First things first.Forget about The Godfather III.It was a good movie, but it was based on conspiracy theories about the murder of Pope John Paul I in 1978 and the collapse of the Banco Ambrosiano in 1982.Sadly, there aren't any trustworthy sources on the internet for the first one. However, if you have the time, interest, and means to get it, this is as objective a source as you'll find. The second one, I'm afraid, is just rubbish. You can go down the rabbit hole of who poisoned Pope John Paul I, how, and why just 33 days into his pontificate, but I promise you that when it comes to historical facts, you're wasting your time.
That said, it's not surprising that Vatican finances are back in the news after The Pillar reported that Cardinal George Pell, who died in 2023, wrote a memo in 2016 about "potentially illegal" banking transactions by the Amministrazione del Patrimonio della Sede Apostolica ("Administration of the Patrimony of the Apostolic See," or APSA). The Pillar says that the letter shows that "the cardinal had discovered a means by which APSA could alter financial records to 'shield the true identity of owner/source of funds' in the SWIFT system, which records international banking transactions."
A quick comment regarding SWIFT ("Society for Worldwide Interbank Financial Telecommunication") before we go on to the Vatican.
You know how slow and old-fashioned the SWIFT system is if you've ever used it to send money to another country. Truth be told, SWIFT is my greatest incentive to invest in Bitcoin, because anything — no matter how dangerous — would be an upgrade over it. You're not alone if you have second thoughts about sending money via SWIFT when the operator on the other end of the line discusses the expenses, probable delays, and hazards of the transaction. Yet, other than crypto-currency, you don't really have an option.
I don't want to undercut Cardinal Pell's concerns in 2016, but coming up with a vague explanation of a fund's source is not difficult in the SWIFT system, and the use of vagueness is generally related to either laziness or a desire to avoid excessive red tape. Such ambiguous — if not untrue — statements may, of course, also be constructed for the purpose of dodging taxes or laundering money, but the wording of Pell's email does not suggest that he thought the irregularities to be that bad. It does show, though, how seriously Pell took his role as Prefect of the Secretariat for the Economy, which Pope Francis gave him in 2014.
The Vatican is a multifaceted body subject to the same dysfunctional hazards as any bureaucracy.
But it is vital to keep in mind that APSA is not the "Vatican Bank," whose actual name is the Institute for the Works of Religion (Istituto per le Opere di Religione).
APSA, created by Pope Paul VI in 1967 and reformed by John Paul II in 1988, is the organization responsible for administering the property, real estate or otherwise, of the Holy See. APSA basically gives the funding necessary for the Holy See to maintain operating. When I worked at the Vatican Secretariat of State, for example, my stipend was doled out by APSA, which is responsible for the Vatican payroll.
The "Holy See" is nothing more than the pope coupled with a conglomerate of other offices that help him in running the Catholic Church. Just like when we say "Capitol Hill" we often mean the "U.S. government," so when you hear "the Vatican" consider "the Holy See."
APSA, now presided over by Archbishop Giordano Piccinotti, is divided into Ordinary and Extraordinary divisions. The Ordinary Section handles the day-to-day administration of the Holy See's assets, while the Extraordinary Section administers a portfolio of more complicated strategic investments. Interestingly, at the time of its inception by Pius XI in 1929, the Extraordinary Section principally oversaw money owing to the Italian government according to the financial arrangement of the Lateran Pact of 1929.
As someone who worked inside the Vatican until 2016, I can affirm that the Vatican's more recent financial troubles are to a considerable degree attributable to efforts that ended up extending the bureaucracy rather than shrinking it.
The entire design of the Secretariat for the Economy, formed by Pope Francis in 2014, and the many adjustments it has seen since then have simply managed to shuffle the bureaucratic deck of cards and fall short of facing problems head on.
I would say that APSA was not actually seeking to hide misconduct, but it obviously felt irritated that an outsider — particularly, Cardinal Pell, Prefect of the new Secretariat for the Economy — was suddenly looking over its shoulder. APSA staff constantly informed me on the street that Pell was an outsider who didn't understand how things worked in the Vatican.
Regardless of whether that's true or not, there was definitely a sense of indignancy — including within the Secretariat of State — that Pell was suddenly endowed with powers to oversee financial and administrative activities and interpret them according to his own «anglophonic norms,» as an acquaintance of mine put it (whatever that means).
I realize it sounds like I am attempting to defend APSA, but I am not. I'm merely relaying what I saw within the Vatican walls.
As an insider, I also sensed a slightly haughty attitude on the part of the Secretariat of State — the department for which I worked — that it was ultimately the direct agent of the pope and had, therefore, discretionary power to involve itself directly in the operations of all the other entities within the Holy See, including APSA.
That, at least, is a partial account of how my employer, Archbishop (now Cardinal) Giovanni Angelo Becciu, who was "Substitute" at the time (i.e., the Number 3 in control), got into difficulties. Becciu was convicted by the Vatican Tribunal of embezzlement and fraud and condemned to prison. You may read more on his case in the Wall Street Journal here and here.
This mindset also partially explains why my other boss, Cardinal Pietro Parolin, Secretary of State (i.e., Number 2), could arrange a commercial loan of 50 million Euro from APSA in 2019 to purchase a bankrupt Italian hospital in the hopes of rescuing it. Cardinal Parolin, a man of humility and sincerity, has been candid about the entire deal. But such arrangements are often achieved at through internal methods that are too flexible, exposing the Holy See to significant risk if not evaluated more properly through external consultation and wider collaboration.
If you're bored with this article, I don't blame you. I wish I could say the Vatican finances were more like The Godfather III, but they're not. They're not that intriguing, and one of the reasons I feel compelled to share my take on them is to show you how banal they are.
The Pillar is to be congratulated for its investigative reporting, but I advise readers to view any allusions to alarmism with a grain of salt. The Pillar suggests that "the potential consequences of alleged falsification of SWIFT records could see the Vatican returned to an international 'black list' of jurisdictions, severely curtailing its ability to interact with the global financial system and markets and making it subject to international sanctions and enhanced monitoring."
True enough, but that is not nearly as horrible as it sounds. There is clearly a transparency problem, which I aim to discuss in a future piece (leave a comment if you're interested). But it is essentially an issue with the Vatican's internal culture, a problem that many in positions of authority within the Holy See are — intentionally or unconsciously — blind to.
I would also not be shocked if additional audits and investigations discover a few isolated incidents of outright fraud, and that, of course, will lead to huge controversy, something the Church can never afford, much less at a time when trust in her authority is already low.
There are obviously concerns with Vatican finances, the main of which being its debt. Although the Holy See hasn't released a clear picture of actual statistics since 2022, estimations run as high as $95 million and climbing. There are ways to manage and reduce it, but it will be up to Pope Leo XIV to devise a clear plan and implement it. He'll need the advice of a few specialists along the way.
We haven't seen much of him lately, so perhaps he's doing what I hoped Francis's successor would be doing. If not, the Holy See risks missing another chance to bring its financial situation in order.
Though there are worldly elements of the Church's day-to-day activity, she is not "of the world." One way she may prove that is by not following worldly administrations who accumulate and postpone enormous debt with no concern as to who would finally handle it.
