Jennifer Haselberger's Affidavit in the St. Paul-minneapolis Archdiocesan Bankruptcy Case: "a Question of Equity and Fairness" Grounded in the Corporatist Tradition of Catholic Theology and Ecclesiology

By William D. Lindsey
The Bilgrimage
June 8, 2016

http://bilgrimage.blogspot.com/2016/06/jennifer-haselbergers-affidavit-in-st.html

Before we left for our recent vacation, I made a promise here, I seem to recall, to read and comment on the 22 May affidavit of Jennifer Haselberger, former Chancellor for Canonical Affairs of the Catholic archdiocese of St. Paul-Minneapolis. The affidavit is Haselberger's testimony in the bankruptcy case of the archdiocese now pending in the U.S. Bankruptcy Court for the District of Minnesota (case no. 15-30125).

I believe it was Mary Q, a good reader of this blog, who pointed me to this document, which is uploaded to the website (pdf file) of Jeff Anderson, who is representing abuse survivors suing the archdiocese. At her blog, Haselberger wrote about the affidavit the day after she made it. As she explains in this posting, she testified in support of "substantive consolidation." She explains:

Substantive consolidation is an equitable remedy available to bankruptcy courts whereby the assets of entities closely related to the debtor, in this case the Archdiocese of Saint Paul and Minneapolis, are combined into the bankruptcy estate.

At the heart of a motion for substantive consolidation is the question of equity and fairness. American law does not allow a corporation like the Archdiocese of Saint Paul and Minneapolis to misuse the benefits of the separate corporate forms of, say, parishes or foundations, to unfairly deprive creditors like the victims of sexual abuse by clergy. In other words, the test for whether substantive consolidation is appropriate in a given case is determined by the degree of interrelatedness between the entities to be consolidated and the parent organization.

And then she provides four reasons for why she supports a motion for substantive consolidation in this case:

1. "The request to consolidate does not include Catholic Charities or Commonbond Communities." And so these Catholic, but quasi-independent entities doing works of mercy, will not be pulled into a bankruptcy settlement requiring that the archdiocese itself bear responsibility for having covered up sexual abuse cases, and can continue doing their works of mercy without penalization.

2. "The request seeks to make more assets available to compensate the victims of sexual abuse of minors by clergy." And why is this necessary? "I believe we cannot turn a blind eye to the harm and suffering experienced by those individuals, most of whom are or were members of our Catholic community, to preserve advantages for others."

3. "The motion and my affidavit will expose the ways in which the Archdiocese of Saint Paul and Minneapolis has harmed the pastors, assistants, and the lay leadership of the parishes, schools, and affiliated entities within this Archdiocese." I want to say more about this in a moment.

4. Finally, it is my hope that the request for substantive consolidation creates a path by which we, as the people of this Archdiocese, can finally put this scandal and its fallout behind us.

What Jennifer Haselberger has to say vis-a-vis point 3 strikes me as especially important, so I'm going to quote that section of her blog posting about her affidavit in more detail:

The motion and my affidavit will expose the ways in which the Archdiocese of Saint Paul and Minneapolis has harmed the pastors, assistants, and the lay leadership of the parishes, schools, and affiliated entities within this Archdiocese. This scandal began when the Archdiocese imposed sexually abusive clergy on parishes and their unsuspecting communities, not even offering the courtesy of a warning to parents and others responsible for the well-being of children and other vulnerable people. In addition, those of us who remember the 2010 Strategic Plan and subsequent decisions made regarding the subsidizing of parishes and schools will recall the arbitrary and unfair nature of the decisions that were imposed and then attributed to 'local decisions'. And, those of you who are parish and school employees or who have been otherwise impacted by recent decisions regarding payroll providers and benefits plans will know that the same type of heavy-handed control continues. This is not only an abuse of the corporate form, but it unjustly, and at times cruelly, impinges upon the autonomy and the consciences of those who have been legitimately entrusted with the spiritual and temporal affairs of our local churches and ministries.

And then, of course, immediately after Jennifer Haselberger filed her affidavit, news broke that abuse survivors in this case maintain that, though the archdiocese has informed the court that its assets are $45 million, the actual figure for archdiocesan assets is some $1.7 billion. As the Wall Street Journal article by Tom Corrigan to which I've just linked notes, survivors claim that what the archdiocese is seeking to do in response to their claims is to propose a "cram-down plan" that offers a pittance of compensation to survivors while shielding and hiding archdiocesan assets.

Jennifer Haselberger commented in a posting at her site about this cram-down plan:

What the Archdiocese does not mention is that what they are seeking is called, in bankruptcy terminology, a cram down. In other words, the Archdiocese is asking the bankruptcy court to cram down the throats of the victims of sexual abuse and other unsecured creditors its reorganization plan, over the objections of those same creditors.

And Jesus wept.

And here's what strikes me about her affidavit: as she herself explains in the posting about it on her blog to which I link in the second paragraph above, "substantive consolidation" is about equity and fairness — and this is why she supports this approach in this bankruptcy case. As she also notes in that same posting, "the test for whether substantive consolidation is appropriate in a given case is determined by the degree of interrelatedness between the entities to be consolidated and the parent organization."

