Even those clerics who opposed Benedict’s motu proprio did not criticize the Pontiff. The man they blamed for the capitulation to Brussels and its secularist regulators was the cleric everyone considered the power behind Benedict’s throne, Secretary of State Tarcisio Bertone. As the head of the Vatican’s diplomatic corps, contended some critics, Bertone more than anyone should have been sensitive to how the motu proprio might restrict the church’s ability to operate under authoritarian governments like those in Myanmar, Iran, Cuba, and China. What might happen to the church’s “independent missions” in offshore financial havens such as the Turks and Caicos and the Cayman Islands? How could Bertone allow the church’s missionary arm to be subject to the stringent new financial oversight?
Bertone’s strong support for the motu proprio reenergized an effort to force him from the Curia. Influential clerics had been trying to oust Bertone since 2009. That year a senior archbishop, Cardinal Angelo Bagnasco, representing a group of ranking prelates, met with Benedict at Castel Gandolfo. He had laid out what he thought was a damning case of incompetence and overreaching against Bertone and pleaded with the Pontiff to dismiss him. Benedict waved Bagnasco away, saying enough in German and Italian.1
Something as significant as a cardinal asking the Pope to fire his Secretary of State did not long stay secret inside the Vatican. When Bertone learned about that failed effort his response was to further consolidate his power. He had already begun the previous year to punish some on his enemies list. Most prominent had been Archbishop Piero Pioppo, whom his predecessor, Sodano, had appointed as the chief prelate of the IOR just before Bertone took power. At the time it had been interpreted not only as a slight to Bertone but evidence of Benedict’s weakness since the Pope ignored appeals from cardinals to void the appointment. At Bertone’s direction, Pioppo was dispatched to become Papal Nuncio to Equatorial Guinea and Cameroon (where he still is, as of 2014).2
In the wake of the dustup over the motu proprio Bertone moved to solidify a loyal team. The Secretary of State favored clerics from the Salesians, his own religious order.3,I
In February 2011, Bertone moved against the popular Cardinal Dionigi Tettamanzi, Milan’s former archbishop and the chief of the Istituto Toniolo, a wealthy religious foundation that controlled the prestigious Cattolica University. During a dispute over Tettamanzi’s management of the Cattolica, Bertone sent the cardinal a brusque fax telling him to resign. Tettamanzi appealed to the Pope, who agreed to see both cardinals that April at Castel Gandolfo. After that meeting Benedict gave Tettamanzi two months to step down. But the message was clear: Bertone had prevailed.5 As Tettamanzi confided to others what had transpired it reinforced the images of both Benedict and Bertone, one as a man too weak to be Pope and the other as too ambitious to be Secretary of State.
In May, Bertone lobbied Gotti Tedeschi to make a $260 million bid for a controlling share of Milan’s San Raffaele Hospital, founded by a priest who was a Berlusconi confidant. By the time Gotti Tedeschi got around to checking the hospital’s books, there were millions in outstanding debts. San Raffaele’s administrator killed himself that October in his own office with a Smith and Wesson revolver. “The Mysterious Suicide That Has Rocked the Vatican” was the headline in London’s Independent.6 Local prosecutors had begun a fraud investigation. Much to Bertone’s fury, Gotti Tedeschi balked. “We do not know how big the deficit is,” he told some colleagues. “There are no accounting records at all. We are walking in the dark.”7
The San Raffaele marked one of the few setbacks for Bertone. Overall, he was leaving his mark inside the Curia. The Italians—many of his choosing—were again on the ascendancy.8 By 2011 they were more than half (thirteen of twenty-five) of Benedict’s top appointments. When the Pope next picked twenty-two new red hats, for the first time in decades the European cardinals had a slight majority for the next conclave (sixty-seven out of 125).9 The Italians were back to thirty, boosting their chance of either retaking the Papacy or at least playing a kingmaker role.10 Some Vatican watchers were uneasy that with all the maneuvering, “one could think with some certainty that Bertone may be a shoo-in for the next pope.”11
A few tried at least slowing Bertone’s power grab. Adolfo Nicolás, the Superior General of the Jesuits, wrote to Benedict enclosing a letter he had received warning of “paralyzing fear” inside the Vatican over Bertone’s leadership.12 An anonymous “Vatican analyst” told Britain’s Guardian, “I don’t think Bertone is a thief, he is just not up to the job.”13
But Benedict was committed to the man who had served him as a deputy for seven years when they served in the Congregation for the Doctrine of the Faith.14
Given a free hand by Benedict, and as the cardinal to whom the IOR oversight committee reported, Bertone exercised broad authority when it came to finances. He had settled the aborted debate the previous year over whether the Vatican should withdraw from the euro. In February, two months after the Pope’s historic motu proprio, Bertone sent a letter to the Secretary General of the Council of Europe. In that letter he requested that Moneyval, the EU’s primary monitoring division in fighting money laundering and the financing of terrorism, evaluate the Holy See and the Vatican city-state.15 This is precisely what Gotti Tedeschi had been urging since his 2009 arrival at the IOR. Bertone reckoned that there was no use in further delaying the inevitable. If the church had any chance of qualifying for OECD’s white list, it needed a good Moneyval report.
