Vatican’s Finance Czar Reports $1.5 Billion in Hidden Assets
By John L. Allen Jr.
Pope Francis’ finance czar today informed fellow members of the College of Cardinals that the Vatican has more than $1.5 billion in assets it didn’t previously know it possessed, although that potential windfall has to be balanced against a projected deficit of almost $1 billion in its pension fund. The discoveries mean that the Vatican’s total assets rise to more than $3 billion, roughly one-third more than previously reported. The cardinals were also informed that the Vatican’s real estate holdings may be undervalued by a factor of four, meaning that the overall financial health of the Vatican may be considerably rosier than was previously believed. The disclosures at the closed-door meeting by Australian Cardinal George Pell, installed as secretary for the economy a year ago, was part of a wide-ranging overview of efforts at financial reform under Francis presented today to cardinals from around the world. “We’re sound,” Pell said of the Vatican’s financial condition. “We’re muddled, it’s been muddled, there’s been inadequate information, but we’re far from broke.” Pell spoke in an exclusive interview with Crux from his Vatican office. In a speech to cardinals on Friday who were meeting in Rome ahead of a Saturday ceremony in which Pope Francis will create 20 new Princes of the Church, Pell said the Vatican’s total assets include some $500 million in various accounts that were purposefully excluded from an overall 2013 balance sheet, as well as $1 billion in assets that should have been included in that report but weren’t. Pell stressed the discrepancies were not the result of illegal activity, but an overly compartmentalized and unwieldy reporting system that allowed significant pockets of assets to go undetected. He styled Friday’s revelations as a major step forward for transparency. “This is the first time we’ve had a comprehensive and, we believe, accurate picture about what’s going on economically,” Pell said. He said the clean-up effort on finances drew “massive support” from the cardinals gathered in Rome. On other matters, Pell conceded that his clean-up operation stirred “enthusiastic opposition” earlier in the process, especially from some of the Vatican’s other traditional centers of power such as the Secretariat of State, but said much of that has dimmed. “There was a bit of a dream world that this wouldn’t really take off, that after some huffing and puffing the world would return to way it was,” he said. He pointed to last October as a turning point, when Pope Francis approved a set of procedures for money management intended to bring the Vatican into line with international best practices. “The penny dropped after that,” Pell said. “People realized the game has changed.” He also confirmed a point made recently by Cardinal Wilfrid Napier of South Africa, a member of the Council for the Economy, in an interview with the Catholic News Service: That a proposed set of statutes for the new secretariat, prepared by the Pontifical Council for Legislative Texts, would have hamstrung their efforts. In early December, Pell revealed in an essay for a Catholic publication in England that his office had discovered “hundreds of millions” of Euro in previously unreported assets, although by Friday’s report to the College of Cardinals, that total had risen to $1.5 billion. Pell told Crux that while he can certify that number is accurate, he’s not yet sure that’s everything that was previously unreported. He cautioned, however, that those discoveries have to be balanced against difficulties in maintaining the pension fund. “We don’t want to frighten people, because the fund is secure for the next 10-15 years,” he said. “But to make sure we can fund pensions in 20 years’ time, we’ll have to somehow put in progressively at least $800 million to $900 million.” Pell said the actual number may be higher still, given that projections on fund performance going forward may be overly “fanciful,” given trends in interest rates. One of the Vatican’s senior financial officials, Pell said, went out of his way on Friday to reassure elderly cardinals that “their pensions are secure.” Pell said that providing an honest picture of the Vatican’s true financial condition is the opening salvo of the broader reform effort. “What we’ve got to do is to get in place structures so that the Vatican is a model to others and not a scandal,” he said. “We have to make it terribly difficult to return to waste and inefficiency and some measure of corruption.” In terms of future steps, Pell vowed that an independent auditor general for the Vatican, reporting directly to the pope, will be appointed by the summer, and that sometime later in the year, a new supervisory board will be in place for the Administration of the Patrimony of the Apostolic See, another of the Vatican’s important financial centers. Pell also promised that sometime later in the year, “for the first time ever in Vatican history,” the various departments will be providing quarterly reports comparing expenditures to budgets. In general, Pell said, Pope Francis has supported the reform effort at every turn. “Whenever there were things we couldn’t clean up on our own, he’s been there to support us,” he said.
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