Not Feeling Charitable

By Carol Eisenberg
Long Island (NY) Newsday
December 22, 2002

http://www.newsday.com/news/nationworld/nation/ny-uscath1222,0,7812827.story

For more than 30 years, Gene Zirkel of West Islip dutifully supported his church. He and his wife gave their time, energy and as much money as they could muster each year to their parish and the Roman Catholic Diocese of Rockville Centre.

"We never even questioned it,” said Zirkel, 71, a retired academic and lay Catholic chaplain at Nassau Community College. "As long as we've lived here, we've always supported the church and its good works.”

No more. A few weeks ago, Zirkel gathered together all his remaining envelopes for the Sunday collection basket and mailed them to Bishop William Murphy. Across the top of the pile, he scrawled in large block letters: "No Voice, No Money.”

"The bishop has lost my trust,” Zirkel said. "Unless I see an independent audit of where our money goes, I will not give the diocese anything.”

Even as the Roman Catholic Church in America struggles to rebuild its moral authority after a year of devastating revelations of priest sex abuse, another crisis is looming: the financial fallout of 11 months of scandals. And that is tied not just to the cost of hundreds of lawsuits, but to a crisis of confidence among tens of thousands of pew sitters such as Zirkel, who have stopped supporting diocesan fund-raising drives. Even some big donors say they are withholding money until they see full financial reports, including an accounting of the scandal's costs.

"I call it the perfect moral storm,” said A.W. Richard Sipe, a former Benedictine monk turned psychotherapist who wrote the book "Sex, Priests and Power: Anatomy of a Crisis.”

"The shock at the priest sex abuse scandals, the financial fallout from the suits and the loss of credibility in authority are all coming together in one powerful moment.”

And the power of that storm grows by the day. The Boston archdiocese is weighing the unprecedented step of filing for bankruptcy to avoid litigating suits by almost 500 alleged victims of sex abuse. California's bishops are warning of an avalanche of lawsuits next year as a result of a new state law lifting the statute of limitations for one year, which may jeopardize funding for church schools, parishes and charities. Steep cuts in social programs already have been made in Boston, and are being contemplated elsewhere, including Rockville Centre, as the ripple effects of the scandals expand.

"The financial viability of the Catholic Church in the U.S. is at risk, particularly in archdioceses like Boston and Los Angeles,” said R. Scott Appleby, a scholar of American Catholic history at the University of Notre Dame. "Three hundred priests may be a small fraction of the number of priests in America, but they can generate an awful lot of lawsuits. So the problem is not going to go away.”

The fact that the scandal comes at a time of economic slowdown and an unforgiving stock market only intensifies the potential impact on the church's vast network of health and human services.

"We are deeply concerned about the ability of Catholic Charities agencies to meet a greater need for assistance when donations are down,” the Rev. J. Bryan Hehir, president of Catholic Charities USA, said recently.

Hehir cited the national economic downturn as the major reason for the drop, although he said the ramifications of the scandals and last year's terrorist attacks also played a role.

Others believe anger over the scandals is playing a more significant part. A nationwide Gallup poll released Wednesday found that four out of 10 Catholics say they are contributing less money to the church because of the scandal. Catholics also are attending church less often -- a trend that preceded the scandal, but which intensified over the course of this year, according to the telephone poll of 1,009 adults done in early December. The poll had a margin of error of plus or minus 7 percentage points.

"This is a time bomb,” said Charles Zech, an economist at Villanova University who has studied Catholic giving. "Folks are upset about the lack of accountability and transparency in church finances. They've been giving their money in good faith and finding out that it's been used for under-the-table settlements. And the longer this goes on, the angrier people are becoming. The bishops, I don't think, fully appreciate that fact.”

Francis Butler, director of a consortium of Catholic donors called Foundations and Donors Interested in Catholic Activities Inc., called the Gallup results "startling.”

"There's just a groundswell of anger that's driving all this,” Butler said.

Earlier this year, his group found almost one in five Catholics who attend Mass weekly had stopped supporting diocesan appeals. To restore trust, the group urged bishops to give a full accounting of the scandal's costs -- but has had only limited success. "Baltimore has done it,” Butler said. "And Belleville has done it. But most have not.”

None of the three New York-area prelates have released such figures.

Murphy has reassured parishioners that their donations to Sunday collections and annual appeals are not being used for settlements. Rather, he said, claims have been paid through an emergency fund set up for "uninsured perils” by the late Bishop John McGann.

But diocesan sources told Newsday that that fund, established to cover such things as sexual abuse lawsuits and asbestos removal, was created about 10 years ago with an annual $3,000 assessment on every parish -- which came from parishioners' contributions or parish reserves.

The sources said the fund has paid out about $2.5 million related to sex abuse claims, including settlements to victims and the cost of counseling and treatment for victims as well as priest offenders.

Diocesan spokeswoman Joanne Novarro declined to comment on the fund.

Meanwhile, victims' advocates say the costs are likely to increase as more victims are emboldened to come forward. Nationwide, plaintiffs' attorneys estimate that the price tag of sex abuse settlements, many of them secret, already has exceeded $1 billion since the first publicized case in Louisiana in 1985.

"The dam is broken now,” said Sylvia Demerest, a plaintiffs' attorney in Dallas who helped win a $120-million jury award in 1997. "Obviously this thing is going to go on and on and on.”

