Election of Pope Francis Raises Hope for Vatican Shake-Up

March 14 (Bloomberg) -- Bloomberg Economics Editor Michael McKee examines how Pope Francis, know as a champion of the poor in his native Argentina, may influence the economics of the Catholic Church. He speaks on Bloomberg Television's "In The Loop."

Even the smallest state in the world can’t escape the ills of big government.

For newly elected Pope Francis, the challenge will be to overhaul a centuries-old bureaucracy that in recent times has been more linked to the intrigue and corruption of its distant past rather than 21st-century standards of good governance.

The Vatican may only occupy 0.2 square miles of territory in central Rome, yet it oversees relations with 1.2 billion believers in more than 100 countries with 3,000 dioceses and almost 1 million priests and nuns. This work is concentrated back at headquarters in the hands of the secretive Roman Curia, a handful of powerful, mostly Italian men.

From stolen papal correspondence showing political infighting to an investigation into suspected money laundering by its banking arm, the veil of secrecy has been partially lifted in recent years on some of the machinations of the Catholic Church’s behind-the-scenes administrators. Francis, the man tasked with managing the Curia, is a bus-taking Jesuit who chose pastoral work in Buenos Aires over high office in Rome.

“The management needs a tune-up,” said Christopher Bellitto, a papal historian at Kean University in New Jersey, in a telephone interview. “Someone to fire and hire with ease and pick from outside and take charge of the sex abuse. The man or the job could not come from within.”

Photographer: Jeff J Mitchell/Getty Images

The Vatican may only occupy 0.2 square miles of territory in central Rome, yet it oversees relations with 1.2 billion believers in more than 100 countries with 3,000 dioceses and almost 1 million priests and nuns. Close

The Vatican may only occupy 0.2 square miles of territory in central Rome, yet it... Read More

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Photographer: Jeff J Mitchell/Getty Images

The Vatican may only occupy 0.2 square miles of territory in central Rome, yet it oversees relations with 1.2 billion believers in more than 100 countries with 3,000 dioceses and almost 1 million priests and nuns.

Surprise Resignation

Benedict XVI’s surprise abdication fueled speculation his exit was partly motivated by an inability to curtail spreading corruption and mismanagement among the 4,000-person apparatus entrusted with running day-to-day church business.

The Curia came in for public scrutiny last year after a massive information dump of letters and documents that were passed to the press by the pope’s personal butler, Paolo Gabriele. The material portrayed the Vatican as a hotbed of conspiracy and Benedict as a frail leader, unable to control his subordinates.

Gabriele defended his betrayal by saying he was trying to protect the pope by exposing the “evil and corruption” rampant in the Curia. He was sentenced to 18 months in a Vatican jail for the theft and later pardoned by Benedict.

Cardinal Tarcisio Bertone, who served as second-in-command to Benedict, was at the center of what came to be known as “Vatileaks.” The 78-year-old Bertone -- as depicted by Gianluigi Nuzzi, the Italian journalist who wrote a book based on the documents he received -- plotted to stymie rivals and covered up for corruption and cronyism. The Italian cardinal’s response to the expose’ was that “many journalists are trying to imitate Dan Brown,” author of the “Da Vinci Code.”

Secret Report

The emergence of a secret dossier on the leaks commissioned by Benedict and presented to the pope shortly before he announced his decision to resign, stirred suspicion that he had little control over what was going on and that he had come to the conclusion there was no one he could trust, according to William Portier, a professor of theology at the University of Dayton in Ohio.

None of the voting cardinals were allowed to see the dossier, which will be for Francis’ eyes only.

Bertone sits on the top of the Curia hierarchy and his duties are comparable to those of a prime minister. As the pope’s right-hand man he controls, or impedes, access to the pontiff and his office is the closest to the pope’s private living quarters.

Top Position

The grip of Italians on the papal seat may have waned -- Benedict XVI was German, John Paul II was Polish and Francis is a soccer-loving Argentine of Italian descent. Yet, with few exceptions, Italy has held the top position in the Holy See government. Historically, that secretary of state post was also a stepping stone to the top job, most recently in 1930 with Pius XII.

