Pope Francis’ words were not enough. The Council of Cardinals met July 1-4. The Secretary of State, Cardinal Pietro Parolin, joined this group of 8 appointed by Pope Francis. The Pope – according to Father Federico Lombardi, director of the Holy See Press Office – told Cardinal Parolin that he is a full member of the Council. However, no document has been issued yet to certify the Secretary of State’s membership in the group. In the meantime, Cardinal Parolin is trying to keep his position via his being present.

Parolin’s activism is a reaction to the push to have reform engulf, it seems, the very Secretariat of State, that could be destined to be divided into two Secretariats: the Secretariat of State proper, i.e. for diplomacy, and the Secretariat for the Life of the Church, i.e. the general affairs. There would also be a General Secretariat of the Synod of Bishops; and there is already the Secretariat for the Economy, led by its proactive prefect, George Pell.

This ‘four secretariats’ structure is just a hypothesis, since the fifth meeting of cardinals have not produced a draft for Curia reform. Widely discussed is the streamlining of the Curia (bringing the Pontifical Council for Laity and Family together; Justice and Peace with Cor Unum and Migrants; and the Congregation for the Divine Worship with that for the Cause of Saints). Also in this case, we are dealing with hypotheses. Pope Francis went back in part to the old draft for a Curia reform written by Cardinal Attilio Nicora shortly before John Paul II’s death. The draft proposed the establishment of a Council of Cardinals, and a brutal amalgamation of dicasteries. The Council of Cardinals was intended to consolidate positions that had crystallized under the administration of the Secretary of State, Cardinal Angelo Sodano, who had his (mostly Italian) interests to maintain. Nicora’s draft was in fact a way to protect this power.

Pope Francis went beyond Nicora’s draft. Angelo Sodano had managed the pre-conclave meetings in a way that led cardinals to speak of management, more than of the substantial issues. The search for a missionary Pope, able to speak to the people, seemed to be a natural consequence. The Pope acts as a front man, while the Roman Curia manages its re-organization, dismantling piece by piece the reform of collegiality carried on by Benedict XVI. Pope Francis noted there was a wish for discussion, the same kind of discussion he was accustomed to, from the Jesuits’ General Congregations. In the end, the Superior General there makes the decision. But during the Congregations, everybody can voice concerns.

This is the spirit that Pope Francis has brought into his pontificate. The notion of a permanent Council, of ongoing talks, can however bring about some surprises. So, the Curia of the old days, after many of his main characters took important posts, had to face some surprises. Especially on the economic side.

For what concerns the economy, Pope Francis has continued, with no rush, Benedict  XVI’s work. The Vatican’s Financial Intelligence Authority strengthened its international profile and issued new statutes. The Vatican first amanded its first anti-money laundering law, and then – under Pope Francis – changed it with a brand new one, which positioned the Holy See among the most advanced countries in the world in this regard. This could not have happened without the enormous effort carried out by Vatican officials.

The Vatican hired several external consultants, thus projecting the idea of a reality moving toward reforms. But consultants are usually people coming from the outside, and this led to pros and cons. On “pro” is that external consultants are professionals (even if also Vatican officials are). A “con” is that consultants can never know in depth the full scope of the realms they are providing advice to and about.

In the media, this is portrayed as a “gang fight”. In fact, what the in the media has become a petty war among gangs, is a fight between two opposite visions. And every mean is licit, in the midst of this war. Also passing to journalists rumors and gossips, sometimes even mischaracterizing reality to prove a thesis.

For what concerns the Institute for Religious Works, the internal line has prevailed. The institute is a resource for the Catholic Church and her mission, and it cannot be abolished. There will not be revolutionary changes. Just an updating, to better insert the institute (whose chirograph and statutes stretch back to 1990) in the international arena.

This issue brings about a debate. The Curia of the old days is tied hand in glove to Italy. And Italy more than once has used the IOR as a scapegoat.  Italy views the Vatican as a subdivision that should manage every international relationship on the basis of its trusted relations with Italy.

This vision contrasts with the international vision, people aiming for the Holy See to be present in the world and able to send money to missions through her own international sovereign channels provided by the IOR.

Among those who support this second vision, there are some who are supporting a more speculative IOR, in order to generate more profits, and to have the IOR fully join the international banking system. On the other hand, there are people who wish the IOR to keep its characteristics of a sovereign institute, with funds at the Pope’s disposal.

Hence, the story of the territorial factions. They are referred to as “The Americans,” “The Germans,” “The Maltese,” and a power struggle ensues. Reality is far more nuanced. The Council of Superintendency of the Institute backed and supported the international turnaround and upholding sovereignty. It also favored the process of reform within the Institute, and making the IOR in some small ways a bank, even (perhaps) giving it the possibility of lending money. An approach that, it seems, was taken at the request of the Pontifical Commission for the IOR, chaired by Cardinal Raffaele Farina.

