The former monastery on a quiet residential street in Rome once sheltered Jews fearing deportation during World War II. Purchased by the Vatican in 2021 as a dormitory for foreign nuns studying at Rome’s pontifical universities, the building now stands empty, a collateral victim of the latest financial scandal to hit the Holy See.
Pope Francis has asked aides to get to the bottom of how at least $17 million, including money to refurbish the dorm, was transferred from the Vatican’s U.S.-based missionary fundraising coffers into an impact investing vehicle run by a priest, The Associated Press has learned. Two years later, the U.S. fundraiser says the money is gone, and the monastery is shuttered. Its renovation is tied up in bureaucratic red tape, while the nuns studying in Rome are still housed at a convent a 90-minute commute away.
The story of what happened to the money is one that has vexed Vatican officials on both sides of the Atlantic, all the more because the transfers appear entirely legal. But they have nevertheless prompted the new leadership of the Vatican’s missionary fundraising operation in the U.S., The Pontifical Mission Societies, to replace the staff and board of directors who approved them, and overhaul its bylaws and statutes, to make sure nothing like this ever happens again.
And for now, the organization known as TPMS-US has written off $10.2 million of the total transferred as a loss since “there is no timeline and no guarantee of investment return,” according to its latest audited financial statement.
The money was transferred from TPMS-US into a New York-based non-profit, Missio Corp., and its private equity fund, MISIF LLC, both of which were created by the Rev. Andrew Small while he was the national director of TPMS-US. Both financial vehicles aim to raise capital to provide low-interest loans and investments to church-run farming initiatives in Africa. MISIF LLC is known as an impact investing fund because it seeks to do social good as well as provide a financial return.
The bulk of the money was transferred to Small’s new initiatives in 2021, right before Small ended his 10-year tenure at TPMS-US. Small, a British-born Oblate of the Mary Immaculate priest, remains CEO of Missio Corp., while now serving on a temporary basis as the No. 2 at the Vatican’s child protection advisory board.
In a series of e-mailed responses to AP questions, Small strongly defended the money transfers as fully approved and in the best interest of the church and TPMS-US. He provided letters from grateful bishops and nuns in Africa who have benefited from Missio Corp.’s low-interest loans, as well as letters from two Vatican cardinals expressing interest in his impact investing initiatives.
But the transfers have, at least temporarily, reduced the endowment fund of TPMS-US by a quarter and seemingly diverted money raised in the pope’s name away from Vatican-approved charities and works in Africa, Asia and Latin America. The loss is thus the latest financial headache for the Holy See, which for decades has been beset by episodes of loss-making investments, opaque accounting methods, porous budgets and conflicts of interest that have undermined its financial reputation.
“The Holy See is aware of the situation and is currently looking into the details of the events,” Vatican spokesman Matteo Bruni said in a statement to AP.
According to publicly available tax returns and financial statements, the moneys transferred included $7 million in expense “reimbursements,” undefined “contributions” and “support,” from TPMS-US to Missio Corp. from 2019-2021. The bulk of the transfers is a $10.2 million investment in MISIF LLC, $7.5 million of which came from a TPMS-US endowment fund.
That investment served as the sponsoring seed investment that persuaded the U.S. federal government’s International Development Finance Corp., in 2021 to loan MISIF LLC $20 million to provide microloans to church-run agribusinesses and educational programs.
Because the TPMS-US board approved the transfers, any litigation to get it back is implausible.
But according to officials at TPMS-US, it remains unclear if the board was fully informed about the transfers and the Vatican’s view of them, especially concerns expressed by the then-prefect of the Vatican’s missionary office, Cardinal Fernando Filoni.
The Rev. Robert Gahl, a moral theologian who runs a church administration and management program at the Catholic University of America, also said the evangelical thrust of TPMS-US donations – which mostly come via an annual Mass collection each October for the Vatican’s missionary activities – differs from MISIF’s more general development strategy of loans that must be repaid.
“How can donor intent be assured if the aims of the two are so different?” he asked. “Donor intent is defended in both civil and canon law,” he added.
Lloyd Mayer, a professor specializing in non-profit law at Notre Dame Law School, said he didn’t see any “red flags” in the transfers, but “a few yellow flags.”
“And the legal question for me is: has someone violated a legal duty here, or is this essentially an internal political dispute?”
Small strongly defended the transfers as consistent with both the mission of TPMS-US and his fiduciary duty to increase its funding, which he said had been steadily declining as donations dried up. He said he also tried crowdsourcing, where donors could see the direct outcome of their gifts, to raise money.
He said donors were increasingly unwilling to just give to the Vatican via the typical structure, where Rome decides where donations are spent — a reference to donor distrust of the opaque finances of the Holy See in general and the Vatican’s missionary office in particular.
“A lot of it goes to bishops and nuncios with only a tiny fraction going to priests and sisters,” Small said. “Many millions of dollars of the US money help pay the expenses of operating nunciatures in mission countries, which seems anomalous with the messages sent to the faithful on Mission Sunday each year.”
Small said he developed Missio Corp., and its public-facing Missio Invest website, because he wanted to apply the principles of impact investing to the needs of the church in mission territory. It was an idea that had some support in the Vatican, which hosted three impact investing conferences in 2014, 2016 and 2018.
