In a case set to refocus attention on the kind of clerical extravagance that Pope Francis has vowed to eradicate, two former directors of a Foundation linked to the Vatican-run Bambino Gesu (Baby Jesus) children's hospital in Rome are charged with embezzling 422,000 euros ($506,500).
The majority of the cash was allegedly used to revamp the spectacular flat occupied by the retired Italian cardinal Tarcisio Bertone, a former number two in the Holy See hierarchy.
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Spread across hundreds of square metres at the top of the Palazzo San Carlo, the residence boasts a huge terrace with magnificent views over Rome.
One of the two accused, Giuseppe Profiti, the former president of the Foundation, testified that hospital funds were used for the renovation with the idea that the cardinal could host intimate dinners for eight to ten wealthy potential donors at a time.
"The more restricted the numbers, the more money is raised because there is an idea of exclusivity," Profiti said.
Bertone, who is not under investigation, had approved the concept, but "the idea was mine alone," Profiti told the court.
The official acknowledged financial controls surrounding the spending had been lax, saying he could not recall if any contracts had been drawn up.
The work was carried out between November 2013 and May 2014, shortly after Bertone had stepped down as the Vatican's Secretary of State. The renovation has been widely depicted in the Italian media as reflecting the once-powerful cardinal's desire to spend his retirement in maximum comfort and elegance.
In sharp contrast, Francis resides in a modest boarding house and has railed against cardinals who think they can "talk about poverty and live like Pharaohs."
The trial is scheduled to continue with further hearings on Thursday and Friday, during which the Foundation's former finance chief, Massimo Spina, will be required to defend his role in the affair.