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Vatican monetary reform succeeding says lay financial czar

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Photo: Shutterstock
Photo: Shutterstock

Reforms governing the transparency and accountability of Vatican monetary transactions are working as intended, said a layman who is spearheading Pope Francis’ remake of the church’s financial structure.

New accounting practices and ongoing auditing are helping to assure that the Vatican’s financial operations are conducted in accordance with international accounting standards, Joseph F. X. Zahra, deputy co-ordinator of the recently established Council for the Economy, told an audience of 150 business leaders at Fairfield University on 8 November.

The efforts are backed by the increasing involvement of lay experts from around the world, Zahra said during the ninth annual Communion breakfast of Centimus Annus Pro Pontifice, a pontifical foundation.

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Zahra explained how his council, along with the Secretariat for the Economy and a new auditor general, were announced by Pope Francis in a February 2014 apostolic letter.

The Council for the Economy is charged with financial oversight of all Vatican-related entities, including the Curia. It is the most powerful of three new bodies created by Pope Francis.

He described the creation of the auditor general as an “earth shaking” appointment because it is an “autonomous and independent” position led by a layman with the powers to investigate.

“Today these three structures are operating efficiently and effectively with an underlying professionalism and transparency,” he said.

“We were using obsolete accounting practices that were 50 to 100 years old. No one understood what was happening in the Vatican,” he said, because they were out of step with international standards.

The Vatican has since adopted “the correct application of accounting principles” after being advised by a panel of international experts including representatives of the Big Four American accounting firms, Zahra said.

The Maltese economist said that in July 2013, four months after Pope Francis was elected, he received a call from the Vatican asking him to consider chairing the new pontifical commission to reform administrative and financial practices.

“While I’ve said yes immediately to prime ministers when they’ve asked me to chair a council, I asked for 24 hours to pray and to think about it,” Zahra said.

The commission first met on 2 August, when most of Rome is on summer holiday. Zahra said he remembers staying at Domus Sanctae Marthae, where the pope lives, and running into the pontiff in the hallway.

After asking how things were going, the pope told Zahra, “Hurry, hurry.”

Zahra began his talk by saying that the pope’s teachings on the economy and the free market often are misunderstood.

“Democracy and the market economy go hand in hand. The business economy has many positive aspects because it is based in human freedom, but it is also risky and can be abused,” Zahra explained.

“Poverty is not the result of the economic system but of human abuse of the economy. Francis has said ‘No’ to the economy of exclusion and inequality. The pope believes it is a time of human crisis and that an economic system can’t be shielded from considering human dignity in its decisions.

“Pope Francis has provoked us to rethink and reform the economic system in the way in which it addresses society’s problems,” he said.

In a question-and-answer session that followed his talk, Zahra said he had not read any of the popular books on Vatican finances, and that he feels “personally betrayed”, if the allegations prove to be correct that two former commission members leaked information to the press.

The Vatican announced on 2 November that Mons Lucio Angel Vallejo Balda, secretary of the Prefecture for the Economic Affairs of the Holy See, and Francesca Chaouqui, a former member of the Pontifical Commission for Reference on the Organisation of the Economic-Administrative Structure of the Holy See, were arrested for leaking documents to an Italian journalist.

“We worked together 24/7 for months, and this just creates confusion,” he said.

Zahra added that the reforms are not an end in themselves, but are designed to free assets to finance the church’s mission of evangelisation, particularly programs that help support poor and the marginalised people with health and education opportunities, “so that they can become artisans of their own destiny.”

When asked about resistance to reform, Zahra said much progress has already been made, but it will take time to change the culture of doing things the old way.

“It’s a journey but we can see the light at the end of the tunnel,” he said, adding that many “administrative prelates have embraced the new practices with enthusiasm and interest”.

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