Vatican court rejects auditor's wrongful dismissal lawsuit

Judges rejected arguments by Libero Milone that the Secretariat of State was liable for his ousting from office

A Vatican City court on Tuesday dismissed a lawsuit filed against the Secretariat of State by former Vatican auditors, who were ordered to pay tens of thousands of euros in court costs.

Former Auditor General of the Vatican, Libero Milone.

In a decision dated Jan. 22, the court rejected the claims brought by Libero Milone, the former auditor general of the Vatican and his recently deceased former deputy, Ferruccio Panicco, over their ousting from office in 2017.

In addition to rejecting their requests for compensation, the court also ordered both men, including the deceased Panicco, to pay legal costs amounting to more than 100,000 euros between them. 

While the court did not conclude that Milone and Panicco had been rightly forced from their jobs, the judges rejected the argument that the Secretariat of State was liable for their ouster, loss of earnings, and subsequent damage to their reputations.

“The question to be addressed is… whether the facts put forward by the plaintiff as the basis of its claims can be considered as attributable to the Secretariat of State,” wrote judges in the decision, a copy of which was obtained by The Pillar. 

“Upon careful examination, however, this attribution must be excluded.”

The court said that Milone’s own account blamed other Vatican officials for his forced resignation, without impugning the Secretariat of State directly.

“In particular,” the judges decided, “the alleged threats underlying the forced signing of the letters of resignation (by Milone and Panicco) according to the narration of the facts made by the plaintiff himself were perpetrated by the then commandant of the Gendarmerie Corps [of Vatican City] Domenico Giani, by Col. Alessandrini, and by Gauzzi Broccoletti, subjects therefore certainly unrelated to the Secretariat of State which cannot be therefore held responsible for such conduct.”

Milone has argued that gendarmerie figures were acting in concert with Cardinal Angelo Becciu when they forced him and Panicco to resign.

The sentence is open to possible appeal in Vatican City court. Contacted by The Pillar on Wednesday, Milone declined to comment on the decision, saying he would meet with his lawyers in the coming days to decide how he would proceed.

Panicco, who died last year at the age of 63, suffered from cancer for a number of years and had accused the Holy See of seizing and withholding his personal medical records, delaying his treatment and ensuring an eventual terminal diagnosis.

As part of the pre-trial process in the lawsuit, Panicco and Milone filed several hundred pages of documents, which they said prove widespread corruption among senior curial officials at the Vatican, and prove that they were forced out for discovering that corruption.

Milone has in the past indicated he would consider releasing those files to the public if his lawsuit proved unsuccessful.

—

Milone, the first person to hold the position of Auditor General of the Vatican, was appointed by Pope Francis in 2015.

Milone and Panicco announced in November 2022 that they would sue their former employers for wrongful termination, loss of earnings, and reputational damage over their ouster from office in 2017. 

At the time of their departure from office, both men were detained for hours by Vatican City gendarmes and threatened with prosecution if they refused to resign their posts.

Milone alleges that he was forced from office because he had discovered systematic corruption in the highest levels of the Roman curia and that his office and computer had been put under surveillance for months.

The court’s finding that Milone and Pannico were forced from office by the former leadership of the Vatican City police force but not in a way creating liability for the Secretariat of State is likely to generate questions from Vatican watchers.

At the time of his removal from office, the then sostituto at the Vatican Secretariat of State, Cardinal Angelo Becciu, released a statement confirming his own role in Milone’s detention, and that the auditor would have faced prosecution had he not agreed to resign. 

Becciu accused Milone of “spying” on the private finances of senior curial officials, including Becciu himself. In a separate case, Becciu was convicted of corruption and abuse of office by a Vatican City court in December last year.

Milone has previously said he was fired because he was digging for the kind of records which eventually got Becciu indicted and convicted – looking in Becciu’s department for records of questionable investments and illicit financial practices.

“When we started to examine the financial statements of the Secretariat of State in March 2016, we were handed a piece of paper showing roughly 800 million euros in investments. So we asked for the information and for a good many months I never got the information.”

“Now I know why they weren’t giving it to me, on the basis of what happened with [London investment property] Sloane Ave.”

Key to the auditors’ claims, according to court filings reported by The Pillar last year, was that it was the then head of the Vatican Corps of Gendarmes, Domenico Giani, who along with Cardinal Becciu forced their resignations.

“What it was,” Milone told The Pillar in 2022, “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.”

The former auditor claimed that Giani had also engaged in his own financial misconduct, and that when Milone discovered it, the police chief formally accused them of illicit spying. 

The former auditors have also previously stated that their Vatican offices had been bugged and computers hacked. Milone has said that although he made several complaints to Vatican gendarmes, under Giani, the security breach was never investigated.

Speaking to The Pillar in 2022, Milone noted that Giani “had a reason to get me out,” because he had uncovered evidence of corruption in the Vatican police force.

Since their dismissal, Milone has previously said, he and Panicco made several attempts to reach an out-of-court settlement with the Vatican through the Secretariat of State but without success. Milone has said he has been unable to work because of the reputational damage he has suffered because of the Vatican’s statements about him.

Milone and Pannico petitioned the court in January to consider the roles of specific cardinals in financial malpractice and to be allowed to call them to give testimony in the lawsuit. That petition was denied by the judges on the grounds that the requests were “not relevant for the purposes of the decision of the present case.”

In the ruling Jan. 22, the Vatican City court ordered Milone to pay a total of 49,336,00 euros in legal costs to the Secretariat of State and the Office of the Auditor General, both of which were named in his suit. 

Pannico’s estate was ordered to pay 64,140 euros in costs. He died in June of last year at the age of 63. Prior to his death, he said that when he was fired, medical records kept in his office were seized by Vatican police. Those records showed that Panicco had heightened PSA levels, a key marker for prostate cancer. They also showed the results of medical tests Panicco underwent in the Vatican’s clinics.

Without the records, Panicco had to find a new urologist after he was fired, and repeat the medical tests he had already taken.

“I estimate that the delay in the diagnosis could be at least 12 months, and I think that without this delay in the diagnosis it would have been early enough not to have an incurable disease,” he told the media in 2022.

Despite requests to Secretary of State Cardinal Pietro Parolin and other officials for the return of his medical records, the documents were never returned.

“​​I think they — the Vatican — are guilty, not maliciously, of sentencing me to death for no reason, after a slow and significant suffering,” Panicco said before his death.