As Pope Leo continues to settle into his pontificate, many in Rome are still waiting on a slate of major decisions and appointments, some of them holdovers from his predecessor’s time, and some of them anticipated from any new occupant of the see of Peter.
One of the quietly less appreciated but perhaps more significant decisions facing Pope Leo will be when and how to replace the 78-year-old Cardinal Kevin Farrell.
The Irishman spent most of his ministerial life in the United States, then was moved from leading the Diocese of Dallas to Rome by Pope Francis in 2016. He was first appointed as prefect of the newly created Dicastery for Laity, Family and Life. Francis later added the role of Cardinal Camerlengo, placing him in charge of organizing the conclave which elected Leo.
Both of these jobs are reasonably high-profile, and Leo will have to give some thought to how to fill them as Farrell approaches 80, the increasingly new normal age of retirement at the top of the curia.
But less noticed — and perhaps more significant — are the raft of other roles handed to Farrell by Francis over the last nine years. The cumulative effect of those appointments has, in practice, made Farrell one of the least noticed but quietly powerful men in the realm of curial finances.
More than any other person, the camerlengo, who has an MBA from the University of Notre Dame, will shape the new pope’s impression of the Vatican’s financial situation, even if Leo intends to take advice from across various bodies and departments — and to seek outside consultation.
And it means that when Farrell does eventually retire from his offices, Leo will have to decide whether he wants to maintain the de facto centralization of economic affairs which was left to him by Pope Francis.
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In addition to his more visible roles as dicastery prefect and camerlengo, Farrell was named in 2020 by Pope Francis to lead the newly created Commission for Reserved Matters, a body charged with overseeing financial matters linked to the Holy See’s sovereign activities, which are otherwise exempt from city state and curial financial laws and oversight.
The creation and appointment of that body was, superficially, presented as a necessary means of segregating matters touching state security, diplomacy and sensitive international operations from a raft of general financial reforms, which aimed at more oversight and transparency.
While that was undoubtedly part of the reason, the commission’s creation — and Farrell’s appointment to lead it — were more significant as a development in curial power politics, especially in the fallout of the Secretariat of State’s financial scandals linked to the London property affair.
The same reserved matters had previously been treated within the Secretariat of State and led by that department’s head, Cardinal Pietro Parolin — in other words, after an embarrassing scandal, Francis created a Farrell-led commission to divest Parolin of sensitive responsibilities.
That same year, Farrell was also handed a seat as a cardinal member of APSA, the Holy See’s sovereign wealth manager, effectively placing him in oversight over all curial assets and investments.
More was to come.
Following years of complaints from curial financial watchdogs like the Office of the Auditor General, and just months after a damning internal report from the Financial Supervisory and Information Authority on APSA’s anemic risk management and investment policies, Pope Francis in 2022 created a Committee for Investments.
According to Francis’ new apostolic constitution on the Roman curia, the committee is charged with “ensuring the ethical nature of the Holy See’s movable investments according to the social doctrine of the church and, at the same time, their profitability, adequacy and risk,” and presumably avoiding a repeat of unethical investment scandals.
Cardinal Farrell was again installed as the committee’s head. Interestingly, while that new committee was intended to function as an advisor, offering advice and clarity regarding the applicability of Church teaching on investments by bodies like APSA, Vatican financial officials say it has evolved into a much more executive role.
“The committee was supposed to supply what was internally lacking at APSA,” one senior financial official told The Pillar. “Clarity on what sectors and types of project it is — and is not — acceptable for the Church to become involved with.”
“Instead, it has become a total center of power. The committee does not advise, quite often it directs specific investments — positively — that is to say, ordering a particular investment of its own selection to be made, not giving advice on the proper choices of others.”
This evolution of the Committee on Investments has placed it in tension with the leadership of other financial institutions and departments, according to several curial officials, including APSA, the Secretariat for the Economy, and the Institute for Works of Religion, the Vatican’s commercial bank — especially following a 2022 rescript from Pope Francis, directing APSA to work solely through IOR.
That rescript was repealed by Pope Leo in September of this year.
A final financial position was created and handed to Farrell by Francis in 2024, one of the previous pope’s final major administrative acts.
In November last year, the pope appointed Farrell as the sole director of the Vatican’s pension fund, dismissing the fund’s board in the process. This move followed shortly after Francis informed the College of Cardinals that the fund faced “a serious prospective imbalance,” and that it was “not able to guarantee in the medium term the fulfillment of the pension obligation for future generations.”
But, highly placed sources close to the fund told The Pillar, while the fund has been in deepening financial trouble for some time, matters have been made more acute in the years immediately preceding total control being handed to Farrell and that the source of the problem was in large part Farrell’s own Committee on Investments.
“The [committee] already took over all decision making on investment matters. Orders were made to sell and reinvest with new investment managers chosen by the committee,” the source said. “We talk about the pension fund, but in reality it is just an account now, there is no actual management proper to it anymore, all discretion is concentrated in the Investment Committee and [the Secretariat for the Economy].”
Internal Vatican financial reports presented to the Council for the Economy last year, seen by The Pillar, show that liquidity in the fund dropped by 87% from 2022-2023, with substantial increases in the amount invested in funds and bonds over the same period.
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As The Pillar has previously reported, the early moves by Pope Leo indicate that the pope has taken a more sanguine view of the Vatican’s financial state than did Francis in the final year of his pontificate. The new pope has downplayed talk of a “crisis” and insisted he isn’t “losing sleep” over financial matters.
Coupled with that, Leo’s decision to revoke Francis’ 2022 rescript ordering the exclusive use of IOR by APSA and other Vatican institutions has been perceived by many as an acceptance of widespread resistance to the initial order among curial bodies like APSA and the Committee for Investments.
On one level, Leo’s rescinding Francis’ order creates, or re-creates, the conditions for a more decentralized process of investment management within the Vatican — something insiders warn will cost the Holy See money, and make oversight more difficult.
But on another level, officials suggest that a practical decentralization of investments and their management masks an actually more centralized decision-making process — a process with Cardinal Farrell at the center.
With less than two years until his 80th birthday, Leo is likely already mulling when and how to replace Farrell in his most forward facing roles as camerlengo and dicastery prefect. But the pope will also have to consider how to replace the man who has quietly become, effectively, the Vatican’s Chief Investment Officer.