Vatican admits possible property portfolio errors

Vatican admits possible property portfolio errors
By Guy Dinmore in Rome
Copyright The Financial Times Limited 2010
Published: June 28 2010 15:37 | Last updated: June 28 2010 15:37
http://www.ft.com/cms/s/0/3187c7ec-82bb-11df-85ba-00144feabdc0.html


The Vatican on Monday admitted possible mismanagement of its vast property portfolio following an Italian investigation into suspected corruption among senior officials in Rome that has rocked Silvio Berlusconi’s centre-right government.

In a statement the Vatican acknowledged “possible errors” in the valuation of property managed by Propaganda Fide, a church agency reported to be in charge of assets worth €9bn used to fund missionary activities.

Cardinal Crescenzio Sepe, 67-year-old archbishop of Naples, and head of Propaganda Fide from 2001 until his removal by Pope Benedict in 2006, was informed this month that he was under investigation by the Italian authorities probing the 2004 sale of a Rome property, allegedly below its market value, to Pietro Lunardi, then minister of transport.

Both men have denied any wrongdoing and said they would co-operate with the investigation. Cardinal Sepe has spoken of unnamed “enemies” seeking to destroy him.

According to media reports, Mr Lunardi is being investigated for government funding he allegedly extended to Propagande Fide for building a church museum that never opened.

The wider investigation began several months ago with a probe into the activities of Diego Anemone, a Rome builder, and Angelo Balducci, a senior civil servant in charge of awarding public works contracts, including projects for hosting the G8 summit last year. Both were arrested and have denied wrongdoing.

The investigation has already led to the resignation of Claudio Scajola, minister of industries, who allegedly bought a luxury flat in Rome with money provided by Mr Anemone. Mr Scajola also denied wrongdoing.

Guido Bertolaso, head of the Italian government’s civil protection agency and a close ally of the prime minister, is under investigation for alleged favours provided by Mr Anemone and for a flat in Rome provided to him by Propaganda Fide. Mr Bertolaso has denied wrongdoing and insists that a woman who gave him massages at a health centre owned by Mr Anenome was a physiotherapist and not a prostitute.

The Vatican said it had set up appropriate structures and regulations to ensure that the management of Propaganda Fide’s property and financial assets met highest modern standards.