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  Vatican Rules on Parish Assets
The Archdiocese of Portland Welcomes the Decision in Boston's Case, but Sexual-Abuse Plaintiffs Say It's Irrelevant

By Steve Woodward
The Oregonian [Oregon]
August 17, 2005

In a preliminary decision with overtones for the Catholic Church in Western Oregon, the Vatican has told the Archdiocese of Boston that it had erred in seizing and selling hundreds of millions of dollars in parish assets.

The recent decision, in essence, means that the Vatican considers parish real estate and investments to belong to the parishes, not the archdiocese.

The Vatican's finding echoes the argument used by the Archdiocese of Portland to protect parish property from being sold to pay off millions of dollars in child sexual-abuse claims. The dispute over Western Oregon's parish property is being fought in U.S. Bankruptcy Court, where 124 parishes and nearly 400,000 parishioners have found themselves named as defendants in a class-action lawsuit to determine property ownership.

"We have not seen (the) decision from the Vatican," the Portland archdiocese said in a statement, "so we are unable to specifically comment on it. However, as Archbishop (John G.) Vlazny stated on July 6, 2004, 'under canon law, parish assets belong to the parish. I have no authority to seize parish property.'

"This is what we have stated all along in the bankruptcy proceedings."

As a practical matter, it remains to be seen whether the Vatican action has any impact on the Portland proceedings.

"The Vatican is a sovereign nation and can't determine U.S. law," said Marci Hamilton, a constitutional lawyer, professor and adviser to the legal team that represents sex-abuse plaintiffs in the Portland bankruptcy.

She added that the Vatican decision has no legal effect on events that happened previously. Property ownership, she said, is determined by actions and writings over the course of time.

"It's a non-event," she said of the recent ruling.

The Portland archdiocese is the first and largest Roman Catholic diocese to declare bankruptcy in the wake of rising sex-abuse claims. A year ago, lawyers representing the abuse claimants in bankruptcy court asked U.S. Bankruptcy Judge Elizabeth Perris to declare that parish assets belong to the archdiocese. A decision in that case is months away.

In the meantime, those involved in the Portland bankruptcy have been watching the Boston archdiocese, where Boston Archbishop Sean Patrick O'Malley has closed more than 60 parishes. Reasons include deteriorating finances, population declines and fewer priests.

In contrast to Portland, the Boston archdiocese has seized and sold off parish assets for its own benefit, arguing that the assets belong to the archdiocese. The closures have triggered widespread protests, including dramatic takeovers of churches by parishioners.

The preliminary Vatican ruling, said a Boston spokesman, confirmed that O'Malley properly handled the closures and reconfiguration of the archdiocese. But there was disagreement on the interpretation of church law that determines property ownership -- at least among the eight parishes that appealed their closures directly to the Vatican.

"We're in communication with the Holy See," said Terrence C. Donilon, Boston's communications head. "They have not issued a final ruling."

For now, Donilon said, the Vatican is now recommending that pastors of closed Boston parishes voluntarily sign over their assets and liabilities for the greater good of the archdiocese. One pastor already has done so.

In Portland, one of the lawyers for the parishes and parishioners is heartened by the latest news, although he said it's unclear what it means for the Portland case.

"It's apparently a very positive thing, because it reaffirms what parishes in Oregon and parishioners in Oregon believe," said Douglas R. Pahl, who argues that the archdiocese is merely holding property in trust for the parishes.

"The archdiocese can't swoop in and take it for any purpose," he said.

Pahl pointed out that the Portland archdiocese consolidated several Portland parishes in the 1990s, liquidated the assets and delivered the money to the resulting parish -- all in accordance with its understanding of church law.

The lead lawyer for the sex-abuse claimants committee in Portland, Albert N. Kennedy, said the canons of the Catholic Church are not the law of the United States.

"It's very interesting, but totally irrelevant," Kennedy said. "Until the United States government, either through congressional action or a constitutional amendment, or the state government, through legislative action or a constitutional amendment, adopts the internal canons of the Catholic Church, the canons are absolutely irrelevant."

A public hearing on the Portland case is scheduled for Oct. 11 in U.S. Bankruptcy Court.