Archdiocese Incorporates Most Parishes As Nonprofits

By Olivier Uyttebrouck
The Abq Journal
January 6, 2014

http://www.abqjournal.com/331631/news/parishes-become-nonprofits.html

The Cathedral Basilica of St. Francis of Assisi in Santa Fe. The Archdiocese of Santa Fe has incorporated most of its parishes as nonprofits over the past year. (Adolphe Pierre-Louis/Albuquerque Journal)

The Archdiocese of Santa Fe has incorporated most of its 92 parishes as nonprofits over the past year – a strategy used by some U.S. dioceses seeking legal protection from sexual abuse lawsuits.

The archdiocese’s action follows those of neighboring dioceses that have incorporated parishes in recent years, including the Diocese of Las Cruces, and the Arizona dioceses of Phoenix and Tucson.

Officials with the Archdiocese of Santa Fe have said the incorporations are an attempt to “describe each parish as a unique civil entity,” but have provided little information about the purpose of the action.

James Stang, a Los Angeles attorney who has represented victims of clerical sexual abuse in bankruptcies filed by six U.S. dioceses, said some dioceses have incorporated parishes in an attempt to shield parish assets from claimants in sex abuse lawsuits.

“If they are separately incorporated entities, the parish can say they have no responsibility for abuses at another parish,” Stang said.

Incorporation is an attempt to “create distance” between a diocese and its parishes, he said.

“What (dioceses) try and do is create an image, or an impression, that there is less centralized control because they’re trying to protect the parish assets,” Stang said.

The Archdiocese of Santa Fe and its attorney, Robert Warburton of Albuquerque, did not respond to the Journal’s requests for comment.

The Archdiocese of Santa Fe incorporated most of its parishes from November 2012 through April 2013, according to records filed with the New Mexico Secretary of State.

It also formed a nonprofit called the Archdiocese of Santa Fe Real Estate Corporation in December 2012, state records show.

The archdiocese faces at least 18 lawsuits filed by unnamed men ranging in ages from their late 30s to mid-50s who allege that, as teenagers, they were sexually abused by priests at parishes throughout northern New Mexico.

Of those, 16 of the lawsuits identify the Rev. Michael O’Brien, who pastored at churches in Ranchos de Taos, Mora, Las Vegas and Questa from 1977 to 1989. O’Brien died in 1993.

In two other lawsuits, a man and a woman, both unnamed, allege they were sexually abused by the Rev. Walter Cassidy, who served at parishes in Albuquerque, Taos and Mora. He died in 1994.

All 18 lawsuits were filed in state District Court in Albuquerque from April through June, said Albuquerque attorney Brad Hall, who filed the lawsuits.

Hall said he doesn’t know how the archdiocese’s decision to incorporate parishes might affect the lawsuits. “We’re just getting started on this litigation,” he said.

The Diocese of Tucson incorporated its parishes as nonprofit corporations in 2005, about a year after the diocese filed for Chapter 11 bankruptcy reorganization in response to sexual abuse lawsuits.

Church officials in Tucson provide a candid explanation for the action on the diocese’s website, saying that incorporation offers parishes “protection from liability for the acts of the diocese or for the acts of the other parishes.”

Incorporation makes parishes legally distinct from the diocese, according to the diocese’s website. “Thus, the parishes will not pay for the debts or shortcomings of the diocese or its bishop.”

Tony Salgado, executive director of finance for the Archdiocese of Santa Fe, announced plans to incorporate parishes in December 2012 in People of God, the archdiocese’s official newspaper.

“This new structure mirrors what church law, that is cannon law, already describes,” Salgado wrote.

Canon law, or church law, is the body of laws and regulations governing the Roman Catholic Church and its members.

“Incorporating parishes as nonprofit corporations emphasizes in a legal way the importance of the canonical uniqueness of each parish,” Archbishop Michael Sheehan is quoted as saying.

The Diocese of Las Cruces incorporated many of its parishes in 1993, state records show.

The Diocese of Gallup has not incorporated its parishes. Instead, the diocese contends that it holds parish property in trust for parishes, court records show.

The Diocese of Gallup in November became the ninth U.S. diocese to file for Chapter 11 bankruptcy in response to lawsuits filed by alleged victims of sexual abuse by priests.

The Gallup diocese contends that its parishes are “separate ecclesiastical entities” that manage their own finances, the diocese said in court records filed in U.S. Bankruptcy Court in Albuquerque.

Parish property is titled in the name of the Diocese of Gallup, which “holds that property in trust for the benefit of the parish,” the diocese wrote.

Shortly before it filed for bankruptcy, the diocese recorded in county records a “notice of the trust relationship” between the diocese and the parishes, the diocese wrote.