The drive from my home to Holy Cross Church
is only a couple of miles away
and every single day I pass by that church,
you're always remembering what happened to you.
Where you were.
The pain and the anguish that you suffered
as a young little kid is never gonna be diminished.
It's never gonna go away.
Also knowing that where I learned about God
was also where I learned about pain.
There are thousands of me all across the country
and still to this day
there are some of us that have never come forward
and will never come forward
because they're afraid of what their community,
what their family and their friends are going to say.
I was very nervous about speaking out
against the Catholic Church
but this is not about the church.
This is about what's doing right for the victims.
Good evening.
Two men are taking on two Albuquerque Catholic Churches
and the archdiocese.
They say they were raped as boys
and accused the church of covering it up.
The diocese is aware of about 500 claims against them.
The Archdiocese of Milwaukee
said it must file for bankruptcy for reorganization.
The diocese says it filed for bankruptcy
because of clergy sex abuse payouts.
The numbers were shocking.
The number of pedophile priests,
the amount of assets that were being transferred
back to the parishes across the country,
or back to the Vatican, so that the Catholic Church
doesn't have to pay their victims.
A lot of archdiocese, before they file bankruptcy
they make moves, shift assets,
they recategorize assets in ways that shrink
the pot of money that's available to victims.
This is a story about money and a church
acting more like a corporation
than a faith-based institution.
My name is Josh Saul.
I'm a reporter for Bloomberg News and Businessweek
and I wrote a story about the Catholic Church
and how it uses bankruptcy to shield its money
from sex abuse victims.
For most of the 1900s,
the way the Catholic Church dealt with claims of sex abuse,
which at that point was usually
just a mother coming forward and saying,
my child tells me that this happened,
was they would cover it up.
Church leaders would say, we're sorry about this.
We'll handle it.
That priest will be disciplined or transferred
and it mostly worked.
They mostly kept it under wraps.
So there was an awakening in the '90s
that there was a problem
that began to appear to be systemic.
And then we come to find out,
historically it's always been happening.
It's just, it's been kept quiet.
I'm Merit Bennett.
I'm a lawyer in Santa Fe, New Mexico.
We have have represented between 100 and 150 cases.
Could be more,
that's my best recollection.
They came to us in shame and that was the tactic.
We will make everybody feel ashamed
if they reveal the secret that we're trying to tamp down
and put in the cupboard and it worked.
But there was still this breakthrough into the public arena.
In the '80s and '90s, people started to file lawsuits
against the church when they themselves
or when their children were sexually abused by priests.
The Catholic Church quickly moved to set up a system
to quote, "mediate these cases."
In other words, to try to get them settled.
Between the early 1980s and 2002,
church leaders paid about $750 million in quiet settlements.
What changed was in 2002,
the Boston Globe, its Spotlight team,
exposed for the first time how priests in that city,
and how church leadership in that city
had abused a huge number of children
and had conspired to keep it all a secret.
And so that created a whole second wave,
really, throughout the country
and there's been a movie made about it since.
They knew, and they let it happen to kids.
Okay?
It could have been you.
It could have been me.
It could have been any of us.
When larger numbers of people started to file lawsuits
about the fact that they were abused,
churches couldn't handle those on a case-by-case basis.
So then church leaders had to file bankruptcy
in order to deal with a large number of lawsuits.
I was used to covering bankruptcies of Toys "R" Us or Sears,
big companies that filed for bankruptcy
but this was a totally different situation,
this was a church.
We begin with the top story
that we've been following all day.
After years of turmoil, the Catholic Diocese of Buffalo
has filed for bankruptcy.
The Archdiocese of Milwaukee
said it must file for bankruptcy.
The Diocese of Rockville Centre is filing for bankruptcy.
Almost 30 dioceses or church districts in the U.S.
have filed bankruptcy since 2004.
There were at least six bankruptcies
by Catholic Churches in 2020.
That's a huge increase.
There have been years in the past
where there wasn't a single bankruptcy.
There were periods where it would take several years
to get to six bankruptcies.
There's been a huge increase
in the number of bankruptcies by church districts.
If you're an abuse victim and you have a lawsuit
that you filed against the church,
when the church files for bankruptcy your lawsuit is frozen.
It's brought into the bankruptcy
and then your only option at that point
is to hope for a good settlement.
Church leaders benefit in a number of ways
when they file for bankruptcy.
First, it creates one central streamlined process
to deal with all of the sexual abuse lawsuits.
Two, you get a bar.
After the bankruptcy,
nobody can file a lawsuit over a past abuse.
