Financial Irregularities – Page 20

January 30, 2014

Minnesota Catholic Church Leaders Cover Abuse With Cash

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.

Complete Article HERE!

October 21, 2013

Finance scandal spurs German bishops to reveal secret funds

File under: Follow the money! Truth is, all bishops have huge slush funds and these guys are showing us only what they want us to see.

By Tom Heneghan

German Catholic bishops are scrapping centuries of secrecy and reporting the value of their private endowments as a scandal caused by a free-spending prelate puts pressure on them for more financial transparency.

Limburg Bishop Franz-Peter Tebartz-van Elst – dubbed “the luxury bishop” – has shocked the Church by admitting six-fold cost overruns on construction of his luxurious new residence, which is now priced at 31 million euros, most of which will be paid from his ample reserves.

She's got the bling! — She’s got the bling!

His lavish spending clashes with the humble style of Pope Francis, who urges bishops to turn away from wealth and pomp and get closer to the faithful. Francis has also promised to clean up the murky finances of the Vatican’s own bank.

The Limburg scandal has also prompted worried German Catholics to ask what their dioceses were doing.

“We take these concerns very seriously,” Bishop Karl-Heinz Wiesemann of Speyer said in a communique revealing his 46.5 million euro reserve.

German dioceses have secret reserves called the “bishop’s chair” known only to the bishop and a few advisors. Run as a diocesan nest egg and source of funds for special projects, they are not taxed and not listed in the annual balance sheets.

In some older dioceses, “bishop’s chair” reserves include age-old property holdings, donations from former princely rulers and funds from German states over the past two centuries. Their make-up and value vary widely from diocese to diocese.

RICHES AND MORE RICHES?

Cologne, the largest and reportedly richest diocese in Europe, announced on Tuesday “in connection with the current discussion about Church finances” that its archbishop had reserves amounting to 166.2 million euros in 2012.

It said the 9.6 million euro earnings from its investments were, as in previous years, added to the diocesan budget of 939 milllion euros in 2012, three-quarters of which was financed by the “church tax” levied on churchgoers.

A critic of church financial secrecy, Berlin political scientist and journalist Carsten Frerk, said Cologne’s total should be about 1.1 billion euros because its large real estate investments were listed at only nominal values.

“They don’t pay tax so they don’t update their assessments,” he told Reuters. “It’s not in their interest to publish these amounts because then they wouldn’t get as many donations.”

Dioceses also had holdings in other accounts and some even have their own private banks, somewhat similar to the Vatican’s bank, so their full wealth is hard to calculate, he added.

Cologne diocesan officials were not immediately available for comment. Cathedral Provost Rev Norbert Feldhoff told the diocesan radio station it would be hard to explain some aspects of Church finances if all details are published.

“There are big sums and there are problems,” he told Domradio. “We can explain it all to experts, but it could be difficult for the average housewife in Cologne to understand.”

TIGHT-LIPPED

At least six of the country’s other 26 dioceses also opened their books, several showing much smaller “bishop’s chair” reserves but some revealing quite large amounts.

The small diocese of Trier, Germany’s oldest, had a reserve of 84 million euros and said part of its earnings went to pay damages to victims of the clerical sexual abuse scandals that rocked the German Church in recent years.

Limburg, where Tebartz-van Elst’s lavish spending has led to loud calls from priests and parishioners for his resignation, has not posted its reserves. Media reports have estimated the sum at about 100 million euros.

German dioceses have traditionally been tight-lipped about their “bishop’s chair” reserves. In 2010, 25 of the 27 dioceses refused to discuss them when asked by Der Spiegel magazine.

Last week, four of the five dioceses in North Rhine-Westphalia – including Cologne – declined to give any information to the local West German Radio station. By Tuesday, only Paderborn diocese had still not published its details.

Germany’s church tax, collected by the state and handed over to the churches, raised 5.2 billion euros for the Catholics and 4.6 billion euros for Protestants in 2012, making them major economic actors at home and abroad.

Complete Article HERE!

July 20, 2013

Pope’s bank clean-up man ‘found stuck in lift with rent boy’

As the man charged with cleaning out the stables at the scandal-struck Vatican bank, Monsignor Battista Ricca will need Machiavellian cunning, good fortune and a whiter-than-white record to have even a fighting chance.

