SACRAMENTO (CA)
Crisis Magazine [Manchester NH]
September 3, 2024
By Matt Kappadakunnel
Dioceses that are currently in or heading toward financial bankruptcy have already suffered from decades of moral bankruptcy that led to these monetary woes.
Recently, a friend expressed his frustration with the Justice for Survivors Act signed in the California legislature in 2023. This Act ends the civil statute of limitations for minors who have experienced sexual abuse. While my friend vehemently agrees that abusers ought to get their reckoning, he took issue with the preponderance of claims related to clergy who were long deceased. The result of this preponderance is the necessity for several dioceses in California to file for bankruptcy, while more teeter on financial turmoil. In his mind, why should the Archdiocese of Los Angeles be under financial strain due to the actions of priests who passed away decades ago?
My friend posed an interesting topic for me to reflect on. Being a financial professional who has worked in distressed debt and turnarounds, I am familiar with corporate bankruptcies—both with companies that failed and those that exited. Additionally, I considered the spiritual implications of bankruptcy. Taking both of these perspectives, I believe that a bankrupt diocese serves a proper purpose. As Catholics, we should demand that our leaders accept the necessary penances for their past sins—even if it leads to utter financial failure.
Bankruptcy from a Corporate Perspective
Companies never form with the intent to become bankrupt; rather for-profit entities generally have the singular aim to maximize profit and to grow this benchmark annually. Businesses that fail do so for a variety of factors, including product/service obsolescence, competition, a rise in the cost of the supplies, or a change in consumer preferences. Brick-and-mortar retailers feel this pressure, along with long-held companies that needed to innovate, such as the newspaper industry.
Businesses generally do not fail overnight. The cracks in the foundation are often years in the making. Lehman Brothers is an example of a failure due to years of improper risk management and the pursuit of greed without appreciating the potential for loss. Business leaders generally have the opportunity to pivot and navigate during financial difficulty. Sometimes the decisions lead to closing locations, layoffs, and focusing on more profitable revenue segments. These changes can occur long before a company heads to bankruptcy.
While closures and layoffs are unfortunate, and directly impact families and communities, the fault lies with the business leaders and their inability to perform. Bankruptcy is simply the remedy for a company to completely exit or to more formally restructure their obligations and shift in a more profitable direction.
The bankruptcy of dioceses also does not happen overnight. Declining parish and school attendance certainly are factors, along with rising costs, but the magnitude of legal expenses and settlement payouts can decimate the viability of a diocese. Just like businesses, Church leaders must take accountability for their decisions that resulted in their financial distress. Inadequate consequences for abusive priests, moving said priests to new parishes only for them to continue their predatory behavior, and offering no recourse to the victims early on set the dioceses up for failure.
Regardless if the priests named in these lawsuits died decades ago, it does not excuse the fact that the dioceses, as the surviving entity and ultimately responsible for the behavior of these deceased clergy, need to practice what they preach and accept the penance due to them. If legal settlements impair a diocese’s ability to continue, then it simply should not continue. The diocese should accept its bankruptcy and cease completely.
This is how an investment banker might view the financial peril of these Church entities, and there is not much ambiguity to offer here. Reviewing this from a spiritual standpoint not only agrees with the financial perspective but suggests the implications are far more severe.
Bankruptcy from a Faith Perspective
While parishes emphasize the practice of penance and mortification during the Lenten season, this ought to be a daily practice. Moreover, this ought to be something the Church entities themselves practice.
I have knowledge of pastors who drive luxury cars, own beachfront homes, go regularly on luxury vacations, and fly on private jets. This is a far contrast from the locusts and honey of John the Baptist.
A century ago, when seminaries and rectories were booming, priestly privilege could go unchecked. But this lack of checks and balances likely contributed to the spiritual and financial demise of the dioceses.
Following in the footsteps of Christ, the Desert Fathers embraced a countercultural lifestyle of mortification and self-denial. Their witness attracted followers who also wanted to live solely focused on the Kingdom of God. This is a far contrast of the worldly priesthood that emerged in the Middle Ages, and it is still a sharp difference from today’s clergy.
Clergy worldliness offers an important observation: mortify oneself now, or be forced to mortify later.
Today’s clergy are on the public’s radar. Sexual abuse in any form will not be tolerated in any respect. The sins of spiritual fathers of the past are bearing the fruit of greater social and legal oversight of clergy behavior. Laxity with mortification of the past fathers place needed pressure on today’s fathers to imitate the Desert Fathers in purifying the senses to have a singular focus on Christ and His Kingdom.
Lawsuits and bankruptcy proceedings actually facilitate the mortification process. The shedding of financial assets can lead to both a material and spiritual poverty, which can cultivate a spirit of repentance and conversion. I believe the Holy Spirit is calling on dioceses on the brink of financial turmoil due to the abuse crisis to surrender to the process and become conformed to Christ through this path of kenosis. Restructuring, financial loss, sale of properties, or even the cessation of a diocese is a small price to pay for the vast sins committed by clergy past and present.
Whether we look to the financial or the spiritual basis of bankruptcy, what is evident is the dioceses that are currently in or heading toward financial bankruptcy have already suffered from decades of moral bankruptcy that led to these monetary woes. Rather than defend against or decry a state’s legislative decision that enforces a comprehensive accountability against bad actors within the Church, notwithstanding if the accused is alive or not, Catholics need to call on said dioceses to accept the consequences due unto them. And we need to warn other Church entities that a reckoning will be coming for them as well if they choose not to repent of their past sins of abuse and believe in the Gospel.
Matt Kappadakunnel is a finance professional who lives in Los Angeles with his wife and two young children. He is from the Syro-Malabar Rite. Previously, Matt spent a few years studying to be a Catholic priest, culminating in graduate studies at Fordham University. He is a graduate of Creighton University and is a CFA Charterholder.