At a time of heightened national awareness of the problems of child abuse, the Catholic Church in the United States continues to ignore and cover up cases of priests who sexually molest children, according to court records, internal church documents, civil authorities and the victims themselves.

Church officials insist that a notorious 1985 Louisiana case in which a priest molested at least 35 boys has taught them to deal firmly with the problem. But a three-month Mercury News investigation reveals that in more than 25 dioceses across the country, church officials have failed to notify authorities, transferred molesting priests to other parishes, ignored parental complaints and disregarded the potential damage to child victims.

To the devastated families, to the lawyers who are suing the church and to Catholics who are pushing for a national church policy, the church's reluctance to address the problem is a time bomb waiting to detonate within American Catholicism. Millions of dollars in damages already have been paid to victims and their families, and one 1986 church report estimated that the church's liability could reach $1 billion over the next decade.

''The sexual molesting of little boys by priests is the single most serious problem we've had to face in centuries," said Father Thomas Doyle, a Dominican priest and canon lawyer who tried for two years to force the U.S. Catholic Conference to deal with the issue.

''I don't say that because of the numbers of priests involved. There are 53,000 priests in this country, and I have concrete knowledge of 200 cases or less. But when people perceive the church is covering up, condoning and stonewalling, they are doubly scandalized."

Local responsibility

National and local church officials say they haven't adopted uniform nationwide procedures for molestations by priests because they believe such cases are more appropriately handled by local dioceses. And the officials say that since the 1985 conviction of Father Gilbert Gauthe in Lafayette, La. — and the payment of $12 million to his victims — the bishops of the nation's 185 dioceses and archdioceses have become more knowledgeable, more sensitive and faster to act.

''We have dealt with it on a national level as far as education and planning go," said Archbishop John L. May of St. Louis, president of the National Conference of Catholic Bishops. "We've had meetings with our legal people, our insurance people, our psychological people, usually regionally, and tried to give each diocese all it needs from an educational and doctrinal standpoint.

''But because we have 185 dioceses of different sizes in different regions in different states where laws differ, we've decided to leave it to the local judgment of each diocese to handle the cases themselves."

Twelve Western dioceses and archdioceses, including those in Northern California, are developing written guidelines on how to handle cases involving molestation by priests. They formed their own liability insurance company last summer, largely because the dioceses had no coverage if they were sued by parents of molested children.

Although officials said that none of the 12 dioceses has ever paid more than $250,000 in a claim, they acknowledge two South Bay cases in recent years. A Fremont priest resigned in 1982 after being accused of fondling eight girls, and before 1981, an unidentified Santa Clara County priest was sent away for psychiatric treatment for sexual attraction to children and since has returned to the San Jose diocese.

However, many dioceses have been reluctant to deal with the problem despite multimillion-dollar settlements paid by the church across the country.

Cases nationwide

Court records and sworn testimony in civil and criminal cases examined by the Mercury News involving 35 priests in dioceses from Spokane to Orlando over the past five years — most of them occurring after the Louisiana case — show that, in one or more cases, church officials have:

Ignored parental complaints that a child has been molested.

Failed to inform authorities, even though most states have laws requiring that such complaints be passed along to police or child welfare agencies.

Transferred the offending priest to another parish or other church-owned facility, such as a hospital or school, without warning parents in the new location of the trouble in the old parish and, often, without even requiring the priest to stay away from children.

Refused to help priests who have asked for psychological help.

Attempted to discredit parents who complained even when parish officials knew of earlier complaints against the priest in question.

Fought, usually with success, to make sure that the files in civil lawsuits against the church are sealed and that settlements remain secret even after the payment of millions of dollars in claims.

Failed to seek out probable victims and declined to turn over files containing information about accusations of other molestations to attorneys suing the church.

Tragic results

Court records and interviews show that these actions have resulted in bitterness for parishioners, psychological damage to victims, huge settlements, a growing public relations problem and a new legal specialty — lawyers who sue the church in molestation cases. Perhaps most important, additional victims have been molested because the church failed to act.

