by Jason Berry
The cardinal who five years earlier had opened a $190 million cathedral was scrambling for hundreds of millions to satisfy the abuse survivors’ claims. Having spent a fortune in legal fees to prevent the release of clergy files, and the real possibility of his own indictment, Mahony did not have access to the $200 million for which, he told John Allen, the Vatican gave him “permission” to raise via alienation of property. That would include cash reserves and liquid assets. He had already committed $60 million seven months earlier, resolving the first sequence of cases. “By our estimate, he didn’t have access to more than $40 million in liquid assets,” said Steve Rubino. “We got trial dates in 2006 to push the negotiating toward conclusion. A certain judge I bumped into at Starbucks told me Mahony was in Rome—raising money. He had to have gotten at least $100 million in Rome to pull it off.”
According to a Los Angeles Times analysis:
More than $114 million has been promised in previous settlements, bringing the total liability for clergy misconduct in the Los Angeles Archdiocese to more than $774 million. The figure dwarfs the next largest settlements in the U.S., including those reached in Boston, at $157 million, and in Portland, Ore., at $129 million.
Hennigan said the archdiocese expected to pay $250 million in cash, with the balance coming from insurers and religious orders.51
The archdiocese borrowed $175 million from the Allied Irish Bank in securing the settlement funds.52 Boucher said he got wind of AIB involvement in spring 2007; although he had no proof, he suspected that the Vatican provided a loan or pass-through support via AIB to the archdiocese. Allied Irish Bank, a registered company in the Republic of Ireland, was formed in 1966 through the merger of three different Irish banks. The firm branched into the United States in the 1980s. AIB helped the archdiocese build the Cathedral of Our Lady of the Angels. “The funds for the [mausoleum] construction were borrowed from the archdiocesan cemeteries with the assistance of the Allied Irish Bank,” according to a history of the cathedral.53 AIB’s “core business in America” has been “funding not-for-profit institutions. AIB ‘banks’ 45 of 194 Catholic dioceses and archdioceses,” according to the Irish Times.54
Eight months after the settlement the archdiocesan newspaper, The Tidings, cited “a bank loan of $175 million and liquidated investments worth $117 million. The administrative office was facing a $12 million deficit.
The $175 million bank loan is expected to be partially repaid with proceeds from the sale of up to 51 archdiocesan properties (estimated at $107 million). The balance remaining at the end of the loan term in 2011 is estimated at $50 million; this amount may have to be refinanced …
The loss of this income, as well as the interest on the bank loan and the interest on the settlement guarantee, means that the Administrative Office will incur a budget deficit of approximately $12 million a year.55
Cardinal Mahony denied an interview request for this book. The archdiocesan spokesman, Tod Tamberg, declined to discuss Allied Irish Bank. Mahony’s approach to the funding crisis for abuse cases stands out in high relief from his counterpart down Interstate 5 in the San Diego diocese. As the settlements there reached an impasse, the judge set a trial date. Bishop Robert Brom had his attorneys file for Chapter 11 protection from bankruptcy in order to halt the trial and presumably bargain down the opposition. Judge Louise DeCarl Adler ordered an independent audit of its assets by a forensic accountant, former FBI agent R. Todd Neilson. San Diego, the fifth-largest diocese in the United States, had vast property holdings. Neilson discovered that the diocese had claimed its ninety-eight parishes as assets in applications to banks and bond markets, but excluded them for Chapter 11 protection. He noted that after the bankruptcy filing, an auxiliary bishop authorized $69,963 in checks from a special foundation to a parish deacon who “supposedly transferred the funds to an individual … who had expertise in importing and exporting goods from Colombia”—to help a poor parish in Colombia. “An additional $23,000 was also disbursed,” Neilson continued in dry prose, “but the Expert has not received any supporting documentation.”56
The diocese had nonchurch properties—multiple-unit buildings, condos, property zoned for commercial or industrial use, stores, and parking lots—valued at $115 million by the county assessor. A real estate economist told the San Diego Union-Tribune that the diocese had properties “with a market value well in excess of $1 billion.”57
The judge dismissed the diocese’s bankruptcy filing with prejudice, meaning it could not soon refile. She gave a strong rebuke: “Chapter Eleven is not supposed to be a vehicle, a method, to hammer down the claims of those abused.”58 In the end, plaintiff attorneys closed their briefcases with a settlement of $198 million for 144 clients. The Vatican made no punitive move against Bishop Robert Brom.
