Cardinal Angelo Becciu tried to hide $200 million in loans that the Vatican took out to buy a luxury London property, Vatican sources have claimed.
Driving the news
Citing “senior sources” in the Vatican Prefecture for the Economy, CNA made the claim against Becciu in a report Monday.
CNA said that the cardinal’s alleged manoeuvre in the transaction goes against Vatican financial policies laid down by Pope Francis in 2014.
The big picture
CNA spoke to “separate high-ranking sources” at both the Prefecture for the Economy and the APSA – the Vatican treasury and central reserve bank.
The sources confirmed that the $200 million the Vatican Secretariat of State used to purchase the property at 60 Sloane Avenue, Chelsea, actually came from borrowed money, not the ‘Peter’s Pence’ donations of the faithful around the world as first reported.
The Vatican purchase of the 17,000-square-metre former Harrods warehouse – later converted into 50 luxury apartments – has been under scrutiny since Vatican police raided the Secretariat of State and the watchdog Financial Information Authority (AIF) on October 1.
CNA’s sources also confirmed that Cardinal Becciu, then-‘number 2’ in the Secretariat of State, was instrumental in obtaining the loan package from Swiss banks.
According to CNA, the loan was intended to fund speculation on the London property market.
Under the loan terms, the Vatican was required to make only interest repayments for three years.
But both the rate of interest and the collateral offered by the Vatican are for the moment unclear.
Specifically, CNA’s sources accused Becciu of hiding the loans for the London property on balance sheets by cancelling them out against the value of that property.
CNA explained that the manoeuvre was detected by Vatican authorities and the issue raised at a meeting of the Vatican supervisory Council for the Economy.
There, at the Council for the Economy, the issue of the highly irregular loans was “noted, but no action was taken”, a source told CNA.
Last week Becciu attempted to defend his role in the transaction, saying that “it is accepted practice for the Holy See to invest in property, it has always done so: in Rome, in Paris, in Switzerland and also in London”.
But a Vatican source told CNA: “it may have been accepted, but that does not mean it is acceptable”.
Vatican Secretary of State Cardinal Pietro Parolin also last week criticised the London property deal as “opaque”.
Why it matters
The latest CNA revelations about the Vatican London property purchase are the latest chapter in what is quickly turning into an all-out war in the Holy See over finances.
Former Vatican police chief Domenico Giani was forced to resign over police mishandling of the suspensions handed out to five Vatican workers after the October 1, only to be visited by the Pope at home and awarded the title of Knight of the Grand Cross of the Pius IX Order, the Vatican’s highest distinction for laymen.
Apart from the rift between cardinals Becciu and Parolin over the “opaque” London purchase, there is also the tension between Vatican prosecutors and the AIF.
Vatican prosecutors alleged as justification for the October 1 raids the “serious indications” of embezzlement, fraud and money laundering they had uncovered in both the Secretariat of State and the AIF.
But the AIF shot back and said an internal investigation had revealed that neither its suspended director, Tommaso Di Ruzza, nor any other employee had “improperly exercised his authority or engaged in any other wrongdoing”.
In the middle of the battles between Giani, Becciu and Parolin, and Vatican prosecutors and the AIF – not to mention the arrival of a top anti-mafia prosecutor as new Vatican magistrate – Italian journalist Gianluigi Nuzzi lobbed another bomb into the fray, suggesting in a new book based on leaked documents that the Vatican is close to bankruptcy.
APSA President Bishop Nunzio Galantino denied the bankruptcy rumours, and Vatican cardinal Peter Turkson emerged to say that the Vatican is presently working on streamlining its investments and on ways to ensure they are entirely ethical.
But just when the waters seemed to have calmed down, APSA President Galantino was caught out on his admission that the APSA had lent 50 million euros to finance the purchase of an Italian hospital, the Istituto Dermopatico dell’Immacolata (IDI).
Due to European banking requirements, the APSA is prohibited from making loans of that type.
Former Vatican auditor Libero Milone also stepped back into the fray this week, telling the Financial Times that he believed he was dismissed by Becciu in 2017 for getting too close to Vatican money held off the books.
“Some people got worried that I was about to uncover something I shouldn’t see”, Milone lamented.
“We were getting too close to information that they wanted to be secret, and they fabricated a situation for me to be thrown out”.