9

The War, Act I: Blocked Budgets and Bureaucratic Assaults

As If Nothing Had Happened

“Money contaminates our thinking, it contaminates our faith.” When greed wins out, human beings lose their dignity and become “corrupt in mind, and risk treating religion as a source of income.” May God “help us not to fall into the trap of the idolatry of money.”1

Francis repeated these words in his homilies at Santa Marta and St. Peter’s while the commissions pored over the accounts demanding explanations of wild expenses, random privileges, and utter superficiality. But the road to change was long and strewn with obstacles. At the holy palaces, everything continued as it had before, as if nothing had happened. While it had seemed as if something might really change at the beginning, the Pope’s new direction provoked discomfort within the walls; a clear sign that his decisions had been right on target. Hypocrisy and smugness seemed to gain ground again, however, when the time came to present the 2014 budgets for the Holy See and the Governorate in December 2013. Six months had gone by since the confidential meeting of the auditors that had given rise to the COSEA Commission.

Anyone who had envisioned an endorsement of the Pope’s fresh approach in the new budgets was sorely disappointed. The bitter truth came out on the morning of December 18, 2013, the day of the biannual meeting of international auditors to review and approve the 2014 budgets. The auditors had received the financial documents only two days earlier, studied them hurriedly, and were aghast at what they read.

A heavy silence fell over the room when the Prefecture’s consultants entered, knowing they were about to face one of the most dramatic sessions in recent years. After the ritual prayer, Cardinal Versaldi opened the proceedings and put on a display of optimism, underlining “the relative acceleration in the timetable and the structural nature of the reform.”

In other words, the “COSEA Commission has set into motion a process of renewal that the Prefecture had hoped for many times and that, in the past, had generated a sense of frustration over the failure to enact the reforms.” Murmuring could be overheard in the room: the auditors were not of the same opinion. The papers they had just seen spoke clearly: everything in the budgets was just as before, without a trace of the new era invoked by Francis. Cardinal Versaldi understood this better than anyone. He stopped, took a deep breath, and, in a rhetorical flourish, let a few seconds go by to impose greater authority on the words he was about to utter:

We should also underline the human and Christian aspect of the reform. All the shortcomings should be highlighted in a spirit of fraternal correction, inspired by evangelical rather than diplomatic criteria. First, a discussion should be pursued with the interested parties. In the event they have persisted in the error of their ways, the Supreme Authority should intervene. We should maintain this approach so as not to lose the results achieved so far. Before “punishing” we must seek to correct. Let it be noted, furthermore, that the collaboration of the heads of the Administrative bodies has been good and there is no bad will, but rather a problem of mind-set and the structure of the system.

Although his language was in perfect curial style, open to a variety of interpretations, the gist of the Cardinal’s “advice” was not lost on the COSEA commissioners. Versaldi was anticipating the obstacles ahead and wanted to limit the discontent and placate the auditors and their requests for stricter measures. The hunt for the culprits—the senior prelate sensed—would hurt everyone. Any punishment of the wrongdoers would have one effect and one effect only: “to lose all the results achieved.”

Versaldi wanted to build a protective wall around the miscreants. But he went further: with all due respect to the Pope, the changes had to achieve general agreement, otherwise the obstructionists would win. While the Cardinal was clearly acting in good faith, to respond to inertia with an equal dose of inertia would lead nowhere. The problem—as the new budgets confirmed—was that the Commission had no results to show, attesting to the indifference if not the hostility of the Church’s managers toward the papal dispositions. Versaldi was unsparing about the meager results of the first few months of the new pontificate:

Despite all our efforts, we find ourselves before two budgets that show no progress over last year, with the exception of the cuts APSA has made to its previous draft estimates.

The data was disheartening. Versaldi’s critique dampened all enthusiasm. “No progress” had been made, he repeated. So the Commission found itself back at square one, where they had been in June 2013, when Francis first decided to create the COSEA Commission to address the Vatican’s catastrophic finances. Then, too, the Cardinal had lamented that, “in the Vatican great progress has not been made. The finances are unsustainable in terms of expenses. We cannot hope for an increase in income [from donations]. The only solution remains to cut costs.” This made it all the more regrettable that the 2014 budgets planned for higher expenditures, as noted by the Secretary of the Prefecture, Monsignor Vallejo Balda. “The budget has clearly gotten worse in every area.”

