The Hundred-Million-Dollar Typo, by Cyril Jones-Kellett, Southern Cross, April 22, 2007

The Hundred-Million-Dollar Typo

By Cyril Jones-Kellett
Southern Cross
April 22, 2007

http://www.thesoutherncross.org/default.asp?issueid=03-sept-11&cid=1&aid=226

COMMERCIAL PROPERTY?

San Diego's daily newspaper seems to think this parish hall is a bank.

The following opinion piece appears in the March 29 issue of The Southern Cross.

San Diego — When the Boston Globe broke the 2002 story that the Archdiocese of Boston had serious troubles with both sexual offender priests and inadequate supervision by bishops, it did a service for the Church, according to several Church leaders who spoke about the issue in later interviews.

But when lesser news organizations, expending far fewer resources and relying on lower levels of professionalism, became involved with the story, they often seemed to be trying to jump into the scandal frenzy.

The Dallas Morning News was among the most notable news organizations to fall into this temptation, printing poorly researched and often just ridiculous stories that shed a great deal more heat than light.

Among the accusations leveled by the Dallas Morning News in 2002 was the shocking "fact," trumpeted in a now infamous and widely discredited headline, that "two-thirds" of Catholic leaders had let priests accused of sexual abuse go on working.

Speaking of the foibles of the Morning News, Msgr. Francis J. Maniscalco, secretary for communications for the U.S. Conference of Catholic Bishops, said they "could have done a service to journalism by doing a good review of the situation that brought in all the factors. They chose [instead] to point the finger, more by innuendo..."

Sadly for San Diego, coverage in our local newspaper has tended to be close to the level of the sloppy Dallas Morning News.

In fact, the San Diego Union-Tribune's coverage raises serious questions about what happens when a city's primary news organization gets frustrated with an institution that it sees as inaccessible, and then takes out that frustration in print.

A brief example of my own dealings with the Union-Tribune: A few years ago, I asked Karin Winner, the editor of the Union-Tribune, why her paper did not do any reporting on the steps the diocese had taken to deal with sexual abuse in the decade before the Boston Globe story broke. I told her of an interview I had done with former San Diego District Attorney Paul Pfingst. In that conversation, Pfingst had told me that diocesan attorney Vince Whelan (now deceased) had come to see him at the DA's office in the 1990s. Whelan, at the direction of San Diego Bishop Robert H. Brom, was seeking to open lines of communication with Pfingst and to set up programs that would prevent sex abuse problems.

"You don't have to believe me," I told Winner. "Just go ask Paul Pfingst."

As far as I know, neither Winner nor any reporter from the Union-Tribune ever bothered to make that call. I began to believe that the Union-Tribune had already made up its mind about how it was going to report this story.

(In fairness, when I recently asked Union-Tribune reporter Sandi Dolbee if Winner had ever mentioned the Pfingst story to her, she said no, but she also said she felt that earlier stories on Pfingst had covered that angle of the story adequately. However, as far as I can tell, the material about Whelan's early attempts to work with Pfingst never made it into the Union-Tribune in anything more than a passing reference, if that.)

Reporters and editors for the paper complain about the unwillingness of the diocese to cooperate with them. Diocesan officials, however, seem to have grown increasingly wary of the newspaper and its penchant for confusing or exaggerating aspects of its stories on the Church, especially when it comes to sexual abuse.

Perhaps a cycle developed in which Church officials became less and less willing to cooperate with the Union-Tribune and Union-Tribune writers and editors responded with increasingly slapdash reporting about the diocese.

Most notable among the narratives the paper has come back to again and again is that the diocese is flush with money and that it could satisfy all the claims of those who are suing it simply by selling some assets and writing big checks.

As we shall see, this contention is just wrong. And by repeatedly implying that the diocese is awash in superfluous real estate, the newspaper almost certainly contributed to the public relations efforts of very wealthy attorneys who are involved in ongoing lawsuits against the diocese.

The most obvious example of the Union-Tribune's adversarial approach to the diocese was a Feb. 20 editorial in which the paper's editors threw what appeared to be an apoplectic fit over Bishop Brom's notice to parishioners and pastors that the diocese might have to file for Chapter 11 reorganization. In a masterpiece of ill-informed moral outrage, the paper asked "When Brom says the lawsuits threaten the diocese's 'overall mission,' is he suggesting that includes being a force in local real estate and development?"

The Diocese of San Diego is a force in the local real estate market? Corky McMillin, Doug Manchester, the Catholic Church -- really? Among editorial writers this is called "being clever." In less lofty circles it's called "making things up."

But what makes this editorial even more embarrassing is that the editors suggest the diocese would be well within its means to pay claims up to $200 million by simply selling "some of its unusually diverse real estate holdings, including commercial projects, apartment buildings, condominium complexes and undeveloped land."

What the editors don't tell their readers is that when they say the diocese owns "commercial projects, apartment buildings, condominium complexes and undeveloped land" they are quite literally stealing their copy from plaintiffs' attorneys.

