Financial Scandals The Hidden Wealth of the Catholic Church


By Anna Catherin Loll and

Part 2: Cuts in Catholic Social Services

On the other hand, subsidies for youth organizations and community centers are to be radically cut or eliminated altogether. Under the diocese's proposed cost-cutting program, a number of facilities would be shut down, including Catholic adult education offices, the Catholic Academy of Trier and Catholic student societies in Trier and the nearby cities of Saarbrücken and Koblenz.

Those who would be affected by the cuts are outraged. "Our goal is to make the church more accessible," says Guido Gross, a pastor who ministers to university students, "but now they want to get rid of the entire field of activity." Lukas Rölli of the Confederation of Catholic Student Societies adds: "I will renounce my faith if the bishop signs this." For Rölli, the Catholic Church creates the impression that it "is trying to withdraw from society more and more, and back into the vestry."

In Cologne, one of the world's wealthiest dioceses, there is also a wide gap between appearance and reality. Grassroots Catholics there have had to struggle to stay afloat financially. Churches have been closed while a shrinking number of priests have had to minister to bigger and bigger congregations in line with strict requirements outlined in austerity programs. Meanwhile, the Archdiocese of Cologne has a large budget of €863 million, and the assets of the archbishop's see are estimated at several billion euros. According to church critic Frerk's calculations, the diocese's holdings in a group of companies known as the Aachener Gesellschaften, which consist of about 26,000 residential and commercial units, were worth more than €1 billion in 2003.

But the archbishop's financial officer makes little mention of all this good news. If he did, would the faithful be quite as willing to support all the cutbacks and cheerfully donate their money to pay for a new stained-glass window in the cathedral by the artist Gerhard Richter? For the archdiocese, it is always preferable to have others foot the bills, even when it comes to paying the archconservative Cardinal Joachim Meisner. Based on a centuries-old agreement, the government pays the diocese the cardinal's monthly stipend of about €11,300, which hasn't stopped Meisner from repeatedly attacked his sponsors for their godlessness and various "failings."

Taxpayers' Money for German Churches

Meisner and many of his fellow ministers aren't the only ones to receive public stipends. Year after year, both the Catholic Church and the Protestant Church in Germany receive generous payments from the federal, state and local governments. Not as well known as the church tax (about €10 billion a year) are the annual subsidies to the church, both direct and indirect, which in 2000 amounted to an estimated €17 billion.

The government pays substantial sums of money for the maintenance and constant renovation of cathedrals and other church buildings. It pays the salaries of religion teachers and foots the bill for the altar wine used in church services for the military. Some benefits, such as the annual firewood deliveries a few southern German towns make to their bishop, are based on 200-year-old entitlements that politicians have never reviewed.

Despite the constitutional separation of church and state in Germany, substantial subsidies are paid for church conferences, church libraries, pastors who minister to police officers, inmates of prisons and psychiatric institutions, and the military. The government even helps to pay for the employment of conscientious objectors, and for the maintenance of offering boxes and wayside crosses.

The church likes to point out how much it does for the poor and the weak, and to promote social cohesion, and it has a valid argument. Nevertheless, the government foots the bill for many of these activities. The German government pays the bulk of the German Caritas Association's estimated annual budget of €45 billion, while the Catholic Church pays only a fraction.

In guidelines published on March 15, the diocesan financial board in the Bavarian city of Regensburg, which manages the assets of the bishop's see, even specifies the conditions that must be met before it will contribute financially to the renovation of church-run kindergartens and shelters -- namely that it will only contribute if the local government "has contractually agreed to pay" two-thirds of total production costs" and is willing to guarantee payment of at least 80 percent of a potential operating cost deficit for "at least 25 years."

Apparently the diocese is only interested in church-run kindergartens if the government assumes most of the cost. Does that mean the diocese would quickly abandon its compassionate care for the children of God if public funding were to dry up? In other dioceses in Germany, Catholic hospitals, schools and retirement homes are even fully government-funded.

Church Pays no Taxes and is Unsupervised

In return, the church is not even required to pay taxes: no property tax, no corporate tax and no capital gains tax. Everything it does as a public corporation in Germany is considered charitable, benevolent and tax-exempt. Unlike other public corporations like universities, the church is not subject to any state supervision.

