Financial Reform under Francis
In six months Pope Francis has implemented more changes to the Vatican’s financial system than his predecessor did during his entire pontificate.
Since he was elected, Pope Francis has appointed a new interim prelate for the Institute for Works of Religion (IOR), commonly referred to as the Vatican Bank, created three commissions to study financial operations at the Vatican, implemented a new law that affect all organizations legally based in Vatican City and issued a warrant asking Italian authorities to help investigate a monsignor who allegedly tried to smuggle 20 million Euros from Switzerland to the Vatican.
Under Pope Benedict the Vatican’s Financial Information Authority (AIF) was created with Swiss lawyer Rene Bruelhart hired to lead the authority. Bruelhart previously served as head of Lichtenstein’s financial intelligence unit. Just before Benedict XVI’s resignation took effect he approved the appointment of Ernst von Freyberg as head of the Vatican Bank. The position had been vacant for nine months. The previous head of the IOR was ousted in May 2012 for incompetence.
Previous to the creation of the AIF, reform to the Holy See’s financial structures had not been made since 1990.
The Institute for Works of Religion was established in 1887 as the Commission for Pious Causes. The Commission of Cardinals that oversees IOR and appoints the bank’s directors was established in 1904. The Commission was turned into an Institute in 1941 by Pope Pius XII. It was only in 1990 that Pope John Paul II issued a decree laying out the institute’s governing statues.
Pope Francis has made these changes:
- June 6 : Appointed a new interim prelate for IOR, Msgr. Battista Ricca. Allegations later emerged that Msgr. Ricca led a double life while serving at Nunciature in Uruguay. Pope Francis has said he personally investigated the claims and found them not credible.
- June 26: Pope Francis created a Commission of Reference to study the activities and mission of the Vatican bank. The commission is made up of five members: Cardinal Raffaele Farina, Cardinal Jean Louis Tauran, Bishop Juan Ignacio Arrieta, U.S. Monsignor Peter Wells, and Mary Ann Glendon, a Harvard Law professor and former U.S. Ambassador to the Holy See.
- July 19: Created Pontifical Commission for Reference on the Economic-Administrative Structure of the Holy See. The eight member panel would begin work immediately after the pope’s return from Brazil and would have scope to collaborate with the eight cardinals on the pope’s new advisory panel. Members include Msgr. Lucio Vallejo Balda, Joseph Zahra, Francesca Chaouqui, and George Yeo
- Aug. 2: Issues warrant for cooperation with Italy regarding financial activities of Msgr. Nunzio Scarano, arrested for allegedly plotting to smuggle 20 million Euros from Switzerland to Vatican City.
- Aug. 8: - Issued Motu Proprio to prevent money laundering, financing of terrorism and proliferation of arms of mass destruction and established Financial Security Committee. New committee includes heads of Vatican’s financial and legal offices.
It is expected more changes may be made after Pope Francis meets with his advisory board of international cardinals in October.