VATICAN CITY (AP) — The head of the Vatican’s financial watchdog agency is leaving his post after a raid by Vatican police on the agency’s offices breached the Holy See’s international financial obligations and jeopardized its reputation.
Pope Francis thanked Rene Bruelhart for his work as president of the Financial Information Authority but decided not to renew his mandate, the Vatican said Monday. His replacement’s name will be announced next week.
In an interview with The Associated Press, Bruelhart said he considered that his job was to serve the Holy See but that he could “only serve as long as the international obligations of the Holy See are respected.”
Vatican police raided the headquarters of the authority, known by its Italian acronym AIF, as well as the Vatican’s secretariat of state on Oct. 1 and seized documentation, computers and cellphones as part of an internal investigation into the Vatican’s multi-million euro investment in a London real estate venture.
The raids were unprecedented, and sparked alarm internationally given the AIF works with financial intelligence units around the world in the fight against money laundering, tax evasion and other financial crimes. Countries would likely be less willing to share confidential information with AIF in the future if that information could so easily end up in the hands of Vatican police, officials feared.
AIF’s own statutes, approved by Francis in 2013, guarantee that data and information held by AIF are “protected with a view to ensuring their security, integrity and confidentiality” and covered by official secrecy.
Bruelhart said that as a member of the Egmont Group of financial intelligence units, “you have to ensure full confidentiality of this information and you also have to secure this information accordingly. With this seizure on the premises of AIF, those obligations were definitely not respected.”
“It was a breach,” he said.
According to the 16-page search warrant, which was seen by The Associated Press, Vatican prosecutors only alleged that the AIF’s actions in the real estate operation were “not clear” and faulted its director, Tommaso Di Ruzza, for being in contact with a London law firm arranging the buyout.
Prosecutors appeared to have misunderstood that AIF was working with Britain’s financial intelligence unit to try to catch the businessmen who were fleecing the Holy See in the real estate deal.
The bulk of the search warrant concerned the actions of the Vatican’s secretariat of state, which in 2012 had put 150 million euros into the luxury apartment building in London’s tony Chelsea neighborhood. The mortgage turned out to be onerous, the property lost its value amid Brexit and middlemen managing the venture were making millions from the Vatican in fees.
The secretariat of state in 2018 decided to buy the building outright but needed a 150 million euro loan from the Vatican bank, known as the Institute for Religious Works, or IOR, to buy out the other investors so it could extinguish the mortgage.
The IOR president, who is close to Francis, and the auditor general’s office raised an alarm with Vatican prosecutors alleging the buyout looked suspicious, sparking the Oct. 1 raids.
In an internal memo seen by the AP, the IOR’s risk managers said one of the reasons the deal looked dubious was because they believed the secretariat of state shouldn’t be managing real estate. The secretariat of state has managed its own assets for decades.
As a result, the Vatican raids appeared more the result of an internal turf battle — between the IOR on one side, and the secretariat of state and AIF on the other — over the secretariat of state’s sizeable financial holdings, which are kept outside the IOR’s shrinking coffers and off the Vatican’s balance sheet.
The Vatican prosecutor appears to have taken the IOR’s view of the operation, saying the Vatican shouldn’t be using donations from the faithful in what he called a “highly risky and speculative” investment — in this case a luxury apartment building at 60 Sloane Avenue.
The Swiss-born Bruelhart, dubbed the 007 of anti-money laundering efforts by some media, had joined the Vatican in 2012 to help turn around its reputation as a scandal-marred offshore tax haven. Under his leadership, the Vatican won coveted membership in the Egmont Group, penned agreements with some 60 countries to exchange financial information and paved the way for the IOR to access the single euro payment area, to smooth wire transfers.
“I think we were successful in giving back the credibility of the Holy See,” Bruelhart said.
Bruelhart’s departure, coupled with the continued suspension of the AIF’s director di Ruzza, means that the AIF is without a leader going into a crucial period ahead of a regularly scheduled on-site visit by the Council of Europe’s Moneval evaluators early next year.