Amid Molestation Scandal, L.A. Archdiocese Mulls $200 Million Fundraiser

By Harriet Ryan, Ashley Powers and Victoria Kim
Tri-City Herald
February 6, 2013

http://www.tri-cityherald.com/2013/02/05/2264160/amid-molestation-scandal-la-archdiocese.html

In the midst of renewed public outrage over its handling of clergy sex abuse, the Los Angeles Archdiocese is considering a $200 million fundraising campaign that could erase debts brought on by the scandal.

The archdiocese has hired a New York company, Guidance In Giving Inc., to study the feasibility of a large-scale fundraiser that would shore up a bottom line hit hard by costly abuse litigation. It would be the archdiocese's first capital campaign in 60 years.

The archdiocese's $660 million settlement in 2007 with more than 500 victims was the largest in U.S. history. According to a December financial report reviewed by the Los Angeles Times, the archdiocese is still paying down loans it used to cover the settlement, and its liabilities now outstrip its assets by $80 million.

The archdiocese is contemplating the fundraiser as a way to repay settlement loans totaling $175 million, according to the report. An archdiocese spokesman confirmed that the capital campaign was being considered but in a statement did not address whether any proceeds would be used to pay down the settlement loan.

Spokesman Tod Tamberg said in an email that the funds would "be put into various endowments earmarked to support the pastoral priorities of the Archdiocese, as well for the general repair and upkeep of our parish churches and schools."

As part of a six-month study, consultants planned to interview pastors at all 288 parishes in the three-county archdiocese as well as other clergy and lay leaders, the report said. Tamberg described initial feedback from the study as "very positive."

The church's last capital campaign occurred in 1949 and raised $3.5 million for new schools in only three weeks. At that time, there were about 650,000 Catholics in the archdiocese. Now there are 5 million, according to church figures.

If the new fundraiser occurs, it would place Archbishop Jose Gomez in the potentially difficult position of seeking large contributions from people whose anger at the abuse scandal has been stoked anew. Files released in a court case last month showed how Gomez's predecessor, Cardinal Roger Mahony, and a high-ranking church official, Thomas J. Curry, plotted to hide molestation from police in the 1980s and 1990s.

How a fundraising push would resonate with parishioners remains an open question.

Eric Nielsen, 52, who regularly gives to various churches and rescue missions, said Tuesday that he would want to know exactly where the funds were going before he considered donating to a capital campaign.

"I want my money to go to a good cause, and not to go toward all this going on right now, lawyers and whatnot," said Nielsen, who attends St. Charles Borromeo Catholic Church in North Hollywood.

But fellow parishioner Frank Penunuri, 85, said the scandal would not affect whether he gives to the church he has been attending for more than 50 years.

"I'm a Catholic," he said, laughing. "I do what I'm told."

In what appeared to be an attempt to turn the page on the decade-long scandal, Gomez last week publicly rebuked Mahony, accepted Curry's resignation and ordered 12,000 pages of internal archdiocese records about abuse posted on the church's website.

Gomez, 61, holds a bachelor's degree in accounting, a background Mahony had predicted would prove useful when he turned over management of the nation's largest Catholic archdiocese to Gomez in 2011.

Under Mahony, the archdiocese agreed to two major abuse settlements: the $660 million payout in 2007 and a $60 million agreement in 2006. Although insurance companies and religious orders picked up about half that amount, the church has paid at least $360 million to compensate victims. The amount does not include legal fees for church lawyers who negotiated settlements and then spent years fighting unsuccessfully in court to keep the church records confidential.

Despite the archdiocese's debt, the church's spokesman said auditors verified church financial reports that concluded that "the archdiocese is financially sound." The church has liabilities of $551 million, and assets, including an investment portfolio and property holdings, of $471 million, according to the financial report. The report suggests that the archbishop has been focused on getting the church's financial house in order since shortly after taking office.

"The Archbishop considers stewardship of the Church's financial resources and sound fiscal planning to be a vital dimension of the new evangelization," the report stated in a section laying out the possibility of a capital campaign.

Gomez appointed a special committee of lay people and clergy last year to look into a major fundraising drive and he later approved the hiring of Guidance In Giving, a firm that specializes in raising money for Catholic groups.

Reached by phone, Guidance in Giving chief executive Michael Cusack said he was doing "some consulting" for the archdiocese. He declined to discuss details beyond saying there was "no capital campaign coming down the pipe" and then abruptly hung up the phone.

Feasibility studies by firms such as Guidance in Giving typically cost tens of thousands of dollars, said Craig Leach, whose company, Graham-Pelton Consulting Inc. has helped archdioceses across the country raise money.

He said the sex abuse scandal is "mostly in the rear-view at this point," at least to major donors. For a successful campaign, he said, church leaders have to show that they have cut ties with the past and present an image of transparency and accountability,

"If there's a problem, you have to tell people that you're taking action and you'll never let this happen again," Leach said. "That's an important step to take."

Charles H. Devers of the Florida-based Center for Institutional Finance, which works with churches on fundraising and financing, said that asking for money in the midst of scandal would require a "careful and focused message." But, he said, attention to past failures in the church could be fertile ground for new donations.

"Cleaning up things that are bygone problems is a very strong way of clearing the air, educating the parishioners as to what their needs are, and how the church can move forward," Devers said.

(Times staff writer Matt Stevens contributed to this report.)

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