The process of reform has almost come to an end. The members of the board will probably tender their resignations, in order to support and facilitate a generational change. The Secretariat for Economy should take the lead of the management of the assets, to be entrusted to another body, the Vatican Asset Management. Surely, the president will change: Ernst von Freyberg has accomplished his tasks.  He operated as a full-time president although he was not one under the statutes.  Now that the statutes foresee having one, the job will not go to him.

Who might be von Freyberg’s successor? Two names are often mentioned: that of Jean Baptiste de Franssu, and that of Francis X. Zahra. They are both members of the Council for the Economy, they were both part of the (now dissolved) Pontifical Commission of Reference on the Economic-Administrative Structure of the Holy See, and they both were – according to unconfirmed rumors – in the set of three names that the Spencer&Stuart head-hunting agency had given to the Secretariat of State when the latter was searching for someone to replace Gotti Tedeschi as president of the council of the IOR, who got a no confidence vote by his own council.

These names would represent a line of renewal within continuity, but at the same time they would not act as the hawks, the latter aiming of making the IOR a speculative reality, as they would like to do with many other realities. For example, the widely gossiped commission for communications  would also be tasked with reviewing the Vatican Television Centre statutes, to make it a more commercial and profitable activity.

Paradoxically, it is the leftist-leaning world of pro-internal democracy that is pushing the Vatican towards a capitalistic pivot.  The democrats are very much to the left and very sympathetic to the Pope, so much so that they stand behind the Papal shield when necessary. They praise Pope Francis’ words on poverty, but they also ask the Church to revise her moral teaching.

These contrasting tendencies will came out, for example, in the next discussion on the Non Proliferation Treaty, the first important test for the new Holy See Permanent Observer to the United Nations Bernardito Auza. Archbishop Auza will have to act as a mediator between the prudent position of those who are against nuclear weapons, but do want to ban nuclear energy, because “it has civil implications to be considered”; and those who, even within the Vatican, back the extremist line, that of a total ban on anything nuclear, a choice that would place the Holy See on one side of the negotiations process instead of as a facilitator.

The sovereignty of the Holy See is always at stake. It was so when the Administration for the Patrimony of the Apostolic See (APSA) issued its new statutes, which made its consultants into members of the advisory board, de facto showing that APSA was acting as a bank even when it was referred to as a Central Body of the Vatican City State. This reform could be swept away if the Secretariat for the Economy’s intentions to dissolve APSA become a reality: the tasks of the ordinary section would be taken by the Secretariat for the Economy; while APSA’s extraordinary section would instead be under the responsibility and control of the Council for the Economy.

All of these issues are portrayed by the media as a gang war. Perhaps, there is just a major issue. What seems to be missing is a central vision, which is never made concrete, with processes becoming, instead, ideas on urgent reforms that are not translated into action. In the meantime, Vatican officials are passionately working, trying to keep the Holy See a modern State, yet preserving its peculiarities.

While cardinals are counseled by many voices (some of them are lobbyists), Pope Francis is still speaking about missionarity.

And the Legionaries of Christ never pushed missionarity aside. Stricken by the scandal of their founder, they have initiated, with great sacrifice, a path to renewal that led them to the election of a new government and the drafting of new constitutions. These constitutions have been examined by an ad-hoc commission. The pontifical advisor, Father Gianfranco Ghirlanda, has taken part in the process of renewal since the very beginning.

Today, the Legionaries have many vocations, notwithstanding the “abnormal and wasted” life, as Benedict XVI described it, of the founder of the Legionaries of Christ, Father Maciel.  While the Legionaries of Christ was renovating its internal structure and organization, the missionary ideal did not falter at all.  Despite any controversies, the Legionaries of Christ example should be followed.  

The announcement of a consistory was expected. So it was that of the membership in the Cardinals’ Commission for the Oversight of the Institute for Religious Works (Istituto per le Opere di Religione, IOR), also known as the Vatican bank (misleadingly). Pope Francis, however, surprised everybody, almost accelerating timeframes.

Perhaps Pope Francis decided to play the surprise card: he never does what it is expected, also because – as he clearly wrote in the apostolic exhortation Evangelii Gaudium – he does not want to be beholden to a «it has always been like this» maxim. Traditions – full of meaning – are not as important as the signals Pope Francis wants to project. Regarding the choice for new cardinals, Francis wanted to elevate the profile of the peripheries of the world, and at the same time show that there are no “class A” and “class B” dioceses. Regarding the IOR cardinals’ commission, there is the feeling that Pope Francis is following the path of Benedict XVI.

