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Defendants point fingers at each other in Vatican trial

The Vatican financial trial resumed hearing on Friday, with witnesses offering conflicting narratives of the now infamous London property deal. 

The building was purchased by the Vatican in late 2018 at a total cost of some 350 million euros and sold earlier this year at a loss of an estimated 136 million.

A former advisor to the Secretariat of State insisted in court that the Vatican was well aware of the deal’s details, which resulted in the Vatican being allegedly extorted for millions for control of the building at 60 Sloane Ave. 

Meanwhile, a former secretariat official claimed that Msgr. Alberto Perlasca, the prosecution’s star witness, was responsible for a sprawling financial mess, and had exceeded his authority in signing off on the details of the London property investment.

The former official also claimed Pope Francis had approved a controversial loan application to the IOR, a Vatican bank, to finance the deal — a loan application that triggered the investigation leading to the current trial.


The day’s evidence, coming during the 24th session of the trial about to enter its second year, marked the beginning of cracks in the defense’s narrative, as the former official’s account appeared at odds with documents already submitted in court, both in the Vatican and in the UK.

The court heard Friday from Nicola Squillace, a lawyer and former advisor to the Secretariat of State, who is charged with fraud, embezzlement, and money laundering in the current trial. In 2019, Squillace was convicted by an Italian court for his role in the bankruptcy of another company, Novaceta, and sentenced to six and a half years in prison. He is currently appealing that decision and remains free pending that appeal.

Squillace was a key figure in the structuring of the Secretariat of State’s deal to withdraw its investments from Raffaele Mincione in 2018. 

Because the Vatican determined to pull its funds from Mincione before the end of the agreed term, it incurred still penalties — forfeiting the balance of its initial investment, and paying additional penalties of tens of millions of euros, the Vatican paid Mincone a total of 200 million euros and received in return ownership of the London building at 60 Sloane Ave., which came saddled with a further mortgage of 150 million.

The secretariat retained Gianluigi Torzi, a businessman with substantial business ties to Mincione, to broker the transfer of ownership of the building to the Vatican. The terms of that arrangement were hashed out in meetings between secretariat officials, Torzi, and two Italian lawyers, Manuele Intendente and Squillace.

The plan structured by Torzi for the Vatican to take control of the London building was complicated: The Vatican would pay Torzi, who would pay Mincione. Ownership of the off-shore holding company which owned the building would then be transferred to Torzi’s Luxembourg-based holding company Gutt SA. Once Gutt controlled the building, Torzi was supposed to hand over all shares of Gutt to the Vatican. Instead, corporate documents show that after Gutt took ownership of the building, Torzi restructured Gutt’s share structure. He created a small class of 1,000 voting shares which controlled the company. 

According to prosecutors, Torzi kept those voting shares while giving the Vatican all the general shares in the company. He attempted to extort the secretariat by making them pay millions more for those voting shares. The Secretariat of State maintains that it was the victim of a fraud in the deal. 

Squillace told the court on Friday that secretariat officials were fully briefed on the terms of the deal, which were approved in full knowledge, and the lawyer produced in court drafts of the agreement developed over the course of negotiations with the Vatican.

Specifically, Squillace said he discussed the terms of the deal with Fabrizio Tirabassi, a lay official who worked, until October 2019, in the administrative office of the Secretariat of State, overseeing investments whom, Squillace said, specifically approved the voting share provision saying it was a known practice in Vatican deals.

Tiribassi, who is himself charged with corruption, extortion, embezzlement, fraud and abuse of office, was also in court Friday. He told judges he was unaware of Gutt’s internal share structure and how it related to control of the company.

As previously reported by The Pillar, corporate filings in Luxembourg show that Tiribassi was a company director of Gutt in November 2018, as the deal was finalized, before stepping off the board a month later. Tiribassi was removed from his curial position in October 2019, following raids by Vatican investigators on the Secretariat of State’s offices.

Tiribassi told the court Friday that it was his former boss in the secretariat’s administrative office, Msgr. Alberto Perlasca, who was fully briefed on the deal and had signed off on it despite, Tiribassi claimed, not having the authority to do so.

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Perlasca has emerged as the star prosecution witness in the case, after he approached investigators in 2020, offering to discuss the financial affairs of his former department after being raided by investigators.

Tiribassi’s account Friday, which was not given under oath because he is a defendant in the trial, appeared to be at odds with other court submissions and findings in Italy and the UK.

In court documents published in London last year, Gianluigi Torzi claimed that Tirabassi offered him prostitutes as a perk while they worked out the terms of the Gutt deal, and boasted of blackmailing senior clergy at the Secretariat of State, Cardinal Angelo Becciu.

Italian newspaper Corriere della Sera reported in 2020 on a recording of a private meeting between Torzi, Tirabassi, and Crasso at a Rome hotel. During the conversation, Torzi can be heard saying he needed to realize at least 10 million euros for his role in brokering the final sale of the London building

Torzi has also accused Tirabassi of threatening his life, and the safety of his family if he did not turn over control of Gutt to him and Enrico Crasso, the Secretariat of State’s former investment manager.

Documents submitted by Torzi to the UK court also appear to show that, Tiribassi’s claims on Friday notwithstanding, Perlasca was granted explicit power of attorney by sostituto Archbishop Peña Parra to act of behalf on the secretariat in financial affairs, including the series of transactions which let to the charges against Torzi. 

Filings in the UK case from Vatican prosecutors also confirmed that Cardinal Pietro Parolin, the Secretary of State, had personally authorized the terms of the deal, including the share restructuring. 

But who understood which of the details remains central to the charges of fraud in the Vatican trial. 

In June last year, an Italian court issued a preliminary ruling on connected charges against Torzi in the Italian Republic, finding that Torzi “openly blackmailed” the Vatican for escalating sums of money for control of Gutt. 

The Italian court also found Torzi had relied upon “internal complicity” by individuals acting for the Secretariat of State, finding that there is evidence of “the concurrence of insiders in the fraud, without which, as will be seen, the gullibility [of the secretariat in agreeing to the deal] would be inexplicable.”

Specifically, the Italian court identified Tirabassi as having sent misleading messages about the deal to Perlasca, and said that “misleading answers provided by Squillace” as legal counsel to the secretariat were to blame for Parolin’s approval of the deal’s terms.

The trial continues.

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