Accounting To No One

Recently, I posted three 19th century newspaper articles from the archives of the Boston Globe about corporation sole (full texts are here). 

The articles tell how this method of governance started. One phrase in the first article sticks out: “At Present Such An Official [the archbishop of Boston] Accounts To No One.” Corporate sole legislation was enacted in 1897 to address this flaw. And yet, over 100 years later, lack of accountability continues to hobble Catholicism. Is there any fix?

The central question — whether there is accountability in our church — is easily answered by opening a newspaper or browser. When it comes to clerical sexual abuse, self-policing simply does not work. Even though the abuse is a symptom rather than a cause, it is the most compelling example of the imbalance of power between the clergy and laity which has produced the lack of accountability. The balance needs to be righted.

Without question, the tort system in U. S. courts has done more for justice, reform and healing in this area than any bishops’ conference; indeed, publicity about testimony during trials and subsequent damage awards has done more to redress the imbalance than all of the bishops’ conferences combined. We can extend the criticism of the bishops’ competence in this area with complete fairness to another vital area: finances. Note that the same issues — obsessive secrecy, elaborate cover-ups, repeated denials — characterize both areas. If you are yet unconvinced, please see this timely in-depth article about US Catholic church finance from the British magazine "The Economist". The article pulls no punches, and characterizes the financial affairs of the nations bishops as "an unholy mess."

The failings in themselves are understandable. Missions, even divine missions, are carried out by human beings. That explains the constant need for oversight, for checks and balances, a need that is now unfulfilled.

Ironically, part of the inspiration for the introduction of corporate sole can be traced to wrong-doing in another diocese, as noted in the articles. We should also note that the Bishop Purcell scandal referred to actually took place in Cincinnati, not St. Louis. Purcell and his brother (also a member of the clergy) got into hot water by acquiring diocesan assets and transferring them to the Purcell family name. After the Bishop’s death, the question of inheritance was key. It took years for the local church to regain financial stability and respectability. Meanwhile, legal wrangling took center stage. Afterwards, diocesan and state officials were eager to avoid such blunders.

In the early years, not surprisingly, there was only one Catholic diocese in Massachusetts. As late as 1866, according to Fr. Bill Pomerleau’s short history, all 400,000 Catholics in the Commonwealth belonged to the Boston Diocese. That would change in 1870 with the creation of the diocese of Springfield. By 1900, the number of all Catholics in the state had grown to one million, 600,000 of whom were in the Boston archdiocese with the rest in Springfield. When the Springfield diocese started, it included everything outside the Boston area. Although Worcester was a larger city at that time, the Springfield-Holyoke-Westfield area was chosen because it was more populated overall, a situation that continues today. It was many more years until the Fall River Diocese was created (in 1904), and until the Worcester Diocese split from Springfield (in 1950). That gives us the present lineup of four dioceses. Ranked by founding, they are: 1. Boston (also called archdiocese or metropolitan), 2. Springfield, 3. Fall River and 4. Worcester.

Getting into these articles, let’s look at the criticism of one of the legislators during the debate on creating corporation sole. He said that he didn’t want to introduce corporation sole because it would result in the church becoming a “gigantic trust”. But, in truth, this phrase  does describe the Catholic church, then and now. There is one pot of money, no matter what you may hear to the contrary from diocesan accountants or lay apologists. The participants belonging to the church have much (and some would say, everything) in common, even if these participants are divided into two broad categories (clergy and laity).

Power within the Catholic church is nominally held by the clergy for the benefit of all. Yet, without some correcting mechanism, power (the ability to DO things, broadly speaking) can easily be misused. 

It's not our purpose to delve into internal Catholic affairs which can be fairly described as religious in nature. What concerns us are the ramifications of official behavior on the civil side of the Diocese. It is a fact that the Corporation of the Diocese of Springfield is not a religious entity at all; like all corporation soles across the country, it's a creature of the state. This fact explains why the bishops' organization (the United States Conference of Catholic Bishops, or USCCB) have standing when it comes to lawsuits, which are always entered into "on behalf" or similar wording, of their respective dioceses. For example, there are 30 amicus briefs listed on the USCCB website and although this is only the tip of the iceberg, it gives some idea of the scope of activity.

