Filenews 25 April 2025
The choice of Pope Francis' successor comes at a critical time for the Catholic Church. Those familiar with what is happening in the Vatican say that religious issues will not be the only ones discussed by the 135 cardinals of the Conclave. Some focus on "administrative" experience and who could be the ideal "CEO" of the Vatican.
This dimension may come as a surprise to those who consider the Holy See alone as the home of the world's 1.4 billion Catholics. The Vatican is a sovereign state with diplomatic missions in 183 countries. Thus, the next Pope should not only be a religious leader and a good communicator, but also have the skills of a top CEO. Or, as National Catholic Reporter columnist Thomas Reese put it 12 years ago, when Francis was chosen: "In short, they want Jesus Christ with an MBA."
The Pope has more executive powers than any CEO on the planet – and he doesn't have to be accountable to the board or shareholders. During his tenure, Francis did more than any other pope to bring the Holy See into line with modern economic practices and no longer operate in the shadows, without oversight or controls. Despite his ambition to act as a reformer, Francis was forced to wage a "secret" internal war with Vatican bureaucrats who attempted to undermine his efforts. The "traditionalists" who did not take kindly to Francis' reforms need a new Pontiff who does not appreciate the historical significance of the changes enacted by his predecessor. A Pope who will not be a good "CEO" can reopen the door to the old... bad days of the Vatican.
In 2012, a year before Francis was proclaimed pope, the Europe-based Committee of Experts on Anti-Money Laundering and Countering the Financing of Terrorism (Moneyval) had issued a 241-page report on the historical audit of the Institute for the Works of Religion (IOR) – commonly known as the Vatican Bank. For the first time in history, the public was able to "see" the finances of the Holy See. At the time, the IOR had assets of more than $8 billion in 33,000 accounts. The Vatican Bank, which has been at the center of many scandals since its founding in 1942 — from being favoured by the Nazis to being involved in money laundering activities — could not be considered a medium-sized bank, by American standards.
The Moneyval report noted that the Vatican did not comply with half of its 45 guidelines. Of the 16 "key and main recommendations," in which the Vatican had to achieve a positive score in all of them to be able to join the OECD's "white list," it failed in seven. And the IOR's oversight team, the Financial Intelligence Authority (AIF), also received a poor assessment.
When Francis was elected pope in March 2013, the Catholic Church was losing believers in Latin America and Africa. In the early years of his tenure, several U.S. dioceses filed for bankruptcy due to court rulings and settlements in sexual abuse cases. As a Jesuit priest from Argentina who was particularly wary of capitalism, Francis — named after St. Francis of Assisi, an advocate of poverty and austerity — promised to be a reformer and pledged to be more transparent. After his election, Pope Francis declared: "Oh, how I would like a poor Church, and for the poor."
He had inherited a system from the 1960s. The Holy See's finances were informally supervised by the Secretariat of State, while the Administration of the Apostolic See's Heritage (APSA) acts as the central bank of Vatican City, responsible for real estate and other assets, which include more than 5,000 historical, residential, and commercial properties in Italy, France, Switzerland, and the United Kingdom: from Beaux-Arts buildings in the heart of Paris to a two-storey unit housing a Bulgari store in London's chic Mayfair district. There are also countless architectural treasures, such as the 14th-century Basilica of St. Anthony in Padua – properties that the Church considers literally priceless, as it values them historically and artistically at the symbolic price of ... €1 per property.
The Prefecture of Economic Affairs of the Holy See is in charge of managing the budgets and balance sheets of the Church. In addition, there is the Vatican Bank, which is administered separately from the Curia, and the Vatican City State, which has revenue from tickets to the Vatican Museums and sales of stamps, coins, and souvenirs.
The Moneyval report could serve as a "guide" for the reform of the Vatican Bank, but Francis surprised the bank's insiders when he announced that if a fundamental change in its operation was not possible, he would even consider closing it. He had not even completed a year in his position before issuing a historic decree for the establishment of a new department, the Secretariat for Economy. The new Department absorbed most of the responsibilities held by the Secretariat of State, the APSA and the Prefecture, giving it unprecedented authority over the Vatican's finances and demanding greater transparency. Francis chose one of his closest advisers, Australian Cardinal George Pell, as head of the Economy Secretariat. Pell was accountable only to the Pope and three newly established bodies authorized to inspect the budgets for about 20 parts of the Church.