It's basically a clean slate,
as one lawyer described it to me.
And three, bankruptcy is a quieter process
than a big civil lawsuit.
The bankrupt, the archdiocese has to account
and disclose all of its assets.
All of its money, all of its property,
all of its real estate as part of the bankrupt estate
so we know what we're dealing with,
all of its debts and so forth and so on.
When we first brought these cases back in the '90s,
we were hearing rumors
that real estate was being put into blind trusts.
A lot of transfers of assets were going on.
They could see, foresee the avalanche down the road.
So what my reporting showed is that a lot of archdiocese,
before they file bankruptcy, they make moves.
They shift assets, they recategorize assets
in ways that shrink the pot of money
that's available to victims.
So I did a lot of work to try to put a number
on the amount of money that the church had moved
from assets that it owned to its parishes
or to various foundations or cemetery foundations.
And after adding up everything from big, big bankruptcies,
like Minneapolis to smaller ones like Gallup, New Mexico
and all the way back to San Diego,
the number that I came up with was $2 billion.
If you imagine an organization that files for bankruptcy
and they have $100 million in assets, that's a lot of money.
That's a lot of assets that can then be divided up
among victims in a settlement.
If you have that same organization, but they say,
oh, we actually only have $5 million in assets.
That's a much smaller pot of money
that can be divided up among victims.
To boil it down, the church shifted money.
Critics would say that they hid money into places
where it was not available for clergy abuse victims.
Santa Fe is a very beautiful community
that is steeped in tradition and culture.
It is a predominantly Catholic community
where individuals focus and tend to have deep pride
in their traditions and the cultures
that they've been practicing for centuries.
As a young kid, I was raised Catholic, went to confirmation,
went through all of my catechism classes as a young kid.
I went to Catholic school my entire life.
And so religion was a part of me.
The church that I was a part of is Santa Cruz de La Cañada.
So as a young kid, I thought I was going to become a priest.
Being a part of the Catholic Church community,
I think as a young kid, you have reverence
and you see these priests and you want to emulate them.
My life changed drastically
right around the age of 10 years of age.
I kind of hold myself to the position
that I allowed my guard to be down.
That's when he took advantage
and I think as a young kid, it really screws with your mind
because you wonder what you did wrong,
and you wonder why it was you?
I'm now 38 years of age.
You deal with this issue every single day
and so for me, my biggest challenge was
I knew I was harmed and I was hurt as a young kid
by this individual, all of us do.
But the real harm and the real hurt
comes from the fact of what the Vatican,
what the Archdiocese of Santa Fe,
what all these other organizations have done
to hide this issue and to brush it away
like it was no big issue.
That's really where the big hurt comes from.
These are the organizations that should be protecting us.
By the archdiocese filing for bankruptcy,
they have essentially told every victim
that they don't care.
Breaking news right now.
The Archdiocese of Santa Fe filing for bankruptcy,
we have learned.
The archbishop just called a meeting
with every priest in the diocese to a mandatory meeting
where he made that announcement.
Now, the diocese attorney says
they are currently handling 35 to 40 cases
from people claiming sexual abuse
at the hands of different Catholic priests.
They have already paid millions of dollars
to victims and survivors, but by filing bankruptcy,
future victims will be waiting longer for compensation.
There ended up being over 300 sexual abuse lawsuits
filed against the Archdiocese of Santa Fe in its bankruptcy.
Which is kind of amazing to think about,
New Mexico is not a big state.
Finally, the archdiocese cracked
and by cracked, I mean they filed bankruptcy.
They basically did that not because, in my opinion,
that they couldn't afford to pay these claims.
They made it as a business decision,
they thought that this would basically save them money.
So when the Archdiocese in Santa Fe filed for bankruptcy
in late 2018, it said we have $49 million in assets.
But on the same filing, it also listed $91 million
that it either held on behalf of its parishes
or that it had transferred to its parishes.
So when Isaac and I drove around
and saw sign after sign after sign
saying welcome to the Archdiocese of Santa Fe
on all of these different parishes,
it again seemed to show to me the close relationship
between the archdiocese and its parishes.
So the Archdiocese of Santa Fe, it's a big organization
it has a CFO, it has a Chief Financial Officer.
For a long, long time it's been the same guy.
His name is Tony Salgado.
You know, people I talked to said like, Tony is a great guy,
he's a really nice guy.
He wouldn't talk to me, which makes sense.
One lawyer described to me, he knows where all the money is.
He is the one who put into effect transfers
and the categorizations that shrank the amount of money
that is available to victims.
So in 2012, Tony Salgado called a meeting.
