Photo: Lorenzo Pesce for The Wall Street Journal
The Trials and Tribulations of the Vatican’s Finance Chief
Pope Francis trimmed powers of Cardinal George Pell, charged with cleaning up the city-state’s muddled accounts, in setback for broader overhaul of Vatican
By Francis X. Rocca
VATICAN CITY—Late last year, Cardinal George Pell, the pope’s finance chief, hired PricewaterhouseCoopers to undertake a comprehensive audit of the Vatican’s finances.
On a mandate from Pope Francis to clarify the city-state’s muddled accounts, the newly powerful cardinal had been assessing and tweaking the system; already he had found a total of €1.4 billion “tucked away” off the books.
Cardinal Pell wanted PwC to check that the 136 Vatican departments—each of which used its own, often loose accounting standards—were following guidelines aimed at imposing budgetary discipline.
His task was like pushing against the ancient stone walls of a basilica.
Other officials, led by Cardinal Pietro Parolin, the Secretary of State, known as the pope’s prime minister, let him know the audit wouldn’t fly. In June, the Vatican announced it had been scrapped, and soon many of Cardinal Pell’s wide-ranging powers were handed to others.
It was also a sign that the Vatican’s established interests have gained the pope’s support, just three years after his election as a historic, New World outsider.
Cardinal Pell, a blunt speaker, had used a vaguely worded papal mandate to reach for broad powers. He has no plans to back down.
“My job is to keep pushing,” Cardinal Pell, 75 years old, said in an interview in June. “The goal is that the Vatican will be recognized inside and outside the church around the world as somebody who handles their finances properly and appropriately.”
Accounting at the Vatican has never followed unified policies. Annual reports aren’t released, different departments use different accounting principles, data are inconsistent and not comparable. Before Cardinal Pell’s appointment, a panel of cardinals charged with economic oversight met just twice a year. Budgets didn’t exist, and expenditures weren’t itemized.
When cardinals elected Pope Francis in March 2013, they gave him a mandate to revamp the Curia.
The resignation of his predecessor, Pope Benedict XVI , had occurred under a cloud of allegations at the Vatican relating to cronyism, inefficiency and corruption.
Complaints surfaced about €550,000 spent for a manger scene in St. Peter’s Square. Later, concern rose about the lack of oversight of hundreds of thousands of euros collected by advocates for potential saints from donors.
Pope Francis moved quickly. In early 2014, he established a new Secretariat for the Economy and named Cardinal Pell to run it. In a two-page document he seemed to hand over sweeping powers, saying the cardinal had authority over “administrative and financial structures” and his reach extended “to all that in whatsoever manner” concerned economic activity, including procurement and hiring. The cardinal would report directly to the pope.
In the cardinal, the pontiff found a rare example of a high-ranking prelate with media savvy, financial experience and a bold personality.
With his 6’3” frame, the Oxford-educated cardinal cuts an imposing figure. In his youth, he played Australian rules football in the position of ruckman, a role akin to that of a center in basketball.
Cardinal Pell is “a no-nonsense, realistic, straight-talking Australian,” Cardinal Timothy Dolan of New York told CBS This Morning soon after the appointment. “He’ll get things done.”
In Australia, he oversaw the merger of eight far-flung colleges into a national Catholic university. As archbishop of Sydney, he streamlined procurement procedures in the archdiocese, which had assets of about US$770 million in 2013 and a staff of 11,000. He raised the return on investments in the church’s real-estate holdings by charging market rents, helping triple the archdiocese’s budget, according to Danny Casey, the archdiocese’s business manager under Cardinal Pell and now a close aide at the Vatican. The cardinal was also a member of a panel of cardinals advising Pope Benedict on economic affairs.
Critics point to what they call an autocratic streak. During his tenure in Australia, the entire staff charged with spiritual instruction at an archdiocesan seminary resigned to protest his plans to impose a regular schedule of prayers and Mass attendance on students.
Australian police are investigating Cardinal Pell over accusations that he sexually abused minors several decades ago, and Australian victims’ advocates have claimed that he failed to report suspected abuse by clerics during the 1970s and 1980s.
In July he said he “emphatically and unequivocally rejects any allegations of sexual abuse about him.” He has also said that the church has made “enormous mistakes” in handling sex abuse and that he regrets not having done more to pursue certain allegations about others as a young priest, but denies any wrongdoing.
With the new assignment Cardinal Pell got off the mark quickly. At a July 2014 press conference, he presented himself as the financial counterpart to the Secretary of State, who had previously been unchallenged as the pope’s No. 2 official. Press accounts hailed the Australian as the Vatican’s financial “czar.”
“Our ambition is to become something of a model of financial management rather than a cause for occasional scandal,” he said at the time.
The “Vatican” refers to both the Holy See—which includes the central administration of the world-wide Catholic Church and related institutions serving the pope—and Vatican City State, the sovereign territory owned by the church inside Italy, where the pope resides.
Blessed Balance Sheet
The Vatican has never published annual financial reports. Partial figures have been made public over the years, but numbers are rarely comparable or complete. Here is a rough estimation of the Vatican’s main assets, sources of revenue and expenditures, based on the most-recent available figures and other Vatican sources.