Benedict XVI’s huge effort for financial transparency was also marked by a change in the Holy See’s strategy at the international level. Benedict XVI was conscious that the Vatican’s borders were no longer just with Italy, but at the very least also with Europe, and that the privileged relationship with the Italian neighbor should not be a double-edged sword for the Holy See. The multilateral approach – together with a specific striving toward the truth, the “guiding light” of Benedict XVI’s pontificate – had to be pursuit at every level. This multilateral approach was carried forward according to the logic of collegiality.

Cardinal Tarcisio Bertone, Secretary of State until last September, had also called for more collegiality. Even before the Vatileaks scandal, as some leaks were already coming out from the Vatican corridors, Bertone underlined the need for more coordination in the drafting of documents, in the preparatory paper of one of the periodic meetings of heads of Vatican dicasteries. Bertone provided the example of the method used by the Congregation for the Doctrine of the Faith.

This logic of collegiality was carried forward to every field, also to the financial area. For this reason, Benedict XVI appointed the president of the Administration for the Patrimony of the Apostolic See (also known by its Italian acronym, APSA) among the members of the IOR cardinals’ commission. When Benedict XVI had to renew the commission on February 16, just a few days before the end of his pontificate, he replaced the former president of the APSA Nicora with his successor Calcagno. On the other hand, Benedict XVI had to renew the commission to leave the house in good order, since its mandate was going to expire. But he also wanted to leave a free hand to his successor, and that is why he only replaced Nicora (who had become President of the Authority for Financial Information) and confirmed all the other members.

Pope Francis wanted to wait and study the issue. In the end, he opted for a radical change. Only Jean Louis Tauran, President of the Pontifical Council for Interreligious Dialogue, kept his post within the commission, the only bridge between the old and the new management. Pope Francis appointed as a member of the new board: Santos Avril y Castellò, Archpriest of the Roman Basilica of Saint Mary the Major and a good friend of the Pope; Cristoph Schoenborn, Archbishop of Wien, Austria; Thomas Christopher Collins, Archbishop of Toronto, Canada; and Pietro Parolin, Secretary of State.

Neither Calcagno, nor any other APSA representative, have been included in the ranks of the commission. More than a “discontinuity” choice, or as an end to Cardinal Bertone’s era, Pope Francis’ decision should be read as one of strong continuity with Benedict XVI’s policy on finances.

Multilateralism brought the Holy See to look at international standards when dealing with its own financial transparency. Undergoing the evaluation process of the Council of Europe’s MONEYVAL committee, as the Vatican did, means engaging in a multilateral dynamic and peer-to-peer relations with other States, on the basis of international standards.

This is the reason why the collegiality policy cannot be applied anymore to the Vatican financial intitutions, since there must be a clear distinction between a public authority (APSA) and a financial institution (IOR), and this is exactly the reason why Cardinal Calcagno can no longer be part of the IOR Cardinals’ Commission.

Nothing extraordinary, from this perspective. Pope Francis merely took Benedict XVI’s work and carried it on, until bringing to a conclusion the reform of the Vatican financial system. The new anti-money laundering law, and the establishment of the Committee for Financial Security, enhanced and surpassed the first anti-money laundering law, which was drafted by external consultants and then completely rewritten by Vatican experts in order to fully comply with international standards.

It would have been perhaps useful if someone would have explained what was going on, in terms of financial reform. For months, newspapers wrote about an “examination” of the Holy See finances by the European commissioners; about the Vatican need to be included in a “white list” which in fact does not exist; and about a report which purportedly represented either an upgrading or downgrading of the standing of Vatican finances by European authorities, while it was merely a “peer review.”

These sort of clarifications seemed to come late, and were also obscured by internal feuds that led to many flawed characterizations of the transparency process. Misinformation often leaked to newspapers by Vatican individuals with an agenda.

Left unanswered is the question about who in particular had wanted to undermine Benedict XVI’s pontificate. As is the question of whether Pope Francis’ pontificate is being rightly defended, by the Vatican institutions themselves.

Pope Francis loves to speak off-the-cuff, and his spontaneity has led to some misunderstandings and to more or less instrumentalized controversies regarding what he says. So, the Vatican felt obliged to deliver a note (posted Jan. 13 on the Facebook page for the Vatican’s “news.va”) in order to precisely enumerate every official websites where Pope Francis’ statements and comments can be read, in order to avoid any further misunderstandings.

It was a necessary measure. Today, many in the Vatican are profoundly aware that it is necessary to shed light on what the Church is really all about. These are Vatican officials that go beyond the business-like approach that consultants take.  Consultants like McKinsey, which has already begun its meetings in the Vatican in order to see how to rationalize the Holy See’s media operations (in fact, the debate about a reorganization of Vatican media goes back to 1983, when a commission confidentially met in the Vatican).

