Scandals will dent, not bankrupt, dioceses

A 1997 article in the Catholic weekly "America" entitled "The church is not broke," rebutted popular perceptions that giving had slowed. Author Joseph Claude Harris, a church financial analyst from Seattle, put revenue for 19,000 parishes and 8,300 schools nationwide at $13.2 billion. Those estimates, from an analysis by Harris, are the best available today, Hoge says.

That total has also undoubtedly grown in the intervening years. Church membership has risen from about 55.5 million members in 1994, the year used in the 1997 analysis, to about 62 million today, Hoge says.

The Archdiocese of Boston is one of the richest dioceses in the country. The Boston Globe reported the cost of settlements in the case of pedophile priest John Geoghan at about $100 million. And other suits are being filed. Eventually, it could cost the diocese dearly.

Yet the diocese has hundreds of millions of dollars of real estate, some of which could be sold – Cardinal Bernard Law's residence, for instance, Hoge says. It also ask other dioceses for help.

Lessons from the past show dioceses are resilient. In Dallas, a $119 million court judgment was negotiated down to a $23 million payment in 1998, and finances are doing well today, a diocese spokesman recently reported. The Santa Fe diocese has paid out more than $40 million, but is on a sound footing, its officials report. And there are similar echoes in dioceses in Stockton, Calif., ($30 million) and others.

"I don't see any one diocese going bankrupt because I think the others will help bail them out if it gets to that," says Charles Zech, a professor of economics at Villanova University and an expert on church finances.

The Vatican, by contrast, is not seen by many as willing to bail out what it considers the rich dioceses of America. More likely, dioceses might band together to help struggling peers.

Even critics like A.W. Richard Sipe, a former priest who has studied sexual abuse within the church, agrees with that assessment. He and others say the Catholic church in the United States faces a crisis of a magnitude and severity that will test both finances and resolve – and the resilience of parishioners, priests, and bishops. The financial threat will likely prod changes of how priests are selected, and other shifts – but will stop far short of being a full-blown disaster, they say.

But there are legal uncertainties. On Friday, a Missouri man speaking anonymously, announced an unusual lawsuit seeking restitution and triple damages, for abuse by a priest, from three Catholic dioceses under the federal racketeering law designed to target organized crime. Victory in the suit could mean huge liabilities, but legal experts whether the strategy will succeed.

There are also questions on the income side. Zech and others see only localized impact on contributions in dioceses where scandals emerge. And even that may not prevent giving, but simply divert it. In the Archdiocese of Santa Rosa, for instance, where a sex-and-finance scandal emerged in 1999, churchgoers switched gears to give directly to their local parish church, not the diocese.

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