Leo XIV inherits Vatican money troubles

New Straits Times

11-05-2025

ALONG with the spiritual leadership of the world's 1.4 billion Catholics, Pope Leo XIV inherits oversight of the Vatican's shoddy finances — and his predecessor's efforts to clean them up.
The dire state of the Holy See accounts was among the topics cardinals discussed ahead of the conclave to choose a successor to Pope Francis, according to the Vatican.
Their pick, American Robert Francis Prevost — now Pope Leo XIV — is likely to continue Francis's push to bring some order, said the chairman of the Vatican's bank, known as the Institute for Works of Religion (IOR).
"Francis has started the process. I'm sure Leo XIV will continue," said Jean-Baptiste de Franssu, a French businessman appointed to the role by Francis in 2014 as part of a radical overhaul of the Holy See's economic framework.
The Vatican fills its coffers by running hospitals, museums, and owning a vast real estate portfolio, together with donations from the faithful. Yet, its finances regularly run in the red.
In 2023, it reported a consolidated loss of almost €70 million on revenue of €1.2 billion. The Catholic Church's economic affairs have long been murky and scandal-prone.
In a telling example, in 1982, Banco Ambrosiano — a bank majority-owned by the IOR — collapsed amid accusations of laundering mafia money. Its director, Roberto Calvi, was found hanging that same year from London's Blackfriars Bridge.
When Francis became pope in 2013, things had not much improved. Italy's central bank had recently suspended all bank card payments in the Vatican over its failure to implement anti-money laundering laws. A year earlier, the United States had added the tiny city-state to its list of countries of concern for money laundering.
In 2014, Francis created a special Secretariat for the Economy, clamping down on corruption and stepping up scrutiny of investments.
"There was no strong governance, the rules were not respected, we did not have the right competence," de Franssu recalled of his early days at IOR.
Francis once likened the effort to fix and bring transparency to the books to "cleaning the Sphinx of Egypt with a toothbrush."
But the efforts did produce some results, including the closure of nearly 5,000 suspect bank accounts. The Vatican's reputation improved: it joined the Single Euro Payments Area and was later commended by the Council of Europe for its fight against money laundering.
"We have been more resistant than those that wanted to resist," said de Franssu.
Yet problems persist.
Italian Cardinal Angelo Becciu, a former adviser to Francis, was sentenced to five years and six months in jail for embezzlement in 2023. He was one of 10 defendants in a trial that began in 2021, focused on a disastrous investment by the Vatican in a luxury building in London.
The accused included financiers, lawyers, and ex-Vatican employees charged with a range of financial crimes in what prosecutors called a "rotten, predatory and lucrative system."
The trial involved the risky purchase of a building in London's upmarket Chelsea neighbourhood, which resulted in major losses for the Vatican. The scandal was particularly embarrassing because Church funds used for such ventures also came from Peter's Pence — money donated by the faithful for the pope's charities.
Becciu — who was earlier removed from office and stripped of his cardinal rights and privileges, and thus did not take part in the conclave that elected Leo XIV — has lodged an appeal.
Among the ongoing financial challenges facing Leo are a decline in donations from the faithful, rising staff costs, and a fragile retirement system. Francis said last year the latter currently "cannot guarantee in the medium term the fulfilment of the pension obligations."