Skip Navigation

Judge has difficult task in Diocese bankruptcy case

Sorting through Harrisburg Diocese's assets

  • Joseph Darius Jaafari
The Roman Catholic Diocese of Harrisburg in Lower Paxton Township, Dauphin County.

 Joseph Darius Jaafari / PA Post

The Roman Catholic Diocese of Harrisburg in Lower Paxton Township, Dauphin County.

Good morning, readers! It’s been a warm winter in central Pennsylvania. And though that might be good for those of us who prefer outdoor cafe seating to indoor lounges, it’s not great for areas that desperately need snow for business. A New York Times piece goes into what all this means for ski and snow-driven businesses across the United States. The Inquirer, meanwhile, profiled a New Jersey scientist who studies snow for a living; he explained what snowless winters mean for people all over our planet. Spoiler alert: It’s not good.  — Joseph Darius Jaafari, staff writer
The Roman Catholic Diocese of Harrisburg in Lower Paxton Township, Dauphin County.

Joseph Darius Jaafari / PA Post

The Roman Catholic Diocese of Harrisburg in Lower Paxton Township, Dauphin County. (Joseph Darius Jaafari / PA Post)

It’s been just under a week since the Roman Catholic Diocese of Harrisburg announced that it would file for Chapter 11 bankruptcy. And as expected, before the court creates a plan for managing the church’s debt, there must be a proper accounting of the church’s assets (property, cash, etc.).

In a 2018 financial filing, the Diocese said it had more than $160 million in properties and other assets, everything from actual parish buildings to schools and even cemeteries. But when the diocese filed for bankruptcy last week, it declared less than $10 million in its coffers.

That’s a big difference that could affect how much compensation the victims of clerical sexual could receive.

In the past week, there’s been lots of breezing over this issue in news coverage. And last Friday, the federal judge overseeing the bankruptcy case ordered the church to stop shifting money around so the court could make sense of everything.

So, let’s spend a bit of time just understanding why the church can say one thing in its annual financial report, and then claim another in its bankruptcy filing.

First, the Catholic Church has its own set of rules. That’s not to say it’s above the law in terms of criminal conduct, but in some respects church law can supersede civil law.

Canon Law – developed over the centuries by the Vatican and codified most recently in the 1980s – defines property ownership based on usage. For example, if a bishop gave a church to a pastor to use as his primary place to congregate worshippers, it spiritually belongs to the pastor despite the legal deed being in the bishop’s name.

In bankruptcy, determining legal property ownership is essential to valuing an individual’s or institution’s assets. But it becomes tricky when dealing with the Catholic Church, which has argued in the past that applying secular to canonical law infringes on their religious freedoms.

Second, many judges aren’t well-versed in Canon Law, said Jonathan Lipson, an attorney and researcher on dioceses bankruptcy.

“For some judges, that would be like applying a foreign country’s law,” he told me over the phone last week.

In my story last week, I noted that the parishes in the Harrisburg Diocese are organized as separate entities that manage their own finances. This is by design. By arguing that the parishes operate independently, the Diocese can effectively say it doesn’t have control over those properties. They are, instead, held “in trust” for the Diocese (meaning the pastor is not the official property owner, but whatever money their parish makes will be used for that church or property).

On Friday, the Associated Press reported that the judge in the Harrisburg Diocese’s bankruptcy case limited the church from shifting around large amounts of money to protect creditors.The Diocese’s attorney explained to the judge that there are 79 bank accounts linked to the church. They also revealed that multiple entities, including high school cafeterias and a basketball boosters’ clubs, had used the Diocese’s federal employer identification number.  While the church will be committed to use the money for normal operations, the bankruptcy trustee will be updated regularly to make sure the accounts aren’t being drained inappropriately.

