Tax-exempt Catholic Church has received at least $1.4 billion in tax-funded pandemic relief
11 July 2020
This isn't the kind of news Republican Sens. Susan Collins and Marco Rubio want to see about the continually problematic Paycheck Protection Program (PPP) they got into this spring’s coronavirus relief bill: The U.S. Roman Catholic Church got at least $1.4 billion in those loans "with many millions going to dioceses that have paid huge settlements or sought bankruptcy protection because of clergy sexual abuse cover-ups." (Disclosure: Kos Media received a Paycheck Protection Program loan.)
The AP has found that the Catholic Church got between $1.4 billion and at least $3.5 billion from the program, split among at least 3,500 forgivable loans to dioceses, parishes, schools, and other church programs. The report found that the church, by "aggressively promoting the payroll program and marshaling resources to help affiliates navigate its shifting rules," became the biggest winner of all from the PPP loan programs. The legislation made an allowance for faith groups and other nonprofits to get the loans, which, being tax-payer funded, are not normally available to religious organizations because of the relief assistance they provide. That was to make sure that home health programs, food distribution centers, counseling services, that kind of thing, would continue. They didn't only benefit from this relaxation of rules, they lobbied hard with the administration to allow them to circumvent the rules in the program that disqualified applicants that had more than 500 employees. They got that "preferential treatment," as AP says, in the form of an exemption on the employee requirement.
"The government grants special dispensation, and that creates a kind of structural favoritism," one expert on religion and constitutional law, Micah Schwartzman, a University of Virginia law professor, said. "And that favoritism was worth billions of dollars." And likely worth billions more than even AP's analysis uncovered. The AP found about 3,500 loans, but the Diocesan Fiscal Management Conference found that about 9,000 Catholic entities got loans in a survey of financial officers. The loans made by the Small Business Administration under $150,000 haven't been disclosed, so many smaller churches and church programs that got these loans weren't included in the information AP reviewed.
But here're some of the loans that were disclosed: The top executive offices of the Archdiocese of New York got 15 loans worth at least $28 million for whatever it does besides cover up child sexual abuse. Also in New York, St. Patrick's Cathedral got at least a $1 million. A $70 million brand new "sparkling glass cathedral" in Orange County, California got at least $3 million in four separate loans. And this: "a loan of at least $2 million went to the diocese covering Wheeling-Charleston, West Virginia, where a church investigation revealed last year that then-Bishop Michael Bransfield embezzled funds and made sexual advances toward young priests."
In the fiscal year ending in June 2019, AP reports, Catholic dioceses and orders paid out $282 million in settlements and legal costs in thousands of abuse cases. There were almost 4,500 reports of abuse that year. About 40 of the dioceses who received these PPP loans are among those who've paid out millions over the last few years in victim settlements and in bankruptcy proceedings. These several dozen dioceses got at least $200 million in loans. These loans are 100% forgivable. It's unclear if they can use that money to recompense themselves for all the money they spent lobbying to get the loans.
Just one archdioceses, Los Angeles, spent $20,000 lobbying Congress to make sure that nonprofits and churches could get the loans. Catholic Charities USA spent $30,000 lobbying for it, and in return it and its member agencies got more than 100 loans, from $90 million to at least $220 million. Again, many of these charities are doing important relief work in this crisis, but whether these tax-exempt institutions should be getting taxpayer money to do that relief—given the net worth of all of the arms of the church—is a big question.
Marci Hamilton, a University of Pennsylvania professor and attorney who has represented clergy abuse victims, says it's a big problem and a further erosion of the First Amendment's wall between church and state. The political divide over religion is growing, Hamilton says. "At this point, the argument is you're anti-religious if in fact you would say the Catholic Church shouldn't be getting government funding."