Church officials dismiss the $1-billion estimate as exaggerated, but concede that unrelenting media attention and high-profile investigations by state and local prosecutors have emboldened plaintiffs' attorneys as well as victims. And with inadequate or in some cases exhausted insurance coverage, some are predicting that hard-hit dioceses may be forced to sell land and other assets to pay claims -- as did Dallas, Santa Fe, N.M., and Santa Rosa, Calif., in the late 1990s.

As Boston was the epicenter of the abuse scandal, so, inevitably, it has become ground zero for financial repercussions. The archdiocese has had to cut its $25-million operating budget by a third, hurting poorer parishes and many church programs. Its banks are cutting credit; its insurers are balking at paying settlements.

"We're seeing a whole new class of victims of the scandal -- poor children, who are being hurt by cuts to inner city schools and food programs,” said the Rev. Robert Bullock, pastor of a church in Sharon, Mass. "This is a serious crisis and it's putting a lot of the ministry of the church in very serious danger.”

Though New York has not been hit anywhere near as hard by lawsuits, in large part because of its narrowly drawn statute of limitations, local dioceses may face increasing liability as aggressive prosecutors as well as plaintiffs' attorneys search for ways around the strict timetables for civil and criminal prosecutions.

Moreover, while annual fund-raising drives for all three New York-area dioceses went well this year, their launches predated many of the worst revelations.

While some priests say Sunday collections are down, there are no diocese-wide figures available. In a September interview, Murphy said, "My priests tell me that their Sunday collections, which are the major things, are holding steady.”

Since then, however, some parishioners say they've been demoralized by reports about him as well as Bishop Thomas Daily of Brooklyn, who both served as top aides to Boston Cardinal Bernard Law. Law himself resigned as archbishop earlier this month.

"I will not contribute one penny of my hard-earned money to Bishop Daily, who protected all those abusive priests in Boston,” said Maureen Lally, 50, a software consultant from Park Slope, who said she has redirected the money she used to put in the Sunday collection basket to Voice of the Faithful, a lay group seeking a greater role in church governance.

Some Long Island Catholics say they also are suspicious of Murphy, since he was Law's top deputy from 1993 until he came here in 2001.

"Let's put it this way,” said Philip Megna, 59, an attorney from Fort Salonga who considers himself a devout Catholic. "Bishop Murphy is the protege of a cardinal who has proven his dishonesty.”

Sources in the Diocese of Rockville Centre say that contingency plans are being made to deal with significant reductions anticipated in next year's drive -- which is likely to coincide with a report from the Suffolk County grand jury investigation into the protection of abusive priests on Long Island.

Several priests said they have told the bishop that parishioners have warned that they won't support his appeal next year.

"They are very faithful people who are disheartened by their perception of the financial mismanagement related to the sexual abuse crisis,” said the Rev. Gerald Twomey, co-pastor at St. Anne's Church in Brentwood, who said his parish collections are down about 11 percent. "The issue is really one of trust and confidence that has rocked the church since the revelations about John Geoghan last January.”

Without becoming completely open about its finances, Twomey said he doesn't know how the bishop can regain the trust of such people.

Church officials acknowledge there is currently little financial oversight of dioceses.

Unlike other nonprofit groups, for instance, dioceses are not required to report to the Internal Revenue Service because of their First Amendment protection as religious institutions.

And though bishops are required to report to a diocesan finance council made up of lay people and to give a state-of-the-diocese report to the Vatican every five years, "they're not required to give minute details” and the reports are not public, Butler said.

The U.S. Conference of Catholic Bishops has guidelines for financial management, "but dioceses are not required to follow them and many do not,” he said.

Kenneth Korotky, chief financial officer for the U.S. Conference of Catholic Bishops, did not dispute that characterization.

"As this whole scandal has illustrated, each diocese stands alone under canon law and each bishop reports only to the pope,” Korotky said.

Critics say it is not surprising, therefore, that former Milwaukee Archbishop Rembert Weakland was able to make a confidential $450,000 payment in 1998 to a man who accused him of sexually abusing him more than two decades ago, or that former Santa Rosa, Calif., Bishop G. Patrick Ziemann was able to hide $16 million in losses from bad investments and undisclosed payments to settle sexual misconduct claims.

In the New York metropolitan area, Brooklyn is the only diocese that publishes an audited financial statement in its diocesan newspaper, The Tablet.

"We have not released financial statements and I do not know of any plans to do so,” said Joseph Zwilling, spokesman for Cardinal Edward Egan of the Archdiocese of New York.

Rockville Centre stopped publishing financial statements a few years ago, but the bishop's finance council planned to discuss possible changes to the practice, according to Novarro.

Asked who the finance council members are and when they would decide, she replied: "We're not releasing the names. They're five people who have volunteered their time. We don't want them to be hounded by the media. We will release the information we should release when we're ready to release it and not before.”

In the current climate, such statements are red flags for many parishioners.

"It was easier when everyone sat in the pew and said, ‘yes father, no father,'” said Megna, the attorney from Fort Salonga. "But they educated us very well. Now everyone says, ‘why?' or, ‘no, you can't do that.'”

Megna said he no longer will give anything to the diocese until he gets a full accounting.

"I'm anxious to give what I used to give, if not more,” he said. "But I won't until such time as I know where my money is going.”