Those who look at the Vatican as if it were just a big company, with a need for a rationalization of its structures and a good press office to communicate innovations, can never fully grasp the issues. Many Vatican officials, on the other hand, have dedicated their whole life to the Holy See and are thus fully aware of the need to shed light on the Church’s reality.

It may be true that, regarding Vatican finances, clarifications had come late. However, Father Federico Lombardi, Director of the Holy See Press Office, was really timely in delivering a note explaining in detail why the Holy See was presenting a report on children’s rights to the UN Committee on the Rights of the Child on January 16.

In 1990, the Holy See signed the Convention on the Rights of the Child. Two optional protocols, on “the involvement of children in armed conflict” and on “sale of children, child prostitution and child pornography” complement the convention. Ratification of these kinds of conventions generally require its states parties to present periodic reports on their implementation.

Every state party must report about its implementation of the convention, but the media did not underline this. The media wanted to exploit a “juicy” target of opportunity. After a state submits its written report to the committee, the independent experts who comprise the committee may submit questions in writing to the state party, which also answers them in written form. These questions and answers in some ways guide the dialogue in Geneva. Among the questions, there was one about children sex abuse by the clergy.

The Holy See gave an articulated answer, explaining the differences between the Holy See, the Vatican City State, and the Catholic Church; and about Penal Canon Law and criminal domestic laws. The Holy See briefers stressed that the Vatican encouraged every local bishops’ conference to establish guidelines to address cases of abuse on the basis of their domestic law, emphasizing the commitment of popes to fight the abuses, from John Paul II on.

In his intervention, Silvano Maria Tomasi, the Holy See Permanent Observer to the UN Office at Geneva, listed the most recent Vatican initiatives, not included in the written answers because these initiatives had taken place after the written responses were delivered. Tomasi also stressed the Council of Cardinals’ decision to establish an international commission for the protection of children.

From all of the above, the only thing that the media focused on, yet with a superficial perspective, is the Holy See’s admission that «there are no excuses» for the abuse cases. This despite the fact that Father Lombardi issued a long note clearly explaining that the report is part of a continuous evaluation process, and how to read the Holy See’s answers. Father Lombardi wanted to clear up any possible doubts.

In the same days, Associated Press published a Holy See statistics proving that Benedict XVI defrocked nearly 400 priests for raping and molesting children. The report finally shed light on Benedict XVI effort in combating the clergy sex abuses. The Associated Press got the Vatican analysis statistics, and this was not presumably by chance. In 2010, when another milestone in the sex abuse saga came out with hundreds of cases reported in the media across Europe and beyond, Associated Press quoted a 1985 letter by the then prefect for the Congregation of the Faith Joseph Ratzinger in which he reportedly resisted pleas to defrock a California priest with a record of sexually molesting children, citing concerns including «the good of the universal Church.»

In fact, Vatican communications seem to be evolving around Pope Francis, sensitive to his particular approach and also giving a wider perspective to his comments, and at the same time it is also working to change the narrative for what concerns the Benedict XVI’s pontificate. There is also a clear message that there has not been a breach with the past. There is a continuity in pastoral action, even if there are, as could be expected, differences in style between Benedict XVI and Francis. The report presented in Geneva is a testament to that continuity in diplomatic action.

Ultimately, the statements of Vatican diplomats show that the Church is the largest “values agent” in the world. While keeping a consistent stance (that of the common good and of the defense of human dignity), Vatican diplomats know how to enshrine, in the best possible ways, every papal comment. The same is true of Vatican officials charged with drafting official documents. In this way, the Pope’s worldviews and concerns are preserved and his guiding principles are embraced by the people.

The Catholic Church is still alive precisely because of the completeness of its content. No professionalizing of her communications will ever be able to displace this expertise. The Church has been nurturing this expertise for several millenniums.

The absence of Msgr. Pietro Parolin at the ceremony of his taking possession as Secretary of State was certainly not a good thing. Struck by gallstone (or appendicitis according to other sources), Msgr. Parolin had to undergo an urgent, albeit not grave, surgery operation. During the ceremony, Pope Francis, after thanking the outgoing Secretary of State Card. Bertone, coined for Parolin a peculiar description: Secretary of State

Prolonging the absence of a leader at the helm of the Secretariat of State also means pushing back the attention-seeking obsessive tendencies of Vatican officials and dicasteries, always ready to jump to center stage. At the same time, it seems that Pope Francis wants to go beyond the Roman Curia.

The Pope’s inability to bear a central government would come from his personal experience of marginalization. As a young head of the Province of the Company of Jesus, he was assigned to Germany (which he felt was like being exiled) to study for a PhD he never completed, and then called again to Argentina and assigned to teaching.

The decade of the 80s is a “vacuum” in Jorge Mario Bergoglio’s biography. In experiencing this exile and marginalization, he would have concluded that governments are merely power establishments,  and that reality is better grasped from the periphery.

