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Treat Vatican corruption with ‘merciful discretion,’ Pope Francis tells auditors

Pope Francis met on Monday with the staff of the Office of the Auditor General, the Vatican department charged with ensuring financial compliance across the Roman curia. 

The pope praised the dedication of the department’s staff, but — amid several financial scandals unfolding in the Vatican — urged officials to balance the need for “absolute transparency in every action” with “merciful discretion” when dealing with cases of corruption.

Pope Francis in audience with staff of the Office of the Auditor General, Dec. 11. Credit: Vatican Media.

The pope granted the audience just days before a Vatican City court is due to return a verdict in the landmark financial corruption case in which ten defendants, including Cardinal Angelo Becciu, are charged with a range of crimes, including embezzlement, fraud, and abuse of office.

Separately, in the coming weeks the Vatican City’s judiciary is also expected to return a decision in a lawsuit brought by the former head of the auditor’s office, who has alleged wrongful dismissal by Cardinal Becciu for uncovering widespread corruption in the Roman curia.

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In his address on Monday, Francis said that “those who work at the Holy See and the Vatican City State certainly do so faithfully and honestly.” 

The pope did not read out his speech because, the Vatican press office said, he is “recovering from bronchitis,” and instead had the text distributed.

“But,” Francis conceded, “the lure of corruption is so dangerous that we must be extremely vigilant.” 

“I invite you to help those responsible for the administration of the Holy See's assets to create safeguards that can prevent, ‘upstream’, the insidiousness of corruption from materializing,” Francis wrote.

But the pope also instructed the auditors to exercise “merciful discretion” when dealing with instances of corruption, saying that financial scandals “serve more to fill the pages of the newspapers than to correct behavior in depth.”

That observation comes as a surprise, as the pope’s Dec. 11 audience came just days before judges have said they expect to reach their verdict in the financial scandal trial. 

Prosecutors have asked for prison sentences ranging from three to thirteen years for the various defendants, and are seeking close to half a billion euros in damages.

During its last inspection of Vatican City financial institutions, Moneyval, the Council of Europe’s anti-money laundering watchdog, warned that internal corruption by Vatican officials, rather than use of Vatican banks by external actors, posed the primary risk of financial crime in the Vatican.

In 2021, Moneyval concluded that the general culture among curial officials carried a real risk of “fraud, misappropriation, giving and receiving bribes, and abuse of office,” but that the threat was not taken seriously enough in the Vatican.

In May of this year, ASIF, the Vatican’s financial watchdog, which monitors transactions through Vatican banks and financial institutions, said it had identified suspicious financial activities originating in two “Vatican authorities” and another instance from a “non-profit organization” linked to the Holy See.

Francis’ call for Vatican auditors to handle instances of curial corruption privately, and presumably outside the Vatican’s legal system, to avoid scandal also comes amid a public dispute between the Holy See and the first person to hold the office of auditor general, Libero Milone.

Milone, a career auditor and accountant with a successful track record working across Europe and in the United States, was appointed to the newly created role in the early years of Pope Francis’ pontificate before he was forced from office in 2017.

Pope Francis appointed him in 2015 and he worked closely with Cardinal George Pell, who was named the first prefect for the Secretariat for the Economy by the pope, until 2017.

In that year, Pell was forced to take a leave of absence from his role to successfully defend himself against abuse accusations in his native Australia, while Milone was forced from his position that same year, along with his deputy, Ferruccio Panicco. 

Both auditors claim they were ousted because they had been too successful in uncovering financial corruption at the highest levels of the Vatican.

They filed a claim for wrongful dismissal in November this year, seeking more than 9 million euros in damages and lost income.

As part of the pre-trial process in the lawsuit, Panicco and Milone filed several hundred pages of documents, which they said proved they discovered widespread corruption among senior curial officials at the Vatican, and supported their contention that they were forced from office.

Pannico died earlier this year after a long battle with cancer, a condition he argued in his lawsuit was exacerbated and made fatal by the seizure of his private medical records by Vatican gendarmes.

At the time of their ouster, then-sostituto Cardinal Angelo Becciu said Milone had been made to resign under threat of criminal prosecution because he was “spying” on the private financial affairs of senior officials, including Becciu himself.

In a public statement at the time of Milone’s resignation, Becciu confirmed that Milone had been threatened with prosecution and said that Milone “went against all the rules and was spying on the private lives of his superiors and staff, including me.” “If he had not agreed to resign, we would have prosecuted him,” Becciu said.

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During his audience with Milone’s successors on Monday, Francis stated that the Office of the Auditor General “does not depend hierarchically on other entities,” but is truly independent within the Roman curia.

That statement comes as Vatican judges have been considering what, if any, oversight the Secretariat of State has or previously had over the auditor’s office.

Under Cardinal Becciu’s tenure as sostituto, the Secretariat of State became the locus of resistance to attempts by Milone and Pell to audit curial finances, with the cardinal issuing an order canceling a planned external audit of all Vatican departments and moving to block oversight of his own department’s financial affairs.

Both Pell and Milone have said Becciu initially cooperated with their efforts to audit the Secretariat of State, but became confrontational after they discovered a series of loans and investments obscured from departmental ledgers using accounting practices prohibited under Vatican financial law.

Among those investments was the London property deal, the exposure of which led to a sprawling investigation and criminal trial in which Becciu is accused of embezzlement and abuse of office.

Becciu has routinely stated in court that the Secretariat of State was outside the oversight of both the Secretariat for the Economy and the Office of the Auditor General, despite no such exemption being present in either department’s remit. 

In October, lawyers for the Secretariat of State conceded Milone’s assertion that he was acting within his mandate in trying to investigate Becciu’s former department.

In legal submissions obtained by The Pillar, lawyers for the Secretariat of State defined the relationship between Milone’s former department and the secretariat as “the relationship between the ‘entity that provides to the audit of the financial statements’ (the Auditor) and the ‘entity subject to audit’ (the Secretariat of State).”

Becciu has also stated that he arranged for Milone’s ousting from office on Pope Francis’ instructions. 

Prior to his comments Monday about scandals “filling the pages of newspapers” Pope Francis has previously made clear his distaste for financial scandals becoming public.

In his 2017 Christmas address to the curia, Francis made a thinly-veiled reference to Milone’s sacking when he spoke about “persons carefully selected to give a greater vigour to the [curial] body and to the reform, but – failing to understand the lofty nature of their responsibility – let themselves be corrupted by ambition or vainglory.” 

“When they are quietly sidelined, they wrongly declare themselves martyrs of the system, of a ‘pope kept in the dark,’ of the ‘old guard’…, rather than reciting a mea culpa,” said Francis.

In the ongoing lawsuit, Milone’s legal team deposited more than 500 pages of evidence with the court which he says prove he uncovered high level corruption during his work and that he was forced from office under threat of criminal prosecution to shut his efforts down.

“What it was,” Milone told The Pillar last year, “is that I discovered that there were cardinals putting money in their pockets, they were doing strange things.”

“Evidently, [Cardinal] Becciu and his friends must have come across these reports because he was the pope’s chief of staff at the time, and got worried because ‘this guy’ was putting these cardinals in difficulty.”

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