The Next Pope Will Need a Good Head for Business

By Carol Matlack and Bernhard Warner
Bloomberg Businessweek
February 11, 2013

http://www.businessweek.com/articles/2013-02-11/the-next-pope-will-need-a-good-head-for-business

Memo to the College of Cardinals: You didn’t ask our advice, so we won’t give it, on the person you should choose as the next spiritual leader of the world’s 1.2 billion Catholics. But whoever it is, could you please ask him to get the ATMs in the Vatican Museum working again?

The Bank of Italy last month shut down all ATMs in the Vatican and blocked its museum’s ticket windows and shops from accepting debit and credit-card payments from visitors. It was the latest chapter in a messy scandal involving the Vatican Bank, which regulators say has failed to comply with international banking standards and money-laundering regulations.

True, the $120 million or so in annual revenue from Vatican visitors is peanuts compared with the tens of billions raised and spent annually by Catholic dioceses and institutions worldwide. Still, it wouldn’t hurt for the next pope to have a good head for business.

Pope Benedict XVI, who announced today he will resign on Feb. 28 for health reasons, “has had a very difficult papacy” from a financial standpoint, says Chester Gillis, dean of Georgetown College and professor of theology at Georgetown University. Settlements and judgments in sexual-abuse cases have cost billions of dollars already and forced some dioceses into bankruptcy. More such lawsuits are still pending.

Even more worrisome for the church’s long-term finances is the fact that membership is shrinking in relatively affluent countries, while more people are joining the church in poorer regions, such as Africa, Asia, and Latin America. “There are places where churches are full but the resources are limited,” Gillis says. Compounding the strain, the church often sends priests from poorer countries to work in the U.S. and Europe, where there is a severe shortage of priests and where the cost of maintaining them is much higher than it would be in their home countries.

The task of balancing the church’s First World and Third World interests could well fall to its first non-European pope. Within hours after Benedict’s announcement, bookmakers identified Cardinals Francis Arinze of Nigeria, Peter Turkson of Ghana, and Marc Ouellet of Canada as the most likely successors. Arinze, now 80, was “close in the betting” in 2005, when Benedict was chosen, a spokesman for bookmaker William Hill said in a statement today. “We think he may be well-placed to succeed him now, although age could be against him.”

Hailing from outside Europe isn’t enough, though. The new pope will need to be a savvy communicator and skilled statesman. In yet another scandal, dubbed Vatileaks, the Vatican over the past year was rocked by a series of leaked documents alleging corruption within its ranks. The pope’s butler was convicted—and later pardoned by the pope—on charges of handing over documents to journalists. But the leaks continued after the butler’s arrest, leaving the impression of an institution rife with backstabbing and bitterly divided over efforts to improve financial transparency.

The Vatican last summer recruited Greg Burke, a former Fox News correspondent, as an adviser to manage its message better. The appointment followed the Church’s move into social media a few years earlier. Pope Benedict himself gained 1.5 million followers on Twitter—although he didn’t update his @Pontifex channel with news of his resignation.

Still, the stain of corruption on the Vatican bank remains a major embarrassment—not to mention a nuisance for visitors who arrive at the Vatican without plenty of cash. Italian prosecutors in 2010 placed the bank’s then-chairman, Ettore Gotti Tedeschi, under investigation for alleged money laundering and later seized ˆ23 million ($30.8 million) from an account registered to the bank. Tedeschi was fired last May, and the Vatican last fall hired Rene Bruelhart, a Swiss lawyer, as a consultant on financial crime issues.

While the pope isn’t expected to get involved in routine financial management, he must “bring in smart, able people to manage the Vatican’s finances” and get the Holy See placed on the so-called white list of fully transparent jurisdictions, says Stefano Maria Paci, a journalist who covers the Vatican for Italian channel Sky TG24. “This is of significant importance,” he says.

Benedict had significant management experience before becoming pope, Georgetown’s Gillis says. “Anyone who has been a cardinal has already headed a complex organization.” But, he says, “the management part of the church, I’m not sure that was his strong suit. He is a theologian.”