Retired Priest Asks Judge to Look at Use of Cemetery Funds
By Annysa Johnson
Milwaukee Journal Sentinel
March 20, 2015
|Father James Connell|
The former vice chancellor of the Archdiocese of Milwaukee, now an advocate for clergy sexual abuse victims, has asked the judge in the archdiocese's bankruptcy to investigate how the church funds its cemetery operations.
In a letter to U.S. Bankruptcy Judge Susan V. Kelley, the Rev. James Connell questions whether the archdiocese may have used its cemetery trust funds to subsidize its other operations, contradicting its assertion that the money can be used only for the perpetual care of its cemeteries. And Connell, a canon lawyer and certified public accountant who previously sat on the archdiocese's finance council, suggests she pull in the FBI to look into it.
It's highly unlikely the judge would do that, according to at least one bankruptcy expert.
But Connell's concerns echo those likely to be raised by abuse victims if and when a pending lawsuit over the cemetery trust, which the 7th Circuit Court of Appeals refused last week to dismiss on religious liberty challenges, resumes in Milwaukee later this year.
James Stang, lead attorney for the creditors committee, which is comprised of victims but represents all of the archdiocese's creditors, declined to comment on Connell's assertions. But he said the committee's financial experts are reviewing his letter.
Jerry Topczewski, chief of staff for Milwaukee Archbishop Jerome Listecki, and attorney Timothy Nixon, who represents Listecki as sole trustee of the trust, said Connell has misread the archdiocese's financial documents.
"He's just wrong," said Nixon. "I think the questions are fair, but we disagree with his conclusions. At the appropriate time, we'll bring our information forward."
Connell cites numerous financial documents presented in the bankruptcy showing that the cemetery trust provided $7.8 million to the archdiocese, or $1.95 million a year, between 2011 and 2014. During those years, he notes that cemetery operations posted surpluses ranging from $428,000 to more than $535,000, with no indication that the surplus was returned to the trust.
"If the trust funds were used to pay expenses other than cemetery expenses, that's an important precedent," Connell said. "Then the judge could decide moneys can be used to pay survivors or whatever else needs to be done for the reorganization."
Topczewski said the trust funds are used only for perpetual care. The surpluses cited by Connell, he says, are from other cemetery operations and that those funds can be used to subsidize other diocesan ministries.
"We've never made a secret that cemeteries in their operations ... contribute to diocesan ministries," he said. "That's not atypical of any diocese in the country."
Church entities have borrowed from the perpetual care funds in the past, but the church has maintained that did not violate the trust, because the loans were paid back — with interest.
Last week, the 7th Circuit reinstated the cemetery trust lawsuit, which had been dismissed by U.S. District Judge Rudolph T. Randa on religious liberty grounds. The archdiocese had filed the lawsuit, saying forcing it to tap even $1 of the $60 million trust for sexual abuse settlements as part of the bankruptcy would substantially burden its free exercise of religion under the First Amendment and the 1993 Religious Freedom Restoration Act.