This is how the assertive Jesuit became a bishop impatient with centralized management, one who takes upon himself all management responsibilities, because he thinks it is best to trust no one.

This exile, together with the experience of living the military dictatorship in Argentine, forged the character and the ideas of Jorge Mario Bergoglio. Perhaps he associates the Curia to the Province of the Company of Jesus which exiled him to Germany. As Pope, he paid homage to the late Jesuits General, Arrupe, by visiting his tomb at the “Casa Generalizia”, the Jesuits headquarters in Rome.

Yet Arrupe was one of the strongest “adversaries” of Bergoglio within the Jesuits, and some Jesuits have pointed out that, had Bergoglio not become Pope, he would have never gone to render honor to Arrupe’s tomb. This might have been the moment Bergoglio really internalized that he had become Pope.

Staying away from the Curia increasingly became “a must” for Jorge Mario Bergoglio (in fact he often did not attend the meetings of the Congregations he was a member of). Now, one of Pope Francis’ missions is to save the Roman Curia from itself. He does not want special events to take place at the Vatican. Not even the Curia’s traditional spiritual exercises of Lent will be held as usual in the Vatican’s Redemptoris Mater Chapel this year.  Instead, they will be held in Albano, Rome. The exercises will be lead by Fr. Angelo de Donatis, a simple priest.

As much as Francis wants to go beyond the Curia, someone will still be needed to run the Curia. Someone who, at the very least, can handle rumors and anxieties at the Secretariat of State. Pietro Parolin is someone who would probably take on this difficult task.

Parolin’s task will not be just about getting a new handle over diplomacy and downplaying general affairs. He must also, most importantly, give a direction to the government to the Holy See.

Pietro Parolin will not be a vice-Pope. Certainly, he will need to protect himself from pressures coming from all directions.  And he will also need to reign in those who vie for recognition and merits since the arrival of the new Pontificate.

A sign of the complete anarchy reigning within the Vatican Walls is the last small reform of Vatican Finances, regarding the Administration of the Patrimony of the Apostolic See (APSA). The reform was announced in a press release by the APSA, which the Holy See Press Office circulated in a bulletin different from its own bulletins.

The press release announced that APSA had started the “due diligence” process, hiring the Promontory Financial Group (already contracted by the IOR) for this purpose. Due diligence is the “evaluation of risks” in investments and loans, particularly with regards to the clients in a bank.

Yet, even if APSA is usually described as a sort of central bank, it is not a bank. When the evaluators of the Council of Europe Committee of MONEYVAL asked the Vatican about APSA’s activities, the Vatican explained that APSA has some accounts, but that its banking-type activity is minimal (they have only 23 accounts, 15 belonging to clerics and 8 to laymen) and that a process to close this banking-type activity started in 2001.

The APSA decision to announce the starting of the due diligence process is problematic: the APSA is not a bank, but is acting as one. So, there is an open question: what should the due diligence process be about? Are the Vatican dicasteries subject to due diligence on their activities?

The same issue arose when the Institute for Religious Works (known with the Italian acronym of IOR) issued its Annual Report, as banks usually do. The IOR is often described as the “Vatican bank” or the “so-called Vatican bank”, although the Vatican has always pointed out that –and explained why– the Institute is not bank. The report could confuse public opinion. If the IOR puts into practice everything requested from a bank, the debate about the nature of the Institute is somewhat “suffocated” from the beginning. Does this ambiguity help the Holy See’s mission?

Hardly, judging from the way the Holy See operates in the European and the international arenas.

The Holy See strategy was that of creating a customized financial model for the Vatican (where there are no banks or markets). One that would adhere to international standards while maintaining the Holy See’s “special kind” of sovereignty.

Neither the APSA nor the IOR seemed to be aware of this. They appear to want to act solo, without coordinating with the “central government” of the Church, in order to show the world that a path toward transparency has began. This behavior earns a lot of publicity to the IOR’s President, Von Freyberg, and elevates the image of the APSA (as well as the profile of external agencies, like Promontory, despite the fact Vatican officials are doing most of the work).

There is something worth noting about APSA. Cardinal Attilio Nicora had been for years president of this Vatican dicastery, until he had to resign, since he was also president of the Authority for Financial Information. Nicora’s conflict of interests (he was at the same time president of both a controller body and a controlled body) was the only issue underscored in the July 12 MONEYVAL report. But Nicora always kept control over the APSA, which he considers a creature of his. Most of the APSA moves are inspired by Nicora, anxious to take center stage once more.

In the meantime, “second tier officials” rose in importance within the Vatican, but it is hard to know on whose recommendation.