“Part of our settlement,” explains San Diego plaintiff attorney Irwin Zalkin, “was funded by Allied Irish Bank. They also funded the building of a high school here. I don’t know if AIB is directly involved with the Vatican Bank, but the grapevine talk among the lawyers is that AIB was a financial arm of the Vatican, that this is how the Holy See is able to fund some of the things they are involved with, including helping to pay for the settlements.”
Unlike Lennon and O’Malley in Boston, Mahony acted like a politician in the end. He went to his people, making an impassioned pitch to all the parishes, in personal meetings and letters, asking for money. He had already apologized. His decisions in recycling perpetrators, and living among them, were more egregious than Bernard Law’s scandal. But the media-savvy Mahony spent heavily on publicity and used his financial muscle to wage the legal fight to shelter incriminating files, a strategy that caused delays, which drove up the costs all around. The protracted struggle consumed more time and more money, ratcheting up an overall final payout of $750 million. But Mahony was not indicted. Battered again and again in the media, he was still standing. Cardinal Mahony could have given Nixon lessons on survival.
A parish in Woodland Hills donated its cash reserves of $1.5 million to the archdiocese. Another parish offered a $100,000 interest-free loan to be repaid over ten years. A smaller, poorer parish pledged $25,000 over five years.59 As Mahony worked to whittle down the huge debt, the clergy files were still bottled up in the labyrinthine Los Angeles court system as the 2010 abuse crisis put Benedict in the media crosshairs. Jeff Anderson had a constitutional attorney working on a motion to the Supreme Court not to hear the appeal by the Holy See, which was seeking to dismiss the Oregon lawsuit and his motion to take Pope Benedict’s deposition. And he had a new client, the thirty-year-old son of Marcial Maciel Degollado, who was livid at how he had been treated by the Legion of Christ.
CHAPTER 13
AMERICA AND THE VATICAN
To advance the canon law cases for the vigil parishes, Peter Borré flew to Rome, on average, every other month in 2009 and 2010, staying at least five days each time. He had passed his seventieth birthday; although his retirement years were darkened by the frustration of dealing with church officialdom, he loved Rome and found enjoyment in his friendship with the canon lawyer Carlo Gullo. In developing the appeals together, Borré had polished his Latin and gained an appreciation of the baroque intricacies of the Vatican legal system. But Borré wanted a way to take the story—parishioners seeking to preserve their churches from becoming liquid assets—beyond Gullo’s elegant Latin briefs and fuse it into the mental circuitry of other Vatican officials. The Signatura was a vertical process of appeals; Borré needed a horizontal strategy, a way of depositing the information in other stations of the Roman Curia.
As he spoke with midlevel officials at the Congregation for the Clergy, the Signatura, and other dicasteries, Borré sensed that many of the priests were severely overworked and lacked the support staff requisite for the central office of a church with 1.2 billion souls. The last thing he wanted was for the church to model itself on some multinational corporation. God forbid. But the fawning way young monsignors greeted bishops and cardina
ls suggested an imperial culture that stultified healthy candor. Raised in Rome and schooled in Italy’s social customs, Borré knew the language of indirect references, the importance of gesture—a shoulder raised, the palm uptilted—a vocabulary of inferences to engage a genuine exchange of information. Italians ran the Curia and to put his story on reality’s table, he had to be a persuasive Italian.
Borré had lost patience with reformers back home who put dialogue with bishops high on their agenda. By his lights the lessons of the abuse crisis, which begat a financial crisis, were stunningly clear. Bishops were cynical to sweet notions of pluralism, of engaging laypeople, even rich ones, in meetings that posed even the remotest challenge to their control of money. Bishops had Finance Councils or advisory boards who operated in the pray, pay, obey mode, which meant avoiding questions like why don’t we have an audited financial statement, Bishop?