But Pope Francis’s new banker appears to possess none of these attributes after it was reported yesterday that he was found stuck in a lift with a rent boy. Msgr Ricca, as Francis’s new primate with responsibility for the troubled financial institution, known officially as the IoR (Institute for Religious Works), is supposed to usher in new transparency and badly needed reforms after years of financial scandal.

Earlier this month, a major report from finance police and magistrates warned that a lack of checks and controls by the IoR and the Italian financial institutions it had dealings with made the Vatican’s bank a money-laundering hot spot.

It is claimed that Msgr Ricca, 57, impressed Francis with the way he ran three key residences used by cardinals, bishops and priests visiting Rome. But detailed claims have emerged detailing how in 1999, Ricca took a Vatican diplomatic posting in Uruguay and moved his lover, Patrick Haari, a Swiss army captain, in with him, to the outrage of church figures and locals in the conservative South American nation. Captain Haari was forced out by the hardline Polish nuncio Janusz Bolonek in 2001.

But there were more problems for Ricca when he was attacked in a cruising ground that year, and soon after firemen had to rescue him from a broken lift, in which he was trapped with a youth known by local police. The weekly news magazine L’Espresso claims that Msgr Ricca was able to get the position as IoR prelate because the supposedly powerful “gay lobby” in the Vatican airbrushed his colourful CV.

Gay sex scandals at the Vatican have made the headlines before. In 2010 it emerged that one of Pope Benedict’s ceremonial ushers and a member of the Vatican choir were involved in a gay prostitution ring.

Vatican spokesman Padre Federico Lombardi sought to dismiss the claims about Msgr Ricca’s private life. “What has been claimed about Msgr Ricca is not credible,” he said. Msgr Ricca himself has not yet responded to the allegations. But La Repubblica noted that the Vatican had emphasised that his appointment as prelate for the IoR was technically an interim one, thus raising the possibility that the job might not last long.

Complete Article HERE!

July 1, 2013July 1, 2013

Archdiocese of Milwaukee faces Monday deadline to make public clergy sex abuse documents

The Archdiocese of Milwaukee was expected to release thousands of pages of documents related to clergy sex abuse on Monday, including the personnel files of more than three dozen priests and the depositions of church leaders including New York Cardinal Timothy Dolan, the former archbishop of Milwaukee.

A deal reached in federal bankruptcy court between the archdiocese and victims suing it for fraud called for the documents to be made public by July 1. Victims say the archdiocese transferred problem priests to new churches without warning parishioners and covered up priests’ crimes for decades. Many pushed for the documents’ release in the belief that it would be an important part of their healing.

Similar files made public by other Roman Catholic dioceses and religious orders have detailed how leaders tried to protect the church by shielding priests and not reporting child sex abuse to authorities. The cover-up extended to the top of the Catholic hierarchy. Correspondence obtained by The Associated Press in 2010 showed the future Pope Benedict XVI had resisted pleas in the 1980s to defrock a California priest with a record of molesting children. Cardinal Joseph Ratzinger led the Vatican office responsible for disciplining abusive priests before his election as pope.

The Milwaukee collection has drawn interest because of the involvement of Dolan, the president of the U.S. Conference of Catholic Bishops and the nation’s most prominent Roman Catholic official. Dolan has not been accused of transferring problem priests. He took over as archbishop in mid-2002, after many victims had already come forward. But there have been questions about his response to the crisis, including payments made to abusive priests when they left the church.

The archdiocese has characterized the money, as much as $20,000 in some cases, as a kind of severance pay meant to help priests transition out of the ministry. Similar amounts were made to men leaving the priesthood long before allegations of sexual abuse surfaced in the Catholic church, spokeswoman Julie Wolf said last year, when the payments came to light.

Charles Linneman, 45, of Sugar Grove, Ill., was among the abuse victims who spoke out against the payments and pushed for the archdiocese to release its records. Linneman said he was an altar boy when he met Franklyn Becker at a Wisconsin parish in 1980. He read the priest’s file several years ago when it became public during litigation in California, where Becker also served.

“It helped me move on,” Linneman said. In particular, he was relieved when the file showed no reports of children being abused after him, he said. He had long wondered if coming forward before he did in 2002 would have kept other children from being hurt.

Abuse victims have long sought to hold the church accountable, but most didn’t come forward until well into adulthood, when it was too late under Wisconsin law to sue the church for negligence in supervising its priests. A 2007 Wisconsin Supreme Court decision gave them a window, saying the six-year limit in fraud cases didn’t start until the deception was uncovered. The archdiocese filed for bankruptcy in 2011, once it became clear that it was likely to face a slew of lawsuits.

