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    Vatican Financial Regulator 'Resigns' in Wake of Probe into an 'Opaque' Holy See Investment Venture

    © REUTERS / Stefano Rellandini
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    Vatican police searched AIF headquarters on 1 October, seizing documents in connection with an investigation into the Holy See’s investment in a London real estate venture that had sparked suspicions.

    The Vatican announced in a brief statement on Monday that Rene Bruelhart, the head of its financial regulator, would be leaving at the end of his mandate on Tuesday, Reuters reported.

    The Vatican added that Pope Francis had taken steps to name a successor, set to be announced after the pope returns from a trip to Thailand and Japan on 26 November.

    Pope Francis greets people as he arrives for the weekly general audience at the Vatican. October 30, 2019.
    © REUTERS / Remo Casilli
    Pope Francis greets people as he arrives for the weekly general audience at the Vatican. October 30, 2019.

    Shortly after the announcement, Bruelhart, a Swiss lawyer who has been in the top job for five years, told Reuters by phone:

    “I resigned.”

    Holy See investment probe

    The news comes in the wake of an unprecedented raid at the offices of the Financial Information Authority (AIF) and the Secretariat of State on 1 October, with files and records seized pertaining to a probe into the Holy See’s investment in a London real estate venture.

    According to the search warrant, seen by The Associated Press, prosecutors alleged that the AIF’s actions in the real estate operation were “not clear”, as Vatican prosecutor Gian Piero Milano was looking into possible embezzlement, abuse of office, fraud and money laundering connected to the purchase.

    The “opaque” deal

    In 2014, the Vatican’s Secretariat of State spent about $200 million for a minority stake in a complex plan to buy a building in London’s Chelsea and convert it into luxury apartments, according to sources cited by Reuters.

    In 2018 the Secretariat of State bought the rest of the stake but took on some debt to refinance it, with several Italian middlemen involved in the operations.

    According to Italian magazine L’Espresso, which published the leaked documents, they may have overcharged the Vatican.

    Pope Francis pays homage to the statue of St. Mary of Fatima during his weekly general audience in St. Peter's Square at the Vatican, Wednesday, May 13, 2015.
    © AP Photo / L'Osservatore Romano
    Pope Francis pays homage to the statue of St. Mary of Fatima during his weekly general audience in St. Peter's Square at the Vatican, Wednesday, May 13, 2015.

    This past June, in a bid to extinguish the mortgage, the Secretariat asked the Vatican bank for a bridge loan of €150 million “for institutional reasons” but the bank refused.

    The Vatican bank and auditor general’s office then raised an alarm with Vatican prosecutors that the buyout looked suspicious.
    It was this that sparked the raids on AIF and the secretariat of state.

    An internal AIF investigation had concluded that neither the authority’s suspended director, Tommaso Di Ruzza, nor anyone else at the agency “improperly exercised his authority or engaged in any other wrongdoing.”

    In a statement, AIF’s board said it was “confident that potential misapprehensions will be clarified soon.”

    It added that it had full faith and trust in AIF director Tommaso di Ruzza “and moreover commends him for the institutional work carried out in the handling of this particular case.”

    Nevertheless, the raid sparked alarm internationally, as officials were concerned that other countries would be less willing to share sensitive information with the AIF in the future if its files and records could so easily end up in the hands of Vatican police.

    The current probe comes as the Vatican prepares early next year for a regular visit by the Council of Europe’s Moneyval evaluators, who monitor the Holy See’s adherence to international norms to fight money laundering and terrorist financing.

     

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