Some in the IOR and the Curia who agreed in principle with Bertone thought it was premature. What if the Moneyval examiners found so much wrongdoing once they got inside the bank that the Vatican got slotted onto the gray, or possibly even black, list?
In early April, Brussels sent word that it had agreed to evaluate the city-state.16 That was only a few days after the Vatican announced, as a further sign of good faith, that anyone entering Vatican City with more than €10,000 ($14,000) in cash had to declare it.17 It was a dramatic departure from the days when clerics working at the Vatican Bank watched Monsignor Donato De Bonis carrying suitcases stuffed with cash.
Representatives from Moneyval and the IOR had to work out the details of any evaluation. It could not be done remotely. The inspectors required access inside the Vatican to IOR files and ledgers that had never before been shared even with other Curial departments. Moneyval would need to conduct evaluations over several years.
On June 1, 2011, the Italians freed the IOR’s $30 million that prosecutors had frozen at Credito Artigiano. It was released only after the Vatican struck an agreement to allow Moneyval to have full access to the IOR and other Curia financial departments for a week beginning November 20.18 A follow-up onsite visit was scheduled for the following spring.19
Moneyval assembled a seven-person team with impeccable credentials in criminal law, regulatory issues, and law enforcement.20 The anxiety was high that November when Moneyval carried out its first thorough assessment inside the city-state. Its visit coincided with the worst financial crisis Italy had faced since World War II, a meltdown that was raising fears about the IOR’s possible exposure to an Italian debt default.21
Everyone inside the church put on a brave face for the team from Brussels. They knew the results would reveal how close or far away the Vatican was from making it to OECD’s white list. The church emphasized transparency for the visit. Pope Benedict met with the inspection team, as did Gotti Tedeschi and a list of who’s-who related to the church’s money.22 At the IOR, the examiners faced a “unique challenge” since they were in a sovereign country that also was the seat of the Catholic Church. “An unusually large amount of documentation was seen during the course of the assessment,” Moneyval’s executive secretary John Ringguth later told reporters.23
What played out that November between Moneyval and the IOR was watched far beyond Europe. Former U.S. Treasury Department official Avi Jorisch summarized in Forbes what was on the minds of financial compliance officers and law enforcement personnel around the globe: “In today’s interconnected financial world, instituting measures to mitigate abuse of the international financial sector is part of the cost of doing business. Unquestionably, one of the most serious public policy challenges the international community will face in the foreseeable future is how to use every tool in its arsenal to make progress against those who exploit tainted money. While the Vatican answers to a higher calling, the EU, FATF and Moneyval should insist that its earthly responsibilities are equally important.”24
What no Moneyval inspector then knew was that Bertone had engineered the exile to America of Archbishop Carlo Maria Viganò, the industrious and outspoken Deputy Governor of Vatican City, who had led the fight for the church to withdraw from the euro instead of acceding to European inspectors entering the sovereign Vatican. Bertone had not, however, moved Viganò because of his stance on the euro. The archbishop had been transferred from Rome because during his two years as the second ranking cleric in charge of the Vatican’s infrastructure, he had made powerful enemies. The brusque Viganò had dedicated himself to breaking up a web of entrenched nepotism, corruption, and cronyism when it came to awarding contracts for work inside the Vatican.25 His unyielding stance earned him a reputation as a “ballbreaker.” Viganò’s crusader attitude made him someone the Vatican would seemingly want to showcase to Moneyval. Even if his work did not affect whether the IOR was in compliance when it came to money laundering and terrorism financing laws, clerics like Viganò would impress upon the examiners from Brussels that the Vatican was embracing the EU’s dual themes of transparency and reform.
What happened to Viganò was a cautionary tale. Once he had pointed out that many longtime contractors had cozy relationships with the Vatican’s old guard, a leak campaign was launched to discredit him. Anonymous sources in the Italian press accused him of being inefficient, overbearing, and even as someone interested only in accumulating personal power.26 But no one could have predicted what happened behind the scenes when Bertone went to rein in Viganò.
