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What’s happening with the former Vatican auditor?

Lawsuits, criminal investigations, new scandals: what is going on with Libero Milone and the Vatican?

Libero Milone. Credit: Rai3 Report/Facebook.

The Holy See’s former auditors remain locked in legal disputes with Vatican court officials in their attempt to bring a lawsuit against the Secretariat of State for wrongful dismissal.

The lawsuit, and linked criminal investigation into the former auditors, has the potential to develop into a full-blown parallel legal process alongside the ongoing financial crimes trial in Vatican City — and could potentially bring dramatic new allegations of corruption to light, or derail the so-called “trial of the century” entirely.

So as the end of the year approaches, what is going on?

The Pillar explains.

Background

Libero Milone, the first auditor general of the Vatican, was forced from his position in 2017, along with his deputy, Ferruccio Panicco. Both claim they were ousted because they had been too successful in uncovering financial corruption at the highest levels of the Vatican.

They filed a claim for wrongful dismissal in November this year, seeking more than 9 million euros in damages and lost income.

At the time of their ouster, then-sostituto at the Secretariat of State, Cardinal Angelo Becciu, said Milone had been made to resign under threat of criminal prosecution because he was “spying” on the private financial affairs of senior officials, including Becciu himself.

Becciu has since told a Vatican court that the decision to force Milone from office came from Pope Francis personally, and the cardinal was merely carrying out the pope’s instructions.

Milone has said he and his team were the target of months of surveillance, including computer hacking and wiretaps, by Vatican law enforcement as part of an effort to shut down their investigations.

In press conferences in November, Milone said he had evidence of corruption on the part of senior curial officials which he would present in court to prove he was wrongfully dismissed.

“What it was,” said Milone last month, “is that I discovered that there were cardinals putting money in their pockets, they were doing strange things, and my reporting line was to the pope, so I reported everything to the pope.”

Despite filing their petition more than a month ago, the auditors’ lawsuit has been stuck in legal limbo, with the court refusing to even recognize members of their legal team.

In line with standard procedure, when they filed their petition on Nov. 4, Milone and Panicco nominated two lawyers to represent them in their case — one, an Italian lawyer, who is their main legal counsel, and another who is authorized to practice before Vatican City courts.

The normal practice in Vatican courts is that, in line with the right of parties to choose their own legal representation (which is acknowledged in both canon law and Vatican civil law), counsel appointed from outside the Vatican’s register of pre-approved lawyers is accepted by the court provided they are considered suitably qualified.

But the Vatican court has so far refused to accept the Italian lawyer nominated by the former auditors, Romano Vaccarella — a former judge on Italy’s constitutional court. In a memo received by Milone on Nov. 16, court officials informed him that Vaccarella’s nomination to work with Vatican-approved attorney Giovanni Merla had been rejected and enclosed the “decree of the president of the Court of Appeals.”

The “decree” consisted of a photocopy of Vaccarella’s letter requesting accreditation with a three-word handwritten note at the bottom: Non si autorizza — “It is not authorized.”

The "decree" of the of the Court of Appeals of Vatican City. Pillar image

No reason was given for the rejection. Milone called the decision “greatly damaging” to the petition and noted to The Pillar this week that Vaccarella had spent two years preparing his legal claim before it was  filed in November.

Milone said he hoped the decision would be reversed, noting that the appointment was in line with both Vatican City law and practice and had been used without difficulty to recognize lawyers for the 10 defendants in the Vatican City financial crimes trial, now in its second year.

The auditor has previously said his attempts to clear his name in the Vatican have run up against “Orwellian” obstacles to justice and transparency — including the decision by Vatican prosecutors to reopen a criminal investigation into Milone in apparent retaliation for his filing suit for wrongful dismissal.

“It’s even more confusing,” Milone told The Pillar, “because Vaccarella has been accepted by [Vatican prosecutors] as my lawyer for my criminal case.”

Milone told The Pillar this week that while he and his Vatican-approved attorney, Merla, are trying to move forward with the legal process, he does not expect any further progress before Christmas. But, he said, bringing their petition forward was especially urgent for his former deputy and co-petitioner, Panicco.

As part of the suit, Panicco is seeking 3.5 million euros in material damages for the seizure of personal medical records from his Vatican office in 2017. Those records, he says, have still not been returned and their seizure led to a year-long delay in his diagnosis and treatment for prostate cancer.

Panicco has stage 4 prostate cancer and is unwell. In November, he told journalists: “​​I think they — the Vatican — are guilty, not maliciously, of sentencing me to death for no reason, after a slow and significant suffering.”

Facing Prosecution

Even if the Vatican City court reversed its current decision not to admit their chief legal strategist, Milone and Panicco’s lawsuit is unlikely to come to court anytime soon.

