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Ex-Vatican auditor sues, threatens to expose financial mismanagement

St. Peter's Basilica, at the Vatican, as seen in 2020. (Andrew Medichini/AP)

VATICAN CITY — A former Vatican financial auditor has filed suit against the Vatican Secretariat of State, demanding the Catholic Church pay for damage to his reputation that he alleges followed his unceremonious firing in 2017.

Libero Milone was hired in 2015 by Pope Francis to look into the notoriously convoluted and troubled finances of Vatican departments, as part of continuing financial reforms begun by Pope Benedict XVI. Only two years later, the Vatican announced that Milone had resigned in the face of accusations of embezzlement and of spying.

As Milone was ushered out, Cardinal Angelo Becciu told reporters that the auditor “went against all rules and was spying on the private lives of his superiors and staff, myself included.” Milone called the cardinal “a liar.” At a meeting Tuesday arranged by his lawyer, Milone told reporters that Becciu, once the third-highest-ranking official at the Vatican, was “the mastermind” of an “operation” to oust him.

Now, Milone says, he is ready to share proof of the financial mismanagement he said he witnessed at Vatican-owned hospitals and in the church bureaucracy. He and his former deputy, Ferruccio Panicco, are asking the Secretariat to pay nearly 10 million euros for reputational and mental damages.

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Milone has been called for questioning at the Vatican on Monday. The Vatican did not respond to repeated requests for comment.

According to Milone, prosecutors have relaunched an investigation into his tenure at the Vatican, as well as that of Panicco. Panicco, who was fired at the same time as Milone, claims the Vatican withheld his personal data after his firing as it investigated him, causing him to lose precious time in his fight against prostate cancer.

“I think they are guilty of sentencing me to death for no reason, after slow and significant suffering,” Panicco told reporters Tuesday, reading from a written statement.

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Milone framed his firing as a battle between “the Middle Ages and modernity” and called out “the small mafia at the Vatican” that was offended by his findings of lapses in the Catholic institution’s finances, including “many cases of rule violations, improper predisposition of accounting records, incorrect registrations.” He said he has proof that several other Vatican offices concealed transactions or obstructed auditors’ attempts to see real estate and investment portfolios. He also pointed to significant anomalies in the management of funds at the troubled Catholic pediatric hospital Bambino Gesù.

Vatican documents show that Vatican police claimed to have investigated the auditor and his deputy for seven months and found evidence of “illicit conduct,” which led to a judicial proceeding against them for espionage and embezzlement. But in a letter dated May 19, 2018, the Vatican’s top prosecutor wrote that there were no criminal charges against Milone.

Milone said he had sent seven letters to the pope and received no reply. He said he had maintained a dialogue with Secretary of State Pietro Parolin, but church officials have refused to settle his case.

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Prosecutors at the Vatican are grappling with a massive financial trial of 10 Vatican employees and curial members, including Becciu, who are charged with, among other things, abuse of power, embezzlement and witness tampering in connection with the controversial 2014 purchase of London real estate made using a papal fund earmarked for charity. In September 2020, Francis stripped Becciu of his Vatican positions and cardinal rights, except for his titles, amid media reports that Becciu had funneled funds belonging to the Holy See to relatives and friends.

In a statement Thursday, Becciu’s legal representatives said they intended to answer what they called Milone’s “completely unfounded reconstructions” with legal action of their own.

“The cardinal clarified that he only carried out an order by the Holy Father, who informed him that Dr. Milone no longer enjoyed his trust, and therefore invited him to hand in his resignation,” the statement read.

— Religion News Service