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Catholic Church Knows How to Deal with Assets and Liabilities

By Rheingold Giuffra Ruffo Plotkin & Hellman LLP

In the fictional movie Godfather 3, Mafia Godfather Michael Corleone is swept up in his attempt to purchase Immobiliare, a European real estate company. Its properties were worth over $6 billion by the 1970s, making it the largest landowner in the world. The Vatican owned a 25 percent interest.

Michael Corleone bought a large block of stock during the 1970s, eventually becoming the company’s largest single shareholder. In 1979, he expressed interest in buying the Vatican’s stake for $600 million in the form of a deposit in the Vatican Bank, which would have given him controlling interest. He had plans to turn it into an international conglomerate.

Despite fierce opposition to the Corleone family’s acquisition of this company, the company’s American directors voted to accept Michael’s tender offer. In fiction and non-fiction, it seems the Catholic Church is no stranger to the real-world politics of high finance. The Times Union reports that “The Catholic bishops of New York sold a lucrative insurance business they controlled and stored the proceeds in a foundation they also administer, keeping billions out of the reach of survivors of childhood sexual abuse.

The move occurred in 2018, with the church selling its Fidelis Care insurance company and moving $4.3 billion of the proceeds into the new Mother Cabrini Health Foundation. At the same time, the Child Victims Act in New York was gaining momentum in the Legislature, a measure that the church had lobbied against for more than a decade. It was ultimately signed into law a year later; and it has exposed the church to thousands of lawsuits alleging sexual abuse of children and, in some instances, the coverup of those incidents and shielding of predators.

Cardinal Dolan, the present Archbishop of New York is no stranger to such deals.  When he was Archbishop of Milwaukee, he was accused of transferring funds in order to avoid abuse payments.  Critics claimed he moved nearly $57 million dollars in church money into a trust, when he was Archbishop of Milwaukee, so it wouldn’t be vulnerable to lawsuits filed by Catholics who said they were abused by Milwaukee priests.

The Times Union reports, “It has been the church’s practice across the country for more than a decade to divert swarms of abuse claims into bankruptcy proceedings rather than handling each in individual court proceedings. That strategy allows the church to often avoid public trials or witness depositions, and to handle claims in one court proceeding that potentially will preserve more of their financial assets. Four of the eight dioceses in New York have already declared bankruptcy, as abuse lawsuits continue to pour in across the state.”

If proven, the intentional transfer or concealment of assets is a felony punishable by incarceration.  Yet, no prosecutor has ever made such a charge against a Catholic Church official. 

If you have been the victim of sexual abuse, contact our experienced child sexual abuse lawyers to discuss your case.

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