One of this second tier characters is Ilson de Jesus Montanari, an employee with a rank of second class secretary who has suddenly been catapulted to the number two position at the Congregation for Bishops. A Brazilian and young, Ilson is rumored to be a close friend of Msgr. Fabiàn Pedacchio Leaniz. Pedacchio is the Pope’s personal Secretary, but still serves as an official of the Congregation for Bishops, where he was sent by Bergoglio in 2007 (Pedacchio had been Bergoglio’s eyes on the Curia for several years).

It was Giovan Battista Ricca who introduced Ilson to Cardinal Bergoglio. Ricca, it seems, backed Ilson’s appointment. Ricca was the director of the House of Clergy in Via della Scrofa, where Ilson used to live and where Cardinal Bergoglio used to stay when he came to Rome.

Ricca was appointed by Pope Francis prelate of the IOR. As soon as the news of the appointment spread out, the vaticanista Sandro Magister published a leaked document about a homosexual scandal which involved Ricca when he worked in the Papal nunziature in Uruguay. The documents accused Ricca of being “the prelate of the gay lobby”, which is how Magister headlined his article. Was also Ilson part of a the gay lobby as Ricca was accused to be? Was he only part of the small circle of friends that rose around card. Bergoglio when he was cardinal? This kind of speculation is often rumored in Vatican corridors.

Finally, one of Pope Francis’ most recent appointments is food for thought. Fernando Vergez, Legionary of Christ, General Secretary of Vatican City State, will receive the title of bishop. Pope Francis (somewhat belatedly) announced this decision with a long and unusual letter to Cardinal Giuseppe Bertello, President of the Vatican City State government.

In the letter, Pope Francis explains that the General Secretary of Vatican City State should focus on pastoral duties and the care of the souls of all at Vatican City State. So, while Vergez will be a sort of “bishop of the Vatican parish”, Bertello is charged with management, thus increasing his power.  It is also the Pope’s intention to entrust Bertello with the coordination of the Curia’s general affairs.

The upcoming ordination of Vergez as archbishop is a good development for the Legionaries of Christ. Vergez’ mother was one of the women in the close circle of Marcial Maciel, the founder of the Legionaries who lived a double life: that of a respected founder of a Congregation full of vocations; and that of a drug addict who had love affairs with several women, at least three illegitimate children, and who abused his seminarians.

The secretary of the late Argentine Cardinal Eduardo Pironio and a respected and active member of the Legionaries of Christ, Vergez distanced himself from the founder of the Congregation at the right time, when the rise of Legionaries of Christ was going to come to an end because of the process instructed by the Congregation for the Doctrine of the Faith lead by Cardinal Joseph Ratzinger. Vergez reportedly testified that the Legionaries statutes approved by Pope John Paul II were not those the Congregation really applied. This is how he was awarded a post in the Vatican City State government. From there, he was catapulted to the number two position at the Vatican City State government.

Vergez’s promotions will presumably help the image of the Legionaries of Christ, which is preparing its general chapter in March and that is ever losing more “freshmen”. The Legionaries of Christ and its traditional supporters, like Secretary of State Emeritus Angelo Sodano, can thank the Pope for this opportunity.

Ultimately, Pope Francis clearly stated that he felt nostalgia for the Curia man of the old days. After the promotions of people presumably part of a gay lobby (and can this not be but a strategy to keep everybody under control?), and his preference to govern without the Curia as much as he can, Pope Francis keeps on going his own way.

Yet, a signal to Parolin has been given. The Pope said Parolin need not worry too much about his new job. Parolin’s importance is not considered pivotal, as evidenced by the Pope not waiting one week for Parolin to get well before officially inaugurating the new Secretary of State’s term in office.  

All too often, the mere mentioning of Vatican finances immediately prompts the depiction of mysterious scenarios and obscure arrangements. Recently, an article in the English newspaper The Guardian emphasized that it was funds that the Italian dictator Benito Mussolini’s gave the Vatican that allowed it to build a financial empire that now includes luxury shops in the heart of London. In reality, it is not quite so. History can help us to better understand Vatican finances reason for being. Basically, the Vatican’s financial structure was born with the establishment of Vatican City State, «that piece of land that permits us to fulfill our mission», in Pius XI’s words.