Versaldi’s version of the facts had more than a few dissenters. As General Accountant Stefano Fralleoni pointed out, at the Vatican it was customary to spend more and more:

The audit of APSA was long hard work. Every single balance sheet for every single department was checked. The only thing listed in the kinds of balance sheets shown to us was expenses. Although the administrations in question report to APSA, they also have assets, in addition to expenses, which should be recorded.

There is another paradox. The budgets show an increase in estimated costs, which indicates the intention to spend more. There are always huge discrepancies between the budget and the final balance. This is the result of a mentality that is hoping for the approval of many of the proposed expenses, for the sake of setting some money aside.

There have been many cuts, but we need to know more about some items. Despite everything, the final balance of the Holy See is showing losses of 25 million, and the financial earnings are modest. APSA did not include even one comment in this regard, which is hard for the Prefecture to understand. While it may be complicated to predict the behavior and fluctuations of the market, there are experts who do this as a profession.

Personnel expenses have gone up, despite our suggestion of a hiring freeze, but the most serious thing is that this increase was already recorded in the budget. This attitude smacks of an outright affront to the authorities.

I should add that there was no variation in the field of consolidation. This approach was determined more by political than technical reasons. The same is true of the need to standardize accounting principles. The Prefecture’s functions are clearly identified but it has been impossible to make them operative.2

Zahra, the COSEA Chair, was at the meeting as an auditor for the Prefecture. He, too, saw no improvement and criticized the arrogance of those who refused to change:

The fact that the same situations are repeated every year indicates a constant rather than a temporary crisis. The problem is not with procedures but with the mentality and the way of doing things. Cooperation from the heads of dicasteries is often less than forthcoming. They can be very haughty, thinking they are the only ones who know how to proceed.

An Outrageous Rejection, a Scorching Climate

The day before the meeting the more inflexible advisors had done a straw poll with their colleagues, noting the growing discomfort of the various professionals and consultants from the oversight bodies. Many were demanding a break with tradition. There were long telephone calls deep into the night, discussions and agreements into the wee hours. The auditors mustered their courage. Together they had to come up with a countermeasure that would take everyone by surprise. They didn’t want to just sit around and complain as they had in the past. The frustration that had built up over the years had been too demeaning. Now they wanted to see results. The hours sped by and a secret plan took shape, gathering the consensus of most of the auditors.

The day of the fateful meeting arrived. From the moment the first speaker, Fralleoni, took the floor, the prevailing line was already clear. The General Accountant lowered his gaze for a moment to check the liabilities columns and, weighing his words carefully, recalled an event from 1993, when John Paul II’s closest collaborator, Secretary of State Angelo Sodano, had refused to approve the budget for Vatican Radio. It was a major precedent, a warning to everyone. There was no reason not to repeat such an approach. The speakers that came after Fralleoni took up the charge, adding criticisms of their own. When Maurizio Prato’s turn came, he still seemed stunned by the data he had seen, and could barely contain his outrage:

It is disheartening to see that it’s still business as usual, with no sign of change or sense of responsibility to manage accurately, efficiently and effectively the patrimony of the Holy See, and with no attempts to contain costs. As for the consolidated budget of the Holy See, in terms of presentation and commentary, it shows patches of improvement but on the whole, the analysis is discombobulated and hard to grasp.

What was most troubling were the expenses and some disappointing investments. Prato continued:

With reference to institutional activities, given the overall stability of canonical income [the amounts that dioceses throughout the world send to Rome to support the Roman Curia], the big increase [in expenses] by comparison to the historic trend until 2012 is a result of the increase in personnel costs (3 million) but mainly the big increase in general and administrative expenditures (9 million). There has been a huge decrease in financial activity by comparison to 2012 while … 2013 was relatively stable in financial market terms, even with the decrease in earnings. To record such significant losses demonstrates yet again the careless and deplorable management of assets, which is anti-economic, and of investment criteria, despite the repeated appeals from the auditors in recent years.3

Versaldi tried to interrupt him. “We have no power over that. It’s up to the Superior Authority to make sure its instructions are followed. We tried to do something at past meetings, but we need more effective tools.”