The fact that corporate sole is a creature of the state also explains why Bishop McDonnell was able to sue the parishioners of Mater Dolorosa in his failed attempt to end their occupation of their closed church. McDonnell did not argue in court that the parishioners were disobedient, or divisive, or sinners, but that they were civil trespassers under the laws of the Commonwealth of Massachusetts. He objected because he was (he said) the owner of the property.

Under a time-honored system, it is the laity who contribute the money, and the clergy who are supposed to contribute the moral authority. The clergy’s role has been challenged greatly by disclosures in recent years. On the local level, these five points stick out:

1. Bishop McDonnell sent 1,000.00 of the money of the diocese to a anti-gay legislative campaign in Maine. Yet, there is no record of this in local church or civil financial statements, and there was no disclosure.

2. The diocese continually sends money for the support of disgraced Bishop Thomas Dupre, and has since 2004. Yet, there is no record of this in local church or civil financial statements.

3. The bare minimum was paid out in settlements to victims in 2004 and 2008 for 105 sexual abuse claims against the Diocese, and though totals were given, individual amounts were not disclosed. Yet, according to the Dallas Norms endorsed by the nation's bishops in 2002, such secret settlements have been banned. There have also been payments to victims of clerical abuse outside of the 105 claims. For example, payments resulting from actions of the former Rev. Al Blanchard, and the payment to the brother of Danny Croteau. There has never been an accounting made of these other payments, which are known only because of newspaper investigations.

4. As long as operating budgets (which record money-in money-out for a given year) are the only records, the financial health of the diocese will remain a mystery. Layoffs have been made, churches and parish centers closed, land sold, programs cut, and yet, a balance statement has never been published which would show how the whole stands in relation to all these parts.

5. The most recent instance of church opacity occurred on July 27 when a settlement was made during the lawsuit of a Williamstown man vs. two Bishops of the Diocese over sexual abuse. The award was 500,000 dollars. There was no indication from church officials where the money will come from...and it is unlikely that there will ever be an indication from church officials where the money will come from.

With this background of how financial accountability continues to elude the Catholic people of Western Massachusetts, we turn to the three 19th century articles which describe how corporation sole was established.

In the first article, as previously noted, Mr. Pierce objected because “…he said the bill proposed the creation of a gigantic trust. He would give to the Catholic church just as much as he would give to any other sect, but not one iota more…” The complaint reveals a common attitude at the turn of the century.

Around 1900 the disillusion with “trusts” (monopolies) was probably at its height. Trust-busting was not some legal technicality confined to the back pages of law books. It was constantly on the front page. The Duponts (purveyors of gunpowder), Standard Oil (sellers of petroleum), and railroads were all scrutinized. Without question there were aspects of the church, with its monarchical trappings and insistence on absolute control, that resembled a trust. But, this warning of Pierce’s was countered by the claim from other legislators that Catholics themselves supported the institution of corporate sole.

That support might be more accurately named subservience. This is not just a subjective criticism, but a theological one, too. At this time the role of the laity, as laid down by Leo XIII, was to follow; the role of the clergy was to lead. Today, the analogy to a trust (monopoly) has less validity. Church doctrine has evolved. The laity no longer follow, but on the contrary are charged to be active. On the civil side, even if secular law sometimes favors trusts or monopolies, the recent lawsuits by the Department of Justice against Amazon, Google and Apple are strong reminders that the principles against monopolistic behavior hold up. This distinction matters because it is in the civil arena that the corporate sole structure of the Catholic church resides.

In the first article the date of 1878 comes up, which is when the Boston archdiocese was established. One of the legislators argues that the law enacted in that year already governed arguments about corporate sole. The establishment law was supposedly modeled after legislation crafted in New York. However, the validity of this law is not without controversy. The New York law seems open to questions about the federal constitutionality of how it transfers property rights from laity to clergy — a bypath that we will not pursue here.

