04 March 2016
by Desmond O'Grady

Cardinal George Pell is in the hot seat in Australia and the Vatican

The pressure is on Cardinal George Pell not only through the hearings of the Commission on sexual abuse of children but also in the Vatican.

When I recently observed to a Vatican employee that the hearing must embarrass the Vatican, the response was: "That's the understatement of the year."

The Australians outside the Hotel Quirinale – from where Pell is giving his video testimony – are wearing T-shirts emblazoned "No more silence" and holding up placards labelled "Pell go to hell". The protesters got a good run on Italian national television news and in the press. Italians are not used to such hearings and certainly not to seeing a curial Cardinal being interrogated in what some of them mistakenly took to be a trial.

But Pell is also under multiple pressures within the Vatican. In the worldwide synod of bishops last October he underwent a papal reproof. With a dozen other participants he signed a letter critical of proposals backed by the Pope, and also the running of the synod. The letter was leaked to the press and, in the Vatican assembly, without naming Pell the Pope asked why those who alleged conspiracies, had not made the charges in the synod hall.

Cardinal Reinhard Marx went out of his way to say that the bishops in his German-language discussion group had been "saddened and dismayed' by Pell's 'divisive' stance".

Marx, a sociologist, is a physical and institutional heavyweight. Like Pell he is one of the nine advisers appointed by Francis.

The cardinals who elected Francis wanted an end to Vatican financial scandals. There had been few effective controls during the 35 years John Paul II and Benedict VI reigned, although Benedict eventually ended Vatican financial exceptionalism by accepting the Council of Europe's standards and procedures.

Francis instituted a commission, the acronym of which is COSEA, to identify much needed corrections in Vatican finances. He brought in expensive international consultancies such as Promontory, Ernst & Young, KPMG and McKinsey to examine every nook and cranny of the Vatican economy and administration. Some cynics said it was a short cut to achieving his aim of a "poor Church for the poor".

Council for the economy
He also created the council for the economy, headed by Cardinal Marx, and a secretariat for the economy which implements its policies. Don't forget the Vatican has status as an independent state in its own right.

The new Secretariat for the Economy had the same status as the Secretariat of State which previously was the key Vatican body, running the diplomatic corps and coordinating ministries. Francis appointed George Pell as the financial czar heading the secretariat. Pell had a reputation for efficient management in Sydney.

Pell announced a new era of exemplary accountability and transparency but some curialists called it a takeover by "an Australian mafia". Pell said that "a poor church should not be poorly managed".

Curial offices run their own finances, some more efficiently than others, but few were keen on Pell's idea of introducing centralised accounting and a pooling assets to allow more profitable investment. This was to be called Vatican Asset Management and was intended to ensure bigger returns which would help the poor.

It sounded fine at Pell's initial press conference but not to one of the old guard, Cardinal Domenico Calcagno (nicknamed Rambo ) the head of the Aministrazione del Patrimonio dela Sede Apostolica, or APSA, which administrates the patrimony of the Holy See, the holdings of which derive mainly from the compensation Italy paid the Vatican in 1929 for seizure of the Papal States in the previous century.

Calcagno did not appreciate Pell giving orders by email rather than by a formal letter but this piddling objection underpinned a more serious dispute over control Vatican wealth. Pell's secretariat will control the Vatican real estate which extends to Washington and Paris while Calcagno remains in charge of APSA investments.

APSA is the Vatican central bank although the media have bestowed the title Vatican Bank on the Institute for the Works of Religion (IOR) which was established in 1942 to move money to Catholic organisations in wartime. Allegedly in recent years some Mafiosi have used it to launder money.

Tarnished reputation
From the time of the Ambrosiano bank scandal in the 1980s associated with Michele Sindona and Roberto Calvi, found hanged under London's Blackfriar's bridge, this small bank with about 100 employees has blackened the Vatican's reputation. During Francis' pontificate, over 3000 of IOR accounts have been closed, most of them simply dormant but 359 dubious. Reform of IOR is a work in progress.

Tensions with Cardinal Domenico Calcagno, of the old guard, were par for Pell's course but the Secretariat of State is guided by one of the new guard, Cardinal Pietro Parolin, who is credited with a crucial role in recent Vatican diplomatic successes. Pell has clashed also with Parolin. In London's Catholic Herald, Pell announced that he had found millions of euro secreted in the Secretariat of State. The secretariat, feeling that Pell was not being a team player, responded that these funds were known to every pope and were reserved for emergencies.

There have been other clashes including one over control of Peter's pence, the offerings of Catholics worldwide for the Pope's charities which, it has been revealed recently, go mainly to cover curial shortfalls. It was thought that Pell's secretariat would take over management of Peter's pence (€78 million in 2013) but it has remained with the Secretariat of State and the same thing has happened with approval of all appointments.

Some Italian curialists find Pell, in his push for efficiency, is overbearing and worthy of Winston Churchill's maxim: "There, but for the grace of God, goes God".

Last November, two Italian journalists published books on the the cronyism and dishonest deals of Vatican finances which made it seem that the situation was as deplorable as during the last phase of Benedict's reign. In them Pell was described as a 'spendthrift moralist' and an 'ambitious mastiff'. The authors claimed they were helping Francis but he did not agree.

On trial
Under a provision he introduced, they are being tried by the Vatican along with three Vatican employees accused of passing them the confidential results of the COSEA investigation of Vatican defects. Again, an unusual feature of the Vatican being its own state.

This internal Vatican report made almost a year earlier was the basis of the journalists' books.

It is said that the secretary of COSEA, a Spaniard, Monsignor Lucio Vallejo Balda, leaked the information being miffed when Pell did not give him a job once COSEA was wound up after concluding its enquiries.

The other co-accused, Francesca Chaoqui, a Maroccan-Italian consultant, voiced the resentment of some curialists against Pell and his manager, Danny Casey, whom he brought from Sydney. Chaoqui said "Roman curialists will not accept that a group of Australian police, who get exorbitant salaries, comes into their homes and calls them thieves."

Among the accusations made in the books was that Pell spent over €500,000 ($744,300) in his first six months. Pell's office replied that the figure was €292,000 which included setting up a Vatican apartment (Pell has moved there from the Domus Australia established for Australian visitors to Rome) and an office with a chapel.

The latest Council of Europe report says that reform of Vatican finances proceeds but it lags in penal procedures for those out of line. Pell's planned Vatican Asset Management has not been established so his main achievement has been installing more efficient budgeting and accounting procedures which show that the Vatican is running at a slight deficit.

Importantly, last June, a layman called Libero Milone was appointed as auditor-general with wide powers to intervene in Vatican organisms. Steps are being taken to strengthen its money-earners such as museums, with their 5 million visitors annually, and reform money losers such as Vatican Radio which lost over €20 million annually.

On June 8 Pell will turn 75 and under Catholic church law is obliged to offer his resignation. He has raised hackles in the Vatican, claims to be not well enough to fly to Australia and his departure might help Francis against claims that he has been too soft on those linked to child abusers. On the other hand there have been no new financial scandals under Pell, he has pushed ahead with Francis' only successful internal reform, and moreover it may be handy for Francis to have him as the target for curial criticism.

When Pell arrived for the child abuse commission hearings on Monday he told journalists that he has Francis' backing. The spotlight will shift to Francis in June – he may delay acceptance of Pell's resignation until he finds someone capable of handling a difficult job.

The odds against him being an Australian are long.