In their annual report released today, the Vatican’s Financial Information Authority revealed they had suspended transactions totaling compared to just last year. Alongside this, assets’ worth was frozen the first time such action has been taken. The financial information authority was set up by Pope Benedict XVI in 2010 to clamp down on financial crimes taking place in the Holy See and to ensure the Vatican complies with anti-money laundering regulations. Under Francis, however, it has been given the legal right to ensure transparency and financial supervision.
According to the watchdog’s president, René Brülhart, the increase in suspicious reports last year relates to closing many accounts at the Institute for the Works of Religion (IOR) – better known as the Vatican bank while demonstrating that the authority was doing its job properly. “I would like to see the figure at zero,” he said, “but this doesn’t reflect reality. Wherever you have financial activity, you always see something suspicious”.
The watchdog’s report also referred 17 cases to Vatican prosecutors, including “serious financial crimes” of insider trading. Last November, it was reported that Holy See authorities were investigating an Italian banker, Giampietro Nattino, for using an account at the financial powerhouse APSA for market manipulation and insider trades.
Questions are increasingly being asked of APSA, a body that operates under little accountability yet manages a property portfolio, investments and pays Vatican employees’ salaries. It emerged today that APSA does not fall under the financial watchdog’s jurisdiction as it is deemed not to be an “entity that carries out financial activities on a professional basis.” APSA has also ensured it is free of the supervision of the Pope’s treasurer, Australian Cardinal George Pell, who is trying to bring in rigorous budgeting and transparency to all entities of the Holy See.
Last week, he was dealt a blow after the controversial suspension of the First Vatican audits by a globally recognized firm, PricewaterhouseCoopers (PwC). Although The Pope’s economic council had commissioned pwC, their work was this month unilaterally suspended by a senior official from the Secretariat of State who cited procedural concerns with the firm’s contract, including that Cardinal Pell had signed it.
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Pressure is increasing on the Pope to get finances under control, particularly as he was elected by his fellow cardinals with a mandate to clean up the Roman Curia and bring an end to scandals. Since 2013 he has introduced many changes, including new management of the Vatican bank and transferring Pell from Sydney to help him overhaul the finances. But after the suspension of the audit, there are concerns that the reform is stalling, and Pell’s position has come under pressure after he was criticized for evidence he gave last month to an Australian Royal Commission investigating sexual abuse.