Catholic bishopric suffers heavy losses in U.S. investment scandal

Edited by walterp on . Posted in Main, Religion

According to the report, Bishop Gregor Maria Hanke reported a former employee in the financial administration of his Eichstatt episcopal see as well an unnamed U.S. business partner to the police.

Both have been accused of involvement in illegal investment practices, a statement by the bishopric on Monday confirmed.

The case has been turned over to the “white collar crime”-focused “Munich II” state prosecution office. The unit has recently achieved fame beyond Germany for its investigations into Audi’s involvement in the “dieselgate” scandal.

State Prosecutors told press that charges had indeed been filed and that both individuals accused of financial misconducts were currently in police custody. The investigators estimated the damage caused by the scandal to the bishopric to be in the tens of millions.

A spokesperson for Bishop Hanke further specified that around 60 million euros (74.5 million U.S. dollars) in “dangerous, unsecured loans” had been identified.

However, an assessment of the exact implications thereof on the financial position of the bishopric had not yet been concluded due to the “complicated” nature of the investments.

The spokesperson said that first suspicions arose in May 2017 when a loan extended by the bishopric that became due was not repaid. Bishop Hanke subsequently commissioned an attorney to file criminal charges, including graft, corruption and bribery, two months later.

The necessity of a wider “transparency offensive” launched in 2015 had thus become “tragically apparent”, the spokesperson admitted. The misconduct was only discovered as a consequence of the initiative across Catholic churches in Germany.

Nevertheless, the bishopric views itself as a victim in the investment scandal and has expressed hope that the proceedings leading to the heavy losses would be thoroughly investigated by authorities and ultimately lead to criminal prosecutions.

However, information cited by the “Sueddeutsche Zeitung” on Monday suggests that the Catholic church may also have been negligent in its related supervisory duties, having previously employed a cleric without subject-matter knowledge of finance, business or accounting as the chief financial officer of the Eichstatt episocal see.

   

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