- Calvi’s relationship with the Italian Mafia, as well as the mysterious disappearance of hundreds of millions of dollars in church assets, demonstrated how deeply organised crime had penetrated the Holy See’s financial arteries.
- Under its hallowed image, the Vatican has long maintained a financial empire like a sovereign hedge fund rather than a purely spiritual entity.
- The Vatican vowed to reform that year and began working with international financial supervision agencies such as Moneyval… However, practical progress has been slow.
- With its finances in disarray and moral authority tarnished by secrecy and scandal, the question is whether meaningful reform can come from within or if outside forces must step in.
The Vatican is one of the most powerful institutions in human history, shrouded in mystery and steeped in formality. It is tucked within the fortified walls of the world’s smallest sovereign state. While it claims to be the custodian of spiritual truth for over a billion Catholics, the incense and solemn rites conceal a complicated network of finances, political manoeuvrings, and debates on par with any secular power. This article delves deeply into the Vatican’s current financial problems, historical ties to corruption, and explosive criticisms, such as those found in NS Rajaram’s Dead Sea Scrolls and the Crisis of Christianity. In a day when transparency is expected of all institutions, the Vatican remains one of the last bastions of impenetrable opacity.
Vatican Finances: A House Built on Sand?
In early May, the Wall Street Journal published an astonishing exposé: the Vatican’s annual deficit has tripled since Pope Francis assumed office in 2013[1]. Even more concerning are its pension commitments, estimated at €2 billion, which remain mostly unfulfilled. While Pope Francis has pushed for financial changes, the outcomes have been disappointing at best. The Holy See’s repeated promises of transparency and accountability have frequently been eclipsed by internal opposition and murky accounting.
This isn’t the Vatican’s first experience with financial instability. In the 1980s, the Banco Ambrosiano scandal dominated international headlines. Roberto Calvi, called “God’s Banker,” was discovered hanging under London’s Blackfriars Bridge in 1982, and his death was officially judged a murder.[2] Calvi previously served as chairman of Banco Ambrosiano, a financial organisation with close ties to the Vatican Bank, which was then run by Archbishop Paul Marcinkus. Calvi’s relationship with the Italian Mafia, as well as the mysterious disappearance of hundreds of millions of dollars in church assets, demonstrated how deeply organised crime had penetrated the Holy See’s financial arteries. Calvi said that the Vatican’s fortune was around $10 billion when he died. However, independent estimates from 1975 put the sum as high as $30 billion.[3] Despite its massive holdings, the Vatican Bank (formally known as the Institute for the Works of Religion) is notoriously hidden, with little monitoring from any external regulatory authority.
Fast forward to the 2020s, and the controversies have not stopped. Cardinal Angelo Becciu was prosecuted and convicted of corruption and abuse of office in 2022, making him the highest-ranking Vatican official.[4] The scandal revolved around a failed €350 million investment in expensive London real estate, which was funded, paradoxically, by donations from the devout via Peter’s Pence. Becciu’s trial, the Vatican’s largest in modern history, exposed not only financial incompetence but also systemic corruption among senior officials.
The Unholy Ledger: Investments, Ethics, and Opacity
Under its hallowed image, the Vatican has long maintained a financial empire like a sovereign hedge fund rather than a purely spiritual entity. Through political bargains, wartime alliances, and clever investments, it has grown into one of the world’s most secretive and ethically opaque financial powers. The Lateran Treaty, commonly known as the Concordat, was signed between the Holy See and Benito Mussolini’s fascist administration in 1929, which laid the groundwork for this shift. Mussolini offered the papacy significant concessions in exchange for the Vatican’s formal recognition of the Kingdom of Italy and its annexation of Rome, including full sovereignty over Vatican City and a substantial financial settlement of 750 million lire in cash and an additional 1 billion lire in Italian government bonds.[5]
To manage Mussolini’s regime’s 1929 windfall, Pope Pius XI selected layman Bernardino Nogara to lead the Vatican’s Special Administration. Nogara agreed only provided religious restrictions were lifted and he could invest globally. The Pope agreed, marking a significant shift in Vatican finances. Nogara amassed a massive, profit-driven portfolio, investing in businesses such as weaponry and banking, and even financing Mussolini’s military operations. Returns trumped ethics, paving the way for decades of opaque and contentious investments.
The Vatican’s annual deficit has tripled since Pope Francis assumed office in 2013.
Nogara’s appointment represented a watershed moment in Vatican finances. Tasked with increasing earnings, he developed a global portfolio that included weaponry, banking, and enterprises that contradicted Church precepts. He sponsored Mussolini’s campaigns and purchased weapons factories in preparation for war. Under his direction, the Vatican engaged in currency speculation and opaque financial practices, some of which bordered on fraud and money laundering, all while protected by religious immunity.
As the Vatican’s assets expanded under Nogara’s leadership, the need for a formal financial organisation became clear. This resulted in the foundation of the Institute for the Works of Religion in 1942, also known as the Vatican Bank, by Pope Pius XII ostensibly to fulfil the Church’s religious and philanthropic objectives.
