Aussie financial watchdog has 'damaged reputation' after Vatican report error

News: Vatican finances

Australian financial investigators told a senate committee on Monday that internal errors in reporting on transfers from the Vatican damaged the credibility of AUSTRAC, the national financial intelligence body. Senators also heard that police had received updated reports in their investigations and considered all criminal investigations closed.

Senators in Australia heard testimony from officials across government departments during a series of hearings March 22-23, part of the country’s annual budgeting review process.

During the March 22 session, Sen. Concetta Fierravanti-Wells asked AUSTRAC’s chief executive officer Nicole Rose if the agency’s reputation had suffered from an error that misreported the value of financial transfers into the country from the Vatican by 1.9 billion Australian dollars.

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Sen. Fierravanti-Wells asked Rose if she would concede that “AUSTRAC’s reputation has been damaged following the discrepancy in the reporting of the Vatican funds to Australia.” 

“I don’t disagree,” Rose told the committee via phone. “It was an incredibly disappointing error that occurred.” 

Rose said the incident, which saw the financial intelligence agency vastly overestimate the amount of money sent to Australia from the Vatican over a period of six years, was “In my view, the only time AUSTRAC has tripped up.”

“It was disappointing more for the fact that it was a simple human error,” said Rose.

After initially reporting last year that more than AU$2 billion had been transferred from the Vatican between 2014-2020, Austrac announced in January that the real figure was less than $10 million, and blamed a coding error for the discrepancy.

Chris Collett, AUSTRAC’s deputy CEO in charge of intelligence, also confirmed to the committee Monday that the agency had worked with the Vatican’s Financial Information and Supervisory Authority on a number of occasions in January of this year, but was unable to confirm if the two bodies had formally cooperated in previous months.

The initial report was generated by AUSTRAC in the weeks following the forced resignation of Cardinal Angelo Becciu on Sept. 24, after several Italian newspapers reported that Becciu had been responsible for the transfer of hundreds of thousands of euros from the Vatican to Australia during the trial of Cardinal Geroge Pell, the former head of the Vatican’s Secretariat for the Economy. Becciu has strongly denied any allegations of wrongdoing.

The Italian newspapers Corriere della Sera and Il Messagero reported in October last year that the transfers, which were suggested to have been in some way linked to Pell’s trial, had been flagged to Vatican prosecutors by Msgr. Alberto Perlasca, Becciu’s former deputy in the Secretariat of State’s first section.

During Becciu’s tenure as sostituto at the Secretariat of State, from 2011 until June 2018, Perlasca was the head of the Administrative Office of the first section, which had management of the curial department’s finances and investments. 

Perlasca was transferred out of the secretariat in July, 2019, the same month Vatican prosecutors began their investigation into the department’s financial affairs. Perlasca’s home and office were raided in February last year and he was suspended from his position as a prosecutor at the Apostolic Signatura, the Church’s supreme canonical court.

Perlasca has been widely reported to be cooperating with investigators since the time of the raid.

Following the Italian media reports, Rose told a senate hearing in October last year that the agency had passed a dossier of information concerning Vatican money transfers over to federal and state police, who each opened their own investigations. 

State police in Victoria announced that they had found no evidence of criminal behavior last year. 

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In January, AUSTRAC revised its initial report that AU$2 billion had been transferred from the Vatican between 2014-2020, conceding that the real figure was less than $10 million. The financial watchdog blamed a coding error for the discrepancy. At the same time in January, the agency confirmed ongoing investigations into millions of dollars allegedly sent by Cardinal Angelo Becciu during the prosecution of Cardinal George Pell. 

The Australian, an Australian newspaper, reported in January that Vatican and Australian authorities were examining four transfers from the Secretariat of State. Two specifically, they said, were sent by Cardinal Becciu to a company in Melbourne in 2017-2018, and amount to AU$2 million. 

However, Australian Federal Police announced in February that it had “completed analysis of the financial intelligence provided by AUSTRAC in relation to payments from the Vatican to Australia,” and concluded that “no criminal misconduct has been identified to date.”

In September last year, Pope Francis ordered Becciu to resign his position as the prefect of the Congregation for the Causes of Saints and his rights as a cardinal, after the pope was reportedly presented with a dossier of evidence against him by Vatican prosecutors related to alleged financial misconduct.

Cardinal Becciu has been linked to a series of financial scandals at the Secretariat of State, including some involving Church-run hospitals, along with the London property deal.

Becciu has also been accused of attempting to shield investments from the Vatican’s Secretariat for the Economy. This led to several reported clashes between Becciu and Cardinal Pell, who was in charge of cleaning up Vatican finances from 2014-2017.

The cardinal has also faced questions about his role in directing the financial affairs of the Secretariat of State even after he was transferred out of the department, including authorizing payment to a self-described “security consultant” and political analyst who has been charged by the Vatican with embezzlement.

Since his forced resignation, Becciu has strongly asserted his innocence of any financial impropriety.