He is very concerned that New Zealand and international reporting around the Pandora Papers has painted a picture that is untrue, and while he is no longer in New Zealand he was born here and has a strong affinity to the country.

"I am truly sorry for the negative impact the trusts have created in New Zealand and especially sorry for any damage to the Church's reputation in Aotearoa. I hope things can be resolved", he told CathNews.

Cleary said it is simply not true that the Legionaries operate three trusts, in fact, they only operate one, the Retirement and Medical Charitable Trust (or RMCT).

The RMCT trust is receiving trust only, used to provide medical care for Legionaries and support elderly members in retirement.

Cleary told CathNews that claims the RMCT trust was established to hide money from sexual abuse settlements is simply untrue.

Cleary was forthcoming about the AlfaOmega Trust and Salus Trust.

However, says they were not established by the Legionaries of Christ but independently, by families.

Quick to clarify, Cleary said both the AlfaOmega Trust and Salus Trust, while established by private individuals, are also the family of a priest of the Congregation who wanted to donate money to Legion and where necessary provide loans so that the elderly members can be looked after and Legionnaires' health needs promptly attended to.

These statements and others to follow, run counter to what was published in the ‘Pandora Papers'; a recently published probe by the International Consortium of Investigative Journalists (ICIJ).

"The 'Pandora Papers' publications have falsely attributed them to the Congregation, although the Legionaries of Christ have clarified this information to the International Consortium of Investigative Journalists", reads a statement on the Legionaries of Christ website.

Wanting to clarify the Canon Law surrounding the priest's actions, CathNews spoke with a Canon Lawyer who confirmed that religious may receive money and gifts, but they are not permitted to benefit from them.

In her opinion, and from what she knew of the situation no Canon Law has been broken.

Further distancing themselves from any role in the AlfaOmega and Salus trusts, the Legionaries of Christ say on its website, it has "has no knowledge of the bylaws governing the AlfaOmega Trust and the Salus Trust, which establish who their board members are because they were not created by the Legionaries of Christ.

"The Congregation has never controlled their funds, their terms, their operations, or their investments.

"Nor does the Congregation determine the destination of their funds in any way, even though the trusts were created by a Legionary priest and his family members.

In a further distancing move, the Congregation denies the media claim that all three trusts have the same directors adding that, "The RMCT trust (created by the Congregation) has a board of directors, made up of members of the Legionaries of Christ, which rotates periodically by statute, according to the positions they hold in the Congregation."

The Pandora journalists also allege the Congregation has hidden $295 million through complex financial mechanisms such as trusts and offshore (New Zealand) accounts.

It is a claim the Legionaries also flatly refute.

What is true, they say, is Legionaries sold properties as part of their commitment to pay the debt it incurred around sexual abuse.

In another alleged serious inaccuracy, the Pandora journalists also reported that 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 implications surrounding hiding money are clear.

But, in a statement to CathNews, Cleary, said he cannot reconcile the Pandora journalists' account with the fact that the RMCT remained inactive until it received its first funds around 2015.

Another elephant in the room is why New Zealand.

Cleary confirmed that there has never been a Legionary community based in New Zealand, saying the Legion's outreach to New Zealand started in Dunedin only in the 1990s.

"The Legion supported and offered spiritual guidance through the Regnum Christi movement to several laypeople, and have been strong supporters and strong benefactors for the Dunedin diocese," he said.

He said the Congregation chose New Zealand because financial environments in Mexico, where the Congregation is primarily based, and in Rome are less than transparent.

"The Legion chose New Zealand because the country is professional, reliable, cooperative and serious".

Cleary said New Zealand always features in the top group of nations with the least corruption and the trust remains in New Zealand because the new regulations make New Zealand even more attractive.

In a statement to CathNews, the Director of Communication for Legionaries of Christ, Fr Aaron Smith, confirmed, "The RMCT has complied with applicable NZ tax regulations, international accounting laws and auditing standards."

A 2014 review of the Legion's finances found no irregularities. Still, the "Paradise Papers" published by ICIJ in 2017, revealed an intricate web of offshore accounts connected to the order.

Sources

• Religion News
• Supplied: Statement and phone conversation
• Legionaries of Christ
• CathNews New Zealand

The Mexico based Legionaries of Christ used the trusts in a complex financial arrangement that held assets in four continents, according to an analysis by the International Consortium of Investigative Journalists (ICIJ).

At the same time, the order is facing lawsuits by victims of alleged sexual abuse by priests.

The collaboration, codenamed the Pandora Papers, has revealed the hidden offshore financial dealings of an array of wealthy and powerful figures, including 35 country leaders, hundreds of politicians, 133 billionaires, celebrities, and sports stars.

The ICIJ identified three New Zealand-registered trusts connected to the Legionaries of Christ in documents from Asiaciti Trust. Asiaciti is a Singapore-based corporate services provider that was one of 14 professional firms whose confidential internal records were exposed in the Pandora Papers.

The first trust, known as The Retirement and Medical Charitable Trust (RMCT), was established in New Zealand July 6, 2010. This was just three days before Pope Benedict XVI asked Italian Cardinal Velasio de Paolis to oversee a reorganisation of the Legionaries of Christ and its lay, branch Regnum Christi.

The use of foreign trusts is not illegal or necessarily tied to tax avoidance or money laundering, and the Legionaries of Christ deny any wrongdoing.

However, when the Legionaries of Christ trusts were established, New Zealand was a popular destination for people seeking to hide money offshore using trusts.

New Zealand foreign trusts were promoted to international clients to hold assets confidentially without paying tax in a jurisdiction that did not carry the stigma of a tax haven.

The disclosure rules were tightened in 2017 following the 2016 release of the Panama Papers, another global financial investigation. This investigation raised questions about whether New Zealand had been too loose in policing overseas money flowing through its legal structures.

A spokesperson for the Legionaries of Christ denies the religious order controlled the trusts that made the investments. They only admit to having control over the RMCT, which received all the profits. They assert that it is incorrect to describe them as responsible for the movement of funds.

However, under an elaborate structure, they hid companies under other companies to hide that the beneficiary of all of those businesses was their own religious order.

The network of trusts and subsidiaries set up by priests and businessmen close to the congregation moved as much as $295 million across four continents.

Two companies based in the United Kingdom were in charge of commercial operations. Their cash flow came from interest-free loans made by AlfaOmega Trust and Salus Trust.

These two trusts were opened in New Zealand by the longtime financial planner of the Legion, Luis Garza Medina, and two of his brothers. The end beneficiary of the scheme, and which received the profits, was a third trust created by the religious order.

A review of leaked documents by ICIJ shows deep connections to the Legion in all three trusts, which share the same New Zealand address and have the same trustees managing them.

The Legionaries of Christ was founded in 1941 by a charismatic Mexican priest named Marcial Maciel. Over the next several decades, the order expanded internationally and established influential connections in the Vatican and elsewhere.

In 1997, reports emerged in the American press of allegations that Maciel had abused boys and young men training to be priests.

In 2006, the Vatican investigated nearly 100 abuse allegations against Maciel. As a result, it removed Maciel from ministry, ordering him to adopt a "life of prayer and penitence".

Maciel died in 2008, and in 2010 the legion's website acknowledged as factual the "reprehensible actions" by Maciel, including sexual abuse of minor seminarians.

Sources

NZ Herald

National Catholic Reporter

El País

Business Desk

BBC