Through his company Imvest, which was raided by Italian financial authorities last year, Capaldo is linked to, among others, Giampiero Nattino, an Italian banker investigated by both Italian and Vatican authorities for money laundering and market manipulation through accounts at APSA, the Vatican’s central reserve bank.
Moneyval will almost certainly be hoping to read a full account of a 50 million euro loan made by APSA to the Secretariat of State to partially fund their purchase of a bankrupt hospital. APSA later wrote off 30 million of that loan, and blamed the write-off for its failure to record an annual profit for the first time in its history.
Leaving aside the circumstances of the hospital itself, which reportedly involve the disappearance of shoe boxes full of cash, along with millions in bogus invoices, links to a Congolese oil company and suggestions of good, old-fashioned nepotism, the APSA loan was made - again over the objections of Cardinal Pell - against specific policies put in place at the behest of Moneyval.
Following a 2012 on-site inspection, APSA agreed to cease granting loans for commercial ventures, like the Secretariat’s for-profit purchase of the hospital.
That agreement also exempted APSA from oversight by the AIF, the Vatican’s internal Financial Information Authority, which ceased inspections the same year the loan was granted, in 2015. Depending on how forthright Vatican authorities are about what happened, and what remedial action they offer to take, Moneyval may be left with no option but to revisit those exemptions.
Although multiple senior sources across Vatican departments have consistently identified Becciu as the driving force behind the loan, Secretary of State Cardinal Pietro Parolin took personal responsibility for the project last week, along with an attempt to offset the loan with a grant from a U.S. foundation (obtained with the help of Theodore McCarrick).
Parolin’s claim, that all this was done with “fair intentions and honest means” may well be included in next month’s progress report. It is not certain whether Moneyval analysts will agree, or whether they will judge that good intentions suffice to cover policy violations.
Of course, it is not all bad news. Some progress has been made, and will no doubt be highlighted.
At the time of Moneyval’s last report, in 2017, the watchdog noted the Vatican had yet to prosecute a case of money laundering in court. The “overall effectiveness of the Holy See’s engagement with combating money laundering depends on the results that are achieved by the prosecution and the courts,” the report concluded.
In response, the Vatican successfully prosecuted its first money laundering case last year.
In 2017, Moneyval also noted that the AIF “seemed to be working efficiently as both a financial intelligence unit and as supervisor of the one financial entity in the Holy See.” If the AIF is still working efficiently in 2019, it would need to be running on auto-pilot. Indeed, perhaps the most pressing question about the December AIF report is who is left to write it.
Among those suspended following the Oct. 1 raids by Vatican gendarmes was AIF director Tommaso Di Ruzza, who was subsequently given a clean bill of health by his own agency, which expressed hope that the matter would “soon be clarified.”
Just over three weeks later, AIF president René Brülhart resigned his post. On the same day, it was announced that the Egmont Group of 160 national financial watchdogs had suspended the AIF. Marc Odendall, a member of the AIF board, quit his post, calling the agency an “empty shell” and saying further affiliation with it would be “pointless.”
The chief of the Vatican gendarmes who organized the raids was also forced to step down last month.
After months of steadily building media coverage, the reaction from the Vatican has begun to shift slightly. After repeatedly being identified as the driving force behind the APSA loan to purchase the hospital, Cardinal Becciu told CNA that the matter was the “exclusive competence” of the Secretary of State, “Bertone and then Parolin.”
Subscribe to our daily newsletter
At Catholic News Agency, our team is committed to reporting the truth with courage, integrity, and fidelity to our faith. We provide news about the Church and the world, as seen through the teachings of the Catholic Church. When you subscribe to the CNA UPDATE, we'll send you a daily email with links to the news you need and, occasionally, breaking news.
As part of this free service you may receive occasional offers from us at EWTN News and EWTN. We won't rent or sell your information, and you can unsubscribe at any time.
When Parolin accepted ultimate responsibility for the APSA hospital loan last week, he told CNA he felt “compelled” to do so “in order to put an end to a controversy that takes away time and resources from our service to the Lord, to the Church and to the Pope, and disturbs the conscience of many Catholics.”
That controversy has not ended, and is only likely to intensify in the coming weeks.
And although he first dismissed concerns about the London property investment, describing the Vatican’s action as “accepted practice,” Cardinal Becciu recently took to Twitter to denounce CNA’s report of his alleged “involvement in financial impropriety ‘discovered’ by Card Pell” as “shamefully misleading” and “false.”
The next day, a veteran Vatican journalist said Becciu’s involvement in the London property deal, the hospital loan project, and his clashes with Pell were “common knowledge” among curial officials at the time, or “well known by now.”
Having already described the London deal as “opaque” while promising to look into the matter further - to the objections of Becciu - Cardinal Parolin may find that, to Moneyval, the problems raised by the deal are all too clear.
Before Monyeval issues its response to the Vatican’s December update, Parolin may find himself needing to offer the pope, and the faithful, substantive means of demonstrating accountability in the curia.
If the Holy See is to avoid returning to international financial “blacklists,” it will need to show it means business, and not business as usual.