While Francis has held positions in the Curia, he’s generally remained far from the Roman intrigue and focused on minding his flock in Argentina. By taking his name from a saint who renounced all his worldly possessions, the 76-year-old Francis set a tone of humility as he takes over a papacy marred by internal strife under Benedict. The Vatican under him stands to benefit from a return to simplicity, maybe even in its arcane book-keeping.

“This will be a pope to bring reform where it’s desperately needed and can clean house,” Christopher Ruddy, professor of history and theology at the Catholic University of America in Washington, said in a phone interview.

Bridging Divide

A U.S. diplomatic cable published by Wikileaks before the 2005 papal election, where Bergaglio was a runner-up, said that while he eschewed a bureaucratic existence in Rome’s ecclesiastical structures, his willingness to serve on various supervisory committees “could indicate an ability to bridge the Curia/local church divide.”

Vatican experts -- including John Paul II’s biographer George Weigel and Jesuit priest Thomas Reese -- have offered a broad range of possible solutions to the new pope: diluting the Italian influence by bringing in clergy from abroad, replacing bishops holding top posts with MBA-wielding laymen and perhaps even appointing a chief of staff to keep the cardinals in line.

Still, a genuine embrace of transparency across the board by the church hierarchy will be hard.

“Dealing with these issues is neither rocket science nor theology,” Reese wrote in his blog on March. 12. “The problem results from the arrogance of thinking that the church is somehow different and cannot learn from government and business practices.”

Clean Slate

Benedict’s voluntary exit -- virtually without parallels since the last papal resignation was forced on Gregory XII to end the Western Schism in 1415 -- is a unique opportunity to make sweeping changes. When a pope dies, or steps aside, the whole Vatican government is dissolved, allowing for a break with the past.

“The greatest gift that Benedict gave was his resignation,” said retired University of Notre Dame theology professor Lawrence Cunningham in a telephone interview. “It sets a model for the future: you have to pay attention to the office and not to the person.”

Both Benedict and John Paul II did make some efforts to improve transparency, particularly regarding the Vatican’s finances.

Edmund Szoka, an American archbishop in Detroit, was moved to Rome at Pope John Paul II’s request to become head of the prefecture for the economic affairs of the Holy See in 1990. Under Szoka, the Vatican began making its financial statements public. Still, Banco Ambrosiano, a Catholic oriented bank partly owned by the Vatican, collapsed on his watch in 1982 and Chairman Roberto Calvi was found hanged from a bridge in London. Prosecutors investigating the bank said the lender had ties to organized crime.

Running Deficit

Regardless, the finances are in disarray. The Holy See, which includes the offices of the Roman Curia, has rarely been profitable. In 2011, its last reported year, it ran a 14.9 million-euro ($19.3 million) budget shortfall, the largest deficit in a decade.

More recently, Benedict insisted the Vatican follow international standards on financial transparency set out by Moneyval, a European anti-money laundering watchdog, after the city-state’s bank was investigated for suspicious wire transfers.

The Curia derives its name from the Latin for “court,” evoking a time when the pope was more of a king than a spiritual guide. The origins of the word nepotism go back to common practice among Renaissance popes to elevate their relatives, mostly nephews, to cardinals.

Growing Strength

It wasn’t until the second half of the 19th century -- after Italy unified and absorbed papal territories that stretched from Naples to Venice -- that the Curia emerged as a force that over the decades grew strong and complex.

The intricate and sprawling administration includes nine congregations -- or departments, including the former Inquisition -- three tribunals, a dozen pontifical councils and as many academies, seven pontifical commissions, a synod of bishops and the spear-holding Swiss Guards.

Corruption in the millennia-old institution of course is nothing new, and also relative. Popes during the 15th and 16th centuries kept a variety of mistresses, regularly resorted to briberies and even poisoned rivals on their way to the top. Alexander VI, for example, was father to Cesare Borgia, the inspiration for Machiavelli’s masterpiece on political cunning, “The Prince.”

Pope John XXIII, viewed as one of the church’s greatest reformers, was once asked how many people worked in the Vatican. He famously, half-jokingly, responded “about half.”

To contact the reporter on this story: Flavia Krause-Jackson in United Nations at fjackson@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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