Other People’s Money
Former cardinal Ted McCarrick is the perfect symbol for the corruption scandal in the Catholic Church, because he is a cynosure of both sexual and financial corruption in the hierarchy, the latter of which we are only now starting to hear more about. This new report from Ed Condon at Catholic News Agency is not related to McCarrick, but it does draw attention to the Vatican’s moral rot having to do with money:
Developers acting for the Vatican Secretariat of State offered to raze a London [UK] parish hall and rectory and replace it with low-cost housing, in order to try to push through a luxury apartment development. The luxury development project involves two recently suspended Vatican employees, and a nest of Vatican-controlled holding companies led by an architect linked to accusations of money laundering and fraud involving Vatican accounts.
In a June 2016 proposal submitted to local authorities in the Borough of Kensington and Chelsea, a developer seeking permission to develop luxury apartments at 60 Sloane Ave offered London’s St. Pius X parish hall and rectory as a location for building the low-income housing required by law to offset the luxury development.
The inclusion of the parish property in the planning application was facilitated by officials at the Vatican Secretariat of State, who visited the parish and worked with the local Archdiocese of Westminster to secure the cooperation of the parish pastor.
The involvement of the Vatican in developing the proposal comes to light after Cardinal Angelo Becciu, who authorized the Vatican’s investment, described the Holy See’s involvement in the real estate development as a matter of ordinary business, denying there was anything suspicious about the transaction.
Fr. Peter Wilson, pastor of St. Pius X, said officials from the Archdiocese of Westminster visited his parish before the proposal was submitted, along with an unnamed official from the Holy See, who outlined plans for the property, which would have incorporated substantial low-income housing units into a new mixed use development.
“I knew that there was somebody from the Holy See coming along, whom I met, but I didn’t know why he was involved,” Wilson said. “The wider provenance of the plan was never vouchsafed to me.”
“They were going to knock down the presbytery and build a block of flats here. They told me I could have one flat in the block of flats and my heart rather sank, but who am I to argue with those above my station?”
Read it all. There are lots of details. That poor parish priest, his own obedience used against him by Vatican machers who stood to profit from the destruction of a parish. It’s rotten to the core.
Today, Cardinal Pietro Parolin, the Vatican Secretary of State (the No. 2 in the Vatican hierarchy), took the fall for the Pope in the corrupt deal involving an attempt to shake down the US-based Papal Foundation, via a compliant Cardinal Donald Wuerl, for tens of millions to cover a Rome investment gone bad. The Papal Foundation is a not-for-profit charity that is supposed to give funds to pay for the pope’s favorite charitable causes. Earlier this year, following his blockbuster 2018 First Things report on alleged gross mismanagement of the Papal Foundation, the Philadelphia writer Matthew B. O’Brien laid out chapter and verse how Wuerl misled the foundation.
An internal Papal Foundation audit documented alleged that the bishops on the Foundation’s board strongarmed the lay members, whom they outnumbered, and outvoted. Note well: these bishops (most of them cardinals) were spending millions of dollars that they had not earned — dollars donated by Catholics for the good works of the Pope — for non-charitable purposes.
Back to the London luxury condo deal: it is at the heart of a recent police raid on the office of the Vatican’s internal financial watchdog, which one of its members, who recently resigned, called “an empty shell.”
All of this reminds a reader of this blog of the so-called “Vati-Con” saga involving Raffaelo Follieri, a young Italian businessman who came to the US in 2003 to make his fortune. He later pled guilty to federal fraud-related charges. According to a 2007 Wall Street Journal story:
When Mr. Follieri arrived in Manhattan in 2003, he had big ambitions. Citing the changing demographics of many U.S. Catholic dioceses and the litigation costs of the church’s sex-abuse scandals, he told potential investors that the church needed to sell lots of property. Buying such properties and redeveloping them could help both the church and urban communities where many of properties were located — and would produce tidy profits for investors, according to Follieri Group marketing material and presentations.
