Catholic Diocese of Tucson
Debt-Free Idea out the Window
Sex-Abuse Suits Mean Deficits Will Get Worse
By Stephanie Innes firstname.lastname@example.org
Arizona Daily Star [Tucson AZ]
Downloaded July 20, 2003
It thought it would be debt-free by 2009, but now the Roman Catholic Diocese of Tucson is looking at a deepening deficit because of pending lawsuits over sexual abuse.
The long-term debt, which shows up in financial reports filed with the Arizona Corporation Commission, is listed as $12.5 million for the 2001 fiscal year ending June 30, 2001 - up from $3.1 million in the 2000 fiscal year, when officials had painted a rosy picture of their financial situation, expecting to pay everything off by 2009.
Diocesan leaders say they are maintaining operations with insufficient resources while facing the possibility of expensive legal fees from nine pending civil actions. The 2001 fiscal year is the last year for which the diocese's information is available from the state.
Diocesan leaders last week listed their long-term debt in the range of $5 million, saying they were able to cut their debt by $7.5 million by, among other things, borrowing from savings and penny-pinching - not a "windfall of donations," one diocese official said.
"I would say the diocese is maintaining. It's trying to move forward with, obviously, the mission of the church. But there are certainly not resources sufficient to keep the fifth-largest diocese in the country running," Chief Financial Officer Mary M. Huerstel said, referring to the Tucson diocese's geographical size, spanning nine counties.
"It's been a long time since the diocese has been in a strong financial situation."
Nine lawsuits - eight of them alleging abuse by priests - are still pending against the diocese, which uses a risk-retention group of 12 dioceses called Ordinary Mutual as it insurer. Huerstel would not disclose the percentage of last year's settlement that was covered by insurance because she says it could compromise the confidentiality agreement that accompanied the settlement.
Since the church pays no taxes, files no report with the Internal Revenue Service and is prohibited from disclosing the amount of last year's settlement over clergy abuse, the only information available to the public is with reports filed at the Arizona Corporation Commission, and any financial data the diocese chooses to disclose. Some parishioners say they'd like a clearer explanation of the church's financial situation.
By the numbers
Diocesan debt reached $23 million in 1988 due in large part to the failure of a television station it established in hopes of offering family-oriented programming. The Vatican set up an oversight committee to monitor the diocese's budget, and through penny-pinching and selling off assets the diocese appeared to be on a path to recovery until last January when it settled 11 lawsuits related to clergy abuse.
"The resources of the diocese are not unlimited," Bishop Gerald F. Kicanas said this past week. "Regretfully, at this point we have not had a great deal of insurance coverage for these claims. The initial settlement was substantial, and it has taken a great deal of funds from the diocese."
Last year's settlement is estimated to be as high as $16 million. The diocese, through reports to parishioners and postings on its Web site, has explained that it pays off the settlement by borrowing from savings deposits from parishes, which it then repays over time.
Huerstel says the $12.5 million figure filed with the Arizona Corporation Commission may have included some of last year's multimillion-dollar settlement over clergy sexual abuse, since the financial statement wasn't submitted until October 2002. Huerstel also says the long-term debt has been reduced to $5 million since the statement was filed with the state by, among other things, reducing assets.
Diocese officials say the Annual Catholic Appeal has reached 95 percent of its $2.8 million goal this year and that donations have held steady despite a rocky economy. The appeal is separate from regular collections at parishes.
The 2001 report lists diocesan assets as $28 million and liabilities at $30 million, numbers that exclude parishes. The operating budget, independent of the 73 parishes, is $6 million.
"The diocese does have major obligations in the legal area and it's not clear where the money is coming from, and it should be transparent where it's coming from," said Terence Carden, a retired Tucson physician who attends St. Pius X Catholic Church, 1800 N. Camino Pio Decimo. He is coordinating a local chapter of the national Voice of the Faithful group that began in the wake of Boston's clergy sexual abuse scandal last year.
Donation patterns altered
The sexual abuse scandal has angered many parishioners enough to change their donation patterns.
Rosalie Crowe, a Tucson freelance writer who attends St. Odilia's Catholic Church, 7570 N. Paseo del Norte, was furious when she found out the diocese has been paying accused child molester Monsignor Robert C. Trupia a monthly salary since 1992, when he was suspended in the wake of allegations of sexual misconduct with underage boys.
