After getting exemption, Catholic Church received at least $1.4 billion in PPP loans
NEW YORK
The U.S. Roman Catholic Church used a special and unprecedented exemption from federal rules to amass at least $1.4 billion in taxpayer-backed coronavirus aid, with many millions going to dioceses that have paid huge settlements or sought bankruptcy protection because of clergy sexual-abuse cover-ups.
The church’s haul might have reached — or even exceeded — $3.5 billion, making a global religious institution with more than a billion followers among the biggest winners in the U.S. government’s pandemic relief efforts, an Associated Press analysis of federal data released last week found.
Houses of worship and faith-based organizations that promote religious beliefs aren’t usually eligible for money from the U.S. Small Business Administration. But as the economy plummeted and jobless rates soared, Congress let faith groups and other nonprofits tap into the Paycheck Protection Program, a $659 billion fund created to keep Main Street open and Americans employed.
By aggressively promoting the payroll program and marshaling resources to help affiliates navigate its shifting rules, Catholic dioceses, parishes, schools and other ministries have so far received approval for at least 3,500 forgivable loans, AP found.
The Archdiocese of New York, for example, received 15 loans worth at least $28 million just for its top executive offices. Its iconic St. Patrick’s Cathedral on Fifth Avenue was approved for at least $1 million.
The Archdiocese of Miami, led by Archbishop Thomas Wenski, received between $1 million and $2 million in PPP funds, according to SBA data.
“With the shutdown, collections dropped since Masses with congregations were not being held — so PPP was an attempt to make us whole for the damage the government policy cost us — like other nonprofits and for-profits,” said Miami Archdiocese spokeswoman Mary Ross Agosta. “The funds received were used for that purpose.”
She said the money was also used to “save the jobs of employees affected by the government’s shutdown of the economy.”
Elsewhere, a loan of at least $2 million went to the diocese covering WheelingCharleston, West Virginia, where a church investigation revealed last year that then-Bishop Michael Bransfield embezzled funds and made sexual advances toward young priests.
Simply being eligible for low-interest loans was a
Wenski new opportunity. But the church couldn’t have been approved for so many loans — which the government will forgive if they are used for wages, rent and utilities — without a second break.
Religious groups persuaded the Trump administration to free them from a rule that typically disqualifies an applicant with more than 500 workers. Without this preferential treatment, many Catholic dioceses would have been ineligible because – between their head offices, parishes and other affiliates – their employees exceed the 500person cap.
“The government grants special dispensation, and that creates a kind of structural favoritism,” said Micah Schwartzman, who is a University of Virginia law professor specializing in constitutional issues and religion and has studied the Paycheck Protection Program. “And that favoritism was worth billions of dollars.”
The amount that the church collected, between $1.4 billion and $3.5 billion, is an undercount. The Diocesan Fiscal Management Conference, an organization of Catholic financial officers, surveyed members and reported that about 9,000 Catholic entities received loans. That is nearly three times the number of Catholic recipients that the AP could identify.
The AP couldn’t find more Catholic beneficiaries because the government’s data, released after pressure from Congress and a lawsuit from news outlets including the AP, didn’t name recipients of loans under $150,000 — a category in which many smaller churches would fall. And because the government released only ranges of loan amounts, it wasn’t possible to be more precise.
Even without a full accounting, AP’s analysis places the Catholic Church among the major beneficiaries in the Paycheck Protection Program, which also has helped companies backed by celebrities, billionaires, state governors and members of Congress.
The program was open to all religious groups, and many took advantage. Evangelical advisers to President Donald Trump, including his White House spiritual czar, Paula WhiteCain, also received loans.
Loan recipients included about 40 dioceses that have spent hundreds of millions of dollars in the past few years paying sexual-abuse victims through compensation funds or bankruptcy proceedings. AP’s review found that these dioceses were approved for about $200 million, though the value is likely much higher.
A spokesperson for the U.S. Conference of Catholic Bishops acknowledged its officials lobbied for the paycheck program but said the organization wasn’t tracking what dioceses and Catholic agencies received.
“These loans are an essential lifeline to help faithbased organizations to stay afloat and continue serving those in need during this crisis,” spokesperson Chieko Noguchi said in a written statement. According to AP’s data analysis, the church and all its organizations reported retaining at least 407,900 jobs with the money that they were awarded.
Also among recipients was the Saint Luke Institute. The Catholic treatment center for priests accused of sexual abuse and those suffering from other disorders received a loan ranging from $350,000 to $1 million. Based in Silver Spring, Maryland, the institute has at times been a way station for priests accused of sexual abuse who returned to active ministry only to abuse again.
LOBBYING FOR A BREAK
The law that created the Paycheck Protection Program let nonprofits participate, as long as they abided by SBA’s “affiliation rule.” The rule typically says that only businesses with fewer than 500 employees, including at all subsidiaries, are eligible.
Lobbying by the church helped religious organizations get an exception.
In program materials, SBA officials said they provided the affiliation waiver to religious groups in deference to their unique organizational structure, and because the public health response to slow the coronavirus’ spread disrupted churches just as it did businesses.
Meanwhile, some legal experts say that the special consideration the government gave faith groups in the loan program has further eroded the wall between church and state provided in the First Amendment. With that erosion, religious groups that don’t pay taxes have gained more access to public money, said Marci Hamilton, a University of Pennsylvania professor and attorney who has represented clergy abuse victims on constitutional issues during bankruptcy proceedings.
“At this point, the argument is you’re anti-religious if in fact you would say the Catholic Church shouldn’t be getting government funding,” Hamilton said.
The U.S. church may have a troubling record on sex abuse, but Bishop Lawrence Persico of Erie, Pennsylvania, pushed back on the idea that dioceses should be excluded from the government’s rescue package.
Persico pointed out that church entities help feed, clothe and shelter the poor — and in doing so keep people employed.
“I know some people may react with surprise that government funding helped support faith-based schools, parishes and dioceses,” he said. “The separation of church and state does not mean that those motivated by their faith have no place in the public square.”