BishopAccountability.org
	Diocese Shouldn't Settle for Less Than the Truth The Advocate September 17, 2009 http://www.stamfordadvocate.com/ci_13360025?source=most_emailed Since the scandal of Michael Jude Fay broke three years ago, Catholic leaders in the Diocese of Bridgeport have used the same word to describe their handling of it. Transparent. In what could be the final chapter of the Fay saga, the diocese this week settled a lawsuit brought by the parish bookkeeper who revealed how the pastor stole more than $1 million from his flock to finance a lavish life with another man. But diocesan officials used a different word to describe the settlement. Confidential. Parishioners who donate money to their churches -- much of it going to Bridgeport -- should know what was paid to the former bookkeeper at St. John's Church in Darien. Bethany D'Erario claimed the diocese did not respond when she first reported Fay was embezzling in 2004. After she hired a private detective to investigate, church officials demoted her, tried to take away her health benefits, partly blamed her for the thefts, and spread rumors that she was having an affair with a former St. John's priest who also took information to the detective, her suit claimed. The attorney for the diocese said the claims were nonsense. They settled nonetheless. Afterward, diocese officials posted a statement on their Web site saying they admit no wrongdoing and settled "to avoid a repetition of the pain caused by the former pastor's actions." The attorney, Daniel Schwartz, said in an e-mail that confidentiality "was a negotiated term of the settlement that was agreed upon by all parties," and the purpose "is to enable the parties involved in a private dispute to resolve their differences without exposing any party to a public debate about the settlement." But public debate goes hand in hand with transparency. In an interesting case in New York, a federal judge this week took a stand against settlements. U.S. District Judge Jed Rakoff is hearing a case in which the U.S. Securities and Exchange Commission sued Bank of America for defrauding shareholders. It began last year during the worst of the financial crisis, when federal regulators trying to save Merrill Lynch from failure pushed Bank of America to take it over. In exchange, the U.S. government gave Bank of America a $45 billion bailout. According to SEC allegations, Bank of America failed to disclose that, just before the Jan. 1 merger, Merrill Lynch paid its employees $3.6 billion in bonuses. Despite the seriousness of the charge, the SEC and Bank of America this week tried to settle the lawsuit for $33 million. Rakoff said no. The judge "has refused to accept a settlement because he thought it was outrageous that Bank of America shareholders would fund a settlement in which the accusations were that Bank of America defrauded shareholders," said Stamford attorney Gary Klein, who handles business litigation cases at Sandak Hennessey & Greco. Rakoff said that, by settling, the SEC was failing to do its job of regulating banks, and Bank of America was failing to admit it deceived shareholders and the taxpayers who bailed it out. He demanded the names of the executives who did not disclose the bonuses. The SEC and Bank of America concocted the settlement to avoid responsibility, Rakoff said. The settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators," Rakoff wrote. "And all this is done at the expense, not only of the shareholders, but also of the truth." He ordered the case to trial. His message: The truth is more important than a deal. After all that's happened in the Diocese of Bridgeport in recent years, the same can be said in the D'Erario case. Fay admitted guilt in 2007 and died in prison last month. The FBI is investigating another former pastor, Michael Moynihan, for stealing at least $400,000 from St. Michael the Archangel in Greenwich. Like Fay, Moynihan had a home he shared with another man. After the embezzlements surfaced, Bishop William Lori said the diocese would be more transparent. He instituted new financial controls, publishing a parish administration manual, distributing audit reports, and establishing employee training, better accounting and a way for parishioners to report concerns. But the transparency keeps getting clouded. After the scandals, for example, parishioners wanted to know what the diocese does about priests who break their vows of celibacy, given that Fay's and Moynihan's longtime relationships were open secrets. When the diocese did not explain, some parishioners wrote to Rome seeking answers, but none came. Transparency was clouded again when the Diocese of Bridgeport sought to keep secret 12,600 documents from cases of clergy abuse of minors, all settled. A state court ruled the documents should be made public. But three weeks ago the diocese appealed to the U.S. Supreme Court to overturn that ruling so the documents can remain sealed. Transparency takes another hit. D'Erario and diocese officials settled within a month after a state Superior Court judge denied the diocese's motion to dismiss her lawsuit. Because of the confidentiality clause, Schwartz and D'Erario's attorney, Mark Sherman of Stamford, said they could not discuss the agreement. There are two reasons for confidentiality, Klein said. "One is to protect the financial privacy of the person paying the money and the person receiving the money, because that individual may receive a significant amount and may not want the world to know it," Klein said. "The other is that, if other people believe they have similar claims and see that the defendant is willing to pay big sums, they may be more inclined to bring a suit." Still, as Rakoff ruled, there are times when a deal should not take the place of the truth. Angela Carella can be reached at 203-964-2296 or angela.carella@scni.com. Her column runs Wednesdays, Fridays and Sundays.
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