The Day – Catholic Church uses virus relief plan for at least $ 1.4 billion in federal aid


NEW YORK (AP) – When the coronavirus pandemic caused a vast economic downturn and unemployment rates during the Depression, Washington responded with trillions of dollars in federal aid.

A centerpiece was the $ 659 billion paycheck protection program. Congress created the program to help small businesses and nonprofit groups – typically those with fewer than 500 employees – keep their employees on the payroll.

An Associated Press analysis found that a special exemption to the 500-employee cap paved the way for the approval of at least $ 1.4 billion for groups affiliated with the Roman Catholic Church, which in fact one of the big winners of the program. Many of those millions go to pay salaries and other expenses in dioceses that have recently paid huge sums of money to victims of clergy sexual abuse.

Key points of the PA analysis:

SPECIAL TREATMENT FOR RELIGION

The Small Business Administration, which manages the Paycheck Protection Program, typically grants or oversees taxpayer-backed loans to for-profit businesses with fewer than 500 employees. When the pandemic hit, Congress also gave access to nonprofit groups.

Lobbying by religious leaders, the Trump administration went further by granting all faith groups a special waiver of the 500-employee cap. For the Catholic Church, this meant that instead of lumping all the churches, schools, and other organizations in a diocese into one total – which made many ineligible due to their size – each could apply as “small.” »Independent entity.

As a result, AP found that at least 3,500 Catholic organizations qualified for loans that the government will forgive if recipients spend the money on payroll, rent, and utilities. Loans to Catholic entities identified by AP stood at at least $ 1.4 billion – and up to $ 3.5 billion.

This is certainly an undercount: a Catholic organization of financial agents says that a survey of its members identified about 9,000 beneficiaries affiliated with Catholics.

A LOBBYING CAMPAIGN

Initially, faith groups had limited eligibility under law passed by Congress. They were still subject to the “rule of affiliation,” which meant that only dioceses or other Catholic organizations with fewer than 500 people employed in often large territories could apply.

This rule was changed after lobbying from religious groups, including the United States Conference of Catholic Bishops and the Archdiocese of Los Angeles, whose leader is the conference chair. The Catholic News Service reported that the bishops’ conference and several large nonprofit Catholic agencies worked the week of March 30 to ensure that religious groups were not restricted.

In a written statement, bishops’ conference spokesperson Chieko Noguchi said the inclusion of faith groups was a matter of fairness. She also acknowledged lobbying from the conference, which she said “works regularly with Congress and the administration on legislation and regulations affecting bishops, including emergency relief provided during the pandemic.”

With government money to pay the salaries of priests and ministers, some legal experts see a troubling precedent given the separation of church and state called for in the Constitution.

Micah Schwartzman, a University of Virginia law professor specializing in constitutional issues and religion, said the treatment of faith communities goes beyond fairness by granting them preferential treatment. “It’s something we’ve never seen before,” he said. “It’s new.”

BIG LOANS, TROUBLE DATA

AP’s analysis revealed that the Archdiocese of New York, where Cardinal Timothy Dolan helped lead the push by religious groups seeking federal aid, was a major beneficiary among Catholic organizations.

The Archdiocese of New York received 15 loans worth at least $ 28 million just for its major executive offices. Its iconic St. Patrick’s Cathedral on Fifth Avenue has been approved for at least $ 1 million.

More rural dioceses have also received loans valued between $ 5 million and $ 10 million. They included the Dioceses of Covington, Ky., And Knoxville, Tenn.

The loans only reflect a range of values ​​because the government refused to disclose specific amounts. Additionally, loan data released this week does not name recipients of loans below $ 150,000, which would include many Catholic parishes and schools. The AP and several other news organizations sued the Small Business Administration to force the publication of full information.

PAYMENTS FOR CLERGY SEXUAL ABUSE

Although the Paycheck Protection Program was intended to help businesses and nonprofits with the financial pressure of the pandemic, the PA found that some dioceses receiving loans were already suffering financial hardship due to large payments to victims of clergy abuse.

In the Archdiocese of St. Paul-Minneapolis, where church leaders recently came out of bankruptcy after agreeing to pay victims $ 210 million, church officials told AP that at least 80 of its parishes and affiliated organizations had requested money.

Abusive payments from the clergy also put a strain on the Diocese of Erie, Pennsylvania. Since 2018, following an explosive investigation by the state attorney general, the diocese has spent at least $ 12 million to settle lawsuits and establish a compensation fund for victims.

The diocese told AP that about 80 affiliated organizations, including schools and parishes, have received $ 10.3 million in paycheck protection loans, while its administrative offices have received nearly $ 883,000. . Diocese spokeswoman Anne-Marie Welsh told AP: “The Diocese of Erie’s participation in the payroll protection program was unrelated to the clergy sexual abuse crisis.”

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