catholics are requested to open their books!

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username
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(6/12/02 8:19 pm)
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catholics are requested to open their books!

THE MONEY 6-12-02
Roman Catholic Church Faces Questions About Finances
By SAM DILLON and LESLIE WAYNE

After spending the past six months fending off accusations that it covered up allegations of sexual abuse by priests, the American Roman Catholic church now faces a new wave of scrutiny about how its finances are handled, particularly because of the large and confidential settlements that dioceses have reached with victims of that abuse.

In fact, some big donors to the church are leveling the same sorts of complaints that abuse victims and their supporters have made: that a church run in such secrecy for decades needs to be more open in its decision-making and more accountable for the consequences of those decisions.

Recent reports of accounting cover-ups, most notably in Milwaukee and Palm Beach, Fla., have only drawn more attention to the inability — or refusal — of many dioceses to disclose where their money comes from or where it has gone.

Those concerns were evident last weekend in Los Angeles during the annual meeting of Foundations and Donors Interested in Catholic Activities, an umbrella organization representing 47 foundations that give the American Catholic church $200 million a year. Philanthropists and their lawyers and administrators called on the church to issue an audited report on how much money it has spent settling sexual abuse cases in the past two decades.

"The church should open up its books," said Erica P. John, an heir to the Miller brewing fortune and president of a family foundation that contributes up to $5 million a year to Catholic causes in Milwaukee.

"The church should not be a secret society," Ms. John said. "We're the people of God, and we want transparency."

During Saturday's gathering of Foundations and Donors, several foundation presidents expressed disappointment in the United States Conference of Catholic Bishops — the policy-setting body for the Roman Catholic Church in America — for not putting financial accountability on the bishops' formal agenda at their meeting that started yesterday in Dallas concerning the sexual abuse crisis.

Francis J. Butler, president of Foundations and Donors, said the group wrote to Bishop Wilton D. Gregory, the president of the bishops' conference, warning that "the crisis of clergy sexual abuse will have profoundly negative repercussions for Catholic giving in the absence of clear and transparent financial reporting."

Some experts said that if the church ever opened its books completely, people would be shocked at at how little oversight or control there was over the finances.

A big part of the confusion is that there is no such thing as "the church," financially speaking. The leaders of the 194 dioceses are independent operators as far as money is concerned and have no obligation to make their financial statements public or follow the general rules of accounting.

"I'm constantly amazed by how little information some dioceses have on their finances," said Pat Schiltz, dean of the University of St. Thomas Law School in St. Paul and a lawyer who has represented the church against sexual abuse claims. "They are run like mom-and-pop operations."

The demands for greater financial accountability and openness come as lawsuits against the dioceses are multiplying.

Since the sexual abuse crisis erupted in January, more than 200 priests across the nation have been removed from ministerial duties. In that time, too, at least 300 civil lawsuits contending sexual abuse by clergy have been filed against the church, according to a recent Associated Press survey.

Plaintiffs' lawyers say scores more are in the pipeline. Last month, the Boston Archdiocese backed out of a proposed settlement with 86 victims of one priest, estimated to cost up to $29.8 million, saying it would have crippled its ability to pay plaintiffs filing new complaints. In Los Angeles, a lawyer who won $5.2 million from the church last year for a single victim said she had signed up 100 new clients in six weeks.

Payments to successful plaintiffs are only one expense the church faces. There are also spiraling lawyers' fees, insurance bills and, since many court-approved settlements call for the church to finance psychological treatment, the costs of treating hundreds of victims. In addition, an increasing number of insurers have balked at paying settlements for "intentional acts" of sexual abuse by priests, leaving the dioceses with sole responsibility for paying.

As dioceses exhaust their insurance coverage, they may face the prospect of cutting back on ministerial programs, borrowing from one another, asking parishioners to give more and selling or mortgaging church property — options faced in the late 1990's by the dioceses in Dallas, Santa Fe, N.M., and Santa Rosa, Calif.

Church officials said that Sunday collection-plate giving in the nation's parishes remains strong. But it is unclear how contributions to bishops' appeals and other fundraising drives have been affected by the scandal, because most dioceses do not release their financial information.

"Some of us feel very embarrassed and stupid for having supported the church for such a long time and never insisted on getting any meaningful data back," said James Post, a professor of management at Boston University and an organizer of a Boston lay group seeking such information.

"We found our trust has been betrayed, and not just a little bit, but in such a catastrophic way that we would not come out of this without an insistence on greater public reporting on the financial side of the church."

Trickle-Up Financing

Unlike unhappy shareholders suing an Enron Corporation or a Global Crossing, people with a grievance against church officials find there is no American Catholic Inc. While the Vatican may rule on theological matters, financially the American church is anything but a top-down operation. Its 194 dioceses operate independent of the Vatican, getting no money from Rome. In fact, the cash goes the other way: American Catholics are collectively the largest financial supporters of the Vatican.

The annual revenues of the nation's 18,500 local parishes total about $7.5 billion, according to Joseph Harris, the financial officer of a Seattle-based charity who studies church finances and has conducted a survey of 3,000 parishes nationwide. Parishes use most of this money to finance local church operations and parish schools, Mr. Harris said.

Continued
See nytimes.com for next three pages of article

chuckle chela
Registered User
(6/13/02 10:00 pm)
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Re: catholics are requested to open their books!

Thanks, username, for this post. I heard today that there were big protests outside the secret meeting of the American bishops, with people demanding openess and honesty. Tomorrow the bishops are supposed to release a statement. It will be interesting to see what happens.

I can only hope SRF leaders are paying close attention to the tragedy that has been unfolding in the Catholic Church. The best bit of advice I can offer the SRF leaders is to open up, adopt a policy of disclosure, honesty, and dialogue. They should note that many, many people are paying close attention to these events in the Catholic Church.

Quote:
In fact, some big donors to the church are leveling the same sorts of complaints that abuse victims and their supporters have made: that a church run in such secrecy for decades needs to be more open in its decision-making and more accountable for the consequences of those decisions.

SRF donors take note.

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