Last year, one distraught mother told a Los Angeles County sheriff's deputy that Father John Salazar, her parish priest and a parochial-school teacher, had sodomized her 13-year-old son. Salazar pleaded guilty to two felony counts of molestation and was sentenced to six years in prison.

The Servants of the Paraclete order began treatment in 1976 for pedophilic priests at its hospital in Jemez Springs, N.M. Photo by Michael Heller — Special to the Mercury News.

However, in compiling the case against him, Los Angeles County authorities learned that officials in the Los Angeles archdiocese had been confronted with a similar allegation against Salazar three months earlier by another distraught mother of a boy at Santa Teresita Catholic School.

''There was at least one more victim because the church didn't do anything," said prosecuting attorney Kenneth Wullschleger.

Testimony outraged father

In Florida, Charles R., the father of a 12-year-old girl fondled by a priest in 1983, was outraged by testimony that the same priest had been accused of fondling two other girls six years earlier.

''Their attitude toward a child molester is no different than that of an alcoholic," he said in an interview. "If he's not causing a problem — by that they mean a public relations problem — they do nothing. If he's causing a problem, they move him to another parish."

In Idaho, law enforcement officials were dismayed after receiving the 1984 pre-sentence report of Father Mel Baltazar, chaplain at a Catholic hospital in Boise. The report said Baltazar had been kicked out of one diocese after more than 20 years because of complaints that he was having sex with young males.

''My client was the first to complain to outside authorities," said Boise attorney Rudy Barchas, who sued on behalf of one of the boys whom Baltazar had met at the hospital and molested at the boy's home while his parents were away. "It turns out that it doesn't do you any good to complain to the church."

Mark Chopko, general counsel of the U.S. Catholic Conference, and other top church officials stressed that under canon law each diocese or archdiocese in the United States answers directly to the Vatican, so that complaints against "the church" are more properly directed to a bishop or archbishop.

And they say steps have been taken by dioceses around the country to respond responsibly.

In Portland, Ore., church officials say they thoroughly investigate every complaint, even anonymous letters. Dioceses in Jackson, Miss., and Orlando, Fla., both hit by lawsuits claiming molestations by priests, have adopted strict written procedures to make sure that molestation complaints are received quickly at diocesan headquarters. In the 12 Western dioceses, officials say their guidelines will set in motion policies for immediately reacting to complaints or suggestions of a molestation problem.

Concerned with image

But Doyle and others point to dioceses where they say bishops were concerned only with the image of the diocese and not with the welfare of any of the victims.

When the actions of such dioceses come to light, church officials often lash back at their accusers as being anti- Catholic. But the complaining parents are almost always Catholics themselves, and often so are the lawyers, prosecutors and police officers who investigate.

''Several months after we got into the case, my partner would tell me these things were going on, and although I believed him, I'd give the church — my church — the benefit of the doubt," said Charles E. Davis., a Catholic attorney from Orlando who sued his own diocese on behalf of two boys molested by a priest.

''Finally, I realized this was a cover-up that went all the way to the bishop. It's one thing to have a bad priest. It's another thing to have the whole hierarchy corrupt. And I told my wife: We will no longer go to a Catholic church."

A report on the severity of the problem and a plan for dealing with it was presented to the leadership of the Catholic Church in the United States two years ago. One of the authors was Doyle, who was serving in the Vatican Embassy in Washington, D.C., when the Gauthe case came to light. Gauthe's molestations had been known for at least nine years to the Lafayette, La., diocese, which handled the problem by transferring the priest from parish to parish at least three times.

Not confined to Louisiana

Doyle became concerned because he knew that such an approach wasn't confined to Louisiana. He joined forces with two other Catholics: F. Ray Mouton Jr., a Lafayette defense attorney retained by the diocese to defend Gauthe, and the late Father Michael Petersen, a priest and psychiatrist who founded Saint Luke Institute in Suitland, Md., a Catholic-owned psychiatric hospital that treats priests with alcohol and drug addictions and sexual disorders, including pedophilia — sexual attraction to children.

