Former auditor, deputy seek damages from Vatican for forced ouster

By Carol Glatz, Catholic News Service

VATICAN CITY (CNS) -- Libero Milone, the former Vatican auditor general, and Ferruccio Panicco, his former deputy, are seeking 9.23 million euros in damages from the Vatican for ending their contracts without just cause and ruining their reputations.

Their ouster in 2017 after just two years of working as the Vatican's first independent auditors was because of the financial irregularities they were discovering, Milone told a group of reporters in Rome Nov. 10.

"I was discovering things that somebody wanted to keep undercover," he said.

The lawsuit against the Vatican Secretariat of State, which was filed in the Vatican court in early November, comes at the end of a Vatican investigation launched in the spring into Milone for suspected embezzlement, he said.

Milone and Panicco were scheduled to have a hearing Nov. 14 with the Vatican prosecutor in the case against them. Milone told reporters he was willing to go to court to defend himself against the charges: "They want to threaten me," and he said he was shown new evidence that was "clearly fake."

Milone was hired in June 2015 to be the first auditor general of a new office that was responsible for auditing the books of any Vatican office and would report directly to the pope. Cardinal George Pell, then-prefect of the Secretariat for the Economy, had said in 2015 that an independent auditor was a key part of the "separation of powers" necessary for reforming the Vatican's economic activity.

However, Milone told Reuters in 2017 that his troubles had begun just a few months later, in September 2015, when he suspected that his office computer had been tampered with. He contacted an external company to check for surveillance devices "because there are no such specialized people" in the Vatican. It found his computer had been the target of unauthorized access, and that his secretary's computer had been infected with spyware that copied files, he had told Reuters.

He said in that interview that he was forced to resign after opponents of Pope Francis' financial reforms mounted a campaign against him. The Vatican press office then responded by saying Milone, "going outside his competencies, illegally hired an external company to undertake investigative activities about the private lives of representatives of the Holy See."

Cardinal Angelo Becciu, then-Vatican undersecretary of state, publicly accused Milone of spying, telling Reuters at the time that there was proof that the outside contractor had been helping Milone to spy on others, "including me." Then-Archbishop Becciu had said, "If he had not agreed to resign, we would have prosecuted him."

In 2019, Milone made an official request to see what evidence there was to warrant the accusations and was told in 2020 he had no right to the information, and that the case was sealed, according to his account to reporters Nov. 10. The Vatican lifted the seal of confidentiality earlier this year when it reopened its criminal investigation against him, he said.

Milone told reporters he had been threatened with arrest if he did not "voluntarily" resign; Domenico Giani, then-head of the Vatican police, "forced me to sign a letter that they already had ready."

Milone said he has now submitted to the Vatican court a "very summarized and partial listing of the myriad irregularities" he found as auditor, as well as instances of "obstructionism and resistance of all kinds."

The accusations include numerous claims of misappropriated funds, including the "disappearance" of 2.5 million euros donated by a foundation for building a new ward at the Vatican-owned Bambino Gesù Hospital. The ward was never built, according to Milone's lawyers, but a plaque honoring the contribution was made and hung at the entrance to an old ward.

Milone told reporters, "In the Vatican they confused auditing with espionage."

Panicco, who has cancer, has filed claims that the Vatican refused to return personal medical records they confiscated from his office when it was searched in 2017 and that their sequester delayed his treatment and his life expectancy.

The office of the auditor general is now led by Alessandro Cassinis Righini, who was assistant to Milone.