Thursday, September 3, 2015

Must-Reading As Papal Visit Nears: The Economist on "Unholy Mess" of Finances in U.S. Catholic Church

For anyone asking why so many Catholics have walked away and continue to do so despite the "Francis effect"; for those with serious concern for the future of the Catholic church; for those who care about the effectiveness of the church in proclaiming the good news of Jesus Christ to the world:

This Economist article entitled "Earthly Concerns" should be must-reading.

It appears to have been published in 2012, but I just learned of it today after Tom Roberts linked it in today's "Morning Briefing" column in National Catholic Reporter. The opening paragraph of the article:

OF ALL the organisations that serve America’s poor, few do more good work than the Catholic church: its schools and hospitals provide a lifeline for millions. Yet even taking these virtues into account, the finances of the Catholic church in America are an unholy mess. The sins involved in its book-keeping are not as vivid or grotesque as those on display in the various sexual-abuse cases that have cost the American church more than $3 billion so far; but the financial mismanagement and questionable business practices would have seen widespread resignations at the top of any other public institution.

That's a recurring refrain in the essay: The financial mismanagement and questionable business practices [of Catholic leaders] would have seen widespread resignations at the top of any other public institution.

Or: "In a public company, this type of thing would attract regulatory scrutiny."


In a corporate bankruptcy, if insurance is relevant to the reason for the company’s failure then its insurance policy has to be listed as an asset. Not so those of the Catholic Mutual Group (CMG), which stepped up its help for Catholic dioceses in the mid-1980s—a time when liability insurance became too expensive as a result of the increase in sexual-abuse claims. 


In the corporate world, those who witnessed such malfeasance might alert a higher authority. But priests make unlikely whistle-blowers. It is often hard for them to imagine a life outside holy orders, which could be their fate if they alienated the bishop who has a hold over their salary, pension and private life.  

None of this is particularly new. But the essay does an outstanding job, in my view, of amassing very strong evidence for its contention that the finances of the Catholic church in the U.S. are "an unholy mess," and that such a mess — such shenanigans and evasions of propriety and morality — would not be tolerated for a moment in a secular corporation.

Example: when the diocese of San Diego declared bankruptcy in 2007 to try to evade claims of abuse survivors, it filed documents listing a block of real estate in downtown San Diego at a value of $40,000 — the price for which it had been acquired in the 1940s. The diocese also altered the forms on which assets had to be listed, causing Judge Louise Adler to order a special investigation of the finances of the diocese.

Example: that notorious transfer of $55.6 million from the funds of the Milwaukee archdiocese to a cemetery fund, as lawsuits were being filed right and left by survivors of abuse in that archdiocese, which Cardinal Timothy Dolan, the former archbishop of this archdiocese, has called "virtuous, open and in accord with the clear directives of the professionals on our finance council and outside auditors." Just as he calls the assertions of those who maintain the transfer was made to shelter these funds as abuse survivors sought recompense "baloney."

Who knew, too (many of you, I imagine, did so, but I didn't), that an increasing number of dioceses are now relying on municipal bonds to make up shortfalls in their budgets as the abuse crisis siphons dollars from church coffers? So that the U.S. taxpayer is being asked, as the Economist notes, to be the "good Samaritan" picking up bills for the Catholic church as its institutional assets are stressed by abuse claims . . . .

As I say, for anyone concerned about the future of the Catholic church and its effectiveness at proclaiming the gospel, this Economist article is must-reading. Just as it's must-reading for those seeking to understand why the "Francis effect" is not luring the many Catholics who have walked away in the past two decades back to the pews . . . .

The graphic is from this JustOrigami video at YouTube (note: video link).

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