The three prepared a confidential, inch-thick report for consideration by the National Conference of Catholic Bishops at its 1985 annual meeting in Collegeville, Minn. Their report proposed that the national hierarchy of the church set up a crisis management team to deal with the problem anywhere it arose in the United States.

The team would ensure that the offending priest was removed from his duties and that he was institutionalized for long-term therapy. The team also would go to the parents of all the child victims, not just to those who originally had complained, and encourage them to take the children to a psychological counselor with experience in the field of child molesting — and offer to pay the bills. These steps, the men believed, would minimize the psychological damage to the child victims, result in treatment for pedophilic priests, lessen the amount the church would ultimately pay in lawsuits and eventually lower the number of molestation cases. One goal, they wrote, was to "maintain, preserve and seek to enhance the credibility of the church as a Christian community."

The three envisioned themselves as leading this crisis management team, which they said needed a canon lawyer, a psychiatrist and an attorney. Mouton offered to give up his law practice — and told the church he would accept half of what he has been earning as a private attorney.

Huge liability

To dramatize how serious they considered the problem to be, they warned that the church's liability during the next 10 years could exceed $1 billion. They predicted, correctly, that the church's liability insurance would be rewritten so that it would not cover damages claimed in cases of sexual molestations.

The report warned that the law in most, if not all, states, required that suspected child molestation be reported to authorities and added that allowing a pedophilic priest to remain in his duties could be considered criminal neglect of the welfare of children.

It outlined for the bishops the "devastating effects" sustained by child victims and warned that such cases create an "image of the church as a haven for homosexuals and sexual perverts" and recommended that church officials deal with the child victim's family and the public in a straightforward manner.

But the crisis management team was never formed. The report was not widely distributed at the bishops' meeting, and although it was discussed, it was not put on the agenda for a vote. In June 1986, Mouton resubmitted the recommendations, this time to the U.S. Catholic Conference, the bishops' administrative arm. Again, the proposal languished.

''It was perceived that this would be setting up an expensive structure that wouldn't have changed the way individual dioceses handled these cases one bit," said Chopko, the general counsel of the U.S. Catholic Conference. The first complaints from parents still would go to local clergy, Chopko said, and it is they who must be educated to treat initial molestation reports seriously.

Chopko and other church officials also said that the church did not know about the extent of this problem until the last two or three years.

Treatment centers

Yet over the past decade, the church has established treatment centers to deal with cases of priests who repeatedly commit molestations. The Servants of the Paraclete order in New Mexico added a wing for pedophilic priests to its New Mexico hospital for alcoholic priests in 1976. Saint Luke Institute was founded in 1981. Houses of Affirmation around the country, where troubled priests are sent, have retained psychologists trained in treating pedophilia.

''These cases were like an earthquake shocking them out of medieval practices regarding sex," said Dr. John Money, co-director of the sexual disorders clinic at Johns Hopkins University medical school.

In recognizing pedophilia as a disease — even if only behind the scenes — the church effectively has revised the Vatican position on sexuality, Money said. Historically, the church has treated sexual orientations that it disapproves of as sins, rather than acknowledging that they may be present from birth.

In the 1985 report to the bishops, Petersen cited evidence showing that a predisposition to pedophilia might be inherited. "If and when this biological basis for human and sexual behaviors becomes more accepted scientifically," Petersen wrote, "the Roman Catholic Church is going to have to look very hard at our current constructs in moral theology and reassess some of our basic 'statements,' which have been codified and accepted without question for many years, if not centuries."

Whatever their reasons, the bishops never adopted the recommendations in the report.

No national policy

''Thus, this church, which loudly proclaims uniform positions on significant sexual issues relating to the creation of children, did not deem this issue — the sexual abuse of children by its own priests — to be worthy of consideration," Mouton said.

And absent a national policy, the molestings — and the cover-ups — continue.

''I got a call from a nun today in Missouri who's got a priest doing this stuff to kids," Doyle said in an interview this fall. "And she can't get anywhere with the bishop. She doesn't know where in the church to turn."