March 25, 2014
By Peter Trute
THE Sydney Catholic archdiocese controls funds worth more than $1.2 billion and has regularly made multi-million dollar tax-free profits.
The royal commission into child sex abuse heard the archdiocese banked surpluses of between $7.7 million and $44 million between 2004 and 2007, a period during which the Catholic church was aggressively defending a claim for $100,000 brought against it by former altar boy John Ellis.
Mr Ellis was abused by a pedophile priest from the age of 13 to 17 during the 1970s.
The church ultimately spent $1.5 million defending the case, winning in 2007 then pursuing Mr Ellis for costs before abandoning the claim and paying him $570,000 for counselling, a holiday and renovations.
Sydney Archdiocese business manager Danny Casey told the commission on Tuesday that the church’s funds, worth $1.24 billion, included extensive property holdings and cash and were ultimately controlled by the archbishop.
The commission also heard the church is spending more on victim compensation and less on legal fees than in the past.
Mr Casey said surpluses recorded by the diocese were exempt from income and capital gains tax and were reinvested to allow the church to do “good works”.
The commission heard the archdiocese makes payments to victims of sexual abuse by priests from a $426 million dollar “procuration fund”.
The fund is part of a complex asset base that includes an $810 million dollar Catholic Development Fund (CDF), described by Mr Casey as an “internal treasury” to the church.
Assets such as schools and nursing homes are not included in the archdiocese accounts.
Mr Casey said the archdiocese had grown its assets by 86 per cent in the 13 years since 2001, which is when Cardinal George Pell became archbishop.
However, payments to abuse victims had also increased while the church had slashed its spending on lawyers, he said.
“The total value of payments made to victims was $1.281 million between 2001 and the end of 2007,” Mr Casey said.
“It is now $5.51 million since the end of 2007.”
Mr Casey rejected earlier evidence that Dr Pell had signed off on all offers made to sexual abuse victims.
Previously, Monsignor Brian Rayner, the former chancellor of the archdiocese, had testified he told Dr Pell of all offers made to victims, including $25,000 initially offered to Mr Ellis.
Dr Pell has denied knowledge of the offer, describing it as “grotesque” and Mr Casey told the commission that Mons Rayner did not need the archbishop’s authorisation to act.
Dr Pell has expressed regret at the handling of Mr Ellis’s case and on Tuesday Mr Casey also described his actions in the matter as a mistake.
The commission saw a 2007 email from the church’s lawyers, Corrs Chambers Wesgarth, which stated that Mr Casey would not pursue Mr Ellis over costs if Mr Ellis agreed never to talk to the press about his case.
Mr Casey said he did not recall saying that but “if that was expressed by me it was completely wrong”.
Dr Pell returns to the commission on Wednesday.
Sydney’s Catholic Archdiocese has assets over $1 billion, royal commission told
The Sydney Morning Herald
Sydney’s Catholic Archdiocese, thought to be the richest in the country, controls funds with assets of $1.24 billion and generates annual multimillion-dollar surpluses, according to evidence at the child sex abuse royal commission.
As the commission explores the church’s handling of sex abuse claims, an unprecedented glimpse of the books was provided by the archdiocese’s business manager, Danny Casey, who said the funds are “ultimately controlled by – owned by, if you like – the archbishop of the day”.
The funds are ‘ultimately controlled by – owned by, if you like – the archbishop of the day’.
Since George Pell’s appointment as archbishop in 2001, the archdiocese has received 204 claims and paid out just under $8 million to victims of child sexual assault, the commission has been told. Payments to “non-school victims” were $5.4 million. This included $740,000 for “boundary issues with adults”.
The commission heard the archdiocesan funds have generated annual surpluses including $43.95 million (2007), $19.6 million (2006) and $9.1 million last year.
The royal commission was shown accounts revealing that the Catholic Development Fund held $810 million, including $321 million in cash at the end of 2013. The procuration fund from which sexual abuse claims are made held $426 million, including real estate assets of $207 million. This included buildings and land used “substantially” for church purposes.
The archdiocese’s reported net assets in 2013 were $192 million.
