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Caritas Luxembourg has created a crisis committee after disclosing around 61 million euros (circa NZ$111 million) is missing from its accounts.
The Catholic charity is a member of Caritas Internationalis – confederation of Catholic relief groups. It is one of Luxembourg’s largest charities.
Caritas Luxembourg says it is providing counselling for its almost 500 employees. They are “deeply shaken” by the scandal Caritas says.
The theft
Caritas Luxembourg’s director general Marc Crochet says when the financial loss was discovered, Caritas had just 28 million euros in the account.
That is about half the money we need in the year to function, he explains.
“And the 28 million euros that were there were not our money either. That was about 25 million that belonged to the Luxembourg state and other donors.”
He discovered 33 million of the missing 61 million euros were in credit and loans taken out in Caritas Luxembourg’s name.
“The only thing I knew for sure was that someone was about to rob us” he says.
Once he saw how the money had been stolen however, Crochet says he had a good idea as to who the thief was.
“And I could actually just connect the dots and say: I know that person.”
The public prosecutor’s office has since said a person was arrested after turning themselves in for the theft on 22 July.
Accounting form PwC Luxembourg will be conducting investigations to uncover the facts.
At the same time, the crisis committee will make the necessary decisions “to restore the confidence of donors, the general public and public authorities in the entities” Caritas Luxembourg says.
Outrage expressed
Government officials are furious about the theft. A national debate rages about overseeing charities receiving state funds.
When he heard about the lost funds, Prime Minister Luc Frieden said Caritas would not receive “a single euro” more amid the scandal.
The Catholic charity with the big international name had been receiving state money to help provide services for the country’s homeless and refugees.
Another government minister said the “sickening” theft will impact “the poorest people in Luxembourg and in the world”.
Theft casts big shadow
The charity’s announcement could hardly have come at a worse time.
The scandal emerged weeks before a scheduled papal visit to the 700,000-citizen Catholic-majority country.
Francis is due to make a daylong visit to Luxembourg on 26 September, meeting the prime minister, head of state Grand Duke Henri, the Catholic community and Jean-Claude Hollerich who serves as the synod on synodality’s general rapporteur.
Auditing underway
While continuing to serve Luxembourg’s people in need, Caritas is negotiating with banks regarding its short-term financial needs and cooperating with the judicial authorities.
An auditing firm has volunteered to assess Caritas’ financial procedures “and to identify and change any technical and/or human shortcomings” a spokesperson says.
“These findings will undoubtedly shed light on how a misappropriation of funds on this scale, and over a period of nearly six months, could have been possible.”
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