Milwaukee Lawsuits Shadow New York Archbishop

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MILWAUKEE (CNN) — He’s the top Roman Catholic figure in the United States, the head of the U.S. Conference of Catholic Bishops and one of the princes of the church who will decide on a new pope.

But Cardinal Timothy Dolan, the archbishop of New York, is now under fire for how his old archdiocese in Milwaukee shifted money as it faced lawsuits by victims of sexual abuse by priests in Wisconsin.

Dolan sat for a deposition with lawyers for some of the victims on Wednesday, the New York archdiocese confirmed. He was Milwaukee’s archbishop from 2002 to 2009, a period in which the archdiocese moved $55 million into a fund for cemetery maintenance and as much as $74 million to a fund for individual parishes.

Dolan “made a conscious decision to secretly and in a quite sinister way to move funds into parishes and transfer funds into other corporations to avoid having to pay the survivors,” Jeff Anderson, a lawyer for some of the abuse victims, told CNN.

Dolan declined an interview with CNN for this report. But in a 2011 interview with a New York television station, he called the allegations “ludicrous.”

But the Rev. Jim Connell, the former vice chancellor of the Milwaukee archdiocese, said the church needs a directive from the very top to come clean.

“There is a sense of secrecy from a top level,” said Connell, now retired. “And I would hope that starting with the holy father, Benedict XVI, he would tell the cardinals and tell the bishops to talk.”

The worldwide church has spent years dealing with the fallout from its handling of priests accused of sexually abusing children, and Anderson said the Milwaukee archdiocese “has been particularly deceitful.” Wisconsin state law blocked lawsuits by most victims of sexual abuse for years, which protected the church. When that changed, lawyers for the victims say, the archdiocese began preparing for court by moving its money.

The archdiocese declared bankruptcy in 2011 when faced with lawsuits by hundreds of potential victims. In December, a bankruptcy court judge found that the timing of the 2005 transfer to the Parish Deposit Fund appeared “fishy,” but ultimately decided that the move was justified: The money belonged to individual parishes, not the Archdiocese of Milwaukee, Judge Susan Kelley ruled.

A creditors’ committee pointed to minutes from a 2003 meeting of the archdiocese’s finance committee that discussed whether to set up a fund to “shelter” the Parish Deposit Fund. But Kelley said that sentence “does not necessarily constitute the smoking gun” that proves the church was trying to shield money from the victims.

Church officials argued the $55 million transfer to the cemetery fund, in 2007, was needed and came from people who paid for burial plots in eight Catholic cemeteries, expecting perpetual care for the grave sites.

“The obligation to maintain the cemeteries never ends,” said William Duffin, an attorney representing the cemetery fund. “No one knows for sure how much is enough.”

Kelley has yet to rule on the question of whether the transfer to the cemetery fund was proper. But Marquette University law professor Ralph Anzivino said that if the archdiocese was moving money around to hide it from abuse victims, it may have broken the law.

“That is what’s called a fraudulent conveyance under the law,” Anzivino said. “You can’t, in anticipation of insolvency, transfer assets away from yourself for your own benefit and lessen what the creditors are entitled to.”

A win for the victims could mean that they would not only get a share of the cemetery trust fund, but a share of future earnings from the sale of grave sites. A win for the church could lay out a blueprint for the other dioceses now grappling with lawsuits themselves and could cement Dolan’s reputation in the eyes of the Vatican as the guardian of the American church.

Dolan is among the cardinals who will choose a new pope after the resignation of Benedict XVI. The cardinal himself was a 33-1 longshot for the papacy as of last week, according to one British bookmaker.

Milwaukee’s Chapter 11 proceedings already have led to the discovery that in 2003, he approved payments of $20,000 to get abusive priests to leave the church. The Milwaukee archdiocese confirmed that it had offered the payoffs as “the most expedient and cost-effective way” to get rid of molesters.

The Survivors Network of those Abused by Priests urged Dolan to allow his Wednesday deposition to be open to the public rather than placed under seal: “The 570 victims of priest sex offenders who filed cases, Catholics of the Milwaukee Archdiocese, and the public deserve to read and see Dolan’s testimony.”

And they’re not the only ones calling for openness. Connell said the church needs to “open up, let it all be known.”

“It’s the love of money that translates into greed, that is the root of all evils,” Connell said.

“And that seems to be what I see is playing out in this situation.

“What’s under the lid?” he asked. “What’s being hidden? How embarrassing can it be?”