Vatican City State was born as the reparation for a wrongdoing. In 1870, the Bersaglieri soldiers of the Italian King Vittorio Emanuele opened a breach in Rome’s city walls, a dozen metres to the west of the Roman gate – known as Porta Pia – and  marched down Via Pia, defeating Pope Pius IX’s troops. The Pope went into exile to Castel Gandolfo, and most of the Holy See’s patrimony was confiscated. It is in that period that Saint Peter’s Pence collection began. It was a spontaneous collection of offers from the faithful, and this allowed the Holy See to cover its bills. The Kingdom of Italy proposal for reparations, the legge delle guarentigie (Law of Guarantees) was a unilateral offer that did not compensate the Holy See for the loss of goods and lands. In addition, many lands belonging to monasteries and parishes were also confiscated, to give the economy of the Kingdom of Italy a respite. Relations between the Holy See and Italy were very tense. With time, this tension subsided. Catholics re-organized, overcame the Papal ban over political participation in the institutions of the Italian Kingdom, and gave birth to a political thought of their own, along the lines of the “new-born” social doctrine, inspired by Pope Leo XIII –who is considered by many one of the greatest philosophers of the last two centuries. Then, the First World War broke out. Pope Benedict XV was committed to peace, and frustrated by how difficult it was for the Holy See to conduct diplomatic relations. At the time, States entertained diplomatic relations with the Holy See through their embassies to Italy. Countries in war with Italy recalled their ambassadors, and so relations between the Holy See and these States in particular became very difficult. Benedict XV was keenly aware of this: a territory and a sovereign State was needed to carry a mission of peace.

When the First World War ended, Giovanni Giolitti was the Italian premier. Benedict XV considered the possibility of a «Conciliation» between the Church and the Italian State. Giolitti was against any such conciliation because he opposed (like some still do today)  recognizing the Holy See’s sovereignty. «If the Vatican – Giolitti said – would ask me to for a fully sovereign territory the size of a postage stamp (and certainly it would ask for something much bigger), I wouldn’t give it to it. » Giolitti’s words are reported in the Conciliation Memoirs of Cardinal Pietro Gasparri, still unpublished, and also mentioned by Benny Lay – the dean of the vaticanologists – in his book Finanze Vaticane (Vatican Finances). Giollitti’s attitude moved the Vatican to turn its attention to Benito Mussolini, who – when he was just a member in the Chamber of Deputies – took the position that fascism should not preach or practice anti-clericalism. It was 1921. The following year, Mussolini rose to power.

Conciliation negotiations were long and difficult. One of the challenges was agreeing on financial compensation. Pius XI worked personally on this issue. The Pope aimed to obtain an indemnity of 2 billion liras –which the Italian State could pay in instalments. For the Pope, this amount corresponded (with the addition of interests) to what the Italian State had unilaterally committed to pay after the occupation of Rome, per the Leggi delle Guarentigie. Pius XI settled, in the end, with 1 billion and 750 million liras, part in cash, part in bearer bonds.

What to do with this money? Two months after signing the Lateran Pacts and almost thirty days before their ratification, the Pope reached out to Bernardino Nogare (born in 1870, deceased in 1958). Pius XI asked Nogara to manage the funds from the Financial Convention of the Lateran Pacts. This is the «Mussolini money» The Guardian wrote about. This money came, in fact, from the Italian State as compensation for the occupation, and helped the Holy See to carry on its mission.

The Guardian, however, maintains that Mussolini was rewarding the Vatican with a huge amount of money in exchange for support and official recognition of the regime. This money would have been invested in prestigious real estate in London. The real estate belonged to Grolux Investments, a society controlled by the Swiss Profima. The latter could be traced back to the Vatican. In fact Bernardino Nogara was a member of Profima’s board.

Why would any of this be considered breaking news? Bernardino Nogara introduced the Vatican to the holding of stocks. Charged with the Special Section of the Administration of the Apostolic See Patrimony (the so-called Speciale), Nogara bought stocks, making conspicuous and smart investments. Through them, Nogara became a member of the boards of administration of several Italian companies, which enhanced his international prestige. During the Great Depression of ’29, Nogara founded Grolux Investments and the Swiss society Profima, to diversify Holy See investments, particularly by investing in gold and real estate.

The story of the establishment of Grolux is in John Pollard’s book Money and the Rise of the Modern Papacy: Financing the Vatican, 1850-1950. In that book, Pollard follows a money trail over three continents. Pollard’s is said to be a book about Popes and their administration of money. But truly, most of the Popes –with Pius XI one of the exceptions– have not paid any attention to administrative matters.  The latter were delegated to a highly select group of ecclesiastics and lay people with financial expertise. They are fascinating protagonists of this story. Just think about Giacomo Antonelli, Cardinal and Pius IX’s Secretary of State, who oversaw the Papal treasury from 1850 to 1876. Antonelli was one of the architects of the first massive reorganization of the budget for the Papal States. The success of his efforts to balance the budget depended on a loan requested and obtained from the Rothschild Banking House. Some could be surprised: did the Church really ask for a loan to a Jewish bank? In fact, this should not come as a surprise, considering that the Church’s relations with the Jewish community are closer than one may think. So close that Federico Cammeo, a Jewish jurist, drafted the Fundamental Law of the new-born Vatican City State after the Conciliation Bernardino Nogara, furthermore, was a top manager of the Banca Commerciale Italiana, managed by the Jewish banker Giuseppe Toepliz (and because of this, for many years the Vatican did not buy stocks in Italian banks other than the Banca Commerciale Italiana).

