Judges in Vatican City overruled this week a litany of objections from the Secretariat of State, allowing a wrongful dismissal lawsuit filed by the Holy See’s former auditor general to go ahead.
The three judge tribunal announced Tuesday that Libero Milone and his former deputy can go ahead with a multimillion dollar claim against their former employers, despite a host of legal objections raised by Vatican officials, and despite the prospect of criminal prosecution which the former auditor has called retaliatory.
The decision, signed March 9 but communicated to the parties by decree on March 14, rejected several arguments from lawyers for both the Secretariat of State and Milone’s former department, the Office of the Auditor General. The court also set a date for a second hearing in May.
Milone and his former deputy, Ferruccio Panicco, filed suit Nov. 4 last year, claiming that they were forced from their roles in 2017 and unfairly threatened with criminal prosecution, because of discoveries they made while doing their work.
Milone has previously argued that he was forced out because his office had uncovered corruption by senior members of the curia.
In a preliminary ruling, a copy of which was obtained by The Pillar, the three judge panel rejected several arguments from the Secretariat of State claiming the court lacked jurisdiction to hear the case.
The court found that, contrary to arguments made by the Office of the Auditor General, Milone’s legal team had deposited sufficient indications of how they would substantiate his claims and provided sufficient supporting evidence to proceed to trial.
The judges also noted that, despite the AG’s office complaining that Milone had not filed supporting evidence, lawyers for the department simultaneously complained in their filings that Milone’s team had filed too many documents without sufficient supporting indexing.
Milone’s legal team had previously deposited more than 500 pages of evidence 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.”
The ruling this week marks a new setback for curial lawyers opposing Milone’s suit, after the court agreed last month to allow a senior Italian lawyer to join Milone’s Vatican legal team over the objections of opposing counsel.
The judges also rejected arguments that Milone was a top-level Vatican civil servant, and so his claim for wrongful dismissal could only be processed by the curia’s internal HR department and process.
Lawyers for the secretariat further argued that since Milone had been appointed in 2015 on behalf of Pope Francis, his loss of that office was covered by canon 1404 of the Code of Canon Law, which bars appeals against acts of the pope. But, the court ruled, although Milone had been appointed in the name of the pope, the canonical provision that “‘The first See is not judged by anyone’ concerns only the acts directly referable to the Pontiff or those which he makes his own with the express and formal approval or acceptance.”
Milone’s letter of appointment cited Francis, but it was issued by the Secretariat of State, and signed by the Cardinal Secretary of State Pietro Parolin and did not include the necessary legal language to make it an unappealable papal act, the court ruled.
Becciu was promoted out of his role as sostituto at the Secretariat of State in June, 2018 and made a cardinal. Pope Francis sacked him from his curial roles and forced his resignation of the rights of a cardinal in September, 2020. Becciu is currently on trial in Vatican City for embezzlement, abuse of office, and other charges, all of which he denies.
Milone has previously said that although his official files were seized by Vatican gendarmes in 2017, he still has access to records he kept at his home during his tenure as auditor general, files which he claims will exonerate him from the accusation of spying and demonstrate a culture of financial corruption at the Vatican, including among senior cardinals and curial officials.
In an initial hearing in January, lawyers for the Secretariat of State and the Office of the Auditor General petitioned the court to have the suit thrown out, together with the Vatican public prosecutors’ office, which has reopened a criminal investigation into the auditors.
The two men are seeking more than 9 million euros in compensation for lost earnings and damages, including 3.5 million euros Panicco is seeking in material damages for the seizure of personal medical records from his Vatican office which, he says, led to a year-long delay in his diagnosis and treatment for prostate cancer, which has now progressed to a terminal stage 4.
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At the time of Milone’s dismissal, Cardinal Angelo Becciu, then the sostituto (chief of staff) at the Secretariat of State, said the former senior Deloitte executive had been “spying” on the private finances of senior curial figures, including Becciu himself, and would have been prosecuted had he not resigned.
Milone has also said that the documents he has submitted to the court prove personal acts of embezzlement by cardinals, and the use of Vatican institutions, like the city state’s governing apparatus and the Bambino Jesu hospital, for money laundering. Milone has said he does not intend to “name names” or make his evidence public unless he is denied the chance to clear his name in Vatican court.
In the decision published Tuesday, the judges also dismissed a petition filed by the Secretariat of State and the Office of the Auditor General to make Milone liable for their legal costs in the process thus far — the judges said court costs would be determined at the conclusion of the trial.
While the judges dismissed all the objections brought by the secretariat and AG’s office, they also allowed a third Vatican department, the Office of the Promoter of Justice, to continue in the case.
The Vatican public prosecutor’s office filed to become a third party to the legal process, citing the public interest of justice in Vatican City and, as has previously been reported, reopened a dormant investigation into Milone and Pannico in apparent response to their decision to file suit.
The judges decided to defer “any decision regarding the existence in the present case of the public interest that can justify the spontaneous intervention of the PoJ.” The judges also noted that, for the moment, “the intervention does not appear to be determined by the sole purpose of delaying the proceeding, nor is it actually the cause of a delay in carrying out the process,” and so the prosecutors could continue their involvement.
The intersection of Milone’s case with Vatican law enforcement has proven difficult for the prosecutors’ office to juggle with its other ongoing cases.
Key to Milone’s claims, according to the judges’ decision this month, is that it was the then head of the Vatican Corps of Gendarmes, Domenico Giani, who along with Cardinal Becciu forced his resignation.
The former auditor claims that Giani engaged in his own financial misconduct, and that when Milone discovered it, the police chief formally accused him of illicit spying. The former auditor also recalls finding that his Vatican offices had been bugged and his office’s computers hacked, and claims that while he made several complaints to Vatican police, the security breach was never investigated.
Speaking to The Pillar in November, Milone noted that Giani “had a reason to get me out,” because he had uncovered evidence of corruption in the Vatican police force.
The Promoter of Justice’s interest in Milone’s suit, and the decision to reopen a criminal investigation of him and Panicco, also raises questions about the ongoing criminal trial of Cardinal Becciu and several other former officials and advisors to the Secretariat of State.
Milone and Becciu have each offered conflicting narratives of the auditor’s actions and departure from office and the chief prosecutor Alessandro Diddi’s decision to pursue seemingly mutually exclusive and contradictory cases has raised questions about his legal strategy.
The lawsuit will resume with a second hearing scheduled for May 10.