Vatican News—The legal representative of the Secretariat of State, Paola Severino, quantifies the severe “injury” caused by the Sloane Avenue affair – the sale of a London property that made news in 130 countries: The Holy See was “severely damaged” by “merchants in the temple to whom representatives of the institution opened the doors.”
“Squandering”, “looting”, “unscrupulous operations”, “economic outrage”, “speculation”: these are some of the terms used, in “fifty thousand articles in print and online” and in “thousands of interactions” to describe the Sloane Avenue affair – the sale of a London property at the center of the ongoing trial concerning the management of the funds of the Holy See. Such judgments and comments “have caused serious prejudice” to the image of the Secretariat of State, which now seeks €177 million in compensation for moral and reputational damages from the ten defendants, including Cardinal Giovanni Angelo Becciu.
Abuses and deception by ‘merchants in the temple’
On Thursday morning, the lawyer representing the Secretariat as a civil party in the case, Paola Severino, quantified the damage caused by the scandal that hit “one of the primary institutions of the Holy See.” She described the Secretariat as a victim of “abuses and deceptions” by “merchants in the Temple” to whom representatives of the the institution opened its
doors, claiming it is now forced to undertake a “reputational campaign aimed at rehabilitating the honor tarnished by the crimes committed.” “It has been written that the First Section has turned into an investment center… It has been stated that this case is comparable to the worst corruption scandal that led to the suicide of Roberto Calvi,” said the former Italian Minister of Justice. “I say this not because journalists take the place of judges but because they give an idea of the extent of the damage suffered.”
Assessment of damages
To “assess the extent of the damages caused by the defendants”, the Secretariat of State has relied on an “expert company,” Volocom srl, which has calculated a value ranging between €98 million and €177 million (€138 million is the median figure). “It is one of the highest amounts ever calculated concerning damage to one’s image,” Severino emphasized at the end of a long intervention in the courtroom, which began with an effective and pointed reconstruction – “all based on the official acts” – of the “grave conduct” and financial architecture put in place even before the London affair. Starting, therefore, from the proposal to invest in oil wells in Angola, made in 2014 by Cardinal Becciu at the urging of the entrepreneur Antonio Mosquito, an old acquaintance. That investment was never realized but it represented a change of direction from the Secretariat of State’s past financial operations, which was traditionally more cautious, conservative, and characterized by a low-risk profile. Above all, the operation crystallized “the moment of entry of the temple merchants, fully accompanied and consented to by His Eminence Becciu,” Severino stated.
Reconstructing the facts
“The past is prologue,” to quote Shakespeare, so starting from the reconstruction of the story helps demonstrate, according to the lawyer, how the operations following the Angola proposal were “the Trojan Horse that allowed Raffaele Mincione and Gianluigi Torzi [the two accused managers, -ed.] to obtain long-lasting unconditional and uncontested control over the assets of the Secretariat of State.” All with the “active contribution” of other representatives of the institution who were instead supposed to protect its interests: Fabrizio Tirabassi, a functionary of the Administrative Office, and Enrico Crasso, a financial consultant since the 1990s who in the London affair perhaps saw “an opportunity to take a leading role.”
Verification of the truth, the purpose of the trial
“This civil party considers itself severely damaged,” Severino reiterated. “Establishing the truth is the purpose of the trial, not revenge, not settling scores, not personal interests. This reaffirms the strength of the Church in the face of the fallacy of men. Wanting this trial is a symbolic fact.”
From the Angola deal proposal onwards
After numerous hearings (the hearing on Friday, September 29th, will be the seventieth, and will involve lawyers representing APSA and ASIF), the facts are now well-known. Severino listed them chronologically: the proposal for the Falcon Oil deal in Angola; due diligence entrusted to Mincione with a negative opinion (“First, gather everything, create the means to manage, then, after more than a year, say ‘no, the investment is too risky’”), the proposal to purchase a property on a prestigious street in the British capital at an “overestimated” price between £101 and £56 million, with damages for the institution that had a 45% stake. Furthermore, the investment in the “peculiar and burdensome form” of Credit Lombard, the purchase of a share of the property through the Athena Capital Fund owned by Mincione himself, and other “investments aimed at satisfying the managers’ interests rather than the subscriber’s, burdened by significant losses,” and so on.
The operations created an atmosphere of suspicion in the Vatican, with the Secretariat for the Economy and the Office of the Auditor pressing for clarification on Mincione’s “disastrous” operations, carried out, moreover, “in a situation of constant conflict of interest.” The broker, however, continued “to operate autonomously,” until “after the summer of 2018, it becomes clear that a change of strategy is needed because – to use Mincione’s words – the games are over.”