When Bertone called the seventy-year-old archbishop to his office in March, it was to inform him that he was to be transferred nearly three years before his Governorate term was over. Viganò was “astonished” and broke protocol by going over the Secretary of State’s head.27 He wrote two extraordinary letters. One to Bertone was blunt. He said that the information relied on by the Secretary of State in reaching his decision was “falsified . . . a grave injustice . . . [and] the fruit of serious slander.”28 Viganò’s second letter was a handwritten one to Benedict. He warned: “My transfer from the Governorate would, in this moment, greatly dismay and discourage all those who believed it possible to correct so many long-entrenched instances of corruption and abuse of power in the management of several departments.”29
When Benedict did not answer, Viganò requested a private audience. At an early April meeting, Viganò passed to the Pontiff a remarkable memorandum he had prepared. Communications to the Pontiff were normally cloaked in flowery language and any criticisms were so oblique as to be practically invisible. This memo, however, detailed the “widespread corruption” Viganò had discovered when he started in the Governorate in 2009 and what he had done to fix it. He warned that significant Vatican City investments were under the control of two funds managed by a group of Italian bankers “who turned out to have put their own interests before ours.” And he provided Benedict with several examples of the rampant malfeasance he had uncovered. In a single instance suppliers and contractors had overcharged the church $2.5 million. Viganò said that was to be expected since “work was always given to the same companies at costs at least double compared to those charged outside the Vatican.”30 In another case, he had shaved $1.2 million from the annual upkeep for the Vatican’s gardens, and put that savings toward a renovation of the city-state’s thermal power plant.
The archbishop confided that the Vatican’s own maintenance workers were demoralized by how badly outside vendors ripped off the church. There were no consequences for the gouging other than getting more business. Viganò shared with Benedict that shortly after he arrived in the Governorate he discovered that the large nativity scene in St. Peter’s Square had cost more than $700,000. By bidding out the project the following year, the church saved $300,000. The scene looked the same.31 Competitive bidding had slashed in half the annual bill from electronic giant Siemens. He even had the numbers demonstrating the sharp reduction of thefts from inventory after he installed surveillance cameras in the Vatican’s warehouses.
Viganò was proud that he was instrumental in turning around the Governorate from an annual deficit of more than $10 million the year he arrived to a recent surplus of more than $30 million.
“Everybody is betting on my demise,” he told Benedict. If the Pope did not act, the archbishop cautioned that his transfer out of the Vatican would “be perceived by all as a verdict of condemnation of my work, and therefore as a punishment” and it would also “expose those who have assisted my renewal action to acts of revenge and humiliating retaliation.”32
No one outside the Vatican knew that Viganò’s fate was so precarious. Italy’s best-connected Vaticanologists were unaware of the drama. La Stampa’s normally prescient “Vatican Insider” ran a long story in late May about the “musical chairs” at the Curia. It mentioned that Viganò had met with Benedict that spring. According to “Vatican Insider,” the Pope “credited him for the cleaning work and the fight against waste which in two years has enabled the Governorship to transform liabilities for seven million Euro in profits for thirty.” And as for what all the shuffling in the Curia meant for Viganò? “Vatican Insider” predicted that while Viganò had been “considered the natural successor of Cardinal Giovanni Lajolo, Governor of the State of Vatican City, now his name is being made as leader of the Ministry of Finance (a cardinal assignment).”33
As word spread throughout the Curia about Bertone’s move against Viganò, others watched it as the ultimate test of Benedict’s commitment to the financial reforms. Four high-ranking Italian cardinals appealed personally to Benedict, asking him to reverse Bertone.34 The cardinals even suggested that the Pope should immediately elevate Viganò as a cardinal to conclusively demonstrate his faith both in him as well as the zealous cleanup on which he had embarked. One of Benedict’s closest confidants, Sister Ingrid Stampa, met him privately and lobbied for the beleaguered Viganò.35
In the case of Viganò, a senior Curial cleric who had the courage to identify widespread corruption and wanted the Pontiff’s backing to stop it, Benedict was frozen. Viganò did not, as “Vatican Insider” predicted, get elevated to a cardinal and put in charge of the Ministry of Finance. Only weeks before the Moneyval inspectors had arrived, he was sent four thousand miles from the Vatican to serve as the Papal Nuncio to Washington. Once again, as he had throughout his Papacy, Benedict had shied away from confronting his Secretary of State. Bertone’s power seemed unchecked.
I. Among some of Bertone’s foes whom he transferred out of the Vatican over a two-year purge were Monsignor Vincenzo Di Mauro, the Secretary of the Prefecture for the Economic Affairs of the Holy See; Archbishop Carlo Maria Viganò, the powerful Secretary General of the Governorate; and Monsignor Ettore Balestrero, the Undersecretary for Relations with States. Bertone had also helped block Cardinal Angelo Scola from becoming the president of the Italian episcopal conference. And he replaced Cardinal Fernando Filoni, who held the key position of the Sosistuto in the Secretariat of State, with fifty-two-year-old Archbishop Giovanni Becciu, the Apostolic Nuncio to Angola, and someone who notably had never in his career served inside the Vatican.4