Hundreds of millions of euros were discovered to have been "tucked away" without having appeared in the city-state's balance sheets, the Vatican's economy minister revealed on Wednesday.
This means that overall Vatican finances have been in better shape than previously believed, Australian Cardinal George Pell, whom Pope Francis hand-picked as head of the recently created Vatican "Secretariat for the Economy," wrote in an article for Britain's Catholic Herald Magazine to be published on Friday, Brisbane Times reported.
"In fact, we have discovered that the situation is much healthier than it seemed, because some hundreds of millions of euros were tucked away in particular sectional accounts and did not appear on the balance sheet," he wrote.
"It is important to point out that the Vatican is not broke ... the Holy See is paying its way, while possessing substantial assets and investments," the Cardinal added, according to an advance text made available on Thursday.
Although Pell did not admit that any wrongdoing had been committed by the Vatican, he claimed the departments had long had "an almost free hand" with their finances and followed "long-established patterns" in managing their affairs, Breitbart reported.
"Those in the Curia were following long-established patterns," Pell said. "Just as kings had allowed their regional rulers, princes or governors an almost free hand, provided they balanced the books, so too did the popes with the curial cardinals."
"Very few were tempted to tell the outside world what was happening, except when they needed extra help," he said, singling out the once-powerful Secretariat of State as one department that had especially jealously guarded its independence.
"It was impossible for anyone to know accurately what was going on overall," said Pell.
In 2009, a series of problems began arising for the Vatican Bank, or "IOR," as it is known.
Functioning like an "offshore bank" outside the European Union, the bank had no rules or protocols for combating money laundering until J.P. Morgan Chase terminated its dealings in March 2012 under the pressure of Italy's Central Bank. As soon as that happened, the Vatican bank started experiencing a sudden downfall.
Pell, who was an outsider from the English-speaking world, was brought in to oversee the Vatican's often muddled finances after decades of control by Italians. Immediately, he put together a team of professionals and began trying to sort through the Vatican's economic beehive, including making current practices more transparent.
As of Jan. 1, each department will have to enact "sound and efficient financial management policies" and prepare financial information and reports that meet international accounting standards, according to Reuters.
"The responsibilities of the Secretariat for the Economy are limited to the Holy See, Vatican City State and the almost 200 entities directly answerable to the Vatican," he said. "But already some cardinals and bishops have wondered aloud whether the new set of financial procedures and chart of accounts, introduced in November this year in the Vatican, might be sent to bishops' conferences for consideration and use. This is something for the future."
Reforms were "well under way and already past the point where the Vatican could return to the 'bad old days,'" he said in the article.
