The issue of purchasing the London apartment also brought to light situations that Cardinal Pietro Parolin called “opaque”. The Financial Intelligence Authority had subsequently cleaned up the operation. Still, the presence of Vatican officials on the boards of the companies involved in the purchase transactions, highlighted by the Catholic News Agency, shows that there were at least questionable operations and reformed.
That was precisely the meaning of the reforms launched by the Financial Intelligence Authority. Seen from this perspective, Pope Francis’s decision to cut loose both the President of the Authority, René Bruelhart, and the director, Tommaso Di Ruzza, who were the architects of the financial reform that earned the Holy See great international credit, is inexplicable.
Cardinal Pell thought he was going to break this system of small interests (someone would say corruption) with a Vatican Asset Management outfit set up and controlled from outside the old power structure, brought out of the Vatican, and by the influence of some circles. The auditing contract signed with Pricewaterhouse Cooper in 2016 also came from that rationale. The agreement was then renegotiated so that the sovereignty of the Holy See would be preserved.
The role of the APSA
APSA is regarded as a central bank and is the institutional-governmental investor of the Vatican City State. It operates exclusively on behalf and in the interest of the organs of the Holy See or of the State itself.
Economic reform has taken many steps back and forth.
The reform began in 2014 with the motu proprio Fidelis Dispensator et Prudens, which led to the formation of the Secretariat for the Economy, the Council for the Economy, and the Vatican Auditor General.
The new Vatican pension fund statutes of May 29, 2015, stipulated that the president of the Fund’s administration would no longer be the president of APSA, but would instead be appointed.
In October 2016, even the Administration of the Patrimony of the Apostolic See underwent a small reform that had changed the functions of its consultors, which had become part of a “supervisory board”.
This reform brought to a tilt in the Vatican system. The reform seemed to treat APSA like a bank, although it was not.
Until 2016, the APSA had accounts of only 23 people (15 members of the clergy and eight laypeople). For this reason, it also came under the jurisdiction of the Vatican Financial Intelligence Authority for a period. The closure of the accounts ended in 2016. Therefore the APSA no longer came under the jurisdiction of the AIF, as highlighted in the third progress report of the Committee of the Europe Council MONEYVAL.
Now, it will be a question of whether the centralized investment fund being discussed will be a sovereign wealth fund linked to the "central bank" or whether it will be treated as an external fund, as was the initial proposal.
Until now, the work done by Archbishop Pena Parra, deputy of the Vatican Secretariat of State, has been to break the old circles of power while maintaining the sovereignty of the Holy See.
A clear example was Monsignor Rolandas Makrickas at the helm of the administration of the Secretariat of State. Monsignor Makrickas is the first non-Italian to take up that position and is totally outside of any circuit until now had managed the operations.
It is all about understanding what the underlying philosophy of the reforms will be.
The reform of the Curia was also born with the idea of reducing staff, and it is no coincidence that a freeze on hiring has been in place since 2014. The Secretariat for the Economy also spoke of flexibility in the remuneration system and of providing more significant opportunities for employees.
However, it would be a matter of changing an entire mentality, which is the most complex work. The success of the financial reform of Pope Francis will be played on these issues. Set aside the problematic reform of the administrative ranks, the new investment funds remain the only option.
So will there be only one investment fund? By whom or what will it be managed? With what criteria?
These are some of the burning questions,.
This is the third of a series of three pieces on Vatican finances. The first piece can be found here. The second piece can be found here.