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New economic standards: Pope Francis' most important reform?

By Phil Lawler (bio - articles - email) | Nov 07, 2014

Don’t look now, but the most important reform of this pontificate may have been introduced this week. Did you notice?

Many nervous Catholics are still discussing the fallout from the October meeting of the Synod of Bishops, worrying that when the Synod meets again next year, there could be a seismic shift in Church teaching on marriage. I disagree. When the dust settles, the Church’s teaching will remain at it is—as it always has been, and necessarily must be.

But the way the Vatican does business will change dramatically on January 1. And that change—a change in the culture of the Roman Curia—will not easily be undone.

On November 7, Cardinal George Pell introduced a new handbook for the management of economic affairs, including guidelines that will be applied to every office at the Vatican, beginning with the new year.

Big deal, you might say. A change in accounting rules: boring! Most reporters apparently took that view of the news, and paid only routine notice to Cardinal Pell’s announcement, if they paid it any attention at all. But what is at stake here is not merely a set of accounting procedures. What is at stake is a way of life in the Vatican bureaucracy.

To appreciate the importance of the economic reforms, one must understand that Vatican dicasteries followed no standard accounting procedures. Each office has made its own spending decisions, with little or no oversight. So the Secretariat for the Economy is not merely tweaking the existing rules; it is imposing rules where none previously existed.

When he established the Secretariat for the Economy, intending to bring reform to the management of the Roman Curia, Pope Francis signaled his determination by appointed Cardinal Pell to head the new body. The former Archbishop of Sydney was, in his youth, a star in Australian-rules football, and he has never lost his combative spirit. Of all the members of the College of Cardinals, he may be the one least likely to worry about stepping on toes, or about stating his blunt disagreement with any other prelate—including the Pope himself.

From the outset, then, the Secretariat for the Economy was tagged as a no-nonsense instrument of reform. Thursday’s announcement did nothing to change that perception. Vatican-watcher John Allen of Crux, who readily understood the importance of the reforms, also read between the lines of the seemingly dull Vatican announcement: “The implied message is that a new era is coming, and the options are to get on board or to get steamrolled.”

What is this new era? To understand what is about to happen, one must first understand what has been happening for years at the Vatican. In theory, every official of the Roman Curia serves at the pleasure of the Holy Father, and has no authority except as a representative of the Pope’s will. In practice, however, for generations Vatican officials have been able to build up their own fiefdoms within the bureaucracy.

Americans, accustomed to the notion that any official should be held accountable for his actions and decisions, may find it difficult to fathom that the Vatican operates on a much older, more personalized European system. Just as kings allowed noblemen wide latitude for conducting affairs within their own estates, Pontiffs gave curial cardinals discretion over their offices. It was considered unseemly to ask a nobleman, or a cardinal of the holy Church, to justify his decisions—much less to account for his spending.

In the past this system of Vatican governance allowed for gross corruption: nepotism, influence-peddling, and simony. In the modern era such blatant scandals have been rare. But the potential for corruption is enormous, and a subtler sort of corruption is widespread. As Allen notes, Vatican officials routinely do favors for friends. There are lavish dinners, no-bid contracts, and expensive trips abroad.

In extreme cases, this approach can give rise to the appearance, at least, of very serious improprieties. The Vatican bank is only now emerging from months of turmoil, prompted by complaints that the institution was allowing opportunities for money-laundering. The bank’s obvious vulnerability—due to a lack of clear financial standards—was enough to worry Italian regulators. Last year, when Msgr. Nunzio Scarano was arrested on money-laundering charges, he claimed that he had done favors for special clients with the approval of his Vatican superiors. That claim is obviously self-serving, but it is not completely implausible.

In less extreme cases, the potential for corruption takes the form of patronage. Money—spending power—is the life’s blood of any bureaucracy. Officials can use discretionary spending to pursue their own ends as well as those of the institution. A powerful Vatican cardinal can decide which bishops, which dioceses, and which religious orders should receive his support. So he can cultivate his own base of support.

Moreoever, the power to spend money is not the only source of temptation. The opportunity to receive favors or funds—gifts from wealthy individuals or institutions—can also sway a prelate’s judgment. It would be crass to suggest that Vatican cardinals are venal enough to accept bribes, but some free-will gifts are unquestionably more innocent than others. Remember how Father Marcial Maciel survived for years at the helm of the Legion of Christ, with investigations into his misconduct stymied by prelates who had received the benefit of his legendary fundraising process.

Transparency is the enemy of corruption, real or imagined; sunlight is the best disinfectant. So by imposing standard accounting procedures on every Vatican office, the Secretariat for the Economy is bringing the Roman Curia into the era of accountability.

Phil Lawler has been a Catholic journalist for more than 30 years. He has edited several Catholic magazines and written eight books. Founder of Catholic World News, he is the news director and lead analyst at CatholicCulture.org. See full bio.

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