They gathered the business managers
for its 90 parishes from across the state.
They gathered them all together in a conference room
in Albuquerque at archdiocese headquarters.
And they told them that each business manager
needed to incorporate their parish separately.
My name's Christine Romero
and I worked for the Archdiocese of Santa Fe for 12 years.
The meeting was sometime the summer of 2012.
The business managers were called together
to help us understand how to incorporate the parishes.
What that has the effect of doing
is it means that all of those assets
that are owned by the church,
its building, its collection plate, its parking lot,
all of that is owned by the parish, not by the archdiocese.
I didn't really have any
either negative or positive ideas about the incorporation.
But when I did ask what the impact
was gonna be on the parishes on my particular workload,
I asked Tony Salgado.
He said that there would be no difference,
that our work would be exactly the same,
that we were incorporating each parish separately
to protect the parishes from the pedophile lawsuits
that were coming in to the archdiocese.
So when Christine told me that, it was a pretty big deal.
I'm like, okay, great smoking gun.
I decided to go on the record
because I don't believe the Catholic Church
should care about money.
We're about protecting our faith, not our money.
If we have had abusive priests, pedophile priests,
that's so unfortunate, but if we have to sell our land
or sell our assets to help the victims,
I think we should do that.
I don't believe that we should be
protecting monetary items, material things.
That's not what our faith is based on.
I just didn't realize the bigger picture
of what was happening on a larger scale
in terms of lawsuits.
I knew at a national level
there was a lot of pedophile lawsuits.
I just didn't realize the magnitude
and the number of lawsuits
that were happening in New Mexico.
Tony Salgado has not responded to these claims.
He's emailed me back only to say
that I would need to talk to the lawyer
representing the church.
By incorporating the parishes separately
and also by moving parish assets into a trust,
the archdiocese moved about $91 million off of its books
into accounts or trusts.
By studying past bankruptcy settlements,
I came up with a very rough estimate
which was archdiocese often settle for half of the assets
that they initially say that they owned
when they filed for bankruptcy.
So using the 50% number as a rough guide,
victims in Santa Fe could expect to get
about $65,000 in the settlement
if the church stuck to saying
that it owned just $49 million in assets.
But if the archdiocese included all of this other money
from its parishes, its foundation,
then victims could expect to get a lot more,
more like $300,000.
I did a lot of reporting to try and understand
what happens after someone's abused.
I talked to a psychiatrist in Santa Fe
who treats a lot of these victims.
Basically what I learned
is that being a victim is expensive.
Researchers at Johns Hopkins actually put a number on it.
Childhood sexual abuse can end up costing
that victim $280,000 throughout their lifetime.
For me personally, as a victim,
I don't always believe that money fixes everything.
A sense of community and a sense of counselling
and rehabilitation is more important.
Money is just the Band-Aid that fixes a scrape,
but we're not really looking as to what caused the scrape.
We're not looking at the long-term effects of that.
And so there needs to be a strong sense of movement
to getting people the help that is continuous
and isn't just temporary.
How do you value the damage
that this inflicts on a human being?
Money's not gonna fix it totally,
but certainly it could begin to help get people access
to mental health care, to get them to rebuild their lives
and be able to find a job
and try to come back to believing that it's not their fault.
But things are changing in a couple of ways.
The bankruptcies now are very contentious.
The victims in Santa Fe actually just won
a court decision where they can now sue the church
to bring some of those assets back into the pot of money
that the archdiocese owns.
So here we are with the archdiocese of Santa Fe
now facing scrutiny that they've never faced before.
So I'm not sure where the Catholic Church goes with this.
This is not unusual, by the way.
This has happened around the world.
Certainly when these types of claims
that threatened these assets started to arrive,
everything went underground
as far as their holdings are concerned.
So that's kind of where we are now.
My hope for this story is that it shows the people
around these bankruptcies, from the victims,
to the lawyers, to the church leaders
what's happened in the past,
helps them understand what's going to be happening
at an even greater rate
as more and more churches file for bankruptcy
in the years to come.
I think this issue of child molestation
and bankruptcy is predominant all across the country,
from Los Angeles, to Chicago, to Milwaukee.
These are issues that have occurred from the highest order
all the way down to seminarians.
And young kids have been caught
in this whirlwind for decades.
I just want to reassure the victims of pedophile priests
that there are some Catholics who do understand
and who do sympathize and who do support them
in their lawsuits and in getting
whatever monetary compensation they need,
to make them and their families whole again.
I think we're about to hit the key point
and we'll see what the church, how they respond to this.