Bishop Defends Wuhan Windfall

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by Kristine Christlieb  •  ChurchMilitant.com  •  July 14, 2020   

Watchdog tracks spending spree

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WASHINGTON (ChurchMilitant.com) - The chairman of the United States Conference of Catholic Bishops' (USCCB's) Committee on Domestic Justice and Human Development is under the gun to explain why the Church needed $1.4 billion taxpayer-funded government loans. 

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Abp. Paul S. Coakley

(Photo: Paul B. Southerland)

When the news broke on July 10 that the Church had been awarded a minimum of $1.4 billion from the Paycheck Protection Program (PPP), committee chairman Abp. Paul S. Coakley of Oklahoma City issued a statement in response to the widespread media coverage

Coakley justified the loans first by saying the Catholic Church is the largest non-governmental provider of social services in the United States, and the Wuhan virus has created even greater demand for these services. He then said the virus has triggered layoffs for the Catholic Church just as it has for other businesses. 

"The Paycheck Protection Program was designed to protect the jobs of Americans from all walks of life, regardless of whether they work for for-profit or nonprofit employers, faith-based or secular," Coakley said.

Patrick Markey, executive director of the Diocesan Fiscal Management Conference, a professional organization for Catholic fiscal managers, told Catholic News Service he was grateful for the government's help, saying the assistance made it possible for managers to "sleep better knowing help is on the way and for now they do not have to lay staff off."

Still: Layoffs, Schools Closing

Media analysts are wondering why America's dioceses are using their financial and legal resources to apply for the limited loan funds meant for cash-strapped small businesses. 

The archdiocese of New York, which received $10 million in federal loans, just announced the imminent closure of 20 Catholic schools.

Well-managed not-for-profit organizations typically have three months of cash reserves on hand for short-term emergencies — for example, natural disasters. In a prolonged crisis, well-established organizations such as universities and large religious institutions should be able to turn to unrestricted endowment funds. Both these options were available to U.S. Catholic dioceses, but they first turned to limited taxpayer loans meant for small business without cash reserves, even though the dioceses had the resources to weather the storm without them.


Is your diocese among those that received close to $65 million in federal loans?
 

In what some are calling the ultimate irony, the loans didn't prevent layoffs. Both the archdioceses of Detroit and Chicago, which between them received nearly $4 million in government assistance, announced staff layoffs in April.

Nor did the loans prevent school closings, which also trigger layoffs. The archdiocese of New York, which received $10 million in federal loans, just announced the imminent closure of 20 Catholic schools. Cardinal Timothy Dolan expressed his regret. "I've kept a hopeful eye on our schools throughout this saga and my prayers are with all of the children and their families who will be affected by this sad news."

If the archdioceses are not using the funds to maintain staff or keep their schools open, what are they using them for?
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St. Andrew's School, Erie, PA

PPP regulations stipulate that if an employee's wages are reduced, the loan amount is reduced by the equivalent amount. When entire salaries are eliminated, it is likely the loan amount will be reduced in that case as well. How archdioceses will handle these stipulations is unclear, but when they do unfold, it is likely the fiscal position of the Catholic Church will have further degraded.

Tracking Expenditures

If the archdioceses are not using the funds to maintain staff or keep their schools open, what are they using them for? The diocese of Erie, Pennsylvania could be a case study. It reports that 80 affiliated organizations including schools and parishes received $10.3 million in PPP loans, while its administrative offices received nearly $883,000.  

An Erie watchdog has ideas about how the funds are being spent. He provided Church Militant with photos from several construction projects:

  • Rectory repairs for St. George Church
  • Replacement of all the windows at St. Andrews school, which closed five years ago and that has remained unoccupied since
  • A repaired roof at Sacred Heart Church in Erie, along with replacement of all the framing around the stained glass windows and upgraded carpet

Faithful Catholics are wondering where the money is coming from for these long-delayed repairs.

$3.5 billion to 3,500 Orgs?

The $349 billion Paycheck Protection Program was approved by Congress and signed into law in early April. The Diocesan Fiscal Management Conference reports that 8,000 parishes, 1,400 elementary schools, 700 high schools, 104 chanceries, 185 Catholic Charities agencies and 200 other diocesan organizations in 160 dioceses have applied for assistance so far.

The Associated Press reports that roughly 3,500 Catholic organizations qualified for PPP loans. As long as the loan funds are used for payroll, rent and utilities the government will forgive the loans. Some reports say the Catholic Church and its affiliated organizations may have received as much as $3.5 billion in PPP funding.

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