Mr. Manchester welcomed the bill because it would be an improvement. He noted that the archbishop accounted to no one, yet was responsible for administering over 5 million dollars of property. Manchester urged that the archbishop should be “… obliged to open his books once a year and show the commissioner of corporations of this state how he has administered the property intrusted to his care…”

Mr. Dubuque of Fall River asserted that the bill would give to the laity of the Catholic church more power than they ever had before. Perhaps the bill did hold out that promise. Yet, there is no evidence that the laity ever had much clout in statewide financial matters, particularly in the early 20th century. Maybe Manchester was expecting some control through state agency. It seems safe to assume that any attempts at control soon gave way to a live-and-let-live attitude between state and Catholic officials.

And that is a summary of what we have today. The financial health of the church is opaque, not only to citizenry, but also to church faithful, who are responsible for maintaining it. Financial disclosure could and should be accomplished at the church level. But, since that never happens, and since it is too important to ignore, it must therefore happen on the civil level. That control should address those issues where church spending impacts the whole society, as outlined elsewhere — in political and social advocacy, and in non-religious lawsuits launched by the diocesan corporation.

In the second article, the headline reads: “Archbishop is Required by New Act to Conform to Its Provisions.” What were these provisions? McCarthy’s synopsis explains that “…should there be any contention about his will, the title would be in peril, and the Catholic body might suffer….” This seems like a slender foundation for such an important change in legal standing. But, his reasoning suggests that corporation sole was instituted not because of any real problem in day-to-day church business in 1897, but as a hedge against anticipated problems.

McCarthy goes on make four important points about the new law:

1. it would ensure that the property of the church was used for the good of the members.

2. “…there would be no danger of the misapplication of the property, as the state has the control, regulation, supervision and direction of every corporation it creates, and may alter and amend the act at any time, if found necessary…”

3. If Catholics want church property held by a corporation sole there is no constitutional bar, as long as the corporation so created is subject to the laws of the Commonwealth.

4. “…the corporation shall be subject to all laws of the Commonwealth regulating corporations established for religious and charitable purposes, in requiring them to make annual and other returns to the commissioner of corporations concerning their condition and affairs,…”

In the third and last article, specific to the Springfield Diocese, not much is new. It’s interesting that prominent non-Catholic politicians signed the petition urging incorporation. This suggests a gathering of a full head of steam to push the bill through. So, the train arrived, debate was foreclosed, and has not been reopened since. Mr. Crowley’s final questions were never answered: He wanted “…returns that would show the income from this corporation sole, and how it was applied…”

I want that, too, and I believe that Catholics deserve that from their officials. A complete accounting for the accumulations of the widow’s mite, along with the many thousands of dollars that are dropped into collection plates on a weekly basis, and information about bequests, is long overdue. This is the Catholic lay issue.

But more important, it is also a citizen’s issue. It is not only Catholics who have a stake in the continued financial viability of this important charity. Any information about Catholic church corporations would be an advance over what we have now, which is a vacuum. Looking ahead, what might the ramifications of a disclosure law be?

First, it would help the state, because it would curb monopolistic behavior. No longer could the church escape neutral, common sense disclosure. Once the secrecy is thrown out, these disclosures would verify to the state, for the first time, that the church can be a good neighbor among all faiths.

Second, it would help the clergy of the church, because it would show the faithful that the clerical/administrative branch has nothing to hide. It would also accelerate a much-needed airing out and reform within the church, which is already in progress.

Third, it would help the citizens of the Commonwealth. For the first time, because of financial transparency, they would have a rational basis for trusting the church.

--the end--

The Origins of Corporation Sole in America

As part of this series on the legislation that makes the Springfield Diocese a civil corporation in the eyes of the Commonwealth, I offer the following commentary about the origins of corporate sole. The history in England, where it arose from common law roots, is not uninteresting. Yet, for the sake of clarity it may be best to stick to how it is applied in the U. S. That application is ably sketched out below. The reference for this article, from which this extract has been taken is:
The Modern Corporation Sole. James B. O'Hara, 93 Dickinson Law Review, Fall 1988.

