Render unto God the Things that are Caesar’s
[March 6, 2014]
Last week Pope Francis released a motu proprio restructuring the economic and financial organizations within the Holy See, and creating:
A Council for the Economy; a consultative body headed by a Cardinal coordinator reporting to the Pope;
A Secretariat for the Economy; a supervisory body with jurisdiction over the administrative and financial institutions throughout the Holy See, headed by a Cardinal Prefect reporting to the Pope; and
An Auditor General; appointed by the Pope.
A motu proprio, ‘his own word’, is something like an administrative statement from the top; not quite an encyclical, a papal bull, or an exhortation; but very authoritative – think of it as a presidential Executive Order.
The media pick-up was extensive but shallow – mostly accolades rather than analysis very much needed when dealing with the Vatican’s financial and administrative power centers being reorganized by a subtle decider-in-chief who is unconstrained by parliamentary procedures.
There are at least five principal entities involved:
APSA, set up in 1967 as the holding entity for the Vatican’s financial portfolio;
AIF, the (would-be) regulator of financial activities within the Vatican, set up in 2010 in response to a history of money-laundering;
IOR, the Vatican Bank of song and legend, set up in 1942, and the catalyst for creating the AIF;
The Prefecture for Economic Affairs, set up in 1967 with oversight for the budgets of the Curia (congregations, i.e. departments); and
The Governorship of the State of the Vatican City, set up through the Lateran Pacts of 1929 with Fascist Italy to normalize the governance of sovereign Vatican territory within Italy.
The discussion below is focused on two key aspects of Francis’ historic management move, the Council for the Economy and the Secretariat for the Economy; followed by some end-comments.
The Motu Proprio
Before you wander off to more important pursuits, probably thinking that this is inside-the-Vatican baseball with limited impact beyond the Leonine Walls which gird the Vatican, please keep in mind the following:
- The Holy See is an absolute monarchy: no separation of powers, no troublesome checks and balances; its global reach includes 5,000 dioceses and 220,000 parishes over which Rome exercises authority, direct or de facto ownership, and tight management control;
- The patrimonial value of the Holy See’s holdings is literally incalculable…what would the Pietà go for on eBay? But the market value of its world-wide real estate is in the hundreds of billions of dollars, maybe half a trillion (!); or euros, or Bitcoins; and
- Its liquid portfolio is in the dozens of billions, probably comparable to the cash stash of Apple or Google (two secular empires also with global reach).
One. The Council for the Economy
“…has the task of offering guidance on economic management and supervising the administrative and financial activities of the Dicasteries of the Roman Curia, of the Institutions connected to the Holy See, and of the Vatican City State.”
Coordinated by a cardinal, the Council will have 15 members consisting of eight collars and seven civilians. It is worth parsing some of the words in its charter. The scope of the Council’s domain is vast; it includes:
Twenty-one ‘dicasteries’, i.e. congregations, or departments of the Vatican government; and papal councils.
There is also mention of the ‘institutions connected’, a delightfully vague phrase which puts a semantic fig leaf over that well-connected institution whose name must not be mentioned, the Istituto per le Opere di Religione; yes, sigh, the Vatican Bank.
Sidebar on the bank:
Its history goes back to its establishment in 1942, as Mussolini’s fascist regime was beginning to disintegrate and smart local money was looking for an exit to Switzerland; throughout, the bank has had a direct-report relationship with the Pope, and has never been part of the Vatican Curia. With such direct access, behind the scenes it has always been very influential, and without meaningful accountability within the Vatican government [not unlike Hillary Clinton during Bill’s presidency].
Lastly, there is mention of the “Vatican City State,” namely the Governorship of the Vatican City State.
The governorship is headed by a cardinal with oversight of property and activity within 105 acres of sovereign territory, as well as a few extra-territorial enclaves elsewhere in Italy.
It is worth recalling that the deputy governor’s memorandum of a few years ago to Pope Benedict, denouncing corruption, was one of the smoking guns during the Vatileaks scandal, and probably the catalyst for Benedict’s sudden resignation in February of last year.
The deputy governor, who imprudently put in writing what many made-members of the Curia knew, was rewarded for his efforts by being exiled to Washington D.C. where he now serves as the Papal Nuncio.
‘Guidance’ and ‘supervision’ are the operative words for the Council’s functions in the motu proprio. Cynics might dismiss the importance of these functions, noting that ‘guidance’ issued from the Throne of St. Peter has been ignored for centuries, by clergy and laity alike; and super-vision could mean looking in from above, without the ability to grasp the inner workings. Ah, those crafty Curiales.
But one must look at the charter of the next entity to realize that a radically new and powerful mechanism for what the organizational wizards call ‘deep-reach management’ has been created, the Secretariat for the Economy.
Two. The Secretariat for the Economy
The Secretariat is headed by a Cardinal Prefect already named, Cardinal George Pell, archbishop of Sydney. The Secretariat is directed by the Pope to
“…undertake the economic audit and supervision of the Bodies [named above], along with the policies and procedures regarding procurement and the allocation of human resources.”
