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Pope revolutionizes Vatican by opening finances to scrutiny

Pope Francis waves to the faithful as he appears at the window of his future private apartment in St. Peter's Square, during the Angelus pra
Pope Francis waves to the faithful as he appears at the window of his future private apartment in St. Peter's Square, during the Angelus pra

By Philip Pullella

VATICAN CITY (Reuters) - Pope Francis on Monday revolutionized the Vatican's scandal-plagued finances, inviting outside experts into a world often seen as murky and secretive and saying the church must use its wealth to help the poor.

Francis, elected nearly a year ago with a mandate for reform, used a document known as a Motu Proprio - Latin for "by his own initiative" - to implement immediate changes including appointing an auditor-general.

The document says the Church must see its possessions and financial assets in the "light of its mission to evangelize, with particular concern for the most needy".

A new Secretariat for the Economy will report directly to the pope and will be headed by Australian Cardinal George Pell, 72, currently the Archbishop of Sydney and a key proponent of financial transparency in a committee that advised the pope. A Church source said Pell would move to Rome.

The auditor-general will have wide oversight powers "to conduct audits of any agency of the Holy See and Vatican City State at any time," a statement said.

The Secretariat, effectively a new ministry, will be headed by Pell and guided in policy making by a new 15-member Council for the Economy made up of eight prelates and seven lay financial experts "with strong professional financial experience" from around the world, according to the statement.

The Motu Proprio's title is "Faithful and Prudent Administrator". A Vatican statement said the changes "will enable more formal involvement of senior and experienced experts in financial administration, planning and reporting and will ensure better use of resources, improving the support available for various program, particularly our works with the poor and marginalized".

IMMEDIATE EFFECT

Francis decreed that the changes have "immediate, full and stable effect," abrogating any existing rules not compatible with them.

An existing economic department known as the Administration of the Patrimony of the Apostolic See (APSA), which manages financial holdings and real estate, will formally assume the role of the Vatican's central bank and have "all the obligations and responsibilities of similar institutions around the world," the statement said.

The role and structure of the separate Vatican bank, formally known as the Institute for Works of Religion (IOR), will not change for the time being, a spokesman said.

There was no mention of the IOR in Monday's statements. Francis has not ruled out closing the bank, which primarily handles funds for religious orders and Vatican employees.

Both the IOR and APSA have been at the center of scandals. Italian magistrates are investigating the IOR on allegations of money laundering. The Vatican dismisses the charges.

Monsignor Nunzio Scarano, who worked as a senior accountant at APSA for 22 years and who had close ties to the IOR, is currently on trial accused of plotting to smuggle millions of dollars into Italy from Switzerland to help rich friends avoid taxes.

Scarano has also been indicted on separate charges of laundering millions of euros through the IOR. He says the money in his accounts at the IOR were from donations. Italian magistrates contest this and the IOR carried out its own investigation of Scarano and shared its findings with the Italians.

In the past year under the leadership of its German president, Ernst von Freyberg, the IOR has closed hundreds of accounts, instituted strict anti-money laundering regulations and launched several investigations into suspicious activities.

(Reporting by Philip Pullella; Editing by Andrew Heavens/Ruth Pitchford)

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