The Cardinal was referring, in particular, to two conferences held in the Synod Hall during Benedict’s pontificate, “in the attempt to have a global vision of the status quo at the Holy See and the Governorate as a basis for all future operations.” But it would take more than good intentions from a couple of congresses to revolutionize a Curia that had been impervious to every previous attempt at reform.

At a few minutes before eleven, the proceedings were interrupted for a coffee break. The Spanish auditor, Josep M. Cullell, still hadn’t taken the floor. During the break he conferred with Messemer, Fralleoni, Zahra, Prato, Kyle, and Monsignor Vallejo Balda. On hearing his observations some said nothing, and others nodded, but they all came to an agreement: it would be up to Cullell to get the ball rolling. When the meeting resumed, he was the first to take the floor:

While it is positive that the documents highlight the problems the International Auditors have been discussing for years, I am not in favor of approving the budgets. I propose that we write an explanatory note on the specific reasons for our rejection. The note could at the very least indicate the points emphasized by Mr. Prato.

The secret maneuver, then, was to not sign off on the budgets and return them to their senders. This dramatic choice would throw a wrench in the Curia’s games, but at the same time it could boomerang against Francis by slowing the dicasteries’ activities. Cullell went further:

The budget documentation analyzed reflects the irregularities in the whole structure. A great deal of information remains unclear (increase in personnel, contracts with outside companies, etc.). Without transparency we cannot act. For a while it looked as if the Prefecture was moving in the direction of greater authority, but not much has changed. Without a serious budgetary law that applies to all the Vatican dicasteries, no reform is possible.

It will take more than good will: it will take rules that oblige all the Dicasteries to write up a proper budget and managers who know how to administer resources. We need a clear law to control the autonomy of the Dicasteries. Although we still don’t know what shape this law will take, it is fundamental for it to guarantee control over expenditures and guide the economic-financial strategy of the Vatican. We have to set priorities and define coordination. We need a clear, defined procedure, as the Pope himself has indicated.

On the subject of transparency of information, there’s a lot of talk about maintenance and restructuring work, but where is any of this entered into the budget? Where is that work recorded? Was there competitive bidding? At the Vatican, contracts are awarded informally, to friends and acquaintances. But one of the basic criteria should be the available funds. And during a crisis we have to cut back on maintenance because there are other more urgent priorities.

All eyes turned to Monsignor Vallejo Balda, the only prelate in the room after the Cardinal President. His support was indispensable to holding off Versaldi, and he did not disappoint:

Competitive bidding is limited to 5–10 companies that have always worked with the Vatican. No public announcements are posted. When the works are being done there is no budgetary ceiling and no item-by-item cost estimate.

Versaldi tried to quell the arguments and reintroduce his criticisms:

Opening up the competition to everyone, without distinction, would create chaos. It’s better to have accredited companies that are regularly updated.

Vallejo Balda had a ready reply. He pointed to the recent works at the Vatican library, a thorn in the side of the Curia because of the huge discrepancy between the estimated and the actual costs:

It’s impossible to analyze the documentation because of this style of operating. Who allocated the funds? How was the budget decided? Was an estimate drawn up? What criteria were used to choose the company? Who is responsible for management?

It was up to Zahra to bring the discussion to its lethal conclusion. For him it was not so much a question of introducing new rules. What was missing from the Vatican was the will to apply them:

The fundamental problem is that the procedures exist but they are not applied, and people are acting on the basis of practice and not rules. In addition to defining the guidelines more clearly, we need concrete tools to be able to step in and sanction departments that do not follow the guidelines. The procedures have to be updated and the various entities have to be held accountable.

