Financial Scandals: The Hidden Wealth of the Catholic Church

By Anna Catherin Loll and

The Catholic Church in Germany, already struggling to cope with the sex abuse scandal, has been hit by revelations of theft, opaque accounting and extravagance. While the grassroots faithful are being forced to make cutbacks, some bishops enjoy the trappings of the church's considerable hidden wealth.

Photo Gallery: The Hidden Wealth of the Catholic Church Photos
DPA

Shortly before Pentecost, Pastor S. received an unexpected early morning visit, not from the Holy Ghost, but from the police.

For the authorities, the words of the Gospel of Luke came true on that morning: He who seeks finds. More than €131,000 ($158,000) were hidden in various places in the rooms of the Catholic priest, tucked in between his laundry or attached to the bottom of drawers. The reverend was arrested on the spot. After several weeks in custody, Hans S., 76, is now back at the monastery, waiting for his trial.

And lo and behold, the proliferation of cash may have been even more miraculous than initially assumed. The public prosecutor's office in the southern city of Würzburg now estimates that S. may have embezzled up to €1.5 million from collections and other church funds. The members of his flock in a wine-growing village in the northern Bavarian region of Franconia are stunned. They had blindly trusted their shepherd, who always seemed so humble and modest.

The Catholic Church is currently being shaken by a number of financial scandals, not only in Franconia but also in Augsburg, another Bavarian city, where Bishop Walter Mixa's dip into funds from a foundation that runs children's homes recently made headlines.

More than €40 million have gone missing in the Diocese of Magdeburg in eastern Germany, €5 million have disappeared in Limburg near Frankfurt, and it was recently discovered that a senior priest in the Diocese of Münster had 30 secret bank accounts. And while parishes throughout Germany are cutting jobs and funds for community work, many bishops are still living on the high horse. A brand-new residence? An ostentatious home for their retirement? Restoration of a Marian column to the tune of €120,000? None of these expenditures presents a problem to high-ranking church officials from Trier in the west to Passau in the southeastern corner of Bavaria, whose coffers are brimming with cash.

In many places, this blatant disparity, along with reports of mismanagement, misappropriation and pomposity have prompted the faithful to challenge church officials. They are accusing many bishops of just covering up the problem, as they did in the sex abuse scandal. They are determined not to allow anyone to see behind the curtain into their parallel world of bulging bank accounts and hidden assets, which, in some cases, have buttressed their power for centuries. The only aspect of church finances that is public is the diocesan budget, which derives its funding from the church tax -- but the church's true assets remain in the shadows.

Growing Questions About Church Funding

Now all of this wealth is becoming a political issue, however. The unemployed, recipients of housing assistance, families, communities, businesses, the military -- in the coming years, the federal government plans to deprive them all of billions of euros. But the church, of all things, is being spared, and hardly anyone questions the generous support it receives from the government.

Financially speaking, Germany's dioceses are in excellent shape. "The Catholic Church claims that it's poor, but the truth is that it hides its wealth," says Carsten Frerk, a Berlin political scientist who, after years of research, is publishing "Violettbuch Kirchenfinanzen" (The Violet Book of Church Finances) this fall. Frerk estimates the cash assets of the church's legal entities at about €50 billion. The Catholics, who are not releasing their own figures, accuse Frerk of being a prejudiced, atheistic critic of the church.

The assets, accumulated over the centuries, are invested in many areas, including real estate, church-owned banks, academies, breweries, vineyards, media companies and hospitals. The church also derives income from stock holdings, foundations and bequests. As a rule, all of this money flows into the accounts of the so-called bishop's see. Only a bishop and his closest associates are familiar with this shadow budget, which tax authorities are not required to review. The public budgets of dioceses consist of far less than their total finances.

This complicated web is handled with such secrecy that not even the financial department heads of all dioceses openly discuss their finances with one another. Seemingly baroque structures make these finances even more difficult to fathom. Depending on the diocese, the administrators of the church's funds can be members of a church tax council, a diocesan tax panel, a financial board or an administrative board. Sometimes assets are also spun off into foundations.

