Ettore Gotti Tedeschi speaks
on the resignation of the Vatican’s first auditor and
the Vatican’s continuing problem with financial transparency
Translated from
June 26, 2017
The sudden unexpected resignation on June 20 of the first ever Vatican auditor, Libero Milone, has raised a series of questions that remain unanswered.
[The Vatican did not give a reason for the resignation, only that the pope had accepted it.]
But they are part of a history that has been troubled for decades - that of the Vatican’s finances. The relationship between faith and money has generated scandals, problems and seemingly endless trouble. We asked Ettore Gotti Tedeschi, former president of IOR, to answer some questions.
Some have said that those who are given the responsibility for Vatican finances seem to be cursed. Is there something to that? Where does the curse lie?
To resolve a complicated situation, and before proposing an prognosis, we must be sure to have a good and correct diagnosis. And that cannot be done if the original causes of a problem are not thoroughly investigated. People will continue to be replaced or shuffled – without allowing them to resolve these causes – thinking that miraculously, they will succeed. But since miracles are not wrought by common mortals, they do not normally happen, and then people say that “There is a curse that afflicts Vatican finances”. In their dreams!
But there is a lack of will to resolve the true causes of the problems being generated – and that is the ‘poison’ in the system. Beyond the chatter that Vatican communicators manage to circulate successfully in the media in various ways, the explanation for the fundamental problem why this apparent ‘curse’ will continue – and won’t be exorcised until the necessary order is established – was in
the change and execution of the process of transparency desired by Benedict XVI and which he decreed in a motu proprio in December 2010.
What did this process of transparency entail?
Since the attack on the Twin Towers in New York City on September 11, 2001, the international norms of transparency in the management of financial activities underwent a change towards greater rigidity, in order to combat not just laundering of dirty money but also the financing of terrorism.
From then on, all ‘fiscal and monetary paradises’ were supposed to disappear, and the standards for financial transparency became more wide-ranging. This obviously also affected the financial activities of the Holy See even if these are principally directed to works of religion.
His Holiness Benedict XVI immediately understood that accepting these norms would mean accepting international rules on transparency which were necessary and timely, and constituted a true opening to the world, in the form of agreements about regulating financial transactions with the financial world.
[This was a truly historic decision because it was the first time ever that the Vatican had ever agreed to be 'inspected' by an outside agency.]
Moreover, it was clear to Benedict XVI that the credibility of the Pope and of the Church were of utmost value to bestow prestige on such international standards so that they would be better heeded. He wanted the Vatican to be exemplary in this respect, even for other countries.
And what does a process of financial transparency mean? It means a system of laws that promote and regulate it, with specific procedures for the practical application of such laws, plus a system that guarantees such application, internally and externally. This was what the Vatican did in 2010 and 2011.
But shortly thereafter (between the end of 2000 and the start of 2012), the system was ‘mysteriously’ changed – since when there has been no ‘peace’. Even poor Pope Francis, while taking into account the complexity and the risks of having so many financial agencies within the Vatican, manifestly never received enough adequate recommendations.
One of his first decisions was to unify everything that had to do with Vatican finances and economy in a single dicastery. Which, however, has been gradually losing its powers. Was that reform not practical? Or are there too many forces within the Vatican that have become too strong and too consolidated for the dicastery to function well?
As Benedict XVI wrote in
Caritas in veritate,
when a situation is too complicated and serious, it is not enough to change your instruments for dealing with it – one must change the men who use these instruments. But choosing the right men who have specific competences and characteristics appropriate for executing reforms is not easy. One must have adequate competent advisers who can suggest adequate solutions.
Much has been said about APSA (Administration for the Patirmony of the holy See], of IOR and other agencies in the Vatican, but very little is said about the Economic Section of the Secretariat of State. Is it important? Does it figure significantly in the overall context of Vatican finances, or not at all? Did it have a role in recent events [like Milone’s resignation] as some have speculated?