The budgets had to be rewritten. Some of the auditors wanted even harsher measures. Prato was one of the most intransigent, proposing an across-the-board cut of 10 percent from the previous year’s budget. He was held back by Kyle:

Considering how slowly things move at the Vatican, I think the priority should be to achieve concrete results. None of the companies for which I’ve worked has ever been a dictatorship: there’s always teamwork but in the long run someone had to make a decision. It’s not up to the employees to define the budget: it’s up to the managers. Anyone who ignores the laws and deadlines has to be replaced. Allowing resources to be mismanaged is a scandal for anyone observing the Church from abroad, especially young people.

The auditors’ move was audacious. Versaldi acted as if he was unperturbed. He stared at the professionals assembled in the room, the same men who a few months earlier had given Francis the ammunition he needed to go after mismanagement. For them to take such a tough stance had to mean the Pope was behind them. But then, the auditors might have been merely interpreting the voluntas of the Holy Father without involving him directly. So for his next statement the Cardinal performed a masterful balancing act:

I sense within this structure a physiological and pathological resistance … I wish to reiterate the need to try to change the Curia without opposing it. If the correction is then ignored, the heads of administration will have to allow themselves to receive instruction. If they do not, then we can talk about malicious resistance. I urge you to be cautious not because I am afraid of taking responsibility but because I want to find the right way to pursue the much hoped for change.4

In the end, he was overruled. With such a large deficit the time for caution and mediation was over. The meeting was adjourned. The auditors refused to sign the 2014 consolidated budgets of the Holy See and the Governorate.

The climate now turned frosty, and relations between COSEA and the Secretariat of State were tense. For two months the Secretariat had been led by a new man, Pietro Parolin, the Pope’s closest collaborator. The 2014 budget had been prepared in the Apostolic Palace, the same building that housed the managers who had been appointed by Bertone, who had ruled the Secretariat with an iron fist for seven long years.

The Losses at Vatican Radio

To find a precedent for what the Prefecture’s auditors had just done, you have to go back twenty years, to when Secretary of State Sodano rejected the budget of Vatican Radio.5 But this time around, the initiative was even more newsworthy: none of the budgets of the Holy See and the Governorate had been approved, which meant that most of the Vatican’s finances were blocked. Still, this initiative was not necessarily enough to set a new path for Church government. The auditors knew this, as the aftermath of the historic precedent had made clear.

Vatican Radio is a glaring example of how things never change at the Holy See. The station and the whole telecommunications unit were still in the red, and every attempt to stem their losses had failed. This deficit was one of the many thorns in the side of the Curia’s financial health, a situation that had long fed concerns and tensions—under both John Paul II and Benedict XVI—and today it was still provoking harsh comments from the auditors.

At the December 18 meeting, there was heavy criticism of the management of the radio station, particularly from Prato:

The Radio’s propensity for spending beyond its means has remained the same, as its 26–27 million in losses attests. At the Vatican Radio nichil sub sole novi—there’s nothing new under the sun. It would be interesting to know what leads anyone to think we can expect a sizeable lowering of the deficit in the future. The negative trend is substantially unchanged for L’Osservatore Romano, the print shop, the bookstore and the television center.

The number of employees and their costs have risen, and the reasons for the increase are unexplained. A hiring freeze is absolutely necessary. The consolidated deficit for 2014 is estimated at 25.1 million euros, following the estimated loss in 2013 of about 28 million euros, accelerating the progressive erosion of the patrimony.

If this were a European Union country the managers would probably have already brought their account books to bankruptcy court. Not to mention that these same criticisms had been voiced at the June meeting. Now it was Versaldi’s turn to lower the boom on the budgets of both the Catholic radio station and of the L’Osservatore Romano:

We can no longer argue that no expense should be spared in spreading the word of God. We can lower costs without affecting our institutional purposes. We’ll decide what to do in a few days. For now it’s clear that the Santa Maria di Galeria station has to be closed because its upkeep is particularly expensive6 … The increase in personnel does not correspond to an improvement in production. Even the Photography Service of L’Osservatore Romano, which has the exclusive on sales of pictures of the Pope, closes the year in the red.

