Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Torturous attempts to follow the money lead nowhere in Holy See

© Maria Laura Antonelli/ShutterstockCardinal Angelo Becciu, who has been accused of money-laundering and other crimes, at a service to create new cardinals in the Vatican in August
Cardinal Angelo Becciu, who has been accused of money-laundering and other crimes, at a service to create new cardinals in the Vatican in August

Powerful churchmen are sabotaging attempts to reform the accounting of the Vatican as another multi-million-euro scandal unfolds, according to a leading expert on the papal state.

Author Gerald Posner warned the dismissal of auditors enlisted to clean the books, showed the institution had a “long way to go” to bring light to its notoriously opaque finances.

Posner, author of God’s Bankers: A History Of Money And Power At The Vatican, said the institution had made limited progress in modernising since being engulfed in controversy when banker Roberto Calvi was found hanging under Blackfriars Bridge in London in 1982.

Calvi was chairman of a bank with close ties to the Vatican and was thought to have died by suicide but an inquest later ruled it was murder.

Posner said: “Time and again in the last decade, the Vatican’s arcane bureaucracy allowed some senior clerics who fear a diminution of their power and authority to resist and sometimes sabotage grand reforms, all without the fear of any career repercussions.”

He spoke as an auditor and his deputy, hired by the Vatican to sort out its convoluted accounts, were suing for £8 million after being dismissed.

Libero Milone, 74, former head of Deloitte in Italy, was hired in 2015 with Ferruccio Panicco but was fired in 2017.

Posner said: “Notwithstanding the hope that came with the 2013 election of Francis, a reformer Pope, and some big improvements in transparency and oversights at the scandal-ridden Vatican Bank, the story of the dismissed auditor and his deputy is a sharp reminder that financial reforms at the Vatican still have a long way to go.” Milone uncovered a number of anomalies before he was fired, including finding an envelope containing €500,000 (about £430,000) in a cardinal’s office. He also found a Vatican-controlled hospital in Rome had secretly used the same amount for donations to Italian political parties. A further £2.1m donated for a children’s hospital had vanished.

Posner said: “The Vatican Bank is only becoming more compliant with internationally accepted financial standards because it has no other choice.

“Once the Vatican opted to use the euro as its currency, its bank became subject to on-site inspections by the EU Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval).

“To avoid being put on Moneyval’s blacklist as a non-compliant tax haven, the Vatican passed in 2010 its first law banning money laundering and establishing an unprecedented financial oversight and enforcement authority.

“There have been four Moneyval reports in the last decade and while the Vatican has not yet qualified for the much-sought-after whitelisting, it has met a series of goals set by EU regulators.”

© Ted Blackbrow/Daily Mail/Shutterstock
Jury at the inquest into the death of Vatican banker Roberto Calvi on Blackfriars Bridge in 1992, where his body was found. They ruled it was murder

Posner said some limited progress had been made as the Vatican Bank was no longer considered an offshore haven for tax avoiders and money launderers.

He said: “As for the rest of the Vatican finances, that is a much slower process since there is no EU regulator pushing the sovereign city-state to undertake the necessary reforms.

“The Secretariat of the Economy, created with great fanfare by Francis in 2014, lost its way in part after the 2019 resignation of Cardinal George Pell who returned to Australia to stand trial on sexual abuse charges. In some instances, the Vatican continued to fulfil early promises and commitments but at a snail’s pace.

“Since 2012 there had been discussions about allowing criminal prosecutions, including for financial wrongdoing, of bishops and cardinals.

“Although there was little concerted opposition, it still took eight years for that to be memorialised in a Papal decree.”

Last year, the Vatican was gripped by another financial scandal. Cardinal Angelo Becciu, 73, once a close ally of Pope Francis, and nine other defendants have been accused of extortion, embezzlement, money-laundering and abuse of office. All deny the charges.

Becciu was sacked as head of the Vatican’s saint-making office by the pope after reports of financial misdeeds emerged.

In July, Posner said, Pope Francis issued an extraordinary decree. A 20-page Investment Policy Statement (IPS) set directives on all investments to ensure they were ethical, green and low-risk and under the eye of the Vatican Bank.

He said: “Reform is always up to one person – whoever is Pope. Under the move, banned are investments in funds associated with pornography, gambling, weapons and defence industries, pro-abortion health centres and laboratories or pharmaceutical companies that make contraceptive products or work with embryonic stem cells.

“Investments in complex financial and structured products should be avoided. Speculative investments in commodities, oil, mining, nuclear energy and alcoholic drinks are strongly discouraged.

“Investment decisions must include a governance factor, favouring companies with codes of ethics and transparent, prudent and fiscally responsible management.”

There was also a portion of the IPS that sent shockwaves through most Vatican departments, according to Posner.

He said: “The IPS set an October 1 deadline to abolish the centuries-old policy whereby all Vatican departments invested their own funds independently.

“Instead, all the departments had to transfer their holdings, about £1.9 billion, to the Vatican Bank.

“There, a newly appointed group of lay experts dubbed the ‘Investment Committee’ will evaluate the suitability of investments.”

Posner said it remained unclear if consolidating all investment under the control of the Vatican Bank would make financial transactions more transparent and less subject to corruption or abuse.

He said: “Preventing that relies on comprehensive oversight and redundant internal safeguards, something the Vatican has been reluctant to fully embrace.”