Magazine article National Catholic Reporter

Judge Orders San Diego Diocese to Disclose Parish Accounts

Magazine article National Catholic Reporter

Judge Orders San Diego Diocese to Disclose Parish Accounts

Article excerpt

At a federal bankruptcy hearing April 11, Judge Louise DeCarl Adler ordered the San Diego diocese to refile its financial disclosure statements and to include this time the balances in the 770 bank accounts held by the 98 parishes of the diocese.

She also indicated she will appoint an expert to analyze the accounting system in the diocese and its parishes.

Adler asked why any organization would have 770 bank accounts. "I've had billion-dollar corporations in this court without this kind of accounting," she said.

Lawyers for the diocese explained that each parish is a separate entity that needs its own bank accounts, and when dealing with money that is dedicated to one purpose and cannot be commingled with other funds, a parish may place that money in a separate account.

The San Diego diocese fried for Chapter 11 bankruptcy protection Feb. 27, the day before the first of 143 clergy sex abuse claims against the diocese was to go to trial.

Adler had called the April 11 hearing demanding that two San Diego priests and three diocesan attorneys show cause why she should not hold them in contempt of court for conspiring with parishes to create new bank accounts and transfer church funds into them without court authorization.

Her order was based on information that Fr. Bruce Osborn, on behalf of the newly formed Organization of Parishes, and Fr. Michael Gallagher had written letters urging parishes to create new bank accounts with new tax identification numbers and transfer parish funds into them.

At the hearing, diocesan attorneys Susan G. …

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