Nogara could count on the benefits of a renewed diplomatic activity of the Church.  Benedict XV had left the Vatican coffers empty, because the First World War prevented bishops from coming to Rome for ad limina visits and contribute to Peter’s Pence. From 1930 on, Nogara invested in a web of projects extended throughout Europe and financial centres in the United States and South America. He was the first non-roman to be in charge of the Vatican finances. He came from a family so Catholic that it weep because of the breach of Porta Pia. With a degree in industrial and electro-technical engineering from the University of Milan, he left for England as soon as he married and went to work in a mine in Wales. From there he was sent to a mine in Greece. In 1908, he was living in Constantinople and managing mines in Asia Minor. There, he founded the Eastern Commercial Society, a branch of the Banca Commerciale Italiana. Well-versed in the political and economic realities of the Ottoman Empire, he became the Italian government’s trusted advisor for Easter affairs.  In this role, he was involved in the Ouchy Treaty, which ended the war in Libya between Italy and Turkey. In 1914, Nogara was the Italian delegate to the Board of Administration for the Ottoman Public Debt.  At the end of the First World War, he was part of the economic and financial commission of the Conferences created to draft peace treaties with Austria, Hungary, Bulgaria, and Turkey.

Overall, Nogara was comfortable dealing with multiple relations in diverse context – the diplomatic-political context as well as the banking one. He was the right man to manage a estate with such a clear international make-up that Speciale’s staff were required to be fluent in French and English.

In the meantime, the Opere di Religione (Religious Works) administration increased in importance within the Sacred Walls. Italy’s alliance with Hitler’s Germany in the war, in 1940, makes increasing the operational capacity of the Opere di Religione all the more important and urgent. This branch of the Vatican financial system, since the very beginning of the war, was able to exchange Italian liras for hard currencies, which facilitated the Pope’s aid to the victims of the conflict. How to enhance this work? From 1940 on, the administration of Opere di Religione was placed under a Cardinals’ Commission. Through this mechanism, the Pope’s assistance reached occupied Poland, the Balkans, and wherever the Pope and the Secretariat of State needed it to reach.  As the Ossservatore Romano (the Vatican daily newspaper) recently noted in an article heading, «Pius XII fought Nazism even with (money from the Vatican’s) investments.»

Were these operations legal? Carlo Pacelli – Pope Pius XII’s nephew and general advisor of Vatican City State – raised this issue with some Italian jurists, among them Vittorio Emanuele Orlando – a prominent Italian politician, who had been Prime Minister and was also part of the Italian delegation in the negotiations of the Peace Treaty of Versailles, which ended the First World War. The question was: given that the Opere di Religione operated from the Vatican, were its transactions linked to Vatican City State or could they be considered legally independent? The jurists concluded they could be considered independent. And so, on June 27, 1942, Pius XII promulgated the establishment of the Institute for Religious Works (Istituto per le Opere di Religione, I.O.R.), an entity with its own corporate identity. This permitted the Holy See to deliver the Pope’s aid all over the world, even to Hiroshima and Nagasaki – also thanks to Vatican bank accounts opened in the United States, a request made by Vatican official to the U.S. Chargé d’Affaires Harold Tittman and approved by President Roosevelt.

This is how the Holy See’s estate and financial wealth was born and its management evolved. It is a sovereign wealth fund, managed through a sort of Central Bank (APSA; the Administration of the Apostolic See Patrimony) and an entity (the IOR) which assets are at the sovereign’s disposal, while the Prefecture for Economic Affairs oversees over the dicasteries balances and have now power to address Holy See’s financial and economic policy and everything is under the Authority for Financial Information oversight. These financial arrangements have been enhanced and modernized through the years with new agencies and also new ways to report balances. The Holy See is now committed to a qualitative enhancement toward full financial transparency.  Perhaps this development is most worrisome to those who have been reckless in their interactions with Vatican financial institutions, taking advantages of the latter’s peculiarities and of Vatican sovereignty. Ultimately, the Holy See financial scandals were always about Italian bankers (from Michele Sindona, to Roberto Calvi, to Ettore Gotti Tedeschi, the former IOR president who was recently involved in an Italian bank investigation regarding his role as Italian representative of the Spanish bank Grupo Santander), and in fact relations between Italy and the Holy See have been very tense, seemingly proving a certain level of Italian hostility toward the Holy See’s path to financial transparency. The Holy See has overcome this hostility, embarking on an international standards path, which is the only way to go in a globalized world. This path will eventually make Vatican City State a modern State, with multilateral relations and an internationally recognized financial capacity. This is the only path to make the Holy See independent from any external influence. The question is: who is not comfortable with the Holy See sovereignty?