Vatican discloses property portfolio as historic trial threatens to expose secrets

 A once-powerful Catholic cardinal and nine others stand trial at the Vatican this week in an embezzlement scandal that allegedly saw charity funds used in a ruinous London property venture.

Ex-cardinal Angelo Becciu, who served as the equivalent of a papal chief of staff for Pope Francis before being fired last year, has been charged with crimes including embezzlement and abuse of office.

It is the first time a cardinal has been indicted by Vatican criminal prosecutors and Becciu, 73, will be the headliner of a trial set to last months.

The defendants face jail time or stiff fines if found guilty.

The alleged graft will have enraged Francis, 84, who has vowed all-out war on corruption and has increased oversight of the Vatican’s finances, dogged for decades by scandal.

Tuesday’s hearing is expected to be purely technical and the trial, held in a makeshift courtroom in the Vatican Museums, may be adjourned to after the summer break.

It was not clear whether Becciu, stripped of his red biretta, will be present.

It follows a two-year probe into how the Secretariat of State — the key department in the Vatican’s central administration — managed its vast asset portfolio and, in particular, who knew what about a disastrous €350m ($415m) London investment.

‘Substantial losses’ 

Two London-based Italian financiers were involved in buying the 17,000-sq metre building — a former Harrods warehouse in Chelsea intended for conversion into luxury apartments.

Gianluigi Torzi and Raffaele Mincione are charged with embezzlement, fraud and money laundering.

The building’s purchase at an inflated price meant “substantial losses for the Vatican, and dipped into resources intended for the Holy Father’s personal charitable work”, the Holy See said before the trial.

The first part of the purchase happened while Becciu was No. 2 at the Secretariat of State, and in charge of the purse strings.

Between 2013 and 2014, the Secretariat of State borrowed over $200m, mainly from Credit Suisse, to invest in Mincione’s Luxembourg fund. Half went to buying part of the London property.

The rest was for stock market investments, but Mincione used it for high-risk ventures. The Holy See, which had no control over where the money went, tried to pull out in 2018.

Taking control

Torzi was brought in and tasked with brokering the purchase of the rest of the building and cutting ties with Mincione — but he instead allegedly joined forces with him.

He arranged for the Holy See to give Mincione £40m (€48m; $55m) for the shares in the part of the London building it did not already own.

But Torzi then allegedly inserted a clause into the paperwork which gave himself control of the property. He is accused of demanding 15 million euros to relinquish control.

Mincione and Torzi were helped, prosecutors claim, by Enrico Crasso, a former Vatican investment manager, and employee Fabrizio Tirabassi, both of whom face a series of charges including fraud.

Embarrassingly for Francis, among those standing trial are two men previously tasked with regulating Holy See finances, including the former head of its financial regulator, Swiss lawyer Rene Bruelhart.

‘The Cardinal’s lady’

Becciu has been charged with embezzlement and abuse of office over the purchase of the London property.

He has also been charged in relation to donations totalling over €800,000 he is accused of making to a charity run by his brother.

Becciu is also linked to defendant Cecilia Marogna — dubbed “the Cardinal’s lady” by the Italian press — accused of pocketing money earmarked for freeing captive priests and nuns abroad.

Prosecutors claim the top hierarchy in the Vatican — including pope ally Cardinal Pietro Parolin, Becciu’s boss — were in favour of the London venture, without realising what was going on.

Becciu, who has denied any wrongdoing, says he is the victim of a plot.

The Vatican published for the first time Saturday its annual budget for a key department managing property and investments, just days before the start of a high-profile trial over a London investment.

The 2020 budget showed that the Administration of the Patrimony of the Holy See (APSA) owns 4,051 properties in Italy and some 1,120 properties in London, Paris, Geneva and Lausanne.

One of those, a former Harrods warehouse in London intended for conversion into luxury apartments, is at the heart of a trial opening in the Vatican next week over alleged embezzlement of charity money.

The purchase by the Vatican’s Secretariat of State nearly a decade ago led to huge losses. Pope Francis handed control of the Secretariat’s investments to APSA last year after the case came to light.

Juan Antonio Guerrero, head of the Vatican’s Secretariat for the Economy, said the tiny city state was making unprecedented efforts to be open about its finances as part of Francis’s war on corruption.

“We come from a culture of secrecy, but we have learned that in economic matters, transparency protects us more than secrecy,” he said as the budget was released.

The trial is expected to look into whether the London scandal could be traced to corruption in the top rungs of the hierarchy, or too few checks on those performing the complex financial transactions.

Guerrero said measures had since been put in place that would make it “very difficult for what happened to happen again”.

The budget showed 14 percent of Vatican properties administered by APSA are rented at market rates, with the money going to fund Vatican work and to charity.

The remaining 86 percent — largely rented at below-market rates — are used by Vatican offices or provides housing for Catholic cardinals and current and retired Vatican employees.

(AFP)