Render Unto Rome (54 page)

Mahony’s lawyers used the term “formation privilege” as shorthand for the religious freedom argument by which that archdiocese shielded sex offenders’ files.
Los Angeles Times
reporters Jean Guccione and William Lobdell, who covered the legal saga with tenacious intelligence, wrote in 2004:

The archdiocese asserts that the privilege stems from a bishop’s ecclesiastical duty to provide a lifetime of formative spiritual guidance to his priests. As claimed by the archdiocese, the privilege would require that sensitive communication between a bishop
and his priests involving counseling—including documents relating to sexual abuse of minors—be kept confidential.

Any action by the state to breach that privilege would violate both state law and the state and federal constitutions’ guarantee of religious freedom, the archdiocese’s attorneys argue.
⁴⁴

Anderson scoffed, “This kind of assertion of a First Amendment privilege has never succeeded elsewhere. Mahony is putting his fingers and toes in a big dyke, but he can’t keep plugging the holes.”
⁴⁵

Mahony had borrowed a page from the Vatican playbook. Archbishop Tarcisio Bertone, a top canon lawyer at the Congregation for the Doctrine of the Faith, asserted in 2002, “If a priest cannot confide in his bishop because he is afraid of being denounced it would mean there is no more freedom of conscience. Civil society must also respect the ‘professional secrecy’ of priests.”
⁴⁶

Bertone was a Salesian. His comments were utterly consistent with the order’s concealment of sex offenders in Jeff Anderson’s experience. Bertone had left the CDF in 2003 to become archbishop of Genoa, gaining administrative experience to help him rise in the apostolic succession. On June 23, 2006, Pope Benedict named Cardinal Bertone to succeed Sodano as secretary of state.

Only later did the news emerge that while in Genoa, Bertone had written a celebratory preface to the 2003 Italian edition of Father Maciel’s book-length interview,
Christ Is My Life
—a last-ditch effort at defending himself in the congregation where Bertone had previously worked.
Christ Is My Life
appeared some months before Ratzinger ordered the investigation. “The answers that Father Maciel gives … are profound and simple and have the frankness of one who lives his mission in the world and in the Church with his sights and his heart fixed on Christ Jesus,” wrote Bertone. “The key to this success is, without doubt, the attractive force of the love of Christ.”
⁴⁷

When Bertone’s endorsement surfaced in 2010, Maciel’s two grown sons had given an hour-long radio interview to Carmen Aristegui, a leading journalist in Mexico City, claiming he had abused them as boys and that meetings with Legion of Christ officials had disclosed, alas, that Maciel’s estate was empty. By then, Secretary of State Bertone and Cardinal Levada were waiting for five bishops from as many countries to deliver
reports of their investigation of the entire religious order, a move without precedent in modern church history.
⁴⁸

CLOSING THE DEAL IN CALIFORNIA

As Ray Boucher pushed his counterpart Mike Hennigan to embrace an aggregate settlement exceeding $600 million, all of the attorneys with cases in the Clergy 2 grouping saw Cardinal Mahony’s role as strategic if they were to prevail. Mahony was being battered in the media (the
New York Times
and
Los Angeles Times
, in disgust at his recycling of pedophiles, called on the cardinal to resign), but the lawyers knew that to close the deal, they needed Mahony on the job, threading the tightrope between insurance companies and the religious orders, particularly the Salesians, who would have to contribute funds for the settlement packages to come together. For all of their clients’ fury at the long delays, the lawyers realized that attacking Mahony as author of a cover-up undercut their interests. As Steve Rubino put it: “If a lawsuit says that negligence causes an injury, that’s a covered claim. But if proof comes out that these were intentional acts, a cover-up, the carriers don’t have to pay. We knew as we prepared these cases, that if we
went to trial
and aggressively argued cover-up, we’d walk right out of coverage: no deep pocket. And we knew Mahony did not have the assets to pay the full value”—which Boucher was pushing for an average of $1.4 million per case.

Jeff Anderson suggested they find a way for Mahony to meet some survivors. As part of this strategy, Boucher hired a producer to film interviews with the clients, edit their testimonies with the reflections of parents or spouses, intercut the memoir sequences with news footage where possible, and provide DVDs of the ten-minute profiles to Mahony and the judges overseeing the mediation process, as a way of turning “clients” and “survivors” into actual people whose stories would inject pathos and real-life issues into the legal mix.