Mr Casey said the archdiocese held a relatively large amount in low-returning liquid assets, depending on the requirements of the “clients”, including church agencies such as schools who may need access to cash within a three-month period. He said: “We need to be very prudent with it and I believe we are.”
“What you are indicating, as I understand it, is that in many years the church makes significant investments – but from property transactions and other transactions gets significant returns, is that right?” asked the royal commission chairman, Justice Peter McClellan.
“That’s correct,” Mr Casey replied.
“No doubt your prudence in this is commended, but in many years, there are significant amounts of money that provide significant returns?” Justice McClellan asked.
“That’s right, your honour”, Mr Casey replied.
Last year’s $9.1 million surplus included a 125-year lease transaction contributing $5.5 million and “we had a very good year with our managed funds and out investments,” he said.
Mr Casey said it had been a “very, very bad decision” not to accept sex abuse victim John Ellis’s pre-litigation settlement offer of $100,000 in 2004. The case finished up costing the Archdiocese $1.5 million including $568,000 in ex gratia payments to Mr Ellis.
The largest amount paid to an unnamed sex abuse victim by the Sydney Archdiocese through its Towards Healing process since 2001 was $795,000, the commission has been told.
Royal commission into child sex abuse told of incredible wealth of Sydney’s Catholic Church, but no cash for alleged victims of sex abuse
The Daily Telegraph Australia
March 26, 2014
The Daily Telegraph
- Sydney Archdiocese controls $1.236b funds
- Church makes $43 million profit a year
- Spent $1.5m fighting $100,000 abuse claim
THE Catholic Church’s Sydney Archdiocese controls an incredible $1.238 billion in funds — most of it tax free.
It was the first time the wealth of the church has been revealed as the royal commission into institutional responses to child sex abuse delved into its finances and examined the church’s response to victims.
The archdiocese’s cash reserves are $321 million and the church has been making a profit of up to $43 million a year through investments since 2001.
But the commission has been told that, instead of settling former altar boy John Ellis’s sexual abuse claim for the $100,000 he asked for, it offered him just $30,000 and then spent $1.5 million fighting him in court. Most claims are settled for between $50,000 and $70,000.
The money maze was unveiled as the archdiocese’s business manager, Danny Casey, gave evidence to the commission yesterday.
The funds are ultimately controlled by the archbishop, who since 2001 has been Cardinal George Pell.
Since then, the church had increased its net asset base by 86 per cent from $103 million to $193 million, the commission was told.
In the same time, just $5.5 million has been paid to victims of sexual abuse by church clerics.
“The state of those funds is such that it would be possible for the church to spend significantly greater moneys in assisting people who have been abused than it has spent so far,” commission chair Justice Peter McClellan said.
Mr Casey: “Yes your honour, there is always an opportunity to redirect existing expenditure.”
The diocese’s wealth has remained a secret to anyone outside a few within the church hierarchy because it is generally not required to file its affairs with any outside agency such as the Australian Securities and Investments Commission.
Mr Casey said that the church’s funds were income tax exempt and capital gains tax free as charities, although it was liable to pay stamp duty on some transactions.
He said that, as at the end of last year, the archdiocese had $810 million in the Catholic Development Fund, which he said operated as an “internal treasury” for the archdiocese.
That included the $321 million cash reserves.
The Procuration Fund, with gross assets of $426 million, is used to fund sexual abuse claims that are settled.
The Sustentation Fund of $1.7 million pays for the upkeep of St Mary’s Cathedral and looks after sick and retired clergy.
Mr Casey said he believed that the $30,000 the Catholic Church offered to Mr Ellis was entirely and completely inadequate.
Cardinal Pell will return to the witness box today to continue his evidence before he leaves for Rome to take up a senior post in the Vatican.
Sydney Catholic Archdiocese controls more than $1.2 billion in assets, inquiry hears
25 March 2014
The Business Manager of the Sydney Catholic Archdiocese has revealed it controls $1.24 billion in assets and a series of funds, and turns a multi-million dollar annual profit.
