Financial Transparency Emerges As Major Theme in St. Paul-minneapolis Abuse Story: Outstanding Mpr Report (and Nicole Sotelo on Knights of Columbus)

By William D. Lindsey
Bilgrimage
January 25, 2014

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To my mind, one of the strangest claims that apologists for the Catholic hierarchy who want to assist the hierarchy by bashing survivors of clerical sexual abuse make is that the Catholic church is and always has been transparent in its handling of finances. This claim is so obviously counterintuitive that I can't quite fathom the reasons some apologists try to trot it out as a weapon against survivors and those who stand in solidarity with survivors.

For Minnesota Public Radio, Tom Scheck has just produced a first-rate, must-read article detailing how the archdiocese of St. Paul-Minneapolis has dealt with the donations of lay Catholics and with its other financial assets for some time now. The picture is far from pretty.

Using internal financial reports of the archdiocese detailing large transactions never disclosed to those outside certain secret internal loops, Scheck shows the archdiocese spending "nearly $11 million from 2002 to 2011 — about 3 percent of overall archdiocese revenues in those years — for costs tied to clergy misconduct under Flynn and his successor, Archbishop John Nienstedt." As Scheck notes, these hidden financial reports "detail a stealth financial system that included payments to persuade priests to leave active ministry, financial support for children fathered by priests and money for legal settlements."

As an example of how the system worked, Scheck points to the case of Father Stanley Kozlak, whom archdiocesan officials decided to pay off in secret after Kozlak fathered a child in 2000--to pay him off in secret as he was removed from ministry in a way designed to hide the reason for his removal. Scheck reports that

Archbishop Harry Flynn agreed in 2002 to pay the fallen priest $1,900 a month "disability" for life, plus $800 a month in rent for life, and $980 a month "to replace the social security payment until Father Kozlak reaches age 67 when he would receive his full social security."

As survivor advocate Judy Block-Jones and survivor Joelle Casteix note in two videos I highlighted last week following the release of a report that Pope Benedict defrocked some 400 priests in his final two years as pope, many questions remain unanswered regarding priests who are defrocked due to sexual abuse of minors: where are these priests after they've been defrocked? What crimes did they commit? What protections have been put into place to keep them away from children? And what funds given by lay Catholics to the church for use in works of mercy have been secretly diverted to pay off and support clergy defrocked for having sexually molested minors?

Scheck's research adds more important questions to the preceding extremely important ones:

1. In a system that does not mandate full financial disclosure and transparency for its constituents, and which completely lacks outside controls, what are the effects of the lack of disclosure, transparency, and control when it comes to matters like embezzlement of church funds? (The archdiocese has not released full, audited financial statements in the past, but is promising to do so in February for fiscal year 2013.)

2. One clearly discernible effect of the system as it now functions: stealing. Scheck points to the case of Scott Domeier, former accounting director for the archdiocese, who went to prison last fall after having embezzled more than $650,000 of diocesan funds, and who says flatly that the secrecy surrounding church accounts makes it easier to steal from them.

3. As Scheck notes, Domeier's assessment is reinforced by findings of Charles Zech, director of Villanova's Center for Church Management and Business Ethics. In 2007, Zech published a study (pdf) which concluded that 85% of U.S. Catholic dioceses had funds stolen in the period from 2001 to 2006. Such embezzlement is facilitated by the lack of standard financial controls and outside audits--though a 1995 recommendation of the U.S. Catholic bishops calls for such controls to be established in all dioceses.

4. As with many dioceses (and parishes), St. Paul-Minneapolis has a finance council to advise Archbishop John Nienstedt, but as Scheck points out, "he [Nienstedt] alone is allowed to make spending decisions." And that is standard operating procedure for Catholic bishops and parish priests, even when dioceses and parishes have finance councils.

5. As Scheck also reports, in the St. Paul-Minneapolis archdiocese, there has been "seething" discontent with the decision of Archbishop Nienstedt in 2010-2012 to use large funds of diocesan money to pursue the political goal of amending the state constitution to outlaw gay marriage. Due to what many Catholics in the archdiocese regard as an illicit politicization of funds they had donated for charitable use, there has been a downward trend in donations--and revelations about the use of donations to pay off priests abusing minors or those fathering children will probably reinforce that downward trend.

To my way of thinking, Nicole Sotelo's current article in National Catholic Reporter about how the Knights of Columbus are "redefining" charity is a perfect fit for Scheck's valuable report. As Sotelo noted in 2012, in recent years the Knights of Columbus have given an increasingly smaller proportion of funds to works of mercy and a larger and larger share of the money they take in from lay Catholics interested in charitable causes to pursue right-wing political goals--notably, to attack gay people and their human rights.

Under the leadership of current Supreme Knight Carl Anderson, who previously served as a legislative assistant for the extreme-right GOP senator of North Carolina Jesse Helms, and then went on to serve in Ronald Reagan's presidential executive office, the Knights have become to all intents and purposes a Catholic arm of the Republican party. The Knights of Columbus were actively involved in Nienstedt's campaign against gay rights in Minnesota in 2010-2012. In September 2010, Timothy Kincaid reported that of $34.6 million that the Knights' Supreme Council spent in 2009, only $3 million was expended for works of mercy. Kincaid notes that in 2009, the Knights provided $8 million for the needs of the hierarchy, $5 million for their K.C. museum, $3 million for evangelization, but over $6 million to “family life” and “pro-life” programs. The latter included $4.7 million for anti-gay and $1.9 million for anti-abortion political advocacy.

Sotelo's latest report about how the Knights are "redefining" charity notes that the Knights are now seeking to classify politically oriented workshops they sponsor for the U.S. bishops (and, increasingly, for bishops outside the U.S.) as charity--though these workshops have nothing to do with the traditional works of mercy, and are designed to educate the bishops in a right-wing political agenda that has a heavy emphasis on combating gay rights.

Sotelo concludes that the Knights' increasing use of funds donated to the group for charitable purposes to pursue right-wing political goals is "anything but ethical," and that the Knights "could benefit from an ethics workshop, one that focuses on the difference between politics and charity." I agree.

And this is one of the primary reasons that I find her article a perfect fit for Scheck's report on the use of secret pay-off funds by the St. Paul-Minneapolis archdiocese, which equally deconstructs classic definitions of the ethical . . . . And why, along with NCR's editors, I have very serious reservations about the role Supreme Knight Anderson is now playing in the Vatican as "a Vatican establishment guy" sitting on several pontifical councils, including the lay council for the Vatican bank, when--as NCR notes--"he has been largely silent on the decades-old clergy sexual abuse crisis, hardly the kind of courageous leadership a corrupt banking operation needs" . . . .