Documents and testimony contained in request for indictments

By Vatican News

The long and complex investigation carried out by Promoter of Justice Gian Piero Milano, Adjunct Alessandro Diddi and by clerk Gianluca Perrone is the result of an inquiry undertaken by the Vatican Gendarmeria led by Commander Gianluca Gauzzi Broccoletti. The probe led to the examination of an enormous number of documents, electronic equipment sequestered from the suspects, as well as the comparison of witness testimony. Vatican City State’s Office of the Promoter of Justice has filed a request in the Vatican tribunal that ten suspects be charged: Msgr. Mauro Carlino (former secretary of the Substitute of the Secretariat of State), Enrico Crasso (financial broker who managed investments for the Secretariat of State for decades), Tommaso Di Ruzza (former director of AIF, Supervisory and Financial Information Authority), Cecilia Marogna (a woman who received considerable sums from the Secretariat of State for intelligence services), Raffaele Mincione (financial broker who made the Secretariat of State underwrite large shares of the fund that owned the London property at 60 Sloan Avenue, who then used that money for his own speculative investments), Nicola Squillace (lawyer involved in the negotiations that Torzi take over for Mincione), Fabrizio Tirabassi (employed as a notetaker in the Admistrative Office of the Secretariat of State who had a leading role in the matter), Gianluigi Torzi (the broker called to help the Holy See get out of the fund owned by Mincione who succeeded in liquidating a total of 15 million so the property could return to its legitimate owners), René Brülhart (former president of AIF) and Cardinal Angelo Becciu.

Allegations arise in summer 2019

The crimes identified by the Vatican magistrates are fraud, embezzlement, abuse of office, appropriation of funds, money-laundering, self-laundering, corruption, extortion, publication of documents under the cover of secrecy, false documentation, falsified internal agreements. As already known, the investigation began because of allegations presented respectively by the Vatican’s Istituto per le Opere di Religione (commonly known as the Vatican Bank) on 2 July 2019 and the Auditor General’s Office on 8 August 2019. The allegations presented by the latter, in particular, hypothesized the commission of serious crimes, such as fraud, extortion, embezzlement, corruption, aiding and abetting, blackmail. The Auditor noted that the greater part of the Secretariat of State’s financial activity (77% of its portfolio) was concentrated in Credit Suisse and that a substantial part of the deposits deriving mostly from donations received by the Pope “had been invested in funds which, in turn, invested in securities of which the client was not aware”, as well as in high-risk, shady, offshore funds. The Vatican magistrates state that these allegations evidenced “how the Secretariat of State may have been investing funds received for charitable purposes (Peter’s Pence and Entitled Funds, which by their nature are not to be used for speculative purposes), in extremely high-risk financial activity and, therefore, toward a goal completely incompatible with that of the original donors”, with the “primary scope being that of sustaining the Holy Father’s religious and charitable activities”.

Mincione’s investment fund

A primary and important chapter in the investigation concerns the Secretariat of State’s investment in Raffale Mincione’s Athena Capital Global Opportunities Fund operative between June 2013 and February 2014. Mincione was introduced to the Vatican by Enrico Crasso, who for many years had been managing funds for the Secretariat of State which up until this point had not made complex or risky investments, nor had it ever leveraged borrowed money. It, therefore, had no experience in this field. The Substitute was Archbishop Angelo Becciu and the head of the office overseeing investments was Msgr Perlasca. The financial transaction undertaken with Mincione replaced another deal involving an investment in the fossil fuel industry in Angola that had been evaluated previously and then discarded. The Secretariat of State, therefore, borrowed 200 million dollars from Credit Suisse to invest in Mincione’s fund (100 million in movable goods, 100 million in immovable goods). By 30 September 2018, 18 million euro of the initial investment were lost on these shares. The overall loss, however, is estimated to be a much larger amount.

Conflict of interest

A large part of the financial activity carried out by Mincione using liquid assets originating from the Holy See was put in place by the fund manager who always risked others’ capital for the pursuit of his own personal interests in obvious conflict of interest. “Breaching elementary principles of prudence”, the magistrates write, “the Secretariat of State’s money was, in fact, invested not only in imprudent and unreasonable speculative transactions such as bids to take over certain Italian banking institutions just as they were failing, financing legal entities managed by Raffaele Mincione himself who thus, on the one hand was managing the funds (a position from which he gained considerable commissions), and on the other hand he was able to use the financial resources of the State for his own initiatives”. In particular, Mincione found in the Secretariat of State the “financial lungs” from which to draw oxygen to balance his accounts with ENASARCO. The value of the London property, the main object of the transaction, was grossly overestimated in the documents presented to the Secretariat of State, which was also kept in the dark regarding a debt contracted with Deutsche Bank worth 75 million pounds.

