IT’S BEEN PEGGED as the biggest threat to the American Catholic Church in modern times. Even before the clergy sex-abuse scandal dominated headlines this year — exposing a staggering number of child molestations by priests and an appalling pattern of cover-ups by Church leaders — the Archdiocese of Boston had paid out as much as $30 million in settlements to victims over the past decade. Last month, it added yet another figure to this tally: on September 19, the archdiocese agreed to pay $10 million to nearly 90 victims in the high-profile lawsuits against defrocked priest and convicted pedophile John Geoghan.
The Geoghan victims got less than they should have, of course. Only seven months earlier, in March, they were set to settle 84 lawsuits with the archdiocese for $15 to $30 million. But then, the proposed agreement came before the archdiocese’s finance council, whose members balked. When the council rejected the initial agreement last May, it argued that the archdiocese could not afford to live up to it and still pay off the scores of alleged victims who were seeking lawyers since the scandal exploded in January. According to a May 3 statement by Chancellor David Smith, the archdiocese’s chief financial officer, "The proposed settlement would consume substantially all the resources of the archdiocese that can reasonably be made available and therefore such an action would leave the archdiocese unable to provide a just and proportional response to other victims." The council, Smith went on to say, had advised Bernard Cardinal Law to create a "nonlitigious global assistance fund for all victims," so as to avoid "crippling" the Church.
Since this dramatic turn of events, we have seen one sign after another that the Boston archdiocese is suffering severe financial difficulties. The latest example? Last month, the archdiocese announced that it had to mortgage Law’s palatial Brighton home, as well as the sprawling 16-acre chancery grounds, to secure a $38 million loan. In a September 27 statement about the deal, Smith (who did not respond to the Phoenix’s request for an interview) said the Church’s ability to raise money had become "even more daunting" in recent months. "It is clear," he explained, "that some people who have supported the Church’s work in past years are withholding ... financial support due to their feelings regarding the terrible scandal of sexual abuse by clergy."
On the surface, the financial repercussions of the sex-abuse scandal seem bleak. Yet dig a bit deeper, and the Church’s fiscal health appears anything but weak. To wit: on August 27, after three months of investigation, the Boston Herald reported that the archdiocese boasts a whopping $160 million in "excess property" — land and buildings that are not being used to facilitate core Church purposes. At the same time, victims’ attorneys have uncovered a second reservoir of Church resources. Jeffrey Newman and Eric MacLeish work at the Boston law firm Greenberg Traurig, which represents nearly 240 victims in sex-abuse lawsuits pending against the archdiocese. When they agreed to a 30-day "moratorium" on legal action with Church lawyers last June, they launched their own investigation into the Church’s finances, particularly its insurance coverage. They found out that the archdiocese has, in MacLeish’s words, "a lot of insurance out there" — indeed, publicized estimates have ranged from $70 million to $100 million in general-liability policies, which happen to cover negligent supervision of predatory priests.
In other words, the Boston archdiocese’s money woes amount to mere hype. As attorney MacLeish puts it, "It’s clear that the archdiocese has plenty of resources and non-mission-related assets at its disposal."
THIS IS NOT to say that the archdiocese has fabricated its financial problems. Even before the clergy sex-abuse scandal blew wide open last January, Church officials had been grappling with multi-million-dollar budget deficits for years; in fiscal 2002, for instance, the shortfall topped $4 million. To bridge the gap, Law signed off on a November 2001 plan to cut costs by 30 percent over two fiscal years.
Then came the scandal, which has outraged rank-and-file Catholics enough to send Church pledges spiraling. So far, the annual Cardinal’s Appeal, which raises money for 80 Church programs and agencies, has failed to muster a fraction of the $16 million that officials hoped to collect this year. Jim Post, the president of Voice of the Faithful (VOTF), a Wellesley-based Catholic lay group, says that he and fellow members surveyed many of the archdiocese’s 362 parishes about their fundraising drives and have yet to find one where people are contributing more than 50 percent of the target amount. Meanwhile, 88 parishes have vowed not to participate in the appeal at all. This translates into some $8 million in lost revenues, Post says, when compared with last year’s figures.
The steep drop in donations hit Church revenues so hard that officials have been forced to apply the entire 30 percent two-year cut to this fiscal year alone. In a June 27 press release about the 2003 budget, the archdiocese announced that it had reduced subsidies to parish schools, eliminated ministerial programs, and laid off 15 employees as a result of "economic challenges." Most notably, it said, "the Cardinal’s Appeal has been impacted by the current crisis due to the sexual abuse of minors by some members of the clergy."
There’s even speculation, fueled by its rationale for backing out of the initial Geoghan settlement, that the Boston archdiocese could go bust if it were to face large awards in the 300-plus sex-abuse lawsuits pending against it. On August 2, Chancellor Smith released another prepared statement in which he did little to dispel such conjecture. "It is true," Smith said, "that ... legal counsel has been authorized to review how bankruptcy law might apply to the Archdiocese."
But if the Catholic Church in Boston is teetering toward financial ruin, ready to crumble under the weight of the scandal, its claims are met with cynicism from many observers. David Clohessy, of the Survivors Network of Those Abused by Priests (SNAP), based in Chicago, regards talk about the fiscal strain of the crisis to be, in his words, "terribly premature." The archdiocese, like other dioceses nationwide, has failed to disclose its books. It has failed to offer a public accounting of its assets, complete with trust funds, incorporated parishes and schools, and real-estate records. It has failed to detail the expenses associated with this issue — the lawyers’ fees, priest-treatment fees, victim-counseling fees, and secret settlements. Until a clear financial picture emerges, Clohessy explains, "the only prudent assumption is that the talk is legal posturing."
Father Tom Doyle, a Catholic priest who’s worked for victims on hundreds of suits alleging clergy sex abuse, including the Geoghan cases, agrees. What better way to outmaneuver victims than to cry poormouth and drive down demands? What better way to salvage its image than to paint victims as money-hungry fiends who’d go after a near-destitute diocese? In defending itself from an avalanche of cases, Doyle says, "the Church’s goal would be to say, ‘The money isn’t there, so don’t bother asking for much.’"
Doyle and other experts are convinced that Law and his underlings would try anything to avoid having to pay out large judgments. Accordingly, they chalk up talk of money woes to mere public relations. No doubt, there’s a flip side to news that Law has had to mortgage his own home: it conveys an image of financial distress that may tug on parishioners’ heartstrings — and pocketbooks. Such commentary may sound jaded, but there are good reasons for it. Says Clohessy, "This is a church that has been so secretive about its money and so determined to avoid litigation. When it suddenly says, ‘We’re broke,’ people respond with skepticism."
Which, naturally, raises the question: why wouldn’t the people who’ve toiled for decades to cover up the crimes of sexual predators and give them safe harbor make misleading statements about their financial situation in order to gain leverage in a lawsuit? Why wouldn’t we expect Law and his bishops to behave this way? As Mitchell Garabedian, the Boston attorney who represents the 86 Geoghan victims, puts it, "You’re dealing with people who allowed children to be raped. Why would they suddenly become honorable people?"