The Modern Corporation Sole

“When John Carroll was chosen as the first Roman Catholic bishop in the United States in 1789, gaining secure title to the property of his church in the various states and territories was one of his most pressing tasks. This task was by no means easy.

Roman Catholicism had no legal standing in England, and its position in the new nation was awkward. Although Catholicism shared the fruits of the first amendment, it had a structure that many Americans judged to be autocratic and monarchical. At that time, congregational ownership of church property was natural to many denominations in America, but was contrary to long-established Roman Catholic policy.

Sometimes, for want of a better method, church property was held in fee simple by the local priest or by a pious layman. This system, however, led to endless difficulty. There was a constant fear that church property held in a private name might be claimed by a relative of the holder. Worse yet, the possibility existed that some unworthy claimant with a plausible story could make out a case for ownership. In one lawsuit, an unfrocked priest claimed to be heir to land that a deceased predecessor had purchased to build a church.48

Bishop Carroll won that suit, but for the next seventy years the Roman Catholic hierarchy struggled to find a legally sufficient and canonically suitable manner for its church to own property. Vesting title in a board of elected or appointed trustees was one obvious possibility. In fact, that is the way Carroll originally incorporated in Maryland.49  But "trusteeism" itself became an issue when the trustees in some areas used their property ownership to pressure the bishops in doctrinal or disciplinary disputes.50 

The internal problems of the Catholic Church were exacerbated and complicated by the rise of a national social and political phenomenon called the "Know-Nothing" movement.51 In addition to their many other objections to Catholicism, these opponents had particular objections to control of church property by the clergy, and strenuously battled the church on this issue.52  The bishops battled back, in what they saw as a defense of the doctrine and practice of their religion against bigots on the outside and recalcitrants on the inside. Over time, the corporation sole became a major weapon.53

Beginning in 1829, a series of national bishops' meetings was held to address the problems of Catholicism in America. Invariably, property problems were on the agenda.54 Soon after the first of these gatherings. Archbishop Whitfield of Baltimore sought a charter in the form of a corporation sole from the Maryland General Assembly. In 1832, it was granted.55

The link between Roman Catholicism and the legal concept of a corporation sole was surprising for two reasons. First of all, in England, this mode of incorporation was limited to the Anglican Church.56 In fact, the Roman Catholic hierarchy was not reinstated in England until 1850.57 Second, Catholic Canon Law did not envision a one-person corporation. The minimum number required to constitute a "collegiate moral person" was three.58 Even the Pope was not a corporation sole.59 Even though bishops of dioceses have great autonomy in church law, favorable action by a board of consultors is still required on major property decisions to this day.60

As Roman Catholicism spread geographically and grew in numbers in the last decade of the nineteenth century, new dioceses were created as new areas of the country were settled. Where they could, the bishops incorporated as corporations sole.61 In some states, this required a private act of special incorporation; in others, a general incorporation statute was utilized.

The effort was not successful everywhere. On at least one occasion, a legislature defeated a bishop's request for sole incorporation on the grounds that Catholicism would thus acquire a legal right not held by other religious denominations.62 Slowly, Roman Catholics won the battle for their church to be incorporated in a manner consistent with church polity.63 During this struggle, the old common law corporation sole was gradually transformed. There was no longer any link with an established church. Although legislative action was often the result of activity by one church, the laws passed were usually broad enough for others.

