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Peter’s Pence USCCB lawsuit is stalled, but not over

Parties have waited more than a year for a federal judge to decide whether to dismiss a lawsuit that claims the U.S. bishops’ conference fraudulently promoted the annual Peter’s Pence collection, but a lawyer for the plaintiff says he expects the case could soon begin moving forward.

And while the lawyer who originally filed the suit in 2020 was credentialed last month as the United States ambassador to Argentina, the attorney now leading the case says he is optimistic about the plaintiffs’ claim, and confident in his legal team.

Image via Alamy Stock Photo

The class-action lawsuit was filed in January 2020 by plaintiff David O’Connell, a Rhode Island Catholic. The suit says that while the USCCB promoted the Peter’s Pence offertory collection as an effort to help the Church’s global relief efforts, most of the money collected — hundreds of millions of dollars — was placed by the Vatican Secretariat of State into suspect investment funds or used “to plug holes in the Vatican’s administrative budget.”

“The USCCB oversaw the promotional efforts for the Peter’s Pence collection, through which it told parishioners across the United States that the money they would be donating to the collection would be applied to help the neediest of the needy around the world. It turned out that was not in fact what happened to almost all the money, which instead went, as we now know, to fill holes in the Vatican budget,” attorney Martin Woodward told The Pillar Feb. 2, explaining the lawsuit’s claims.

“The materials that were used uniformly around the county — it is clear they were designed to give parishioners a rather clear message that their funds were going to be used in a particular way. And the funds apparently were not used in that way,” Woodward told The Pillar.

Because the USCCB “has always known the difference between a donation for emergency assistance and a donation to defray Vatican administrative expenses,” its promotion of the campaign constitutes a fraud, the lawsuit claims.

“And we are looking to ensure that nothing like that happens again, and that misapplied funds are applied to where they should have been or returned to parishioners if they wish,” Woodward said.

The USCCB denied in court most of the lawsuit’s allegations, saying in July 2020 that while it “assists the Holy See in the promotion of the Peter’s Pence Collection” it does not “administer, oversee, collect or receive funds for the Peter’s Pence Collection.”

The bishops asked the court to dismiss the lawsuit, and a hearing was held in January 2021. But before the case’s judge issued a ruling, she was promoted to a new bench, and there has been no progress in the lawsuit for more than a year.

In December 2021, President Joe Biden nominated Marc Stanley, the lawsuit’s lead attorney, to become the U.S. ambassador in Argentina.

Woodward told The Pillar that despite delays, the case will continue, and that he expects a new judge assigned to the case could rule soon on the bishops’ plea to see the lawsuit dropped.

“We were hopeful last year for a ruling fairly quickly after the hearing, but the judge was nominated and confirmed [to an appellate court bench] and did not issue a ruling before she left the bench, which just kind of left things as they were,” Woodward said.

With Stanley’s departure, the legal team is adding new attorneys, and then “we will see about trying to get a status conference or something to get moving again, because we would like to be headed to discovery. And we need to have a ruling on this motion before we can get there.”

Woodward told The Pillar he believes that the USCCB was aware that money sent to Rome from the Peter’s Pence collection was used for administrative efforts, and promoted the collection as a global relief charity fund anyway.

“It would be surprising to us to learn that the USCCB does not have exact records of what money [the collection] took in and where it was ultimately applied, because their own standards obligate them to keep those records. And, if it turns out that everything can be accounted for, I would think that they’d be eager to share that with us,” Woodward said.

It is not clear how funds, collected each June in U.S parishes, are sent to the Holy See, or whether the bishops’ conference has any role as a pass-through or intermediary in forwarding the money.

The Pillar asked the USCCB to clarify its role in the Peter’s Pence collection, and its expectations for the lawsuit. The conference has not yet responded to questions.

While the Peter’s Pence collection might be generally understood to support the pope’s charities, it has been used to support administrative costs in the Roman Curia for decades.

The collection became connected with scandal when 2019 media reporting claimed that only 10% of funds were distributed to charity, and showed that Peter’s Pence funds had been used in connection with the Vatican’s controversial London property investment, and with other controversial funds, some of which are now under scrutiny in the Vatican’s own financial crimes trial.

But recent interest notwithstanding, the extent to which the collection has been used to meet curial budgetary shortfalls has been documented in the past.

Thirty years ago, Fr. Thomas Reese, SJ, wrote in “A Flock of Shepherds” that the money “used to go to the pope’s charities but now helps balance the Vatican budget.” Reese also quoted Philadelphia’s Cardinal John Krol as saying that in order to meet administrative and operating expenses, the Vatican “started taking a little from Peter’s Pence, then more and more, and then all of it.”

In 1988, Krol himself founded the Papal Foundation, which raised millions of dollars for the pope’s use, largely as a response to the problem that Peter’s Pence collection was being used for administration, rather than charities.

“It started out, in that period of time, because there was a Vatican deficit, and they were trying to rectify that situation,” a member of the foundation’s development committee explained in a 2005 interview.

As it happens, following the furor around Vatican finances in recent years, the Papal Foundation has now pivoted to providing direct grant support to named charities and projects in line with the pope’s priorities, instead of sending the money to Rome.

Pope Francis said in 2019 that it was responsible stewardship for the Vatican to invest Peter’s Pence funds, and in recent years, Vatican officials have provided some information on the fund’s use, explaining, for example, that slightly more than one-third of Peter’s Pence receipts during the early months of 2021 had been distributed to international aid and evangelization projects.

For his part, Woodward told The Pillar that “this case is worth pursuing in the interest of justice. We believe that very strongly.”

“We are anxious to get going on the case.”

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