Of Germany's 27 Catholic dioceses, 25 refused to provide information in response to a SPIEGEL survey, noting that this information "is not made public." Only two dioceses, Magdeburg and the Archdiocese of Berlin, which was on the verge of bankruptcy a few years ago, were somewhat more accommodating, probably because they have so few assets to hide in the first place.

Secret Assets

The vicar general of a well-heeled diocese, on the other hand, said: "Yes, the assets in the bishop's see are secret. But perhaps it would be better if you wrote: confidential." When asked to explain this secretiveness, a spokeswoman of the Diocese of Limburg responded: "That's just the way it is." Finally, a representative of the German Bishops' Conference said: "I don't want to talk to you about this."

Elected lay representatives at the base are hardly more successful. They face a wall of silence, even when they are responsible for financial supervision in their diocese. One of them is Herbert Steffen, whose congregation appointed him to the diocesan council in Trier. Steffen, 75, is not exactly a fierce critic. A former furniture manufacturer, he comes from an arch-Catholic family of entrepreneurs in the Moselle River region. His concern was as straightforward as it was conservative: He wanted to make sure that his diocese was in solid financial shape.

The businessman was irritated by his experiences in the diocesan council. "I was surprised by the small size of the budget. It was something I thought we ought to look at," he says. At a council meeting, he asked a confidant of the bishop whether this was the entire budget. "There is also the budget of the bishop's see. But it isn't intended for the public," the official replied. When Steffen asked, "are you telling me that we can't see it, either?" the official said: "No!"

Trier, Germany's oldest diocese, is a good example of the Catholic divide between rich and poor. Bishop Stephan Ackermann, who also oversees sex abuse cases for the German Bishops' Conference, can be quite generous in financial matters, particularly when they involve prestigious projects adjacent to his bishop's palace. For example, the diocese currently has €1 million earmarked for a planned renovation of the square behind Trier Cathedral. Local church authorities want to make sure that the area looks its best, just in case the pope decides to lead an annual pilgrimage to the "holy robe" in 2012, joining the faithful in worshipping a robe that supposedly contains scraps from the robe Jesus wore.