This well-known situation was frowned upon in the Curia, but for years nothing had been done to change it. As Kyle had pointed out at the June meeting, in the various working groups, “Not even one cardinal had supported the current position of Vatican Radio, not even the representatives of the developing countries. The Secretary of State had tried to intervene, but to little effect. The short-wave emissions had to be blocked and with determination.” The heads of the radio station had always opposed any change. Versaldi often remarked sarcastically that the managers of the broadcaster tried to treat “the heads of the Prefecture as businessmen rather than as men of the Church.”

With regard to personnel costs Monsignor Vallejo Balda was scathing:

Some aspects of management clearly show serious failures, and the heads of the various Administrations, including Father Lombardi, are perfectly aware of this. The equipment at the Ponte Galeria Radio belongs in a museum. The costs of supporting the media sector make up 20 percent of the Holy See’s expenditures. The equipment analysis also included the structures in Piazza Pia and Piazza Leo XIII. The heads of the media sector don’t even know the square footage of their offices. Since APSA handles the expenses, there may not be a lot of attention to optimizing costs. These properties could be rented and become a source of income. But the most radical change has to be in personnel. About 84 journalists work at L’Osservatore Romano, but not all of them are needed. They could at least modify their contracts, but instead, everything continues passively from one year to the next. Although this year’s budget is balanced, it’s hiding some unconvincing elements, such as the constant increase in personnel costs.

In the fall of 2013, with the help of the McKinsey consultants, the COSEA investigation uncovered the reasons for the hands-off treatment of the account books. Four risks were identified and presented to the attention of the cardinals in the Curia:

The off-budget resources go to covering various geographic areas. At Vatican Radio the same number of editorial resources are dedicated to France and Belgium (three people for about 53 million Catholics) and to Albania (the same number of people for about 0.3 million Catholics). L’Osservatore Romano: the copies printed in Poland do not fully recover the costs of printing and shipment (a loss of about 1.5 euros per copy). Operations management is insufficient (as are outsourcing policies and production planning): 70 percent of the copies of the Italian edition are returned by the newsstands. The rotary printer of the Vatican Print Shop is only used for two hours a day. There is a duplication of the main activities by the various media departments (news production, digital activities, etc.).

Francis insisted on a communications reform and the creation of the Vatican Media Center, prepared by COSEA advisor Francesca Chaouqui. In early January 2014, the Commission scheduled an intense series of meetings with the heads of the various editorial departments. This enabled the Holy Father to get the cardinals’ endorsement of a new department that would streamline human resources, costs, and investments in the field of communications. It would be an essential tool of the Church’s evangelical mission in the world. In June 2015, the Secretariat of Communications was established, to be headed by Father Dario Edoardo Viganò, director of the Vatican television center.7 He would be assisted by Monsignor Adrian Ruiz, head of the Vatican internet service, who gave Francis the gift of an iPad—in regulation white, of course—the day after his election to the papacy.

The Counteroffensive of the Vatican Bureaucracy

Starting on December 16, 2013, COSEA and the McKinsey consultants, including Filippo Sciorilli Borelli, entered the office of the Secretariat of State to begin a series of inspections and audits. The climate they found was icy. To get their hands on the data they needed, they had to overcome distrust, reluctance, and resistance. Zahra, feeling isolated, turned to Xuereb for advice. The cardinals close to Francis were not taking a stand, and tensions were mounting between COSEA and the Secretariat of State. A dangerous fracture was opening up between Bergoglio’s supporters at the very moment they needed to be most united. In a quick sequence of events, between the end of 2013 and the beginning of 2014, COSEA opened up a much broader series of investigations into twenty-five departments of the Holy See.

On December 4, 2013, COSEA had written to Parolin asking that the documentation requested for the audit be made available. On December 16 the audit began, but on January 3 another letter was sent to Parolin in which Monsignor Vallejo Balda hinted that the acts and documents requested be forwarded no later than January 10. The next day, in a two-page letter, Parolin told him to take a hike. And he explained why: for one group of departments, “this Secretariat does not have the documents requested; beside which, it would seem more correct to forward the request directly to each of the departments mentioned.” For some of the bodies named in the COSEA letter, he recalled that “the documentation is also kept at the Prefecture.” All the Commission had to do was search through the file cabinets in its own offices. Parolin could not conceal his irritation:

Allow me to add that I felt it was my duty to bring to the attention of the Holy Father our correspondence on this occasion, so that everything may be done in loyal adherence to the desiderata of the Holy Father.

