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Ousted Vatican auditor appeals for justice

July 01, 2024

News analysis by Phil Lawler

This week the Vatican’s former auditor general renews his bid to persuade a Vatican tribunal that he was wrongfully dismissed from his position, in a case that threatens to expose further evidence of corruption in Vatican finances.

Libero Milone, the first-ever auditor general, whose hiring in 2015 was trumpeted as a centerpiece of financial reforms under Pope Francis, was abruptly dismissed from his post in June 2017. Milone testifies that he was forced to resign—threatened that he would otherwise face criminal prosecution—by then-Archbishop Angelo Becciu.

In December 2023 that same prelate—now Cardinal Becciu—was convicted of financial misconduct by a Vatican tribunal in what became popularly known as the Vatican’s “trial of the century.” Becciu’s conviction seemed to strength the case of the former auditor general. But just a month later a Vatican court tossed out the wrongful-dismissal case brought by Milone and his former deputy, Ferruccio Panicco.

On July 3, Milone’s lawyers will initiate their appeal of that ruling. The former auditor general vows that he will continue to pursue the case, if necessary to the European Court of Human Rights, to secure justice.

“I have always asserted,” Milone says, “that we were eliminated for that which we uncovered as a result of having done our job professionally, ethically, and correctly within the terms of the Office of the Auditor General (OAG) statutes.” He can cite substantial evidence to support his claim.

Case dismissed

When Milone’s sudden resignation caught Vatican reporters (and, apparently, top Vatican officials) by surprise, Archbishop Becciu sought to explain: “Milone went against all rules and was spying on the private lives of his superiors and staff, myself included. If he hadn’t agreed to resign, we would have pursued him from a penal standpoint.” The head of the Vatican Gendarmerie, Domenico Giani, chimed in: “Against Milone there is irrefutable, obvious evidence.”

To this day, that evidence has not been produced—not even to the accused. Milone has been informed that a “Document 61,” detailing his alleged misdeeds, cannot be disclosed because it is under the “pontifical secret.”

However, Milone received some relief in May 2018, when the Vatican prosecutor informed him that he would not pursue a criminal complaint; the case was closed. Armed with that reassurance, the former auditor general applied to the Vatican Secretary of State, Cardinal Pietro Parolin, asking for a settlement that would clear his name. He also wrote to Pope Francis—seven times—asking for a chance to plead his case; he received no reply.

With settlement talks going nowhere, and Milone contemplating legal action, Vatican officials resumed playing hardball. In May 2022—four years after he had been told the case against him was closed—Milone was informed that the prosecutor had reopened his investigation. Still the former auditor general was not given an account of any evidence to support the potential charges.

In December 2022 Milone and Panicco, who had been his deputy, filed suit against the Vatican Secretariat of State, charging that they had been wrongfully terminated. After a long wait—during which the “trial of the century” took place—the Vatican dismissed that case in January 2024, on the grounds that the Secretariat of State was not responsible for their dismissal. The court cited Milone’s own testimony that he had resigned under pressure from Becciu and Giani, and concluded that the Secretariat of State “therefore cannot be held accountable.”

But Archbishop Becciu was acting, at the time, as the sostituto: the deputy Secretary of State. He told Milone that the Pope had lost confidence in the auditor general. He later testified at his own trial that “it was the Pope who asked me to summon Milone; and he said that he was sorry to give me the thankless task, that is to tell Milone to resign.”

Despite this seemingly clear evidence, the court ruled that insofar as he pushed Milone to resign, Becciu was acting as a private citizen. But a private citizen would not have the authority to oust the auditor general, who reported directly to the Pontiff, and was employed on the basis of an agreement signed by Cardinal Parolin, the Secretary of State.

Milone also points out that when Giani demanded his resignation, the head of the Gendarmerie helpfully produced a letter of resignation for Milone to sign. As a police official, Giani could have pressed criminal charges, but he certainly lacked authority to demand Giani’s resignation.

Reflecting on the jumbled legal arguments, Milone laments: “It makes one doubt if there will be any real justice in the Vatican city-state.”

The auditor hits roadblocks

Libero Milone had an impressive career as an auditor before he arrived at the Vatican. He had studied and worked in the United Kingdom and the United State; he had risen to become a partner in Deloitte, and the chief executive officer of Deloitte Global in Italy.

When he was approached about taking the newly established position of auditor general at the Vatican, Milone at first was reluctant, knowing the Vatican’s unhappy reputation for slipshod financial management. But he was persuaded that, after years of lucrative practice in auditing, he could do a great service to the Catholic Church by setting up rigorous standards.

When he took the job, Milone had a 5-year contract, a legal assurance that he would report directly to the Pope, and the strong support of the late Cardinal George Pell, who had taken a no-nonsense approach to his own task of bringing order through the Secretariat of the Economy.

