Home Christian News Vatican Trial Opens Into Financial Scandal Rocking Papacy

Vatican Trial Opens Into Financial Scandal Rocking Papacy

The London real estate deal dates to 2014, when the Vatican’s secretariat of state decided to invest an initial 200 million euros in a fund operated by Italian businessman Raffaele Mincione, with half the money put into the London building, half in other investments.

By November 2018, the original investment had lost 18 million euros, prosecutors say, prompting the Vatican to seek an exit strategy while retaining its stake in the building in London’s swank Chelsea neighborhood.

Enter Gianluigi Torzi, another broker, who helped arrange a 40 million euro payout to Mincione.

But prosecutors say Torzi then hoodwinked the Holy See by secretly restructuring 1,000 shares in the property’s new holding company in a way that gave him full voting rights. Prosecutors say Torzi then extorted the Vatican for 15 million euros to get control of the building that it thought it had already acquired.

Mincione and Torzi, who are accused of fraud, money laundering, embezzlement and other charges, have denied wrongdoing.

Becciu’s successor as chief of staff, Archbishop Edgar Pena Parra, told prosecutors that Francis had made clear by November 2018 that he wanted to lose as little money as possible to finally secure ownership of the building and “turn the page and start over.” It was a message Francis repeated to Torzi himself during a January 2019 meeting, Pena Parra told prosecutors.

After realizing that Torzi actually controlled the building and based on Francis’ desire to move forward, Pena Parra said the Vatican had two choices. Those were to sue him or pay him off for the 1,000 voting shares that he owned. Pena Parra said the Vatican’s concern was that suing him could take years and even possibly end in Torzi’s favor.

“Between these two options, with the advice of lawyers and experts, option No. 2 was chosen because it was considered more economical, with more contained risks and in a more manageable time frame,” Pena Parra wrote in his testimony seen by The Associated Press. “It also simply aligned with the desire of the Superior,” a reference to Francis.

And yet the payout of 15 million euros to Torzi is at the heart of the case. Prosecutors accuse Torzi of extorting the Vatican for the money and the Vatican’s financial oversight agency of failing to stop the deal. The oversight’s managers say the Vatican had no choice but to pay Torzi, given the Secretariat of State — knowingly or not — signed legally binding contracts that gave Torzi control of the building.

Prosecutors say the secretary of state, Cardinal Pietro Parolin, was deceived into approving Torzi’s contract by a lawyer who drafted a one-page memo describing the deal but omitting key details, including Torzi’s voting stake. Pena Parra said only later did the Vatican realize the lawyer was associated with Torzi. Quoting Parolin’s own notes, Pena Parra said the cardinal approved the deal based on the lawyer’s brief memo and assurances from Perlasca and another Vatican money manager, Fabrizio Tirabassi.

Parolin, Pena Parra and Perlasca were not charged. Tirabassi is charged with corruption, extortion, embezzlement, fraud and abuse of office; he denies wrongdoing.

This article originally appeared here.

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nwinfield@churchleaders.com'
Nicole Winfield is the Vatican correspondent for The Associated Press in Rome. She has covered three popes – John Paul II, Benedict XVI and Francis – travelling with them around the world and reporting on everything from the priestly sex abuse scandal to the church’s relations with Jews to Francis’ revolutionary papacy.