In several cities or dioceses with enclaves of affluent Catholics—Naples, Florida, and Rockville Centre, Long Island, for example—the bishops had banned Voice of the Faithful from meeting in any parish. Here was the face of power showing its fear of the truth. Although many pastors supported VOTF’s agenda, which called for financial transparency as a means of reform, a priest who disobeyed a bishop’s rule faced the loss of his parish, demotion to a marginal job, or losing his faculties, the approval one needed to say Mass, hear confession, minister the sacraments.
“The bishops have been raised in a Roman culture that is military in nature,” Patrick Wall, the Orange County canonist–turned–expert witness remarked. “They take a long view of history. Loyalty and faithfulness are rewarded. These men have been raised in the Latin tradition … This is all they have. The bishops don’t do battle like the Navy SEALs. They aren’t looking to bring everyone home.”1
From his years in the navy, Borré knew that a military culture needed a system of justice in order to maintain discipline and the allegiance of the governed. In the spring of 2009, Borré was closing in on five years’ voluntary work in trying to reverse the suppression orders of the nine vigil parishes in the Boston archdiocese. His strategy of flooding the Vatican with appeals had spread to distant cities as Borré traveled, meeting people with the same values who were trying to keep their churches open. Future-Church’s website posted information that went buzzing through a new spiritual network.
Looking beyond the dictatorial politics of the Vatican, Borré and Sister Chris Schenk hoped that civil judges in the various states would begin to weigh the Suppression orders that deprived people of their spiritual homes as a religious tradition that deserved its freedom, too.
A priest in Rome who was sympathetic to Borré’s efforts suggested he approach the Secretariat of State, and Monsignor Pietro Parolin, the undersecretary for relations with states. This should be done in writing. For several weeks Borré and Gullo collaborated on the letter, which melded the high formalism of the canon lawyer with the American agitator’s drumbeat of candor. The final product, dated April 7, 2009, covered eighteen single-spaced pages: a Request for Mediation, asking Monsignor Parolin for “the appropriate dicastery of the Holy See [to] instruct the Apostolic Signatura and the Congregation for the Clergy to suspend the reviews of American parishioners’ appeals against parish closings.” It included the names and dioceses of all the parish groups and their leaders.
The document quoted a 2004 address by the late pope, referred to as “John Paul the Great,” during a visit of American bishops:
The parish, in fact, is “pre-eminent among all the other communities in his Diocese for which the Bishop has primary responsibility; it is with the parishes above all that he must be concerned” (Pastores Gregis, 45) … The Diocese should always be understood as existing in and for its parishes (emphasis in the papal original).2
Borré wrote on behalf of thirty-one groups from eight dioceses—Boston; Cleveland; New Orleans; New York; Buffalo; Scranton; Allentown, Pennsylvania; and Springfield, Massachusetts. Remarking on the four Boston groups “inside their churches round-the-clock, peacefully and prayerfully,” since October 2004, the letter evinces Gullo’s influence in explaining that there “have been no violations of the Magisterium or of canon law”—a sober bow of deference to the Congregation for the Doctrine of the Faith. Moreover: “The most striking development within these communities has been an intensified devotion to Our Blessed Mother, with frequent praying of the Rosary during the vigils, something well beyond what was customary before the suppression of these parishes.”
The letter rolls between a Romanesque style of religious salute and deference, registering a within-the-cloth sensibility of believers in a dialogue over prudent religious governance, and an American intercutting of facts to support the core argument. “More than one thousand American parishes have either been closed, or are scheduled to close in the near future. And this number will multiply several times over in the years ahead”—a period of great social stress, “of material hardship not experienced since the Great Depression.”
Much of the document reviews canonical procedures, decisions already handed down, demographic data on the American church, and a review of the financial impact of the clergy abuse litigation.
In the letter’s request for structured meetings, facilitators, “norms of respect and courtesy for all persons involved,” and a deadline to convene the mediation with a suggested time frame to address the crisis, the tone echoes the elemental courteousness and mannered ways of the Curia. Nothing about the long document was disrespectful of the Holy See, though the synopsis of decisions by certain prelates, notably Seán O’Malley and Richard Lennon, made clear the feelings of shock caused by their decisions.
Borré was invited to meet with a midlevel official in the Secretariat of State, whose name he shared with me on background. As Borré tells it, he provided a more textured overview of the various parishes, the issues, media coverage, and financial implications, particularly the deepening deficit in Boston. The Vatican official nodded. He seems to get it, thought Borré. He left with cautious optimism, hoping that the notes the priest had taken would be distilled into a formal report for his superiors, and possibly reach the desk of Cardinal Bertone, the secretary of state.