According to church law, "the Catholic Church has the innate right, independently of secular power, to acquire, own, manage and sell assets for the attainment of its own purposes." Defending this "innate right" and the billions backing it is one of the central functions of bishops.

Complicated financial structures and secret coffers only become somewhat more visible to the public when perfidious administrators abuse them.

This is a particularly glaring issue in the Diocese of Limburg at the moment. A few weeks ago, the head of a church financial administration, who had embezzled about €5 million, was sentenced to more than six years in prison. The man, who was also the managing director of the Catholic congregation in Limburg, had unimpeded access to church funds.

"The embezzlement was surprisingly easy," the judge remarked. The problem was only discovered when the diocese recently began to introduce a new commercial accounting system. Until then, the Limburg bishops and their confidants could apparently dispose of their funds as they saw fit. The current Bishop of Limburg, Franz-Peter Tebartz-van Elst, had to admit that mistakes were made during financial audits.

A Palace Fit for a Prince

The diocese could easily afford such a careless approach to its finances, because the bishop's see appears to have plenty of cash. It is currently planning to build a new residence for the bishop, partly with funds from the bishop's see. Residents of the small city refer to the hill above Limburg, where the bishop will live behind the tall stone walls of a former aristocratic estate, as the "Acropolis."

"Our bishop wants to be a prince again," the locals say mockingly. By contrast, his predecessor, Bishop Franz Kamphaus, chose to live modestly in a two-room apartment in the seminary instead of the old bishop's residence, which he turned over to a family of Ethiopian refugees for several years.

What architects have designed for Tebartz-van Elst on the "Acropolis" is far more than a generous apartment with an on-site chapel. As part of the project, adjacent buildings will also require extensive renovation and conversion. New quarters will be needed for an order of nuns that will be moving in to ensure that His Excellency is well taken care of. And as part of a new security system for the cathedral museum, relocating one of the museum's emergency exits will cost €1.5 million alone. As an added benefit, it will be harder to disturb the bishop in his refuge in future.

Meanwhile, the bishop has ordered his flock to live by the motto "Save and Renew." Limburg is one of the dioceses cutting back on parishes, masses and priests. In the surrounding villages, the faithful are hard at work collecting donations for the most urgent maintenance work on their churches. "The saving is happening at the base, while the renewing takes place elsewhere," says Henny Toepfer of the local chapter of the reform movement "We Are Church." She has trouble understanding why millions of euros are available for a new residence, but not to pay for buses to bring elderly Catholics from the villages to church services.

The Lure of Financial Markets

For some time now, the old-fashioned vices of pomposity and wastefulness have been joined by a thoroughly modern temptation for the financial administrators of the bishops' sees: the promise of turning a profit in global capital markets.

Take, for example, Magdeburg. Hoping to solve its financial problems, the poverty-stricken diocese, which also has relatively few members, established a stock corporation called Gero AG. To increase earnings from interest and compound interest, Bishop Leo Nowak's confidants invested in real estate deals, ship partnerships, biogas plants and even controversial research into genetically modified plants. A priest in the administration of the diocese even blessed a greenhouse intended for use with genetically modified plants, in hopes that the church's pious investment would flourish.

Today the bishop faces a financial mess. His diocese claims to have lost more than €40 million, while the press estimates the losses at about €100 million. Now the new executive board of Gero AG plans to restructure the ailing network of companies and holdings. The corporation has already sued its former managing director for damages.

Why do the princes of the church refuse to be held accountable to their congregations? And why are they so careful to keep the government, which supports them so generously, out of their financial affairs?

A former spokesman of a diocese has spent a lot of time thinking about these questions. He attributes the current problems to the pre-modern world of diocesan ordinariates and residences, which revolved around royal courts. "The bishops and prelates, with their colorful titles, feel superior to the Western world and shield themselves against it," he says. "The confessional stands in the church, not the offices of the tax authorities."

Translated from the German by Christopher Sultan


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ChewyBees 06/16/2010
1. Dissolution of the Fiction
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.
Norberto_Tyr 06/18/2010
2. Social services and charities are not sanctum businesses
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
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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