With a finely tuned ear one may pick up the sound of the OMGs ringing throughout the Curia, the connected institutions, and the Governatorato.
What commentators have grasped, correctly, is that this creates a super-department, a secretariat, where to date there has been only one such coordinating entity within the Vatican, the Secretariat of State.
And by media reports, it may be concluded that the secretariat’s capo, 6’3” Cardinal Pell, has the nuanced management style of his (Christian) namesake, George S. Patton, Jr. Let’s hope that Pell will go through the frescoed Vatican corridors in the manner of General Patton’s Third Army knifing across France in the summer of 1944; as the general put it, like bleep through a goose.
The combination of budgetary, personnel and procurement control gives the secretariat the combined firepower of the U.S. executive branch’s Office of Management and Budget (OMB, [not OMG]); the Office of Personnel Management (OPM); and the General Services Administration (GSA).
However, the media have generally missed some vital aspects of this new order of things, through their failure to get beyond their cheer-leading, and do some actual analysis of the radical changes in the Vatican’s power flows. Drilling down, here are some likely first-order consequences.
a) The secretariat has the mandate to break up a little-known real estate empire nested within the Curia, the vast holdings of the legendary Congregation for Evangelization of Peoples commonly known as Propaganda Fide.
This ‘dicastery’ is nested quietly in Rome’s Piazza di Spagna, conveniently offsite, with its own real estate portfolio probably worth over €50 billion (almost $70 billion at current exchange rates).
There have been recurring reports in the Italian press about sweetheart real estate deals between Propaganda Fide and favored friends and politicos. But to date Propaganda Fide has been immune from outside interference or adult supervision.
Historical footnote about Propaganda Fide…About 80 years ago a former Jesuit seminarian from Germany’s Rhineland adopted some of the congregation’s evangelizing techniques for his home country, borrowing the word propaganda as the chosen name for his own government department created in Berlin circa 1933, the Ministry of Public Enlightment and Propaganda.
b) In this new order of things, where is the center of gravity and control, Clergy or Laity?
Some media commentators have seized on this as the key issue, with one Rome-based American esperto reporting that to date money management has been in the hands of clergy lacking ‘formation’ in business management.
This is unhelpful, for two reasons:
It misses what is in plain site, the deliberate misdeeds of high-ranking Vatican prelates in recent history, as detailed below; and
It whitewashes these prelates, absolving them of responsibility for financial scandals that stretch from the recent past to the mid-1970s, at least.
Probably the worst money manager in the Curia was the late Archbishop Paul Marcinkus in the 1970s and 1980s; what he lacked in business ‘formation’ he made up for in sheer chutzpah, “you can’t run the Church on Hail Marys; and he ended up (a) costing the Vatican about $250 million in a settlement with aggrieved creditor/depositors (with pinky rings and large neck-sizes); and (b) living as a virtual prisoner in the Vatican until a deal was made to allow him safe passage through Italy to the U.S. and his last post as a parochial vicar in Scottsdale, AZ.
More recently, Monsignor Nunzio Scarano, formerly a high-ranking official in APSA (the Vatican’s holding company), and since June of last year a guest of the Republic of Italy in a prison in Rome, after being nabbed with a suitcase containing €20 million at Rome’s Ciampino airport; handling financial matters for some of Italy’s richest families, the clever monsignore was not definitely not lacking in business ‘formation’.
Finally, say what you will about former Secretary of State Cardinal Tarcisio Bertone, through his iron control over the Vatican Bank he showed no lack of business ‘formation’,
Whether through his chosen staffer to follow the bank’s day-to-day operations, under secretary of state Monsignor Ettore Balestrero, who days after Pope Benedict’s announced resignation was promoted to archbishop, and sent quickly away from Rome to Bogotà as papal nuncio with diplomatic immunity; or
Cardinal Bertone’s hands-on supervisory role in the hiring and then ousting of the bank’s chairman, Ettore Gotti Tedeschi (a lifer and senior executive of Spain’s Banco Santander, always close to Opus Dei).
Giving a pass to the Vatican’s clergy at the leadership level because of its lack of business ‘formation’ is to miss entirely the main point, or perhaps choose to overlook it.
c) The secretariat also has effective control over the Congregation for the Clergy, and through this ‘dicastery’ may choose to have final say in the fate of some 220,000 parishes world-wide, including 17,000 in the U.S.
This new scope of authority vested in the secretariat may have enormous considerable significance.
Over the past decade the Vatican’s Congregation for the Clergy has been mostly a rubberstamp for American diocesan bishops hell-bent (in the literal sense) on closing parishes and selling off churches, especially in the Northeast, Mid-Atlantic and Mid-West where over 60% of U.S. faithful reside. Essentially, the bishops in these areas are in full retreat, writing off what they view as the Catholic rustbelt, and downsizing to a comfortable life in upscale suburbs. Catholic Boston’s pastoral planning trajectory since the quick exit of Bernard Law in 2002 has been from almost 400 parishes to a current level of about 288; and the current round of pastoral planning will reduce this further to 125 ‘collaboratives’ in a few years.
