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Cardinal Parolin asked Vatican bank for loan to exit troubling London realty deal

Parolin, the Vatican’s secretary of state, said he intended to use the loan to pay off a mortgage on the property that was weighing heavily on the Vatican coffers.

VATICAN CITY (RNS) — Cardinal Pietro Parolin, the second-highest-ranking official at the Vatican, requested a loan two years ago from the Vatican Bank, also referred to as the IOR, or Institute of Religious Works, hoping to buy a high-priced property in London currently at the center of the institution’s financial scandals, calling it “a valid investment,” according to a letter leaked to the Italian newspaper Domani.

The letter, dated March 4, 2019, represents the first time Parolin’s name has been linked to the troublesome London deal. Speaking to reporters in October of that year, Parolin referred to the London investment as “rather opaque,” while promising that the Vatican was making every effort “to clear it up.”

He made no mention at the time of the loan, which was not ultimately approved. Instead, in June 2019, Gian Franco Mammì, the director general of IOR, halted the loan request and filed a complaint to the Vatican’s promoter of justice, bringing media scrutiny to the London deal.

There is no indication that Parolin is accused of any wrongdoing. 

In the letter, Parolin asked for a loan of 150 million euros from the Vatican Bank. Parolin, the Vatican’s secretary of state, said he intended to use the loan to pay off a mortgage on the property that was weighing heavily on the Vatican coffers.

The letter, sent to IOR’s president, Jean-Baptiste de Franssu, claimed that the “valid investments” made in foreign countries by the Vatican’s Secretariat of State required “confidentiality,” according to the paper’s report. Parolin wrote that due to the market trends at the time, he could not take the money from his own department and needed cash from another source.

“For this reason, we ask this institute to provide a loan of 150 million euros in the short term,” the letter reads, according to the article written by Vatican reporter Emiliano Fittipaldi.

According to the leaked letter, Parolin offered his “gratitude” to the Vatican Bank if it approved the request.

Archbishop Edgar Pena Parra, second in command at the Secretariat of State, also sent two letters to IOR requesting the loan. 

A recent papal decree stripped the Vatican Secretariat of State of all its financial assets, which will be centralized under the Administration of the Patrimony of the Holy See, or APSA, led by Archbishop Nunzio Galantino. Media reports had previously suggested that a part of the money used in the London deal came from Peter’s Pence, a global fund dedicated to the pope’s charitable actions and until recently controlled by the Secretariat of State.

In 2014, the Vatican’s Secretariat of State invested roughly $200 million held in Swiss bank accounts to purchase a minority stake in a deal aimed at transforming a building in London’s Chelsea district into luxury apartments.

The building belonged to Italian investor Raffaele Mincione, who had purchased it in 2012 for about $170 million. Mincione also owned a Luxembourg-based fund called Athena Capital, where the Vatican money was transferred.

The deal ended up being a major loss for the Vatican, but Mincione made a substantial profit, according to the Financial Times. Other Italian entrepreneurs, such as Gianluigi Torzi and Luciano Capaldo, also participated in the deal.

The fallout wreaked havoc in the tenuous power balances inside the Vatican walls, resulting in the defenestration of Tommaso di Ruzza and Renee Bruelhard, who ran the Financial Information Authority, the Vatican anti-money laundering agency. Five other Vatican employees were suspended in October 2019 after their offices were raided by Vatican police.

The largest head to fall because of the London affair was that of Cardinal Angelo Becciu, who was stripped of his cardinal rights by Pope Francis last September and removed from his roles within the Vatican.

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