VATICAN CITY — Libero Milone, the Vatican’s first ever auditor general, has vowed to continue fighting for justice after a Vatican tribunal ordered key elements of his lawsuit against the Vatican for unlawful dismissal to be removed.

Milone says the elements related to documented evidence of financial mismanagement, corruption and obstructionism that Milone and his team of auditors came across between 2015 and 2017. 

Together with his former deputy, Ferruccio Panicco, who died in 2023, Milone sued the Vatican for 9.3 million euros in 2022 for unfair dismissal, loss of income, and damage to their reputations, after the Vatican ignored their attempts to reach an out-of-court settlement. 

The ex-auditor general, a former chairman and CEO of the Italian branch of the multinational auditing firm Deloitte, has always strenuously maintained that he and Panicco were ruthlessly pushed out after uncovering financial irregularities and corruption at the high levels within the Vatican. 

But the tribunal threw out their case in January 2024 and imposed fines of approximately 100,000 euros on Milone and Panicco’s estate, leading Milone to issue an appeal. 

Nine months later, Milone and his lawyers received a Vatican court order instructing them “to remove a substantial part of the elements included in our appeal documentation supporting the reasons for our claim,” Milone said in a March 18 statement. “Approximately half our claim, some 25 pages, needed to be removed to continue with the proceedings.” 

The court instructed them in writing to “regenerate our original claim,” he explained, “telling us exactly what to remove” and giving them two reasons for doing so: “inappropriate language used,” which Milone said related to “certain adjectives perceived as offensive,” and the “removal of certain pieces which they specifically identify as inappropriate.” 

The court’s decision led to Milone’s head legal counsel, Romano Vaccarella, a well-known veteran constitutional lawyer in Italy who once defended former premier Silvio Berlusconi, withdrawing his assistance in the case. Milone told the Register that, in his long career, Vaccarella had “never been told what or what not to put in a claim, so he resigned because he thinks that an injustice has been committed; the court is not being impartial.” 

The Register has obtained a copy of Milone’s and Panicco’s claim. Among the passages ordered for removal is one explaining that “an image will emerge of the top echelons of the Holy See that is highly incompatible with the mission entrusted to it by Providence,” adding that “every concrete initiative is sabotaged.” 

Other passages labeled cancellato (“deleted”) include various cases of alleged financial malfeasance. These include “the illegal involvement” of the Vatican-run Bambino Gesù Hospital (OPBG) in the acquisition of two Italian hospitals; “the concealment of funds” by the Congregation for the Doctrine of the Faith; the “diversion of funds” by the Pontifical Council for the Family; “serious conflicts of interest involving important members of the Prefecture for Economic Affairs”; and the “obstructionism” of the Administration of the Patrimony of the Apostolic See (APSA) that managed the Holy See's real estate and other assets, including by its president at the time, Cardinal Domenico Calcagno.

Further passages ordered to be removed included the following allegations: 

• “insufficient collaboration, or rather ostentatious disinterest,” especially by the Vatican’s promoter of justice and the Vatican’s Financial Information Authority (AIF) “that clearly smack of money laundering”; 
• a confidential note written in 2016 by the late Cardinal George Pell, then prefect of the Secretariat for the Economy, noting “insurmountable hostility” at APSA toward the adoption of practices that would remedy practices that were “completely irregular and heavily damaging to the Holy See”; 
• the disappearance of 2.5 million euros donated by the Bajola Parisani Foundation for the construction of a new ward at the Bambino Gesù Hospital and that the construction was “replaced” by simply “affixing a plaque of thanks at the entrance of an old ward”; 
• a transfer of 500,000 euros from the Bambino Gesu Hospital, ostensibly for a “marketing campaign,” which “in reality was intended for the illicit financing of Italian political parties during the 2013 elections”; 
• “the illegal use of funds from the Gendarmerie [Vatican Police] to cover the share of the renovation costs (€170,000) charged to Commander Domenico Giani”; 
• “the opaque management of the 2015 Jubilee by Monsignor [Rino] Fisichella” — Archbishop Fisichella is currently managing this year's "Pilgrims of Hope" Jubilee;
• the existence of “non-rational criteria in the remuneration of personnel, especially with regard to overtime”; 
• how “repeated requests” to the Secretariat of State regarding an infamous London property investment that led to hundreds of millions of euros in losses for the Vatican were met by a “brick wall” and never responded to; 
• that a request by the auditor general to inspect the inventory of the Vatican’s holding of gold bars and coins was met by the response that “the keys could not be found,” even though Msgr. Alberto Perlasca had told the media that “everyone knew where the keys were”;
• APSA’s relations with a Swiss bank (BSI) that was “involved in a major investigation for money laundering and tax evasion”; and 
• Cardinal Angelo Becciu’s role in the cancellation in 2016 of the Vatican’s first external audit by auditing firm PricewaterhouseCoopers, despite him having agreed to their auditing procedures. 

The claim stated, in further passages ordered to be deleted, that this list gave only a “very brief” insight into a “myriad of (to put it euphemistically) ‘irregularities’ detected by the auditor general,” adding that these various cases represent “the tangle of interests and power structures” that his office was “called upon” to investigate. 

Milone described the areas they looked into as “a real nest of vipers” whose subjects “felt threatened by the investigations and by the simple requests for clarification and/or documents.” 

They also alleged in further deleted passages that those subjected to audits “tended to unite — even putting aside their conflicts — to get rid of the intrusive Milone and his deputy Panicco [and] go back … to the old ways.” And they expressed suspicions as to why the other deputy auditor general at the time, Alessandro Cassinis Righini, was not only left in place but subsequently promoted to auditor general.  

 The Vatican court also ordered the removal of Milone’s own explanation as to why he encountered such a reaction to his work: He said in his claim that he found it unsurprising he “did not enjoy particular favor in the upper echelons of the Vatican administration” given that he was using the “usual international methods of control and verification.” 

Milone has always insisted that he was working according to the statute promulgated by the Pope in 2014 creating the Office of the Auditor General, which specifically stated that the auditor general had to adhere to international auditing standards and that he was to report to the Pope.

Milone also explained how, when he was trying to obtain information from the Secretariat of State about the London property investment, “by a strange coincidence” his regular face-to-face meetings with Pope Francis halted and were never resumed, despite repeated requests to the prefect of the papal household. That information, too, was ordered for deletion from the claim. 

In his March 18 statement, Milone said that “based on the wording” of a court order he had received in January, he believes it is “apparent that the claim will be thrown out again without us being able in any way to demonstrate the reasons for having been forcefully removed from office and, additionally, it is repeated that our claim should never have been addressed to the Secretariat of State.” 

He was referring to a disagreement over whether the Secretariat of State is the correct entity to address in the lawsuit. Milone has argued that, according to a 1933 law, legal claims must be presented to either the secretary of state or the governor of Vatican City State. 

“We are at a loss to understand how it is possible that we were the subjects presenting the appeal, and therefore we are presenting the case, and it should not be the tribunal deciding what they would like to hear!” Milone said in his statement. “It is obvious that we will continue this litigation to obtain the justice we deserve for all the reasons presented, and never debated or rejected, but just refuted.” 

“We will go to the end and find a solution,” Milone told the Register March 19. “We won’t give up.”