BishopAccountability.org
	Parishes Will Heed Deposit Request Extra Funds Will Go to Diocesan System By Sandi Dolbee and Mark Sauer Union-Tribune August 2, 2007 http://www.signonsandiego.com/news/metro/20070802-9999-1m2diocese.html Diocese in Turmoil – An attorney for Catholic parishes and a top church official said yesterday that churches and schools will comply with a policy to deposit surplus funds with the diocese. "If a given pastor doesn't comply, we'll be having a conversation with him," said the Rev. Steven Callahan, the diocese's vicar general. In a memo sent to pastors, administrators and school principals last week, Callahan said funds beyond the normal operating expenses for a two-month period are to be deposited "as soon as possible" with the diocesan banking system. "Your cooperation is appreciated, and it will also improve your chances of not having to appear in bankruptcy court to explain why you are not complying with the diocesan policy," Callahan wrote. Victor Vilaplana, lawyer for the Organization of Parishes, acknowledged that parishes have been reluctant. "After the bankruptcy, the parishes withheld money because they were concerned that their property would be somehow lost," he said. The clergy-led group was formed after the San Diego diocese filed for bankruptcy protection against 150 sexual-abuse lawsuits. Part of the problem, Vilaplana said, is that parishes historically have not strictly followed the diocesan policy. That will change. "I think one area we have been remiss in is not trying to get the money up there as quickly as possible." Their statements came after a court-ordered financial review found widespread disregard for the diocese's policy. In the report released late Monday night, financial expert R. Todd Neilson estimated that about $22 million had been withheld by various parishes. This practice continued despite repeated attempts to force compliance – including an earlier memo from Callahan in May and an order from bankruptcy Judge Louise DeCarl Adler in June. As for the rest of the 175-page financial report, Vilaplana said he thinks it essentially underscored his argument that "the parishes are independent." But he would not comment on what may be Neilson's most contentious finding: that the diocese gave conflicting statements about whether parishes are part of its assets. Diocese officials have told the court that under church law, parishes are held in trust by a diocese and are not assets. But Neilson said the diocese's financial statement to banks and bond markets "makes no disclosure of a trust relationship and gives no indication that any asset in the diocesan bank belongs to anyone other than the diocese." The issue is important because it may affect how much the diocese can pay to settle the lawsuits. A hearing on the report is set for Aug. 23. Although church attorneys have characterized the findings as largely positive, a bankruptcy attorney for the other side called the report "scathing." "In their pleadings, the diocese said the diocesan bank was not an asset, but it was represented as an asset to the bond market," said Jim Stang, who represents a committee of those claiming sexual abuse. He found it curious that the diocese's lawyers recently asked the court to appoint John E. Ryan, a highly regarded retired California bankruptcy judge, as their adviser. Ryan would work for free. Stang suggested that the diocese feared repercussions from the report, but Susan Boswell, the diocese's bankruptcy attorney, said the church "should have the opportunity to utilize (Ryan's) experience." Adler last week denied the request to appoint Ryan. Sandi Dolbee: (619) 293-2082; sandi.dolbee@uniontrib.com Mark Sauer: (619) 293-2227; mark.sauer@uniontrib.com
Any original material on these pages is copyright © BishopAccountability.org 2004. Reproduce freely with attribution.