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Vatican spent over a year examining Angolan oil investment

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Via Financial Times

The Vatican’s powerful central administration office spent more than a year researching a $200m investment into an Angolan oil company in a deal proposed by a personal contact of a senior Cardinal, raising fresh questions about the oversight of funds administered by the Catholic Church.

The Vatican Secretariat of State, custodian of charitable donations made to the Church by Catholics around the world, used external consultants in 2012 to conduct due diligence into lending funds it held in Swiss bank accounts to Falcon Oil, an Angolan oil company owned by the businessman Antonio Mosquito, people with direct knowledge of the proposal said.

After deciding against the loan to Falcon Oil, the Secretariat instead decided to invest the $200m with a London-based Italian financier to buy a minority stake in a building he already owned in London’s exclusive Chelsea. That London property deal has become subject of a Vatican investigation in which Vatican police seized documents and computers from the offices of the Secretariat.

The Vatican has declined to comment on the focus of its investigation and the suspension of five officials, saying only it was examining past financial transactions conducted by the Secretariat.

Mr Mosquito directly approached the Vatican about the $200m investment, a senior Holy See official said. The Angolan businessman had an existing relationship with Cardinal Giovanni Angelo Becciu dating back to when he served as the Vatican’s ambassador to Angola from 2001 to 2009.

Falcon Oil and Mr Mosquito did not respond to a request for comment.

Until 2018 Cardinal Becciu was the second-highest ranking official in the Secretariat of State reporting directly to both Pope Benedict and later Pope Francis. He personally authorised the London real estate investment, people directly involved said.

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At the time that the Secretariat was considering the investment, Angola was led by President José Eduardo dos Santos. Until he stepped down in 2017, Africa’s second-largest crude producer had developed a reputation as one of the most corrupt countries in the world, with few investors entering Angola. The country sits near the bottom of Transparency International’s index of corruption perceptions, ranking 165 out of 180 countries.

Alberto Perlasca, a former senior official in the Secretariat’s Office of Administration at the time of the proposal, who this year was moved by Pope Francis to serve on the Church’s highest court, told the Financial Times the Secretariat was approached directly by Mr Mosquito about the Angolan oil opportunity. Mr Perlasca was responding to questions directed to Cardinal Becciu’s office on his behalf.

“Mr Mosquito contacted the Secretariat of State as anyone else could have easily done,” Mr Perlasca said in an emailed response to questions from the Financial Times. “The fact that nothing was done about it shows that the Secretariat of State has been scrupulous in the examination of the investment beyond every consideration of person or of friendship.”

Mr Perlasca did not directly respond to questions about why a $200m loan to an Angolan oil platform was considered a suitable possible investment for the Secretariat, which is the custodian of hundreds of millions of dollars of charity money donated to the Catholic Church by the faithful.

In 2012 Falcon Oil held a 5 per cent stake in the Angolan offshore exploration block 15/06, whose largest shareholders were and still are Italy’s ENI and the Angolan state company Sonangol. Falcon was seeking the $200m loan to finance its contribution to the construction of an offshore platform.

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Angola’s offshore oilfields have been difficult to exploit as the country has battled to turn round a decline in reserves. Drilling mostly came to a halt after the 2014 oil price slump.

Mr Perlasca added that “Cardinal Becciu had met Mr Mosquito in Angola. Note well: it was Mr Mosquito who contacted the Secretariat of State, and not the Secretariat of State who contacted Mr Mosquito.”

“The investment about oil was not considered attractive, unless one considers it a bit further in consideration of the novelty of the proposal,” Mr Perlasca said. “But to take something under consideration does not seem to me to be a fault.”

Cardinal Becciu declined to respond directly to the FT’s questions.

WRM, the family office and investment fund of Raffaele Mincione, the London-based Italian financier that majority owned and managed the Secretariat’s investment in the building in Chelsea, said that in 2012 it had been asked by the Secretariat to perform extensive due diligence on the Angolan oil proposal.

“Credit Suisse, on behalf of the Holy See, asked WRM to perform due diligence on the potential investment with the objective to invest $200m in this venture,” it said. “Our due diligence was extensive and . . . lead us to recommend to Credit Suisse and the Holy See not to pursue this investment.”

Credit Suisse declined to comment.

Credit Suisse was acting as the private banker for the Secretariat, and its adviser for its investments.

WRM has said it has no direct knowledge of the Vatican investigation into the Secretariat’s investment into its London property, and is confident that it has committed no wrongdoing.

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