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1. Dissolution of the Fiction
ChewyBees 06/16/2010
Just as we are seeing a worldwide collapse of the fictional financial and economic system that has been thrust upon us by an equally fictional political system, so too will we see the collapse of the third angle of the trinity of control, which is the CATHOLIC CHURCH. Anytime an organization has so much money that it needs to hide the numbers, that organization is engaging in criminal activity (i.e. victimizing activity) and will face certain dire repercussions if the source and magnitude of their funds were discovered by their unwitting victims. I have a hard time accepting that the PERSONS involved in the business of CATHOLIC CHURCH even believe in God. And when I say CATHOLIC CHURCH, I mean that corporation and all its entities, which means with few exceptions every other Christian denomination, most Muslim denominations, and the Jew-ish hostile corporation called Israel. The reason I question the faith of these corporate officers is simple. We often see the bumper stickers or signs that say, "what would Jesus do?" We know that according to the Gospel Jesus freaked when he came across the 'money changers' (quick change artists, drug dealers, pimps?) in the temple. So how would he react when he sees his entire message, and his name and image (many times graven) are used as a motive for guilt and profit in a pyramid scheme that enriches a very few and 'forgives' the 'sinners'. I quote forgives and sinners because Christ never gave these Church Officers a personal ordainment, a prescription or authority to address anyone in his name in the way that they are. They have promoted his crucifixion in every grotesque way possible as the remedy for the laws of God, when in fact the entire gospel up to that brutal torture and merciless murder teaches the opposite. If these CATHOLIC Officers have read the Gospel even once, and I assume they have, they would know that everything they are doing is a flaunting hypocrisy against it, and that if they truly believed in any of it they would know it would mean the judgment of their souls for all eternity. You cannot serve 2 masters. They serve one over the other, because they despise the other. They do not render unto caesar because they are in league with, and in many cases directly are caesar. If you believe in the Gospel and in Christ, then you must also acknowledge the power of the deceptions of Lucifer. This isn't simply one man deceives another, coveting his donkey. It has come down to a few men have deceived a planet, calling themselves 'of god', 'called and ordained ministers of god', the 'chosen people of god', 'Father', 'Holy', and the list goes on despite the fact that from top to nearly bottom their actions and reactions are the polar opposite of what that requires as taught in the Gospel. Redemption requires repentance. Repentance requires acknowledgement and transparency. Forgiveness requires healing. Healing requires love. I challenge anyone to show me where this exists in the corporate churches of planet Earth. If you want forgiveness and you want to be as close to God as possible in this shell of flesh, then why worship a middle man or men, paying tribute and bowing and praising as if they were Creator of this planet and its inhabitants. Do not honor other men who would dishonor you as they do themselves. Honor yourself, look for God where he is closest, and learn to find redemption, repentance, forgiveness and love where it was in the first place. And ultimately, follow the commandment of Christ: Love thy neighbor as you love thyself.
2. Social services and charities are not sanctum businesses
Norberto_Tyr 06/18/2010
As a catholic, I would prefer the church to stay away from this ‘services’ and leave to the individuals and the state caring for the material world. The church does have neither the means nor the organization to perform these duties to a modicum level; and from a pure materialistic point of view, much of what was considered ‘charity’ in the past today are true entitlements. On the other hand, I am not proposing the church to divest all her riches, no at all, better stored as art and gold in a monastery rather than ‘invested’ in US treasury bonds, or chasing vaporware in swaps, derivatives and futures since the Black-Scholles model for valuating derivatives is not theological stuff, to say the least. One of modern most successful deals, apart from the toxic assets dispersal, of course, is the business of charities. Once approached by a charity worker I naively asked: “are you getting a commission on these contributions?”, and the person honestly answered: “yes, I am ashamed but I must say: Yes”. Yes, there is an enormous hidden business in charities. I first noticed during my MBA course the great number of successful well educated and superbly connected accountants, businessmen and women were in the business of charity and attending MBAs.. Then I scratched my head and was pricked by my bad curiosity, so I decided to investigate this subterranean virtual gold mine. I started working for a ‘charity’ apparently run by the Baptist community. My first surprise came when we were encouraged by management to improve the relationship between the organization and the Baptist Churches, as if they were worlds apart, and they are. The second surprise was the fact that there was not a single crucifix in any room of the head quarters. The third surprise came when I saw one of the top mangers using his ‘dirty finger’ to point to the lines he was reading from the New Testament, and then the same person boasted that more than fifty percent of the employees at this charity organization were not Christians. This prompted me to investigate a bit further and I found that the charity organization’s revenue did not come from charity, seventy percent came from the government amounting to a total of about $ 100 million dollars per year (2007), and due to the fact that it was a ‘religious charity’, this organization was one of a very few exceptions in terms of accountability in the whole country, in fact they were accountable to none at all in this material world, including the government and church except the board. The spending was as liberal as government's unaccountable donations. In short, yes, I agree, the Catholic Church should not be involved in pseudo charity and money making exercises (which is what has been converted), but, and a big but, be careful about who and why religiously assume the task, “no sea que saltemos del fuego y caigamos en las brasas” (nicht direkt vom Feuer und fallen in die Kohlen). Norberto
3.
BTraven 06/18/2010
It disappoints me to read that the bishop who has been asked to handle the aftermath of the sex scandals as well as to implement measures making it impossible to happen it again belongs to the kind of persons who managed to climb the career ladder because of a great talent God gifted them – anticipatory obedience. Earmarking 1 million euro for a possible renovation of a square just in case the Pope decides to visit Trier is ridiculous, especially when expenditures for youth programmes where the future financiers of the church are won are cut. No wonder that so many people try to leave the church. Instead of behaving like bean counters the high representatives of the church should focus on their real task – taking care of those who need help.
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