Diocese's Budget Raises More Questions

By John Rather
New York Times
March 23, 2003

A grassroots group of Long Island Catholics is questioning why the Diocese of Rockville Centre is not doing more to help the needy with nearly $316 million held by the diocese's administrative offices.

Members of the group, the Long Island Voice of the Faithful, said the size of the reserve was a surprise to them and to others among Long Island's estimated 1.4 million Catholics. It became known when Bishop William F. Murphy, the leader of the diocese, ordered the release of a financial statement for the diocesan administrative offices last month.

The audited statement, for a one-year period ending Aug. 31, 2002, showed $341,007,052 in total assets, including $12,643,467 in cash or cash equivalents and $303,122,749 in investments. Most of the money came from Catholic parishes.

Members of Voice of the Faithful, which claims about 1,250 active members pledged to bringing change to the diocese in the wake of the national scandal over sexual abuse of children by priests, said they understood that a large balance in the account was prudent and that they recognized the diocese's authority to make financial decisions.

But they said that $316 million seemed excessive at a time when looming local, state and federal cuts in support for social welfare programs were putting pressure on charitable groups such as Catholic Charities, the social service arm of the diocese, and when other needs were going unanswered.

"Why, with so many people suffering and with so many Catholic institutions in need of financial support, should the diocese be holding $316 million in cash and other liquid assets?" said Kevin Connors, a retired insurance executive from Plainedge and co-chairman of the group's finance committee.

Mr. Connors spoke at a meeting the group held at the North Babylon High School on March 13 attended by more than 300 members from parishes across Long Island. The diocese does not formally recognize the group, and Bishop Murphy has barred it from meeting on church property.

Mr. Connors and other group leaders said they were gratified that the diocese had released the financial statement. But they said many questions about church finances remained unanswered. They said these included answers about whether other substantial diocesan assets or deficits remained undisclosed.

"The bishop is committed to full disclosure," Mr. Connors told the audience. "This is not full disclosure." Joanne Novarro, a spokeswoman for the diocese, said that in coming weeks the diocese would release financial reports for other church funds, including a special fund, known as the uninsured perils fund to cover, to pay for settlements and other costs associated with sexual abuse by priests.

The uninsured perils fund was a focus of a report released last month by a Suffolk County grand jury investigating sexual abuse by priests in the Rockville Centre diocese. The grand jury found that diocesan officials protected abusive priests, left children prey to them and pretended to offer help to abuse victims while in reality striving to block public disclosure, limit claims and minimize financial settlements.

Ms. Novarro said the $316 million was in what was called the Diocesan Deposit and Loan, which she said was "really like a big bank" that made loans to parishes and other diocesan institutions at lower interest than commercial lenders.

"It is very important for people to understand that that money does not belong to the diocese," she said. "That money belongs to the parishes, schools and other diocesan entities who deposit their money in this account where it can be invested by professional people who can get a better rate of return because of economies of scale." She said such setups were common in Catholic dioceses.

But members of the group said they had not known of the practice and also believed that Bishop Murphy, as the top official in the diocese, had power over how the assets could be used.

"It's true that the administrative offices are holding money on behalf of parishes and other programs," said Dan Bartley, an accountant from Hauppauge and the group's co-director. "But we believe that the bishop has either control or substantial influence over those funds."

Scott Stepp, a spokesman for Catholic Charities, a separate organization whose board Bishop Murphy sits on, said state and county budget cuts would affect a number of programs Catholic Charities carried out under government contracts. When program funding was cut, he said, Catholic Charities had to cut services or make up for deficits from its own resources.

Asked if having more money would help, Mr. Stepp replied: "Of course. There are always more needs." A financial statement for 2001 showed Catholic Charities had $26,292 in cash, more than $6 million in accounts receivable and $21,471,595 in investments.

Last week, Bishop Murphy released an audit showing $13,336,612 in pledges and $271,149 in interest received by the bishop's annual appeal last year. The report showed $1.9 million was allocated to Catholic Charities. The largest allocation, $3,934,049, went to parish support. Ms. Navarro said that donations to the bishop's appeal for this year were running behind last year.

The Long Island Voice of the Faithful, which had a cash balance of $9,200 at the end of February, said it would have to continue to meet the expense of renting meeting places. But a co-director, Sheila Peiffer of Southampton, the director of religious education at Sacred Hearts of Jesus and Mary Church in Southampton, said it was determined to remain active until the diocese became "a safe place where trust is restored."

[Photo Caption: The scene at a March 13 meeting of Long Island Voice of the Faithful at North Babylon High School. (Maxine Hicks for The New York Times)]