Modernizing Vatican finances: ‘huge task’, says Economic Council member – 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 up to international standards, according to one of its lay members.
“We are very focused on putting these basic standards in place and making sure that the information the Pope has when he makes decisions is thorough, complete and fair. And we’re not in that situation yet, ”Economics Council member Ruth Kelly told EWTN News.
Kelly, who was secretary of education 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 overseeing 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 budgets for Holy See entities and increase the level of financial transparency – which Kelly says can pose unique challenges.
“For example, the historical legacy is very, very difficult to tackle 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. It may be that no one ever had it valued, or really thought about who legally owned it, because through customs and tradition it was clear what use it should be made 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 valuing it to make sure it is properly accounted for on the balance sheets. “
“So this is a real area in which 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.
“I am actually very encouraged by the steps that I have seen, even though there is so much to do and so much to do,” she said.
Pope Francis created the Economic Council in 2014 as part of his financial reform program. Kelly was appointed on the board for a six-year term last August 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 for her own sake, but also for the credibility of the process, ”Kelly said.
“The ambition is for international accounting standards to be fully applied throughout the Holy See,” she said. “It is not a position that we have arrived at yet, but it is a position that we aspire to.”
Kelly spoke at the Inspiring Trust: Church Communications and Organizational Vulnerability webinar series hosted 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 it, from my point of view from the board’s point of view … it’s not clear how the funds have flowed and how they’ve been managed because the transparency hasn’t been there,” she declared.
Kelly is adamant, “once that 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 wants to put money into the Peter’s Pence account, they have to know that the money is well spent. And at the moment you can’t say for sure that we can show that, 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 cutting costs in setting this year’s budget, asking Vatican departments to come up with spending cuts, Kelly said.
The Vatican budget, which was already operating in deficit, suffered another blow in 2020 and early 2021, when the Vatican Museums, a major source of revenue, were forced to close for months.
For the Holy See, the coronavirus crisis has also meant the collapse of investments in the market, uncertain income from real estate investments, and declining contributions of the Church to the world.
“The Holy See has suffered, along with all the other organizations, or many other organizations, in the pandemic, and it is not surprising. And the question that really arises for the board is how much of this is temporary and how much of it will bounce back, ”she said.
“And it is true that fundraising has been severely hampered by the COVID crisis, which is not surprising, as it has been felt throughout the Church,” she said.
“So, you know, that’s one of the areas on our minds as we think about how to restore the reputation and build a solid reputation for the way the Holy See handles finances.”
Kelly believes that the lay members and cardinals of the council are firmly committed to “making 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 board,” 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.
Non-professional members include 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 maker 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 I explore as we go along is how the whole whistleblower setup works in the Vatican. Because I believe that an open culture is part not only of financial transparency, but also of the ability of people to raise issues in private, perhaps without being identified or only if they wish.
“Now I know that whistleblowing is happening, 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.