Diocesan officials have called Trupia a notorious serial predator, and are attempting to defrock him. Yet since 1992 they have paid him nearly $200,000 in a monthly $1,475 salary he continues to collect.
"At the height of my anger I wrote a letter on the Annual Appeal letter saying I could no longer support it," said Crowe, 66. "The money I would have normally given to the Annual Appeal I gave to the St. Odilia's building fund."
Other parishioners continue to donate as they always have, but with concern.
"I did look over the budget, and I examined it pretty carefully. It appears to be a justified budget," said Hurd Baruch, a retired lawyer who attends St. Thomas the Apostle Catholic Church, 5150 N. Valley View Road.
"It bothers me that some of my money is going to legal matters. Obviously it's not what I'd like it to be used for, but under the circumstances I don't see any alternative. It's better that the church pays out to compensate people for harms caused than the church saying they are going to buy organs and stained glass windows."
Where does the money go?
Lynne M. Cadigan, the Tucson attorney who reached the settlement with the diocese last year, estimates the local church is worth $100 million and has more than enough resources for future settlements. The church's land and buildings in Pima County alone are worth $37 million, according to property records.
"I am confident this diocese has sufficient money to pay whatever the jury thinks is a fair amount," said Cadigan, who has filed six of the nine pending lawsuits against the local diocese. "We think their cries of poor are deceptive. They don't pay taxes, and they have tons of vacant land."
Minneapolis attorney and Catholic Church expert Jeffrey R. Anderson agrees. He has represented more than 700 victims of clergy sexual abuse across the country and has said that since dioceses aren't obligated to open their books, they can conceal vast wealth in the form of gifts, land and endowments.
"If people choose not to believe the diocese is honest, that is their choice," diocesan spokes-man Fred Allison said this week, disputing Cadigan's comments about the church wealth. He added, "The Brink's truck hasn't stopped here in a long, long time."
Huerstel said the diocese has seen an increase in "fixed" donations that specify funds must not be used for legal expenses. And Kicanas has assured worshippers that the Annual Catholic Appeal will not go toward any legal costs.
"If there are judgments or settlements that occur because of malfeasance, I'm not in favor of supporting malfeasance," said Carden, the St. Pius X parishioner.
Carden does not donate to the Annual Catholic Appeal. All his contributions go directly to his parish collection plate, which ensures that at least 93 cents of every dollar he donates stay at St. Pius. A tax of 3.5 to 7 cents on every dollar donated to individual parishes goes toward operating the diocese.
Diocese officials said donations appeared to hold steady this year. Kicanas says Catholics have shown one of their highest levels of participation in this year's Annual Catholic Appeal and that he believes it is a message from worshippers that they wish to carry on the mission of the church.
"Giving my due"
Baruch, the St. Thomas the Apostle parishioner, believes he has an obligation to support the diocese.
"The payments should be made. Even if the cases are beyond the statute of limitations, it's important to make the payment to victims. If justice is done for the victims, then I believe the people will come forward with the money."
Baruch wishes the church would do the "moral" thing and make payouts to all victims. But he is not worried that the church will go belly-up: "God will see that the church gets enough money to keep going," he said.
Still other parishioners are leery of handling sexual abuse with monetary payments.
"There are so many greedy people out there," said Kenneth Brush, 79, a former seminarian who attends St. Mark the Evangelist Catholic Church, 2727 W. Tangerine Road. "As soon as they find out there's money to be had, they come out of the woodwork."
Brush also continues to donate.
"I give my due," he said. "I don't believe the church should be paying out more money. Let's face it, those multimillions of dollars, the parishioners are paying for it. But the way I see it, if people think they can get money by being Judases, then OK. You know what happened to Judas."
The U.S. Conference of Catholic Bishops does not have any national data on whether donations are up or down among the nation's 66 million Catholics since last year. Some dioceses have threatened Chapter 11.
"One of the ways corporations, and the diocese as well, can use to put an end to litigations is the process of bankruptcy," Kicanas said. "Clearly the diocese does not want to pursue that. In terms of the litigation, we're trying to explore a creative way. We'd like to bring them all into a group type of situation where there are resources available for the victims. But how to do that remains an unsettled question."
* Contact reporter Stephanie Innes at 573-4134 or at email@example.com.
Any original material on these pages is copyright © BishopAccountability.org 2004. Reproduce freely with attribution.