“I’ve met a very large number of victims,” the cardinal told me in our 2005 interview. “I’ve also looked at the taped interviews the plaintiff attorneys here have developed. Dozens of interviews on DVD. I’ve listened to those, every single one of them. They just cause you to cry. You simply are in disbelief at what has happened to the lives of these people. It has been a very humbling experience. Spiritually, I was absolutely at the
bottom, which means total vulnerability to God’s grace. And I began to realize that this is the ministry Jesus Christ is asking of me and others at this time, to repair the damage, to make sure it won’t happen again.”

Boucher, at a dinner with Mahony and counsel Mike Hennigan in the cathedral rectory, insisted that the settlement numbers for the 554 claims go well north of $600 million, using $1.4 million per victim as the gauge. He knew his counterparts were in a mosh pit with the insurance lawyers. Subsequently, Hennigan suggested they divide the L.A. group into two sequences—one small, one large. For Mahony’s planning, they had to cut the first deal before the end of 2006, and give the cardinal some time to corral the rest of the money. On December 1, 2006, the archdiocese agreed to $60 million for forty-five plaintiffs. These cases involved the most recent perpetrators, post-1985, when the archdiocese was self-insured, and the earliest cases, when it had little or no insurance. Mahony announced that $40 million had come from “funds we set aside last year,” money from religious orders and limited insurance payments.
⁴⁹

Most of the trial lawyers, like Jeff Anderson and Steve Rubino, had been working on these Orange diocese and northern California cases for four and a half years, bearing the cost of hotels, meals, and paralegal help; the long flights between LAX and Minnesota or New Jersey also were a drain on time with their families. As cases settled and clients were paid, the attorneys who carried large loans for the relentless work began repaying their banks, which gave them some breathing room. In the final payout, they stood to pull in fees in the range of $25 million each, if the archdiocese met the target Boucher had set for some 500 remaining cases.

Although the Supreme Court had refused to hear Mahony’s appeal on the so-called formation privilege, Hennigan had delayed the documents’ release by arranging for a retired judge to read the voluminous files and decide what should be disclosed. Survivors like Manny Vega wanted Mahony to stop hiding the files. The lawyers saw the cardinal scrambling for money.

“Mahony wanted to settle from day one, but the documents got in his way,” said Rubino. “He had a delicate balance between cooperating with carriers and not turning over files that would kill your defense. Insurance carriers kept threatening to pull.”

Near the end of 2006, Boucher got Hennigan and Mahony to agree on $660 million. “The church had a budget for the number of diocesan cases,
and the ones with religious orders,” Boucher told me. “I think Hennigan was right that the carriers should have put up more. The handful of major religious orders had adequate resources to cover their obligations, but the archdiocese did not have a buy-in with them as yet … Mahony went to Rome to get approval.”

At the Congregation for the Clergy, he needed the approval under canon law to alienate church property at a level far greater than did Boston’s O’Malley, who faced an $85 million hole in 2003. Benedict had appointed a new prefect, Cardinal Cláudio Hummes, a Franciscan prelate from Brazil. In an interview with John Allen of
National Catholic Reporter
several months after the settlement was announced, Mahony said, “Of our total settlement, we’ve only needed to get permission to alienate $200 million … Cardinal Hummes particularly has been extremely helpful.” Mahony told Allen that he had met with Cardinal Franc Rodé, prefect of the congregation that governs religious life, in May 2007. Rodé, a Slovenian who had spent time in a World War II work camp, was one of the more reactionary figures in the Curia, hostile to Vatican II. Rodé ordered a 2010 Vatican investigation of American nuns, the questionnaire for which sought information on their financial holdings, which most of the sisters’ superiors ignored. Rodé was a great friend of Maciel’s and utterly loyal to Legionaries. Two weeks after the July 15, 2007, settlement was announced in Los Angeles, Cardinal Rodé took a vacation in sunny Cancun, Mexico, courtesy of the Legion, according to a Legionary priest. In the ornamental language on which cardinals thrive, Mahony told Allen that Rodé “gave us the key principle … He said the religious institutes must bear full responsibility for their members, and the dioceses for their members. He said that’s the only formula that’s going to work, and that’s the formula we’ve been following.”
⁵⁰

Of course, it was Mahony’s formula all along. Boucher continued: “He came back from Rome with the authority to settle the cases at the amounts we set, and to apply pressure on the religious orders. The orders had to come up with about $200 million. The Salesians were the worst offenders—the most callous, the least apologetic, the most repellent.” In early July, Boucher watched from across Hennigan’s office as Mahony worked the phones. “He was dialing for dollars with the religious orders.”