‘Playing with the Secretariat of State’s money’
Games, indeed, because “games” are what Severino and her two colleagues, lawyers Daniela Sticchi and Elisa Scaroina, referred to, or at least, that is how they defined them. “Many times, they played with the money of the Secretariat of State: in 2013, in 2014, they played again in 2018…”
This is the year when the “second phase” of the story begins: the transition from Mincione’s GOF fund to Torzi’s GUTT fund. In November 2018, the well-known meeting took place in London where the Framework Agreement was signed, in which Torzi undertook to purchase, on behalf of the Secretariat of State, the shares of Mincione, “subject to a settlement” of £40 million. And the Share Purchase Agreement was also signed, with which the Secretariat of State acquired from Torzi 30,000 non-voting shares at the symbolic price of €1, “where Torzi remains the owner of only a thousand voting shares” – shares that give him the right to sell or decide any destination.
The agreements signed in London
Tirabassi and Crasso were both present in London. For Severino, the meeting was a “trap,” because the two were “convinced they were participating in a meeting to identify an exit strategy from an unwanted financial management.” Instead, they find a ready-made plan to formalize “illegal agreements.” The Secretariat of State passed from the hands of Mincione to those of Torzi, who was “equally skillful and interested” and, as a first step, dismissed Tirabassi from the board.
Peña Parra’s intervention
“Whoever finds a friend finds a treasure, in this case, the treasure of the Secretariat of State,” Scaroina joked. “Torzi and Mincione achieved their partly common goals,” Severino echoed. In this well-oiled machine, a “pebble” arrived that jams the gears: the arrival of the new Substitute, Archbishop Edgar Peña Parra, who was immediately alerted to the fact that with the signing of the contracts in London, the Secretariat of State had “effectively acquired an empty box.” Peña Parra, Severino recalled, understood that “it was necessary to find a way out of the situation, preserving the investment as much as possible.” He turned to IOR and ASIF and tried to “recover what is recoverable.” It was the beginning of what the Substitute himself has repeatedly called “a real Via Crucis.” With the burdensome Chayne Capital loan, between unpaid or grace-and-favour rents, the Holy See lost increasingly substantial sums: “The substitute could not sleep at night,” Scaroina highlighted.
The final station of the Via Crucis, at the end of a tortuous negotiation, is the payment – after receiving the opinion of the prestigious law firm Mishcon De Reya – of €15 million to Torzi who “had the upper hand” to gain full control of the property: €10 million to sell the thousand shares and €5 million as compensation for the six months of management. Torzi sold the property, whose value in the meantime has increased from £230 million to £275 million in a way that was “completely unjustified.” But the broker provides “entirely different reasons”: it is the “last-ditch effort” of what the prosecution portrays as extortion. “The entire negotiation was a demonstration of the power and strength they possessed while the Secretariat of State was powerless,” Severino said.
The Secretariat’s requests
The lawyer then spoke of “various corruptions,” “castles of fraud,” misappropriation of resources, and other “serious offenses,” but noted that the London affair is the one that has had the most significant media coverage in 130 countries worldwide. Therefore, it has caused profound “injuries” to the Secretariat of State, and hence the request for compensation for reputational damages amounting to €177.818 million necessary for a “restoration campaign,” then the request for conviction to pay a provisional sum to be paid upon possible first-degree conviction, amounting to €98.473 million (the lower end of the range established by the expert).
IOR’s compensation request
In addition to these requests, there is the one presented today by the lawyer representing the IOR, Roberto Lipari, for compensation for the funds that would have been taken by the defendants in the case under trial and that would have affected the €700 million contributed over sixteen years by the Institute for the needs of the Holy See and set aside by the Secretariat of State. The request for restitution is set at €206.493 million, which is added to the moral damages, for which Lipari has requested from the Court an “equitable settlement,” and to the reputational damages, established by experts at €987,494.
On Friday, the lawyer representing APSA as a civil party to the suit, Giovanni Maria Flick, will present his request for compensation for damages to the Administration of the Patrimony of the Apostolic See, which, since December 2020, by the will of Pope Francis, is the holder of funds and properties of the Holy See.
- Vatican finances: What is the transfer of institutional cash to the Vatican Central Bank all about? – Catholic Business Journal
- Vatican Finances: London Deal Players had prior history– Catholic Business Journal
- Vatican Finances: Vatican officials arrest London property broker for extortion and money laundering -Catholic Business Journal