Sunday, November 17, 2002

The financial crisis of the Santa Rosa diocese

Church officials are searching for ways to protect Sunday collection plate cash and an ongoing $20 million fund-raising campaign from the reach of plaintiffs' attorneys.

But with a new law exposing all California dioceses to greater legal liability and with wary local parishioners already curbing their contributions, officials admit the diocese is in a precarious position.

Bishop Daniel Walsh said Friday in a written statement that he is attempting "to balance the just needs of victims with a respect for the resources entrusted to us" to carry out the church's mission.

The bishop acknowledged concerns about the potential cost of the new civil litigation in a letter earlier this month to priests and deacons."It's a very serious threat," said Dan Galvin, the diocese's attorney.Galvin declined to say how much insurance the church carries, or what other funds could be applied to any large judgment.

...Jim Dillon, a retired banker and diocesan finance council member, said bankruptcy was considered in 1999 in Santa Rosa, when the 140,000-member North Coast diocese confronted the $16 million debt attributed to former Bishop G. Patrick Ziemann's mismanagement.

The diocese has paid $7.4 million to about 40 victims of former priests whose crimes or misconduct date back to the 1970s.The Santa Rosa Diocese has a pending $5.1 million property sale, received a bank loan for an additional $5 million (since repaid) and gained financial help from other dioceses and from parishioners to cope with its debt.

The filing of two lawsuits in the past month and renewed appeals by attorneys and victims' advocates urging sex abuse victims to come forward have deepened the struggle to rebuild faith, reputation and financial stability.

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