In 2008, after Follieri had been arrested by the feds, Vanity Fair‘s Michael Shnayerson did a profile of him and his scamming. Excerpts:
On this night, because his sinuses were acting up, provoking a bad bloody nose, his mother had let him take the bedroom while she slept on the spare bed. Follieri’s father, Pasquale, was back in Italy. By one report, it was he who had urged his son to parlay his Vatican contacts into a timely business: helping the Catholic Church sell off properties in the U.S. to pay the devastating settlements from lawsuits in the wake of the pedophile-priest scandals. If those properties could be bought at a good insider’s price, and sold or developed for a profit, the sky was the limit. Pasquale is still listed on the Follieri Group’s Web site as its president, and his portly figure had often been seen at Catholic Church events, glad-handing bishops. For a while, at least, none of the bishops seemed to know that Pasquale, a lawyer and sometime journalist, had been convicted in 2005 by an Italian court of embezzling $300,000 from a company whose assets he’d been asked to manage. (The ruling is reportedly on appeal.) Now with both the F.B.I. and the New York State attorney general’s office investigating the Follieris, Pasquale returned to Italy.
The business plan contemplated by Follieri padre and figlio wouldn’t have worked in Rome. The Vatican, one of the largest property owners in the world, handles its own real estate without need of 25-year-old outsiders. But to bishops and monsignors an ocean away, the plan would seem more plausible.
Follieri’s ace was Andrea Sodano, fortysomething nephew of Cardinal Angelo Sodano. Distant as the connection might seem, the relationship was real, and Cardinal Sodano was hardly just another red hat in the flock. Under the ailing John Paul II, he essentially ran the Vatican as secretary of state [the same position that Cardinal Pietro Parolin holds now — RD]. Andrea, who started flying over to New York to help Follieri pitch investors, was fond of flipping open his cell phone to show digital pictures of his uncle. Later, prosecutors would dismiss the contacts as insignificant. But what if they worked?
At first they did, as New York lawyer Richard Ortoli soon saw. Ortoli drew up papers of incorporation for the Follieri Group. Like Shin, he found the young man’s enthusiasm infectious. He let Follieri sleep on his spare bed, then agreed to host a party at the University Club, where he was a member, with all guests invited by Follieri. Into the club’s dark-paneled rooms, above Fifth Avenue, strode a covey of Catholic Church officials, including Cardinal Egan of New York—and Cardinal Sodano himself. Impressed, Ortoli became one of Follieri’s first investors, committing, he says, with lawyerly discretion, something less than $100,000.
Follieri found another investor in Vincent Ponte, a downtown restaurateur and Tribeca real-estate developer. A hard-boiled businessman, Ponte was won over the day Follieri walked into his FilliPonte restaurant, on Desbrosses Street. “And then Cardinal Egan comes in!” recounts a Ponte associate. “And Egan greets Follieri like an old friend!”
Read it all. Follieri eventually did time in a federal prison, then, upon his 2012 release, was deported.
Back in 2006, before the arrest, National Catholic Reporter laid Follieri’s appeal out in plain language:
Still, there is little secretive or subtle about the Follieri Group’s business plan.
“Our intention is to purchase properties from dioceses and religious organizations, to renovate them, and if necessary, convert them to new uses, such as housing (lower, middle and upper income, depending on the area) and commercial use,” the Group’s then-director of business development, Joseph Iallonardo, said in an early 2005 letter to a religious order. “Because of the Follieri family’s deep commitment to the Catholic church,” the letter continued, “and its long-standing relationships with senior members of the Vatican hierarchy, the Follieri Group understands very well the imperatives of the church and is sensitive to its needs.”
The firm’s literature mentions no specific Vatican figures, but the Follieri group clearly has ties to Cardinal Angelo Sodano, Vatican secretary of state since 1991. Andrea Sodano, the cardinal’s nephew, is a Follieri Group vice president, a fact widely known in U.S. church real estate circles.
Raffaello Follieri, the Group’s charismatic 27-year-old chief executive officer, said the company does not use its Vatican ties to gain access to church officials. Andrea Sodano, Follieri told NCR, is a renowned engineer in Italy with long-standing ties to the Follieri family’s development business there and extensive experience in converting church property to other uses. Sodano is a “technical person” who “does not do [marketing] relations for us,” said Follieri.
