Records on life of Father Flanagan, founder of Boys Town, presented at Vatican

Vatican City, May 16, 2017 / 06:29 am (CNA/EWTN News).- The Vatican’s 2016 AIF financial report shows the trend toward transparency of previous years has continued, with a drop in suspicious activity and a growing number of international collaborators.

In May 16 comments to journalists, Rene Brülhart that so far “there has been a steady process in building a functional system, and hopefully a sustainable system” of financial transparency in the Vatican.

“If you look into the facts, into the figures, that’s what has been achieved in the last years, and 2016 has been a key moment in getting there,” he said.

Brülhart, a Swiss lawyer, is president of the Vatican’s Financial Intelligence Authority (AIF). Established by Benedict XVI in 2010 and strengthened under Francis, the AIF is the Vatican’s watchdog when it comes to financial supervision and preventing and countering money laundering.

The AIF works alongside other financial entities in the Vatican, including the Secretariat for the Economy and the Council for the Economy, both of which were established by Pope Francis as part of his ongoing reform of the Roman Curia.

Brülhart was present alongside AIF director Tommaso Di Ruzza at a May 16 press briefing on the AIF’s fifth annual report, which covered 2016 and summed up their continued efforts to crack down on suspicious financial activity in the Vatican and strengthen international ties.  

In 2016, the only entity supervised by the AIF was the Institute of Religious Works (IOR), more colloquially referred to as “the Vatican bank.”

In a press release on the report, Brülhart said “a significant fostering of international cooperation of the Vatican competent authority with its foreign counterparts to fight illicit financial activities, a consolidation of the reporting system as well as a further strengthening of the regulatory framework” were key achievements in 2016.

In comments to journalists, he noted that, in continuity with previous years, there had been a “significant increase of international cooperation” in 2016. This is key, he said, given the Holy See’s position as a global institution, which makes bilateral collaboration in the supervisory level “very important.”

According to the 2016 report, the year “was characterized by a continuous increase in supervisory and regulatory activities, especially in the field of prudential supervision.” In this regard, the majority of efforts were spent monitoring relationships among the IOR and foreign financial institutions.

“The unique geographical situation of Vatican City State and the activities carried out by the supervised entity (IOR) implies the necessity to establish relations with foreign financial intermediaries,” the report read.

In 2016, the AIF signed a “Memoranda of Understanding (MoU) with the supervisory authorities of Brazil, Italy and Poland. In addition, they also have formal ties with authorities in German, Luxembourg, and the United States.

Through their membership in the Egmont Group, the AIF is also allowed to interact with the financial intelligence units of 152 countries and jurisdictions.

Showing the efficiency of these relationships, AIF in 2016 had 837 international information exchanges, 720 of which were requested by AIF itself, while 116 were requests made by its foreign counterparts – an increase on both fronts from previous years

Part of this increase, according to the AIF report, is due to the increase in foreign counterparts and the AIF’s “preventive and proactive approach” at the international level. On the other hand, it’s also due to the “sophisticated feature of cases under strategic and operational analysis,” which involve various subjects and foreign jurisdictions.

In addition to an increase in international collaboration, 2016 saw a dip in the number of suspicious activity reports (SARs) filed compared to 2015.

For Brülhart, the decrease is “no surprise, but a logical follow-up to the path we have been taking these years.”

However, the report insisted that the number was still higher than in previous years, showing “an ever-increasing and effective implementation of reporting requirements by supervised entities,” Di Ruzza said in the press release.

The report also showed an improvement in the quality of SARs reports, with a positive impact in terms of their dissemination to the Vatican Promoter of Justice, “which are leading to domestic prosecution.”

If a transaction is flagged and found to be problematic, it is sent to the office of the Promoter of Justice, currently Gian Piero Milano. In 2016, 22 reports were sent to the office, 5 of which had action taken against them: 4 of the transactions were suspended, totally over $2 million, while the account was frozen for the remaining 1, worth over $1.5 million.

Asked about the fact that to date there has been no known public prosecution of persons found guilty of wrongdoing in the Vatican, Brülhart said he “cannot speak for the Promoter of Justice,” but, without getting into detail, acknowledged that “there have been relevant developments in recent times.”

He did explain, however, that the delay is likely due to several factors, including the fact that the system they put into place is still new, and lacks sufficient IT resources and qualified people who can develop the cases flagged by AIF before sending them to Milano’s office.

Bureaucracy is also part of the equation, he said, explaining that after receiving a case, Milano must request information from international agencies, which frequently slows down the process.

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Vatican City, Mar 14, 2020 / 04:56 pm (CNA).- Due to the coronavirus pandemic, Pope Francis’ liturgies for Holy Week and Easter, which usually include the presence of thousands of people, will be held without public attendance this year.

