The appointment of Giuseppe Pignatone came two days after Vatican police raided the Apostolic Palace and seized documents and computers from the secretariat of state. Also searched were the offices of the Vatican’s financial watchdog agency, which is tasked with flagging possible money laundering and other suspicious financial transactions.
The Vatican press office declined to comment further on the raids, saying only that they were based on a report from the Vatican bank and auditor general’s office about past financial operations. A Vatican source familiar with the case, speaking on condition of anonymity because he wasn't authorized to reveal details, said the transactions concerned efforts by the secretariat of state to sanitize a botched, money-losing real estate deal in London that originated during the previous pontificate.
L'Espresso magazine, meanwhile, reproduced what it said was a Vatican police directive announcing the precautionary suspension of five Vatican employees involved in the transactions. The Vatican newspaper, L’Osservatore Romano, denounced the publication of the directive as “mediatic mudslinging,” though the editorial didn't address the Vatican police's decision to distribute the directive, complete with photos and identities of the employees, to all Vatican staff. It said the investigation showed that the financial reforms launched by Pope Benedict XVI a decade ago were working.
But the institutional damage to the reputation of the Financial Information Authority was already being felt. The office cooperates with counterparts in other countries, sharing information in the global fight against money-laundering and terrorist financing. A Vatican police raid and sequester of files might make other nations less willing to share sensitive financial information.
Pignatone retired in May as chief prosecutor in Rome, where he led investigations into political corruption and organized crime as well as Italy’s probe into the suspicious death in Egypt of an Italian graduate student. Previously Pignatone had been prosecutor in Palermo, Sicily and Reggio Calabria, where he handled major anti-Mafia investigations into the Cosa Nostra and ‘ndrangheta.
The Vatican’s criminal tribunal handles crimes that occur on Vatican territory or involving Vatican diplomats. The penal code is based on the Italian criminal code with elements of canon law. Some of the tribunal’s most high-profile cases in recent years have involved the two “Vatileaks” scandals of leaked Holy See documents; the prosecution of the former president of the Vatican’s children’s hospital over financing for a cardinal’s apartment renovations; and the conviction of a Vatican diplomat on child pornography possession charges.
More recently, Vatican prosecutors have recommended that two priests from the Vatican’s youth seminary be prosecuted in a sexual abuse case involving young seminarians.