Modernizing Vatican finances is “huge task”, says member of the Economic Council – Eurasia Review
By Courtney Mares
The Vatican Economic Council faces a “huge task” in its efforts to quickly bring the Holy See’s accounting and financial transparency to international standards, according to one of its lay members.
“We are very focused on putting these basic standards in place and ensuring that the information the pope has when making decisions is thorough, complete and fair. And we’re not in that situation yet, ”Economics Council member Ruth Kelly told EWTN News.
Kelly, who served as Education Secretary under British Prime Minister Tony Blair and later worked for HSBC Global Asset Management, is one of the seven lay people of the Vatican Council who oversee the administrative and financial structures and activities of the Roman Curia, institutions of the Holy See, and Vatican City State.
Lay members work with eight cardinals to set the budget for Holy See entities and raise the level of financial transparency – which Kelly says can pose unique challenges.
“For example, the historical legacy is very, very difficult to approach if you take the example of, say… a place of residence by tradition in a particular part of the Vatican, or in Rome, or somewhere in the world. No one may have ever evaluated it, or really thought about who legally owned it, because through customs and tradition it was clear what purpose it should be used for, ”she said.
“The Holy See cannot yet account for all the investment properties it owns specifically around Rome and in Italy. And there is a huge task to be done to ensure that it correctly identifies the property of each one – whether it belongs to a diocese, whether it belongs to the Vatican, whether it belongs to a parish or someone. else – and then evaluate it to make sure it is properly accounted for on the balance sheet.
“So this is a real area where the Holy See must be quickly updated. “
The Economic Council is also currently implementing an investment policy for the Vatican and “a broad training program” in financial standards for those working in its departments and dicasteries, according to Kelly.
“In fact, I am very encouraged by the steps that I have seen, even though there is so much to do and a long way to go,” she said.
Pope Francis created the Economic Council in 2014 as part of his financial reform program. Kelly was appointed to the board for a six-year term last August along with five other women with backgrounds in banking, finance, asset management and international law.
“There is a real recognition that it is now very important in the heart of the Church to have lay experts involved in overseeing Vatican accounts and policies and so on. And that’s important, not only in and of itself, but also for the credibility of the process, ”Kelly said.
“The ambition is to fully apply international accounting standards throughout the Holy See,” she said. “It is not yet a position that we have reached, but it is a position that we aspire to.”
Kelly spoke at the “Inspiring Trust: Church Communications and Organizational Vulnerability” webinar series offered by the Pontifical University of the Holy Cross in Rome. The university is entrusted to Opus Dei, with which Kelly is associated.
“To be bluntly honest about this, from my perspective on the board’s outlook… it’s not clear how the funds were disbursed and how they were managed because the transparency was not there,” she declared.
Kelly is adamant, “once the transparency is there and international standards are applied, then you can start talking quite differently about the role and responsibility of the Vatican and how it handles money, etc. .
“If anyone puts money into the Peter’s Pence account, they should know that the money is well spent. And at the moment you can’t say for sure that we can show it, but we are well on the way, I think, to be able to do it before too long, ”she said.
The Economics Council was very focused on containing costs when setting this year’s budget, asking Vatican departments to come up with spending cuts, Kelly said.
The Vatican budget, which was already running in deficit, took another hit in 2020 and early 2021, when the Vatican Museums, a major source of revenue, were forced to shut down for months.
For the Holy See, the coronavirus crisis also meant the collapse of market investments, uncertain income from real estate investments and a decrease in the Church’s contributions to the world.
“The Holy See has suffered, along with all the other organizations, or many other organizations, from the pandemic, and this is not surprising. And the question really for the board is how temporary this is and how much it will bounce back, ”she said.
“And it is true that fundraising has been badly affected by the COVID crisis, unsurprisingly, as it has been felt throughout the Church,” she said.
“So, you know, that’s one of the areas we’re thinking about, as we think about how to restore the reputation and build a solid reputation for how the Holy See handles finances. “
Kelly is convinced that there is a strong will among lay members and cardinals of the council to “make an impact quickly.”
“We expect results, very significant results, before the end of the six years at the end of the current term of the council,” she said.
German Cardinal Reinhard Marx has overseen the council since its inception in 2014. Other current cardinals on the council include Joseph Tobin of Newark; Anders Arborelius from Stockholm; Péter Erdő from Esztergom-Budapest; Odilo Scherer from São Paulo; Gérald Lacroix from Quebec; Giuseppe Petrocchi from L’Aquila; and Cardinal Daniel DiNardo of Galveston-Houston.
Among the lay members are German law professor Charlotte Kreuter-Kirchhof; Maria Kolak, President of the National Association of German Cooperative Banks; Alberto Minali, former investment director of the Eurizon asset management group; Leslie Ferrar, who was treasurer to Prince Charles of Great Britain; elevator manufacturer Zardoya Otis; and Eva Castillo Sanz, who sits on the board of Spanish bank Bankia.
Kelly said: “One of the things that I really think to explore as we go along is how the whole whistleblower setup works at the Vatican. Because I think part of an open culture is not just financial transparency, but the ability of people to raise issues in private, perhaps without being identified or identified only if they want to.
“Now I know the denunciation is taking place, but I’m not yet sure it’s working well enough within the Holy See and the Vatican. “
“There is a huge way to go, but I think the will is there at the top to see the change happen,” she said.