Indicted former Vatican finance watchdog resigns from Swiss bank role

News: Vatican finances

The former head of the Vatican’s financial intelligence agency has resigned from the board of directors of a Swiss bank. 

René Brülhart left the board of Hypothekarbank Lenzburg AG at the end of last week for “personal reasons,” he is currently on trial in Vatican City for abuse of office during his tenure as president of the Financial Information Authority.

René Brülhart, former president of the Financial Information Authority (AIF) of Vatican City. Credit: Riccardo De Luca UPDATE/Pacific Press/Alamy Live News

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“For private reasons, René Brülhart has decided to step down from the Board of Directors of Hypothekarbank Lenzburg AG with immediate effect,” according to statement released by the bank Aug. 19. 

“The Board of Directors respects his personal decision and thanks him for the trusting and competent cooperation. Hypothekarbank Lenzburg AG regrets his resignation and wishes René Brülhart all the best for the future.”

Brülhart has served on the board of the Lenzburg-based mortgage bank, which specializes in real estate development, since 2016, including as chair of its Audit and Risk Committee. The resignation comes nearly a month after the first day of the Vatican City trial of 10 defendants, including Brülhart, in the financial scandal surrounding the Holy See’s Secretariat of State. 

The Swiss lawyer made his career as an engine of financial reform, overseeing the financial intelligence agency of Liechtenstein until 2012, when he was appointed as director of the Vatican’s AIF by Pope Benedict XVI. In 2014, Pope Francis named him as the agency’s new president, and he continued in that capacity for five years.

Brülhart stepped down from the AIF at the end of 2019, shortly after Vatican law enforcement conducted raids on the agency’s offices as part of their investigation into the financial scandal at the Holy See’s Secretariat of State. 

While his departure was initially portrayed by Vatican communications officials as a scheduled end to his term of office, it was subsequently reported that he was among the subjects of an ongoing investigation into alleged financial crimes. Brülhart was formally charged with abuse of office on July 3. 

In a statement from his lawyers shortly after the charges were announced, Brülhart said that the charges against him are a “procedural error.” Brülhart said that as soon as he is given the chance to offer his defense, accusations against him “will disappear like mist in the sun."

Prosecutors conducted a two-year investigation into Vatican finances after receiving a complaint from the leadership of the Institute for Works of Religion, a Vatican bank overseen by Brülhart’s AIF. The complaint concerned a request for a 150 million euro loan from the Secretariat of State.

Gianfranco Mammì, the IOR director general, complained to Vatican financial watchdogs about the “opacity” of a formal request for a 150 million euro loan from the Secretariat of State intended to refinance a mortgage on the London building which the secretariat acquired as part of its purchase of the building from its former investment manager, Raffaele Mincione.

At the time of the complaint, the IOR was the sole Vatican financial institution under the AIF’s authority

In a 488-page indictment against the 10 accused, Vatican prosecutors argued that the AIF, under Brülhardt’s leadership, “overlooked the anomalies of the London transaction – of which it had immediately been informed – especially considering the wealth of information acquired as a result of intelligence activity.”

In July, The Pillar reported that in addition to his AIF role, Brülhart had a second contract with the Secretariat of State, for which he acted as a consultant on investments, despite the apparent conflict of interest this role could have created with his regulatory role.

One senior Vatican source told The Pillar that Brülhart was paid at least 300,000 euros annually for his work as president of the AIF (subsequently renamed the ASIF), a role which only required him to work the equivalent of two days per week, the source said. 

The same source told The Pillar that Brülhart was separately contracted for a similar amount by the Secretariat of State to act as an “advisor” on the department’s investments.

Sources at the Secretariat for the Economy and the Secretariat of State told The Pillar last month that the consultancy payments were arranged by Cardinal Angelo Becciu, who served as sostituto at the Secretariat of State from 2011-2018 and who is also among those charged in the current financial trial.

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A senior source close to the Secretariat for the Economy told The Pillar that payments from the Secretariat of State to Brülhart were not made known to the Vatican’s economic secretariat, which was charged by Pope Francis with reforming Vatican accounting and administrative procedures.

However, while confirming the arrangement, Brülhart’s legal team told The Pillar that suggestions his client’s ties to the Secretariat of State were kept off-books is “without foundation and shocking,” and denied the consulting arrangement was handled through Becciu.

“In fact, the contractual relationship between Dr. Brülhart and the Secretariat of State was regulated by a formal contract signed by His Most Reverend Eminence Cardinal Pietro Parolin,” the lawyer said.

Lawyers for Cardinal Becciu subsequently issued a statement to The Pillar also stating that the arrangement between Brülhart and the secretariat had been approved by Parolin.

“Regarding the alleged consulting deal of Mr. Brülhart with the Secretariat of State, we want to clarify that the aforementioned financial relationship was brokered by the Second Section of the Secretariat of State, as per their institutional role, and was properly authorized and overseen by His Eminence Cardinal Parolin, without any involvement of His Eminence Cardinal Becciu,” the lawyers said.

The Vatican trial is ongoing, the next hearing is scheduled for the first week of October.