Catholic Church Hides $2 Billion in Assets from Abuse Victim Settlements
According to Bloomberg Businessweek in January 2020, a review of court filings by lawyers representing churches and victims over the last 15 years has shown that the Catholic Church in the U.S. has moved around more than $2 billion in assets in an effort to prevent the money from going to alleged abuse victims. Throughout the country churches have been aggressively transferring and reclassifying assets, and filing for bankruptcy, as more victims of sexual abuse by priests have come forward and filed lawsuits.
From the early 1980s through 2002, church leaders paid out roughly $750 million according to BishopAccountability.org, a nonprofit that tracks clergy sex abuse. Since 2004, dioceses have filed for Chapter 11 bankruptcy more than 20 times. This has allowed the dioceses to reach universal settlements and protected them from additional victim claims.
"The survivors should have gotten that money, and they didn't," says Terry McKiernan, president of BishopAccountability.org. "The Catholic Church has behaved like a business. It hasn't behaved like a religion that lives by the rules it espouses."
In 2007, then-Archbishop Timothy Dolan of the Archdiocese of Milwaukee, sent a letter to the Vatican requesting permission to move almost $57 million into a trust fund originally meant for maintaining cemeteries. The letter revealed that the purpose of the move was to shield the assets.
"By transferring these assets to the Trust, I foresee an approved protection from any legal claim and liability," Dolan wrote.
When the Archdiocese of St. Paul and Minneapolis filed for Chapter 11 bankruptcy in 2015, it said it didn't own the parishes, schools, or the 10 cemeteries within its territory. It claimed only $50 million in assets, while lawyers for victims estimated the archdiocese was worth about $1.7 billion. Ultimately, it reached the largest bankruptcy settlement by an archdiocese giving 450 people a total of $210 million, which averages to about $467,000 each. Some of the money came from church assets and some from insurance.
In New Mexico, to protect funds from settlements, the Archdiocese of Santa Fe, has distanced itself from about $178 million since 2012. On average, an archdiocese in bankruptcy will settle with clergy abuse victims for about half the value of its estate. If the Santa Fe archdiocese settles for half the value of the $49 million it says it owns, the 375 victims will each get about $65,000, about one-fifth of the $300,000 they would get if the archdiocese hadn't taken $178 million off its ledger.
"The bankruptcy code should not be used to re-victimize victims," said New Mexico attorney general Hector Balderas. "They are really just trying to shield assets."
According to a 2018 study by the Johns Hopkins Bloomberg School of Public Health, victims of childhood sexual abuse experience increased mental and physical health problems. Additionally, they receive lower earnings, with the cost to a victim of more than $280,000 over a lifetime.
"We realize that nothing can ever adequately compensate those who have been victims of this terrible crime," Santa Fe Archbishop John C. Wester said in November, 2018. "Nonetheless, we seek to do all we can by way of publicly acknowledging their pain, offering apologies and providing financial compensation."
The Roman Catholic Church is the world's oldest and largest continuously functioning international institution. Church leaders have prioritized the wealth of the archdiocese over making victims whole. Moving around and hiding funds from sexual abuse victims is an outrage, immoral, and callously adds to the suffering these victims are forced to endure.
Horowitz Law has filed numerous sexual misconduct claims on behalf of children who were sexually abused by clergy of all religious denominations. If you or someone you know was sexually abused by a clergy member of any religious faith, please contact our law firm at 888-283-9922 or send an e-mail to sexual abuse lawyer Adam Horowitz at adam@adamhorowitzlaw.com for a free consultation.