Comments on the Audited Financial Report of the Archdiocese of Saint Paul and Minneapolis

By Jennifer Haselberger
Canonical Consultation
November 21, 2014

http://canonicalconsultation.com/blog.html

Yesterday, the Archdiocese of Saint Paul and Minneapolis released audited financial reports showing a more than $9 million operating deficit for the fiscal year that ended June 30, 2014. In both the Archbishop's column accompanying the announcement and the report of the Chief Financial Officer, the precarious financial position of the Archdiocese is linked to the passage of the Child Victims Act, which opened a window for the introduction of 'old' civil cases involving acts of sexual abuse of minors. I disagree, and instead attribute the financial crisis to poor management and a fundamental failure of Archdiocesan leadership to govern the diocese in accord with its mission. Let me explain.

1. The Child Victims Act

The passage of the Child Victims Act did not create the financial distress that we learned of yesterday. All the Child Victims Act did was create a window during which victims of sexual abuse could present civil cases that otherwise would have been barred by the statute of limitations. Permitting someone to introduce a case is not the same as guaranteeing that person a positive verdict. The 'number of cases' the Archdiocese is facing is not the result of the Child Victims Act, it is the result of decades of abuse perpetrated by clergy, often under circumstances in which the Archdiocese knew of or could have reasonably assumed the likelihood of such abuse occurring. For proof of this statement, I need only refer you to the Archdiocese's own website and its growing list of 'Individuals with substantiated claims against them of sexual abuse of a minor within the Archdiocese of Saint Paul and Minneapolis'.

[]

These actions were taken despite the Catholic Church's explicit support for for the rights and needs of victims found in documents like ‘Responsibility, Rehabilitation, and Restoration: A Catholic Perspective on Crime and Criminal Justice’, which is a policy statement issued on November 15, 2000, by the United States Conference of Catholic Bishops. The Archdiocese also often pursued ends in court that are contrary to Catholic teaching, such as forcing victims to undergo psychological testing and other procedures which the Church believes cannot be compelled because of the natural dignity of all persons.

In this context, the Child Victims Act, which the Archdiocese spent more than ten years and nearly a million dollars opposing, can be seen as merely leveling the playing field for a category of victims that had been denied justice by a powerful organization committed to winning in court using all means available- fair or foul. For, the Archdiocese had other options available to it besides litigation and lobbying. It could have avoided its present predicament by doing as other dioceses did and voluntarily agreeing to mediate or arbitrate cases that fell outside of the statute of limitations (see, for example, the Diocese of Springfield) prior to October 2014. This was, of course, the position advised by Mark Chopko and the USCCB, which encouraged dioceses to consider mediation and other forms of alternative dispute resolution as early as 2005.

2. $1,000,000 Write Off of Software

The statement of the CFO, Tom Mertens, notes, 'The Chancery Corporation wrote off $993,642 of software that did not meet specifications identified in the Report and Recommendations of the Safe Environment and Ministerial Standards Task Force.' I have no doubt that this is true. However, the Archdiocese did not need a Task Force to tell it that this investment was of no value, nor is that the fault of the software itself. As early as July of 2012 I informed the Archdiocese that I had no confidence that the software project could be successfully completed and noted 'the financial cost to this Archdiocese will be unjustifiable'. This loss of nearly a million dollars can be attributed only to poor management decisions that included acting against the advice of several employees as well as the contractors that had been employed to guide the project and employing unqualified personnel in order to win favor with others in the episcopacy.

3. Nienstedt: 'The Chancery Corporation's financial condition does not directly affect the parishes or other Catholic institutions'.

Wait, what? This statement doesn't fit with the theological symbiosis of the parishes and dioceses of the Catholic Church, nor with what I know of parish and Chancery operations. When I left in April of 2013, the Archdiocese (Chancery Corporation) owned the land on which several schools were built (these include Totino Grace and Benilde-St Margaret). Surely this land (especially given the value of the Benilde property) would be considered an asset in any bankruptcy proceeding, or a significant point of contention if it were determined that the land was 'gifted' away in the last year. In addition, the Archdiocese has guaranteed many of the loans taken out by parishes for capital improvements and other building expenses, and floats the costs of medical and pension insurance for the parishes and other institutions in the self-insurance plan, at times permitting struggling parishes to go significantly into arrears on these costs. I cannot see how the deficits reported in yesterday's statements, and the possibility of a bankruptcy filing, do not impact these parishes and institutions.

UPDATE: I neglected to mention that the Archdiocese also owns the land and buildings of the Cathedral, although the Cathedral parish (a separate corporation) owns the debt.

I also find it significant that the Archdiocese has announced that it is beginning another wave of 'strategic planning'. What I am hearing is that there is more than one parish within the Archdiocese that is running out of money to pay its bills, and quickly. At least one of these parishes, according to my sources, is under the absent leadership of a priest 'temporarily removed' from ministry last December for 'boundary violations' involving minors and is currently staffed by a resident priest who is himself under restrictions in terms of his ministry. Yet, rather than removing the pastor and assisting the parish in overcoming the disheartening situation to which the Archdiocese knowingly subjected it, the parish is being left to implode and is without any hope of meeting its expenses much less any type of criteria for avoiding restructuring. I find this a convenient situation for an Archdiocese with financial woes, especially given the interest in the parish property that has been expressed by a neighboring Ukrainian Church.

Conclusion

In his column, the Archbishop writes that he has 'spent countless hours and several sleepless nights trying to analyze the current situation and find the best resolution available to us'. With all due respect, it would appear that the Archbishop has failed to consider the most obvious resolution, which would start