The Holy See invested funds in a pharmaceutical company which produces an emergency contraceptive “morning after pill,” an Italian news outlet reported, but sold its shares in the company when the Vatican’s auditor reported the investment to senior Church officials.
According to a former senior official at the Secretariat for the Economy, the Vatican held the shares at the same time that former Vatican finance czar Cardinal George Pell pushed for policy that would have required Vatican investments to align with the principles of Catholic social teaching. Pell first proposed that policy when he was appointed to the Vatican in 2014, but when financial advisors pushed back on the plan, the cardinal’s efforts were stymied.
Libero Milone was until 2017 the first auditor general of the Vatican Curia, a position he held until Cardinal Angelo Becciu accused Milone of spying on him, and threatened him with criminal prosecution if he did not resign.
In an April 26 interview with Italian broadcaster Rai3, Milone said that APSA, the Holy See’s investment management and real estate office, had made investments that “did not correspond to the social doctrine of the Church.”
Rai3 reported that APSA held shares worth 20 million euros in two Swiss pharmaceutical companies: Roche and Novartis, which produces and distributes so-called emergency contraceptive pharmaceuticals. The report did not indicate whether Vatican employees or outside investment managers had initially made the investment, or were responsible for its oversight.
“Emergency contraceptives” can be used to prevent both ovulation and fertilization, and at least some such drugs, according to the Food and Drug Administration and other public health authorities, “may prevent a fertilized egg from attaching to the womb.”
According to Rai3, when the auditor general’s office discovered APSA investment in the pharmaceutical company, it was reported to senior Vatican officials, and the Novartis shares were sold in 2016.
Catholic doctrine holds that “human life must be respected and protected absolutely from the moment of conception.” A pharmaceutical preventing a human embryo from adhering to its mother’s uterine wall - the process called implantation - is regarded by Catholic doctrine to be an abortifacient.
The former senior Vatican official told The Pillar that when Cardinal George Pell was appointed in 2014 the inaugural head of the Vatican’s Secretariat for the Economy, he proposed investment norms that would have prohibited the investment of any Vatican funds in companies seen to directly contravene Catholic social doctrine, including pharmaceutical companies producing abortifacients.
That effort was stymied by resistance both by curial officials and the Vatican’s financial advisors, the official said, and when Pell left the Vatican in 2017, a policy still had not been approved.
“The desire to have a clear policy for ethical investments was a priority under the initial phase of reforms which [Cardinal Pell] tried to bring in. It was on a very short list of top priorities, but virtually no progress was ever made.”
“The idea that you had to model the Church’s teaching in the way its money is invested was totally foreign to the people in charge of the money. Their absolute priority was making a return, there just wasn’t any other consideration, and the suggestion that there should be was treated as fanciful.”
Asked if a policy is now in place at APSA or other Curial departments regarding the alignment of Church investments with Catholic moral and social teaching, the former official told The Pillar that there was resistance to attempts to initiate such a policy.
“They didn’t have one when the work of financial reform began, and there wasn’t one [by the time Pell left in 2017],” they said. “I would be shocked to discover that one has been brought in over the last several years, such was the resistance [to the idea].”
Of the investments in the pharmaceutical companies, the former official said it was “new news to me” and that he was “shocked but not surprised.”
“What is so maddening about the resistance [to bringing in ethical investment standards] is that the Church has a lot to say about issues like modern slavery in the supply lines, moral means of research and development and so on.”
“She should be modeling this teaching, if for no other reason than that it’s good for business.”
Responding to the Rai3 report and Milone interview, the current president of APSA, Bishop Nunzio Galantino said that he was not working in APSA at the time the investments were made or sold and was unable to comment on the specifics of the report. Galantino was appointed by Pope Francis in 2018, he was previously secretary-general of the Italian bishops’ conference (CEI).
“In 2016 I was not APSA, I was at the CEI,” he told Il Fattoquotidiano April 27.
“I can say with certainty that ethical criteria are followed for investments [now],” he said.
Galantino pointed to the investment policies of the Italian bishops’ conference.
“Among other things, a reference can be found in the CEI’s 2020 text entitled 'The Catholic Church and the management of financial resources with ethical criteria and social, environmental and governance responsibility'.”
Galatino also said that he was unfamiliar with the Rai3 report, and that he did not watch the channel’s news programming.
The U.S. bishops’ conference set in 2003 investment policies for USCCB funds, which includes the “absolute exclusion of investment in companies whose activities include direct participation in or support of abortion. Direct participation in abortion may include, but not be limited to, companies involved in the manufacture of abortifacients and publicly held health-care companies that perform abortions when not absolutely required by federal or state law.”
Milone was appointed the Vatican’s auditor general in 2015, after reaching positions of global management at accounting firm Deloitte, and serving on the audit committee of the UN World Food Program. While Milone had regular access to the pope for his first year in his Vatican position, he says that in September 2016 Secretariat of State officials told him he needed to request papal appointments through their service, and he was not subsequently permitted to see the pope.
While he had not given extensive public comment on Vatican affairs since his 2017 sacking, Milone this week also confirmed reports, first made in 2019, that his office and the Secretariat for the Economy had as early as 2016 detected the investments made by the Secretariat of State which led to its controversial London property deal. Efforts to investigate the deal were rebuffed by the Secretariat of State when Vatican finance officials pushed for details.
Milone’s interview comes as Vatican prosecutors continue a sprawling investigation centered on financial affairs at the Secretariat of State, which is examining whether senior secretariat officials invested in a London property without proper authorization. Gianluigi Torzi, the businessman who brokered the deal, is charged by the Vatican with money laundering, extortion, embezzlement and fraud, while prosecutors continue to investigate other figures connected to a series of suspect transactions.
This report was updated after publication to include that Rai3 did not indicate who was responsible for APSA’s purchase of Novartis shares, or under what conditions.