In the courts, judges began to require specific legislative authorization for a corporation sole. The common law was not invoked to create sole corporations in states where the legislature had not acted.64 Finally, at the beginning of this century, the Supreme Court, in an opinion by Justice Holmes, confirmed what was already an almost universal judicial stance: "Apart from statute the law does not recognize the bishop as a corporation sole . . ."65

The transformation of the corporation sole from its common law form to a legislative format, however subtle, created something altogether new. Zollmann, writing in 1915, called it "a new form . . . vigorously flourishing"66 and "American in the true sense of the word."67 The tide had turned. Momentum to secure the property rights of the Roman Catholic Church a century ago left permanent traces in modern American law. Today at least thirty states have a corporation sole in one form or another."
48. Browers v. Fromm, 1 Add. 362 (Pa. 1798).
49. 1792 Md. Laws 55.
50. See generally 1 A. STOKES, CHURCH AND STATE IN THE UNITED STATES 808-18 (1950); Guilday, Trusteeism (1814-1821), 18 HIST. REC. & STUD. 7 (1928); McNamara, Trusteeism in the Atlantic Stales, 1785-1863, 30 CATH. HIST. REV. 135 (1944); Stritch, Trusteeism in the Old Northwest, 1800-1850, 30 CATH. HIST. REV. 155 (1944).
52. A. STOKES, supra note 50, at 808.
54. P. GUILDAY, A HISTORY OF THE COUNCILS OF BALTIMORE 1791-1884 (1932). The 1829 meeting was attended by Roger B. Tancy, a prominent Catholic layman, later Chief Justice of the United States from 1836 to 1864. Taney's role at this meeting of bishops is unclear, but possibly he was serving as legal counsel. Id. at 89.
55. 1832 Md. Laws 308.
56. Recent Cases, supra note 16, at 295-96.
57. There were a few Roman Catholic bishops ministering to congregations before 1850, but there were no dioceses until the hierarchy was reestablished in that year with the appointment of Cardinal Wiseman as Archbishop of Westminster.
58. This long-standing policy was formally codified in 1917 Code c. 100, § 2. For an exceptionally clear short explanation of the canonical concept of moral personality, see A. MAIDA. OWNERSHIP. CONTROL AND SPONSORSHIP OF CATHOLIC INSTITUTIONS 10-22 (1975).
59. C. CARR, supra note 14, at 16 n.l.
61. It is not the purpose of this study to create a state-by-state history of this pattern of incorporation. However, in some of the cases there are occasional references to the history of this pattern. A few examples will suffice: Illinois had created a corporation sole by private act in 1845; South Carolina in 1880; Kentucky in (or before) 1888; Massachusetts in 1898. See Chiniquy v. Catholic Bishop of Chicago, 41 III. 148 (1866); Decker v. Bishop of Charleston, 247 S.C. 317, 147 S.E.2d 264 (1966); McCloskey v. Doherty, 97 Ky. 300, 30 S.W. 649 (1895); Searle v. Roman Catholic Bishop of Springfield, 203 Mass. 493, 89 N.E. 809 (1909).
62. Union Church v. Sanders, 6 Del. (1 Houst.) 100, 127 (1855).
63. For a summary of the later stages of the trusteeship controversy, see 3 A. STOKES, supra note 50, at 408-13. The Vatican gave formal approval to the corporation sole as one of the approved modes of holding title to church property in a private letter sent to the American bishops in 1911. For the text, see 2 T. BOUSCAREN. CANON LAW DIGEST 443 (1966). The corporation sole is still the "preferable civil law instrument for the dioceses to use in holding title to property." See A. MAIDA & N. CAFARDI. CHURCH PROPERTY, CHURCH FINANCES, AND CHURCH-RELATED CORPORATIONS 129 (1986).
64. See Roman Catholic Archbishop v. Shipman, 79 Cal. 288, 21 P. 830 (1889) (affirming action taken by the legislature of California). For other decisions where a court did not recognize a corporation sole because the legislature had not acted or where a party had not followed a procedure created by state law, sec Dwenger v. Geary, 113 Ind. 106, 14 N.E. 902 (1888); Blakcslee v. Hall, 94 Cal. 159, 29 P. 623 (1892); First Nat'1 Bank v. Winchester, 119 Ala. 168, 24 So. 351 (1898).
65. Wright v. Morgan, 191 U.S. 55. 59 (1903).
66. Zollmann, Classes of American Religious Corporations, 13 MICH. L REV. 566, 571 (1915).
67. Id. at 573.