By Philip Pullella
VATICAN CITY, Feb 4 (Reuters) - In the latest twist of a messy internal conflict shaking the Vatican, four clerics in the office that manages the tiny city-state on Saturday rejected charges of corruption, mismanagement and greed levelled by a former deputy governor.
The four said in a statement that charges made by Archbishop Carlo Maria Vigano, currently Pope Benedict's ambassador in Washington, were "either the fruit of erroneous evaluations or based on fears not backed up by proof".
Vigano was transferred to the United States against his will last year after he denounced what he saw as a web of corruption in the management of Vatican City, a 108-acre (44-hectare) sovereign city-state surrounded by Rome and where the pope rules as a monarch.
In letters to Pope Benedict and his number two, the secretary of state, Vigano complained about what he said was nepotism and cronyism linked to the awarding of contracts to outside companies at inflated prices.
The letters, leaked to the media last month, read like a Renaissance drama of court intrigue, rivalry and petty bickering that has embarrassed the Vatican.
By issuing Saturday's statement, the Vatican again confirmed the authenticity of the letters, saying they had been "published without authorisation" and had caused "great sadness" among past and present administrators.
As deputy governor of Vatican City from 2009 to 2011, Vigano was the number two official in a department responsible for maintaining the city-state's gardens, buildings, streets, museums and other infrastructure.
The statement was signed by Vigano's former boss, Cardinal Giovanni Lajolo, as well as the current governor and two other clerics in the department. All of them are Italian.
In their seven-point statement, the four attempted to dismantle one of Vigano's charges - that contracts for building and maintenance were awarded under an established system of cronyism at inflated prices to Italian companies with Vatican connections.
They said contracts for "significant" works, such as the current restoration of the colonnade in St. Peter's Square, were awarded by an ad hoc committee on the basis of bids, while smaller works were carried out by outside companies known to the Vatican and at prices applied in Italy.
Vigano, in one of his letters to the pope, said Vatican-employed maintenance workers were demoralised because "work was always given to the same companies at costs at least double compared to those charged outside the Vatican".
The statement, however, did not mention one of Vigano's most shocking accusations: That when he took the job he discovered that the cost of the Vatican's nativity scene in St. Peter's Square was an exorbitant 550,000 euros ($720,000)in 2009.
He chopped 200,000 euros off the cost for the following Christmas and, in the process, made enemies inside and outside the Vatican because of his insistence on transparency and cost-cutting.
The four officials also attempted to contest Vigano's implicit assertion that his strict style of management helped turn Vatican City's finances from a deficit to a surplus during his tenure.
They say the turnaround was mostly due to the management of investments and "excellent" results from the Vatican Museums.
Vigano has not made any public comment on the controversy but the unprecedented leaking of such high-level letters and the ensuing public spat among cardinals, bishops and monsignors has provoked much consternation in the Vatican.
In one letter, Vigano writes of a smear campaign against him by other Vatican officials who were upset that he had taken drastic steps to clean up the purchasing procedures.
In another, before he was transferred away from the Vatican, he begged to be allowed to continue his crusade and denounced a "vulgar and insolent" cleric behind a plot to destroy him.
The four clerics said they had written the statement to contest the impression that Vatican City's administration was "an untrustworthy entity in the hands of dark forces". (Editing by Alessandra Rizzo)