‘Clergy’ has been abetted in this by the Congregation for the Bishops, which is fiercely protective of the worthy prelates installed in the dioceses, after vetting and short-listing by ‘Bishops’ itself.
There are indeed a few cases where ‘Clergy’ has granted parishioners some relief by reversing the local bishop’s parish suppression decrees, but these are the exceptions that prove the rule, not new jurisprudence.
The eleven parish suppression decrees of Cleveland’s bishop reversed by ‘Clergy’ a few years ago, were a function of local circumstances – and I state this with direct knowledge.
But there is growing displeasure in Rome over the American ordinaries’ continuing destruction of the Catholic grass-roots presence through ‘pastoral planning’, the sham process for selecting parishes for suppression and churches for sell-offs (cfr. dozens of dioceses; notably Boston (supra), Philadelphia, Springfield MA, Allentown, Metuchen NJ, Saginaw MI, Greensburg PA, Youngstown, etc. etc.).
With its mandate to supervise…financial activities of the Dicasteries, and powered by vigorous leadership, the Secretariat for the Economy has clout to override the spreading systematic destruction of the Church’s spiritual infrastructure – parishes and churches – by American diocesan bishops. This requires breaking the protective grip of the two congregations that have been enablers of parish destruction in the U.S. – Clergy and Bishops.
Why would the secretariat engage in this?
What is the answer to the actor’s perennial question to the director, ‘what’s my motivation?”
The secretariat’s reason for asserting its authority over parish and church closings would be to resolve a fundamental contradiction in the governance of the Church:
The profound inconsistency between the objective of evangelizing, on the one hand; versus the American bishops’ ongoing campaign of destroying parishes and churches – the essential means for attaining the objective;
cfr. Vietnam during the Tet offensive of 1968, ‘we had to destroy the village to save it’.
It is naïve in the extreme to attribute the economic and financial dysfunction within the Vatican to innocent clerics manipulated by evil (lay) functionaries. That is a trope used by apologists and media ‘experts’ in residence in Rome ought to know better.
In a recent Special Report on Tech Startups, The Economist gave a shout-out to “Luca Pacioli, a Franciscan friar and mathematician, [who] wrote down the principles of double-entry book-keeping as used by merchants in Venice in the late 15th century.”
Of course, double-entry book-keeping should not be confused with double book-keeping, something else that may probably originated in the Boot.
There is a deep tradition of financial savvy under the cassocks, going back for centuries.
It is not a matter of putting some cardinals and bishops through a quickie Finance 101 online tutorial; it is a matter of cleaning out what Cardinal Joseph Ratzinger referred to as ‘filth in the Church’ shortly before the 2005 Conclave and his elevation to the Papacy.
The Vatican’s Money Game continues.
Just a couple of recent items, fresh from the 21st century:
Italy’s respected daily, Corriere della Sera, reported a few weeks ago that the Vatican Bank has been linked by investigating prosecutors to the spectacular collapse of Monte dei Paschi (MdP), a Siena bank now in de facto receivership. The facts, as always, are murky, but here are the essentials:
A few years ago Monte dei Paschi paid Banco Santander €9 billion to purchase Antonveneta bank, this just a few weeks after Santander had acquired Antonveneta for €6.6 billion.
So Santander cleared €2.4 billion (about $3.3 billion) in a few weeks.
According to Reuters the Corriere article reported,
“…several sets of numbers it said identified IOR bank [Vatican bank] accounts used to transmit funds to Monte Paschi for the acquisition. Prosecutors are looking into allegations that bribes were paid to secure the deal.”
Just last week, according to a respected Vaticanista in Rome, there was a curious two-step involving the naming of the #2 official in the Secretariat for the Economy.
While Cardinal Pell was quickly named the prefect (CEO) of the secretariat, the key position of “prelate secretary general” i.e. the COO [Chief Operating Officer] had not yet been filled.
Days ago a prominent monsignore closely associated with Opus Dei let it be known – unofficially, but widely – that he was to be named as prelate secretary general.
So it must have come as a surprise to this worthy cleric that at the beginning of this week it was announced officially that the Pope’s personal secretary, Mons. Alfred Xuareb, would fill the post of COO. The monsignore is from Malta. Let’s hope he will be as sharp-eyed as local Maltese Falcons are reputed to be.
From a distance, all of this may strike some as office politics among celibate males. Not so, this is deadly serious business involving an unrelenting fight over money, power and accountability.
There is an old joke that ran on Italian TV a few years ago after one of the bank’s scandale du jour and prompted a blast from the Vatican; abbreviated:
The Holy Trinity wins a quiz show, the prize – free trip anywhere.
God the Father opts for East Africa, “ancestral home of humankind.”
The Son picks Palestine, “grew up there, lived at home in Nazareth until I was 30.”
The Holy Spirit, “I’d like to go to the Vatican.”
The Emcee, “What, isn’t that a busman’s holiday for you?”
The Holy Spirit, “Haven’t been there in decades.”
Time for a visit.