Pope Enacts New Procurement Law To Combat Deficits, Corruption


 

ROME - Moving to address both a short-term financial crunch caused by the coronavirus and a longer-term history of financial scandal, Pope Francis decreed a new centralized system for procurement in the Vatican on Monday, aiming to promote what a Vatican statement called “transparency, oversight and real competition” in how contracts are awarded.

The system was published in the form of a legal document called a motu proprio, meaning issued on the pope’s personal initiative, and it applies to all entities connected to the Vatican, including both the Roman Curia and the Vatican City State. It takes effect July 1.

Centralizing control over the awarding of contracts for goods and services marks a dramatic break with past Vatican practice, according to which the various congregations, councils and other offices largely handled their own procurement decisions.

Among other things, officials say the new rules, described as four years in the making, bring the Vatican in line with “the most advanced international legislation in the area,” including the UN’s 2003 Convention against Corruption. It’s also intended, according to a synthesis provided by the Vatican News Service, to “combat illicit deals and corruption,” as well as to achieve significant cost savings though “economies of scale.”

The procurement law itself runs to 86 articles and is accompanied by a 12-article set of new procedural rules for Vatican tribunals to adjudicate cases of alleged violations of the procurement system.

Highlights include:

  • The creation of a new centralized register for eligible contractors entitled to bid on projects, which, among other things, is intended to ensure “genuine competition” in bidding and equal treatment for all bidders.
  • Preventing potential contractors from bidding on Vatican projects if they’re under investigation for fraud or other criminal activity, if they’ve already been convicted, if they’ve failed to meet their tax or social security obligations in the country in which they’re based, or if the company is registered in a country with a suspect financial system.
  • Centralizing control over awarding contracts to the Administration of the Patrimony of the Apostolic See (APSA) for the Roman Curia, meaning the administrative bureaucracy for the global Church, or the Government of the Vatican City State for the Vatican’s physical territories and personnel, expect in certain specifically authorized cases.
  • Tasking the Vatican’s Secretariat for the Economy with maintaining an up-to price list for goods required by the Vatican as well as another list of costs for labor and services for contractors entered in the new register.
  • Vatican entities will be required to demonstrate that proposed expenditures are financially sustainable, and to plan proposed acquisitions by Oct. 31 of each year.
  • The Secretariat for the Economy will maintain a list of officials authorized to sit on a commission to judge competitive bidding procedures, and the members who will assess any particular proposal will be chosen by lot to avoid conflicts of interest.
  • Officials will be disqualified from assessing a bid if they’re related to the bidding agent up to the fourth degree (such as first cousins once removed), or if they’re related by marriage up the second degree.
  • The Tribunal of the Vatican City state is designated as the ordinary court to judge alleged violations of the norms, with appeal possible to the Apostolic Signatura.

“The inspiring principle of the new text is the diligence of a good father of a family,” a Vatican statement said, “who wants an efficient and ethical administration of the family’s resources that favors at the same time transparency, oversight and equal treatment amid real competition for those who seek to establish an economic relationship with the various entities.”

Though the procurement law has been in the works since 2016, when the Vatican became a signatory to the UN’s anti-corruption convention, a couple of recent developments have added a sense of urgency.

The first is a ballooning deficit for 2020 related to contractions in the economy caused by the coronavirus. An internal report recently prepared for Pope Francis and his department heads suggests the shortfall could be as much as 175 percent for 2020, meaning a deficit of roughly $168 million.

A statement issued Monday by Giuseppe Pignatone, president of the Vatican tribunal that will handle cases related to the new procurement system, acknowledged the urgency.

“Reducing expenses is extremely relevant and important in this moment, which is unfortunately destined to last, of grave economic difficulties for the whole world but also, in a special way, for the Holy See and the Vatican City State,” Pignatone said.

The other force driving the reform is a long history of financial embarrassment and scandal, recently illustrated by a $225 million land deal in London to buy a former Harrod’s warehouse originally slated for conversion into luxury apartments carried out by the Vatican’s ultra-powerful Secretariat of State drawing on funds from “Peter’s Pence,” an annual collection designed to support the works of the pope.

When the Secretariat of State tried to get out of a partnership it had entered into with Italian financier Raffaele Mincione, an internal investigation was triggered which, so far, has led to the resignations or dismissals of at least seven former Vatican officials.

Vincenzo Buonomo, rector of the Pontifical Lateran University and an expert on international law, said Monday the new legislation is designed to prevent such scandals.

“Utilizing appropriate measures of oversight, you can avoid contracts and transactions that are the opposite of good administration,” Buonomo said. “You can eliminate the problem of waste and [unnecessary] losses, and, therefore, prevent corruption in its various forms.”

According to a Vatican statement, the new procurement norms are the result of a “synergistic work” coordinated by the Secretariat of State and involving the Council for the Economy, the Secretariat for the Economy, APSA and the Government of the Vatican City State.

The new law replaces all existing regulations adopted in the past by various Vatican departments on matters related to contracting and procurement. (Crux).