At the same time, the budgets that had not been approved by the Prefecture needed to be cleared. On January 3, 2014, the matter was brought directly to the attention of the Pope, who granted an audience to an increasingly distressed Cardinal Versaldi. After the meeting, Versaldi wrote an urgent letter to both Cardinal Bertello, President of the Governorate, and Calcagno, the head of APSA, with a copy to Parolin. They needed to find a way out of the mess, and the terms in which Versaldi chose to express himself were not reassuring:

At the audience granted to me by the Pope in response to my request, the Holy Father delegated me to sit down with APSA and the Governorate before the mid-February meeting of the fifteen cardinals. The purpose of these encounters is to explain to these dicasteries the criticisms advanced by the international auditors and give the technicians involved the means to assess and absorb them. This will make it possible to unblock a situation that will otherwise create a crisis for the whole economic and administrative system of the Holy See and the Governorate. I will come to request that your dicastery quickly indicate its willingness to attend a meeting in the Prefecture designed to satisfy the Pontiff’s instructions. For my part I can assure you that my intention is to have a serene and collaborative talk for the sake of mutual understanding and a solution to the problems that objectively exist and that this Prefecture has signaled for years but that have taken too long to overcome.

Calcagno tried to lift the tension and sent a prompt reply:

We are always available to verify together whatever can be improved. My best wishes for your work.

See you soon, D. Calcagno

The two sides were locked in a dangerous struggle. On the one side the Secretariat of State felt invaded by the auditors, with their pressing demands for information; on the other, the budgets of the Holy See had been blocked for weeks. At the Apostolic Palace the atmosphere was stifling. And the news of some unexpected expenses did nothing to lift the tension. The Brazilian press reported that the Holy Father had donated 3.6 million euros to the Organizing Committee of the World Youth Day held in Rio de Janeiro on July 22–29, 2013, to help cover the enormous 28.3 million euro debt it had left. The event had been managed by the local archdiocese, whose bishop, Orani João Tempesta, was in line to be made a cardinal by Bergoglio.

In the meantime, at the Apostolic See, there was meeting after meeting. Zahra realized that if the waters were not calmed it would only benefit the defenders of the status quo. On January 6 he requested and received an audience with the Secretary of State. The meeting had two objectives: to receive the requested information and to lower the tensions.

Parolin is a priest from one of the poorer parts of Latin America, and he had been the Apostolic Nunzio to Venezuela. He is a simple man, spontaneous and sincere. But he was in the stalwart offices of the Curia. Zahra is a businessman who understands numbers. Both of them shared Francis’s policies, but their personalities could not have been more different and the series of misunderstandings and incidents made dialogue between them quite difficult. Zahra went in with a strategy. Barely forty-eight hours after the meeting he held out an olive branch to the Secretariat of State: he wrote to Parolin a long summary of their meeting so that it would remain on the record:

Dear Monsignor Parolin:

It was a pleasure to meet with you on Monday and I wish to thank you for finding the time to see me. It was an honor to be of assistance to you in helping our Holy Father in this stimulating process of reform to benefit our Universal Church. I wish to provide you with some feedback on some of the various points we discussed during our meeting:

 … 4.) Accounts of the Secretariat of State. We received your response to our request regarding the accounts only this morning. The contents of your letter definitely cut in half our efforts to consolidate the accounts. The Prefecture has confirmed that it does not have copies of these financial statements or other partial information on the dicasteries mentioned in point 1 of your letter, without which we are unable to do our work. In the case of the Bambino Gesù hospital, the last statement that the Prefecture received is dated 2006. I am attaching a letter that Mr. Profiti sent to the Prefecture regarding these accounts.8 It seems like an endless carousel. We cannot close our assessment of these accounts, unfortunately … I repeat that we are working on these very inspiring reforms and it is normal to encounter severe opposition and resistance. I know that you and I are both determined to proceed in line with the will of the Holy Father in the most fluid way possible. It is clear that not everyone understands the seriousness and urgency of this task … and I entreat you to find a solution that will be beneficial to the delicate work we are both conducting. I will be back in Rome on January 20, and I can make myself available for a meeting should it be necessary. Rest assured that I support you fully in your difficult mission.

