CHURCH CAN'T GO BROKE -- INCORPORATION A TREND FLASHLINE CHURCH CAN'T GO BROKE -- INCORPORATION A TREND Web Posted: May 30, 2002 esieged by lawsuits and constant new allegations of pedophile priests and other sexual abuse, the question is being asked -- can so vast a financial holding company as the Roman Catholic church which owns land, buildings, stocks, bonds and other assets actually go broke? According to Time Magazine, the answer is a definite "no." The current (June 3, 2002) issue notes that the church takes in annual revenues of $7.5 billion. "Even more impressive are its vast property holdings, which include everything from cathedrals and schools to beachfront retreats, stately mansions, golf courses and television and radio stations." That tells only part of the story, though. No one, not even the U.S. Government and the Internal Revenue Service, really know how much property and other holdings are controlled by the Roman Catholic Church or any other religious entity for that matter. There have been few investigations into church wealth, but the Time Magazine probe did produce some interesting findings. ¶ 1998 suit filed on behalf of two brothers who had been sexually molested revealed that the diocese in Stockton, California controlled the Roman Catholic Welfare Corporation which was worth a substantial $400 million. The archdiocese, after losing in court, was hit with a $29 million judgment. The church pleaded poverty, though, and managed to have that slashed to $7.6 million. Plaintiffs attorney Jeffrey Anderson noted, "The Catholic Church doesn't have to do any accounting to anybody." ¶ Church officials manage to keep old and outdated values of property -- often the original purchase price -- on city records and tax rolls, rather than the current fair market value. This allows them to circumvent or minimize the impact of legal judgments. For instance, the Archdiocese of Los Angeles -- reputed to be one of the wealthiest in the nation -- negotiated a "relatively small settlement" of $5.2 million in one case. All of this, says Time, provides the Catholic Church with a near-impenetrable veil of secrecy. Even more significant, in the wake of the current pedophile priest scandal, "Practically every Catholic institution in the U.S. is searching for ways to protect itself financially," reports the magazine. The Boston Archdiocese, which has paid out over $30 million in settlement hush-money and other awards, is now "considering a complete reorganization of its corporate structure to protect against future liability." "One possibility would be for it to hold all its real estate in trust for its parishes, which would make it even more difficult for new claimants to squeeze money out of the archdiocese for priests' misdeeds." In Colorado, for instance, the Denver Archdiocese is planning to end a decades-old policy of having the bishop be the technical owner of church property and instead transfer all assets to corporations. For decades, the local bishop or archbishop often owned local church-controlled real estate. That is now changing. According to the Denver Post, five churches in the local Archdiocese incorporated in January, and "the archbishop is committed to move the plan to all parishes." A priest and canon attorney in one parish denied that this was due to liability issues, and says that it does not prevent suits from being filed against the archdiocese. Collection of judgments is another matter, though, since the church would be insulated by a "corporate veil" protecting assets. In 1974, Madalyn Murray O'Hair published what was, up to that time, one of the most thorough exposes of church wealth and ecclesiastical holdings in her book "Freedom Under Siege, The Impact of Organized Religion on Your Liberty and Your Pocketbook." The work is now out of print. O'Hair relied mostly on "public record" accounts, tax roll listings, even church publications for much of her information. In a chapter appropriately titled, "Render Not Unto Caesar (The Church as Big Business)," she revealed the scale of religion-controlled wealth. Roman Catholic assets, for instance, exceeded the combined holdings of the titans of the American corporate world -- Standard Oil, American Telephone and Telegraph (AT&T), and U.S. Steel. Corporate "fronts" like Angelus, Inc. were essentially holding firms for the church, controlling lucrative properties, operating businesses and concealing ecclesiastical lucre. All of this property then, as now, was tax exempt. In 1876, then-President Ulysses S. Grant proposed an amendment to the Constitution to remedy what he termed the "evil of accumulation of the vast amount of untaxed church property." William Lloyd Garrison agreed, declaring that government had no right to "exempt church property from taxation." So did Elizabeth Cady Stanton, who cited the "magnificent cathedrals with their valuable lands in Boston, Philadelphia and New York." Taxing those church properties, said Stanton, would proportionately lighten the tax burden on women who held property, and "every widow in the land, struggling to feed, clothe, and educate a family of children..." It never happened. Instead, churches were granted tax immunity through mechanisms like the Internal Revenue Service code. Attempts to reform the code repeatedly failed; in 1950, for instance, non-profit organizations were required to pay taxes on "business income" that was "unrelated" to their nonprofit activities. Religious groups were carefully excluded from the new requirement. The church's immediately legal future is described as "bleak" in the latest Time. There are nearly 450 individual cases in Boston related to the pedophile scandal, which has spread throughout the country. More than 90 men have come forward in Louisville, Kentucky and are filing complaints against 14 priests, a deacon and a lay parochial school teacher for abuse that allegedly occurred over a 25-year period. And Milwaukee Roman Catholics are in shock over charges against Archbishop Rembert Weakland, who allegedly paid a former theology student $450,000 to settle a claim of sexual assault more than two decades ago. The church is in a fight for its congregations, and its purse. Flash Line Flash Line Home (11-18-02) Postal Service to display religionized 'In God We Trust' national motto throughout country (11-17-02) Faith-based funding compromise dead in Senate -- for now (11-8-02) Godless Americans rally on DC mall, call for new voice in political arena (10-30-02) Atheist Scout won't recant, BSA threatens explusion (10-29-02) Report on Calvi autopsy returns spotlight to Vatican bank scandal (10-28-02) Fate of Roy Moore's Ten Commandments now in hands of federal judge (10-23-02) Proof of the historical Jesus, or rush to judgment? (10-17-02) Watts on board with new faith-based funding scheme -- vote could come at any time (10-4-02) House rejects church electioneering bill (10-3-02) Cobb County, Ga. school board opens door to creationism, 'Intelligent Design' pseudo-science in classrooms (9-27-02) Speaker roster announced for November Godless Americans March on Washington (9-23-02) Catholic traditionalists demand apology from Chicago Reader for 'blasphemy' -- demo planned (9-21-02) Bowing to White House pressure, Senate readies vote on scaled-down faith based funding bill Copyright © 2002 American Atheists, Inc. All rights reserved. [text only]