The Mexican Catholic religious order Legionaries of Christ (LOC) created financial trusts that are currently holding $300 million in assets following a sex scandal and a 2010 Vatican announcement it would seize the order’s assets, reports the International Consortium of Investigative Journalists (ICIJ).
Three financial trusts with ties to the LOC were created in New Zealand. Their existence was discovered in a leak of financial records which has been named the Pandora Papers. The trusts invested in residential real estate.
“In statements to ICIJ, the Legion acknowledged it had set up one of the three trusts, but distanced itself from the other two, which held the majority of the funds designated for the Legion.”
When the ICIJ asked the LOC about disclosure of its assets, the ICIJ was told the “religious institutes do not have an obligation to send detailed information to the Vatican regarding their internal financial decisions or organization.”
The ICIJ organized the Pandora Papers project and recruited hundreds of journalists to examine almost 12 million records leaked from 14 offshore services firms. The ICIJ is describing the Pandora Papers as “The largest investigation in journalism history.”
El País, the Madrid, Spain-based newspaper and partner of the ICIJ in the Pandora Papers investigation, reported the LOC created offshore accounts to invest $18.5 million or 383 million pesos.
While El País doesn’t refer to the offshore banking scheme as money laundering, the activities described in the investigative report might give that impression: “The money flowed through Swiss bank accounts to investments mainly in Mexico and the United States.”
The LOC investments benefitted members of the organization. The Mexican religious order used trusts registered in New Zealand to invest in Jaguar Holdings, a Mexican oil company controlled by members Garza Medina’s family. Medina oversees the LOC’s finances.
The ICIJ operates the Offshore Leaks Database, which is a valuable tool for investigating international money laundering and global finance. After ICIJ and its media partners finish vetting the Pandora Papers data, the Offshore Leaks Database will be updated.
Trinity Foundation uses the Offshore Leaks Database in its open source investigations and has identified several religious organizations with questionable corporation filings in tax havens.
One example would be Morris Cerullo World Evangelism (MCWE) which created a foundation in Aruba in 1993. MCWE is not transparent financially. The ministry refuses to file a Form 990 which would disclose grants to foreign affiliate organizations.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.