Federal Judge Says Catholic Church Can Hide Assets From Abuse Victims, For Freedom

Seems like only the beginning of this month that we were all outraged and stuff about the terrible news that the Archdiocese of Milwaukee was playing hide-the-assets in an attempt to avoid paying compensation to victims of sex abuse. And now, not only has a federal judge declined to say, "No, Archbishop, that's arch-villainous," the judge actually went several steps further and granted the Archdiocese ridiculously broad immunity from federal bankruptcy law, basically saying that large chunks of religious institutions' finances are exempt from scrutiny under the First Amendment. Please summarize for us, ThinkProgress:  

While the ostensible issue in this case is whether over $50 million in church funds are shielded from a bankruptcy proceeding triggered largely by a flood of clerical sex abuse claims against the Archdiocese of Milwaukee, Judge Rudolph Randa reads the church’s constitutional and legal right to religious liberty so broadly as to render religious institutions immune from much of the law.

That's some catch.

The shell game worked like this: In 2007, while he was Archbishop of Milwaukee, Timothy Dolan (now Archbishop of New York) transferred some $57 million from the Archdiocese's general fund into a special trust for maintaining cemeteries. Dolan wrote a letter to the Vatican explaining that this one weird trick would result in "improved protection of these funds from any legal claim and liability.” So the question for Judge Randa was whether as part of the Archdiocese of Milwaukee's bankruptcy case -- brought on largely because of claims in sex abuse cases -- the court could require that the hidden asserts be moved back to the general fund so they would be available to creditors, including those abuse victims.

Nope, says Judge Randa. You see, that cemetery fund is now faith-based money, and no matter whether the evidence shows it was deliberately hidden, the First Amendment protects it:

Randa relies on a law that limits the federal government’s ability to “substantially burden a person’s exercise of religion,” Randa cites to the current Archbishop of Milwaukee’s statement that “the care and maintenance of Catholic cemeteries, cemetery property, and the remains of those interred is a fundamental exercise of the Catholic faith,” and concludes that this statement alone is enough to shield the church’s funds. As Randa explains, “if the Trust’s funds are converted into the bankruptcy estate, there will be no funds or, at best, insufficient funds for the perpetual care of the Milwaukee Catholic Cemeteries.”

Pretty neat! Must suck to be one of the hundreds of victims of sex abuse by priests in Milwaukee, where the Archdiocese has at least managed to scrape up some $9 million to for legal fees.

There is one bit of hope in this whole sorry spectacle, and that is that Judge Randa "has a history of being reversed by higher courts in cases involving hot button social issues," so the victims' inevitable appeal probably has a pretty good chance. And until then, the Archdiocese can keep its sacred obligations to the dead and to its lawyers.

[ ThinkProgress ]