Therefore, the magistrates observe, the Secretariat of State, without any prior evaluation of the investment, agreed to a price completely disproportionate to the value at which the property had been sold in the previous two years. As well, there was an evaluation from the Vatican Gendarmerie which had advised against relying on Mincione, a recommendation that was evidently not taken into consideration.

The relationship with Mincione ends

After a considerable delay of a few years, it became clear that the transaction was extremely harmful to the Holy See. The problem became that of saving what was salvageable and entering into possession of the property in London. According to some of the testimony, one of the original causes leading to the decision to break relations with Mincione was his decision to cease payments of hidden commissions to Crasso and Fabrizio Tirabassi that were to have been turned over to a company based in Dubai. Thus, a transaction was orchestrated that brought Gianluigi Torzi on the scene. Provided in the transaction was the payment of 40 million pounds by the Secretariat of State to Mincione in exchange for his shares to finally come into possession of the London property. This never happened because instead of creating an ad hoc company controlled by the Secretariat of State, the Secretariat of State decided to entrust the transaction to another financial broker, Gianluigi Torzi, who later succeeded in maintaining control for himself, circumventing the Holy See, thanks to internal complicity. From the documentation produced by the Vatican magistrates, it appears that Mincione and Torzi were actually in complicity to execute the transaction with the Secretariat of State to recuperate the liquid assets lost in the bid to take over CARIGE bank, but also “to continue to manage the London property together”. “Specific evidence has been acquired that demonstrates that a portion of the 15 million euro that the Secretariat of State paid to Gianluigi Torzi…to acquire the property that he did not intend to cede to the Vatican, was turned over to Raffaele Mincione by Torzi”.

Personal gain

A key figure that emerges in the investigatory documents is Fabrizio Tirabassi. In March 2004, he signed a contract with UBS by virtue of which the Swiss financial institution paid to the Vatican public official an annual commission equal to 0.5% on the basis of the volume of accumulated contributions and for referring new clients. Payments were made to a numbered account. Regarding Tirabassi’s role, on the basis of temporal coincidences, chats and trips that confirm the statements of some of the defendants, Vatican investigators hypothesize that Enrico Crasso and Tirabassi himself received cash in exchange for the transactions they were promoting. In particular, the magistrates write, “the content of the statements by Gianluigi Torzi, confirmed by the tenor of some of the messages discovered during the investigation on sequestered electronic devices, makes it possible to confirm that Fabrizio Tirabassi, who had become the reference point for managing the Secretariat of State’s investments, during the course of his activities, put his own interests before his duty and, thanks to that position was able to take advantage of every opportunity to receive benefits that is represented today by an estate that appears absolutely disproportionate to his ability to produce that income”. According to gathered testimony, there existed an “axis between Fabrizio Tirabassi and Enrico Crasso by means of which the former directed the Secretariat of State’s investments toward Credit Suisse in return for the payment of fees”.

Officials deceived

Soon after arriving in Rome in October 2018, after Becciu left the Secretariat of State due to his appointment as Prefect of the Congregation for the Causes of Saints a few months earlier, the new Substitute of the Secretariat of State, Edgar Peña Parra, was made only partially aware of the transaction already underway to get out of Mincione’s fund. Thanks to internal complicity, Torzi managed to get a Share Purchase Agreement signed that removed control of the London property from the Secretariat of State. He did this by creating 1,000 shares in GUTT SA and granting voting rights only to these shares he held. Meanwhile, the other 30,000 shares owned by the Secretariat of State did not carry the right to vote. Thus, the Secretariat of State found itself with another broker in the Vatican with sole possession of decision-making power. The alleged “solution” that in reality handed complete power over the Sloane Avenue property to Torzi was, according to Torzi himself, proposed by Tirabassi and Crasso, “that was shared by Credit Suisse”. Tirabassi and Crasso, instead, deny having been aware of placing the ownership of the property in the hands of GUTT and Torzi. The magistrates are convinced, however, that “initially Crasso, Tirabassi and Torzi, with the active collaboration of lawyer Squillace, had actually planned the creation of 1,000 shares so as to maintain control over the London property, concealing it of course from the Superiors of the Secretariat of State who were to sign the agreements. Herein lies the crux of the investigation. The Vatican magistrates hold that “neither Msgr. Perlasca, who signed the Share Purchase Agreement, nor his Superiors, the Substitute Edgar Peña Parra, and above all Cardinal Pietro Parolin had been effectively informed to be fully aware of the juridical effects that the different categories of actions would cause”.

