ROME -- A Vatican judge indicted 10 people Saturday, including a once-powerful Italian cardinal, on charges of embezzlement, abuse of office, extortion and fraud over a nearly $300 million investment in a London real estate venture.
The indictments were handed down after a sprawling two-year investigation into how the secretary of state office managed the Vatican's vast asset portfolio, much of which is funded by the Peter's Pence donations from the faithful. The scandal has resulted in a sharp reduction in donations and prompted Pope Francis to strip the office of its ability to manage the money.
The investigation, a Vatican statement said, was "directly connected" to the pope's efforts to "clean up Vatican finances."
The accusations stem largely from the office's investment in a building in London's affluent Chelsea neighborhood, originally a showroom for the Harrods department store that had permits allowing it to be converted into luxury apartments.
Archbishop Nunzio Galantino, president of the Vatican office that administers the financial assets of the Holy See, told the Catholic newspaper Avvenire last year that the Vatican lost millions on the deal.
Among those who will stand trial on charges including embezzlement and abuse of office later this month is Cardinal Angelo Becciu, a one-time papal contender who was once the third-highest-ranked figure in the Vatican. He helped engineer the initial London investment when he was the chief of staff in the secretary of state office.
Francis fired him as the Vatican's saint-making chief last year, apparently over claims that Vatican funds were inappropriately used by Becciu to finance his brothers' businesses and charities in Sardinia as well as an external consultant who had been hired to help free Catholic hostages held in Africa. Instead, the consultant, who also will stand trial, made personal luxury purchases, prosecutors say.
"I am the victim of a plot hatched against me and I have been waiting for a long time to know any accusations against me, to allow myself to promptly deny them and prove to the world my absolute innocence," Becciu said. "Only by considering this great injustice as a test of faith can I find the strength to fight this battle of truth."
A lengthy account on the official Vatican News site, summarizing documentation from the prosecution, portrays Becciu as interfering in attempts to salvage the property deal even after he had moved on to a new position in the Vatican, as head of the department in charge of sainthood.
Becciu, the account said, also played a role in making sure that $200 million in papal charitable funds were invested instead in "reckless, speculative activity."
Becciu issued a statement through his lawyer denying any wrongdoing and ascribing the charges to "obscure plots" against him.
Last September, when Becciu renounced the rights of cardinal -- one of the few times that has happened over a century -- neither the Vatican nor Francis explicitly tied the move to the investment deal. A day after his firing, Becciu called a news conference and said that he had been accused by the pope of embezzlement in a face-to-face conversation. But Becciu described the accusations as pertaining to a separate case involving donations to Becciu's home diocese on the Italian island of Sardinia.
Another main suspect in the case, Italian broker Gianluigi Torzi, is accused of having extorted the Vatican out of about $17.8 million to turn over ownership of the London building in late 2018. Torzi had been retained by the Vatican to help it acquire full ownership of the building from another indicted money manager who had handled the initial investment in 2013, but lost money on what the Vatican said were speculative, imprudent investments.
Vatican prosecutors allege Torzi inserted a last-minute clause into the contract giving him full voting rights in the deal.
Torzi has denied the charges and said the accusations were the fruit of a misunderstanding. He is currently in London pending an extradition request by Italian authorities, who are seeking to prosecute him on related charges.
Prosecutors accused the Vatican's financial watchdog, Rene Brulhart, of failing to raise the alarm on the deal.
Brulhart, in a statement sent to The Washington Post, said: "I have always carried out my functions and duties with correctness, loyalty and in the exclusive interest of the Holy See and its organs." He called the Vatican's latest steps a "procedural blunder."
The trial will begin July 27, the Vatican said.
OPAQUE FINANCES
Francis has prioritized cleaning up the Vatican's notoriously opaque finances -- a goal that past pontiffs also had talked about and struggled to tackle. But the London financial scandal has added to the pressure, highlighting what can happen in a secretive city-state when priests with little to no investment training handle enormous assets.
Among the steps already taken, Francis last year formally stripped the secretary of state office of its financial holdings and ordered the department to transfer its holdings to another office. The Vatican has fired several employees over the London case. In October 2019, Vatican police raided the city-state's Financial Information Authority and the secretary of state office.
The prospect of a cardinal facing a Vatican trial appears unprecedented in the modern history of the church, and is sure to amplify what had already been one of the Holy See's largest financial scandals in decades.
A Holy See spokesman said a special procedure, involving Pope Francis' personal approval, was needed for the indictment of a cardinal.
Some defense lawyers expressed concern about the Vatican city-state's legal code, which dates to an 1889 Italian code no longer in use. Critics say the code severely limits the rights of defendants, particularly in the pretrial phase when the defense has no access to the evidence that will be presented.
A legal code that is more than 100 years old "runs counter to modern judicial systems," said Filippo Dinacci, who is representing Brulhart.
In the Vatican legal system, prosecutors can directly indict someone without going through a judge or grand jury that would determine whether there is enough evidence to proceed.
Information for this article was contributed by Chico Harlan and Stefano Pitrelli of The Washington Post; by Nicole Winfield of The Associated Press; and by Elisabetta Povoledo of The New York Times.