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	Judge Considering Whether Priests, Attorneys Are in Contempt of Court By Scott Marshall North County Times April 10, 2007 http://www.nctimes.com/articles/2007/04/11/news/sandiego/8_88_414_10_07.txt San Diego — Two Catholic priests and three attorneys have been ordered to appear in bankruptcy court this afternoon to explain to a judge why they should not be held in contempt of court. The order from bankruptcy Judge Louise DeCarl Adler is based on allegations that the priests and attorneys have tried improperly to transfer money between accounts while the bankruptcy of the Roman Catholic Diocese of San Diego is pending. The diocese filed for bankruptcy Feb. 28, bringing a halt to sexual abuse litigation on the eve of the first trial of an abuse case in San Diego. The diocese has offered to pay $95 million to settle the more than 140 sexual abuse claims filed against it, but attorneys for those who have sued in connection with alleged abuse by priests have said a fair settlement would be closer to $200 million. The diocese, which covers San Diego and Imperial counties, has 98 churches, runs nearly 50 schools and has almost 1 million parishioners. Adler wrote that it appeared that the diocese, parishes and their attorneys had conspired to transfer money. An advocate for victims of sexual abuse by priests has issued a statement accusing the diocese of lying about its finances. Attorneys for the diocese have filed documents in which they argued that the diocese is not hiding assets in parish bank accounts. In a five-page order filed Monday, Adler wrote that the attorneys and priests appeared to have misrepresented facts to the court and may have violated court orders and bankruptcy laws. Adler gave the Rev. Bruce J. Orsborn of Blessed Sacrament church in San Diego, Monsignor Michael Gallagher of Our Lady of Grace church in El Cajon, and attorneys Susan G. Boswell, Jeffry Davis and Victor Vilaplana until 5 p.m. Tuesday to respond in writing to her order. Boswell, who represents the diocese, wrote that no intentional misstatements have been made to the court. Vilaplana represents the Organization of Parishes, which was formed to represent the interests of individual parishes during the diocese's bankruptcy. Davis represented the organization until last month. Vilaplana and Davis wrote in their responses that they believed they were complying with court orders and implementing suggestions Adler made at a hearing March 1. Orsborn, Gallagher, Boswell and Vilaplana could not be reached Tuesday for comment. Davis declined to comment. Joelle Casteix, the southwest regional director of the Survivors Network of those Abused by Priests, issued a statement late Monday night in which she commended Adler and accused the diocese of lying about abusive priests and its finances. "It should come as no surprise that the same diocesan officers who deceived parishioners, the police and the public about the sexual abuse of children would now attempt to deceive San Diego Catholics about the finances of the diocese," Casteix said in the written statement. Adler wrote in her order that when the diocese filed for bankruptcy, it held property in trust for others, including 770 bank accounts that used the diocese's taxpayer identification number. Adler referred to those accounts as Alleged Parish Accounts. The diocese cannot transfer property after filing for bankruptcy, nor use cash in the Alleged Parish Accounts "even in the ordinary course of business," without the approval of the court, Adler wrote. At a March 1 hearing, Boswell told the court that how those accounts were handled would not change. Boswell and Davis indicated at that hearing that they were not asking Adler to decide whether the accounts were the property of the diocese or the parishes, Adler wrote. However, in a March 17 letter, Gallagher wrote that the court had ordered parishes to obtain new taxpayer identification numbers for the Alleged Parish Accounts. Orsborn wrote a March 29 memo urging parishes to get the new numbers and providing instructions on what to do. Boswell wrote in documents filed Tuesday that the diocese has no access to or interest in the 770 parish accounts Adler referred to in her order. The diocese does control a trust with funds for the parishes and Catholic schools in the diocese, but those funds are not released unless the parishes or schools can show donated money was designated for them, Boswell wrote. Davis thought comments Adler made March 1 suggested that parishes should obtain their own taxpayer identification numbers for clarity in the bankruptcy case, and Orsborn was trying only to provide simple instructions to the parishes to do that, Davis wrote in documents filed Tuesday. Gallagher's letter contained mistakes, but he does not speak for the Organization of Parishes, Valiplana wrote. Attorneys for the diocese argued in documents filed with the court Friday that parish accounts are not part of the diocese's operations, that the court should not compel the parishes to disclose how much is in those accounts, and that the diocese "is not hiding assets" in those accounts. — Contact staff writer Scott Marshall at (760) 631-6623 or smarshall@nctimes.com.
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