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Top cardinal claims responsibility for Vatican loan scandal, does not mention link to Pope Francis

Paul Smeaton Paul Smeaton Follow Paul

November 22, 2019 (LifeSiteNews) – Cardinal Pietro Parolin, the Vatican Secretary of State, has informed Catholic media that he is responsible for arranging both a 50 million Euro loan to help the Vatican purchase a scandal-ridden Italian hospital and for requesting a subsequent $25 million grant from a US-based Catholic foundation in order to cover that loan. He made no reference, however, to evidence that the request for the $25 million grant was originally linked to a request coming from Pope Francis.

Parolin confirmed that he had personally arranged the 50 million Euro loan from APSA, the Vatican’s central bank, which was used to help purchase the “Istituto Dermopatico dell'Immacolata” (IDI) hospital - a bankrupt hospital in Rome with a history of fraudulent financial activity, including activity linked to the Vatican.

In order to help cover the loan, a request was made by the Vatican for a grant of 25 million USD dollar from the US-based Papal Foundation. The Papal Foundation is funded by lay members who 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. Ordinarily the Papal Foundation issues grants of no more than $200,000 to organizations in the developing world.

The $25 million grant was initially approved by the Foundation and $8 million was sent to Rome in July 2017. A further $5 million was sent in January 2018. The unusual grant was strenuously objected to by lay members of the Foundation with some resigning from the Foundation, including the chairman of the Foundation’s audit committee. It was eventually decided in January 2018 that no more of the outstanding amount of the grant would be sent from the Foundation to Rome.

In February 2018, LifeSite broke the news that leaked internal documents from the Papal Foundation suggested that Pope Francis was personally connected to the request for the grant. On January 19, 2018 the Foundation’s executive committee sent a letter to its donating members, in response to the concerns that many of them had raised about the grant. That letter was sent by Bishop Michael Bransfield, then president of the Foundation, who has subsequently resigned in scandal after allegations of sexual harassment and lavish spending. The letter was also signed by Cardinal Wuerl, Cardinal Timothy Dolan, as well as several Stewards on the executive. It 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)

Both mainstream and Catholic media around the world picked up on the story linking Pope Francis to the grant.

Pope Francis subsequently cancelled his annual audience with the Foundation members. This was, reportedly, the first time in the thirty-year history of the Foundation when there has been no annual audience with the Pope, excepting occasions when the Pope has been unwell.

In November of that year Legatus, another US-based organization for Catholic business leaders, announced that it would not be sending its annual contribution to the Holy See

While admitting to his own involvement with both the 50 million Euro loan and the controversial grant, Cardinal Parolin made no reference to any involvement by Pope Francis in either case.

Cardinal Parolin told Catholic News Agency (CNA) on November 19 that “the operations involving IDI...are ascribable to myself.” 

Cardinal Parolin is also reported to have said that the initial loan transaction to assist with the purchasing of the hospital was “carried out with fair intentions and honest means.”

However, the report points out that Moneyval, the Council of Europe’s Committee for combating money laundering and terrorist financing, put in place regulatory measures that legally prohibit APSA (the Vatican Bank from where the loan was drawn) from making loans that finance commercial transactions. The loan was reportedly opposed by Cardinal George Pell, who at the time was the Vatican Prefect for the Secretariat of the Economy. 

The IDI, a dermatological hospital in Rome, has been plagued with corruption and financial scandal for years. Reports from 2013 claim “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).”

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.”

With regards to the decision for the Papal Foundation to approve a grant more than ten times its customary amount, one of the three leaked documents, “The Papal Foundation Report to the Stewards”, states that initially the grant was accepted unanimously by the board of the Papal Foundation after which $8 million of the grant was sent to Rome. The following $5 million that was sent to Rome was done after numerous protests from the donating stewards prompted a meeting and subsequent vote on whether or not to send the remaining $17 million of the grant. 

It would seem that in both cases the cardinals on the board of the Foundation ensured that the grant was approved. In the letter previously cited from Foundation President Bishop Michael Bransfield, and signed by Cardinal Wuerl, Cardinal Timothy Dolan, in a clear reference to the criticism of the process by which the grant was approved, they state:

“The Papal Foundation has bylaws that put the ultimate control of the organisation in the hands of the US-domiciled Cardinals. Those Cardinals are the Members of the organization, who approve the Trustees who serve on the Board. These same Cardinal Members are also Trustees who may vote at a board meeting. While donors might certainly and legitimately claim that they were unaware of the governance structure of the organisation, this information has never been hidden from anyone.”

On January 6, 2018, 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.

Commenting on the December vote which led to the approval of the remaining $17 million being sent to the Vatican (although ultimately only $5 million was sent) he said:

“In a carefully choreographed process the 15 bishops outvoted the 9 Stewards with a vote of 15 YES, 8 NO, 1 ABSTENTION (two bishops did not participate). It was a clear out-muscling of the Stewards. Political favor replaced sound stewardship of our resources.” 

With regards to the grant generally his report stated:

“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.”

His report also noted that the Foundation’s “initial $8 million was sent without any supporting documentation.” 

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