The Vatican’s Shocking Easter Nest Egg, by Christina Lavingia, Go Banking Rates (April 20, 2014)

In recent years, the Institute for the Works of Religion (IOR), often referred to as the Vatican Bank, has come under scrutiny for its lack of transparency and use of funds. With a history of accusations tying the Vatican Bank to everything from money-laundering to connections with the Mafia to, most recently, the funneling of tens of millions of dollars toward legal settlements surrounding priest sex-abuse scandals, many are calling for the Vatican Bank to be more upfront about where its money comes from — and goes.

Recent Years of Controversy for the Vatican Bank

According to CNBC, in 2010, the Italian government began investigating the Vatican Bank after the Bank of Italy notified the authorities about two transactions it made totaling $30 million, from Credito Artigianato to JPMorgan Chase and Banca del Fucino. The Vatican violated Italian law by not stating the origin of the money, but denied any wrongdoing; the matter was eventually dropped.

The Vatican Bank officially operates as a financial institution designed to support charitable work, meaning it can avoid typical banking governance. However, Pope Emeritus Benedict XVI tried to get the Vatican on the Organization of Economic Co-operation and Development’s “white list” in 2010, designated for countries that uphold international banking standards.

At the end of that year, Benedict created the Financial Information Authority as an independent agency to oversee the Vatican Bank and other Vatican-related institutions in regard to their financial activities.

However, the 2012 “Vatileaks” affair, in which Benedict’s former butler leaked documents disclosing transfers made to the American church to cover its more than $3 billion in sex-abuse settlements, made it clear that the Vatican Bank was still struggling with corruption.

That same year, Archbishop Carlo Maria Vigano claimed that he was transferred out of the Vatican against his will for criticizing exorbitant expenses, including more than $740,000 spent on an elaborate nativity scene in the center of St. Peter’s Square. Then-director of the IOR, Paolo Cipriani, pledged soon after to “lift the veil of secrecy” surrounding the Vatican Bank’s doings.

Managing $6.8 billion of the church’s wealth and investments worldwide, the bank has control over 33,000 accounts belonging to clergy and parishes, and earned more than $16 million in fees and commissions for making loans and providing asset management to clients in 2012.

Because it’s Easter Sunday 2014, let’s talk about the Catholic Church’s finances. How is Pope Francis beginning to audit this near-$7 billion net worth, which, according to TIME Magazine, comprises $4 billion in securities, $55.9 million in gold, metals and precious coins, as well as a real estate company with two investment properties totaling $2.5 million?

Pope Francis’ Financial Reforms for the Vatican Bank

With the introduction of Pope Francis to the papacy, the push for financial reform is actually seeing tangible efforts. Within four months of assuming his pontificate, the pope removed Vatican Bank’s director and deputy from their posts mere days after Monsignor Nunzio Scarano, the former head of the Vatican’s Administration of the Patrimony of the Apostolic See (APSA), and two others were arrested on smuggling charges.

In July of 2013, Pope Francis brought on a team of seven international lay experts and one cleric to advise him on economic affairs and improve the transparency and enforcement of accounting principles. Equipped with full access, the commission’s members will have the right to scrutinize any paper or digital document in the Vatican.

On Oct. 1, 2013, the Vatican Bank published its first financial report in its 125-year existence, documenting in 100 pages the Vatican’s 2012 net profit of $117 million, a quadruple gain over 2011. More than $67 million of this was given to the pope to use for his charitable works.

Ernst and Young, an international accounting firm, was appointed by the Vatican in November of last year to evaluate the Governatorato, the department at the center of the Vatileaks corruption allegations, that handles the daily activities of Vatican City. This review was concurrent with that of the Vatican Bank and APSA, a Vatican department that maintains stock portfolios and real estate holdings.

In January 2014, Pope Francis dismissed four of the five cardinals overseeing the Vatican Bank, including Benedict’s secretary of state Cardinal Tarcisio Bertone, stating that “they were either corrupt or incompetent.”

The next month, Pope Francis used an executive decree, known as a Motu Proprio, to appoint Australian Cardinal George Pell to the role of Secretariat for the Economy. Pell’s task is to ensure follow-through of financial reform, allowing him wide oversight to audit any agency of the Holy See and Vatican City State at any time.

Pope Francis’ focus on financial reform is a means to address the discrepancy between the Vatican’s wealth and the poverty of those who require its service most. Last month Pope Francis made his fiscal reform more personal, calling a summit of some 500 treasurers of the global orders to re-evaluate their wealth and become critical of the global capitalist economy, the message applying to approximately 900,000 priests, brothers and sisters in religious orders around the world.