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'Business Week' Writer Discusses Catholic Church Money, Scandal

Aired May 06, 2002 - 12:29   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Turning now to the crisis in the priesthood, Cardinal Bernard Law says that his Boston Archdiocese if facing a crushing number of legal claims. Law celebrated mass at Holy Cross Cathedral yesterday. He said that a church panel has backed out of a settlement with 86 people because of 150 additional claims that the archdiocese may also need to pay. Protesters were waiting for the cardinal as he left. They shouted and waved signs in what has become a new Sunday ritual at the cathedral.

Well, with those claims piling up, what is the future of the church's finances? For some answers, we turn to Bill Symonds with "Business Week." He's been covering the priest sex abuse scandal since the beginning of the year -- Bill, good morning.

BILL SYMONDS, BUSINESS WEEK: Good morning, Daryn.

KAGAN: A fascinating article I had a chance to read before talking to you. Main point here, forget the sex abuse scandal for a moment. If you really want to see scandal, look at how the church has handled its finances.

SYMONDS: That's right. They've been very secretive about their finances, just like they have been about the sexual abuse problems.

KAGAN: But there are some who believe that as much as $1 billion has already been paid out?

SYMONDS: That's right.

KAGAN: As an educated guess, I guess.

SYMONDS: That's a guess by the attorneys representing the people who have been abused. They say that up to $1 billion has been spent already, but several billion dollars more might have to be spent to meet all the claims that are flowing in now.

KAGAN: Now, of course, when you talk about the money that the Catholic Church spends, there's a lot of good work that the Catholic Church does, whether you're talking charity, schools, other things that the church takes care of.

SYMONDS: That's right. The Catholic Church is actually the largest non-governmental institution in the United States. It's the largest operator of private schools, for example. It runs over 200 colleges. And by some measures it's the largest charity in the U.S. So a great deal is at stake because of this scandal.

KAGAN: But here's the catch: where the money comes from is right out of parishioners' pockets. And if they're not feeling good about the church, then that's going to be a huge problem in terms of funding.

SYMONDS: That's right. There's a real danger here that fund- raising could dry up, and that could severely impact the work the church does. As a matter of fact, yesterday, Cardinal Law here in Boston launched the so-called cardinal's appeal, which they do every year. And obviously the response to this has been less than enthusiastic.

KAGAN: And just right there, what, they're looking for $16 million, I think?

SYMONDS: That's right. They're looking for $16 million, but many people feel they may only get half that amount this year.

KAGAN: And then who ends up getting hurt?

SYMONDS: Well the first thing that would be hurt would be the church operations itself. Secondly, it could effect things like Catholic charities. And it could effect the poor that are benefited by those charities.

KAGAN: You also do an interesting structural analysis in this article talking about how it's set up. How each archdiocese is almost kind of like -- is this a fair analysis, like a little company within itself?

SYMONDS: That's right. The dioceses in this country have enormous freedom. They report only to Rome. There's no control from Washington. What that means is that if the diocese cannot handle its financial claims that are coming up, it might be forced to file for bankruptcy.

KAGAN: That particular archdiocese. But if you're trying to take a positive turn on that, if you're next door or if you attend a church in a different archdiocese and you don't like what's happening in Boston, let's say, they can't come into those coffers and take money to pay out legal claims for something that's happening in Boston.

SYMONDS: That's right. That's one of the strongest defenses the church has. Not only that, but the schools and the colleges, etcetera, are also independent. So they couldn't go after those as part of the sexual abuse claims either.

KAGAN: And you also point out in the article that there are places where the finances are working just fine in certain archdioceses.

SYMONDS: They are working fine in some cases. But, Daryn, the problem is that in the large cities, where the Catholic Church has its historic roots, like Chicago, Boston and New York, the Church is actually running a deficit right now.

KAGAN: And the other problem is there are some big bills coming due that have nothing to do with the huge legal bills.

SYMONDS: That's right. They have a lot of costs in a number of different areas, including the need to repair many churches and schools where they've neglected the maintenance for many years.

KAGAN: And also making up the difference in what is costs to have a priest or a nun run a certain operation versus when you have to hire lay people because you don't have enough priests and nuns to do the job.

SYMONDS: That's right. For years they have relied on basically free labor. Nuns and priests, many of them have taken a vow of poverty. So they really have not had to be paid much at all. Now they're moving increasingly to lay workers, who obviously are demanding a much higher salary.

KAGAN: All right. And it's not just about pointing out the problems and the deficits here. You do look at some potential solutions. One of the suggestions in the article is make the financial books of the Catholic Church more financially transparent. Is that really a realistic possibility?

SYMONDS: I think it is realistic because, after all, there are 64 million Catholics in this country. And that includes many very sophisticated financial leaders. So they could tap those people and have a much better situation where people could understand what's happening to the money they give the church.

KAGAN: And while this might be culturally painful to make changes in this financial situation, as well some other changes on its way to the Church, it sounds like from your article you conclude there really is no choice. The Church needs to do something if it hopes to survive.

SYMONDS: That's right. After all, virtually every other charity in the U.S. does make its books public. The Catholic Church is going to have to follow that lead sooner or later.

KAGAN: All right. Bill Symonds, "Business Week" magazine, thank you so much.

SYMONDS: Thank you.

KAGAN: Fascinating piece. And, as I've said, you can see more of this in "Business Week." Thanks for joining us.

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