With Francis' support, Pell instructed that each section of the Vatican should report on its balance sheet all funds it receives from outside sources. This put an end to the usual practice of hiding large donations from actors outside the Vatican who tried to influence church politics. And for the first time in the history of the Vatican, Francis brought in a professional external auditor, PricewaterhouseCoopers, to audit every account and budget.
In 2014, Francis announced that he would not close the Vatican Bank. He decided instead to reorganize it completely. It transferred its investment work – the Bank then owned assets of €8.2 billion, of which $4.6 billion in assets under management – in a new department. He also replaced the head and directors of the Vatican Bank with a team of Europeans and Americans with extensive experience in private finance and what is happening on Wall Street.
"The goal is to become a model of good practice in financial management," Cardinal Pell said in 2014.
The Vatican Bank published its annual report for 2013 on the same day as its reorganization. It was further proof that Francis was renewing the way the Vatican operated. About 3,500 bank accounts had been closed in the previous year, many of them owned by tycoons and powerful figures on the Italian political scene. Francis transferred the investment activities of the Vatican Bank to a newly established division, Vatican Asset Management.
Francis' restructuring of the Vatican Bank meant that it would be used primarily as a payment service and financial advisor for Catholic Church charities, religious orders, and Vatican City employees. The Vatican Bank would no longer deal with the purchase and sale of real estate and stocks.
Francis expected the bureaucratic resistance of the services that were losing their power and influence. Often the backlash was expressed publicly, such as when the Vatican's deputy undersecretary unilaterally tried to cancel an external audit in 2016 by PricewaterhouseCoopers. Other times the resistance was sub rosa. Pope Francis was so popular with the faithful of the Catholic Church that his internal enemies who wanted to undermine his reforms decided to attack Pell. Evidence was leaked to the press showing that the Pell Secretariat was making exorbitant expenses, while cutting the budgets of other departments. The Vatican dismissed these reports as "fiction." When that didn't work, Pell's enemies encouraged investigators from a government commission in Australia to look into "rumours" that he had mishandled clergy sexual abuse cases when he was archbishop of Sydney.
In early 2016, Australian investigators searched for Pell for three nights in a hotel in Rome. This research encouraged some of the Vatican's "old guard" to believe that all they had to do was... patience. In 2017, Francis gave Pel permission to travel to Australia and clear his name of allegations that he had abused two boys in the 1990s. The Secretariat for Economy never fully recovered after Pell was convicted in 2018 of five counts of child abuse. (The Court of Appeal overturned the convictions in 2020.)
Without Pell, Francis often seemed hesitant amid conflicting interests between "traditionalists" and reformers. The conservative wing argued that the Vatican Services are like the ministries of any state – therefore, there must be a degree of confidentiality when formulating their budgets.
It wasn't long after Pell's conviction that the first signs of a possible financial scandal resurfaced in the Vatican. An internal investigation was launched by the Holy See regarding rumours of a deal to buy and sell a property worth €350 million in London. In 2021, the Vatican launched the largest criminal prosecution in its history, where Cardinal Angelo Betsio and nine other people were charged with fraud or criminal failure to act to prevent fraud, after €136 million was "lost" in the case of the property in London. The trial lasted more than two years and included other financial irregularities.
By the end of the trial in 2023, with the conviction of Cardinal Betsios for embezzlement and other confessions, the original purpose of the case had been lost in... tsunami of journalism and the questioners who felt that the Vatican's bad money habits were too deeply rooted for the Pope to correct.
But not all economic developments were unpleasant for the Pope. Moneyval issued a report last May, noting that the Holy See had made great progress since its first assessment in 2012, both in the fight against terrorist financing and in preventing money laundering. The measures implemented by Francis at the Vatican Bank were deemed so effective that Moneyval will not carry out a new audit until 2028.