The editorial's quote is lifted from a Feb. 19 news story by Sandi Dolbee and Mark Sauer: "The real estate holdings [of the diocese] include not only churches, schools, rectories and diocese offices, but also investment property, such as apartment buildings, condominium complexes, commercial developments and undeveloped land."

Dolbee and Sauer do not name a source for this assertion. They simply sandwich it between two quotes from Attorney Irwin Zalkin -- a man who is seeking to make millions of dollars from lawsuits against the diocese -- strongly suggesting that these "facts" came from him.

If this material did, in fact, come from Zalkin, then the editorials of the Union-Tribune are basically being written by plaintiffs' lawyers.

But can it be proven that this is what happened?

Yep.

I asked Sauer for his source and he answered honestly: "The source on that aspect of the story was the plaintiff's attorneys."

So the paper's reporter was quoting plaintiffs' attorneys and then the paper's editors were quoting the reporter -- all without any citation of the source, and in an editorial in which they were lecturing the Church on ethics.

Oops.

And what is more, the paper had its facts wrong. Diocesan Finance Officer Richard Mirando summed up the facts in an email exchange with The Southern Cross -- "The Diocese does not own apartment buildings, condominium complexes and commercial properties," he said simply.

Now you might think that having been duped by plaintiffs' attorneys would embarrass the Union-Tribune, but consider the following. It would seem to suggest that the paper has a somewhat limited capacity for being embarrassed.

In a report published on July 31, 2006, the paper claimed to have done its own analysis of diocesan finances. "A Union-Tribune accounting of the San Diego diocese's properties placed tax-assessed value at more than $500 million," the paper declared grandly.

The paper gave no details about how it had done the accounting or about what was included in the accounting.

In later reporting, however, the paper completely dropped that claim and reverted to reporting directly from the mouths of plaintiffs' attorneys.

In the Feb. 19 story by Dolbee and Sauer, for example, the paper ran unchallenged a quote from a plaintiff's attorney: "San Diego is one of the richest dioceses in the country," Attorney Irwin Zalkin said. "It has more than $600 million in real estate assets based solely on tax assessors' values and not market value."

The paper repeated this figure directly from the mouths of plaintiffs' attorneys on at least three occasions without ever bothering to point out that it was $100 million higher than what the paper had, itself, reported six months earlier.

So what happened to the paper's own "accounting"?

In an email exchange with the Union-Tribune's Reader Representative, Carol Goodhue, I asked: "For the record, is there anyone at the U-T who can explain where you got your figures and information regarding finances and real estate holdings?"

Goodhue referred me to the paper's editors, but a few days later (it turned out to be the day after the diocese filed for reorganization in Federal Court) this is what ran in the U-T's morning edition:

"Plaintiffs' lawyers have pegged the assessed value of the diocese's holdings at $600 million.

"However, property records through December 2005 compiled by The San Diego Union-Tribune of six Southern California counties showed that the diocese's real estate portfolio has an assessed value of about $400 million."

How odd. Now that the paper knew The Southern Cross was preparing a story on how bad their financial reporting had been, their "accounting" dropped by more than $100 million. At least that's how it looked to me.

But the editor who worked on the Union-Tribune's stories about the diocese, Susan Gembrowski, told me flatly, "That did not happen."

Fair enough, but what did happen? Why did the paper report more than $500 million in one report, then ignore that report when plaintiffs' attorneys repeatedly gave a much higher number, then come in later with a number around $400 million?

Gembrowski told me she would check and get back to me. When she called back she said of the original reporting of $500 million, "I think we just must have had a typo."

Here I would ask you to please refrain from laughing out loud.

I must interject that everyone I spoke to at the Union-Tribune was forthcoming and helpful to me as I researched this story. Gembrowski was, as far as I could tell, honest and fair in all her replies to me.

So, fine, typo it was.

I asked her if the paper was going to print a correction.

"Well, it's kind of a long time ago," she told me. "But all I'm telling you is that it was an error in July."

A hundred-million-dollar typo and no correction?

Yep.

I also asked Gembrowski about Mark Sauer's claim that his source was plaintiffs' attorneys.

She told me the reporter was wrong about his own source. "We did our own research," she said.

Because the paper does not share its research methods, however, Gembrowski would not say any more about the matter.

Dolbee also told me that the paper had done its own research and that it stands by the (new) "about $400 million" estimate of diocesan real estate.

So, the Union-Tribune is now sure about what the Diocese of San Diego is worth. They just can't agree with each other about who their source is.

But even this leaves the rather large question of just what constitutes diocesan real estate?

What is obvious is that the paper has simply accepted uncritically the assertion by plaintiffs' lawyers that the diocese owns the properties of parishes and schools.

There is no other way to arrive at a figure anywhere close to $400 million.

When it filed for reorganization, the diocese declared $156 million in assets and $100 million in liabilities.

What the Union-Tribune never reports when it discusses diocesan finances is that the bulk of the Local Church's real estate is comprised of churches, schools, rectories and other parish properties. Title to these properties is held in the name of the corporation sole in trust for parishes and in their behalf.

Here's how a responsible journalist might report such facts:

"Many of these schools and churches are owned by the local parishes, but the diocese holds the title in trust. There's a difference between being the trustee and having ownership of the property."

