Reforming the Vatican

Curia

Joseph F X Zahra

November 2015

Three Parts

• Introduction to the Centesimus Annus Pro Pontifice Foundation

• Pope Francis and reform

• The reforms in the Vatican Curia

Introducing Centesimus Annus

Pro Pontifice Foundation

Centesimus Annus – Pro Pontifice Foundation

• Saint John Paul II encyclical “Centesimus Annus” on May 1st, 1991, the 100th anniversary of Pope Leo XIII encyclical “Rerum Novarum”

• Foundation set up in June 13th 1993… “to help diffuse the basic principles of the social doctrine of the Church … and look for new sources of funding for the activities of the Holy See.”

• The Foundation is based at the Vatican.

• Today the Foundation has members from fifteen countries around the world including of course the United States of America and Canada.

• The main event of the Foundation is the Annual Convention in the Vatican in May of each year. Top speakers are invited to reflect and speak about the application of Catholic Social Teaching in the social and economic context of today.

A Foundation that serves…

• This is a highly dynamic Foundation… transforming itself more as a think-

tank on Christian social teaching.

• The last major project that involved meetings in Rome, New York and

Dublin is the “CAPPF Statement of 2015” which took up the challenge of

proposing the way forward in reforms in the financial sector.

In brief, the Foundation…

… promotes informed knowledge of the social teachings of the Church and of the activity of the Holy See among qualified and socially motivated business and professional leaders

…promoted initiatives aimed at expanding the Church’s effective role in all sectors of contemporary society

…promotes fund raising activities to help support the activity of the Holy See.

(www.CAPP-USA.org)

Pope Francis and

economic reform

Pope Francis and the economy

• The Catholic Church says that the “business economy has many positive

aspects – its basis in human freedom exercised in the economic field”

(Centesimus Annus,32)

• Free culture, free markets and free polities that create a free society.

Democracy and market economies go hand in hand … but they are also risky

and can be abused.

The “problem” is people and its culture not the

economic system

• The “pathologies” eating away at our society and our environment are the fault of

ethical and cultural systems, not economic ones.

• Pope Francis says… “this time of crisis…a human crisis: it is the human person that

is in crisis! Man himself is in danger of being destroyed!” (Address in St Peter’s

Square, 18 May 2013)

• Benedict XVI in Caritas in Veritate… the “conviction that the economy must be

autonomous that it must be shielded from “influences” of a moral character, has led

man to abuse the economic process in a thorough destructive way.”

The economy operated by persons is therefore

not autonomous

• The monstrosity of social decay, poverty, marginalisation is a result of human abuse of the economy

• Pope Francis points at one specific way of doing the economy… “thou shalt not to an economy of exclusion and inequality – such an economy kills.”

• Pope Francis: “the crisis will not be completely over until situations and living conditions are examined in terms of the human person and human dignity…our duty is to continue to insist…that the human person and human dignity are not simply catchwords, but pillars for creating shared values and structures.” (address to conference of FAO).

Pope Francis provokes us…

• Pope Francis is provoking us to re-think and reform the economic system in a way that addresses the social problems created by its misuse and abuse…

• Poverty, marginalisation… resulting from greed and selfishness, dishonesty, lack of transparency

• But this is done by means of SOLIDARITY… “which allows all people to become artisans of their destiny” “Every person is called to self-fulfilment” (Evangelii Gaudium, 190)

Pope Francis and the human person

The integrated human person as a…

Person of DIGNITY – from work, through family

Person as an INVENTOR – to improve the quality of life of every person without distinction

The solution is through GIVING – GRATUITOUSNESS – THE GIFT OF OURSELVES… for the COMMON GOOD

Pope Francis is a prophet

• Why does the economy need to be reformed? The context has changed… globalisation, technology, nature of work

• Decision making by business and consumer – ethical decisions

• Long term investment – intergenerational

• Growth (quality of life), Profit (investment in R&D) – the purpose of business is the common good – develop a culture of service to society

• We have a choice between what is right and what is wrong

• It is us who have to make that choice.

Reforms at the Vatican

Curia

Chirograph of July 18, 2013 by Pope Francis

• “The reflections of recent days…have led us to…proceed with the introduction of

reforms in the institutions of the Holy See with a view to simplifying and

rationalising the existing structures and programming more attentively the

economic activities of all Vatican administrative bodies…”

Establishing COSEA

• The Holy Father established COSEA, a Commission to investigate the administrative and economic matters of the Holy See and the Vatican City State, and offer technical recommendations:

• Avoid duplication of economic resources

• Favour transparency in the acquisition of goods and services

• Enhance the administration of patrimony

• Ensure the correct application of accounting principles

COSEA

The Commission was…

Composed by 7 lay experts and one clerical secretary

Supported by external consultants focused on specific projects

Meeting in plenary form on a monthly basis between August 2013 and May 2013

Recommendations on principles for reforms

• Establish the “four eyes principle” in the administration of economic

matters

• Separate and diffuse any concentration of power and authority that had

developed in the Vatican itself and in a number of dicastries

• Promote transparency and adopt international standards in accounting

and reporting and apply them to all entities and administrations

In simpler terms…

• Simplicity

• Rationalisation

• Elimination of waste

• Checks & Balances

• Integrity and honesty

• Challenge the “status quo”

The break-through: the Motu Proprio “Fidelis

Dispensator et Prudens”

• The Apostolic Letter “Fidelis Dispensator et Prudens” of the 24th February 2014 designed the new structures of the Vatican.

• Guided by two principles :

Universality

Technical expertise – lay experts contribution

Three New Structures

• The Council for the Economy

• The Secretariat for the Economy

• The Auditor General

Associated Institutions

• Governatorato

• IOR

• Vatican Media

• Hospitals

IOR reforms

• The Institute for Religious Works

• It is not a Bank nor a commercial financial services provider

• It provides a service and advice to Catholic institutions that serve the pastoral and evangelical mission of the church globally

• It has now conducted a thorough review of its customers… closely supervised by the Vatican regulator AIF (Autorita’ di Informazione Finanziaria).

• It publishes since 2 years ago its comprehensive Annual Report

• It guarantees full compliance to international regulatory standards and transparency

AIF – Autorita’ d’ Informazione Finanziaria

• The competent authority of the Holy See/Vatican City State to fight money

laundering and financing of terrorism.

• … financial intelligence unit, a supervisory unit …

• For both prudential purposes and the prevention and countering of money-

laundering and financing of terrorism

The New Structures

The Council for the Economy

• 15 members, 8 cardinals and bishops, 7 lay experts of various nationalities with recognized professional financial competence

• Is chaired by a Cardinal Coordinator

• Has oversight for the administrative and financial structures and activities of the dicastries of the Roman Curia, the institutions linked to the Holy See, and the Vatican City State.

• Reports directly to the Holy Father

• Recommends consolidated annual budgets and financial statements for approval to the Holy Father

The Secretariat for the Economy

• Responsible for administrative services as well as financial control and

vigilance over the dicastries of the Roman Curia.

• Implements policies and procedures related to administration, procurement

and human resources

• Acts as an executive arm to the Council for the Economy

• Is headed by the Prefect of the Secretariat

The Auditor General

• Independent and autonomous from all other structures

• Performs specific and regular audits over entities and administrations

• Receives and investigates on any reports upon request from the Council for

the Economy

• The Auditor General is a senior lay expert

Conclusion

• All three structures are operating effectively and efficiently

• Professionalism and transparency

• Universal standards of accounting

• Control mechanisms are in place

• Improvement of programmes and higher levels of efficiency to ensure better

support to the poor and the marginalised.