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Vatican brings in outside firm to investigate financial office

Source: Reuters - Tue, 15 Oct 2013 16:47 GMT
Author: Reuters
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The Loggia of the Blessings is seen behind the statue of Saint Peter in Saint Peter's Square at the Vatican March 11, 2013. REUTERS/Max Rossi
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* Believed to be first time outside firm looking into APSA

* Department handles Vatican real estate, stocks, financial portfolios

* Department has been accused of impropriety and corruption

By Philip Pullella

VATICAN CITY, Oct 15 (Reuters) - The Vatican has called in an outside company to investigate a department that manages its real estate holdings and financial and stock portfolios following accusations of corruption.

A committee of cardinals took the decision to look into the books and activities of the Administration of the Patrimony of the Apostolic See (APSA) as the Vatican tries to clean up the image of its bank, the focus of scandals for decades.

APSA, which has two divisions, manages the Vatican's real estate holdings in Rome and elsewhere in Italy, pays the salaries of Vatican employees, and acts as a purchasing office and human resources department. It also manages the Vatican's financial and stock portfolio.

A Vatican statement said the Promontory Financial Group would carry out a due diligence procedure of both sections, looking into its financial and economic activities and its management procedures.

The same company is helping the Vatican bank comb through its accounts in order to meet international financial standards and eliminate those which could be used for money laundering.

The aim of the procedure, believed to be the first time an outside company has looked into APSA's books, was "to deepen the checks into the financial and management situation at APSA," a statement said.

Since assuming office in March, Pope Francis has taken action to tackle years of financial scandals involving the Vatican bank, which has long been in the spotlight for failing to meet international standards against tax evasion and the disguising of illegal sources of income.

In recent months, sources with knowledge of the situation have said that APSA would also have to go under the microscope because of the large amounts of money it handles and allegations of impropriety.

Monsignor Nunzio Scarano, a prelate who worked at APSA for 22 years as an accountant and is now under arrest, told Italian magistrates the department acted improperly as a parallel bank.

Scarano, a suspect in an investigation into alleged money laundering through the Vatican bank, told them that officials at APSA allowed the office to be used by outsiders even though it was against its regulations, according to a transcript of his questioning obtained by Reuters last month.

Scarano's lawyers say he did not launder money.

Through his position at APSA, Scarano had ready access to the Vatican bank, formally known as the Institute for Works of Religion (IOR), where he had several accounts. (Reporting By Philip Pullella; Editing by Angus MacSwan)

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