Tuesday, December 10, 2019

Tangled Web of Transactions Utilized to Fund Bankrupt Italian Hospital

Catholic accountability finance business hospitals charity deception Italy

VATICAN CITY — Using costly methods that appear deceptive, Vatican officials diverted 50 million euros belonging to the Bambino Gesù children’s hospital in Rome to guarantee a loan for the same amount to a bankrupt Italian dermatology hospital in 2014, despite warnings from the cardinal appointed to oversee financial transparency not to go ahead with the transaction.

According to documents seen by the Register, the officials, including two lay consultants who received six-figure commissions on top of their other salaries for their efforts, worked with two Curial cardinals to arrange for the Bambino Gesù hospital, which is under Vatican authority, to guarantee the loan to the Istituto Dermopatico dell’Immacolata (IDI).

The IDI, then owned by the Congregation of the Sons of the Immaculate Conception (CFIC), was at the time on the brink of closure, with debts in excess of 600 million euro. A further body, a foundation called the Fondazione Luigi Maria Monti, was set up in 2015 to help save IDI and keep it within the field of Catholic health care.

As reported by CNA in November, the loan was firmly opposed at the time by Cardinal George Pell, then the prefect of the Vatican Secretariat for the Economy, but Pope Francis overrode his opposition and agreed to let the Administration of the Patrimony of the Apostolic See (APSA) go ahead with the transaction. The Holy Father later canceled the hospital’s guarantee of the loan when he realized the error, but the 50 million euro has yet to be returned by APSA to the children’s hospital.

Documents show that Vatican officials concealed the origins of the loan by forcing the Bambino Gesù to deposit the funds with APSA, the Vatican department also responsible for real estate management, in the form of a “certificate of deposit” (CD) issued by APSA itself. This usually takes the form of a no-risk loan to be repaid within a fixed time. APSA then used the CD as collateral to guarantee the loan to the IDI, which went to the congregation.

The plan made it look as if APSA, rather than the Bambino Gesù hospital, which is a well-respected children’s hospital in Italy mostly funded by the Italian state, was providing the financing to the CFIC, IDI’s owners — something unlikely to have been allowed in view of the children’s hospital being mostly state-funded.  (more...)

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