ROME – In an apparent attempt to smooth-over backlash over recent financial scandals, a top Holy See official gave an interview to the Vatican’s formal information platform breaking down operational expenses and explaining where the funds come from to cover these costs.
Speaking to Vatican News, Bishop Nunzio Galantino, president of the Administration of the Patrimony of the Apostolic See (ASPA), which manages the Holy See’s real estate holdings and, more recently, the investments of the Vatican’s Secretariat of State, defended the pope’s attempted financial reform efforts.
Current financial reform, Galantino argued, is about developing processes and procedures based on transparency and ensuring there are proper controls, checks, and balances in the management and administration of the Holy See’s assets.
“Submitting to a clear procedure and accepting these controls is the minimum that can be done so that the administration is trustworthy and credible. Everywhere,” he said.
Galantino said there is “a change of mentality in play” under Pope Francis when it comes to the Vatican’s finances and pointed to the swath of changes the pope has made to the Vatican’s financial laws and norms over the past 18 months.
“It seems that what is being done, thanks to the procedure put in place, is going in the right direction,” he said.
Over the past year and a half, ever since the coronavirus lockdowns caused an abrupt stop to Pope Francis’s busy travel schedule, he has dedicated his time home to cleaning house when it comes to finances.
Facing several public scandals and severe COVID-related losses, as well as the enduring problem of a bloated payroll and a looming pension crisis, the pope since March 2020 has made several moves on the financial front, including the issuance of new laws targeting oversight and contracts; the establishment of a commission to evaluate the confidentiality of the Vatican’s economic activities; centralizing investments; and forging partnerships with top European investment and business leaders.
Most of these moves were made in a bid to clean up its act ahead of its annual review from Moneyval, the Council of Europe’s anti-money laundering watchdog. Moneyval conducted its last review in October 2020, determining that while the Vatican had made progress in the wake of financial scandals, there was still much to be done.
The bulk of these scandals are tied to an infamous real estate deal in London gone wrong, which lost the Vatican some $225 million in an attempt to purchase a former Harrod’s warehouse originally set to be converted into luxury apartments, but that investment went south when the property lost significant value post-Brexit, causing the Vatican serious losses on the purchase of the property, and in bloated fees to its allegedly shady Italian business partners.
What made the scandal more egregious for outside observers was the fact that the London property was purchased by the Vatican’s Secretariat of State using funds from “Peter’s Pence,” an annual collection designed to support the works of the pope.
For most who donate to the fund, they do so under the belief that they are supporting papal works of charity, rather than subsidizing the Holy See’s business and administrative costs.
In his interview, Galantino attempted to explain the reason for using Peter’s Pence to cover the Vatican’s administrative costs, insisting that the fund is meant to support “the Holy Father’s mission and his works of charity.”
“The exercise of the pope’s ministry in the Church and the world requires structures and personnel that need to be maintained and compensated for the professional service they provide. This encompasses all the rights needed for this,” he said, noting that the Church gets the funds to cover these costs through donations and income that comes from its patrimony.
In terms of the Holy See’s expenses, Galantino argued that these involve “material charity and evangelization,” in that they include the payment of employees’ salaries, and are associated with “spiritual, intellectual, and social charity” through the Vatican’s various departments.
Vatican departments, he said, are responsible for guaranteeing “the Church’s communion in the world,” conveying its teachings, exercising justice, and implementing charity, all of which costs money.
Peter’s Pence is just one of the Vatican’s sources of income that helps to sustain “the two-dimensional characteristic of the Pope’s ministry (apostolic and charitable) that he carries out through the structures of the Roman Curia.”
“Their operating costs – including salaries for approximately 5,000 Vatican employees – are subsidized through offerings, donations and revenues generated by the Holy See’s patrimony, since the Holy See cannot rely on an internal system of taxation,” he said.
APSA’s main task, Galantino said, is to work to ensure “a transparent, competent and productive management, both in terms of quality and quantity,” of the Holy See’s resources.
To do this, he said, Pope Francis is requiring APSA and the Vatican’s other financial entities, especially in light of recent scandals, to conduct their work with an “exemplary style” and level of competence “so that the Church’s proclamation and evangelization might also be credible through the reputation of those called to proclaim and witness to the Gospel.”
“It would be difficult for a Church with little credibility to find people who would be open to welcoming the Word of God,” he said, adding, “being inserted into the social context, the Church is obliged to observe all the laws that regulate social and economic life.”
Noting that the Holy See’s real estate management has also faced scrutiny over the years, and especially in the wake of the London scandal, Galantino said APSA currently manages roughly 1.5 million square meters of real estate assets in Italy.
APSA’s goal in managing these assets, he said, has been and will continue to be “that of improving the service and performance of the real estate holdings and to facilitate the control and transparency of the activities carried out.”
A portion of proceeds from the Vatican’s rental payments, he said, is “partially reinvested for maintenance and upgrading purposes. The rest is used to contribute to the expenses of the Holy See, and therefore, to the Pope’s mission.”
Insisting that the Holy See’s budget cannot be compared to a company, Galantino called it a “mission budget” meant to cover the costs of the Vatican’s various departments.
“There have been years in which expenses were lower than revenue. This made it possible to create a reserve fund that until recently was managed by the Secretariat of State,” he said, but noted that no contributions have been made to this account in recent years.
Amid financial losses related to the coronavirus pandemic, Galantino said APSA’s is to both understand and manage the consequences of these losses, and to ensuring that the Holy See’s activities move forward as normal with no interruptions.
To this end, several groups have been formed and numerous meetings have been held between department heads and experts “in order to put measures, procedures and solutions into play that must be functional so as to guarantee stability in a context that unfortunately presents strong unstable connotations.”
“Within the changed social-economic conditions and, thanks to a growing sensitivity of the Church in terms of management and administration of the goods entrusted to her, APSA has been called to do its part, rethinking its objectives and, in some areas, rethinking the methods of intervention,” Galantino said.
In other words, APSA must become more proactive, “even in the way it administers the movable and immovable holdings of the Holy See.”
The process of reform, he said, “is a long one, but with the Lord’s help and for the good of the Church, we think it can be done.”
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