Borré’s letter to the Secretariat of State made fleeting reference to, as he put it, sending police “to arrest Catholics in their churches” by Cardinal Egan in New York and Archbishop Alfred Hughes in New Orleans. Referencing Boston, he noted, “to call in the police to arrest the vigilers … would cause great harm to the archdiocese.” The police action in New Orleans nearly provoked a riot.
NEW ORLEANS: WHO ARE THESE PEOPLE?
When Hurricane Katrina hit on August 29, 2005, more than a million people from the greater urban area evacuated; as they returned, people worked frenetically on cell phones to position themselves on work lists of contractors who converged for rebuilding homes and businesses. The flood saturated 80 percent of the city: an area seven times the size of Manhattan sat in saltwater for nearly a month. “God has brought us to our knees in the face of disaster,” said Archbishop Hughes. “We are so overwhelmed, we don’t really know how to respond. Powerlessness leads us to prayer.”3
No one doubted the piety of Al Hughes, a short, balding, modest man. His personality exuded humility, but his credibility had been badly damaged three years earlier in the city’s clergy abuse scandals, for which he made humble apologies as guilty priests were sent away. Hughes had gotten his start in Boston as an auxiliary bishop in the 1980s under Cardinal Law.
Boston bore scant resemblance to the archdiocese he took over in 2002. Founded in 1718 as a French colonial port, New Orleans was Catholic from the start, unlike the heavily Baptist and evangelical upper South. The city was the nation’s largest slave port in the 1840s and a rare social mosaic. “A man might here study the world,” a late-nineteenth-century bookseller wrote. “Every race the world boasts is here, and a good many races that are nowhere else … The air is broken by every language—English, French,
Italian and German, varied by gombo languages of every shade.”4
Slaves worshipped in the rear pews of antebellum churches, behind planters, merchants, working-class whites, and free persons of color, many of whom owned slaves. Despite a deep presence of black Catholics, the twentieth-century growth of African American vernacular churches, like Church of God in Christ, and the larger Baptist denominations had broadened the demography of faith. Still, when Katrina hit, the Catholic Church was the largest denomination in the eight-parish area, with 480,000 members in a population of 1.4 million. Parochial schools educated 50,000 students (many of them non-Catholic), nearly as many as were enrolled in the city’s decaying public school system. Despite huge damages from Katrina, the church’s relief efforts were heroic.5
Hurricane Katrina gave Archbishop Hughes a shot at redemption
“I am also a refugee,” a weary Hughes said on a visit to a homeless shelter in Baton Rouge the second day after the storm. He heard confessions of state troopers and aid workers. “It’s not easy to be so drastically dislocated without any early hope of being able to return.”
The church initially announced a $40 million deficit. Over the next three years, $107 million poured in from dioceses, bishops, Rome, individual Catholics, philanthropists, and foundations for rebuilding and relief costs. Volunteers from parishes in many states traveled to New Orleans, gutting houses that had taken four, six, eight, ten feet of water. Catholic Charities provided $7 million in direct relief for survival assistance.
But in the winter of 2006, New Orleans had only 40 percent of its population back. Federal funds to assist home owners whose insurance did not fully cover their rebuilding needs were slow to get congressional approval. The church had reopened 107 of 142 parishes, and 81 of 107 schools. Although the archdiocese would, like many agencies, recoup substantial losses from FEMA, the immediate task was deciding how to allocate its resources across the area. Several parishes had been destroyed; others would have to merge as part of a smaller urban footprint. Hughes entrusted a key part of the planning for this job of enormous complexity to Father Michael Jacques, the white pastor of St. Peter Claver, an African American parish in a downtown neighborhood that was heavily damaged. Jacques was not a seasoned urban planner. He was popular in the community, though overshadowed by Jerome LeDoux, the seventy-six-year-old African American pastor at St. Augustine, ten blocks away in Tremé, a neighborhood steeped in cultural traditions, just outside the French Quarter. Early in his career, LeDoux had spent four years in Rome, earning a master’s in theology and a Ph.D. in church law.
