Bankruptcy filing creates probe of church finances
ALBUQUERQUE» New Mexico’s largest Catholic archdiocese has spent hundreds of thousands of dollars in recent months on lawyers to fight claims of clergy sexual abuse and to prepare for a potentially lengthy battle in U.S. Bankruptcy Court.
The Archdiocese of Santa Fe’s petition for reorganization provides a rare look into the finances of a religious organization that for decades has been wrestling with the financial and social consequences of a scandal that rocked churches across the country.
Archbishop John Wester describes the filing as an equitable thing to do as church reserves dwindle. He says compensating the victims is a priority.
National watchdog groups and attorneys for victims of clergy sexual abuse said this week the archdiocese’s actions suggest otherwise. They point to money spent by the archdiocese on lawyers over the last three months and the tens of millions of dollars in real estate that has been transferred to parishes in recent years, effectively reducing the amount of assets held by the archdiocese.
About 20 dioceses and other religious orders across the U.S. have filed for bankruptcy protection as a result of clergy sexual abuse claims, and victims’ advocates say there are trends. That includes the shifting of assets to other funds or parishes, a tactic that has been used elsewhere, including dioceses in Minnesota, Wisconsin, Tennessee and Southern California.
In Pennsylvania, documents associated with an August grand jury report that detailed decades of abuse and coverup included letters between church officials and attorneys that talked about pushing assets around.
In one of the most publicized cases, lawyers for abuse victims accused Cardinal Timothy M. Dolan of New York of creating a trust fund to hide money from their clients when he was archbishop of Milwaukee. Dolan wrote to the Vatican in 2007 that transferring more than $50 million in assets would provide “improved protection of these funds from any legal claim and liability.”
Dolan had dismissed allegations that he was trying to shield church assets, and an appeals court later ruled that the fund was not protected from creditors.
There also were clashes over assets belonging to the Archdiocese of St. Paul and Minneapolis as part of that bankruptcy case.
Terence McKiernan, cofounder of BishopAccountability.org, an online resource of documentation about the scandals, pointed to efforts by church officials there to value a massive granite cathedral at just $1.
“The Catholic Church is real estate wealthy beyond our wildest dreams,” he said. “And it’s a bit of a conundrum — how much is the diocese worth? How do you value ecclesiastic property?”
In its bankruptcy petition, the Archdiocese of Santa Fe claims nearly $50 million in assets, including real estate valued at more than $31 million.
The filing also states that more than $57 million in property is being held in trust for numerous parishes, and property transfers worth another $34 million were done over the past two years. State records also show that individual parishes were incorporated as part of an effort that started in 2012 under Wester’s predecessor.