For years, the bank has faced allegations of money laundering, tax evasion, and dubious transfers. The bank’s director and deputy were fired in 2013 after being investigated for illegal financial practices.[6] The Vatican vowed to reform that year and began working with international financial supervision agencies such as Moneyval, the Council of Europe’s anti-money laundering arm.[7] However, practical progress has been slow, with reforms frequently hampered by internal resistance and a lack of political will.
While the Vatican preaches moral ideals from the pulpit, its investment portfolio provides a more mixed picture. According to a variety of critical studies and assessments, including assertions made in NS Rajaram’s work, the Vatican has directed funds into industries that contradict its doctrinal beliefs. Allegations include investments in companies that make birth control pills, military hardware, and even firearms.[8] These disclosures highlight a fundamental contradiction: the Church condemns abortion and violence, but its financial apparatus appears to profit from both. This dichotomy—moral judgment on the one hand, economic opportunism on the other—has fueled distrust among both believers and outsiders.
The Church condemns abortion and violence, but its financial apparatus appears to profit from both.
Drawing on the work of Baigent and Leigh, he contends that the modern Catholic Church has strayed far from its spiritual compass.[9] He claims that its financial activities are more like those of a global organisation, with a focus on stability, control, and wealth acquisition rather than dogma. Rajaram cites the Vatican’s investment arm, APSA (Administration of the Patrimony of the Apostolic See), as a vehicle for investments that are not declared or ethically consistent with Church doctrine.
For a Church built on truth and justice, secrecy and questionable investments threaten its moral authority. With rising scrutiny, the Vatican must reform—or risk losing relevance.
Sexual Abuse Scandals: A Crisis of Conscience
While financial malfeasance casts a long shadow, nothing has harmed the Vatican’s moral reputation as much as the global avalanche of child sexual abuse allegations. These crimes have been methodically buried over continents and decades through silence, cover-ups, and complicity.
Although the problem has existed since at least the 1950s, the first significant media storm erupted in the 1980s and continued to grow until the early 2000s. Pope Francis declared a zero-tolerance stance when he first took office.[10] In 2019, Pope called a meeting of Church officials to break the long-standing veil of “pontifical secrecy” around abuse accusations.
However, for many survivors, these interventions are insufficient and come too late.[11]
According to Anne Barrett Doyle of BishopAccountability.org, while Francis’ language differs from that of his predecessors, genuine change remains elusive.[12] Cases such as Gabriele Martinelli’s, an Italian priest convicted in a Vatican City court for molesting altar boys within the Apostolic Palace, show how widespread the problem is, even at the heart of the Church.[13]
In Chile, the abuse issue came to a head in 2018, when every bishop resigned following an internal inquiry that found extensive cover-ups.[14] In the United States, the Los Angeles Archdiocese paid a record $660 million in settlements in 2007. Surprisingly, that figure was eclipsed in 2024, with a $880 million payout—an economic toll that reflects the tremendous magnitude of devastation.[15]
Conclusion: A Moral Reckoning
The Vatican is experiencing a crisis of trust, not just faith. With its finances in disarray and moral authority tarnished by secrecy and scandal, the question is whether meaningful reform can come from within or if outside forces must step in. Pope Francis’ decade-long papacy may be remembered more for what he attempted to mend than what he accomplished. And, since the Vatican continues to function behind closed doors, both believers and sceptics are left with the same disturbing question: Who watches over the shepherd?
References:
- [1]The Vatican Financial Mess Pope Francis Couldn’t Fix
- [2]Mafia boss breaks silence over Roberto Calvi killing
- [3] Yallop, D. (2012). In God’s name. Robinson.
- [4] Cardinal convicted of financial fraud bows out of conclave to elect new pope
- [5] Rajaram, N. S. (1997). Dead Sea Scrolls and the Crisis of Christianity: An Eastern view of a Western crisis. London: Minerva Press.
- [6] Vatican Bank Director Resigns Amid Scandal
- [7] Vatican bank promises sweeping change as senior staff resign
- [8] Rajaram, N. S. (1997). Dead Sea Scrolls and the Crisis of Christianity: An Eastern view of a Western crisis. London: Minerva Press.
- [9] Baigent, M., & Leigh, R. (2001). The Dead Sea Scrolls Deception. Random House.
- [10] Abuse victims question if Pope Francis did enough to stop predators
- [11] Pope Francis had a troubled course on dealing with clergy sexual abuse
- [12] Pope Francis’ troubled course on addressing clergy sexual abuse
- [13] Vatican convicts priest accused of abuse at papal altar boys’ school
- [14] Chile police raid Catholic church HQ in sex abuse investigation
- [15] Archdiocese of Los Angeles Agrees to Pay $880 Million to Settle Sex Abuse Claims
Pranav S is a Project Assistant at the Energy Department, Government of Karnataka with an MA in Public Policy. Views expressed are the author’s own.
Abhinav Sharma 
Lakshmi Karlekar & HM Greeshma 
Megna Devkar