A hint of accountability in new Vatican financial scandal

By JOHN L. ALLEN JR.

Only half in jest, I’ve sometimes suggested that the pace of change in the Vatican amounts to, “Talk to us on Wednesday and we’ll get back to you in 200 years.” It’s an institution, in other words, decidedly not built for speed.

Recent days, however, have brought an intriguing hint of a culture shift in the direction of accountability, perhaps accelerated by fallout from the global sexual abuse crisis.

Already reeling on that front, the Vatican now faces an embarrassing financial scandal: Cardinal Crescenzio Sepe of Naples has been named a target by Italian prosecutors for his role in alleged corruption in public works contracts while he was Prefect of the Vatican’s Congregation for the Evangelization of Peoples from 2001 to 2006.

The investigation of Sepe comes as part of a widening corruption scandal in Italy known as the “Great Works” probe, which has already linked an array of politicians and businessmen to an alleged network of kickbacks in major public projects, such as the Jubilee Year of 2000 and the recent meeting of the G8 in earthquake-damaged L’Aquila, Italy.

Sepe is the first former Vatican official implicated in the scandal.

In a nutshell, Italian news reports indicate that prosecutors suspect Sepe gave various Italian public officials sweetheart deals on apartments and other residences in Rome owned by Propaganda Fidei, at the same time that massive amounts of state funds were being allocated for remodeling projects on congregation properties, including its famed headquarters in Rome’s Piazza di Spagna.

One Italian newspaper reported on June 21 that the amount of public funds involved could be as much as $3 million – and that some of the money may still be unaccounted for, since some of the work was never completed.

For his part, Sepe has denied wrongdoing, saying that he’s “completely calm” and that “the truth will come out.”

What’s striking vis-à-vis the broader issue of accountability is that both the Vatican and Sepe have vowed that the 67-year-old cardinal will cooperate with the probe, rather than attempting to invoke diplomatic immunity on the basis of holding a Vatican passport.

On background, a senior Vatican official said this morning that the recent sexual abuse crisis has helped create an environment under Benedict XVI in which officials are less likely to invoke the church's traditional privileges in a fashion that could be seen as attempting to skirt accountability for misconduct.

At the same time, the official said, the Vatican will protect its institutional autonomy, meaning that it would resist probing too deeply into the internal workings of Vatican departments.

Vatican officials have insisted that this will not be another “Marcinkus affair,” a reference to the late American Archbishop Paul Marcinkus, a former head of the Vatican Bank who was implicated in a massive financial scandal that led to the collapse of an Italian bank in the 1980s. The Vatican eventually paid $240 million to creditors of the Banco Ambrosiano, denying legal responsibility but acknowledging “moral involvement” in the bank’s implosion.

At one stage civil authorities in Italy issued a criminal indictment for Marcinkus, forcing him to remain on Vatican property until the Italian Supreme Court ruled in 1988 that he enjoyed immunity from prosecution. Marcinkus died in February 2006.

In this case, however, Vatican officials have said there will be no analogous effort to shield Sepe from the Italian investigation.

Vatican spokesperson Fr. Federico Lombardi has said that while Sepe has the right to be “respected and esteemed,” the Vatican also wants the “situation to be cleared up fully and rapidly, so that shadows on him and on church institutions can be eliminated.”

At the same time, Lombardi said that "it's necessary to take account of the procedural aspects and the legal profiles implicit in the proper relationship between the Holy See and Italy" -- meaning, in effect, that the Vatican will look after its institutional interests, but Sepe will have to answer the inquiries of civil officials.

Aside from the context of the sex abuse crisis, another factor that may help explain the contrast is that while Marcinkus was closely linked to John Paul II (among other things, Marcinkus was credited with foiling a 1982 assassination attempt against John Paul in Fatima), Sepe is not seen in the same way as an intimate of Pope Benedict XVI.

Sepe first rose to prominence in 1996, when, as the secretary of the Congregation for Clergy, he put together the celebrations in Rome for the fiftieth anniversary of Pope John Paul II’s ordination to the priesthood. On the strength of that performance, Sepe was named the chief organizer of the Great Jubilee Year of 2000, overseeing what was almost certainly the most complex logistical enterprise in recent Roman memory.

Sepe’s elevation to the College of Cardinals in 2001, and his nomination to head Propaganda Fidei in the same year, was widely seen as a reward from John Paul for Sepe’s work on the Jubilee Year.

Roughly a year after Benedict’s election to the papacy, however, Sepe was transferred to Naples, while Cardinal Ivan Dias of India took over at Propaganda Fidei. Among Vatican insiders, the word was that the new pope not only wanted a prefect who came from a traditional mission territory, but also someone who would be less of an impresario, putting the accent more on the spiritual dimension of the church’s missionary enterprise.

That history may mean that Benedict XVI, and the people around him, feel less of an investment in defending Sepe. Should any charges stick, Benedict’s decision to remove Sepe from Propaganda Fidei could end up making the pope look prescient.

For the record, Sepe is not the first Cardinal of Naples to face corruption charges. His predecessor, Cardinal Michele Giordano, was acquitted in 2000 after an indictment for involvement in a loan-sharking ring run by his brother. Two years later, the cardinal was sentenced to four and a half months of house arrest after charges that he had illegally converted property bequeathed to the archdiocese into apartments rather than a retirement home for priests, as specified by the terms of the will. That conviction was set aside in 2005 by Italy’s highest court.