Contract signed hastily

From London, Tirabassi was putting pressure on Perlasca, who was in Rome, to quickly sign an agreement. The contracts handing over control of the property from Mincione to Torzi were concluded on 22 November 2018, to the detriment of the Secretariat of State. They were signed by Perlasca who “at the moment lacked any authorization from his Superior, Peña Parra. The latter had granted the necessary authorizations to Perlasca as of 27 November, that is, only after Cardinal Parolin had in turn granted his authorization through a handwritten memorandum”. It was only on 22 December 2018, a month after, that Peña Parra “learned of the real content of the agreements signed by Tirabassi and Perlasca”. What emerges from a systematic reading of the messages exchanged between Tirabassi and Perlasca, “is that the two conducted the negotiations without ever informing any of their Superiors and, above all, with the precise awareness that they would later have to face the issue of how to inform their superiors about what happened in London”.

Power of attorney after the fact

The special power of attorney pre-dated 22 November 2018 that authorized the transaction harmful to the Secretariat of State was actually then signed by Peña Parra after the fact, on 27 November. Secretary of State Pietro Parolin and the Substitute were given a memorandum that presented the terms of the transaction in interesting but opaque terms. It is actually a document drafted by the lawyer Squillace (who was, in fact, one of Torzi's men, who he introduced to Msgr. Perlasca as a lawyer whom he knew) and by Tirabassi himself. The seeming advantages of the transaction are praised in the memorandum, but there is not a single mention of the existence of the various classes of shares that, in fact, removed all power from the Secretariat of State and placed it all in Torzi’s hands. This was the memorandum used by Perlasca and Tirabassi to inform Peña Parra and Parolin. Having received incomplete information, on 25 November, Cardinal Parolin placed a provision at the end of the document which reads: “After having read this Memorandum, and in light of the explanations furnished yesterday evening by Msgr. Perlasca and Dr. Tirabassi, having received assurances regarding the validity of the transaction (that could be advantageous to the Holy See), its transparency and the absence of reputational risks…I am in favor that the contract be concluded”.

Internal complicity

“Gianluigi Torzi”, reads the indictment, “even though he did not sign any agreement with the Secretariat of State in this sense, envisaged that, in addition to the possibility of managing the property in London (replacing the role played by Raffaele Mincione up to that time), he could also … dip into the coffers of the Secretariat of State for his own financial dealings; Fabrizio Tirabassi, official of the Secretariat of State … acted with the aim of taking advantage of the situation in complicity with Torzi for kickbacks; Enrico Casso, in addition to demanding fees for himself, was interested in bringing in the newly acquired CENTURION fund he managed, another failed investment subsidized with funds from the Secretariat of State….” According to what Torzi has stated to Vatican magistrates, to obtain the management of the property in London, Torzi himself had to pay 50% of the money he received to Tirabassi who was interested in “his return”. Chats taken into examination demonstrate the exchange of cash Torzi asked his collaborators to obtain just prior to the dates on which he had to meet with Crasso and Tirabassi (8,000 and 30,000 euro).

Torzi’s extortion

After the summer of 2018, Tirabassi realized his mistake in trusting Mincione and was reinstated by Archbishop Peña Parra. In the meantime, Msgr. Perlasca was removed. Substitute Becciu’s former secretary, Msgr. Mauro Carlino, who had also initially been Peña Parra’s secretary, replaced him as the person managing the transaction. From the Vatican magistrate’s investigation, Carlino appears to have inserted himself well in the group that internally managed the transaction. In March 2019, Torzi paid 224,640 pounds to the lawyer Squillace for legal counsel with money taken from GUTT (that is, from the Secretariat of State), without any payment order being made by the Secretariat of State. Squillace had, in fact, never been appointed to represent the interests of the Secretariat of State, but was acting on those of the other party. In the meantime, the Vatican realized the absurdity of the transaction in which Torzi played a leading role: that the broker, who had been hoping to use the Holy See’s funds for his own financial activities was now able to use his dominant position exclusively for his own advantage.

