Morally Bankrupt

News: Video Reports
by Nicholas Wylie  •  •  February 20, 2023   

Bishops abuse Chapter 11

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As clerical sex abuse continues to come to light throughout the United States, more dioceses are filing for bankruptcy. 

In tonight's In-Depth Report, Church Militant's Nick Wylie discusses the next possible additions to the list of Chapter 11 filings.

Kevin Eckery, spokesperson, diocese of San Diego, Calif.: "We owe a duty to survivors, period. But the fact is that we only have so many resources. It's really just a matter of transparency. We just want people to know what the situation is."

As sex abuse lawsuits continue to pile on, two California dioceses are strongly considering filing for Chapter 11 bankruptcy.

Cardinal Robert McElroy's diocese of San Diego recently announced the possibility. While in December, Bp. Robert Vasa's Santa Rosa diocese announced it could file by March 1.

Josh Saul, reporter, Bloomberg News: "A lot of archdioceses, before they file bankruptcy, they make moves, shift assets; they recategorize assets in ways that shrink the pot of money that's available to victims."

Invoking Chapter 11 has become one of the hallmarks of morally bankrupt dioceses, and assets are not the only thing that's being hidden.

Jeff Anderson, attorney: "And they did this, in our view, and based on our experience, is to stop us, the attorneys and survivors working with them, from excavating all the secrets they have kept that have been so reckless for so long."

Once bankruptcy is filed, gaining access to potentially incriminating diocesan files becomes impossible.

Bp. Edward Scharfenberger, diocese of Albany, N.Y.: "Pursuing a Chapter 11 reorganization not only makes sense but is the most responsible path."

In 2004, the archdiocese of Portland was the first to exploit the legal maneuver.

To date, 26 dioceses have undergone Chapter 11 proceedings; 10 are still in the process, while the other 16 have completed it.

Currently in the process are the dioceses of Agana in Guam, Buffalo, Camden, New Orleans, Norwich, Rochester, Rockville Centre, San Juan in Puerto Rico, Santa Fe and Syracuse.

Those completing it include Portland, Davenport, Duluth, Fairbanks, Gallup, Great Falls–Billings, Harrisburg, Helena, Milwaukee, New Ulm, San Diego, St. Paul and Minneapolis, Spokane, Stockton, Tucson, Wilmington and Winona–Rochester.

Mitchell Garabedian, attorney: "The secrecy continues. Where is the transparency? You take away their robes, take away their religion, they're just criminals, and they belong in jail."

And bishops aren't footing the bill, since it is the laity — through their tithing and almsgiving — who bear the financial burden.

Chris McGowan, parishioner, diocese of San Diego, Calif.: "These people should be prosecuted, and then they should pay for what they owe. Filing bankruptcy is like a criminal act, and it's almost admitting guilt to me."

The real reason bishops file bankruptcy is because they have something to hide, and it's not just money.

The diocese of San Diego attempted to file for bankruptcy in 2004. But after it lied about its assets, the case was dismissed.

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