Pope halts controversial Vatican investments after London property scandal

Pope Francis has blunted the powers of the Vatican department involved in a controversial London property deal and ordered all ties cut with a suspect investment fund, his spokesman said Thursday.

The Secretariat of State is the most important department in the Vatican administration, overseeing the Holy See's diplomacy and general affairs inside the Vatican and has historically controlled its own funds, investments, and real estate holdings.

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The pontiff created a commission Wednesday to oversee the changes, Vatican spokesman Matteo Bruni said, following a vast financial scandal which has already cost one high-ranking Catholic cardinal his post.

An investigation into the London deal, which involved several middlemen, led to the suspension last year of five Vatican employees, the resignation of its police chief and the exit of the former head of its Financial Information Authority.

In a letter released by the Vatican press office on Thursday, the pope said he was transferring all the assets to a Vatican department called APSA, which will manage them, while they will be overseen by the Secretariat for the Economy.

The Secretariat of State's assets include an annual fund for the pope's charities, which is known as Peter's Pence.

In September, Francis fired Cardinal Angelo Becciu, who was number two at the Secretariat when it purchased a building in London as an investment.

Becciu has denied any wrongdoing after the pope alleged embezzlement and nepotism.