ABOUT THE CHURCH AND THE VATICAN

All the Denarii of Peter:
Vices and virtues of the Vatican bank

Two hundred million dollars a year for the Pope's charities.
Where does it come from? Where does it go?
New revelations on past malfeasance in the Istituto per Opere di Religione (IOR), the Vatican bank.
And on obstacles in the way of its full rehabilitation from the scandals of the 1990s.





ROME, June 15, 2009 – In early July, the Vatican will publish its financial report for 2008, as it does every year, in two chapters plus an appendix.

The first chapter will list the income and expenditures of the Amministrazione del Patrimonio della Sede Apostolica, APSA, which manages the fixed and current assets owned by itself, the curia, the diplomatic corps, the publishing house, the radio and television stations.

The second chapter will list the income and expenditures of the governorate of Vatican City State: land, services, museums, stamps, coins.

The appendix will present the balance sheets for Peter's Pence, the Church collection for the Pope taken all over the world every year on June 29, the feast of Saints Peter and Paul, plus the donations made directly to the pope over the course of the year.

In 2007, for example, the collection and donations totaled 94.1 million dollars, 14.3 million of which came from a single donor who wanted to remain anonymous.

This is what is published each year.

Nothing else. Not a line about the other income, apart from Peter's Pence, intended for the Pope's charities. But not a line about how this sum is used.

There is an office in the Secretariat of State that deals with precisely this matter. It was directed for many years by Monsignor Gianfranco Piovano, who was replaced a few months ago by Monsignor Alberto Perlasca. Both men are career diplomats.

In addition to Peter's Pence, funding comes from contributions that the dioceses all over the world are required to make to the Successor of Peter, according to Canon 1271 of the Code of Canon Law.

Money is also sent by the religious congregations and foundations. In 2007, according to a confidential report that the Vatican sent to the dioceses, these contributions amounted to 29.5 million dollars, which together with the Peter's Pence, total 123.6 million dollars.

This money is earmarked for the Pope's charities. In a lecture to diplomats from various countries in the Middle East and North Africa, given in Rome at the Pontifical Gregorian University in May of 2007, the banker Angelo Caloia, president of the IOR (which means Istituto per le Opere di Religione) the "Vatican bank," described the use of this money:

"It is directed above all to the material needs of poor dioceses, to religious institutes and communities in grave difficulty: the poor, children, the elderly, the marginalized, victims of wars and natural disasters, refugees, etcetera."

In that same lecture, moreover, Caloia referred to another funding source of the Pope's charities: the profits of the IOR. In March of every year, in fact, the IOR makes entirely available to the Pope the difference between its income and expenditures during the previous year. This total is kept secret, but it is believed to be close to that of the Peter's Pence. At least this was the case in the four years for which figures were leaked.

It came to 60.7 billion Italian lire in 1992, 72.5 billion in 1993, 75 billion in 1994, and 78.3 billion in 1995. During those same years, the Peter's Pence was just slightly above these amounts.

Given this state of affairs, 2007 should have brought Benedict XVI, for his charities, a sum total of about two hundred million dollars.

During that same year, the ledgers showed a deficit of 9.1 million euros for APSA, and a surplus of 6.7 million euros for the governorate. Chopped liver, by comparison.

***

Caloia said little about the IOR in his lecture to the diplomats. He emphasized that this "does not have a functional relationship" with the Holy See. And he stated that the only authorized depositors are "individuals or persons juridically endowed with canonical legitimacy: cardinals, bishops, priests, sisters, brothers, religious congregations, dioceses, chapters, parishes, foundations, etcetera."

But the reality has not always corresponded to this description. When Caloia became head of the Vatican bank in 1990, it had just emerged from a terrible deficit connected to the name of Caloia's predecessor, Archbishop Paul Marcinkus, and to the reckless operations he undertook with the financiers Michele Sindona and Roberto Calvi, both of whom later died violent deaths under mysterious circumstances.

Cardinal Agostino Casaroli, the Secretary of State at the time, had resolved the dispute by ordering that the creditors be paid 242 million dollars as a "voluntary contribution."

In an agreement with the Italian government, Casaroli appointed two specialists in finance and administrative law, Pellegrino Capaldo and Agostino Gambino, to investigate the operations of the Vatican bank, together with a prelate in the Curia who had his absolute trust, Monsignor Renato Dardozzi. Dardozzi was born in 1922 and became a priest at the age of 51. He received degrees in engineering, mathematics, philosophy, and theology, and was a telecommunications manager before finally becoming director and chancellor of the Pontifical Academy of Sciences.

From that time until a few years before his death in 2003, Dardozzi continued to oversee the operations of the IOR on behalf of the Vatican Secretariat of State, under Casaroli and his successor, Cardinal Angelo Sodano.

Dardozzi documented his work of oversight. And this documentation has now been made public in a book recently released in Italy, written by Gianluigi Nuzzi and published by Chiarelettere.

