Well...one of the reasons, Hypocracy. I can understand a corporation protecting its assets, but even most corporations avoid blatant deciet when dodging the bullet. This just makes me sick....the Church could have made a stand against its failings and become stronger, instead it is continuously sinking lower and lower into the muck.
Posted on Thu, Sep. 02, 2004
Diocese accused of creating 'straw corporation'
By GILLIAN FLACCUS
Associated Press
LOS ANGELES - A lawyer for alleged victims of sexual abuse by priests alleged Wednesday that the Roman Catholic Diocese of San Diego used questionable financial tactics to secure a nearly $30 million bond to build three high schools.
A motion filed in Los Angeles County Superior Court alleges that the diocese created a ''straw corporation'' last year and gifted it with property worth between $30 million and $325 million. The property was used as collateral for a federal tax-exempt bond issued to the new corporation.
The motion alleges that the corporation was created to avoid disclosing sexual abuse lawsuits that would have disqualified the diocese from the bond.
It asks Judge Haley Fromholz to reverse the transfers and freeze the diocese's remaining assets, including property, bank accounts and investment portfolios. A hearing has not been scheduled on the motion.
Fromholz is the judge overseeing all Southern California clergy abuse cases.
Diocese officials said bond underwriters required them to form the new corporation to manage money dedicated to school construction. Chancellor Rodrigo Valdivia has said the diocese would be reimbursed for the properties' assessed value after the corporation had repaid the full amount of the 30-year bond.
''We don't try to do illegal things,'' he said when questions about the issue first arose last month.
Andrea Leavitt, the San Diego attorney who filed the motion, said there are about 145 claims of sexual abuse against the diocese and she was concerned that the transfer of assets threatened her clients' ability to collect on any future settlements.
''They were transferring away substantial amounts of property which could be used to settle the judgment for these victims who've been terribly, terribly hurt,'' said Leavitt.
, who represents about 10 plaintiffs. ''It becomes very important -- especially if they may not have insurance coverage to indemnify them -- that they preserve these properties.''
Calls to diocesan attorney Dan White and H.L. Hal Gardner, the diocesan finance officer whose signature appears on many of the bond application documents, did not return calls for comment Wednesday.
Catholic Secondary Education-Diocese of San Diego, Inc., was incorporated on April 9, 2003. The corporation shares the diocese's mailing address and processing agent, according to filings with the California secretary of state.
The corporation listed the diocese as an affiliate and guarantor during the application process for the bond, which was approved last fall.
In May 2003, the diocese transferred Carmel Valley property assessed at nearly $24 million into the new corporation, according to the San Diego County assessor's office. However, the motion contends that the assessments are out of date and the first property currently would be worth $213 million to $320 million.
On March 19, 2004, the diocese again transferred property assessed at nearly $4 million into the new corporation, the records show.
Mary Neale, an attorney for the California Statewide Community Development Authority, which issued the state bond, did not return repeated phone calls.
The diocese also hopes to raise $150 million in school construction donations under the Secondary Education Initiative. The money also will be placed in the corporation, said Steve Marietti, initiative director. About $75 million has been raised so far, he said.
http://www.montereyherald.com/mld/mo...ws/9561927.htm