Catholic abuse claim hits $90m

Associated Press/September 12, 2003

Boston -- The Catholic Archdiocese of Boston mortgaged its cathedral and seminary to finance a clergy sexual abuse settlement that has grown to nearly $90m.

The Cathedral of the Holy Cross and St John's Seminary were mortgaged to secure bank loans so the archdiocese can get the settlement money this month, The Boston Globe reported on Tuesday.

Otherwise, the archdiocese would have to wait for the proceeds from the sale of a 11ha parcel that includes the mansion that housed Boston's cardinals. That planned sale had been announced last week.

The archdiocese has also dipped into funds for retired clergy and cemeteries to finance the settlement.

The Boston Archdiocese, the nation's fourth-largest, was at the centre of the sex abuse scandal that rocked the Roman Catholic church in the United States last year. Cardinal Bernard Law resigned last December over his handling of allegations of abuse by priests in the archdiocese.

In a letter to priests this weekend, a copy of which was obtained by the newspaper, Bishop Richard Lennon said the initial $85m settlement to victims of priest sex abuse had increased because the archdiocese agreed to pay some victims who had filed individual claims.

"While we had hoped to borrow the entire $90m from the banks, that proved impossible because of our overall financial situation and our commitment not to pledge parish assets," Lennon, the archdiocese's chief administrative officer, wrote in his letter.

The $75m in bank loans are being secured by mortgaging St John's Seminary, while a $15m loan from the clergy retirement fund - which provides pensions and health care to retired priests - was secured by a mortgage on the cathedral and related properties. One-third of the bank loans are also being guaranteed by an individual whom the church has declined to identify.

The Rev Christopher Coyne, a spokesperson for the archdiocese, said the properties are not at risk.

"Both the cathedral and the seminary are important to the life of the archdiocese, and we would never imperil either institution," Coyne said.

The archdiocese has also announced the sale of other properties expected to bring in more than $20m, which would pay for the carrying costs of the loans, outreach and counselling for victims, abuse prevention programs and any unsettled abuse cases.