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	Church Aims to Shield Assets from Lawsuits Catholic Diocese to Place Parishes in Charitable Trusts By Kevin O'Connor Rutland Herald May 15, 2006 http://www.rutlandherald.com/apps/pbcs.dll/article? AID=/20060515/NEWS/605150366/1002 Vermont's Catholic Church, fearing the potential costs of 19 priest misconduct lawsuits against it, hopes to shield its 130 local parishes by placing each in a charitable trust. "In such litigious times, it would be a gross act of mismanagement if I did not do everything possible to protect our parishes and the interests of the faithful from unbridled, unjust and terribly unreasonable assault," Bishop Salvatore Matano has written in a letter to be shared this month with the state's 118,000 Catholics. Matano, however, doesn't explain how the diocese will pay off its debt, which totaled $127,947 at the start of its fiscal year July 1 and ballooned tenfold when the church took out a loan last month to cover a record $965,000 settlement in the first priest misconduct lawsuit against it. And the lawyer representing all 19 men accusing priests of child sexual abuse says he'll fight the charitable trust move in court, saying "what the diocese is doing is committing fraud." The diocese doesn't have insurance for lawsuits. Matano, speaking Sunday at a by-invitation reception for Catholics at the Woodstock Inn, said the placement of parishes into individual charitable trusts was "an extra layer of protection" from anyone seeking to tap their assets. The legal wording of each trust specifies: "The assets of the trust shall remain the sole property of the trust … . Trust property may be used solely to further the religious, charitable and educational purpose of the trust," Matano's letter says. The bishop will serve as "trustee" of each trust, each parish pastor as "trust administrator" and each parish finance council as "trust advisors." "Thus, the present diocesan protocols and regulations for the administration of parishes remain, in effect, unchanged," Matano writes in his letter. Church lawyer David Cleary said the use of charitable trusts is a "basic tenet" of canon law set out by the Universal Roman Catholic Church. "The bishop is doing nothing more than what is his obligation under canon law to protect the property of the parishes," Cleary said Sunday. But attorney Jerome O'Neill, representing the accusers, says the move breaks the state's fraudulent conveyance law. "You can't take property you have, transfer it and then say it's beyond the reach of your creditors," said O'Neill, chairman of the Burlington Police Commission and a former federal prosecutor. "It is a slap in the face to the victims. It's saying to them, 'Although we let our priests abuse you, we will not be fair and compensate you.' By trying to hide the money, the diocese is revictimizing them." The charitable trust move is just one way the diocese is trying to protect itself from 19 priest misconduct lawsuits it faces in Burlington's Chittenden Superior Court. Cleary, in a motion filed under seal at the close of court Friday, is seeking to bar the judge who oversaw the $965,000 settlement from presiding over the rest of the lawsuits. Cleary claims Judge Ben Joseph's rulings in that first priest misconduct trial — the civil case of Michael Gay, 38, of South Burlington versus the Rev. Edward Paquette — have jeopardized the diocese's ability to receive fair hearings in the future. According to Cleary, the judge's removal of a gag order after the settlement led to a torrent of news reports in which the church admitted it knew Paquette had molested boys in two states when it assigned him to parishes in Rutland in 1972, Montpelier in 1974 and Burlington in 1976. The diocese faces 14 more lawsuits against Paquette. Cleary questions how the church will find an impartial jury to hear future cases. In his motion, the attorney wants Joseph to recuse himself from dealing with any more of the lawsuits or be removed by the state's chief administrative judge. The court is expected to make a decision about whether to release the motion publicly as early as today. If the judge agrees to step down, the matter is settled. If not, the motion goes to the state's chief administrative judge, Amy Davenport, who will make a final decision. Whoever ultimately hears the cases will face a handful. The diocese also faces one lawsuit each involving former Vermont priest James Dunn; James McShane, the subject of a $120,000 settlement in 2004; George Paulin, the subject of a $20,000 settlement in 2003; and two cases against Alfred Willis, the subject of a $150,000 settlement in 2004. Matano, for his part, will continue his kickoff campaign for the annual Bishop's Fund drive at by-invitation receptions Thursday at St. Johnsbury's Black Bear Tavern and Grille, Friday at Manchester's Equinox Resort and next Sunday at Burlington's Wyndham Hotel. Contact Kevin O'Connor at kevin.oconnor@rutlandherald.com.
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