On October 1, Vatican police staged a surprise raid on the offices of the Financial Information Authority (the financial watchdog authority known as the AIF) and the Secretariat of State, the most powerful department in the Vatican at the center of diplomacy and bureaucracy. The Vatican has released a statement saying the police took away documents and electronics in order to investigate “suspected financial irregularities.” The investigation was a follow-up to complaints filed by the independent Vatican Bank (formally known as the Institute for the Works of Religion, or IOR); the complaints allegedly concern “irregular financial transactions in the millions” regarding the buying and selling of Vatican-owned real estate.
It is believed to be the first time either of the organizations have been searched for evidence of financial crimes. Pope Francis has instituted financial reforms that have increased transparency in Vatican dealings in order to eliminate corrupt practices. Last year, a former head of the IOR and an Italian lawyer were out on trial for alleged money laundering and embezzlement through real estate, which is still in progress. The AIF released a statement in 2018 noting that reports of “suspicious financial activity” had reached a six-year low, which lends credence to the recent reforms. The IOR has closed hundreds of illegal accounts opened by Italians, which had been created with the help of former IOR officials.
On October 14, the longtime chief of the Vatican police, Domenico Giani, resigned after information regarding the raid on October 1 was leaked to the Italian press. The Italian paper L’Espresso also published the order that was issued to all Vatican policemen as well as the information of five employees following the raid. The Vatican released a statement condemning the leak and publication of the order, calling it “prejudicial to the dignity of the people involved.” The statement also included information on Giani’s resignation, clarifying that “[i]n order to assure the proper serenity to the ongoing investigation … and although the Commander bears no personal responsibility in the unfolding of the events, Domenico Giani has tendered his resignation.” Giani had served as Francis’ foremost bodyguard for public events and organized the security for the pope during his international visits. Giani has said in an interview that the information leaks has caused Francis “great pain” and said he has resigned “out of love for the Church” and to preserve the dignity of the individuals involved.
The President of the IOR, Frenchman Jean-Baptiste de Franssu, has stated that, contrary to the belief among Italian journalists that the Vatican is in financial chaos, these new cases being brought to light are a sign that the reforms of Pope Francis are working. According to CruxNow, Franssu has insisted the revelations of previously opaque real estate dealings, such as a $200 million property deal in London carried out by the Secretariat of State, are the direct result of new reporting requirements put in place by Francis and his predecessor, Pope Emeritus Benedict XVI. Franssu also argues that besides papal pressure, reforms are also driven by the risk of not acknowledging international regulators’ scrutiny in order to make future deals with other countries; in 2017, Italy placed the Vatican on its list of countries with “cooperative financial institutions” after years of mistrust. Franssu says the Vatican still has a long way to go, but has already made significant progress in reforming its finances.
Grant is a senior studying Information Systems at the Carroll School of Management. He keeps busy by studying and writing for The Torch.
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