Newlywed IOR employees fall foul of nepotism rule
The bank prohibits bank officials from marrying each other, requiring one of them to resign within a month
The Institute for Works of Religion has defended its personnel policies after a pair of employees were notified they will lose their jobs after marrying each other.
The couple, who have not been named but are being referred to as “Romeo and Juliet” in Italian media reports, will see their employment ended at the end of September, after the pair contracted marriage on August 31.
The pair have separately been placed on administrative leave, according to some reports, for allegedly publicizing their situation.
In one of several recent rounds of reform, the bank adopted a rule banning close relations from working together in curial departments, as part of Pope Francis’ broader institutional drive to prevent nepotism and guard against the possibility of corruption.
Since 2020, Pope Francis has made more than half a dozen legal reforms to Vatican employment and hiring regulations along with new norms on contracts, public procurement, and administrative transparency across curial institutions.
According to the IOR’s personnel policy, “the employment of spouses, blood relatives up to the fourth degree [first cousins] and relatives [by marriage] in the first and second degree, according to canonical calculation, of people and administrators within the Institute is prohibited.”
“In order to guarantee equal treatment, even the celebration of a canonical marriage between an employee of the Institute and another employee of the Institute, or of other administrations of the Vatican City State constitutes a cause for the loss of the employment requirements.”
According to the policy, if one of the two spouses resigns within 30 days of contracting the marriage, the other spouse can continue employment. However, neither member of the couple appears willing to do so, despite having appealed against the policy internally and been denied.
The Association of Lay Vatican Employees, which boasts some 600 members across curial departments and other institutions like the Vatican museums, has issued a statement of support for the couple, claiming that they had sought mediation over the situation on the couple’s behalf but been denied.
The IOR is in a somewhat unique position among Vatican institutions as relates to its internal governance.
While almost all other departments or bodies are either dependant upon or linked to a curial dicastery or subject to the Governorate of the Vatican City State, new statutes confirmed by Pope Francis last year enshrined a degree of operational and functional independence for the IOR, keeping its employment and salary decisions in-house and separate from the oversight of external bodies in the Holy See.
As such, any appeal past the IOR’s board of superintendence and group of cardinal commissioners would have to go to Pope Francis personally.
In response to Italian media reports, the IOR issued a statement this week noting that its policies are aimed “exclusively to guarantee conditions of equal treatment among all employees during the entire period of their employment” while serving the public interest.
“Public interest which, necessarily, must prevail over the individual interests of individual employees,” the IOR statement said.
“Since the Institute brings together just over one hundred employees in a single location, without branches, this rule is in fact fundamental to prevent both inevitable professional conflicts of interest between interested prospective spouses and the emergence of possible doubts of family [mis]management among their customers or the general public.”
The bank also noted that the policy had actually been adopted several years ago but had been held in suspension until the last of five husband-and-wife couples working at the bank had retired.
According to the Association of Lay Vatican Employees, the couple who married in August — despite the regulation having already come into force and their awareness of it — should have been granted a dispensation from the rule because they “had already set the date and place of the wedding” at the time the regulation was adopted, though they did not specify how long the engagement had been.
Robert Warren, a professor of accounting at Radford University, and a retired IRS investigator with an expertise in forensic accounting and the financial fraud in Church institutions in the United States told The Pillar that the scope of the policy would raise eyebrows in America.
“In the United States that would actually be illegal,” he told The Pillar, and noted that husbands and wives often work at the same financial institutions and government departments.
“You have to make sure that one spouse is not in the reporting line to the other, that is the key,” he said.
Warren suggested that the couple could have been “grandfathered in” as the new policy was brought online “especially since they were clearly already in a relationship. Why would they be more likely to collude as a married couple then they already were?”
“One married couple is not going to cause many problems, assuming there’s not a line of reporting and assuming one wasn’t responsible for the hiring of the other,” Warren suggested, otherwise “you could lose a good person, assuming that both of them are good employees to begin with.”
“If this was a compelling problem in general, you would have expected them to impose the policy immediately with the other five couples who were allowed to move on naturally. I think you’d otherwise expect to have seen something in the institute’s annual reports laying out why this policy is so essential in the first place.”
But, Warren said, “there could be a lack of prudence [shown by the couple] if they knowingly violated a policy and have tried to force the bank’s hand in public.”
While the adoption and enforcement of the anti-nepotism rule has been portrayed as uncaring and “anti-family” both by Association of Lay Vatican Employees and some sections of the Italian press, the regulations followed relevant scandals at the bank and the recommendations of international inspectors.
The institution was, for decades, a byword for scandal, corruption and conspiracy theories. But its 2023 annual report, issued June 14, recorded news levels of profitability, allowing significant charitable disbursement to Catholic projects around the world.
At the same time, after more than a decade of internal reforms, the IOR has become widely seen as the most credible, profitable, and vigilant Vatican financial institution.
In 2019, it was the IOR leadership who flagged — despite threats and offers of “protection” from other Vatican departments, including the Secretariat of State — the suspicious activity which led to the uncovering of the London property scandal and Vatican financial crimes trial which convicted nine people, including a cardinal, last year.
As a civil party to that case, the bank filed a claim for 1 million euros in reputational damages against the defendants, which include the former deputy head of the Secretariat of State, Cardinal Angelo Becciu.
The IOR is the only Vatican financial institution currently subject to external oversight by Moneyval, the Council of Europe’s anti-money laundering agency. The group last issued a report on the financial health of the Vatican and the IOR in June of 2021, following a lengthy onsite inspection the previous October.
That report concluded that, after years of internal policy reform and a change in leadership, the risk of money laundering at the IOR was “medium-low.” But the same report also warned about the general culture among curial officials, which it concluded carried a real risk of “fraud, misappropriation, giving and receiving bribes, and abuse of office.”
The success of the IOR’s reforming efforts has widely been credited to the bank’s leadership team of president Jean-Baptiste de Franssu and director general, Gianfranco Mammì, both of whom were key witnesses during the Vatican financial trial which concluded last year.
De Franssu assumed his current role in 2014, meaning next year will see the end of his second five year term, and potentially paving the way for a turnover at the head of the bank.
> According to the policy, if one of the two spouses resigns within 30 days of contracting the marriage, the other spouse can continue their employment.
If the IOR does not pay a living wage then that's a problem that someone will need to resolve, but otherwise I think it's generally preferable for a woman to have the opportunity to be a homemaker and raise children for a while (without also having to work for pay). It broadens the mind.
Also, one time I looked up the etymology of "nepotism" (etymology is often a surprise and a delight), and the memory of this inclines me to think that it's quite a good thing for a Pope to be opposed to nepotism since popes invented it.
For the life of me, i don't understand people that look at a bright line rule that an organization has established and say "damn the torpedoes" let's do it our way. They were warned, they ignored it, one of them had a chance to resign and they declined so they'll both forfeit their jobs. That's completely on them. The comment from Prof. Warren that this would be illegal in the US is meaningless because this isn't the US. People need to grow up and accept responsibility for the decisions that they make.