What comes into play here is what the investigators believe to be “extremely serious extortion” carried out by Torzi to the detriment of the Secretariat of State. Documentary evidence shows that Torzi “between the end of April and the beginning of May 2019, after a long and exhaustive negotiation conducted through various mediators, had agreed to return the London property in exchange for a payment of 15 million euro, effectively paid without any economic or legal justification”. A crucial moment for the implementation of this goal was the possibility on Torzi’s part to take advantage of the powers he had due to his 1,000 shares in GUTT SA, the only shares that carried voting rights, which he had managed to retain by deceiving the good faith of the officials in the Secretariat of State present for the signing of the agreement”. At this point, Perlasca would have liked to have appealed to the judiciary rather than submit to Torzi’s demands. But he was substituted by Carlino. According to Torzi, Tirabassi would have been “able to maintain his position, despite the ‘mess’ created, because of the power of blackmail he would have been able to exert on the Secretary of State because of information regarding the private lives of people working in the administrative apparatus of the same Secretariat”. But this “merely theoretical” hypothesis “has not been supported either by the searches and seizures carried out in the State, nor by the acquisitions made in Italy following a rogatory commission”.

The signed document

In an effort to convince Torzi to return his shares, Giuseppe Milanese, an entrepreuner well-known in the Vatican, also entered into play. According to testimonies taken, Torzi asked for 23 million euro to return the property to the Holy See. Msgr. Mauro Carlino managed the negotiations and had the Holy See pay 15 million euro. To justify the payment – which had not gone unnoticed by the financial control authority – Tirabassi altered an official document on 23 November 2018, adding a type of acknowledgement of debt in the amount of 3% in favor of Torzi. Thus, the Secretariat of State would have committed itself in granting Torzi that percentage in case the operation did not go through. The magistrate contends this act to be “of unprecedented seriousness, not only because it constitutes an attempt to evade the control of the financial intelligence authorities…but because, due to such deceit, Gianluigi Torzi could have even deceived a judiciary”. Msgr. Carlino is accused of extortion in complicity with others because “although aware of the absolute illegitimacy of Gianluigi Torzi’s requests, he contributed to the latter’s ability to carry out his plan”. The reasons for payments made to Torzi were, in fact, “completely false”.

AIF’s role

At this point the chapter opens regarding the role of AIF, of its president at the time, René Brülhart, and its director at the time, Tommaso Di Ruzza. According to Vatican magistrates, AIF “overlooked the anomalies of the London transaction – of which it had immediately been informed – especially considering the wealth of information acquired as a result of intelligence activity”. According to the results of the investigation, Di Ruzza acted in concert with the Secretariat of State and played “a decisive role in completing the liquidation process of Gianluigi Torzi’s claims”. Di Ruzza was acting as a sort of consultant to the Secretariat of State. AIF had made the feasibility of the transaction subject to two conditions: the first was that the commissions for Torzi had to be in accordance with any contractual obligations entered into prior to the transaction of 3 December 2018; the second was that ownership and control of the London property “be effectively transferred to the Secretariat of State”. To make sure that the first condition would be respected, to the text file created on 26 November 2018 for the Substitute’s signature that allowed the transaction to go ahead, a new text was added (which underwent modifications on 17 April 2020), an “acknowledgement of debt”, according to which the Secretariat of State had only agreed verbally to pay Torzi 3% of the value of the property at the time of the final reacquisition. The additional text file was discovered on Tirabassi’s computer. “From the chronology of the facts, it is clearly understood how Msgr. Carlino and Fabrizio Tirabassi knew perfectly well that they were going against AIF’s directives.” The Promoter of Justice “believes that AIF’s behavior in the persons of its director and president seriously violated the basic rules governing supervision precisely because, due to the interventions described above, it was possible to attribute the semblance of credibility to a payment that everyone – without exception – knew was not due, insomuch as to resort to the creation of an acknowledgement of debt after the fact and to create invoices for non-existent operations, thus providing a decisive contribution to the effectuation of the payment of the sum requested through extortion by Gianluigi Torzi”.

Investigation regarding Cardinal Becciu

The Cardinal, former Substitute of the Secretariat of State, did not become a suspect immediately. Rather, he became involved in it because of what the magistrates define as “interference”. “For a long time”, the magistrates write, “Becciu remained extraneous to the focus of the investigation. He suddenly and unexpectedly came to the fore at the end of May 2020, a few days before Gianluigi Torzi’s interrogation through a tactic that this Office, in light of investigation carried out, does not hesitate to define as an attempt to mislead the investigation”. In particular, there had been two offers to reacquire the building in London, both at a price in excess of 300 million pounds: one by the Fenton Whelan firm, the other by the BP Development Real Estate Corporation. Both proposals, the Vatican magistrates write, not only actually “originated with Gianluizi Torzi and Raffaele Mincione, that is, from the two principal players in the maneuver to plunder the finances of the State, but both were linked to the common factor of having been promoted by Angelo Becciu”.

