Vatican financial reform going in the right direction, Pell says

Vatican financial reform going in the right direction, Pell says

In this June 29, 2017, file photo, Cardinal George Pell prepares to make a statement, at the Vatican. (Credit: Gregorio Borgia/AP.)

Australian Cardinal George Pell, formerly the Vatican’s top official on financial affairs, said he believes the pope’s recent reforms signal progress, and called for additional competent laypeople to be involved in the process.

ROME – Australian Cardinal George Pell, formerly the Vatican’s top official on financial affairs, said he believes the pope’s recent reforms signal progress, and called for additional competent laypeople to be involved in the process.

Speaking of Pope Francis’s decision in November to transfer control of Vatican finances from the powerful Secretariat of State to the Administration of the Patrimony of the Apostolic See (APSA), the Vatican’s treasury office, Pell said “There’s no doubt that if it’s implemented appropriately and well, it represents massive progress.”

Around the same time Francis made that shift, he also beefed up the oversight role of the Secretariat of the Economy, of which Pell previously served as president, by giving the office control over spending.

Pell referred to both past and present Vatican scandals, suggesting that had these steps been taken sooner, “A good deal of the present troubles, especially the London troubles, they might not have been prevented, but they certainly would have been recognized earlier.”

Pell’s mention of London refers to the controversial $225 million land deal in London in which a former Harrod’s warehouse originally slated for conversion into luxury apartments was purchased by the Vatican’s Secretariat of State drawing on funds from “Peter’s Pence,” an annual collection from Catholic faithful designed to support papal charities.

He was speaking during an online event titled, “Creating a Culture of Transparency in the Catholic Church,” which was part of a webinar series organized by the Global Institute of Church Management with the help of the Program of Church Management at the Pontifical University of the Holy Cross.

In his remarks, Pell said that for him the question of who controls the Vatican’s money was always a “secondary issue,” and that the more important task was ensuring it was “managed well, that money wasn’t wasted, that we were getting a good return on our investments.”

“The losses on that one London property alone might be 1 or 2 million,” he said, adding, “That’s very significant. The Vatican is not a very big operation by world standards.”

Just how effective Francis’s decision to transfer the purse strings to APSA, then, will depend “on how faithfully and competently it’s done,” he said.

It will depend on whether “it’s directly under supervision and controlled, that the Secretariat for the Economy has got to have effective power to stop things when they need to be stopped,” Pell said, adding, “There’s no point in having a Secretariat for the Economy who’s just a commentator. The secretariat has that power.”

Pell said another factor that will likely be key to the success of the Vatican’s financial cleanup efforts will be acting on the pope’s plan to establish a board of competent experts to manage the Vatican’s investments.

“Coming out of COVID, coming out of the financial pressures we’re currently facing, that will be absolutely vital,” he said, and praised the work of a commission known as COSEA the pope established in 2013 to advise him on financial reforms.

While two members of COSEA were charged by Vatican courts for leaking confidential documents related to its finances to the press after the commission’s mandate ended, Pell said the entity generally did “a good job of identifying the main problems and in setting out the essential elements for reform.”

Referring to the pressure the Vatican is facing over its financial scandals and the microscope that has been placed on its reform efforts, Pell stressed the need for transparency, which he said is the natural result of fostering a culture of honesty and service for the good of the community.

“Transparency means that we let the light in on these things, and if there’s a mess it’s good to know about it,” he said, noting that recently there have been some “very big mishaps” in the financial sector in both the United States and Australia, leaving Catholic laypeople “very disconcerted and worried.”

These mishaps refer to the use of the Peter’s Pence fund in the purchase of the London property deal and to the recent admittance by Australia’s financial crime watchdog agency, AUSTRAC, that it massively over-estimated the amount of money transferred from the Vatican to Australia between 2014-2020.

In December AUSTRAC reported that $2.3 billion Australian dollars (US$1.8 billion) in Vatican funds had been transferred to Australia from the Vatican during those years, however the body Wednesday said the actual number was closer to AU$9 million.

In the face of the Catholic laity’s demands to know what’s going on behind the scenes in these situations, Pell said “that’s got to be respected and their basic questions answered. “

Speaking of the Peter’s Pence fund, Pell said that he has long insisted that “if donors give money for a specific purpose, it must be used for that specific purpose.”

In the case of Peter’s Pence, the main purpose of which is to assist the poor, Pell said he and several other members of the pope’s Council of Cardinals – established in 2013 as an advisory body to the pope on matters of Church governance and reform and of which Pell was an original member – had pushed for it to be included in reports that portions of the fund were being used for the running of the Curia.

“I was never in favor of the majority of the Obolo of St. Peter to be used to balance the books, to minimize the deficit,” he said, insisting that the fund “should never have been used for speculation.”

“It’s in the documentation that it was used to cover the running costs of the papacy,” Pell said, adding, “I fail to see just how it can or should be used for investments, and I think it’s a legitimate question to the powers that be who are in charge of those collections, simply to state clearly and briefly what it is being used for and then to give some sort of report of what in fact it is used for.”

Going forward, Pell said that in the wake of the coronavirus pandemic and the massive pension crisis the Vatican faces, “I’m not sure the Vatican can continue much longer losing money the way we’re losing money.”

“Grace won’t exempt us from these things,” he said, voicing his belief that many dioceses around the world likely have better management of their finances.

He stressed the importance of regular external audits and emphasized the need for laypeople to have a hand in the oversight of diocesan funds.

Bishops, he said, should have a financial committee and they ought to regularly consult that committee, while still maintaining the freedom not to take its recommendations, provided he give a detailed explanation of why not.

Pell said that in his view, the “great majority” of these councils or committees should be composed of laypeople, “and they should be highly competent and expert at every level.”

“If you’ve got a whole body of experts, it should be very rare that you don’t take their advice, and if once in a while you mightn’t be able to, a bishop would have to explain in very significant sequential detail why he wasn’t doing that,” he said.

“I’m certainly not the slightest bit in favor of having a finance committee on paper and never meeting. Nor am I in favor of having a financial committee which is full of people who don’t understand money and often will boast that they don’t understand money. These are recipes for trouble and occasional disaster,” Pell said.

Speaking of the role of women, Pell pointed to Pope Francis’s appointment in August 2020 of 13 new members to the Council for the Economy, six of whom were women.

He praised each of the women as “highly competent” with “great professional backgrounds,” saying he is hopeful that “they will be very clear headed on the basic issues and insist that we sentimental males get our act together and do the right thing.”

Pell said he believes there should be some sort of teaching on management and financial management even in seminary, as well as ongoing formation on this for priests and bishops.

Despite the scandals of recent months, Pell said he believes “We’ve made very significant progress in the Vatican.”

“It’s got to continue,” he said, saying he believes Pope Francis wants the Vatican to take the lead in financial transparency and best-practices in the Catholic Church, but “he’s struggling to do that.”

“He’s like the leader of any organization. Just because he decides something should happen, it doesn’t automatically follow that will,” he said, noting that Vatican culture itself has to change in order for this transparency to happen, which is a much harder task.

“I think you need clear policies, and you need people in key positions who understand those policies and who are competent in implementing them, who can explain them, who are approachable humanly speaking,” Pell said.

If proper procedures are in place and competent people are behind the wheel, “it’s much more difficult to be wrong, and Catholic people are entitled to honesty and efficiency,” he said.

Follow Elise Ann Allen on Twitter: @eliseannallen

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