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Vatican funds rescue of Rome hospital linked to financial scandal

Vatican funds rescue of Rome hospital linked to financial scandal #Vatican #funds #rescue #Rome #hospital #linked #financial #scandal Welcome to Lopoid

The Vatican has completed a financial deal to save a Catholic hospital in Rome from closure. The Fatebenefratelli hospital, on an island in the middle of the Tiber river had faced closure as a result of mounting debts, connected in part to the current financial scandal and trial.

The Fatebenefratelli hospital, formerly run by the San Giovanni di Dio religious community, is now owned by a special company and will be run in partnership with the Gamelli Hospital Foundation, famous for treating several popes. According to Italian media reports, the rescue package, which sees the Vatican partner with a private company, is reportedly worth a total of 100 million euros, and was personally organized and approved by Pope Francis. 

Fatebenefratelli Hospital in Rome. Credit: Dguendel/wikimedia CC BY SA 3.0

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The deal was reportedly financed with investments from Luxottica, an Italian eyeglasses company, and from APSA, the Vatican’s central bank, sovereign wealth manager, and payroll administrator. APSA and Luxottica have jointly funded the project through the creation of a company called Società Isola Tiberina.

APSA previously funded the rescue of another Catholic hospital in Rome, via the Vatican’s Secretariat of State, in a move that raised questions about the bank’s adherence to Vatican and European financial regulations. 

In 2015, the Vatican’s own financial watchdog, the ASIF, concluded that APSA was no longer an “entity that carries out financial activities on a professional basis,” and explained that “APSA stopped being a part of AIF’s jurisdiction at the end of 2015” — meaning that APSA was exempted from future inspections by ASIF and by Moneyval, the Council of Europe’s anti-money laundering watchdog. 

Despite that decision, in 2019, the head of APSA, Bishop Nunzio Gallatino acknowledged that APSA had provided a 50 million euro commercial loan in 2014, in violation of the commitments  to ASIF and Moneyval that led to the 2015 exemption. The loan went to a foundation co-owned by the Secretariat of State, and was used to finance the purchase of Rome’s IDI hospital, which had collapsed under 800 million euros of debt related to money laundering, embezzlement, and fraud charges.

Cardinal Parolin later acknowledged that he had acted to secure the loan from APSA, despite a 2012 prohibition on such loans. Parolin also claimed to be responsible for a grant request to the U.S.-based Papal Foundation for $25 million which was intended to help cover the loan at APSA. When the grant stalled and the loan was not repaid, APSA had to write off 30 million euros in bad debt, wiping out its profits for 2018.

The announcement this week of the Fatebenefratelli recuse deal comes after the Vatican confirmed in October last year that it was helping to develop a “recovery plan” to resolve the long-standing “economic and management crisis” at the hospital, caused by crippling levels of debt.

Among those debts, Italian authorities have been investigating for several years whether businessman Gianluigi Torzi, who is also on trial in the Vatican for extortion, committed a multi-million euro fraud against the hospital.

Authorities are investigating whether companies owned by Torzi defrauded the Fatebenefratelli when they helped convert debts owed to the hospital into securities which could be sold at a diminished value to raise cash for hospital operations. 

There are conflicting reports in Italian media about exactly how Torzi’s companies are believed to have defrauded the hospital, but generally they are described as having realized large commissions and exorbitant service fees for their work, while allegedly withholding some funds owed to the hospital.

Torzi has maintained his innocence.

Torzi has also been implicated in a similar scandal involving securitized debt, together with his long-time business associate Giacomo Cappizzi. 

Capizzi was the administrator of the Sierra One Bond, a financial product valued at 100 million euros, made up of receivables owed to Italian hospitals and related vendors, that was packaged and sold by Torzi’s company Sunset Enterprise Ltd. 

Included within the Sierra One bond were debts issued by facility management company Esperia SpA, which was ordered into forced liquidation for alleged ties to a Camorra mafia crime family in July, 2018.

The Pillar has previously reported that Raffaele Mincione, the businessman who for years managed hundreds of millions of euros in Vatican funds for the Secretariat of State, and who sold the Vatican the London building at 60 Sloane Ave., had business connections to Torzi, who was engaged by the Secretariat of State to broker its separation from Mincione and finalize the purchase of the London building. 

Company records examined by The Pillar show that, on Dec. 31, 2018, one month after the completion of the building’s sale, a fund through which Mincione invested Vatican assets under his management held 3.9 million euros of investment in Sierra One SPV SrL, a financial special purpose vehicle made up of receivables owed to Italian hospitals and related vendors.

Both Mincione and Torzi were among 10 individuals charged in the Vatican’s ongoing financial crimes trial, which began last July, following a two-year investigation into the Secretariat of State’s financial dealings.

Torzi is charged with extorting the Secretariat of State for 15 million euros in exchange for control of the London building after ownership of the building was transferred during the purchase to his Luxembourg holding company, Gutt SA.

Mincione is also on trail in Vatican City, facing related charges of abuse of office, fraud, embezzlement, and money laundering. 

Both Mincione and Torzi maintain their innocence, the trial is ongoing.

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