Archbishop Vigano had claimed he personally informed Pope Francis in June 2013 that in "2009 or 2010", after Cardinal McCarrick had retired, Pope Benedict imposed sanctions on him because of allegations of sexual misconduct with and sexual harassment of seminarians.
Francis' own papacy was thrown into turmoil in August when retired Vatican ambassador, Archbishop Carlo Maria Vigano, accused Francis and about two dozen Vatican and US church officials of covering up for McCarrick and said Francis should resign.
On Saturday, the Vatican announced that Pope Francis approved an investigation into McCarrick using Vatican archives to figure out why he was able to rise through the ranks of the church despite allegations of sexual misconduct.
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"In response to your unjust and unjustified attack, dear Viganò, I conclude therefore that the accusation is a political set-up without a real foundation that can incriminate the Pope, and I reiterate that it deeply hurts the communion of the Church", Ouellet said Sunday.
Ouellet did confirm for the first time that McCarrick, now 88, had been subject to some form of disciplinary measures given uncorroborated "rumors" of misconduct in his past.
The letter, addressed to Vigano but identified as an open letter to the faithful, marked an extraordinary end to the official Vatican silence about Vigano's claims.
Vigano said the pope knew for years about sexual misconduct by McCarrick, the former archbishop of Washington, D.C., with adult male seminarians but did nothing about it.
Francis removed McCarrick as a cardinal in July after a USA church investigation determined an allegation he fondled a teenage altar boy in the 1970s was credible, according to the Associated Press. Another man later said McCarrick molested him when he was a young teen and other men have said they were harassed by McCarrick when they were adult seminarians and priests.
"After a review of the archives, I find that there are no documents signed by either pope in this regard, and there are no audience notes from my predecessor, Cardinal Giovanni-Battista Re, imposing on the retired archbishop the obligation to lead a quiet and private life with the weight normally reserved to canonical penalties", Ouellet wrote.
The reason such measures were not taken then and were only taken in June by Pope Francis, Cardinal Ouellet said, was because there was not "sufficient proof of his presumed guilt".
"Imagine the enormous quantity of verbal and written information he received that day regarding many people and situations", the cardinal wrote.
"I strongly doubt that McCarrick would have interested him to the point that you want people to believe, since at the time he was an 82-year old archbishop emeritus, and for seven years had not had a job". But he said Francis effectively rehabilitated McCarrick and made him a trusted counselor. As prefect of the Congregation for Bishops, Ouellet meets weekly with Francis to discuss nominations, and presumably would have come to understand if McCarrick had Francis' ear.
Addressing Archbishop Vigano as "dear brother", Cardinal Ouellet said, "I understand how bitterness and disappointments have marked your path in the service of the Holy See, but you can not conclude your priestly life this way, in an open and scandalous rebellion".
"You can not end your priestly life in an open and scandalous rebellion that inflicts a painful wound" on the church and divides its people, he ended his letter.
He urged Vigano to "Come out of hiding, repent for your revolt and return to better feelings toward the Holy Father instead of worsening hostility against him".