Church cash crisis after scandals

The Vatican is losing money rapidly because of bad management, dodgy contracts and dipping donations, and risks defaulting by 2023, a book has claimed.

Drawing on 3,000 confidential documents, Gianluigi Nuzzi writes in Universal Judgment that the Vatican lost nearly €44 million (NZ$77m) last year as its huge and shadowy property portfolio went into the red for the first time.

‘‘Pope Francis’s reforms of the Vatican’s finances are failing, like a plaster placed on a haemorrhage,’’ Nuzzi told The Times .In his book, which is released today, he writes that ‘‘every reform is anaesthetised, blocked, sabotaged’’ by insiders.

Nuzzi was a central figure in the Vatican leaks scandal that revealed alleged corruption. He published documents leaked by Pope Benedict’s butler in 2012, and later wrote a book exposing greedy cardinals and suspicious deals in 2015 which led to him being tried and acquitted by a Vatican court for publishing confidential information.

His latest book documents the establishment of an emergency task force in the Vatican last year to ward off a financial meltdown as 2018 losses rose to €43.9 million from €32 million the year before.

Gianluigi Nuzzi

‘‘The deficit is recurring and structural, has reached worrying levels and we risk a default if no urgent steps are taken,’’ according to a confidential note cited in the book, which also quotes officials expressing concern that Vatican staff pensions may be in danger.

One of the main causes is the drop in donations, known as Peter’s Pence, after sex abuse scandals damaged the church’s reputation. From €101 million in

2006 donations fell to €70 million in 2016, and Nuzzi quotes a document saying that the figure is now below €60 million. The shortfall comes as inept managers waste cash and entrenched, privileged prelates resist Francis’s transparency drive.

The book also claims an assistant of a friend of Pope Francis who was hired to promote Peter’s Pence failed to raise any money before it emerged that he was under investigation for allegedly brokering bribes in Sicily.

The book includes a list of cardinals whose mysteriously large bank accounts at the Vatican have been closed down since the accession of Francis.

In an effort to improve transparency in Vatican accounting, Francis named the Australian cardinal George Pell as his economy minister in 2014. The toughtalking prelate found more than

€1 billion hidden off the books and alleged that feuding Vatican departments had hidden money from each other. His campaign came to an abrupt end when he was tried and jailed for child sex abuse back in Australia. ‘‘Before his arrest, Pell’s work was continuously being sabotaged at the Vatican,’’ Nuzzi said.

Meanwhile, the return on the Vatican’s financial investments dropped to €14.9 million last year from just over €20 million the year before. ‘‘Only 10 per cent of donations are now used for charity work, as the rest is used to prop up the accounts,’’ Nuzzi said. ‘‘It doesn’t help that a lot of accounting work is still written longhand,’’ he added.

The book pins much of the blame for the cash crisis on shoddy management of the 2926 properties owned by Apsa, the Vatican’s real estate office, which made a loss of €22.6 million in 2018 – the first ever year in the red. – The Times

‘‘Pope Francis’s reforms of the Vatican’s finances are failing, like a plaster placed on a haemorrhage.’’