Judge's Tears, Rebuke Close Case

By Sandi Dolbee and Mark Sauer
November 2, 2007

The San Diego Catholic diocese's eight-month-old bankruptcy case drew to an emotional close yesterday with the judge shedding tears and scolding the church for being "disingenuous" in reporting its finances to parishioners as part of a campaign to fund a $198 million settlement with victims of sexual abuse.

Judge Louise DeCarl Adler said she had planned to grant the diocese's request to dismiss the bankruptcy without comment. But then she got a packet in the mail from her former parish asking to help pay the settlement.

The mailing, which was recently sent to parishioners in the diocese, included a financial breakdown she said was less than candid.

“Chapter 11 is not supposed to be a vehicle, a method, to hammer down the claims of those abused.” JUDGE LOUISE DeCARL ADLER on the diocese filing for bankruptcy

Adler said there is ample property the church could sell or mortgage to fund the settlement, citing parking lots, houses and other holdings listed in court documents.

The diocese could have settled the claims without seeking bankruptcy, she added. "Chapter 11 is not supposed to be a vehicle, a method, to hammer down the claims of those abused," she said.

Moments before delivering her rebuke yesterday, Adler was moved to tears by several victims who stepped forward to thank her for her work.

Rodrigo Valdivia, a diocese spokesman, said church officials were disappointed by Adler's comments and called the financial breakdown accurate. "It is not disingenuous," he said.

The Roman Catholic Diocese of San Diego filed its Chapter 11 case Feb. 27, hours before the first abuse trial was to start. Bishop Robert Brom said bankruptcy protection was needed to continue the church's work while trying to compensate men and women sexually abused by priests and church workers when they were minors.

Attorney Jim Stang, a bankruptcy specialist who represented the abuse victims, agreed with Adler.

"The diocese had enough assets to pay the fair settlement value of the claims," he said.

The diocese settled outside bankruptcy court Sept. 7, agreeing to pay $198 million to 144 victims. Under the settlement, the payouts would be made in two installments next year.

Last month, the diocese launched Embracing Our Mission, a campaign to raise $25 million from Catholics in San Diego and Imperial counties to help pay for the settlement.

Online: For a list of properties in which the Roman Catholic bishop of San Diego holds title, according to the San Diego County Assessor's Office, go to

Adler does not object to Catholics being asked to contribute. "I think it's a good thing to do," she said. But she said she was troubled that the financial breakdown was "lacking candor."

An analysis by The San Diego Union-Tribune found the Roman Catholic bishop of San Diego holds title to more than 420 properties in the county. The bishop is also listed on dozens of other properties in Imperial and other counties.

In its battle through bankruptcy court, the diocese insisted that the 98 parishes were separate and could not be counted as assets, though the point was never resolved.

As of March, Catholic Church properties in San Diego County had an assessed value, including land and buildings, of $446 million. Half of the properties are listed as churches, "church parking, or related," cemetery properties and public buildings/schools.

The other half includes vacant residential parcels, single-family residences, multiple-unit buildings, condominiums, vacant parcels zoned for commercial or industrial use, stores and parking lots.

The bulk of the assets that are not churches, schools or cemetery property is assessed at about $115 million by the San Diego County Assessor's Office.

But that is only a fraction of the properties' market value, said Gary London, a San Diego real-estate economist.

"The market here doubled in the 1980s and has doubled again in the past seven years. So you can multiply many of these assessed values by a factor of at least four to get the fair market value," he said.

Applying that multiplier, London said, the diocese "conservatively holds properties (in San Diego County) with a market value well in excess of $1 billion."

"(Church officials) can easily get loans against these assets to satisfy this settlement," London said.

A statement from the diocese yesterday defended the Embracing Our Mission campaign.

"It is based on an accurate analysis of actual diocesan assets without confusing these with assets that do not belong to the diocese," said a statement sent to pastors and church staff.

San Diego is the fifth and largest diocese in the nation to declare bankruptcy. None of the others has asked parishioners and priests to directly contribute to settlements of sexual-abuse cases, said Charles Zech, an economics professor who has followed the clergy-abuse crisis from Villanova University, a Catholic school near Philadelphia.

However, in the Tucson and Spokane, Wash., bankruptcy settlements, Zech said, parishes were required to contribute and it was up to each to decide how to raise the money.

Property values

Assessed values of Catholic Church properties in the county, according to the San Diego County Assessor's Office:

Parishes: $185 million

Parish parking lots: $39 million

Schools: $96 million

Holy Cross Catholic Cemetery: $11 million

All others: $115 million

Zech, who noted that selling property other than churches, schools and cemeteries is "the first thing the diocese should do," has polled 1,000 Catholics nationwide who regularly attend Mass about their willingness to fund abuse settlements.

His most recent poll, in 2005, found that 44 percent favored a diocesanwide collection like that proposed by Brom; 38 percent preferred a sale of church property; and 33 percent backed cuts in programs to make up the shortfall after insurance funds are exhausted.

Mark Sauer: (619) 293-2227;

Sandi Dolbee: (619) 293-2082;


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