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After scandals, new guidelines align Vatican investments with Church teaching

VATICAN CITY (RNS) – Continuing Pope Francis’ efforts to clean up scandal-ridden Vatican financial dealings, the Catholic Church on Tuesday (July 19) announced a series of ethical and moral principles that will guide its investment policies.

“The new investment policy plans to ensure that investments are aimed at contributing to a more just and sustainable world,” read a statement from the Vatican.

Beyond safeguarding the heritage of the Holy See, the new guidelines aim to ensure that investments “are aligned with the teachings of the Catholic Church” and avoid participating in the financing of activities that “contradict its fundamental principles, such as the sanctity of life”. or the dignity of the human person or the common good.

The guidelines come after it emerged that some Vatican investments were at odds with Catholic teaching. Last year, Libero Milone, the Vatican’s former auditor general, told Italian media that APSA, the office that manages the Holy See’s real estate and investments, had made investments that “didn’t fit to the social doctrine of the Church”, including in a company which produces the emergency contraceptive “morning after pill”.

Through a fund it invested in, Centurion, the Vatican also backed pop star Elton John’s 2019 biopic, which included his coming out as a gay man. Catholic teaching considers homosexual acts a sin.

The new investment rules were generated by the Council of the Economy, created by Francis in 2014 to oversee the finances of the Vatican departments and offices that make up the Roman Curia. They have been officially published by the Secretariat for the Economy, which has authority over all the Vatican’s economic activities.

Proceedings of the Vatican finance trial on May 20, 2022. Photo by Vatican Media

Elected in part to put the Vatican’s finances in order after years of mismanagement and scandals, Pope Francis has faced his own financial explosion following the Vatican’s 2019 purchase of high-end real estate. range in London using funds originally intended for charity. The deal led to the trial in the Vatican of 10 Vatican employees, including Cardinal Angelo Becciu, once the church’s third-highest-ranking prelate.

The new guidelines specify that investments should not be “speculative in nature” and that the choice should be guided by “moral and cultural” principles.

To ensure that the guidelines are followed, the church will appoint an investment committee whose role will be to “define the investment strategies” and the “effective implementation” of the investment principles.

The committee will ensure that the risk profile of each investment is in line with Vatican values, in accordance with the statute establishing the committee, as well as monitoring the costs and fees of investments. The London real estate deal ended up costing the Vatican $370 million in unexpected fees.

London property at the heart of the Vatican financial scandal.  Picture via Google Maps

London property at the heart of the Vatican financial scandal. Picture via Google Maps

Prosecutors investigating the London property deal have accused three fund managers – Raffaele Mincione, Gianluigi Torzi and Enrico Crasso – of defrauding the church out of millions of euros. Under the new plan, the investment committee will select and oversee external portfolio managers, “verifying that they have proven experience, sufficient technical skills and appropriate ethical standards, as well as being free of conflicting interests.” ‘interests”.

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APSA and the Secretariat for the Economy will appoint the chairman and four members of the investment committee, for the approval of the pope. An ethics officer, appointed by the prefect of the secretariat for the economy, will guarantee “the transparency and the proper functioning of the committee, compliance with the standards in force” as well as compliance with the investment policy. This person will also ensure that there are no conflicts of interest and will monitor the risks, according to the law.

While the committee will act under the vigilance of APSA and the Secretariat, the statute does not say whether it will fall under the jurisdiction of the Vatican’s anti-money laundering entity, the Financial Supervision and Information Authority, or ASIF.

The guidelines come into effect in September.

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