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Saturday July 22nd, 2017 10:36PM

Vatican trial dawns for alleged misuse of hospital donations

By The Associated Press
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VATICAN CITY (AP) — Other than St. Peter's Basilica, there is hardly better real estate in Vatican City than the sprawling penthouse apartment in the Vatican gardens, where the rooftop terrace has in-your-face views of the dome itself and overlooks the hotel that Pope Francis calls home.

The 300-square-meter (3,230-square-foot) bachelor pad, belonging to the previous pope's second-in-command, looked even better after undergoing a 422,000-euro ($481,000) face-lift.

Who footed the bill? The Bambino Gesu Pediatric Hospital foundation, which raises money for sick children at the "pope's hospital" in Rome.

A recent Associated Press investigation uncovered a secret 2014 Vatican probe that found that the hospital's mission under its past administration had become "more aimed at profit" than patient care. Now the renovations at Cardinal Tarcisio Bertone's flat have sparked a criminal trial that shines a light on how some of that money was spent.

The Vatican on Tuesday will put its past hospital president, Giuseppe Profiti, and former hospital treasurer, Massimo Spina, on trial on charges they diverted hospital donations to renovate Bertone's retirement fixer-upper.

If found guilty of embezzlement, the pair face between three to five years in prison and fines starting at 5,000 euros. The penalty can be reduced if the amount diverted is repaid before the trial starts.

The scandal is the latest to strike the Holy See as Francis works to clean up centuries of shady business dealings in the walled-in, 44-hectare offshore city state, the world's smallest. And it comes as Francis copes with the fallout from the embarrassing exit of his top financial adviser, Cardinal George Pell, who returned to his native Australia last week to face trial on sex abuse charges.

Profiti, appointed hospital president by Bertone in 2008, has said the 422,000 euros in hospital foundation funds he used to spruce up Bertone's home was an investment, since he intended to use it for fundraising events for the hospital.

"The presence of Your Illustrious Eminence as a guest at these events would be a guarantee of a certain success in terms of participation and relative economic and institutional return," Profiti wrote Bertone in a Nov. 7, 2013 letter pitching the idea.

He proposed that the soirees take place in Bertone's own home, with its glorious views and close-to-the-pope pedigree, to "give a further sense of exclusiveness and privilege" to potential benefactors.

Bertone readily agreed, replying the following day that he would take care to ensure that "third parties" — and not the foundation — would pay for any renovations. Whatever happened to those "third parties" is unclear, but Bertone spent 300,000 euros of his own money for the work on top of the 422,000 that came from the foundation.

Bertone's successor as Vatican secretary of state, Cardinal Pietro Parolin, has said the trial is evidence of the transparency Pope Francis wants to bring to the Catholic Church's finances.

"And it's only right that everyone accounts for his or her own behavior," Parolin said last week when the indictments were handed down.

Bertone wasn't charged or placed under investigation, even though he personally benefited from the donations. After the scandal broke in 2015, Bertone made a 150,000-euro "donation" to the hospital for research, but insisted he had no idea the foundation had paid for his flat repair.

Also spared were the Castelli Re construction company and its owner, Gianantonio Bandera, a longtime Bertone associate who received around 800,000 euros for the whole project.

The indictment accuses Profiti and Spina of a conspiracy to "illicitly use money belonging to the Baby Jesus foundation to benefit Bandera." The indictment, however, makes no suggestion of kickbacks or any other wrongdoing, merely that money belonging to the hospital foundation instead went to "completely extra-institutional" uses.

Profiti has told AP none of the donations were intended for childcare.

Spina's lawyer, Alfredo Ottaviani, said the expenses for the renovations were in the "general interest" of the foundation for fundraising purposes, and that regardless, his client had no authority to make any decisions about how the money was spent.

It wasn't the first time the foundation's cash had been used for eyebrow-raising ends: In 2012, the foundation headed by Profiti spent 24,000 euros to ferry Bertone by helicopter to southern Potenza to open a branch of Bambino Gesu. Profiti justified the expense in terms of Bertone's busy schedule.

Bertone's apartment is owned by the Vatican, but was assigned to Bertone for his personal use after he retired in 2013. Located on the edge of the Vatican gardens, the third-floor apartment in the Palazzo San Carlo sits just across the street from the hotel where Francis preaches his "church of the poor and for the poor" gospel from a two-room suite. Ironically, Bertone's downstairs neighbor is the Vatican's financial intelligence agency.

Bertone has defended his apartment's size by saying other cardinals have even bigger apartments and that he lives there with a secretary and three nuns who help care for him, and that he needed the space for his archive, library and chapel. His former boss, Pope Benedict XVI, has occupied similarly prime real estate on the other side of the Vatican gardens, taking over an entire converted monastery with his household staff following his retirement.

Profiti resigned suddenly as president of the hospital in January 2015, nine months into a new three-year term. According to the AP investigation, a secret Vatican-authorized task force concluded in 2014 that under his administration, the hospital's mission had been "lost" and was "today more aimed at profit than on caring for children."

Also in 2014, a Vatican-ordered external audit by PricewaterhouseCoopers confirmed that the hospital's mission had been "modified in the last few years" to focus on expansion and commercial activities without sufficient governance controls. The audit, portions of which were obtained by the AP, found that five years after it was created, the hospital foundation still didn't have an executive committee, audit board or organizational model as called for by its statutes.

The audit and details of the Bertone apartment renovation were first revealed in a 2015 book, "Avarice," by Italian investigative journalist Emiliano Fittipaldi.

Fittipaldi and another Italian journalist were subsequently put on trial at the Vatican for having obtained leaked Vatican documents. The court ultimately ruled it had no jurisdiction to prosecute them, primarily because they weren't Vatican public officials.

Profiti and Spina were employed by the Vatican-owned Bambino Gesu and headed its affiliated fundraising foundation.

The Vatican tribunal, which roughly follows the Italian penal code, has jurisdiction over crimes committed on Vatican territory, or by Vatican citizens or public officials. The prosecutors' request for indictment identifies the pair as "public officials" of the foundation, and accuses them of committing a crime on Vatican territory between November 2013 and May 28, 2014, presumably when the foundation paid a series of bills to the construction company.

In April of last year, Fittipaldi published the exchange of letters between Profiti and Bertone detailing Profiti's proposal to use the cardinal's apartment for fundraising.

"I'm just sorry that Bertone was allowed to stay in his penthouse, while the journalist who discovered the scandal ended up on trial," Fittipaldi said in an email last week. "Different standards for different people."

___

Follow Nicole Winfield at www.twitter.com/nwinfield

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