Italian police on Thursday arrested a priest accused of pocketing €4m (£2.76m) from a Catholic hospital he ran and helping run up €600m in debts that forced it into bankruptcy.
The Rev Franco Decaminada, who until 2011 was the chief executive of the IDI dermatological hospital in Rome, was placed under house arrest by Italy's financial police. They also detained two other people while seizing a Tuscan villa that police say Decaminada built with stolen money.
The plight of 1,500 IDI workers who haven't received paychecks for months had prompted Benedict XVI in one of his last acts as pope to name a delegate in February to take over the religious order that owns the hospital to try to bring it back to financial health.
But in the end the Vatican refused to provide any financial assistance and last week a Rome court certified the hospital as insolvent.
IDI workers have occupied the hospital's management area and are buying food to help needy co-workers while continuing to work without pay in hopes of saving their jobs.
"After years of suffering and eight months without salary, we at least have the satisfaction of seeing that justice is starting to work," Bartolomeo Di Gregorio, 56, a biomedical lab technician, told the Associated Press on Thursday.
He welcomed the arrival of Cardinal Giuseppe Versaldi as the papal delegate to head the religious order – the Congregation for the Children of the Immaculate Conception – which runs the hospital, but said in the end it didn't help "because we went into bankruptcy anyway".
The problems at the IDI are the latest in a series of financial scandals at Catholic-run health facilities in Italy that, while not directly involving the Vatican, have links to its No. 2, the secretary of state, Cardinal Tarcisio Bertone.
According to leaked Vatican correspondence, Bertone looked into investing money from the Vatican bank into a failing Milan hospital, the San Raffaele, in 2011 after it accumulated millions in debt because of mismanagement. In the end, the hospital went to outside investors.
But Bertone's apparent interest in building up a Vatican healthcare network in Italy has been cited as evidence of his own administrative failings in running the Holy See by focusing too much on small Italian problems and not on global church issues.
On Thursday, Decaminada's order sought to distance itself from his crimes, saying it was a victim in the case and it was co-operating with investigators. It stressed that "no member of the congregation ever saw or visited the home in Tuscany built by Father Decaminada" and its construction was never authorised.
