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Vatican Facing Default After Sex Scandals

“There is no such thing as bad publicity,” is a phrase attributed to circus promoter P.T. Barnum. While this holds true for many professions, keeping and dispensing religious faith is not among them.

A tidal wave of sex scandals that prove institutionalized abuse among Catholic clergymen is rocking the Vatican boat to the point of tipping over. The British Telegraph indicated that donations from followers of the Catholic Church are drying up after 3,000 confidential documents were obtained by Italian investigative journalist, Gianluigi Nuzzi who then featured the hush-hush information in a book titled Universal Judgment.

Archbishop Nunzio Galantino, president of the Vatican real estate and assets management office, was quick to deny the accusations during the Italian bishops’ conference on October 22, 2019. The solution was simple, said the Archbishop: conduct a “spending review” to slash budget expenses.

It’s about time. “The Vatican hasn’t published a budget since 2015 and has been without an in-house auditor or economy minister for more than two years, fueling conspiracies about its financial health.”

In one document acquired by author Nuzzi, a Vatican official wrote:

“The deficit is recurring and structural and has reached worrying levels. We risk default if no urgent steps are taken.”

This insider intel jives with a Business Insider article from July 5, 2012, that said the Vatican’s 2011 budget was “one of its worst budget deficits in years, plunging back into the red with a €15 million ($19 million) deficit in after a brief respite of profit.”

The Vatican attributed the financial shortfalls to the high costs for staff and communications coupled with a down market, particular in the real estate sector. Vatican Radio, television, and the Vatican newspaper L’Osservatore Romano are all expensive and generate little or no significant revenue.

The Vatican’s annual report admitted that “Not even a €50 million [$55 million] gift to the pope from the Vatican bank and increased donations from dioceses and religious orders could offset the expenses and poor investment returns.”

Vatican losses rose from €32 million [$35.6 million] in 2017 to nearly €44 million [$49 million] in 2018.

Universal Judgment claims that the Vatican’s real estate portfolio, worth an estimated €2.7 billion ($3 billion), was mismanaged. About 800 properties sat empty, with 15 percent of the 3,200 rented properties leased for free or below-market rates.

Nuzzi painted an unappealing picture of Vatican rivalries and greed, charging the Pontiff’s team of cooking the books. He called out the Holy City Fathers for making a mess of money management and getting tangled up in bad real estate deals, writing:

“If the pontificate of Frances fails, it won’t be because of the attacks of conservative Catholics or the crisis in vocations or because of the declining number of faithful. It will be because of the financial collapse that is coming ever closer.”

The author compared the Holy See’s deficit to “a voracious and insatiable parasite, attacking wealth that was accumulated over the centuries from the pious offerings of the faithful.”

Millions of Catholics around the world disapprove of the hypocrisy exposed by allegations of underage pedophilia among the prelates that have proven true in court. Australian Cardinal George Pell is serving prison time after his conviction of sexually assaulting teenage boys in the state of Victoria.

According to a Gallop poll published on January 11, 2019, 31% of Catholics give the clergy’s honesty a high rating, down from 49% in 2017.

Even Pope Francis admitted that the Catholic Church’s “credibility has been seriously undercut and diminished by these sins and crimes, but even more by the efforts made to deny or conceal them.”

The Vatican established an emergency task force to deal with its budgetary shortcomings.

There have been so many accusations of rape and sexual molestation involving priests and cardinals that the faithful are voting with their wallets and opting out of adding more wealth to the Vatican’s treasury.

In 2006, the church collected €101 million ($112 million) in contributions. Ten years later, donations were down to €70 million ($77.9 million).

The Vatican has arrested Gianluigi Nuzzi and a second author of a recently-published Vatican tell-all, Emiliano Fittipaldi. They are facing legal charges brought by the Holy See that rest on the leaked documents, called “the unauthorized and illicit sharing of sensitive and privileged documents and information.”

The two defendants, both investigative journalists, have accused the Vatican of attacking freedom of the press. The maximum penalty, if convicted, is eight years imprisonment.

Pope Francis has blessed the trial which includes three other defendants – Spanish priest Monsignor Lucio Vallejo Balda, his secretary Nicola Maio, and Francesca Immacolata Chaouqui, a public relations expert who sat on a commission which advised the Pope on economic reform.