The job was formidable. As he began auditing Vatican agencies, Milone and his staff encountered abundant evidence of negligence and worse: financial accounts written in pencil on loose sheets of paper; Vatican offices collecting cash in huge sacks; funds that were donated for one purpose but withdrawn for another—sometimes perhaps innocently, sometimes certainly not. He met with Pope Francis every two or three weeks, reported what he had found, and says that the Pontiff always gave him his backing. On more than one occasion, he recalls, the Pope curtly ordered a ranking Vatican official to restore funds he had “mistakenly” appropriated for his personal use.

But like Cardinal Pell, Milone as auditor also faced roadblocks. Some Vatican offices—notably including the Secretariat of State—resisted his requests for documents to support expenditures. The battle between would-be financial reformers and old-guard Vatican bureaucrats came to a head in 2016, when Archbishop Becciu, in his role as sostituto, unilaterally cancelled an outside audit by PricewaterhouseCoopers. On paper Becciu had no authority to stop that audit, which had been approved by Cardinal Pell and the Council for the Economy. Nevertheless Becciu’s decision stuck.

The in-house conflicts were frustrating, yet the auditor’s work continued, producing evidence of deeper problems in Rome. “As auditor,” Milone reports, “we uncovered a number of scandalous matters, for example such as the Vatican state being a major shareholder in companies producing the abortion pill, and the Slone Avenue real-estate scandal.” (The latter is the disastrous investment by the Secretariat of State that gave rise to the “trial of the century.”)

The auditors also unearthed cases of concealment and misuse of funds, illegal financing agreements, negligent or missing inspections, unauthorized withdrawals of major sums, sweetheart contracts, and multiple breaches of security and confidentiality.

Spy vs. spy?

Perhaps ironically it was a security breach that escalated the conflict between the auditor’s office and the Secretariat of State. In September 2015, Milone found evidence that his office computers had been hacked. He hired an outside consultant to investigate the extent of the hacking to provide expert advice on office security. At the same time he asked the consultant to provide him with various bits of information from Italian public records that were useful to his work on Vatican files.

Among his reports, the consultant offered the information that Archbishop Becciu owed money on his social-security taxes. Milone says that he had no interest in that fact; he had not asked for the information, he says; it was irrelevant to his work for the Vatican. But he felt obliged to keep the information in a whistleblower file, never disclosing it. Yet somehow, when he confronted Milone several months later, Becciu charged him with having illegally obtained the information. Moreover, when officials of the Gendarmerie searched Milone’s office, after his resignation, they knew exactly where to find the folder about Becciu’s social-security status. How did that information, which was locked in Milone’s file cabinet, find its way to Becciu?

Milone has a potential answer to that intriguing question. After his departure, Archbishop Becciu handed an assistant invoices from the same outside consultant, saying that they were evidence of Milone’s spying. But Milone insists that he had ended his contract with the consultant, and there was no evidence that the consultant was working on behalf of the auditor’s office. So was he, perhaps, working for Becciu?

The conflict can be reduced to a pair of matching complaints: Archbishop Becciu charges the Milone was spying on him; Milone believes that Becciu was spying on the auditor’s office. But there is a crucial difference. An auditor’s job is to seek out evidence about the financial transactions in the offices under his jurisdiction. Is that “spying?” Commenting on Milone’s forced resignation, Cardinal Pell said, “They never understood that he was just auditing and doing a good job.”

Serious personal damage—and more

In October 2019, after the Vatican Gendarmerie raided the offices of the Secretariat of State, in a sensational highlight of the investigation leading up to the “trial of the century,” Domenico Giani, the head of the gendarmerie, resigned. The reasons for his resignation have never been adequately explained. Then last year Cardinal Becciu was convicted of financial misconduct. So Milone’s two primary accusers have lost credibility.

But Milone himself has been living under a cloud. “I cannot find work,” he complains, “because my reputation has been seriously damaged, for something I did not do.”

For Feruccio Pannico, his former deputy, the consequences of his rushed ouster from the Vatican have been even more serious. When his office was raided by the Gendarmerie, all his papers were confiscated, including the records of his medical treatment for prostate problems. Despite multiple requests, those medical records were never returned. As a result, when he sought medical treatment at a new medical center, doctors took some time to diagnose Panicco’s condition: a malignant form of prostate cancer. Before his death last year at the age of 59, Pannico said: “I estimate that the delay in the diagnosis could be at least 12 months and I think that without this delay in the diagnosis it would have been early enough not to have an incurable disease.”


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  • Posted by: rfr46 - Jul. 05, 2024 3:39 AM ET USA

    It sounds as if Milone is largely if not entirely innocent, but it is hard to imagine a more irresponsible and corrupt story inside the Catholic Church. Last Sunday we had the collection for Peter's Pence. My wife and I decided not another penny to the Vatican until this corruption is rooted out. We have witnessed homosexuality, theft, lies, slander, cowardice, vanity, spite, infidelity to Church teaching and Tradition, persecution of clerical and lay critics, coverup of misdeeds, and so on.