One of the offers involved Giancarlo Innocenzi Botti, a former member of parliament and undersecretary for Forza Italia, together with Italian diplomat Giovanni Castellaneta. A less clear aspect of the story is the fact that the company proposing the acquisition, Bruton RE LDT, was established on 30 May 2020, that is on the same day on which Innocenzi and Castellaneta went to the Secretariat of State to present the proposal. It is not understood with what capital Bruton could have acquired the property by paying out a sum of between 315 and 330 million pounds. “Torzi was hidden behind the bid”, the magistrates sustain. The person who brought Innocenzi and Castellaneta to intervene was Marco Simeon, a person who was already well-known in the Vatican. He was to have received about ten million as a commission. Torzi “clearly reported that the initiative behind this transaction was to be ascribed to Cardinal Becciu”. In a letter dated 1 May 2020, addressed to Innocenzi, in which he thanks him for the bid to purchase the property, Cardinal Becciu entrusts him with “the mandate to act as our intermediary in order to formalize an acceptable proposal”. The Vatican magistrates point out that the Cardinal, who at that time was the Prefect for the Congregation for the Causes of Saints, “had no competence whatsoever to entrust a mandate relative to affairs belonging to the Secretariat of State, which was among other things subject to an investigation on the part of the Vatican investigative authority”. Still in terms of “interference”, Innocenzi advised Torzi not to present himself  to the Vatican magistrates for interrogation, citing health reasons due to Covid. In so doing, Innocenzi showed Torzi a screenshot of a chat with Marco Simeon, who had advised him to do so, in complicity with Becciu.

Attempt to make Perlasca recant

Another form of interference the magistrates charge Cardinal Becciu with concerns Msgr. Perlasca. The latter was advised by the Cardinal to move out of Casa Santa Marta. He was also told that, in reality, the process would never take place. In addition, Becciu asked Oscar Cantoni, the Bishop of Como, to intervene so as to convince Perlasca to retract what he had already told the magistrates, and that not doing so would have “condemned him to a six-month sentence”. The Bishop of Como himself, the diocese in which Perlasca was incardinated, revealed to the prelate that the request came from Becciu. Returning to what happened in previous years, the magistrates contest that Becciu played a role in making sure that 200 million dollars from Peter’s Pence, managed by the Secretariat of State, were invested in Mincione’s ATHENA fund “without a minimum of guaranty, and above all, without any control to prevent that the offerings of the faithful given to subsidize charitable works would be invested in reckless, speculative financial activity”. The realization of such transactions can be considered “an abusive act to which the Substitute gave his decisive consent”.

Payments to Marogna

Then there is a chapter dedicated to the payments made to Cecilia Marogna. A report from the Slovenian police was received by the Vatican magistrates through the apostolic nunciature regarding suspicious transactions on the accounts of Cecilia Marogna’s company, Logsic Humanitarne Dejavosti D.O.O. Between 20 December 2018 and 11 July 2019, her company received 575,000 euro worth of payments sent by the Secretary of State. A letter rogatory allowed the investigation to ascertain that this sum “was mostly used to make purchases that were not compatible, and therefore, unjustifiable, with the corporate purpose of the company” that was founded the day before the first wire transfer and was completely controlled by Marogna. In a televised interview on RAI Report, Marogna stated that she received the sums of money to carry out intelligence activity commissioned by the Substitute Becciu. In addition to the movement recorded for payments in fashion stores and luxury hotels, there are also cash withdrawals totaling 69 thousand euro. It was Becciu who, even after he was no longer Substitute, ordered Perlasca to make the payments to Marogna. The former Substitute sustained that the payments were made to pay the ransom to free a nun who had been kidnapped. 

Payments to his brother’s cooperative

Finally, the magistrates contend that Becciu financed his brother Antonino’s cooperative with 600,000 euro that came from funds belonging to the Italian Bishops’ Conference and 225,000 euro that came from funds belonging to the Secretariat of State. “The donations originating from the Secretary of State”, the ordinance reads, “in contradiction to Becciu’s thesis defending himself, were widely used for purposes other than the charitable purposes for which they were intended”. A substantial portion of the funds in the current account of his brother’s cooperative were “diverted and used for non-charitable purposes”, among which is included a loan to the Cardinal’s niece to acquire property in Rome.

(Working translation of the Italian original)