The next bankruptcy hearing isn’t until April, so we’ll keep you abreast of the filing when that comes around. – Joseph Darius Jaafari

Best of the rest

Mark Tenally / AP Photo

FILE – This is a Jan. 27, 2020 file photo of The Supreme Court in Washington. The Supreme Court said Monday it will hear a dispute over a Philadelphia Catholic agency that won’t place foster children with same-sex couples. The justices will review an appeals court ruling that upheld the city’s decision to stop placing children with the Archdiocese of Philadelphia’s agency because it would not permit same-sex couples to serve as foster parents. (AP Photo/Mark Tenally)

  • Philly goes to Washington: The Supreme Court will hear a case on whether or not Philadelphia violated a Catholic foster-parent agency’s religious rights by cancelling it’s contract. The agency discriminates against same-sex couples in placing homes for children, which violates a city ordnance that can refuse to work with company’s that don’t abide by equal treatment. The attorney representing the foster agency, though, says that the Supreme Court should realize the need for more agencies, and that same-sex couples can do business elsewhere. The Philadelphia Inquirer has the story. 

  • Smoke gets in your eyes: State Rep. Dan Frankel (D-Allegheny County) wants to expand the Clean Indoor Air Act and place more restrictions on establishments that currently allow smoking, including some lounges and college campuses. But, as you might expect, smokers are wheezing in frustration. “If we say no smoking here, then where are you going to smoke when it’s 13 degrees outside, and your wife won’t let you smoke in the house?” one cigar lounge owner said to the Centre Daily Times.

  • It begins: Priorities USA, a Democratic Super PAC, will begin airing anti-Trump ads in Pennsylvania and three other battleground states today. MSNBC’s Rachel Maddow previewed one of the ads on her show Monday night. President Trump’s victory in Erie County helped deliver the Keystone State for him in 2016. But a new Mercyhurst University poll shows the president is trailing in the swing county. The Inquirer‘s Jonathan Tamari has the story. Separately, The Inquirer looks at another key voting group in Pa. — newly naturalized citizens. About 34,000 immigrants have gained the right to vote in the state since 2016, not much less than President Trump’s 44,000-vote edge that won him the state four years ago.

  • Philly special: Voters in the 190th House District will decide today who will fill the seat left open when Movita Johnson-Harrell resigned after being charged with stealing $500,000 from a nonprofit she created. The candidates — Democrat G. Roni Green and Republican Wanda Logan — were not the victors in respective party primaries. Instead, they are picked by party insiders i a process that’s ripe for reform. Spotlight PA has a good story on the issue.

  • Absentee FAQ: Here’s a useful guide to the state’s new mail-in voting rules, written by The Inquirer‘s Jonathan Lai. The new rules take effect for the April 28 primary.

  • Impeachment aftermath: Democratic Sen. Bob Casey fired off an angry letter to the Justice Dept. on Monday, blasting Attorney General Bill Barr’s decision to have the U.S. Attorney for Western Pa. review new “evidence” of Ukraine wrongdoing dug-up by the president’s lawyer, Rudy Giuliani. “Law enforcement resources in Western Pennsylvania should not be diverted from combating serious safety issues to vetting Russian propaganda from Mr. Giuliani,” Casey wrote, according to the Pittsburgh Post-Gazette.

  • Water, Sewage, Garbage, EMS: Across Pennsylvania, ambulance crews are in dire need. In Union City, close to 30 percent of all the 911 calls needing help couldn’t be answered due to a lack of funding and manpower. The problem is, of course, financial: there simply aren’t enough public ambulance workers, and as EMS costs continually rise, medicare billing for services is simply not enough. From The Morning Call: “Even if the fire company answered every call, experts say the volume is barely enough to break even financially.”

  • Trying time for hemp farmers: The hemp industry hasn’t been as lucrative as many hoped. Though some have seen their crops break even financially – as was the case with Mitch Shellenberger in Mount Joy who broke even off his crop this year – many haven’t had the same luck, according to WGAL. For more “context,” (get it?) Rachel McDevitt with WITF originally profiled Shellenberger in December and how the hemp industry, labeled as Pennsylvania’s new savior crop, might be a tough sell, literally.


Subscribe to The Contextour weekday newsletter

Support for WITF is provided by:

Become a WITF sponsor today »

Support for WITF is provided by:

Become a WITF sponsor today »

Up Next
Uncategorized

Could Bernie actually beat Trump in Pa.?