The documents cited and reproduced in the book are absolutely reliable. They demonstrate that the removal of Marcinkus and his replacement by Caloia in 1990 was not enough to purge the IOR of malfeasance right away.

In fact, Monsignor Donato De Bonis stayed in the key role of "prelate" of the Vatican bank until 1993. And during those years, he launched a sort of parallel shadow bank, under his exclusive command, that again risked plunging the IOR into deficit.

It was in the spring of 1992 that Caloia began to suspect that there were irregularities. He ordered a thorough investigation, and verified that in effect De Bonis controlled accounts attributed to fictitious foundations, which in reality concealed illegal financial operations, in tens of billions of lire.

In August, a detailed report on these fake accounts came to the desk of the secretary of John Paul II, Monsignor Stanislaw Dziwisz.

De Bonis was removed from the IOR in March of 1993. No one replaced him in the post of the bank's "prelate," which remained vacant. De Bonis was consecrated bishop and appointed military chaplain of the Sovereign Military Order of Malta, a role that enjoys diplomatic protections.

[I find the Vatican practice of transferring erring prelates to other prestigious jobs very disturbing. I found it questionable when John Paul II decided to name Cardinal Law to be Arch-Priest of Santa Maria Maggiore, and it is just as questionable when a De Bonis was made Patron of the Knights of Malta - with diplomatic immmunities - after committing apparent financial hocus-pocus in a big way!

At least, at Santa Maria Maggiore, no one has accused Cardinal Law of coddling sex offender priests under him, but this Mons. De Bonis went on committing his questionable activities even after he left IOR!]

But even after his departure from the IOR, De Bonis continued to operate through officials connected to him. Alarmed by this, at the end of July Caloia wrote to Cardinal Secretary of State Sodano:

"... It is increasingly clear that criminal activity is being conducted deliberately by those who, according to their chosen way of life and the role they fulfill, should instead have provided a strict critical conscience. It is becoming more and more difficult to understand the continuation of a situation such that the person in question [De Bonis] continues, from a no less privileged position, to manage indirectly the activities of the IOR...".

The risk was all the more severe in that, precisely during those months, the Italian judiciary was investigating a colossal "bribe" paid illegally by the company Enimont to the politicians who had favored it. And the investigations also led to the IOR, as a concealed intermediary for these payments through the fake accounts operated by De Bonis.

In the autumn of 1993, the magistrates in Milan asked the Vatican, by rogatory, to provide information on the disputed transactions. The Vatican complied by providing the minimum required, less than what it had discovered in its own investigations. Some officials were replaced, the fake accounts were blocked, and De Bonis did not recover so much as a lira of the funds deposited in them.

Along with De Bonis, the cardinal in the Vatican who had been his biggest support also left the scene, José Rosalio Castillo Lara, president of both the APSA and the governorate.

In 1995 Caloia was confirmed for another five-year term as president of the IOR. And again in 2000. And yet again in 2006, after a year's extension "ad interim" amid insistent demands that he be replaced immediately.

In the summer of 2006, before leaving the Secretariat of State to his successor, Tarcisio Bertone, Cardinal Sodano nonetheless restored the post of "prelate" of the IOR, assigning it to one of his own secretaries, Monsignor Piero Pioppo.

There are still occasional calls for a change at the head of the IOR. But Caloia, 69, with an English wife and four children, is holding an appointment that lasts until March 14, 2011.

Without a doubt, thanks to him the IOR is getting closer – more so than ever before – to the image of the virtuous bank described in the lecture two years ago to the diplomats from the Middle East and North Africa.

____________


The address on the finances of the Vatican given by the president of the IOR to the school for diplomats of the Pontifical Gregorian University in 2007 is contained in the volume of the proceedings:

Angelo Caloia, The financial structures of the Holy See, in Franco Imoda, Roberto Papini (eds.), "The Catholic Church and the International Policy of the Holy See / L'Eglise Catholique et la Politique Internationale du Saint-Siège", Nagard, Milan, 2008, pp. 148-151.





*I must note here that the English translation provided by Magister inexplicably used the term "Pope's charity" in quotation marks. I have replaced that in this post by Pope's charities - without quotation marks - as the more idiomatic and appropriate translation for 'carita del Papa' (in Italian, the singular and plural forms of the noun carita are identical].

Besides, using the quotation marks for 'Pope's charity' as Magister's translator does throughout the article somehow tags this 'charity' as questionable even if that may not have been the intention.

By the way, the IOR is not listed at all among the Vatican agencies on the Vatican website. A so called 'Vatican Bank website' on the Net turns out to be a 'global URL' set up by someone and contains nothing at the moment but isolated and random news items about the Vatican from the wire services. The items have nothing to do with Vatican finances, but I don't have time to check out all the items that have been posted to see what, if any, selection principle is used for the items chosen.