VATICAN CITY (ChurchMilitant.com) – Pope Francis has ordered all Vatican institutions to transfer their moveable accounts to the Institute for Religious Works, also known as the Vatican bank, in an Aug. 23 rescript.
The Vatican bank
Monday’s order calls for transfers to happen immediately, with a Sept. 30 deadline. The rescript has the potential to shift almost all of the Vatican’s finances to the only major financial institution in the Vatican under international regulatory oversight. This would precipitate a sea change in Church leaders’ battle to bring financial transparency to the Vatican.
The rescript states that all institutions “that possess financial assets and liquid assets, in whatever form they are held, with financial institutions other than the IOR must inform the IOR and transfer them to it as soon as possible within 30 days from 1 Sept. 2022.”
The Vatican bank is only one of three institutions that manage most of the Vatican’s money.
The Vatican’s investments and real estate were (until the rescript) controlled by an institution called the Administration of the Patrimony of the Holy See. The third money manager is the powerful Secretariat of State, which governs the Vatican state itself. The Secretariat of State oversees much of the Vatican’s wealth, especially since it has authority over Peter’s Pence — the pope’s charitable fund, mired in scandal in recent years.
There are several reasons why funds are being shifted into the IOR. It has been suggested that it may be an attempt to reinforce the Vatican’s finances as it undergoes a liquidity crisis.
Still, the rescript’s most significant effect may be to subject the Vatican’s financial transactions to stronger oversight. The IOR is closely monitored by European regulatory agencies, making it by far the most transparent of the three institutions. The move has the potential to eliminate much of the corruption that has dogged the Vatican’s recent finances.
With all moveable assets, including investment accounts, moved to IOR, international watchdogs could potentially review any investments or transfers from institutes of the Holy See.
The lack of transparency has facilitated serious fraud over the years in the Curia. The Secretariat of State has been embroiled in several scandals, including a calamitous real estate deal. At the alleged direction of Cdl. Giovanni Becciu, the then-second-in-command of the Secretariat of State, the dicastery is purported to have engaged in embezzlement and cover-ups to hide its crimes. Becciu has been stripped of his rights as a cardinal and fired from his post as the head of the Dicastery for the Causes of Saints and is currently on trial. Becciu maintains that he is innocent.
Cardinal Becciu repeatedly clashed with Cdl. George Pell, who had been entrusted with reforming the Vatican’s troubled financial system. Cardinal Becciu went as far as to cancel an external audit of the Secretariat of State.
Cardinal Pell was cleared of sex abuse charges by Australia’s highest court in 2020. In an interview he gave shortly after his release from prison, Pell speculated that forces tied to Vatican corruption may have conspired to get him accused in retaliation for his work on financial reform.
The Administration of the Patrimony of the Holy See, for its part, has been accused of financial irregularities. In defiance of regulations, APSA gave a 50-million euro loan to finance the purchase of a hospital. APSA had been exempted from regulatory oversight in exchange for refraining from commercial ventures, but the loan violated that agreement, damaging the institution’s reputation. Pope Francis’ rescript removes much of APSA’s brief and gives it to the IOR.
The IOR has had its share of scandal as well. Accusations of impropriety stretch back years, with the institute’s notorious lack of transparency fueling numerous conspiracy theories. Money-laundering scandals in recent decades have harried the IOR. Its reputation sagged to such a point that Hollywood smeared it in a famous film. A fictional IOR scam was a plot point in the 1990 film The Godfather Part III.
The IOR has come a long way in the last 10 years and is now the most transparent Vatican financial institution. Measures enacted under Pope Benedict XVI and continued under Francis have cleaned up the bank’s operations. But some believe there is still a long way to go.