VATICAN CITY — Nov 14, 2017, 4:13 PM ET

Catholic order concedes past offshore holdings in tax havens

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The scandal-marred Legion of Christ Roman Catholic religious order acknowledged Tuesday it had offshore companies in Caribbean tax havens in the past, but said they had been closed and that none was used for illegal activities.

In a statement, the Legion sought to blame its offshore corporate strategy on its disgraced founder, the Rev. Marcial Maciel. The Mexican-born Maciel, who died in 2008, sexually abused his seminarians and fathered three children, all while cultivating a cult of personality around himself that extended to the highest echelons of the Vatican.

The Legion's multi-million dollar offshore holdings, long the source of speculation given the order's studied cultivation of wealthy donors and fast expansion, were revealed in the so-called Paradise Papers leak.

Reports by a consortium of investigative journalists have detailed how lawyers and priests still currently active with the Legion helped manage the financial empire beyond Maciel.

Spain's El Confidencial reported that the Legion in 1994 created a corporation in Bermuda, IVS or International Volunteer Services, to receive the millions that the Legion made from its schools and universities. The Legion denied El Confidencial's estimation that $300 million passed through IVS annually - it said IVS was set up but never used.

The report and a similar one in Italy's L'Espresso said the fund was secretly liquidated in 2006, just before the Vatican sanctioned Maciel to live a life of penance and prayer for raping and molesting his seminarians. In 2010, after the Legion publicly revealed the existence of his children, the Vatican took over the order entirely.

In the statement, the Legion said the Vatican-mandated inquiry into its financial management found no misappropriation of funds or other "irregularities." It said it currently had no offshore corporations or money invested in them.

The statement didn't explain why the offshore corporations were established initially. A spokesman referred to mentions in the statement of the Legion's expansion in the 1990s beyond Mexico and the receipt of donations.

In theory, the Legion would have had at its disposal another tax haven option in the form of an account at the Vatican bank, the Institute for Religious Works, where religious orders can keep their deposits and donations and move money globally. But that would have required a degree of oversight, or at least knowledge, of account balances and activity by Vatican authorities.

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  • RobertJohns

    The Vatican itself was a major tax haven and money laundering center until just this past spring, when it finally started to clean up its act. It comes as no surprise that other parts of the church have been behaving just as badly.

  • Billy Bob Smith

    Why not? Religion is more of a business now than ever before. Why don't you also investigate people like Joel Osteen and Joyce Meyer? Or other "religions" like Scientology? I'll bet they're hiding money offshore, too.

  • whitepine

    Religion is big business. If the Catholics did this, what about the Southern Baptists? They are the rich religion in the South.

  • Onetaxpayer

    It appears that the wealthy have another loop hole to hide money and the government does nothing about this. We are told that many companies and citizens hold profits in other countries keep and Congress can not find a way to have this money comeback. Actually this money can deposited in a bank in another country that does business in the US.

  • John Cram

    God doesn't need any more money. Put your charity towards helping others, not build an lavish church with a 300k pipe organ.

  • WorkingClass

    Apparently they chose not to render unto Caesar what was Caesar's. Like most churches....

  • JerseyJeff78

    A renegade Catholic order...

    It’s the stuff of mystery novels.

  • Nathan Broussard

    good, the next time I see my priest I am going to shake him down for money