By Philip Pullella
VATICAN CITY (Reuters) - Two new books by Italian journalists depict a Vatican plagued by mismanagement, greed, cronyism and corruption and where Pope Francis still faces stiff resistance from the old guard to his reform agenda.
The books, "Merchants in the Temple," by Gianluigi Nuzzi and "Avarice," by Emiliano Fittipaldi, which are being released in Italy on Wednesday, have already been condemned by the Vatican.
On Monday, the Vatican said the books "generate confusing, partial, and tendentious interpretations" in a statement that announced the arrest of two members of a commission the pope had set up to study financial reforms.
The two, including a high-ranking cleric of the Holy See, were arrested on suspicion of leaking confidential documents to the authors.
One highlight of Nuzzi's book, which was made available to Reuters before publication, is the transcript of a recording of the pope at a meeting in July 2013 - four months after his election - in which he complains to top Vatican officials about its murky finances.
"We have to better clarify the finances of the Holy See and make them more transparent," he is quoted as saying in the recording, which the author says was made secretly by someone in the room.
"C-l-a-r-i-t-y. That is what's done in the most humble companies and we have to do it, too," he says, adding that "It is no exaggeration to say most of our costs are out of control".
Nuzzi rose to fame in 2012 with the book "His Holiness," which was in large part based on leaked documents from Paolo Gabriele, the butler of former Pope Benedict who stole documents from the pope's desk.
That scandal, which led to the butler's arrest and imprisonment, became known as "Vatileaks" and the uproar it caused is believed to have led at least in part to Benedict's decision to resign the following year.
BETRAYAL OF TRUST
Nuzzi's latest book is based in part on documents said to have been leaked by the arrested commission members, whose behavior the Vatican called a "serious betrayal of the trust bestowed by the pope".
He writes of irregularities in the funding of causes to declare saints in the Roman Catholic Church, the purported diverting of funds intended for the poor to plug administrative deficits and the lavish lifestyle of some cardinals.
Nuzzi writes that the management of Peter's Pence, a collection taken up yearly around the world for charities and sent to Rome, "is an enigma cloaked in the most impenetrable secrecy".
Maintenance and restoration contracts were handed out at inflated prices, Vatican real estate is worth seven times what it is listed on the account books and the city-state's pension fund is fast approaching collapse, he writes.
He says Francis, who was given a mandate by the cardinals who elected him in 2013 to clean up Vatican finances, still encounters "entrenched and tenacious resistance" to his agenda.
In the other book, "Avarice," which is also based on leaked documents, Fittipaldi writes that some funds from a foundation that runs a Vatican-owned children's hospital in Rome were diverted to pay for the renovation of an apartment belonging to a senior cardinal.
Fittipaldi, a journalist for the newsweekly L'Espresso, says the foundation paid 24,000 euros for a helicopter flight to take the same cardinal to southern Italy for a charity event, according to excerpts in Rome's La Repubblica newspaper.
The Vatican's statement on Monday accused the authors of the books of trying to reap advantages from receiving stolen documents, saying this was "a gravely illegal act".
Both have rejected the accusations, saying they are just doing their jobs.
(Reporting by Philip Pullella; editing by Grant McCool)