My best wishes, Joe9

The Color Purple

During this same period, Parolin received the auditors’ request for an explanation of the budgets they had rejected. It was a seven-page critique of the financial documents: “There is a general sense of inertia, with no clear signs of change or responsibility for careful management of the patrimony of the Holy See and without concrete actions to contain costs.” Regarding the patrimony, for example, the request was made for a “required, but missing, planning of property maintenance jobs, greater efficiency in the rental area, and clarification of the contract awarding process.” The budgets had to be redone, particularly the line items on financials and human resources. Until then they would remain blocked:

The redoing of the employee expenses line item, keeping in mind the freeze on hiring, turn-over, the replacement of retirees, overtime, promotions, and limitations on raises in 2013 (or 2012) to cost-of-living hikes.

The Secretariat of State, APSA, and the Governorate finally chose to collaborate. They responded to all of these questions and sent in the revised budgets just in time for the January 14 meeting of the group of cardinals in the Prefecture.

While data and information was coming in on the budgets, there was still little movement on the documentation requested from the Secretariat of State for the audit. On Saturday, January 11, Zahra was forced to approach Parolin. He asked once again for the financial statements of the bodies that report to the structure he headed. The Secretary of State was under pressure, but Francis remained undeterred. And the next day Parolin received important confirmation of the Pope’s unconditional trust in him. During Mass, at the Angelus, Parolin was named as one of the nineteen prelates who would be made cardinals by Bergoglio at the Consistory of February 22. This marked a significant changing of the guard at various Congregations. As a new cardinal, Parolin wrote one of his first emails to Zahra:

Dear Mr. Zahra, Dear Joe,

Thank you for the congratulations you sent me on my appointment as Cardinal. It is one more responsibility and challenge … purple is the color of martyrdom … pray for me! I am very pleased to send my regards and my blessings to your family. I have received your two earlier emails and I thank you warmly for them and for the meeting that preceded them. I wish to assure you of my complete willingness to work together in pursuit of the dispositions of Pope Francis. It seems to me that the most urgent questions are listed under points 4 and 5 [the request for financing of COSEA]. As for 5) tomorrow I will speak directly with the Holy Father and I trust that the thing can be quickly unblocked. As for 4), I am perplexed, because I do not know exactly how to recover the documentation you need (especially because of the tight deadline). Tomorrow I will bring the matter up again with the Substitute. If you have no objection, Mons. Balda can contact me directly to see how to proceed … We will try to find the time to meet on the occasion of your next stay in Rome and have an update on the situation. Thank you for everything. Let us place everything in the hands of God and ask him to help us to act always according to his will and for the greater good of the Church.

With my warmest regards, Pietro Parolin

But the situation was not as simple as the Secretary of State would have it. Forty-eight hours later, Zahra sent him this reply:

It seems that the question of gathering financial information from the Secretariat of State is far from settled. Last night I received the financial documents from Mr. Profiti, who to my surprise is saying in his letter (attached) that he had sent the communication to the Secretariat. I also refer to the dicasteries indicated in points (1) and (2) of your January 4 letter. The Prefecture of Economic Affairs does not have this information or else [the information is incomplete]. Now we are writing directly to these dicasteries even if we would not be surprised to find this information already available at the Secretariat.

I now refer to the items in my January 3 letter [regarding the bank accounts of the Secretariat of State]. Your reply to my letter does not refer to these two items. You are aware that we need this information to complete the whole financial picture of the Holy See. Naturally I respect the fact that there might be confidential accounts at the Secretariat, but what I am asking for is information on these other accounts. You can understand how difficult my job is and you are aware of the resistance I am facing in fulfilling the wishes and the mission of the Holy Father. Your intervention with the managers to help us in the work we are carrying on would be most appreciated.

