VATICAN CITY (RNS) — An embattled Catholic religious order accused of hiding almost $300 million in offshore accounts denied any wrongdoing in an online statement, declaring that it did not evade taxes and complied with international accounting standards.
The Legionaries of Christ, a once powerful Catholic religious order that fell into disgrace in 2010 after sexual abuse scandals involving its founder, allegedly hid $295 million through the use of complex financial mechanisms such as trusts and offshore accounts, according to a recently published probe by the International Consortium of Investigative Journalists.
The revelations coincide with Pope Francis’ overhaul of the Vatican financial system, which has also been embroiled in financial scandals involving tax evasion, money-laundering and offshore accounts.
On Oct. 3 the consortium released a massive amount of leaked data and documents known as the “Pandora Papers,” shedding light on intricate maneuvers by wealthy and influential individuals and organizations to avoid paying taxes through offshore accounts in tax havens.
Among the list of A-listers is the Legionaries of Christ, which allegedly hid millions through three trusts in New Zealand. The Retirement and Medical Charitable Trust was created in 2010, only a few days before then-Pope Benedict XVI announced that the Vatican would take over the order’s management.
The other two trusts, the AlfaOmega Trust and the Salus Trust, were reportedly created in late 2011 to manage its investments just as the Legionaries faced massive settlements from alleged sexual abuse victims.
“The two trusts that the media reports claim have this money were not created by the Legionaries of Christ,” read the statement issued by the Legionaries on Thursday (Oct. 7), adding that the Pandora Papers “falsely attributed them to the Congregation.”
The statement confirms that the Legion did receive donations and loans from the trusts, which the statement said were created by a priest in the order and his relatives.
The Legionaries of Christ was founded in 1941 by the Mexican priest Marcial Maciel Degollado, who was later accused of sexually abusing minors and young men and of fathering multiple children while he led the religious order. Maciel died in 2008, and two years later the Vatican took control of the Legion after a wave of revelations concerning its management of abuse allegations and its finances.
The Rev. Luis Garza Medina, a Mexican priest who took over some of the management of the order after Maciel’s death, oversaw two of the order’s funds in New Zealand, according to the ICIJ report.
A 2014 review of the Legion’s finances found no irregularities, but a trove of documents published by ICIJ in 2017, the “Paradise Papers,” revealed an intricate web of offshore accounts connected to the order. After the reports, the Legion announced that it no longer held offshore entities.
“That statement was true then and it is true today,” the order said in its statement this week, adding that New Zealand is not considered a tax haven by the European Parliament and that the Retirement and Medical Charitable Trust exists for the sole purpose of receiving and distributing donations.
According to the report, a portion of the funds in the three trusts was used to invest in real estate in the United States. The report, published with the help of 150 media partners all over the world, showed that $14 million of the trusts’ funds were invested in apartment complexes that financially squeezed and evicted tenants during the height of the pandemic.
Speaking to attendees of the 75th General Assembly at the United Nations in September 2020, the pope called for “a new ethics” where nations “work together to close tax shelters, avoid evasions and money laundering that rob society,” and to “speak to nations about the importance of defending justice and the common good over the interests of the most powerful companies and multinationals.”
Article originally published by Religion News Service. Used with permission.
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