One of Pope Leo's primary missions is to clean up the reputation of the Catholic Church after years and years of scandal and overall bad PR, but the latest headlines are definitely not helping in that regard.

According to Politico, the Vatican is under fire, having been accused of using a "skeleton key for money laundering" by allegedly illegally manipulating bank transfers. 

A former top financial official for the Vatican, who was forced out of his position in 2017, claimed "that its payroll agency was able to alter the names and account numbers on transactions after they were made, masking the identity of recipients and senders."

The scheme is potentially huge as it would have allowed top Vatican officials to wire funds to private clients without identifying them, which is a violation of textbook anti-fraud rules.

What's going on?

The situation is unfolding and is certainly not a great look for the new pope, who has vowed to help restore the Vatican's reputation to its former glory, a reputation tarnished by years of financial scandal and budget shortfalls.

Not surprisingly, the Vatican has denied the allegations, and people who are familiar with the institution that oversees and facilitates international money transfers claim the scheme would be impossible.

However, the accusations are reportedly being taken seriously given the credibility of the person who brought them to light, marking yet another likely bad round of press for the Vatican and the new pope.

Politico noted:

What adds to the intrigue is how closely the allegations mesh with internal Vatican politics.

They come from Libero Milone, former auditor at Deloitte, a top accountancy firm, who was appointed by the late Pope Francis in 2015 to fix the Vatican’s finances after years of scandal and neglect.

Notably, Milone was forced out of his position just two years later after officials accused him of being a spy.

Milone insists he was forced out "because he had identified financial wrongdoing connected to the city state's former police chief and cardinal, Giovanni Angelo Becciu."

Surprise, surprise - Becciu was convicted of embezzlement in 2023 for misusing the city-state's funds.

Convincing case

Milone, according to The Pillar, a Catholic website, is reportedly sitting on a trove of potentially explosive information that would look really bad for the Vatican.

The website said if Milone's claim that a 'skeleton key' exists that could alter the transfers, that "the Vatican would likely end up on an international financial black list of the darkest kind, frozen out of the international banking system, meaning no money could come in or out of the city state except in literal, physical cash."

Only time will tell if Milone's claim is truthful and, if so, what happens to the Vatican as a consequence.