She's arguing, in other words, for a corporatist approach to the question of how the Catholic church ought to be responding to abuse survivors. She's arguing for something that is at the very heart of Catholic theology and ecclesiology — the notion that we're all in it together, that what affects one of us affects all of us, that those who have also have an obligation to assist those who have not. "I believe we cannot turn a blind eye to the harm and suffering experienced by those individuals, most of whom are or were members of our Catholic community, to preserve advantages for others," Haselberger states in enumerating her reasons for a substantive consolidation approach in this bankruptcy case: this is a catholic we. It is our responsibility as a Catholic institution to respond humanely, justly, equitably, and with love to these fellow human beings and fellow Catholics who are a part of us.

Haselberger is arguing against the attempt of one contemporary Catholic pastoral leader after another to deny the corporatist basis of Catholic theology and ecclesiology, when the institution itself is challenged to own its mistakes and to make amends for them. She's arguing against the strange (Have lawyers convinced the bishops and Vatican of this strategy? Have CEOs done so?) approach to the community of survivors which has prevailed from the outset of the abuse crisis, which refuses to recognize that they are fellow human beings and fellow Catholics who do not deserve to be treated like the enemy.

Faced with the obligation to own the institution's responsibility for its sins of destroying human lives through sexual abuse of minors, one contemporary leader of the Catholic church after another has suddenly sought to disclaim any responsibility — on the part of the institution, on the part of the Catholic community, on the part of the bishops and Vatican officials as top church leaders — for this sin. One current pastoral leader of the Catholic church after another has thrown up his hands in face of demands for the community and the institution to make amends and affects suddenly to have discovered that popes and bishops have no responsibility for what priests do: they're independent agents, independent operatives.

Though these very same pastoral leaders in all other respects fiercely insist on their absolute ownership of the entire Catholic shebang, down to the last penny in parish coffers, if they happen to be bishops or archbishops . . . . As you can see, there's a shell game going on here, and it's a stinky, disreputable one that totally undermines the claims the Catholic church makes about itself at the most fundamental level possible.

As Jennifer Haselberger states plainly from the outset of her affidavit (¶ 15), she is testifying as an expert in Catholic canon law about "the interrelatedness of the entities." Her affidavit demonstrates, with rich canonical and historical information informing it, with abundant historical examples including ones drawn from the history of the St. Paul-Minneapolis archdiocese, that, contra the attempt of the pastoral leaders of the archdiocese to claim that the parishes and institutions of the archdiocese are disconnected, disaffiliated, quasi-independent entities when financial claims are being pressed againsts the archdiocese, they are, in fact, bound together very closely into one corporate body by Catholic theological assumptions and the assumptions of canon law.

As she notes,

The Archdiocese of Saint Paul and Minneapolis grants approval for organizations to be included in the Official Catholic Directory when it wishes to exercise control, and it refuses to endorse or otherwise support an organization, even when the organization has a Catholic purpose or intent, if the necessary control is not present or the organization acts in an independent manner (¶ 59).

And so,

There is no question that the 315 and 317A corporations under consideration for substantive consolidation originated with the Catholic hierarchy, nor that they have conformed to the internal rules and regulations of the Catholic Church that demonstrate their ongoing subordination to the parent organization. One need only to look to the fact of their inclusion in the Official Catholic Directory to find proof of this subordination, or the purpose statements in the Articles of Incorporation, which state that the corporations shall ‘be operated and conducted in conformance with the laws, theology, philosophy, and teaching of the Roman Catholic Church’ (Sagrado Corazon de Jesus), sometimes with the additional caveat ‘in the Archdiocese of Saint Paul and Minneapolis’ (Holy Family Catholic High School) (¶ 62).

In conclusion, here's what Jennifer Haselberger means — concretely — when she argues in her blog posting in support of substantive consolidation that "it is my hope that the request for substantive consolidation creates a path by which we, as the people of this Archdiocese, can finally put this scandal and its fallout behind us":

Despite what you may have been told by the Archdiocese or its representatives, the separate incorporation of the parishes is being called into question, meaning the only real way for parishes to get out from under the sexual abuse claims that they are facing is to participate in the bankruptcy process. I know that as a matter of justice, many parishes would gladly contribute the little that they are able to a settlement agreement, but are being prevented from doing so because a few parishes want to avoid having to add their considerable assets to the settlement pot. One might ask if such actions should be understood as mistaking right or wrong for what is good or bad for the institution, and if so doing is not an abdication of our collective responsibility to promote reconciliation and make reparation.

Some parishes in the archdiocese "get" it. Some parishes want to pay their fair share to clean up the mess the institution has created. Some parishes understand that we are all in it together, that when one of us suffers, we all suffer.

Other parishes, however, do not "get" it, and want to shield their assets (and do you notice that Jennifer Haselberger refers here to the "considerable assets" of these parishes? That makes one wonder if the parishes that "get" it happen to be those comprised of people on the socioeconomic margins of society, while those that don't "get" it — she specifically states this, doesn't she? — tend to be the parishes comprised of those who have abundant resources).

As Jennifer Haselberger notes in this paragraph, a substantive consolidation approach to this bankruptcy case allows all of us to put the abuse situation behind us by refusing to permit any of us to pretend we are disconnected, have no responsibility: it's someone else's problem. I think she's precisely right in taking this tack.

I also think her approach to this matter is far more deeply grounded in authentic Catholic teaching than that of many of the current pastoral leaders of the church — albeit that they are qualified to represent Christ in the world in a way she is not, they inform us, because they have the requisite biological equipment to be Christ to the world. And she doesn't.

I find the graphic illustrating the concept that we're all in this together used at a number of websites, without any indicator (that I have spotted) of where it originates.