Last month, while the Pope was hospitalized, the Vatican issued a decree setting up a Commission on Donations to the Holy See. Consisting of a president and four members, this Commission reflected Francis' effort to offset the rising costs of running the Vatican by increasing charitable donations from ordinary Catholics and large private foundations.
Dependence on tourism and charity is not a very reliable way for a government to function – the Vatican increased ticket prices for its museums by 18% to €20 last year and attracted about 6.8 million visitors. But it is the system that the Holy See has been using for a century, and this is what the new Pope will inherit. Francis proved that charisma and a sense of empathy matter when it comes to donations. Contributions to Peter's Pence skyrocketed when Francis succeeded Pope Benedict XVI.
In 2023, Peter's Pence received $57 million, $53 million from donations — but spent $121 million, with most of the spending being covered by the Vatican's legacy. Almost 90 percent went to the Vatican's operating expenses.
The next pope will face a number of economic challenges as Francis' reform work remains unfinished. Internal disputes remain in the Holy See, and not all of the Vatican's financial affairs are governed by transparency. The Secretariat for Economy, which includes the APSA, but not the Vatican Bank or the Vatican City State, reported in 2023 that it had a budget deficit of 75 million euros. and its net assets had fallen by 6% to $4.6 billion. More than 50% of that money comes from APSA, its asset arm, which recorded net assets of $3 billion in 2023. Despite the profits generated by its real estate, the Secretariat still relies on external donations, which account for 45% of its revenues, plus a small contribution from the Vatican State – an entity that does not publish annual reports or record its GDP.
The Vatican Bank now manages money only for religious orders, the Curia, dioceses, cardinals, institutions and the Vatican State, its employees and pensioners. In 2023, it recorded a net profit of €34 million and managed assets of $6 billion. All its investments must be "consistent with the faith", following the principles of the Church's social dogma, the sanctity of life, respect for human life and respect for the environment. This requires a conservative investment strategy, with the Vatican Bank investing $2.3 billion in bonds and just $55 million in stocks.
A "headache" for the next pope will be the Vatican Pension Fund, which is maintained by contributions from Vatican officials. Francis had done the first audit a decade ago and discovered that the Fund had a deficit of €1.5 billion. He proposed measures to deal with it, but nothing has been done and the Fund remains in the "red". According to the most recent audit, in 2022, the Pension Fund showed a deficit of €631 million. In a letter to the College of Cardinals in September, Francis urged them to make further efforts to ensure that "zero deficit is not just a theoretical goal, but an achievable goal."
All these goals may change with the next Pope. While cardinals are generally divided into two camps when it comes to religious doctrine—traditional and progressive—the lines are not so distinct when it comes to financial management. Even those who run their own dioceses with "black" money are not familiar with the unique challenges faced by a pope.
Until the next pontiff is chosen, the incumbent pope is 77-year-old Dublin-born Cardinal Kevin Farrell, a naturalized U.S. citizen. He has abilities as a "CEO", but no realistic chance of being the next Pontiff. The same is true of most American cardinals. Although they are capable of administering large—and successful—dioceses, the Conclave does not seem willing to allow an American to be at the helm of the Roman Catholic Church.
Candidates to succeed Francis range from hardline conservatives, such as Cardinal Peter Turkson of Ghana, to progressive Cardinal Luis Antonio Tagle of the Philippines. Many who are still concerned about the loss of believers in developing countries believe that perhaps the time has come for the first pope from either Asia or Africa.
The first betting odds place the 70-year-old Vatican deputy foreign minister, Cardinal Pietro Parolin, as the favourite to become the next Pope, followed by Cardinal Taggle, Italy's Angelo Scolla and Canada's Mark Cuele. Those who study the Vatican, however, know that it is unwise to attach much importance to these considerations. The election of Francis proved that papal conclaves are unpredictable.
The spiritual vision of the next Pope may ultimately determine whether he will be an effective leader of the Catholic Church, but do not underestimate the importance of being a tough, unflinching CEO: with one eye on the sky and the other on the result.
Rendering – editing: Michalis Papantonopoulos
