Priest Abuse Spurs Layoffs
Oakland Diocese Forced to Cut 17 Workers Due to Shortfall Caused in Part by $56.4 Million Settlement

By Angela Hill
The Argus [Oakland CA]
February 1, 2006

OAKLAND — The Roman Catholic Diocese of Oakland has laid off 17 administrative employees in its chancery offices to help cover a $1.2 million budget deficit.

Church officials say the deficit was caused in part by costs related to a $23 million loan the diocese took out last year to pay settlements in priest sexual abuse cases.

After some three years of litigation and months of negotiation, the diocese agreed in August 2005 to a $56.4 million settlement with 56 childhood sexual abuse survivors. Insurance covered roughly half that amount, said the Rev. Mark Wiesner,who serves as diocesan spokesman. The church took out a loan for about $23 million, he added.

Locally, lawsuits or settlements regarding the clergy sex abuse scandal involved the late Vincent Breen during an assignment at Holy Spirit Parish; Donald Broderson from assignments at St. Leonard and Santa Paula parishes; the late James Clark from an assignment at Corpus Christi Parish; Robert Freitas from assignments at Santa Paula Parish and Our Lady of the Rosary Parish in Union City; Stephen Kiesle from assignments at Santa Paula and Our Lady of the Rosary parishes; and George Crespin from an assignment at Our Lady of the Rosary Parish.

Although Crespin's case was settled, a diocese review board found "evidence insufficient to support the allegation."

In a prepared statement, the Rev. George Mockel, a vicar general of the diocese, said the deficit was caused by a widening gap between income and expenses during the past several years, and the recent substantial cost of financing a loan related to the settlement of the sexual abuse claims.

But Rick Simons, a Hayward attorney who represented several of the victims, questioned why the diocese opted to lay off employees rather than sell some of its properties.

As part of determining the diocese's assets for the settlement, Simons said he found "two dozen" pieces of property owned by the diocese that were either rented to retail stores or vacant lots.

"They could easily take out a mortgage on those properties and take on monthly payments or sell of some of those properties," Simons said.

Mockel said the diocese intends to sell some of its property in the future.

"(We hope) this loan will be retired over the next few years with the sale of diocesan property not currently being utilized," he said.

The diocese also is undergoing an expansion project, building its $131 million Cathedral of Christ the Light near Lake Merritt in Oakland, scheduled for completion in 2008. But no money raised for cathedral construction can be used for anything else, said cathedral project spokesman Lee Nordlund.

"The cathedral is a completely separate entity from the chancery," Nordlund said. "A separate budget. We're even a separate corporation with a whole different management team. We still have to raise money for the project, but we're going forward as planned and we're on schedule."

In September, the diocese began trimming wherever it could, Wiesner said, reorganizing some departments and cutting expenses.

"The interest and various loan costs are affecting our operating budget," Wiesner said. "There are other factors as well. We have not seen a decrease in donations, but the increase of donations has not kept up with the rate of inflation. Salary and benefit costs have been increasing. So cuts had to be made, unfortunately."

The Oakland Diocese serves half a million in Alameda and Contra Costa counties.

Staff writer Jonathan Jones contributed to this report.

Wiesner said that all 17 eliminated positions are in the main diocese offices on Lakeshore Avenue in Oakland, and Friday's layoffs did not directly affect Catholic schools or cemeteries run by the diocese, the Catholic Voice church newspaper or Catholic Charities, which all run under separate operating budgets from that of the chancery offices.

Five of the eliminated positions are part-time and 12 are full-time, Wiesner said. Three of the full-time staffers took voluntary severance packages. That leaves a little more than 110 employees at the chancery offices, where the total 2006 operating budget is $13.5 million.

The layoffs affect clerical and administrative positions in several programs including the liturgy office, the small Christian community office, family law, special religious education, canon law and young adult ministries. These programs will continue, however.

"We regret the difficulty and pain these decisions will inevitably cause some of our employees," Mockel said.

"But unfortunately in light of limited financial resources, these decisions became necessary."

Staff writer Jonathan Jones contributed to this report.


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