In fact, that is exactly how John Warren, editor and publisher of San Diego Voice and Viewpoint, reported the facts. The Union-Tribune could have done the same in its reporting. It chose not to.

(An exception was a March 18 story by Bruce Bigelow. The reporter on this story at least had the courtesy to point out that the diocese claims not to own parish properties. Also, in recent days as diocesan lawyers make this argument in bankruptcy court, the Union-Tribune's reporters are forced to cover it. However, the Union-Tribune continues to run claims of plaintiffs' attorneys that the diocese is worth from $600 million to $1 billion without balancing these claims even with the paper's own [still flawed, but lower] numbers. And it continues to bias its reporting in favor of plaintiffs' attorneys by standing by its claim that the diocese is worth $400 million – a number that cannot be reached unless the paper includes parishes and schools. In other words, by continuing to report that the diocese is worth $400 million, the Union Tribune is publicly siding with plaintiffs' attorneys on the issue of parish and school properties.)

One can certainly understand the frustration of a news organization that doesn't get pampered with quotes and interviews from Church officials.

Reporter Sauer seemed to sum up the frustration of the paper when he told The Southern Cross, "I have implored the diocese to respond, pointing out in emails that if their voice is not included on matters such as property holdings -- and many other important aspects of this long and very complicated matter -- then the plaintiffs' voices will be manifest in the stories."

Gembrowski, too, stressed with me how frustrated the paper's staff had become with the diocese.

But the Union-Tribune cannot seriously be contending that if you choose not to talk to them they have a right to say whatever they want about you -- can they?

Maybe in their frustration they just began to assume the worst. And, as the hundred-million-dollar typo suggests, general incompetence cannot be summarily dismissed as an explanation.

The problem for the diocese is that it doesn't really matter what the motives at the Union-Tribune are. The paper's willingness to play along with plaintiffs' attorneys in painting the diocese as immensely wealthy made it look like the diocese was just being obstinate in not writing checks -- even for outrageous sums. The paper's failure to report in any serious depth about the very real efforts of diocesan officials such as Vince Whelan who were fighting sex abuse problems all through the 1990s left a gaping hole in its reporting.

The paper regularly ran huge numbers whenever it reported on diocesan assets. Those numbers were not given in context, nor was the fact of trusteeship explained. Often the Union-Tribune ran quotes from plaintiffs' attorneys that were much higher even than the paper's own wildly inflated numbers and it did not bother to contradict the attorneys.

And then the editorial page editors got in the act with their flailing and angry diatribes that the diocese had "forfeited any claim to the moral high ground" and the like.

Of course none of this removes the pain and the shame of the undisputed fact that we have had Catholic priests who have sexually abused minors.

What fair reporting in the Union-Tribune would have shown, however, is that the Diocese of San Diego, in the time that it has been under the leadership of its current bishop, has, in fact, taken sexual abuse quite seriously. It would have shown that Bishop Brom's apologies to victims and his vows to keep abusers out of ministry were consistent with longstanding policies and practices of this diocese.

Fair reporting also would have shown that the diocese was telling the truth about its inability to pay scores of settlements for mammoth sums.

A Commercial Property?

The San Diego Union-Tribune says it stands by its reporting that the Diocese of San Diego owns "apartment buildings, condominium complexes, commercial developments and undeveloped land."

But the diocese's own finance officer says, "The Diocese does not own apartment buildings, condominium complexes and commercial properties."

What gives?

One possible explanation may lie with buildings such as the one pictured with this story.

A few years ago, the small, culturally diverse, and landlocked parish of St. Mary, Star of the Sea in downtown Oceanside bought the former bank building next to the church. The purchase of the building represented years of fundraising by the people of the parish, and the building now serves as a much-needed parish hall.

This purchasing of neighboring properties to be used by parishes is not uncommon, and many other parishes may own properties that once functioned as businesses. The Union-Tribune has clearly mixed parish properties in with its estimate of diocesan properties (see main story), and buildings such as this one may show up in the paper's reporting as commercial properties, even though they were purchased with parish donations and are used for the life and mission of the parish.

Is this one of the properties that the Union-Tribune lists as a diocesan "commercial property"? Who knows? They say they don't discuss their research methods with outsiders, and they have never published their list of diocesan properties.

Why does it matter what the Union-Tribune reports?

Why does it matter what the Union-Tribune reports? Because other news outlets around town rely on the Union-Tribune for much of their reporting. If it is printed in the Union-Tribune it is often reported in radio and television newscasts. When people hear the same reporting coming from multiple sources, the "facts" begin to seem very solid. After all, everybody is reporting the same thing. In journalistic circles, this is referred to as "the echo chamber."

For example, the day that the diocese first announced that it might have to file for reorganization, television news reporter Leonard Villarreal reported that "we are told" that the diocese has assets of $600 million.

To whom did that "we are told" refer? Was it plaintiffs' lawyers themselves? Was it news stories printed in the Union-Tribune? What speaks volumes about how closely the Union-Tribune relied on wealthy trial lawyers as its source for news is that it didn't really matter. They were both saying about the same thing.