As part of their bid to clear their names following their public dismissal for “spying,” the two petitioned the Vatican to declassify records of the investigation by Vatican gendarmes which was used to force their departure. Once unsealed, they hoped, they could refute the accusations against them and show they had been dismissed without cause.

Instead, shortly after they deposited their legal petition with the Vatican court, they were informed the files had been unsealed but the criminal investigation into their time in office had been reactivated and they could face prosecution.

Last month, the former auditors were interrogated for hours by Alessandro Diddi, the Vatican City promoter of justice (public prosecutor).

Diddi is also the lead prosecutor in the ongoing trial of Cardinal Becciu and other former Secretariat of State officials and advisors for corruption.

Milone has told journalists that the accusations of “spying,” now revived by Diddi’s office, relate to his use of an Italian investigative firm, Falco, during the first months of his tenure as auditor general.

According to the prosecutors, Milone says, his use of the firm proves he was “spying” on curial officials. But the auditor says he used the firm at a time when his office was still being set up and he did not have more than a handful of staff to conduct its work.

Falco was used, he says, to check public records in regional archives across Italy as part of routine background checks undertaken by his office to ensure compliance with Vatican rules for external contracts and internal hiring processes. Moreover, Milone says, his use of the firm was both explicitly within his remit as auditor general, and within the budget for his office.

But, at least according to Milone and those familiar with his suit, the purpose of the new investigation into the former auditor may be to block his lawsuit from ever coming to court. Under Vatican law, where the same issue is subject to both a criminal and civil legal complaint, the criminal matter takes precedence, meaning Milone’s action could be blocked indefinitely as long as it is subject to a live criminal process.

A Parallel Process

The decision by Diddi’s office to reopen the investigation into Milone has raised eyebrows across Vatican trial watchers since it means the promoter of justice is effectively pursuing two sides of the same Vatican financial scandal.

In the current trial, Diddi is the lead prosecutor and chief antagonist of Cardinal Angelo Becciu, whom Milone says was the chief opponent of his anti-corruption work and the architect of his ousting from the Vatican.

Becciu has repeatedly denied any impropriety, let alone criminality, during his tenure as sostituto at the Secretariat of State, which ended in 2018. But he and multiple officials from his former department are now accused of a range of crimes, including corruption, embezzlement, fraud, money laundering, conspiracy, and witness tampering.

For his part, Milone says he has records proving senior Vatican officials, including cardinals, engaged in personal acts of embezzlement, and used Vatican institutions like the city state’s governing apparatus and the Bambino Jesu hospital for money laundering.

But, in choosing to treat Milone as a suspect instead of a source of possible proof for his other case, Diddi has appeared to some court-watchers to have lent credit to Becciu’s chief defense against Diddi’s own attempts to prosecute him. The cardinal claims he is the victim of a smear campaign and that everything he did in office was legal and, where necessary, personally approved by the pope.

Diddi has attempted to prove otherwise, recently producing tape of a phone call in which Becciu secretly recorded his attempts to get Francis to take responsibility for some of his allegedly criminal actions.

But if the prosecutor tries to bring charges against Milone, it would be taken by many — possibly including the judges — as a vindication of the cardinal’s most controversial actions by the prosecution.

On the other hand, if Milone makes good on his promise to produce proof of high level financial corruption in Vatican court it could help bolster Diddi’s case against Becciu. But it could also be a seriously complicating factor for Diddi.

Letting Milone see the inside of a Vatican courtroom — either as a plaintiff or a defendant —  could give the former auditor the chance to clear his name in public, but in doing so throw up possible charges against a range of other senior officials and cardinals, both serving and retired.

It’s not clear if Diddi has the capacity — or the willingness — to deal with a possible raft of new investigations into senior churchmen, or if the Vatican is prepared for its current financial trial to evolve into a new generation of scandals.

What happens next?

In the short term, Milone and Panicco are likely to keep pressing for their claim to be heard in court.

While court delays, like refusing to admit their lawyer, and the reopened criminal investigation can stall that for a time, Milone has asserted in public that he has the means to clear his name and prove the corruption he says he was forced out to cover up.

If the Vatican continues to stall hearing his claim, or opts to use the criminal process to try to keep him under control, Milone may opt to convene his own trial in the court of public opinion and release his cache of documents to the press.

Some Vatican watchers have suggested the Vatican may try to settle with Milone out of court and prevent any further scandals from coming to light — and Milone himself has been frank that he tried for years to secure such a settlement before filing his own lawsuit.

It is possible that a private agreement could avoid further public disclosures from Milone, and more legal cases in the Vatican. But the longer the process drags on, and the more unwell Panicco becomes, the less likely such a resolution looks.

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