ROME, February 20, 2018 (LifeSiteNews) – Leaked documents obtained by LifeSiteNews connect the Pope himself to a new Vatican financial scandal and raise serious questions about his global reputation as the “pope for the poor.”
LifeSiteNews has obtained internal documents of the U.S.-based Papal Foundation, a charity with a stellar history of assisting the world’s poor, showing that last summer the Pope personally requested, and obtained in part, a $25 million grant to a corruption-plagued, Church-owned dermatological hospital in Rome accused of money laundering. Records from the financial police indicate the hospital has liabilities over one billion USD – an amount larger than the national debt of some 20 nations.
The grant has lay members of the Papal Foundation up in arms, and some tendering resignations. Responding to questions from LifeSiteNews, Papal Foundation staff sent a statement saying that it is not their practice to comment on individual requests.
Speaking of grants in general, the Papal Foundation said their mission has not changed. “The grants to help those in need around the world and of significance to the Holy Father are reviewed and approved through well-accepted philanthropic processes by the Board and its committees,” it said.
Lay membership or becoming a “steward” in the Papal Foundation involves the pledge “to give $1 million over the course of no more than ten years with a minimum donation of $100,000 per year.” Those monies are invested in order to make a perpetual fund to assist the Church.
However, the majority of the board is composed of U.S. bishops, including every U.S. Cardinal living in America. The foundation customarily gives grants of $200,000 or less to organizations in the developing world (see a grant list for 2017 here) via the Holy See.
According to the internal documents, the Pope made the request for the massive grant, which is 100 times larger than its normal grants, through Papal Foundation board chairman Cardinal Donald Wuerl in the summer of 2017.
Despite opposition from the lay “stewards,” the bishops on the board voted in December to send an $8 million payment to the Holy See. In January, the documents reveal, lay members raised alarm about what they consider a gross misuse of their funds, but despite their protests another $5 million was sent with Cardinal Wuerl brooking no dissent.
Along with this report, LifeSite is publishing three leaked documents. Access them here, here, and here.
‘Negligent… flawed… reckless’
On January 6, the steward who until then served as chairman of the Foundation’s audit committee submitted his resignation along with a report of the committee’s grave objections to the grant.
“As head of the Audit Committee and a Trustee of the Foundation, I found this grant to be negligent in character, flawed in its diligence, and contrary to the spirit of the Foundation,” he wrote in his resignation letter accompanying the report. “Instead of helping the poor in a third-world country, the Board approved an unprecedented huge grant to a hospital that has a history of mismanagement, criminal indictments, and bankruptcy.”
“Had we allowed such recklessness in our personal careers we would never have met the requirements to join The Papal Foundation in the first place.”
The audit committee chairman’s report noted that the Foundation’s “initial $8 million was sent without any supporting documentation.”
He said the board eventually received a “2-1/2 inch thick binder of information (mostly in Italian)” but it lacked essential details. The report notes:
There was no Balance Sheet. There was no clear explanation as to how the $25 million would be used. Normal grant requests are fairly specific about how our money will be used. Buried in the thick binder was only a one-page financial projection labelled “Draft for Discussion” showing:
2017 1.6 million Euro PROFIT
2018 2.4 million Euro PROFIT
2019 4.4 million Euro PROFIT
And on this data, our Board of Directors voted to grant this failing hospital $25 million of our hard-earned dollars. To put this in perspective, rarely have we given above $200,000 to a grant request. I pointed out that there was NO PROFESSIONAL DUE DILIGENCE, just a lot of fluff. If the numbers presented were accurate, then this commercial enterprise should go to a bank. They don’t need our money. If the numbers were not accurate, then a decision could not be made.
The controversial hospital
The lay members of the board have good reason to be concerned about the supposed recipient of their generosity. Pope Francis asked for the funds to be directed to the Istituto Dermopatico dell'Immacolata (IDI), a dermatological hospital in Rome that has been plagued with corruption and financial scandal for years.
On May 15, 2013, ANSA, the leading news wire in Italy, reported “police confiscated over six million euros worth of property and bank accounts as part of investigations into alleged corruption at the Italian hospital group Istituto Dermopatico dell'Immacolata (IDI).”
