Vatican auditor sues over ouster as new dirty laundry aired

VATICAN CITY (AP) — The Vatican’s first auditor general and his deputy have sued the Holy See for 9.3 million euros ($9.5 million) for wrongful dismissal, as a new litigious chapter opens in Pope Francis’ troubled financial reform effort.

In a lawsuit made public Thursday, Libero Milone and his deputy, Ferruccio Panicco, alleged that Vatican gendarmes essentially extorted them by forcing them to resign in 2017 or risk arrest and prosecution for their work investigating and auditing the Holy See’s murky finances.

In the lawsuit filed with the Vatican tribunal, the auditors said they uncovered astonishing financial malpractice in the “viper’s nest” of the Vatican and believe they were forced out because certain cardinals and monsignors “felt threatened by the investigations and simple requests for clarification.”

The Vatican spokesman’s office declined to comment Thursday.

The Milone scandal is just one of many that have marked Francis’ 10-year effort to impose international financial budgeting and auditing standards on the Holy See’s opaque finances. The lawsuit, and its host of previously confidential attachments, now threatens to expose more potential wrongdoing and even problematic decisions by Francis himself.

Already, a criminal trial has been under way for over a year in the Vatican courtroom concerning the Holy See’s 350-million-euro investment in a London property; prosecutors have charged 10 people with a host of alleged financial crimes, including embezzlement and fraud. The defendants have denied the charges and said the Holy See simply was in over its head.

The lawsuit, which involves many of the same characters as those in the criminal trial, suggests the pope’s flip-flopping reforms and allegiances have generated spasms of retaliation and retribution that are now being fought in court, with Francis and his top aides implicated.

Francis appointed Milone, who had headed Deloitte’s Italy operations, in 2015 to serve as the Holy See’s first-ever auditor general. The Vatican press office announced his resignation two years into his five-year term, accusing him of having illegally hired an outside firm to spy on the private lives of Vatican personnel.

Milone insisted in the lawsuit that the information-gathering work involved legitimate consultancies that were sanctioned by the statutes of his office. He said at the time that he was forced to resign under threat of arrest for what he said were trumped-up charges orchestrated by Cardinal Angelo Becciu, a once-powerful cardinal and Francis confidante.

The lawsuit, which names the Vatican secretary of state and the new auditor general as defendants, lays out Milone’s grievances and hints at some of the dirt he and Panicco uncovered during their first two years in office, as well as the resistance they encountered trying to get Becciu and other Vatican hierarchs to turn over their financials for auditing.

They are seeking to recover lost wages as well as damages for reputational harm.

Panicco’s claim is also personal: He is seeking 3.5 million euros because he tried for years, unsuccessfully, to get the Vatican gendarmes to return personal medical records that were seized when Vatican police raided the auditing offices in 2017 in the run-up to his ouster. Those records involved months of diagnostic tests for a possible cancer diagnosis which Panicco had to redo, setting back his treatment for months, to the detriment of his health, the lawsuit alleges.

Milone accuses in particular Becciu, a former top official in the secretariat of state who is currently on trial in the London property case, of being behind his ouster as the official who most resisted his efforts to impose an external audit on the secretariat of state’s 600-million-euro asset portfolio.

In a statement Thursday, Becciu’s lawyers recalled that the cardinal had already told the tribunal that it was Francis himself who wanted Milone to resign because the pope had lost trust in him over the “illegal surveillance” operation he commissioned.

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