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IOR president was offered ‘protection’ to approve London deal

IOR president was offered ‘protection’ to approve London deal

The president of a major Vatican Bank told a courtroom Thursday that he reported a suspicious Vatican property deal to investigators, even while senior Vatican officials offered him “protection” to help the deal go through.

Jean-Baptiste De Franssu is president of the Institute for Works of Religion, a Vatican City bank. Amid a sprawling Vatican City criminal trial, De Franssu answered questions Feb. 16 about the Secretariat of State’s 2018 acquisition of a London building at 60 Sloane Ave.

The banker told judges that in 2019, the Vatican Secretariat of State submitted a loan application to his bank - commonly called the IOR - in order to refinance a mortgage it had taken from a Swiss bank when it bought the London building.

De Franssu told judges that because of the suspicious businessmen involved in the London property deal and the irregularities in its legal structure, he had “no other choice” than to report the application to investigators at the Office of the Promoter of Justice.

His concern was motivated in part by the prospect that deal was being used for money laundering, he said.

He also testified that leaders of the Vatican’s internal financial authority pressured him to drop his opposition to the loan application – alleging that the agency’s two senior officials offered to “protect” him if he approved a loan of 150 million euros.

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De Franssu appeared in court Thursday for the 46th hearing of a financial trial in which 10 defendants, including senior former officials at the Secretariat of State, are charged with a range of crimes, including embezzlement, abuse of office, fraud, witness tampering and others.

The trial, which formally opened in July 2021, was the result of a multi-year investigation into the Secretariat of State’s financial affairs.

De Franssu’s 2019 complaint trigged the investigation. The banker raised a red flag after senior clerics at the secretariat - including Cardinal Pietro Parolin - pressured the IOR to approve a loan intended to refinance a mortgage on the London building.

Because of a complex web of transitions involving businessman Raffaele Mincione, the secretariat paid a total of 350 million euros for to buy the London building, considerably more than its market value. Much of the money was paid as part of its terms of separation from Mincione, in whose Athena Global Opportunities Fund the secretariat had invested 200 million euros, with money borrowed from Swiss banks.

The Vatican sold the building in 2022 at a loss of more than 100 million euros.

Mincione, as well as the former sosituto at the Secretariat of State, Cardinal Angelo Becciu are among the defendants in the trial.

De Franssu told the court last week that he and the IOR’s leadership were subject to considerable pressure to approve the loan application, despite irregularities with the proposal, the financial risk it posed to the Vatican bank, and a lending freeze at the institution as a result of a previous property scandal.

He said he and members of the IOR board had their competence called into question, and were accused of being “unreasonable” for opposing the loan request.

De Franssu told the court that "the only possible option” for the IOR was to report the deal “in order not to incur a money laundering charge.”

The IOR leadership rejected the loan application and flagged the request as “opaque” and “suspicious,” leading Pope Francis to authorize a criminal investigation into the entire affair in July, 2019.

In testimony last year, the court heard from the secretary of Becciu’s successor as sostituto, Archbishop Edgar Peña Parra, that the archbishop was “outraged” by the bank’s rejection of the loan application and authorized a retaliatory investigation into the IOR’s director general, Gianfranco Mammì, in response.

De Franssu told the court that after he flagged money laundering concerns about the London deal to the Vatican’s own financial watchdog, the Financial Information and Supervisory Authority, the ASIF’s director and president, both defendants in the current case, told him he was being “obstinate” and said he would be “protected” if he authorized the deal.

René Brülhart, who served as president of ASIF until November 2019, and his former deputy Tomasso Di Ruzza, are both charged with abuse of office.

In April last year, Brülhart told the court that his former office was powerless to intervene in the London property deal and that it had been made clear to him by Archbishop Peña Parra that the deal was going through “under any circumstances.”

The Pillar  broke the news that during his tenure as head of the ASIF, Brülhart had a lucrative second contact as an investment advisor with the Secretariat of State — effectively doubling his Vatican income but presenting a potential conflict of interest between his two roles.

Referring to that arrangement, the potential conflict of interest, and how Brülhart and Di Ruzza had worked with the Secretariat of State to pressure the IOR over the deal, De Franssu said he “had the feeling that our trust had been betrayed” by the ASIF leadership.


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In court on Thursday, De Franssu also said that he objected to the loan proposal, in part, because of the involvement of Mincione and Gianluigi Torzi, the businessman appointed by the Secretariat of State to broker the purchase of the building.

Torzi, who was arrested in Vatican City in June of 2020 before jumping bail and fleeing to London, is accused of restructuring the shares in a Luxembourg holding company used to acquire the building in order to extort the Vatican for millions of euros.

De Franssu said both Mincione and Torzi were named on a database of businessmen flagged for suspicious financial dealings.

The Pillar has previously reported that, despite supposedly representing opposite interests in brokering the London deal, Mincione and Torzi had a long financial relationship together.

During the period of years the Secretariat of State invested 200 million in Mincione’s Athena Global Opportunities Fund, Mincione invested millions of euros of Vatican money in debt products marketed by Torzi, some with links to mafia-affiliated companies. Mincione invested Vatican money into one such debt product called Sierra One bond,

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

Torzi currently faces investigation and criminal charges in a number of Italian jurisdictions, including tax evasion and money laundering, in connection to his role in the Vatican’s London property purchase, as well as fraud charges related to his attempts to market securitized hospital debt, including Catholic hospitals.

He has also faced court action in the UK over millions of euros of missings assets under his control, also linked to the allegations of extortion against the Vatican.

De Franssu has led the IOR since 2014, taking over after decades of turmoil and scandal at the institution, including the jailing of his predecessor for nearly a decade by a Vatican court in 2021.

Since De Franssu’s appointment, the IOR has undergone a series of reforms, including several inspections by Moneyval, the Council of Europe’s anti-money laundering watchdog, leading to a 2021 report which concluded that the threat of the bank being used by external individuals and institutions for money laundering purposes had been broadly mitigated.

Instead, Moneyval warned that the new dangers facing Vatican financial institutions came from “fraud, misappropriation, giving and receiving bribes, and abuse of office” by Vatican officials.

The trial remains ongoing.

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