Day 1 of the Vatican financial trial: What we learned

News: Vatican finances

What happened: Tuesday was the first day of the long-awaited trial in the ongoing Vatican financial scandal. 

Lawyers for the 10 defendants, including Cardinal Angelo Becciu and several former officials and advisors to the Secretariat of State, presented their opening objections to the proceedings, looking to impugn the evidence presented by prosecutors, the manner in which it was gathered, and the constitution of the court itself.

What’s new: Cardinal Angelo Becciu, the highest profile defendant, told reporters that he is “serene” about the proceedings and confident he will be exonerated on the charges of embezzlement and abuse of office. 

Becciu also announced he will sue Msgr. Alberto Perlasca, his former deputy at the Secretariat of State, for defamation over statements the priest made to Vatican prosecutors during the investigation. 

Why it matters: The trial is the first of its kind in the modern era, with Cardinal Becciu the first cardinal to go on trial for Vatican financial crimes since the 18th century. The trial comes after years of reporting on financial scandals and is widely seen as an immediate test for the raft of financial reforms issued by Pope Francis this year.

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The tribunal of the Vatican City convened in a specially constructed court room on Tuesday morning for the opening of the trial of 10 defendants facing charges of embezzlement, fraud, abuse of office, and numerous others. The trial is the denouement of a sprawling, two-year investigation by prosecutors into the financial affairs of the Secretariat of State, the most powerful curial department of the Vatican.

The opening day of proceedings, held in a converted hall in the Vatican museums, saw prosecution and defense lawyers trade procedural arguments. Witnesses testimony and the formal presentation of evidence will not begin until the court reconvenes in October, after the summer recess.

Of the 10 defendants, only the two clerics facing charges, Cardinal Becciu and Msgr. Mauro Carlino, appeared in person. The others, seven lay men and one woman, were represented by lawyers, with the judges acknowledging that Gianluigi Torzi, the broker at the center of the London property deal which triggered the initial investigation, remained in London pending an extradition request lodged by an Italian court earlier this year.

Becciu was ordered to resign his position as prefect of the Congregation for the Causes of Saints in September 2020, after the pope was reportedly presented with evidence of embezzlement by the cardinal. Before taking that role, Becciu served for years as sostituto at the Secretariat of State, acting in that role as a kind of de facto papal chief of staff.

Msgr. Carlino also worked in the Secretariat of State’s general affairs office, and was for a time a director of the U.K. company through which the Vatican controls the London building at the heart of the current scandal. He also, for years, worked closely with Cardinal Becciu and Msgr. Alberto Perlasca, who has not been charged and instead has emerged as the prosecution’s star cooperating witness.

Perlasca’s evidence appears crucial to the prosecution case. Perlasca served as head of the Administrative Office of the Secretariat of State for a decade, before he was transferred to the Apostolic Signatura, the Vatican’s supreme canonical court, and made Substitute Promoter of Justice - deputy chief prosecutor. In February 2020, Perlasca’s home and office were raided by Vatican police over his work on the London property deal and he was suspended from his role at the signatura. 

Since then, he has given a number of interviews to prosecutors in which, they contend, he laid out the network of financial dealings and decision making at the secretariat and allowed for the construction of much of the case now being heard by the court. 

One of objection offered by defense lawyers during Tuesday’s hearing was that Perlasca’s interviews with prosecutors should be ruled inadmissible, since he had no lawyer present during questioning. 

In a surprising turn, Vatican prosecutor Alessandro Diddi told the court that Perlasca had, in effect, never been formally interrogated as a suspect and his cooperation was purely voluntary and, since the sessions were recorded, they presented no evidentiary problems. 

Diddi also confirmed that the pope had intervened personally to authorize various stages of the investigation, including the issuing of arrest warrants and authorizing the wiretapping of computers.

For his own part, Becciu told the press on Tuesday that his “conscience was clear” and he had full faith that the Vatican judges would exonerate him. Becciu’s legal team separately confirmed to reporters that the cardinal is suing Perlasca for defamation over statements made to prosecutors and investigators, though it is not clear if this suit is being filed in Vatican City or the Italian republic.

Other objections were raised against the constitution of the court itself and the Vatican’s sovereign legal system, with lawyers for Enrico Crasso, a former senior investment manager for the secretariat, suggesting that no other legal jurisdiction would have allowed this trial to proceed. Others insisted that many of the alleged financial activities took place outside of the Vatican City and could not, therefore, be prosecuted before the Vatican court.

At least one defendant, Raffaele Mincione, had already initiated legal proceedings against the Secretariat of State prior to his indictment in Vatican City. In a suit filed at the High Court of England and Wales in June 2020, Mincione asked that the court grant him declaratory relief against the Secretariat of State and rule he "acted in good faith” in his dealings with the Vatican. 

Through the Athena Global Opportunities Fund, created by Mincione as a vehicle for Vatican investment, the businessman invested millions of Vatican funds into his own companies and speculative investment projects, including the London building at 60 Sloane Avenue, which he owned through a series of nesting holding companies in the Channel Islands.

In June, 2018, Micione also invested 10 million euros of Vatican funds in Sierra One SpV, a bond product packaged and sold by Sunset Enterprise Ltd., a company then under the control of GIanluigi Torzi. The Sierra One bond included debt products issued by a company linked to organized crime

Torzi, in turn, used his companies to lend Mincione tens of millions of euros during the same period.

After the seven-hour opening session on Tuesday, the court went into recess and will next meet on October 5.