Archdiocese Trusts Scrutinized, by Annysa Johnson, Milwaukee Journal Sentinel , April 11, 2011

Archdiocese Trusts Scrutinized

By Annysa Johnson
Milwaukee Journal Sentinel
April 11, 2011

http://www.jsonline.com/features/religion/119668679.html

The Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy sex abuse cases, filed for Chapter 11 bankruptcy protection in January. As the case proceeds, we'll have updates, analysis, documents and more.

Attorneys representing the creditors committee in the Archdiocese of Milwaukee bankruptcy case asked the court on Monday for permission to hire a forensic accounting firm to analyze the archdiocese's transfers of more than $125 million in the weeks and years leading up to the bankruptcy filing.

At issue, creditors say, is whether that money - some of which was transferred into newly created trusts - should be able to be used to pay clergy sex abuse claims as part of the archdiocese's bankruptcy and reorganization. Attorneys for victims said they do not know the total amounts in the trusts and that the archdiocese has failed to provide adequate information about them.

"We have enough information to know that significant amounts of money were transferred at important times in the prosecution of these cases, and that they need to be carefully scrutinized," said creditors committee attorney Jeff Anderson.

Jerry Topczewski, spokesman for the archdiocese, said it has shared its complete financial information with victims and their attorneys, and that those statements are audited and available on the archdiocese's website, www.archmil.org.

Creditors filed a motion Monday asking to hire California-based Berkeley Research Group, which also analyzed church assets in bankruptcies involving the dioceses of San Diego and Wilmington, Del., and the Society of Jesus, or Jesuits, in Oregon.

The creditors committee has raised concerns about the creation of at least six trusts in less than four years, the transfer of $70 million in parish funds off the archdiocese's books, and $20 million in funds the church says are restricted for specific purposes and unavailable for sex abuse claims.

The trusts include one for Catholic cemeteries, into which $55 million was transferred in March 2008; and the Faith in Our Future Trust, established to hold proceeds from the $105 million capital improvement campaign launched by the archdiocese in 2007.

The archdiocese maintains that the Faith in Our Future Trust is a separate entity unrelated to the archdiocese, and that the $70 million in parish funds were returned to those congregations. The cemetery trust, it says, merely formalized its treatment of cemetery funds as restricted to those uses.