ROME- Italian magistrates suspect a Vatican cardinal may have diverted 30 million euros in state funds destined for a children's hospital to save a Church-owned institution and kept the operation from Pope Francis, Italian media reported on Saturday.
Both Cardinal Giuseppe Versaldi and the Bambino Gesu hospital, denied any wrongdoing in separate statements.
Leading Italian newspapers said magistrates in the southern city of Trani suspected the two violated laws on inappropriate use of public funds. The southern magistrates asked their Rome colleagues to take up the investigation.
The reports were based on leaked documents from magistrates, including transcripts of police wiretaps, that emerged from another investigation into a fraudulent bankruptcy of a health institution in the south.
They said Versaldi and former Bambino Gesu President Giuseppe Profiti agreed to divert 30 million euros (S$45.44 million) of the 80 million euros the Italian senate had destined for Rome's Bambino Gesu paediatric hospital in 2014.
The magistrates suspect that the money may have gone instead to save the Istituto Dermatologico dell' Immacolata (IDI), a dermatological clinic in Rome owned by a Catholic religious order.
At the time IDI was placed under receivership after it ran up losses of more than 600 million euros and risked closing.
According to a wiretap of a conversation between Versaldi and Profiti, they allegedly agreed to keep the subject from the pope at a meeting with him later that day in February, the newspapers said.
Versaldi, who was then head of a Vatican economic department, said in a statement sent to Italian news agencies he had not kept anything from the pope but had wanted to spare him the technical details of the financial operation to save IDI.
Bambino Gesu, which was donated to the Vatican in 1924 and is considered one of Italy's best paediatric hospitals, said in a statement sent to Reuters that it "categorically denied" the reports and that "not even one euro" had been diverted.
Many hospitals in Italy that are religiously affiliated receive state funds because of the role they play in the country's overall health care system.