With my best wishes, Joe

The only person who could break the stalemate now was Francis, as was stated nakedly in the weekly status report of the McKinsey consultants:

Secretariat of State, status:

• Received a letter from the Secretariat of State confirming that none of the financial information requested is available.

Next steps:

• Receive guidance from the Holy Father on the unshared accounts.

• Keep in touch with Mons. Parolin.

Parolin had never given too much credit to COSEA or to the Commission on the IOR. In an interview published in the daily newspaper Avvenire in February 2014, he stated:

The Curia is a reality of service, not a center of power or control. There is always a danger of abuse of power, large or small, that we have in our hands, and the Curia has not and does not escape from this danger. “But ye shall not be so,” as the Gospel warns us, and on this Word, so demanding but so liberating, we seek to model our activity in the Roman Curia, despite limits and flaws. I would like to emphasize that while a reform of the structures is needed, it will not be enough unless it is accompanied by a permanent personal conversion. The commissions? They have a limited term and a job to “refer,” that is to say, their purpose consists in submitting to the Pope and the Council of Eight Cardinals suggestions and proposals in the framework of their competence.10

It was only thanks to the intervention of Francis, at the urging of Zahra, that on January 30 the Commission received a twenty-nine-page file of answers—incomplete—regarding the Holy See’s tangled financial web. Something had finally broken. The laypeople on the Pontifical Commission, in this last phase of their work, could sense a crumbling of the opposition thanks to the Holy Father’s intercession. A harmful and mutual distrust began to insinuate itself among them.

In the meantime, Francis was reflecting. When he has to make painful decisions, he regroups in private to find strength and focus. He prayed in his room, a simple environment in its furnishings and decorations: a crucifix, a statue of Our Lady of Luján, an icon of St. Francis giving mercy and hope, and a statue of St. Joseph sleeping.

The Curia as a whole deserved to be admonished. Once the budgets were unblocked, the entire community had to share Francis’s concerns over the financial future of the Church, and he would have to impose with force, if necessary, the longed-for changes that were only on paper so far. There was a growing risk that the erosion of the patrimony would become unstoppable. On the one hand the economic crisis was striking the richest Catholic countries, reducing their generosity to the Church. On the other hand, in the Vatican, despite the arrival of Francis, expenditures kept going up. And while all of this was happening behind closed doors, faithful pilgrims continued to fill St. Peter’s Square, unaware of the hard work it would take to turn the Pope’s dictates into reality.

Francis realized that he needed to act immediately, taking drastic measures if necessary. So he decided to intercede mainly on the question of personnel, not only because all of his appeals to take greater care in hiring and assigning jobs had been ignored, but especially because personnel measures more than any other would change the daily perceptions of the people who lived and worked inside the walls. Drastic human resource measures that would make everyone understand that the situation was serious and that the Argentine Jesuit meant what he had promised.

The Holy Father summoned Parolin and immediately ordered the application of emergency measures to the entire Apostolic See. It was a turn of the screw. On February 13, 2014, the Secretary of State sent a memo indicating all the cuts that had to be made. In the document, sent to all the cardinals who headed dicasteries in the Curia, Parolin referred to the crisis, and called for the following:

The immediate adoption of measures that will help contain expense items concerning personnel so that in this difficult moment of economic crisis the application of these decisions will contribute, in general, to guaranteeing the maintenance of the whole community of work at the service of the Holy Father and the Universal Church.

Bergoglio urged greater mobility between departments, and he imposed a freeze on overtime, on the renewal of temporary contracts, on new professional positions, on promotions, and, of course, on hiring. When a person retired, “the employees in our work force”—Parolin advised—“will not fail to shoulder generously the activity no longer being performed by their colleagues.” But the ultimate goal was still remote. “How I would like a Church which is poor and for the poor,” Francis had said without guile on March 16, 2013, at his audience with the media. In the Curia there were many who now remembered those words and contrasted them to the notorious remark of Monsignor Marcinkus, the head of the IOR during its worst scandal, who often quipped, “You can’t run the Church on Hail Marys.” With that he dictated a mind-set that would dominate a dark chapter in Vatican history, a mind-set that persists in some corners of the Curia today.