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On February 4th, the Associated Press published an investigation entitled: “Sitting on billions, Catholic dioceses amassed taxpayer aid.” In a lengthy piece, they concluded that “Overall, the nation’s nearly 200 dioceses, where bishops and cardinals govern, and other Catholic institutions received at least $3 billion. That makes the Roman Catholic Church perhaps the biggest beneficiary of the paycheck program.”
But the Associated Press investigation has several misconceptions about what the Church’s structure looks like, how it works, who handles the funds, and how they can be spent.
The Associated Press article generated controversy. The Pillar, a site specialized in covering and analyzing news about the Catholic Church, responded point by point to the AP investigation’s claims.
Response to Associated Press: The Catholic Church is a society, not a monolith
The Pillar‘s piece is titled, “A society, not a monolith: What the Catholic Church is, and is not,” which is, essentially, a response aimed at the Associated Press.
“On Thursday morning, Associated Press ran a report accusing “the Roman Catholic Church” in the United States of “sitting on billions” while it “amassed taxpayer aid” through the Paycheck Protection Program,” said the outlet.
“The AP article, which follows a similar AP report published in July 2020, takes as a whole the assets and investments of the Catholic dioceses, parishes, schools, and other charitable institutions affiliated with the Church in the United States and treats them as a parts of a singular whole.”
From this point, the Catholic portal clarified several points of the Associated Press’ article:
“The Catholic Church is a society, not a monolith,” notes The Pillar. “The Catholic Church understands itself to be a communion of people and institutions, not a singular organization. Its legal structures are designed to reflect that theology.” so understanding the Catholic Church as a monolithic group that handles all the money in a concentrated way is a mistake. And this is what AP does when it claims that “The Roman Catholic Church” is sitting on billions as if a single institution had all that money at its disposal.
The Pillar article points out that “Many news reports fail to understand the legal and theological distinctions between a diocese, a parish, a Catholic school, and other Catholic institutions like a cemetery. Those organizations are canonically distinct, and almost always distinct in civil law as well. Bishops don’t control the cash of most organizations within their jurisdiction – and for theological reasons connected to the Church’s basic self-understanding.” the media outlet stresses.
Was this point ignored by the Associated Press in publishing the investigation? Is there information on this? According to The Pillar, “The Vatican has insisted for more than a century that U.S. Catholic bishops ensure the legal and financial organization of Catholic institutions reflect Catholic theology, and that distinct realities are not treated in law or practice as a single organization.” This point was never mentioned in the agency’s research work.
Another point that the Associated Press inadequately addressed is how money is handled in the dioceses.
For example, in one part of the investigation, they state that “as the pandemic began to unfold, scores of Catholic dioceses across the U.S. received aid through the Paycheck Protection Program while sitting on well over $10 billion in cash, short-term investments or other available funds, an Associated Press investigation has found. And despite the broad economic downturn, these assets have grown in many dioceses.”
But the agency failed to mention that there are significant legal restrictions on how money can be spent within the Church.
For example, the Associated Press article “reported that the Archdiocese of Chicago “had more than $1 billion in cash and investments in its headquarters and cemetery division as of May” while “Chicago’s parishes, schools and ministries accumulated at least $77 million in salary protection funds.”
But even though the archdiocese is a “corporation sole,” thus centrally managing all archdiocesan institutions and revenues, “the archbishop, Cardinal Blase Cupich, cannot, under canon law, divert money held by the archdiocese away from the express purpose of maintaining Catholic cemeteries in perpetuity. Nor could he legitimately take seminary money and use it for a parish project. If he did, the Vatican would invalidate the action upon appeal.” In other words, even if some institutions or organizations of the Church have sound finances, it is not possible to divert those funds to a struggling institution. This is the same principle under which public offices operate.
The AP report, according to The Pillar’s response, suggested that an archdiocese like Chicago could “raise capital by selling bonds to investors,” and cited a Moody’s assessment where it was explained that “the $1 billion in cash and investments held by the archdiocese headquarters and cemeteries division could cover about 631 days of operating expenses.”
That is factually wrong because the Church sets strict legal limits around how cemetery funds can be leveraged because it considers their perpetual maintenance a sacred responsibility whereby, canonically, it is not possible to use that money for other purposes. “Endowments established for that purpose are, according to canon, to be deposited in a safe and separate account and “cautiously invested” only for the benefit of the foundation.” The Pillar explained.
In another part of the investigation, the Associated Press commented that churches were exempted from the requirement of having fewer than 500 employees to receive state grants.
The story states, “After Congress let nonprofits and religious organizations participate in the first place, Catholic officials lobbied the Trump Administration for a second break. Religious organizations were freed from the so-called affiliation rule that typically disqualifies applicants with more than 500 workers.”
“Without that break, many dioceses would have missed out because — between their head offices, parishes, schools and other affiliates — their employee count would exceed the limit,” says the article.
However, this is also a dubious claim since, as explained in The Pillar’s response, “While a “diocese” may appear to employ thousands of people, the canonical reality is that a teacher in a Catholic school and a lawyer in the chancery do not work for the same entity.”
“What the AP called an “exemption” was really just clarity on basic corporate law. Parishes, dioceses, and other Catholic institutions are separately incorporated in civil law. But as PPP rules were being written, it became clear that Catholic entities in proximity to each other, which sometimes have contractual relationships allowing them to centralize infrastructure, were in danger of being inaccurately counted by the Small Business Administration (SBA) as one organization,” explained JD Flynn, editor of The Pillar, for National Review.
“Lobbyists for the U.S. bishops’ conference intervened with the SBA to explain that the separate civil organization of Catholic institutions wasn’t just a legal fiction, but was, in fact, a reflection of the Catholic Church’s theological and canonical self-understanding,” he added.
Since the vast majority of Catholic dioceses operating in the United States do not operate under the legal form of a “corporation sole”, they do not have control over all the assets of the diocese. Although there may be thousands of employees among seminaries, parishes, the diocesan curia, universities, hospitals, among other institutions, these often have a separate legal personality. Dioceses themselves control far fewer assets than they appear to, so most have no more than 500 employees. The Pillar explains that “while a “diocese” may appear to employ thousands of people, the canonical reality is that a teacher in a Catholic school and a lawyer in the chancery do not work for the same entity.”
In short, the Associated Press article, while not making false claims about the aid given to Catholic institutions, does overlook how the money is managed or how the organization itself functions and does not seek to cross-check sources for an alternative explanation of the situation. This exposes, in the end, an ideological bias in his report that forms a wrong and negative matrix of opinion towards the Church. Or, in Flynn’s own words, a “lurid and soft-core anti-Catholicism”.