I don’t know what role it may have played. I believe that its role and functioning depends also on who is the Secretary of State. The present one appears to me – and it is confirmed by everyone – to be intelligent, competent, trustworthy, as well as a man of God. It would be important to know if he knows how to delegate authority.
But I think that more than that Economic Section, there is another organ that is very important, though it is normally forgotten when Vatican finances are discussed This is the Authority for Financial Information (AIF), which was the controlling organ desired by Benedict XVI and which he entrusted to the late great Cardinal Attilio Nicora, who headed it in its first two years. He was subsequently replaced during an uneasy and controversial period by other persons who seemed to have competed in changing the original law on financial transparency and against money laundering that Benedict XVI had promulgated.
According to the standards adopted in 2010, AIF was supposed to be the agency that would control the adequacy of the financial laws and regulations and their conformity to the procedures defined for every order of financial activity within the institutions of the Holy See. Today, I do not know what it does principally. Its auditors would normally be limited to establishing and evaluating the conformity of written accounts with accepted accounting principles.
[For the past three years, however, AIF - under a high-profile lay director - hs made annual news by reporting the number of cases of potential financial malfeasance it has investigated and how many prosecutions have resulted from these ivnestigations.]
Is this a ‘game’ that is principally played within the Vatican, or are there other important protagonists outside the Vatican, and what role would they have?
It would seem obvious. But it is the AIF that should answer these questions.
In January 2015, you wrote an open letter published in the Catholic Herald that was addressed to the Prefect of the Secretariat for the Economy, Cardinal George Pell. What prompted you to do that?
Because one month earlier, also in the Catholc Herald, Cardinal Pell gave an interview in which he said that
“finally, in this new pontificate, the finances of the Holy See are under control”. I took on the liberty and responsibility of correcting him, to point out
that those finances were already ‘under control’ with the norms, procedures and structures legislated by Benedict XVI – and I had to explain when and how those came to be modified and with what consequences.
I also explained which facts, in my opinion, motivated my dismissal as president of the IOR, an infamous event about which, for the good of the Church, I had requested many times, but in vain, for my side to be heard. I also told him which documents he ought to examine to understand what happened from 2011 to the end of May 2012
[when Gotti-Tedeschi was voted out of IOR] and determine who was responsible for what happened. Also to read the interview given by Mons. Georg Gaenswein in Otober 2013 about those events, and to ask about what happened on February 7, 2013, at 6 pm in an apartment in the Citta Leonina. But I have never learned if Cardinal Pell did as I suggested.
What was it that happened?
Cardinal Bertone personally communicated to me – at the home of a cardinal (as I refused to enter the Vatican) – that the Holy Father Benedict XVI had decided on my immediate ‘rehabilitation’ and asked me to be available in Rome during the next few days. But the Holy Father announced his renunciation on February 11, and I was never called after that.
[To my knowledge, this is the first time that Gotti Tedeschi has revealed these specifics although he has referred to it in general terms before.]
[The whole story about the changes made in 2011 to the original transparency rules and regulations promulgated by Benedict XVI in 2010 and Gotti Tedeschi’s later ‘defenestration’ by the IOR Board of Directors has never been clear – and Gotti Tedeschi does not help clear it up by never saying who was responsible for the changes he obviously disagreed with.
In all the reporting at the time, it appeared that Cardinal Bertone, who headed the Cardinal’s Committee responsible for oversight of the IOR, was principally responsible for said changes, but I could never understand why and how he could simply override Benedict XVI on this matter.
Especially since the original norms and regulations set down by Benedict XVI – and principally drafted by Gotti Tedeschi and his team - had been the basis for the Council of Europe’s Moneyval bank supervisory agency to evaluate the financial operations and procedures of the Holy See in order to include it on the White List of countries whose financial institutions were certified to be compliant with international banking regulations specifically against money laundering and denying funds for terrorism.
It appeared at the time that the changes to the original norms were made in 2011 prior to the second evaluation of Vatican financial operations by Moneyval, ostensibly to be more compliant with Moneyval requirements.] [Modificato da TERESA BENEDETTA 28/06/2017 01:05]