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Dan Rather

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Spiritually Bankrupt

Posted: 06/29/10 02:00 PM ET

This is written with a sense of sadness and some mixed feelings. While not a member of the Roman Catholic Church, I have great respect for the church and its followers.

The church has done and continues to do much good in the world. I've seen it among the poor, the downtrodden, and the ill all around the globe. But with a team of other investigative reporters, we uncovered some things that should be brought to light and pondered.

Earlier this month, Pope Benedict XVI issued the first apology to priest abuse victims from St. Peter's Square - a gesture intended to show that church leadership is finally ready to confront this growing scandal.

But in reporting a recent story, we found that behind the scenes - and in court - the church has taken a much less contrite and more confrontational position. Our investigation found that in various dioceses across the United States, church leaders were going great lengths to avoid making amends with the same victims of abuse they claimed to be trying to make peace with.

Facing waves of lawsuits by now-adult victims, we found the church has reacted more like a big business than a sacred institution: Wealthy dioceses have claimed to be broke and taken the drastic act of filing for bankruptcy. Only when forced to open their ledgers in bankruptcy proceedings does it become clear that several of these dioceses were actually flush with assets - cash, real estate, parishes - that it could have made available to victims seeking restitution.

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Take the Diocese of San Diego: In 2007, just before several abuse cases were scheduled to begin, it filed for bankruptcy. It sought this protection despite owning hundreds of millions of dollars worth of real estate - everything from commercial buildings, to open land, to parking lots. Only after it became clear that the bankruptcy judge was ready to dismiss the diocese's bankruptcy filing did the church seek to settle with victims. At the end of the bankruptcy proceedings, the judge, a Catholic, scolded the church for being "disingenuous."


In Davenport, Iowa, diocese officials went on a spending spree just before it claimed insolvency and filed for bankruptcy in 2006 - spending that included nearly $20,000 for the very-much-alive bishop's future funeral.

In Wilmington, Delaware -- the most recent diocese to file for bankruptcy-- church officials have tried to limit liability by claiming the property owned by its parishes is separate from its own. It all came down to a $120 million investment fund administered by the diocese. Various diocese entities --including schools, parishes and cemeteries-- had invested $75 million in the fund. The diocese argued that that money should be off-limits to victims' lawsuits. But the bankruptcy judge didn't buy it. On June 28, he ruled that all of the money should be up for grabs.

We spoke to one of the plaintiffs in Wilmington, Jim Holman, who has a unique perspective. Holman was abused by a priest when he was a teenager. Now, he's a bankruptcy lawyer who has guided dozens of companies through Chapter 11 filings. He's clearly not adverse to the concept of bankruptcy -- But he said the church, as a sacred body, should be held to a higher standard than the average corporation.

"This, let's preserve every avenue of defense with regard to our liquid assets -- you know, it's-- it's an understandable reaction if you're dealing with a widget factory," Holman told us. "It's not an understandable attitude when you're dealing with this kind of civic wound."

While the church hierarchy has finally acknowledged the civic wound of sexual abuse by priests, it has preferred to deal it on its own terms. And not just in the United States, but around the globe. Just last week, authorities in Belgium raided various church buildings, including one where a group of the country's top church leaders were holding a meeting. Police taking part in "Operation Chalice," as the raid was dubbed, refused to allow the stunned bishops attending the meeting to leave, and even confiscated their cell phones. It soon got out that the investigators had even dug into the crypts of two former archbishops.

Pope Benedict XVI denounced the raids. The Belgian authorities, he said, had trampled on the church's own internal abuse investigation. Even worse, it had affronted the Vatican's sovereign immunity. It's hard to know at this point whether he has a fair argument, since the details of the investigation haven't yet surfaced. There should be no surprise if many observers argue that there's one thing telling about the pope's response to the raids: In describing them as "deplorable," he was arguably using even stronger language than he has used to criticize the pedophile priests and their protectors that have gotten the Roman Catholic Church into this mess.

Dan Rather Reports' "Spiritually Bankrupt" aired Tuesday, June 29 at 8 PM and 11 PM Eastern on HDNet. You can now download the show on iTunes.