After a hearing June 30, judges of the city state’s Court of Appeal rejected on July 22 Milone’s appeal for a new hearing of the case, after a lower court dismissed the lawsuit last year.
“With regard to the compensation claim under consideration, it is not so much the lack of passive standing of the Secretariat of State that must be affirmed, but rather the groundlessness of the claim brought against it. Consequently, the claim must be dismissed,” judges wrote in their decision, issued July 22 and forwarded to The Pillar.
The judges reaffirmed a lower court order that the auditor pay costs for the initial trial, amounting to tens of thousands of euros, while splitting the costs at appeal between all parties.
Milone was in 2015 appointed by Pope Francis as the first auditor general of the Vatican. In 2017, he was forced to resign by then-sosituto Cardinal Angelo Becciu, who accused Milone and his deputy, Ferruccio Panicco, of “spying” on the private financial affairs of senior curial officials, including Becciu himself.
In a separate case, Becciu was convicted of corruption and abuse of office by a Vatican City court in December 2023.
At the time of their departure from office, both Milone and Pannico were detained for hours by Vatican City gendarmes and threatened with prosecution if they refused to resign their posts. Cardinal Becciu released a statement at the time, confirming his role in Milone’s detention, and that the auditor would have faced prosecution had he not agreed to resign.
Milone alleges that he was forced from office because he had discovered systematic corruption in the highest levels of the Roman curia and that his office and computer had been put under surveillance for months.
Milone’s lawyers had argued before the court in June that jurisprudence from Italian courts in similar cases was relevant to the suit, and held that in cases of illegal action by an official, legal responsibility lay with the institution, who in turn would have to pursue their rogue officer.
“During both the first and second instance proceedings, we maintained the existence of a general liability of the Secretariat of State as the ‘papal secretariat’ to which the number two of the entire papal hierarchy belongs, due to the lack of another entity against which it is possible to bring a liability action for events that occur within the Vatican City State,” Milone’s team argued in a brief presented to judges in a June 24 brief, also seen by The Pillar.
“One cannot agree with the reasoning of the first-instance judges, who, in rejecting the appeal of the former Auditors General against the Secretariat of State, at least for the conduct of one of its organs in the specific case, the Deputy for General Affairs [Cardinal Angelo Becciu], argued that he had, if anything, acted for personal purposes, unrelated to the aims of the Ministry of which he was a member.”
However, the judges disagreed, noting that while the actions of Cardinal Becciu to force Milone from office could be unlawful, the cardinal had not been sued by MIlone, nor criminally prosecuted in Vatican City over the affair. In light of that, additional liability for the Secretariat of State could not be established.
The appeal judges said in their ruling that while “liability for culpa in vigilando for unlawful actions by employees committed in their capacity can certainly be admitted,” “it is therefore logically necessary to establish liability against the alleged perpetrators of the intimidation.”
“However, they [Cardinal Becciu and the former head of the Vatican City Corps of Gendarmes] have never been sued,” the judges observed, echoing the reasoning of the lower court’s decision to dismiss the case.
“The appellants maintain that the omnimodal representation ad extra which for the Holy See is the responsibility of the Secretariat of State entails a necessary responsibility for illicit or illegitimate acts committed within the State by employees of the Roman Curia or the Governorate [of the city state],” wrote the appeal judges. “This deduction cannot be shared.”
Lawyers for the Secretariat of State have contended since the trial’s outset that if Becciu acted illegally in office, the department is not liable for his extra-legal actions, and that since Milone was appointed by Pope Francis, his suit for wrongful termination was legally an attempt to appeal a decision of the Roman Pontiff — prohibited by canon law.
Judges at the lower court level agreed, in part, with the Secretariat of State’s arguments. While the court did not conclude that Milone and Panicco had been rightly forced from their jobs, the judges rejected the argument that the Secretariat of State was liable for their ouster, loss of earnings, and subsequent damage to their reputations.
In addition to rejecting their requests for compensation, the court also ordered both men, including the deceased Panicco, to pay legal costs amounting to more than 100,000 euros between them.
“The question to be addressed is… whether the facts put forward by the plaintiff as the basis of its claims can be considered as attributable to the Secretariat of State,” wrote judges in the decision last year. “Upon careful examination, however, this attribution must be excluded.”
In preparation for the lawsuit’s initial trial at the lower court, Panicco and Milone filed several hundred pages of documents, which they said would prove widespread corruption among senior curial officials at the Vatican, and prove that they were forced out for discovering that corruption.
Those filings, which lawyers for Milone also sought to introduce at appeal, were excluded as irrelevant to the case by lower court judges.
Earlier this year, the Court of Appeal judges blocked the files from being introduced, ruling that they contained “the general and repeated attribution to persons holding top positions in the Roman Curia of practices that are at least immoral and certainly indecent,” and would harm the “good name” of individuals not party to the lawsuit.
Milone has in the past indicated he would consider releasing those files to the public if his lawsuit proves unsuccessful.
Following the Court of Appeal’s decision not to hear the lawsuit, Milone’s only remaining avenue of legal recourse would be to petition the city state’s court of cassation, which is the final judicial forum in Vatican City.
Although both the court of first instance and the appeal tribunal are made up of lay judges, the court of cassation was reformed by Pope Francis in 2023, with the previous pope appointing as judges a slate of cardinals without legal backgrounds, either civil or canonical.
Milone and his former deputy Panicco announced in November 2022 that they would sue their former employers for wrongful termination, loss of earnings, and reputational damage over their ouster from office.
Panicco died from cancer in 2023, stating at the time that Vatican City officials had seized and withheld his personal medical records, delaying his treatment and ensuring an eventual terminal diagnosis.
In 2017, Cardinal Becciu accused Milone of “spying” on the private finances of senior curial officials, including Becciu himself. In a separate case, Becciu was convicted of corruption and abuse of office by a Vatican City court in December 2023.
Milone has previously said he was fired because he was digging for the kind of records which eventually got Becciu indicted and convicted – looking in Becciu’s department for records of questionable investments and illicit financial practices.
“When we started to examine the financial statements of the Secretariat of State in March 2016, we were handed a piece of paper showing roughly 800 million euros in investments. So we asked for the information and for a good many months I never got the information.”
“Now I know why they weren’t giving it to me, on the basis of what happened with [London investment property] Sloane Ave.”
Key to the auditors’ claims, according to court filings reported by The Pillar last year, was that it was the then head of the Vatican Corps of Gendarmes, Domenico Giani, who along with Cardinal Becciu forced their resignations.
“What it was,” Milone told The Pillar in 2022, “is that I discovered that there were cardinals putting money in their pockets, they were doing strange things.”
“Evidently, [Cardinal] Becciu and his friends must have come across these reports because he was the pope’s chief of staff at the time, and got worried because ‘this guy’ was putting these cardinals in difficulty.”
The former auditor claimed that Giani had also engaged in his own financial misconduct, and that when Milone discovered it, the police chief formally accused them of illicit spying.
The former auditors have also previously stated that their Vatican offices had been bugged and computers hacked. Milone has said that although he made several complaints to Vatican gendarmes, under Giani, the security breach was never investigated.
Speaking to The Pillar in 2022, Milone noted that Giani “had a reason to get me out,” because he had uncovered evidence of corruption in the Vatican police force.
Since their dismissal, Milone has previously said, he and Panicco made several attempts to reach an out-of-court settlement with the Vatican through the Secretariat of State but without success.
Milone has said he has been unable to work because of the reputational damage he has suffered because of the Vatican’s statements about him.
A spokesman for Milone told The Pillar that, following the decision this week, the auditor was “taking some days to reflect on the decision and consider how to proceed.”