But for religious orders to pledge $200 million did not mean they could
deliver cash on the barrel: property sales and aggregation of assets take time. In the meantime, the archdiocese had to write the check.

HOW MAHONY RAISED THE MONEY

The cardinal who five years earlier had opened a $190 million cathedral was scrambling for hundreds of millions to satisfy the abuse survivors’ claims. Having spent a fortune in legal fees to prevent the release of clergy files, and the real possibility of his own indictment, Mahony did not have access to the $200 million for which, he told John Allen, the Vatican gave him “permission” to raise via alienation of property. That would include cash reserves and liquid assets. He had already committed $60 million seven months earlier, resolving the first sequence of cases. “By our estimate, he didn’t have access to more than $40 million in liquid assets,” said Steve Rubino. “We got trial dates in 2006 to push the negotiating toward conclusion. A certain judge I bumped into at Starbucks told me Mahony was in Rome—raising money. He had to have gotten at least $100 million in Rome to pull it off.”

According to a
Los Angeles Times
analysis:

More than $114 million has been promised in previous settlements, bringing the total liability for clergy misconduct in the Los Angeles Archdiocese to more than $774 million. The figure dwarfs the next largest settlements in the U.S., including those reached in Boston, at $157 million, and in Portland, Ore., at $129 million.

Hennigan said the archdiocese expected to pay $250 million in cash, with the balance coming from insurers and religious orders.
⁵¹

The archdiocese borrowed $175 million from the Allied Irish Bank in securing the settlement funds.
⁵²
Boucher said he got wind of AIB involvement in spring 2007; although he had no proof, he suspected that the Vatican provided a loan or pass-through support via AIB to the archdiocese. Allied Irish Bank, a registered company in the Republic of Ireland, was formed in 1966 through the merger of three different Irish banks. The firm branched into the United States in the 1980s. AIB helped the archdiocese build the Cathedral of Our Lady of the Angels. “The funds for the
[mausoleum] construction were borrowed from the archdiocesan cemeteries with the assistance of the Allied Irish Bank,” according to a history of the cathedral.
⁵³
AIB’s “core business in America” has been “funding not-for-profit institutions. AIB ‘banks’ 45 of 194 Catholic dioceses and archdioceses,” according to the
Irish Times
.
⁵⁴

Eight months after the settlement the archdiocesan newspaper,
The Tidings
, cited “a bank loan of $175 million and liquidated investments worth $117 million. The administrative office was facing a $12 million deficit.

The $175 million bank loan is expected to be partially repaid with proceeds from the sale of up to 51 archdiocesan properties (estimated at $107 million). The balance remaining at the end of the loan term in 2011 is estimated at $50 million; this amount may have to be refinanced …

The loss of this income, as well as the interest on the bank loan and the interest on the settlement guarantee, means that the Administrative Office will incur a budget deficit of approximately $12 million a year.
⁵⁵

Cardinal Mahony denied an interview request for this book. The archdiocesan spokesman, Tod Tamberg, declined to discuss Allied Irish Bank. Mahony’s approach to the funding crisis for abuse cases stands out in high relief from his counterpart down Interstate 5 in the San Diego diocese. As the settlements there reached an impasse, the judge set a trial date. Bishop Robert Brom had his attorneys file for Chapter 11 protection from bankruptcy in order to halt the trial and presumably bargain down the opposition. Judge Louise DeCarl Adler ordered an independent audit of its assets by a forensic accountant, former FBI agent R. Todd Neilson. San Diego, the fifth-largest diocese in the United States, had vast property holdings. Neilson discovered that the diocese had claimed its ninety-eight parishes as assets in applications to banks and bond markets, but excluded them for Chapter 11 protection. He noted that after the bankruptcy filing, an auxiliary bishop authorized $69,963 in checks from a special foundation to a parish deacon who “supposedly transferred the funds to an individual … who had expertise in importing and exporting goods from Colombia”—to help a poor parish in Colombia. “An additional $23,000
was also disbursed,” Neilson continued in dry prose, “but the Expert has not received any supporting documentation.”
⁵⁶