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	Catholic Church in N.O. Fiscally Sound, Credit Rating Firm Says By Bruce Nolan The Times-Picayune July 11, 2009 http://www.nola.com/news/index.ssf/2009/07/catholic_church_in_no_fiscally.html The Archdiocese of New Orleans is financially sound and able to repay what remains of $69 million it borrowed on Wall Street, even after paying $7 million in legal settlements since 2007, including some for sexual abuse claims, according to a Wall Street credit report on the church's finances. The payments came out of reserves the archdiocese has set aside for litigation, Moody's Investors Service told potential investors around the country. The archdiocese confirmed that some of the payments went to plaintiffs in sexual abuse cases. But not all payments did, the church said, refusing to provide details. "For various reasons, we cannot provide a total amount paid in sex abuse claims since 2003," when the church last made a public accounting of the costs of sexual abuse litigation, said archdiocesan spokeswoman Sarah Comiskey. The payouts came from the archdiocese's central administrative budget rather than parish coffers, she said. "No programs or ministries have been closed or cut to pay any sex abuse claims," she said. The disclosure came in a June 30 credit-rating update that Moody's circulated to its subscribers around the country. Having issued $69 million in bonds two years ago to assist its recovery from Hurricane Katrina, the church now makes detailed financial disclosures to Moody's and others who monitor its financial strength for investors. The church has since repurchased $35 million of the debt, Comiskey said. Comiskey said most of the legal settlements reported by Moody's were included among insurance expenses totaling $15.7 million for 2007 listed in a financial statement of operations the archdiocese released last month. The Moody's report reviewed litigation as part of its risk assessment of the archdiocese. Without differentiating between settlements made for sexual abuse cases and those made for other reasons, the report said the 16 settlements were among 40 lawsuits outstanding against the church. No new lawsuits had been filed in the prior year, it said, noting that "the archdiocese expects to resolve all of the current claims with minimal impact outside of the established reserves." The archdiocese's last accounting for sex abuse litigation came in December 2003, near the end of the national clergy sex abuse scandal, when dioceses around the country began to make first-time disclosures to their parishioners about the economic costs of sex abuse claims. The New Orleans archdiocese said then that from 1950 until 2003 it had spent $1 million on settlements, victims' therapy and legal fees. Insurance carriers paid another $1 million, the church said at the time. There has been no accounting since then, however. In other parts of its review, Moody's noted that in the three years after Katrina, the church experienced steep property losses, erratic cash flows and Federal Emergency Management Agency compensation that has been difficult to predict. But on the plus side financially, it noted the archdiocese's deep roots in New Orleans, more than $184 million in assets under management and a portfolio of surplus property. The report said for the 10 months before April 30, the archdiocese has investment losses of 14 percent, but noted that its return is "better than many peer institutions." It left the church's credit rating unchanged at Baa2, denoting moderate risk. Bruce Nolan can be reached at bnolan@timespicayune.com or 504.826.3344.
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