Complete Article HERE!

June 28, 2013

Senior Vatican cleric arrested in money smuggling case

File under: Sex (particularly gay sex) is sinful. Money laundering and corruption, not so much. Gay mafia in Vatican = BAD! Regular mafia in Vatican = business as usual.

By Philip Pullella

A senior Catholic cleric with connections to the Vatican bank was arrested on Friday for plotting to help rich friends smuggle tens of millions of euros in cash into Italy from Switzerland, in the latest blow to the Vatican’s image.

Monsignor Nunzio Scarano, 61, who worked as a senior accountant in the Vatican’s financial administration, was arrested along with an Italian secret service agent and a financial intermediary in a tale that reads like a spy novel.

It involves police wiretaps, a private plane rented to collect the cash from Locarno, burned cell phones, an allegedly corrupt secret services agent who promised to get the money past customs and a shady financier.

Details of the case against Scarano will come as an acute embarrassment to Pope Francis, who, since his election in March, has pointedly eschewed many of the trappings of office and sought to stress the importance of a simple life of devotion.

Only two days ago, the Vatican announced he had set up a commission of inquiry into the Vatican bank, formally known as the Institute for Works of Religion (IOR), which has been hit by a number of scandals in the past decades.

Scarano, who was arrested in a Rome parish and taken to Rome’s Queen of Heaven jail, had hatched a plot to bring up to 40 million euros ($52 million) into Italy for a family of shipbuilders in his hometown of Salerno in southern Italy, magistrate Nello Rossi told reporters.

Rossi is already investigating the Vatican bank for money laundering, and the latest arrests stemmed from that.

Rossi and fellow magistrate Stefano Pesci said there was no indication so far that the bank was directly involved in the attempt to bring the money into Italy, but that the investigation was continuing and more searches were underway.

Scarano is under separate investigation in southern Italy in relation to his accounts in the Vatican bank.

CELL PHONES DESTROYED

According to Rossi, in July last year Scarano engaged Giovanni Zito, a paramilitary Carabiniere policeman on loan to the secret services, to help him get the money, which was in a Swiss bank, into Italy without tax and customs controls.

The third person arrested was Giovanni Carenzio, a financial broker with offices in Switzerland and the Canary Islands and who was acting as the fiduciary for the owners of the money.

The three originally planned to bring back 40 million euros in cash but later reduced it to 20 million euros.

A private plane went to Locarno from Rome and waited several days before returning to Rome without the money.

The cash never left Switzerland because of disagreements and nervousness among the three, Rossi said, adding that cell phones that were used were later destroyed by being burned.

Zito had promised to use his position in the secret services to avoid customs controls. The plane was to have been met on the runway of a Rome airport and the cash taken under armed escort to Scarano’s home in Rome, Rossi said.

Even though the money never left the Swiss bank, Zito demanded the payment he had been promised for his services.

Scarano gave Zito two checks, one for 400,000 euros and another for 200,000 euros. Zito cashed the first check but Scarano blocked the second before Zito could cash it by filing a false report that it had been lost.

VATICAN READY TO COOPERATE

Asked if money laundering was involved, Rossi said that would depend if the continuing investigation determined that the original source of the money was criminal activity.

“We are trying to determine the origin of the vast amount of money that was at the disposal of Scarano, who is the holder of several accounts at IOR,” Rossi said.

Vatican spokesman Father Federico Lombardi said Vatican authorities stood ready to cooperate with the Italian investigation, but had so far received no official request.

He said the FIA, the Vatican’s own financial intelligence authority, was following the case and would take action if necessary.

Scarano worked for years as a senior accountant for a Vatican department known as APSA, whose official title is the Administration of the Patrimony of the Apostolic See.

He was suspended from his duties several weeks ago when he was placed under investigation by magistrates in Salerno.

In that investigation, his lawyer Silverio Sica said wealthy friends had donated money to Scarano in order for him to build a home for the terminally ill.

According to Sica, his client wanted to use that money to pay off his mortgage so he could sell a property in Salerno and use the proceeds to build the care home.

Apparently to cover his tracks, Scarano has been accused of taking 560,000 euros in cash out of his account in the Vatican bank and giving various amounts to friends who gave him checks in exchange.

He then deposited the checks into an Italian bank account to pay off the mortgage. ($1 = 0.7691 euros)

Complete Article HERE!