The news of Vatican financial corruption connected to the IDI hit international headlines in 2015 with a June 20 Reuters article showing the Italian magistrates suspected Vatican Cardinal Giuseppe Versaldi diverted 30 million euros destined for a Church-owned children’s hospital to the Church-owned IDI.
Another ANSA piece from 2016 reported, “Finance police discovered IDI was 845 million euros in the red and 450 million euros in tax evasion while 82 million euros had been diverted and six million euros in public funds embezzled.”
In May 2017, La Repubblica – the only newspaper Pope Francis says he reads – reported on court rulings revolving around the IDI detailing twenty-four indictments, leading to a dozen convictions, some of which carried over three years in prison. The court recognized the evidence from the financial police including “about 845 million euros in balance sheet liabilities and over 82 million in diverted funds, plus the undue use of another 6 million public funds.”
‘He is the Pope, and we listen to him’
On January 19, after numerous calls and emails among lay members supporting the audit committee’s position, the Foundation’s executive committee sent a letter trying to placate the donating members.
That document, sent by Foundation President Bishop Michael Bransfield, and signed by Cardinal Wuerl, Cardinal Timothy Dolan, as well as several Stewards on the executive, highlights that the request for the donation came directly from Pope Francis. They wrote:
Many of us believe that, had it been us, we would have told the Holy Father that the Papal Foundation would not be able to help on this project – but we weren’t in the room with him. We can surmise what we would have done, had it been one of us, but we really don’t know. In fact, we have been explicit throughout our history that this is the Papal Foundation. We have worked in conjunction with the pope from the very beginning. We don’t approve every request he makes, but he is the Pope, and we listen to him, and we listen intently. (emphasis in the original)
Attempts to mollify big donors
The executive’s letter regrets “the significant degree of discontent” but admonishes: “If we do not have love in our hearts toward one another, we are like clanging gongs or clashing cymbals.”
“We do not believe it is in the best interest of Christ or his Church to presume bad faith or ill will…,” it adds, but allows it is “legitimate to have disagreements over prudential decisions.”
“The Papal Foundation has bylaws that put the ultimate control of the organization in the hands of the US-domiciled Cardinals,” says the letter.
The executive concedes that when a grant is “over one hundred times the size of many of our other grants, there should be near unanimity in the vote, and that is not what happened.”
The letter also notes that while half of the $25 million was already transferred to the Vatican – for the IDI – Cardinal Wuerl “has written to the Secretary of State to request, given the circumstances surrounding this grant, that the Holy See decline to accept any further monies pursuant to the grant that was approved in December.”
Moreover the executive proposes a “new grant policy wherein any grant of more than $1 million must be approved by a majority of both lay and clerical Trustees on the Board.”
A first attempt to quell the stewards was sent on January 8 suggesting that the massive request of funds for the corrupt hospital was actually a part of Pope Francis’ effort to fight financial corruption. Accompanied by a letter and reflection from Cardinal Wuerl, a “PF Stewards Report” explained that the $25 million request of the Pope for the IDI was made, “in the larger context of the Holy Father’s commitment to confront and eliminate corruption and financial mismanagement both within the Vatican itself and in outside projects with which it was involved or sponsored.”
A highly trusted source inside the Vatican informed LifeSiteNews that much financial corruption continues unabated under Pope Francis even though the Pope was informed of it.
The Papal Foundation’s record
The Papal Foundation has a stellar record of assisting the Popes to support the poor, largely in developing nations. Since their first gift to Pope St. John Paul II in 1990, the Foundation’s fund has grown to over $215 million, and has given a total of $121 million in grants and scholarships.
From a look at their recent grants it is evident that the use of funds heretofore has been above reproach. The wealthy American Catholic families funded the building of churches, monasteries, schools and seminaries in impoverished nations. AIDS hospices, facilities for care of youth with physical and mental disabilities, and the like have also benefited from their generosity.
It seems this scandal is the first in the 30-year history of the organization. The executive letter states: “It is true that over the last fifteen years, if not longer, most of our donations have gone to the poor, and most of those poor have been in the poorer countries of the world.” It acknowledges that throughout the organization’s history, “almost all of the decisions of the organization were made with near unanimity of the Board.”