Judge allows Milwaukee archdiocese to shield over $50M in cemetery funds from creditors

  • Article by: DINESH RAMDE , Associated Press
  • Updated: July 30, 2013 - 4:20 PM

MILWAUKEE — The Archdiocese of Milwaukee can shield more than $50 million from creditors in sex-abuse settlements because the money is in a cemetery fund protected by the First Amendment's guarantee of religious freedom, according to a federal court ruling.

Sex-abuse victims have accused the archdiocese of shifting money into the fund to avoid having to pay them, while the archdiocese has said the money was always intended for cemetery care. A judge ruled Monday that Catholic cemeteries are sacred to believers, so setting money aside to maintain them represents the free exercise of religion.

The cemetery trust was formed in 2007 by then-Archbishop Timothy Dolan, four years before the archdiocese filed for bankruptcy protection to deal with hundreds of sex-abuse claims. Dolan specifically wrote to the Vatican seeking permission to move $57 million into the trust.

Archdiocese spokeswoman Julie Wolf said the trust was established for the perpetual care of cemetery sites and funded by sales of cemetery plots and mausoleums.

"Because these funds were held in trust as prescribed by canon law, they were independent of the general assets and could only be used for their intended and pledged purpose — to care for the resting places of the departed as sacred places under canon law," she said in a written statement.

Peter Isely, an advocate for sex-abuse victims and a spokesman for the Survivors Network of those Abused by Priests, did not immediately return a message Tuesday.

Dolan's letter to the Vatican came to light earlier this month when it was among thousands of pages of documents released by the archdiocese in conjunction with the bankruptcy case.

The cemetery trust was formed to cover costs associated with operating burial facilities on nearly 1,000 acres of land in which more than 500,000 people are buried, according to the ruling by U.S. District Judge Rudolph T. Randa. The judge noted that burial, death and resurrection are key tenets of the Christian faith, and he said Catholics believe in the ultimate resurrection of their own bodies.

"The sacred nature of Catholic cemeteries — and compliance with the Church's historical and religious traditions and mandates requiring their perpetual care — are understood as a fundamental exercise of this core belief," Randa wrote. "Theologically, the deceased must be treated with respect and charity in the Catholic faith with the hope of resurrection."

Randa cited the church's Code of Canon Law that he said requires that the cemetery trust's funds be used specifically for their stated purposes. If those funds were used for a different purpose, he wrote, the archbishop as trustee could face discipline and a religious penalty from the church.

Randa acknowledged that the archdiocese's property interests would be generally determined by state law. But he said the Religious Freedom Restoration Act gives additional protections for the free exercise of religion.

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