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Papacy used offshore tax havens to create £500m international portfolio, featuring real estate in UK, France and Switzerland

Few passing London tourists would ever guess that the premises of Bulgari, the upmarket jewellers in New Bond Street, had anything to do with the pope. Nor indeed the nearby headquarters of the wealthy investment bank Altium Capital, on the corner of St James’s Square and Pall Mall.

But these office blocks in one of London’s most expensive districts are part of a surprising secret commercial property empire owned by the Vatican.

Behind a disguised offshore company structure, the church’s international portfolio has been built up over the years, using cash originally handed over by Mussolini in return for papal recognition of the Italian fascist regime in 1929.

Since then the international value of Mussolini’s nest-egg has mounted until it now exceeds £500m. In 2006, at the height of the recent property bubble, the Vatican spent £15m of those funds to buy 30 St James’s Square. Other UK properties are at 168 New Bond Street and in the city of Coventry. It also owns blocks of flats in Paris and Switzerland.

The surprising aspect for some will be the lengths to which the Vatican has gone to preserve secrecy about the Mussolini millions. The St James’s Square office block was bought by a company called British Grolux Investments Ltd, which also holds the other UK properties. Published registers at Companies House do not disclose the company’s true ownership, nor make any mention of the Vatican. …

… The Mussolini money was dramatically important to the Vatican’s finances. John Pollard, a Cambridge historian, says in Money and the Rise of the Modern Papacy: “The papacy was now financially secure. It would never be poor again.” …

… The Mussolini investments in Britain are currently controlled, along with its other European holdings and a currency trading arm, by a papal official in Rome, Paolo Mennini, who is in effect the pope’s merchant banker. Mennini heads a special unit inside the Vatican called the extraordinary division of APSA – Amministrazione del Patrimonio della Sede Apostolica – which handles the so-called “patrimony of the Holy See”.

According to a report last year from the Council of Europe, which surveyed the Vatican’s financial controls, the assets of Mennini’s special unit now exceed €680m (£570m).

While secrecy about the Fascist origins of the papacy’s wealth might have been understandable in wartime, what is less clear is why the Vatican subsequently continued to maintain secrecy about its holdings in Britain, even after its financial structure was reorganised in 1999.

The Guardian asked the Vatican’s representative in London, the papal nuncio, archbishop Antonio Mennini, why the papacy continued with such secrecy over the identity of its property investments in London. We also asked what the pope spent the income on. True to its tradition of silence on the subject, the Roman Catholic church’s spokesman said that the nuncio had no comment.

Via How the Vatican built a secret property empire using Mussolini’s millions | World news | The Guardian

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