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Moscow Archdiocese Allegedly “Embroiled in Property Scandal”

Moscow City Court
Moscow City Court
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The Moscow Archdiocese has faced accusations of receiving property at someone else’s expense and fraud on a particularly large scale. This is reported by The Daily.

The Russian capital has recently been hit by allegations of financial irregularities brought against the Archdiocese of the Mother of God in Moscow, headed by Archbishop Paolo Pezzi, an appointed member of the Pontifical Council Cor Unum. A cursory glance at the situation over the past decade is enough to explain the shock and confusion that has arisen recently.

In 2007, Pezzi succeeded Tadevuš Kandrusievič, a prominent Catholic figure in post-Soviet countries. With the latter at the helm of the Archdiocese of Moscow, the Church leased a dilapidated hospital in the northeastern part of the city, took up repair and restoration works and even expanded the building by adding more sections, the efforts authorized by the authorities. It was some time later that the city government unexpectedly terminated the 25-year-long lease, which came as a nasty shock for the Archdiocese. Challenging the step could prove to be a costly and time-consuming affair, especially due to the fact that by that time the Church had already contributed large sums of money to the restoration of the building. To avoid extra spending, the Archdiocese approached Mosinvest-Siberia, a company with extensive expertise in property issues and commercial property disputes in particular, with the two sides entering into an agency agreement. Consequently, the deal gave the company the legal right to speak on behalf of the Church in court and to take all the appropriate measures. The cooperation bore fruit, as the case was decided in favor of the Archdiocese which, in its turn, expressed gratitude to the agent for its decent services and suggested that they should continue working together. 

The words translated into deeds in January 2013, when Igor Kovalevsky, Chancellor of the Mother of God Archdiocese, initiated a deal with Mosinvest-Siberia aimed at taking possession of four buildings, part of the Lubyanka historical ensemble of the Saints Peter and Paul Church. The agent undertook to bear all financial costs involved in performing the contract, to do a lot of paperwork required to vest the Church with legal access to the buildings in question, and to abide by the clauses regulating the payment issues. Here it is noteworthy that all the buildings that the Church laid claims to fell within the scope of the mandate of different departments and institutions, and some of them voiced their opposition against the Archdiocese’s decision to become the owner. At that time, Mosinvest-Siberia realized that under such circumstances there was a slim chance that the court would rule in favor of the Church, which meant that the herculean efforts, including, among others, talks with federal and city authorities and document preparation and gathering, would come to nothing. 

For all the fears of the court killing the campaign stone-dead, the judge issued a June 2017 order that granted the Catholic Archbishop of Moscow a title to four buildings of the historical ensemble of the Saints Peter and Paul Church. However, it took Mosinvest-Siberia another couple of years to muddle through the red tape and extensive paperwork required to transfer to the Catholic Church the 6,000 square metre property located in the heart of the capital city. At that time, its market value was estimated to be some 2.5 billion rubles, at the very least. The company had to submit a plethora of claims and documents to a bewildering array of departments, including even Russia’s Presidential Administration, and to defend its client’s interests in courts of different instances. All this was not in vain, though. In the end, the Archdiocese of Moscow entered into possession of the buildings perfectly suitable for its purposes and needs at no cost.  

In 2019, both parties agreed that Mosinvest-Siberia had fulfilled its obligations under the January 2016 contract stipulating that the agent “shall be eligible for a one-time payment in consideration for the services accepted for the performance”. However, the agreement was followed by the Archdiocese of Moscow’s alleged refusal to abide by its commitments. According to some sources, Paolo Pezzi just went ghost. After having invested a lot of time, money and sweat into helping the Archdiocese of Moscow regain its right to use the property, Mosinvest-Siberia reached a deal with “Dostupnoe Zhil’ye” LLC that enabled the latter to demand that Paolo Pezzi perform his part of the agreement. Yet he has purportedly taken no steps to rectify the situation so far.

Curiously enough, reports emerged in 2020 that Pezzi had made a request to the Congregation for the Clergy to approve of his decision to put the buildings up for sale at a price higher than the market price. This may be tacit recognition of the fact that it was with the aim of profiteering that the Archdiocese of Moscow had employed Mosinvest-Siberia to get back its property in the city center. At the same time, very few people think that by expressing his willingness to sell the parts of the historical ensemble, Pezzi aimed to settle his debts owed to Dostupnoe Zhil’ye, and here are the reasons why.

To encourage the Vatican to give the green light to the sale, the Archbishop supposedly promised to use its proceeds to build a new Catholic church and back those priests who do not get paid. Apart from stating that repair and maintenance costs were beyond the means of the Archdiocese, Pezzi emphasized the necessity to reimburse all fees, charges and other costs to Mosinvest-Siberia and to meet the contractual obligations in terms of remuneration. In April 2020, the Vatican said yes to the suggestion, adding that the proceeds from the event must reasonably and lawfully go to the given purposes under the Archdiocese’s supervision. This wording may have dismayed Pezzi, and he decided against selling the property on those terms and conditions that he had previously outlined. By doing so, he opted for a course of action that apparently put him and the Holy See in a credibility gap.

In fact, the Archbishop deliberately ignored the Vatican’s recommendations and ordered the Vicar General to inform Dostupnoe Zhil’ye that the Archdiocese had no intention of selling the buildings belonging to the Saints Peter and Paul Church. This may be deemed tantamount to the Catholic Church reneging upon its agency agreement with Dostupnoe Zhil’ye, which puts a dent on its reputation and violates Russian legislation. To recap, the Archdiocese of Moscow returned the vast property in the city center for nothing only to breach its legally binding contract with the two companies. In this light, the remedy could be the transfer of some buildings to partly repay the debts, but it seems that the Archdiocese has no desire to consider this option.

Over the past decades, the Catholic Church has repeatedly found itself at the center of much bigger scandals over child sexual abuse swept under the carpet, the Vatican bank’s money laundering and tax evasion, and ties to the mafia. However, the election of Pope Francis who embraced the task of cleaning the Augean stables raised hopes that the Holy See would re-emerge as an embodiment of morality and spirituality. Italian and French journalists who have already taken an interest in the allegations of financial impropriety surrounding the Archdiocese of Moscow believe that the Vatican is not well aware of the facts on the ground. Moreover, some consider that the story may trigger another cascade of accusations against Paolo Pezzi and his acolytes. Specifically, he along with Italian banker Vincenzo Trani is reported to have established a network of predatory microfinance organizations. We are likely to see how things pan out, as some authoritative media outlets in Europe have so far reached out to the pontiff and his collaborators in the Roman Curia for clarification.

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