ROME – With the Vatican’s trial on financial crimes reopening Oct. 5, there are two surprising names on the list of those in the dock: René Brülhart and Tomasso Di Ruzza, who had both previously played a key role in Pope Francis’s financial cleanup efforts.
Brülhart and Di Ruzza, who held leadership roles at the Financial Intelligence Authority (AIF), now the Financial Supervision and Information Authority (ASIF), were indicted by the Vatican over the summer in a trial featuring 10 defendants, including Italian Cardinal Angelo Becciu, the first prelate wearing a red hat to be indicted by a Vatican tribunal.
Initially opened during a July 27 hearing, the trial was suspended until after the summer break.
What makes Brülhart and Di Ruzza unique, however, is that while each of the other eight defendants in the trial, including Becciu, are facing a slew of charges for financial crimes such as fraud, extortion, and beyond, the former AIF-duo are facing less severe charges, largely to do with their intervention in a suspicious London property deal at the heart of this trial.
These charges, when released, surprised many observers in part because per its statutes, AIF at the time of the London deal never held any supervisory role over the Secretariat of State.
A prestigious background
Born in 1975 in Aquino, Di Ruzza is the son-in-law of Antonio Fazio, a former governor of the Bank of Italy, and has vast legal experience throughout Italy and beyond, having worked in Siena, Rome, Oxford, and Vatican City.
He entered the Vatican scene in 2005, serving as part of the Holy See delegation to the United Nations until 2010, and as a legal office for the then-Pontifical Council of Justice and Peace.
Di Ruzza began working with the Financial Information Authority (AIF), a Vatican watchdog unit, when it was established in 2011, working his way up the ladder to eventually become director of the outfit, a role that gave him top authority and decision-making power, in 2015 at Brülhart’s suggestion.
Brülhart comes from a prestigious background in the world of European finance and had an acclaimed reputation for his efforts in financial cleanup when he was brought into the Vatican by Pope Benedict XVI as AIF’s director in 2012. He was named its president in 2014.
Before coming to the Vatican, Brülhart from served as head of the financial intelligence unit of Liechtenstein from 2004-2012, playing a key role in ending the small principality’s reputation as financially untouchable and helping it to make it onto the “whitelists” of clean financiers.
During his time in Liechtenstein, Brülhart was also named the vice-chair of the Egmont Group, an international consortium of financial intelligence units who facilitate the sharing of information to fight financial crime and the financing of terrorism.
When Brülhart was brought to the Vatican under Benedict, it was widely interpreted as a sign of how serious the Vatican was about its own financial reform.
During his time with the Vatican, Brülhart took several significant steps, including assisting in the creation of a reporting system for suspicious transactions that was praised by big-time players such as Moneyval, the Council of Europe’s anti-money laundering agency.
The London Deal
The now-infamous London real estate scandal began in 2013 when a contact of Becciu’s from his time serving as nuncio to Angola reached out with a proposal for the Vatican Secretariat of State to invest 200 million euros ($232,799,000) into an oil project his company was launching.
At the time, Vatican officials asked an Italian businessman, Raffaele Mincione, who has also been indicted for various financial crimes, to do due diligence on the proposal.
Mincione advised against it, and the Vatican’s money was instead invested into a fund his company managed. That money was then used to purchase 45 percent of shares into a former Harrod’s warehouse in London’s upscale Chelsea neighborhood, which was to be converted into luxury apartments.
Money for that investment was taken from the Peter’s Pence fund, which is an annual collection taken up in parishes to support the works of the pope, and which is widely believed to support charitable causes, rather than the Vatican’s investment portfolio.
By 2018, however, Mincone’s company had lost some 18 million of the Vatican’s initial investment, and the Vatican found itself allocating tens of millions in burdensome mortgage payments on the property, which had largely lost its value after Brexit, as well as generous fees to their Italian business partners.
The Holy See officials then began to seek an exit strategy while maintaining the Vatican’s stake in the London property and as part of the exit deal, another Italian broker, Gianluigi Torzi, who has also been indicted, was brought in and orchestrated a 40-million-euro payout from the Vatican to Mincione for the shares in the London building that they didn’t already own, so they could cease paying fees.
Torzi then allegedly pulled a fast one over Vatican officials by reallocating shares in the London property while drafting the contracts so that he held the majority share of voting rights. He is accused of then extorting the Vatican for a 15-million-euro payout for control over the property it thought it already controlled.
However, when the Vatican in 2018 attempted to purchase the remaining shares in the London property, they needed a loan from the Vatican Bank, officially known as the Institute of Religious Works (IOR), to do it.
Both the IOR’s director and the Vatican auditor general’s office flagged the request as suspicious and informed Vatican police.
Under Di Ruzza’s order, AIF then launched an international investigation in collaboration with UK authorities to catch those responsible for swindling the Vatican, but their headquarters were later raided by Vatican police during their own investigation, seizing files and records related to the London deal, and AIF’s leader, Tommaso di Ruzza, was suspended for unclear motives.
Brülhart then resigned from AIF in November 2019, with the Vatican announcing his exit as simply stepping down at the end of his term. However, many observers believe there is more behind his resignation, and that his leaving marked a major blow to the Vatican’s financial reform efforts.
The charges
Vatican prosecutors have charged Di Ruzza with embezzlement, abuse of office, and with violating the secrecy oath he swore when taking on his leadership role at AIF.
Brülhart has simply been charged with abuse of office.
Prosecutors have argued that both men “seriously violated the basic rules governing supervision” for apparently lending legitimacy to an illegitimate payment to Torzi, and they allege that under Brülhart, AIF “overlooked the anomalies of the London transaction – of which it had immediately been informed – especially considering the wealth of information acquired as a result of intelligence activity.”
At best, Vatican prosecutors have described AIF’s actions in the London deal as “not clear,” and pinned the blame largely on Di Ruzza for being a point of in contact with a London law firm.
At initial glance, it appears Vatican prosecutors misunderstood AIF’s actions in the London deal, failing to realize that AIF was working with Britain’s own financial intelligence unity to catch the businessmen who were cheating the Vatican out of millions.
Under its statutes, AIF – which has since been rebranded as “ASIF,” the Financial Supervision and Information Authority – holds no supervisory power over the Secretariat of State, nor did it at the time Brülhart and Di Ruzza in charge, i.e. during the time the London deal played out.
The only Vatican financial entity AIF actually supervises is the Vatican bank, raising the question for many as to how Brülhart and Di Ruzza managed to violate “basic rules governing supervision” of an entity they weren’t supervising.
Charges against Brülhart have been touted by some as especially dubious, given that he was a non-executive president of AIF, meaning he provided vision and direction, but Di Ruzza had the real authority.
ASIF conducted an internal investigation into its own actions in the London deal, which found that neither Di Ruzza, nor anyone else at the agency, “improperly exercised his authority or engaged in any other wrongdoing.”
Some have speculated that Brülhart’s indictment may be linked to the Vatican’s Moneyval evaluations, as they often praise him but criticized the Vatican Promoter of Justice’s office, led by Italian layman Gian Piero Milano since 2013.
Follow Elise Ann Allen on Twitter: @eliseannallen
