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Pope Francis’s lay finance expert vows ‘no more scandals’

A Maltese economist tapped by Pope Francis to help lead a new finance council says the pope’s reforms will ensure that the sort of scandal which erupted last summer, involving a Vatican accountant allegedly enmeshed in a John le Carré-esque plot to smuggle millions in cash, becomes a thing of the past.

“We’re building a system of controls that will ensure these scandals never happen again,” said Joseph F.X. Zahra, who spoke to the Globe in an exclusive March 8 interview.

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Centering on a former Vatican official named Monsignor Nunzio Scarano, the smuggling scheme was only the latest financial scandal to engulf the Vatican, capping a period that also saw senior Vatican bank officials quit in the face of a criminal probe, and credit card services frozen at the Vatican over allegations of suspicious transactions.

Observers believe Francis’ efforts to promote financial glasnost are important not merely for the Vatican but to set a tone for the wider Catholic church, where accounting practices often remain informal and subject to abuse. A 2007 study by Villanova University, for instance, found that 85 percent of American dioceses had discovered instances of embezzlement within the previous five years.

Francis pressed his campaign on Saturday by appointing eight cardinals and seven lay financial professionals from around the world to serve on a new Council for the Economy, which will oversee the Secretariat for the Economy created by the pope in late February and led by Australian Cardinal George Pell.

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There are only two Italians on the new body, which includes members from twelve nations. Cardinal Daniel DiNardo of Galveston-Houston, vice-president of the US bishops’ conference, is the lone American.

Francesco Pecoraro/AP

Monsignor Nunzio Scarano was accused last year in a smuggling scheme.

The body’s senior lay member is Zahra, a former director of Malta’s Central Bank and a consultant who serves on a variety of corporate boards. He also heads a commission on the Vatican’s economic and administrative structures created by Francis last July.

Zahra said the watchwords are “transparency” and “checks and balances.”

“We’re going to have a complete landscape of proper governance,” Zahra said. “No institution will have unitary authority … because somebody else will always be checking up.”

Zahra said Francis wants to free up resources “to serve the poor and marginalized” and to promote “evangelization and pastoral activities.”

The following are excerpts from Zahra’s Globe interview.

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Globe: In layman’s terms, what’s the role of the new Council for the Economy?

Zahra: It’s part of a broad reform which has three components. The first is the new Secretariat for the Economy, which has been put on the same level as the Secretariat of State. [Note: By tradition, the Secretariat of State is the most powerful department in the Vatican.] It will be responsible for overseeing all the Vatican’s economic functions, including finances, procurement, human resources and so on.

The second is the Council for the Economy, which is not merely a consultative body. It has authority over the new secretariat and other economic departments. All annual budgets and financial statements will have to be approved by it. This is the first time at such a high level there’s been a council in which cardinals and laity are full members with the same voting rights.

The third element is the Auditor General, who will be appointed by the pope and who will report directly to him. The auditor general will conduct annual reviews of accounts, but also has the authority to carry out special investigations if they’re required.

Bishops have long complained that it’s impossible to get a straight answer from the Vatican about how much money it actually has. One year from now, will you know the answer?

That’s the idea, to be in a much stronger position to get the full picture of the Vatican’s financial situation. It’s a new venture and I can’t give any guarantees, but this is absolutely one of the reasons the council was created.

Once you have the information, will you make it public?

The pope wants transparency. We have to meet and discuss what we’re going to do, but it’s reasonable to expect that whatever’s released will have more detail than the current annual financial statement.

Can you promise that once this system is up and running, there won’t be any more Scarano scandals?

In addition to transparency, we’ll also have checks and balances. In the business world we call it the “four eyes approach.” We’re building a system of controls that will ensure these scandals never happen again. No institution will have unitary authority over its money and assets because somebody else will always be checking up.

The Financial Information Authority provides another mechanism to look into suspicious transactions and to take action. We’re going to have a complete landscape of proper governance.

What’s your experience as a lay person in a clerical world?

The issue isn’t whether one is a lay person or a cleric, because it’s always a question of personality and character. The trick is building relationships. We’ve had a difficult six or seven months because of the rhythm at which the pope wanted us to work, but that has nothing to do with dealing with clergy.

Our commission, made up almost entirely of laity, made a number of recommendations for reform that have been accepted. That says a lot about the willingness of the prelates in the Vatican to listen.

Have you run into an old guard in the Vatican resistant to reform?

Anytime an institution tries to change there’s always resistance. I would say the level of resistance we’ve run into so far is no different than any corporation or government I’ve encountered. What people have to understand is that holding on to the status quo is unsustainable, that they have to move with the times.

Pell has said he believes that within a short time millions, if not tens of millions, can be saved. Is that realistic?

The pope wants to avoid duplication and waste, and to move in the direction of simplification and rationalization. If we do that, money will be saved. I don’t know how much, but if we’re going to be effective, there’s no point in aiming at hundreds or thousands. We need to set the bar high and think in terms of millions.

For the pope, saving money isn’t an end in itself. He says this money is supposed to serve the mission of the church, especially helping the poor and marginalized. He wants it to go to health care, education, and development, as well as evangelization and pastoral activities.

There aren’t any women on the council. Why not?

The pope has spoken strongly about the role of women, and the absence of a woman on this one council in no way means they’re being barred or shut out. It’s more about the fact that the pope wanted to move fast. Five of the seven lay members were members of the study commission, while another is an advisor to the Prefecture for Economic Affairs, so they’re all known quantities.

As we get going, there’s nothing to stop us from drawing on advisors and consultants, and some of those people will definitely be women.

John L. Allen Jr. is a Globe associate editor, covering global Catholicism. He may be reached at john.allen@globe.com. Follow him on Twitter, @JohnLAllenJr, and Facebook, https://www.facebook.com/JohnLAllenJr
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