O'Malley pledges financial openness

Archbishop Sean P. O'Malley, facing pressure from some legislators and lay Catholics to publicly report the church's financial holdings, today is making a public pledge to disclose fully the financial and real estate holdings of the Archdiocese of Boston.

But leaders on Beacon Hill pushing to mandate financial disclosure by the Catholic Church said O'Malley's pledge doesn't go far enough, and said they would not agree to a request from the archdiocese to drop legislation to require financial disclosure by Massachusetts religious denominations.

In a letter published in today's edition of the archdiocesan newspaper, The Pilot, O'Malley said that he will release audited financial reports early next year with ''full disclosure" of the archdiocese's revenues and expenditures, as well as an explanation of the cost and source of all clergy sex abuse settlement payments. He also promises to release an accounting next fall of the finances -- including assets and liabilities -- of each of the archdiocese's parishes, which currently number 295. O'Malley said the disclosures would then be made annually.

O'Malley said he was seeking to comply with a promise of financial transparency he made last year, and ''out of respect for people of the Archdiocese as donors and members of our Church and to demonstrate to the general public that the Archdiocese is fulfilling its fiduciary responsibilities."

The lobbyist for the state's Catholic bishops briefed state Senator Marian Walsh on the plan in a closed-door meeting yesterday. But he was unable to persuade Walsh, the lead sponsor of the legislation, to drop her effort. Walsh said she has 39 cosponsors supporting her measure.

''A voluntary policy can be changed by anyone, this year or next year or anytime," said Walsh, a West Roxbury Democrat. ''We want to make sure the taxpayers and donors are protected in statute."

O'Malley's spokesman, Terrence C. Donilon, said the archbishop would reserve comment until today. The letter did not make clear whether the reporting will include every account controlled by the archdiocese and whether the report will include enough detail to satisfy advocates of transparency.

The question of disclosure of the church's finances has become a highly charged subject, in part because of anger remaining over the clergy sexual-abuse scandal and parish closings. Walsh's legislation, which would require all religious organizations to file annual financial reports and a list of real estate holdings with the attorney general, is widely viewed as a test of how much clout the Catholic Church retains with the state's political establishment.

''It is a clearly part of a legislative strategy on their part to delay if not to prevent passage of this legislation," said Secretary of State William F. Galvin, a critic of the archdiocese who attended the meeting with the church's lobbyist, Edward Saunders.

Walsh and Galvin said they were frustrated Saunders did not offer specifics of O'Malley's plan. They also said the plan does not cover the other three dioceses in Massachusetts -- Worcester, Springfield, and Fall River.

Walsh accused the House Judiciary Committee chairman, Representative Eugene L. O'Flaherty, of holding up her legislation in his committee. She said O'Flaherty told her that his committee was facing a heavy load of bills and was ''very, very busy."

O'Flaherty, a Chelsea Democrat, left late Wednesday with a half dozen other House members for a 10-day tour of Spain and Portugal, and could not be reached last night.

''It is frustrating to learn the chair of judiciary is on vacation when we are facing the end of the session," Walsh said.

In addition to the lawmakers, many Catholic laypeople and lay organizations have been pushing for greater financial disclosure by the archdiocese since the sexual-abuse crisis began in early 2002, shaking the confidence of many parishioners in church leaders. The demand for financial transparency has been heightened locally by the archdiocese's contention that it is in financial crisis, one of the factors that required the closure of 62 parishes since the summer of 2004. Another 14 parishes are still slated to close.

Nationally, Catholic lay leaders and major philanthropists have been demanding greater financial accountability by all dioceses. A leading national advocate of greater financial transparency in the Catholic Church praised O'Malley's pledge.

''It's a very straightforward statement, with significant commitments to participation and transparency, and those are the essential building blocks for good fund-raising and trust," said Francis J. Butler, president of Foundations and Donors Interested in Catholic Activities, Inc., a Washington, D.C.-based coalition of major Catholic donors.

O'Malley first pledged disclosure in a letter to Boston Catholics on Nov. 13, 2004, when he wrote, ''I am committed to financial transparency." Since then, the archdiocese has periodically offered reports of its handling of the assets of closed parishes, but has not disclosed some of its other accounts or offered an explanation of its complex financial organization. At one point recently, when the Globe asked how many separately incorporated funds are overseen by the archbishop, the archdiocese said it was unable to come up with an answer.

In today's letter, O'Malley promises a far more comprehensive report, though questions remain. ''During the first quarter of 2006 we will release consolidated audited reports for fiscal years 2004 and 2005 with full disclosure and explanation of the Archdiocese's organizational structure, including Corporation Sole," O'Malley said, referring to the corporate structure of the archdiocese, which includes the central fund, which finances its administrative functions and ministries, as well as the parishes, an insurance fund, and an endowment.

The disclosure is to include pension obligations, as well as real estate holdings.

The president of the lay reform organization Voice of the Faithful praised O'Malley's pledge, but said it remains to be seen whether the reports will be specific enough.

''This is another step in the right direction . . . but, obviously, the devil is in the details," said the president, James E. Post, a Boston University professor. ''Transparency is the key to all accountability."

Michael Paulson can be reached at mpaulson@globe.com.