In a period in which letters and confidential documents continue to pour out from across the Tiber and Vatican finances continue to be targeted, there is good news from a U.S. court: the five complainants who were suing the Holy See decided to withdraw all their allegations at the moment when they were required to prove their case with facts.
Accordingly, the district court judge who has been following the case for ten years, issued a final sentence according to which the Holy See cannot in any way be held responsible for the illicit trafficking carried out by Martin Frankel, a “ficititious” businessman who had tried to use the name of the Vatican, thanks to his friendship with an American priest.
The script of this story seems déjà vu: clergymen who are either naive or slightly wheeler-dealers are swindled by unscrupulous men.
Martin Frankel, who in May 1999 covered his tracks (and the money) from Greenwich in Connecticut, after collecting a large sum of money, and was later arrested after escaping to Germany. Two prelates had believed in his promises: Peter Jacobs (who did not work in the Vatican and had trouble with his bishop in the United States years earlier) and Mgr. Emilio Colagiovanni, a former judge of the Roman Rota, retired in his early eighties, with Alzheimer's disease. Jacobs was involved in a fictitious foundation created by Frankel: the St. Francis of Assisi, while Colagiovanni ran a small foundation – called Monitor Ecclesiasticus Foundation – set up by the diocese of Naples, that published a legal journal of the same name.
Both foundations were not related to the Holy See.
In 1998 Jacobs was contacted by the Catholic New York lawyer Thomas Bolan to act as intermediary for what he pretended to be a big donation. Bolan explained that a rich Jewish "genius" wanted to set up a foundation across the Tiber in order to donate an astronomical amount, equal to "hundreds of millions" to the Church. On August 6, 1998 Bolan had come to Rome, along with Jacobs and met a prelate of the Secretary of State, Gianfranco Piovano.
The outcome of that meeting, which until now has remained unclear, emerges from the case documents: the attempt to establish a new Vatican foundation was rejected both by the then-Deputy Secretary of State (known as the “Substitute”), Giovanni Battista Archbishop Re and by the then-Secretary of State, Angelo Cardinal Sodano.
Monsignor Piovano communicated this final decision.
Nonetheless, Frankel, who presented himself under a false name as David Rosse, continued to seek support in the Vatican.
The fake businessman had taken control of several small insurance companies through a series of scams, and wanted to buy others to pillage them and pocket even more money. At the same time, Frankel tried to take the money abroad and this was the purpose of the fake St. Francis Foundation.
At a later time, when he realized that the project was not feasible, he tried to exploit the elderly Monsignor Colagiovanni.
Frankel, had no intention of donating money to the Catholic Church, but wanted to use Colagiovanni and his small foundation to hide his money from the American authorities.
Frankel asked Colagiovanni to provide an "affidavit", for which he offered in exchange ten percent of the amount “donated” to the Monitor Ecclesiasticus Foundation. He did not reveal, of course, where the money he intended to launder came from, saying that the money came from Swiss accounts that were the product of his legitimate business operations.
The Vatican, however, had already said no several times, and had never accepted either proposals or offers of money from the businessman. In no case, therefore, was there any deviation from the line clearly expressed from the outset by both Archbishop Re and Cardinal Sodano.
Nevertheless, the elderly Colagiovanni, who had already lost his judgment due to Alzheimers, continued to play the game, because Frankel seemed able to offer him the only thing he really cared about: enough money to keep the scholarly journal "Monitor Ecclesiasticus" alive even after his death.
And Frankel had understood that the Monitor Ecclesiasticus Foundation could be useful, since it published the decisions of the Rota, thereby seeming (falsely) to be in some way connected with the Holy See. The trafficking went on for some time: when he wanted to buy a new company in the United States, Frankel offered Colagiovanni and Jacobs a trip to the U.S. and exhibited them as guarantors of the purchase.
But in a few months, the scam was uncovered: not even one penny of the five million dollars promised by Frankel to his interlocutors in robes reached Rome, much less the Holy See or the IOR. The insurance companies asked for clarification from the Holy See, which knew nothing: the foundations do not in fact belong to the Vatican, despite the assurances given by Jacobs and Colagiovanni at the request of the false patron.
The trustees of some insurance companies defrauded by Frankel – who were the regulators of the five States of the United States where these insurance companies were located - sued the Holy See which in 2002 was summoned by the district court in Mississippi.
The State Regulators took this action despite several witnesses, among them the apostolic nuncio to the United States, who had repeatedly and clearly said that the Holy See was actually a victim of attempted fraud, just like the bankrupt insurers.
Nevertheless, they preferred to continue to pursue their case, hoping to receive money from the Vatican. In fact, the Holy See was taken to court with a request for $ 600 million in damages, despite the fact the at that time the request to create a Vatican foundation had been rejected and that neither the Vatican nor the IOR ever received a penny from the false benefactor.
Meanwhile, the Holy See, which knew nothing of the insurers’ intention to sue, was in close contact with another American court, in the District of Connecticut, which was pressing criminal charges against Frankel and his criminal associates.
It was that court that had issued a letter rogatory to the Vatican, through diplomatic channels, asking for assistance in the case. And the Holy See had cooperated, providing testimony and information.
The court and prosecutors in Connecticut had never filed any charges against the Vatican or even implicated the Vatican in the Frankel scheme. All this, however, was unknown in Mississippi, where the State regulators decided instead to sue before being well-informed of the facts in question.
The whole affair could have been closed ten years ago, given the clarity of the documentation produced to the court of Connecticut.
But the bankrupt insurers proceeded in a civil case and sought compensation for the money they had lost. In the end, the insurers did not receive anything from the Holy See, and there was no settlement agreement closing the case, because, as pointed out to Vatican Insider by Jeffrey Lena, a lawyer who followed the case for more than ten years on behalf of the Holy See, "You do not pay if you are not at fault. Here, neither the Holy See nor the IOR was at fault. Except that it took ten years before the complainants opened their eyes. In my view, when they finally understood there was no case, they withdrew. It is perhaps an important lesson to all that there is a big difference between allegations of what happened, and real facts."