This week: the unfolding Vatican financial scandal

By Phil Lawler (bio - articles - email) | Nov 22, 2019

The top CWN headline for this week should have been the Pope’s trip to Asia, where he stopped first in Thailand, encouraging the Catholic minority to evangelize and denouncing the sordid traffic in drugs and human flesh.

Unfortunately that wasn’t our top story. Yet again, the top story—and for that matter the #2 story—involved corruption at the Vatican.


The week began with the news that Rene Bruelhart was leaving his post as the president of the Financial Information Authority (AIF). Bruelhart, a financial expert with impeccable credentials, had been brought aboard in 2012, charged with restoring international confidence in the Vatican’s financial affairs. Bruelhart told reporters that he had resigned. Other Vatican officials said that he had completed his term—an odd explanation, since he had not been appointed for any set term.

While an official statement from the Vatican praised the Bruelhart for his service, there was unmistakable evidence that his departure was the result of another intramural battle. Remember that in October, the Vatican gendarmerie had raided the AIF offices. Now, several weeks later, both the head of the gendarmerie and the head of the AIF have stepped down—in both cases, with kind words but no explanations from the Vatican. At first the October raid looked like an effort to uncover financial wrongdoing; now Vatican-watchers are leaning toward the more cynical explanation that the raid was designed to cover up financial wrongdoing.

Although that raid itself has never been explained, reliable sources in Rome have confirmed that the Vatican prosecutor was following up questions about a loan, made by officials at the Secretariat of State, to prop up a troubled Italian hospital. The loan was made without legal authorization, kept off the books, and arranged through a Swiss bank with a reputation for involvement in money-laundering. Cardinal George Pell, then prefect of the Secretariat for the Economy, demanded more information about the transaction, and for his efforts he drew a reprimand from the Secretariat of State.

[Ed Condon of the Catholic News Agency has done a first-rate job of investigative reporting on this story, producing a series of revelations about the controversial loan and the surrounding financial transactions.]

By the end of the week, Cardinal Pietro Parolin, the Secretary of State, had taken personal responsibility for the troubled loan, saying that he did so “in order to put an end to this controversy.” But his statement is unlikely to end questions about the loan and the officials (notably Cardinal Angelo Becciu) who were instrumental in securing it and—at least for a while—shielding it from scrutiny.

Shortly after the announcement of Bruelhart’s departure, another member of the AIF board resigned, making a bit more noise as he left. Marc Odenall, a Swiss banker and philanthropist, said that he was leaving because the AIF had become “an empty shell.” He said: “We cannot access information and we cannot share information.”

Soon the cause of Odenall’s complaints became evident. The Egmont Group, an international financial-oversight agency, had suspended the AIF’s participation in the sharing of confidential information. The AIF had, quite rightly, claimed a substantial victory when the Egmont Group admitted the Vatican agency as a participant in the international exchange of information about suspected money-laundering. Now that victory has been reversed.

So that’s the story about one aspect of corruption exposed at the Vatican: a huge setback in the quest for financial accountability.


Unfortunately, there was another major setback on another important front: the festering sex-abuse scandal.

This week a prosecutor in Argentina called for the arrest of Bishop Gustavo Zanchetta, who faces criminal charges for abuse. The former Bishop of Oran, Argentina, was allowed to return to Rome in August, on the basis of Vatican assurance that he is employed there (although he is in fact suspended), to await his trial date. But the prosecutor says that the bishop has not responded to messages, and fears he may have fled.

A spokesman for the accused bishop denounced the prosecutor’s charge, insisting that Bishop Zanchetta has been cooperating with law-enforcement officials in Argentina. However, the spokesman did not disclose where the bishop is currently living, nor did he guarantee that the bishop would return to Argentina for trial.

The Zanchetta case, as I explained in a news-analysis piece, is particularly damaging to the credibility of Pope Francis, who personally appointed Zanchetta as a bishop (having previously worked with him in Argentina), then created a new position at the Vatican for him when he left the Oran diocese under a cloud.


Could I switch quickly to a more edifying subject? Possibly the most welcome news of the week—particularly for American Catholics—was the announcement that Archbishop Fulton Sheen will be beatified on December 21. The ceremony will take place in Peoria, Illinois, where the remains of the beloved preacher are now buried.

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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