Vatican’s financial-misconduct trial was a step backward on transparency

By Phil Lawler ( bio - articles - email ) | Oct 17, 2017

At last, a Vatican prosecutor has obtained a conviction on financial-misconduct charges. Unfortunately, the conviction looks like a step backward for the cause of financial transparency.

For months now, the Vatican has been under pressure to bring criminal charges for financial misconduct. In December 2015, a report by the Moneyval, the European financial watchdog, applauded the Holy See for instituting new rules on financial transactions, but cautioned that the Vatican “needs to deliver some real results on the prosecutorial side.” The new regulations looked strict enough, but if no one ever paid a penalty for violating those regulations, the Vatican still couldn’t be judged as a reliable partner in international business transactions.

So now, nearly two years after Moneyval delivered that critique, the Vatican can boast its first “real result.” But does it inspire confidence? Judge for yourself.

Giuseppe Profiti, the former president of the Bambino Gesu Hospital foundation, was found guilty of abusing his office by diverting nearly $500,000 to pay for renovations to the apartment of Cardinal Tarcisio Bertone, the former Vatican Secretary of State. A Vatican tribunal was unconvinced by Profiti’s defense that the expense could be justified because the apartment was used as a venue for the foundation’s fundraising events.

So far, so good. A suspicious transaction, a deal that was clearly arranged by an old-boy network, resulted in a criminal conviction. Yet the Vatican tribunal gave Profiti only a token punishment: a suspended sentence. And that outcome, too, seems just, because while he was found guilty of violating his fiduciary responsibilities, there was no real evidence that Profiti had malign intent. He had drawn no personal profit from the deal, and his defense attorney made a convincing argument that Profiti understood the deal had approval from higher Vatican authorities.

Profiti committed a financial crime, the Vatican tribunal concluded. But did he plan the crime, or was he a pawn in a larger scheme? That question arises naturally, inevitably, from the nature of this prosecution.

Whereas Profiti gained no profit from the misappropriation of funds, Gianantonio Bandera did. Bandera, an Italian contractor, was paid twice for the work on Cardinal Bertone’s apartment—which, by the way, was never completed, as Bandera’s company filed for bankruptcy. Yet for reasons that have never been explained, Bandera was not indicted by the Vatican prosecutor. *

Bandera’s company was personally selected to do the renovation work by Cardinal Bertone, who ignored ordinary Vatican procedures to give the contract to his acquaintance without taking bids. And it is relevant here that Cardinal Bertone, when he was Secretary of State, helped put Giuseppe Profiti in control of the Bambino Gesu foundation. But Cardinal Bertone—the ultimate beneficiary of the misappropriated funds—was not a defendant in the case. Nor was he called as a witness!

The lavish renovations to Cardinal Bertone’s apartment were a classic example of the Vatican old-boy network, running at full throttle: friends doing favors for friends. But it would take an extraordinary degree of naiveté to believe that problem began or ended with Giuseppe Profiti. His conviction does not resolve questions about the transparency of Vatican financial transactions. Quite the contrary; it raises new questions.

*- An early version of this story incorrectly reported that Bandera was not called to testify at the trial. He did testify on October 2.