“The ultimate goal was to create a social impact fund that could provide low-interest loans to church-run enterprises in Africa so as to create a sustainable source income for the church and, presumably, make them less dependent on foreign annual donations which had shown themselves to be increasingly precarious,” Small said.
Small said the board of TPMS-US was informed of all developments and approved all the transfers, and that he made at least annual presentations to the Vatican’s missionary office.
Robert Warren, a retired IRS criminal investigator who now teaches accounting at Radford University in Virginia, said the relationship between TPMS-US and Missio Corp., on its surface is problematic because Small headed both. Such interlocking relationships, he said, require extra scrutiny by auditors and management.
“I always tell my students: You have to determine whether there is an arm’s length transaction. If you have related parties, that means by definition you do not have an arm’s length transaction,” he said. If one charity is providing the bulk of funding to keep a second charity going “you now have an interrelated party and all those transactions require extra scrutiny by the auditors and by management.”
After Small’s term ended in 2021, TPMS-US under the leadership of its new national director, Monsignor Kieran Harrington, hired a law firm to investigate. Small didn’t respond to the lawyers’ questions.
“The independent analysis concluded that the TPMS board approved the funds transfers in a way consistent with their powers and the TPMS bylaws,” TPMS-US told AP in a statement.
Harrington subsequently replaced the board with more high-ranking officials and Vatican oversight. It includes the pope’s ambassador to the United States, Archbishop Christophe Pierre, along with other senior U.S. cardinals and archbishops, including Boston Cardinal Sean O’Malley, who as head of the Vatican’s child protection board, is now Small’s boss.
“The new board is working to evaluate the governance structures of TPMS and will soon recommend new ecclesiastical statutes and vote upon the civil corporation bylaws,” TPMS-US told AP.
TPMS-US asked for the $10.2 million investment in MISIF back, but Missio Corp., “denied the request,” according to the TPMS-US audited financial statement.
“Management of the organization is diligently working to redeem the investment, however there is no timeline and no guarantee of investment return,” the statement says. TPMS-US now values the $10.2 million investment as a total loss.
Small criticized the write-off as “shortsighted,” saying there were no grounds for such a decision based on the fund’s performance. Small said the board knew well the minimum 10-year commitment of the investment, and that regardless the MISIF investing model considers the economic impact on local communities as part of the return for investors.
He said it was “unfortunate” that TPMS-US had such little confidence in the mission church’s ability to repay its loans.
“If we don’t believe in our missionary colleagues, how will banks and other capital markets?” he asked.
However, even Small’s own auditors for two years running have said they were unable to verify MISIF’s calculation of the fair value of its investment portfolio, which represents more than half of its assets. For both 2021 and 2022, the auditors declined to express an opinion on MISIF’s financial statements.
The fate of the Rome residence for nuns is now tied up in Italian bureaucracy and pandemic-related construction delays. The Vatican had purchased the building after TPMS-US sent $13 million from a fund it had established to support the education of religious sisters.
The building has a rich history: During WWII, when it was owned by a Canadian order of nuns, it housed at least 80 Jews who were hiding from Rome’s Nazi occupiers, according to archival research published in the Vatican newspaper L’Osservatore Romano.
When the Vatican in 2021 asked TPMS-US for more money to renovate the building, the education fund for religious sisters was empty. Small said the board, “for a variety of reasons,” had decided not to send the remaining $4.7 million to Rome but instead to his Missio Corp., to fund the training of sisters in Africa, which he said was consistent with its intended purpose.
The Vatican is believed to have found other funding, but the Rome residence today stands empty, a chain lock around its front gate. The nuns studying at the Pontifical Urbaniana University live at a campus in Castel Gandolfo, a 90-minute commute away.
“They lose so much time travelling,” said Sister Genowefa Kudlik, the Polish nun who runs the Castel Gandolfo campus. “The property was bought some years back, I believe. But I don’t think anything was done.”
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
Canada's economy was flat in July, new GDP numbers from Statistics Canada show – CBC News
David Hockney: Ceramic cat gifted by hitchhiking art student to be sold – BBC
India-Canada news: Blinken meets Indian foreign minister – CTV News
Silver investment demand jumped 12% in 2019
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Iran anticipates renewed protests amid social media shutdown
Economy23 hours ago
Fed’s Goolsbee Says Traditional Economic View May Cause Overshoot
Business23 hours ago
‘We are not there yet’: Metrolinx refuses to give end date for long-overdue Eglinton Crosstown LRT
Economy22 hours ago
German Economy to Shrink 0.6% in 2023 Before Wages Drive Rebound
Art13 hours ago
Details of the Pokémon/Van Gogh art museum crossover are just as adorable as we’d hoped【Pics】
News16 hours ago
Canadian immigration consultant’s plan to open India office paused due to political turmoil
Business22 hours ago
Alberta sets Canadian record for annual net interprovincial population growth: StatCan
Art17 hours ago
Scalpers Are Ruining A Pokémon Art Exhibit
News21 hours ago
What are Canada’s most popular baby names?