Danny Casey detailed the rare and revealing figures during the hearing into the case of John Ellis, who was abused by Sydney priest Father Aidan Duggan at Bass Hill between 1974 and 1979.
The Royal Commission into Institutional Responses to Child Sexual Abuse has heard Mr Ellis was left a shattered man after he lost a case seeking $100,000 in compensation against the Church in 2007.
When he was offered $30,000, he took the Church to court.
Mr Casey says the Church should not have proceeded with legal action against Mr Ellis.
He says the expensive and hard-fought legal battle was wrong.
“It was a very, very bad decision to proceed and not seek to settle at $100,000,” he said.
Mr Casey has been asked why the Church did not settle the matter out of court, considering the legal costs far exceeded that amount.
“Looking back on this, I think that was a mistake. The extent to which I could have influenced things back then, I wish I had done more,” he said.
Mr Casey revealed that the books also show annual multi-million dollar profits, including $9.1 million last year.
The royal commission was told that in 2013 the Archdiocese had net assets totalling $192 million.
A Catholic Development Fund amounts to $810 million alone.
Victim of ‘legal abuse’
Earlier, the inquiry heard senior Catholic officials, including Cardinal George Pell, were in agreement that Mr Ellis was a victim of “legal abuse”.
The evidence, by Reverend Monsignor John Usher, Chancellor of the Catholic Archdiocese of Sydney, directly contradicts testimony by Cardinal Pell, Australia’s most senior Catholic.
Reverend Usher had been asked to respond to yesterday’s evidence from Cardinal Pell, who is the former head of the Archdiocese of Sydney.
The Cardinal had conceded that the expensive legal battle was “disproportionate” but defended the Church’s right to take matters to court and denied ever saying Mr Ellis was a victim of “legal abuse”.
In a statement, Cardinal Pell said:
“While, in retrospect, there were steps in the litigation which cause me concern, I did not use the term ‘legal abuse’ myself,” the statement reads.
“I do not regard the mere defending of the litigation commenced by Mr Ellis as ‘legal abuse’.”
But Monsignor Usher told the hearing he was adamant a discussion with Cardinal Pell and other senior Catholic officials took place.
“There was an agreement that it was legal abuse,” he said.
“There was a legal abuse of process.”
Mr Ellis lost the case in the New South Wales Court of Appeal in May 2007.
The hearing has been told Cardinal Pell decided not to pursue court costs in May 2008 and Mr Ellis was not informed in writing until August 2009.
Monsignor Usher was presented with a note instructing lawyers to keep the decision about court costs in confidence.
“It does seem to indicate that the Cardinal, even at this stage, was saying he was not going to pursue costs, but let’s not let the other side know,” he said.
A ‘change in attitude’
Reverend Monsignor Usher told the Commission he has noted a change in Cardinal Pell’s attitude to complaints of child sexual abuse involving the clergy.
“I don’t know whether it’s because of this Royal Commission or because of extra learning,” he said.
The Chair of the Commission, Justice Peter McClellan, asked the Chancellor to clarify what changes he had seen in Cardinal Pell.
“To admit he made mistakes,” he responded.
Monsignor Usher has also pointed out the dangers of protecting the name of the Church when victims come forward.
“The victim is the prime responsibility of the Church, not the good name of the Church, and certainly not the perpetrator,” he said.
“There’s a danger that people think they’re all equal players in this. They are not.
“It’s almost predictable that people will try and defend the institution before they give care to a victim. I don’t know why.”
The evidence comes after Cardinal Pell’s highly-anticipated testimony, in which he denied being involved in the day-to-day running of the Ellis case.
Cardinal Pell has also rejected evidence he was made aware of John Ellis’s request for compensation, and labelled one claim that he offered an extra $5000 when Mr Ellis lost his job as “grotesque”.
In a statement to the Commission, Australia’s most senior Catholic cleric apologised to Mr Ellis for the “gross violation and abuse” committed by Father Aidan Duggan.
“I deeply regret the pain, trauma and emotional damage that this abuse caused to Mr Ellis,” the statement reads.
Cardinal Pell will re-appear at the Commission on Wednesday before taking up his new post at the Vatican managing the Church’s finances.