File under: Follow The Money
by Robert Lawson
Catholic church leaders in Minnesota were investigated by Minnesota Public Radio (MPR), who alleges that the church embezzled funds to cover child abuse and other misconduct with church cash, sources in the Twin Cities report. The investigation cited internal church documents to make their case that leaders of the Catholic church, such as the Archdiocese in the Twin Cites (Minneapolis/Saint Paul), paid millions of dollars to keep secrets quiet.
MPR reported that the church had several secret accounts that led to financial abuse in the system. The accounts were used for payoffs for people like Rev. Stanley Kozlak, who fathered a child. Kozlak received payoffs for rent and living until he reached the age to retire on social security benefits. The internal documents in the church indicate that part of the agreement held that Kozlak would still be a priest, the Archbishop would have to sign a letter that states Kozlak isn’t a pedophile and that there would be negotiated child support. Over the course of nine years, from 2002 to 2011, the accounts had been used repeatedly and paid out around $11 million. That amounts to about three percent of revenue for that time period.
The efforts by the Catholic church to deal with clergy problems is staggering. Money was used to quietly allow some to leave their ministries. This strategy proved to be the back door to embezzlement within their secretly constructed financial system. Legal costs and therapy were also listed expenditures. In one instance, a private investigator was hired and paid more than $1o0,000 the Rochester Post Bulletin reported via Associated Press (AP). The Minnesota Catholic church leaders investigated appeared to have decided it was easier to cover up the problems with cash, but other abuse followed and it proved to be an expensive strategy.
The archdiocese made a statement on Thursday to address news of the investigation by MPR. They said they already hired a new CFO in December of 2012 to improve transparency, according to the report in the Post Bulletin. There are no government regulators that the Catholic church leaders are accountable to and the archbishop can spend money how he sees fit. There is a council that advises him, however. There will be a full audit completed by February.
MPR investigated to find that these payments, referred to as “disability” in the ledger account, were paid to victims and clergy. MPR reported a culture that kept many secrets within the walls of the Catholic church. Once accountant already pleaded guilty to stealing around $650,000 in cash from the church during these activities. He said people there knew what questions not to ask.
The MPR report and investigation also reveals the plump and healthy financial condition of the church, which has been infused with revenue over a five-year time span. Their operating revenue was up to around $40 million up to the point of 2011. Cash levels and assets grew as well, but now the Catholic church faces pressure from legal circumstances. The Minnesota Catholic church leaders tried to cover abuse with cash only to find more abuse and the threat of losing that very cash.
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