Cleaning Up The Vatican: Cardinal Pell Bares Discovery Of Hundreds Of Millions Of Hidden Euros

Suddenly, like magic, the Vatican has found itself awash in cash.

In an extraordinary revelation, Cardinal George Pell, the Australian prelate charged by Pope Francis with cleaning up the Vatican's murky finances, has disclosed that they discovered "hundreds of millions of euros ... tucked away" in accounts of various Holy See departments that did not appear in the Vatican's official balance sheets.

Writing in the first issue of the Catholic Herald weekly magazine published on Friday, Dec. 5, Pell said the discovery meant that overall Vatican finances were in better shape than previously thought. "It is important to point out that the Vatican is not broke ... the Holy See is paying its way, while possessing substantial assets and investments," the cardinal said.

The Pope earlier appointed Pell to the new Vatican post of Prefect of the Secretariat for the Economy to oversee the Vatican's often muddled finances after decades of control by Italian prelates. The post is independent of the now downgraded Secretariat of State.

Speaking bluntly about the financial mess he found when he assumed his new job earlier this year, Pell said he was asked recently by a member of a British parliamentary delegation: "Why did the authorities allow the situation to lurch along, disregarding modern accounting standards, for so many decades?"

He said he responded by stating that "those in the Curia were following long-established patterns." The Curia is the central administration governing the Roman Catholic Church.

"Just as kings had allowed their regional rulers, princes or governors an almost free hand, provided they balanced the books, so too did the popes with the curial cardinals," he said.

He explained further: "Congregations, Councils and especially the Secretariat of State enjoyed and defended a healthy independence. Problems were kept 'in house'... Very few were tempted to tell the outside world what was happening, except when they needed outside help ... It was impossible for anyone to know accurately what was going on overall."

The cardinal hinted that for centuries unscrupulous figures took advantage of the Vatican's financial naiveté and secretive procedures.

But he said things have changed. New structures and organizations are bringing Vatican finances into the 21st century, and making their workings transparent, with full accountability, Pell said.

He said the involvement of lay experts is a principal component of the financial reforms in the Vatican. He revealed that at the start of the New Year, the Vatican will name a lay person as auditor general who will be answerable to the Pope but will have autonomous power to conduct audits of any agency of the Holy See at any time.

"Donors expect their gifts to be handled efficiently and honestly, so that the best returns are achieved to finance the works of the Church, especially those aimed at preaching the Gospel and helping the poor escape from poverty," Pell said. "A Church for the poor should not be poorly managed."

He said the reforms are designed "to make all Vatican financial agencies boringly successful, so that they do not merit much press attention."

He said his office sent a letter to all Vatican departments last month about changes in economic ethics and accountability.

At the start of 2015, he said each department will have to enact "sound and efficient financial management policies" and prepare financial information and reports that meet international accounting standards.

Each department's financial statements will be reviewed by a major international auditing firm, he added.

Pell also disclosed that bishops worldwide are eager to learn lessons from the Vatican's financial overhaul. "The responsibilities of the Secretariat for the Economy are limited to the Holy See, Vatican City State and the almost 200 entities directly answerable to the Vatican. But already some cardinals and bishops have wondered aloud whether the new set of financial procedures and chart of accounts, introduced in November this year in the Vatican, might be sent to bishops' conferences for consideration and use. This is something for the future," he said.

Since Pope Francis' election in March 2013, the Vatican has enacted major financial reforms to prevent money laundering. It has closed many suspicious accounts at its scandal-rocked bank.

Pell said the reforms were "well under way and already past the point where the Vatican could return to the 'bad old days'."