Europe

Catholic Church releases guidelines for ethical investing


VATICAN CITY — Earlier this month, the Vatican’s former chief auditor accused senior Church officials of stealing and mismanaging funds.

Then this week evidence emerged in a trial at the Vatican showing the church lost more than €100million in a shady London property deal. This same court on Thursday heard a surreptitiously taped phone conversation between a once-powerful cardinal now accused of embezzlement and Pope Francis, in which the pontiff appeared to agree to secretly pay up to a million euros in ransom. to free a nun taken hostage by militants. .

And on Friday, the Vatican released a guide to financial best practices for ethical investing.

“We had a hard time,” said Cardinal Peter Turkson, the Vatican official who oversaw the writing of the church’s money management guide, laughing at the Vatican’s long tradition, and critics say, continues with obscure transactions and financial intrigues, filled with tales of money-filled envelopes and hidden accounts.

The 46-page document was originally slated for release nearly a year ago when Cardinal Turkson spoke about it in an interview. But the Vatican pulled the plug at the last moment, without explaining the delay. Church officials did not explain why the report was released on Friday, and Cardinal Turkson, who has moved to another Vatican department in the meantime, was not immediately available for further comment.

But he and other officials argued that the Vatican had cleaned up its law and that the new guidelines, which are aimed at Roman Catholic churches and organizations around the world, were another step in the right direction. He argued in the previous interview that the guidelines would help devotees avoid filling financial portfolios with morally high-risk investments that could lead to eternally negative returns. “It’s a call to action,” he said.

The report is part of the Vatican’s Spiritual Treatise and Vanguard Fund Report, setting out principles for centralizing and formalizing the management of Catholic assets so that it is consistent with the social doctrine of the church. “The document simply says that anyone managing finances must also accept responsibility for what managing finances entails,” Cardinal Turkson said.

The new guidelines, which were already common in Catholic churches in developed countries like the United States and Germany, would push wealthy churches to get up to speed on the pope’s priorities, such as climate change and helping migrants, and teach the little churches to dip their first toes. in the market for how to avoid hidden dangers.

Jean-Baptiste de Franssu, president of the Vatican Bank, said dangerous investments included gambling sites, dirty gas polluters, war profiteers and “adult entertainment, as they say”.

When asset management is outsourced without strict guidelines, he said, money can end up in less-than-sacred places. “It definitely happens,” he said.

The document’s name, Mensuram Bonam, refers to the biblical passage, “For the measure which you use shall be measured unto you.” It recognizes that dioceses, Vatican congregations and Catholic organizations have a responsibility to increase their wealth, their gifts and their investments to serve their mission, and insists that an investment consistent with faith does not necessarily mean lower yields.

“There should be little or no fear of underperformance or the risk of failing to live up to one’s fiduciary responsibility,” the document states, arguing that the growing multi-billion dollar field of ethical investing shows that in the long term, we can “do well by doing good!

The guidelines urge investors to be aware of ‘collateral impacts’, but they also recognize ‘grey areas’ such as ‘abuse of ‘speculative products or investment techniques’ or use of loopholes in accounting practices exploiting the protection of tax havens”.

Mr de Franssu added that in the sleazy world of finance, seemingly clean companies could have subsidiaries that were into “pornography or god knows what”.

“Grey areas” are particularly difficult to avoid for new-to-market churches, the document points out. Churches that are beginning to seek financial stability by moving away from grants and donations and toward “a business model of investment,” such as those in his native Ghana, Cardinal Turkson said, “cannot do this without their show how to do it”.

The Holy See considers some funds to be bad investments, no matter how lucrative. Companies that contradict Church doctrine, in areas such as abortion or contraception, are such offenders. But the guidelines also suggest that the faithful avoid investments that harm workers or those that strip natural resources, potentially producing economic migrants who endure inhumane conditions to reach Europe.

Yet despite the pope’s emphasis on environmental protection, many of the church’s investment portfolios include companies producing fossil fuels.

“We’re not saying don’t participate,” Mr. de Franssu said, adding that investors should ask questions such as: “’What is your exposure to fossil fuels? And is it less than 5% of your portfolio? There are many factors you can take into account. »

Cardinal Turkson said that while some religious women’s groups in the United States had disengaged from oil and gas companies, the Vatican’s approach was to push for investments in sustainable energy and to urge the industry to point other local churches in this direction.

The document, he stressed, was a guide, not a dictate from the church.

“Nobody will penalize you, absolutely nobody,” agreed Mr. de Franssu. “Except your conscience.”

The Vatican does not have an exceptional record when it comes to finances. US Archbishop Paul Marcinkus, who headed the Vatican Bank from 1971 to 1989, has been embroiled in a host of scandals, including the collapse of Italy’s largest private bank, Banco Ambrosiano.

Last year, a Vatican court convicted a former senior Vatican Bank official and his lawyer for embezzlement and money laundering, sending a strong signal that the church was determined to put its house in order. his finances.

The latest stain has been the ongoing trial of 10 defendants, including Cardinal Angelo Becciu, once one of the Vatican’s top power brokers, linked to a disastrous investment in a London building. Vatican prosecutors are seeking to determine whether the defendants are criminally responsible for the loss of tens of millions of dollars of church money, including funds in Peter’s Pence, donations made directly to the Holy See that are used for charitable purposes and to cover the Vatican’s deficit.

On a flight to Rome from Japan in 2019, Francis said Catholics shouldn’t mind the Vatican investing its charitable contributions. “The sum of Peter’s Pence is coming and what should I do? Put it in a drawer? he said. “No, it’s bad administration. I’m trying to make an investment.

Mr de Franssu said the church had worked to reverse its lack of “transparency or accountability, which is also part of the social doctrine of the church”. Referring to the London property lawsuit, he added: “Had we had a much better formalized investment process, including ethically, we should have avoided this situation.”

An investigation into a Sardinian charity linked to Cardinal Becciu produced a tape of Francis, which prosecutors accused the cardinal of secretly recording when he called the pope from his apartment in the Vatican. In the recording, Cardinal Becciu asks Francis to confirm that the pope had authorized payments to free a Colombian nun kidnapped in Mali in 2017 by al-Qaeda in the Islamic Maghreb, which funded her activities by withholding Western ransoms.

Cardinal Becciu, who essentially acted as the Vatican’s chief of staff, is also a target of Libero Milone, the Vatican’s former chief auditor. The Vatican sacked Mr Milone in 2019 amid espionage charges. This month he filed a lawsuit against the Vatican for wrongful termination of his contract and for damages, essentially arguing that the church got rid of him because he learned too much about his financial shenanigans and his bad investments.

nytimes Eur

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button