Accordi… […]

Vatican City, Jan 7, 2021 / 03:33 pm (CNA).- The draft of the delayed document that will reform of the Roman Curia gives the Vatican’s Secretariat of State a more prominent place in the workings of the Church’s central governing bureaucracy. But during the year 2020, Pope Francis moved in the opposite direction.

In fact, within the span of a few months, the Secretariat of State has been gradually divested of all of its financial power.

In September, the Pope appointed the new commission of cardinals of the Institute for Works of Religion (IOR) – the also called “Vatican bank.” For the first time, the Secretary of State was not among the cardinal members. Nor is the Secretariat of State represented in the Commission on Reserved Matters that the Pope established in October via the first Vatican procurement law. In November, the Pope decided that the Secretariat of State should transfer all its funds to APSA, the equivalent of a Vatican central bank.

In December, Pope Francis spelled out how the handover should occur, clarifying that the Secretariat of State will be under the constant oversight of the Vatican’s leading financial operations watchdog, the Secretariat for the Economy, which has been renamed the “Papal Secretariat for Economic Affairs.”

These moves are in direct contrast with the Roman Curia’s draft constitution, Praedicate Evangelium, which continues to be revised by the Council of Cardinals.

Indeed, the document’s draft proposes the establishment of a real “papal secretariat” within the Vatican Secretariat of State, which would take the place of Pope Francis’s private Secretariat and coordinate the various bodies of the Roman Curia. The papal secretariat would, for example, summon the periodic interdicasterial meetings and even bring dicasteries together to work on specific tasks or projects when needed.

If Praedicate Evangelium remains essentially as it appears to be in the draft version that circulated last summer, then the piecemeal reforms that Pope Francis has introduced will make the new regulations old and outdated as soon as they are promulgated.

If, on the other hand, the draft is being heavily amended to match to what Pope Francis has been doing, then Praedicate Evangelium will not see the daylight any time soon. Instead, it will continue to be under examination for an even longer time, putting the Church in a state of “reform as you go.”

In other words, rather than setting reforms in stone with a binding document like Praedicate Evangelium, as previous popes have done, reforms will come via Pope Francis’ personal decisions, which several times have overturned his previous ones.

That is why the path of Curial reform has been characterized, until now, by many as back-and-forth.

First, it was the Secretariat for the Economy seeing its powers shrinking.

Initially, Pope Francis understood Cardinal George Pell’s reformist ideas and supported a significant recasting of financial control mechanisms. The first phase began with establishing the Secretariat for the Economy in 2014.

But by 2016, Pope Francis embraced the cause of the Secretariat of State, which argued that Cardinal Pell’s approach to financial reform did not take into consideration the Holy See’s particular nature as a State, not a corporation. The opposite views escalated into a fight when the Secretariat for the Economy signed a contract for a massive audit with Pricewaterhouse Coopers. The auditing contract was signed in December 2015 and scaled down by the Holy See in June 2016.

After reducing the scope of Cardinal Pell’s audit, the Secretariat of State regained its central role in the Roman Curia, while the Secretariat for the Economy was weakened. When Cardinal Pell had to take a leave of absence in 2017 to go back to Australia and face infamous allegations, of which he was later acquitted, the Secretariat for the Economy’s work got stalled.

Pope Francis appointed Fr. Juan Antonio Guerrero Alves to replace Cardinal Pell in November 2019. Under Fr. Guerrero, the Secretariat for the Economy regained power and influence. Simultaneously, the Secretariat of State got caught in the scandal that followed by the purchase of a luxury real estate in London.

With the decision to take any financial control from the Secretariat of State, the pope returned to his original vision of a strong Secretariat for the Economy. The Secretariat of State has lost any sense of autonomy since its financial operations are now transferred to APSA. Now, every financial move by the Secretariat of State falls directly under the Secretariat for the Economic oversight.

The transfer of funds to APSA seems to recall Cardinal Pell’s project for Vatican Asset Management. APSA, as the Vatican Central Bank, has been become the central office for Vatican investments.

So far, after the latest papal moves, the Secretariat of State is the only Vatican department with a former financial autonomy that has lost it. Pope Francis’ decision has not yet involved the Congregation for the Evangelization of People –which handles, among others, the massive funds of the World Mission Sunday- and the Vatican City State Administration, which also have financial autonomy.

But many Vatican observers agree that no dicastery can now consider itself safe from Pope Francis’ on-the-go reform, since the pope already proved himself ready to change direction unexpectedly, and to do it very quickly. In the Vatican, there is already talk of  “a permanent state of reform,” rather that the definitive one that should have come with Praedicate Evangelium.

In the meantime, the dicasteries’ activities are at a standstill, while Curia members wonders if the Curia reform document will ever be out. The Secretariat of State is the first victim of this situation. But most likely it won’t be the last.

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