A recent Italian news report presented evidence of a Vatican official being "demoted" after exposing corruption in a letter written to Pope Benedict XVI.
Archbishop Carlo Maria Vigano allegedly pleaded not to be removed from his high-ranking position inside the Vatican.
Vigano previously served as the No. 2 administrator of the Vatican, but is now the pope's ambassador to Washington D.C., the Associated Press reported.
It was a move he fought against.
"Blessed Father, my transfer in this moment would provoke confusion and discouragement for those who thought it was possible to clean up so many situations of corruption and abuse of office," he wrote in a letter to the pope.
The controversy stems from allegations made by Vigano in letters to the pope that a small group of businesses held most of the Vatican contracts and charged twice the going rate for services.
He also accused a group of Italian bankers (hired by the Vatican to shore up its finances) of mismanaging two investment funds and working more towards their own interests.
Some allege Vigano was "stepping on too many toes" by speaking to the pope directly about the corruption.
The Vatican flatly denies the allegations that the Archbishop was punished.
"It must be decisively affirmed that entrusting Archbishop Vigano with the role of apostolic nuncio to the United States - one of the most important roles in Vatican diplomacy given the importance of the country and of the Catholic Church there - is proof of unquestionable respect and trust," Vatican Spokesman and Press Office Director, Fr. Federico Lombardi S.J said in a statement to Vatican Radio.
The National Catholic Reporter shared that Vigano's actions may have produced backlash among administrators of individual departments, such as the Vatican museums and Vatican gardens, who had been accustomed to operating in semi-autonomous fashion. The Italian investigation also named a handful of senior officials and financial advisors in the Vatican allegedly involved in mismanagement and lack of adequate financial controls.
The same report suggests that the Vatican may take legal action against the station for what it calls "biased and banal" accusations.