In an e-mail response to an NCR inquiry Andrea Sodano said: “I have worked with the Follieri family for the past 15 years as an engineering consultant. My involvement long predates The Follieri Group’s interest in the States. The Follieri Group’s long and successful track record in real estate speaks for itself.”
But others familiar with the Group’s marketing strategy paint a different picture. The Sodano name, and the implicit Vatican endorsement that the Group has promoted along with it, has opened doors that might otherwise be closed to a firm headed by Italian nationals with no real estate development track record in the United States, according to those who have had business dealings with the Follieri Group. “When Raffaello wants to meet with the bishop, they put the touch on from the Vatican and they get the meeting,” said one East Coast diocesan real estate professional. “They’re about as connected as it gets.”
In fact, say church real estate professionals who have met with the group, rather than acting solely in a behind-the-scenes technical capacity, Andrea Sodano frequently accompanies Raffaelo Follieri to meetings with church officials. “They certainly make it clear they have relatives in the Vatican,” said one such official who has met with the Group’s representatives.
… How well wired is the Follieri Group? In early 2005, Catholic blogger Domenico Bettinelli, editor of the Catholic World Report, summed it up: “Unless [Andrea Sodano’s] name was Wojtyla, you couldn’t get a better connection.”
To be clear, there is no connection, known or asserted, between the Follieri affair and the London deal. Nor was criminal activity ever alleged against Cardinal Sodano in the Vati-Con mess. I only bring it up as an example of how the Church rolls at its higher levels, regarding handling filthy lucre. (And, a Catholic reader pointed out something I hadn’t thought of: “It’s fairly obvious that laws doing away with the statute of limitations [on sex abuse cases] provide advantages to anyone who profits from the sale of church property under conditions of duress.”)
These lines from the Vanity Fair piece make the connection between the Follieri mess and what senior churchmen like Becciu, and the Papal Foundation divines, do:
His role model, he told more than one friend, was Greek shipping magnate Aristotle Onassis, who’d started poor but made his first $1 million by the age of 25 and perfected the art of using “O.P.M.”—other people’s money.
Other People’s Money. There you have it. This is why the Papal Foundation’s clerical leadership felt they could do what they wanted to do with the money donated by lay Catholics. They were so used to using Other People’s Money to advance their own agendas that they didn’t see the problem.
Trouble is, eventually Other People get tired of having their pockets picked. The Catholic Herald editorialized last month about reports concerning massive investment losses from the “Peter’s Pence” fund, composed of donations from the global Catholic laity for the pope’s personal works of charity. It’s all tied to Cardinal Becciu. As the Herald said:
There has reportedly been a steep drop in Peter’s Pence donations: from just over €100 million in 2006 to just below €60 million more recently. That fall appears at least partly connected to a perception among the faithful that Francis has not come to grips with the broader crisis in clerical culture, the worst symptom of which is the ongoing cover-up of clerical sexual abuse. Francis’s reform efforts in those regards have not reassured the laity, including some who are otherwise well-disposed to him.
It is a sad truth of our time that with declining church participation, and shifting demographics, some churches and church facilities have to close, and be sold off. But it is a bitter fact that in more than a few cases, the pennies donated by immigrant ancestors to build these churches are now going out the door to pay the clerical buggery bill.
The loss of church authority in the face of hierarchical luxuries and clerical indulgence is not a new theme, nor is it restricted to the Catholic Church, heaven knows. As far as I know personally, most priests and pastors do not live in great luxury any more than they have eventful sex lives. Though, like Father Peter Wilson of the targeted London parish, they have to live with the consequences of those clerics, especially hierarchs, who do.
We’ve expended lots of pixels in this space over the years talking about the consequences to the loss of ecclesial moral authority by clerical sexual corruption. What about financial corruption? Whatever your church or religious tradition, how have these revelations (including the well-known televangelist scammery, e.g., Jesse Duplantis asking his followers to buy him a $54 million private jet) changed the way you regard religious authority, if at all?