Inquiry finds settlement violated no laws

MILWAUKEE -- The Archdiocese of Milwaukee did not violate any laws when it used $450,000 from a real estate account to settle a civil suit by Paul Marcoux against former Archbishop Rembert G. Weakland in 1998. That was the determination of an inquiry conducted by the U.S. Attorney's Office and the Milwaukee County District Attorney's Office.

While Weakland and the archdiocese have been cleared of any wrongdoing, the settlement's impact on charitable giving remains in question. The archdiocese has defended the settlement, saying it avoided a trial and legal fees.

One prominent Catholic said the settlement was unjustifiable and shows that the archdiocesan administration is out of touch with Catholics in the pews and a review of their roles is in order.

"All of the people in the Cousins Center need to be evaluated for their productivity and what their positions are in the archdiocese," said John Stollenwerk, president and CEO of Allen-Edmonds Shoe Corp., of Port Washington.

"What do they do for us to make their positions meaningful in carrying Christ's message here in the Milwaukee Archdiocese?" added Stollenwerk. "I think that (evaluation) has to be done sooner, rather than later."

On May 24, one day after Marcoux told a reporter on ABC-TV's "Good Morning America" that Weakland sexually assaulted him in 1979, U.S. Attorney Steven Biskupic and Milwaukee County District Attorney E. Michael McCann launched an investigation into the settlement.

The inquiry was to determine whether the money used in the settlement had been given to the archdiocese for a specific purpose. If funds had been targeted for another cause, the settlement would have been illegal. Biskupic and McCann released a joint statement July 22 stating that the no misuse of funds occurred.

"No evidence that was reviewed establishes that the archdiocese obtained funds through misrepresentations on how those funds would be used," said the statement. "No evidence shows that the funds used for the Marcoux settlement were obtained from contributions previously dedicated to other purposes."

In a statement, archdiocesan spokesman Jerry Topzewski said, "We are happy that this matter is resolved and that the U.S. attorney did not find any basis for further action."

According to the joint statement, the archdiocese paid $450,000 from the "Archdiocesan Real Estate Account," which comes from the sale of real estate owned by the archdiocese. At the time, the account had a balance of $974,340.09. Most of that amount came from the May 1997 sale of an office building at 7700 W. Blue Mound Road in Wauwatosa.

The building was donated to the archdiocese in 1992 by the DeRance Foundation, which was established by the late Harry John, heir of the Miller Brewing Company. The charitable foundation was dissolved that year following a long legal battle, and John's wife, Erica, established a new charity -- the Archdiocese of Milwaukee Supporting (AMS) Fund.

When DeRance donated the building, which served as the firm's headquarters, no restriction was placed on its use. It was sold by the archdiocese in May 1997 for $1 million, with $936,017.25 deposited into the real estate account.

According to the joint statement, there is no evidence the building was sold specifically to raise money for the settlement.

Erica John told the New York Times June 13 that she was "devastated" to learn about the Weakland settlement. During a national meeting of Catholic donors, John told the Times that "The church should open up its books.... The church should not be a secret society. We're the people of God, and we want transparency."

Frequent calls to Thomas Cannon, attorney for the AMS Fund, for comment on the AMS Fund and any changes to the fund, went unanswered.

In a letter to the Milwaukee Journal Sentinel June 18, Stollenwerk, who is active in many church and civic projects, expressed outrage with the settlement decision.

"I, along with every one of my practicing and donating Catholic friends and relatives, am angrier than ever by the continued cover-up and justification for spending $450,000 in donated funds to an extortionist to keep him quiet," wrote Stollenwerk.

The businessman told the Catholic Herald that he received about 70 telephone calls, e-mails and personal greetings from people who supported his letter.

Asked if any new rules or guidelines should be established by the archdiocese to prevent another such controversy, Stollenwerk responded, "You don't need any more rules or regulations, just good common sense. That's why I go back to my original statement about people in the Cousins Center. You need people of good common sense working within the spirit of Christ in the Catholic Church."

(The July 4 issue of the Catholic Herald reported that Milwaukee's Archdiocesan Finance Council will take an active role in reviewing extraordinary, non-budgeted expenses related to out-of-court settlements, a significant addition to the council's responsibilities of reviewing the annual operating budget and annual audit results.)

Stollenwerk said he believes Catholics in the pews may think twice before writing a check to the church.

"Catholics in the pews are saying, 'If I send $100 to the Milwaukee Archdiocese, what is it going to be used for? To handle lawsuits?" said Stollenwerk. "I like Rembert. It's unfortunate about the situation, but he's human. But the other part of it, using donated funds to take care of a personal indiscretion? That just was not right."

P. Michael Mahoney, chairman of the board and president of Park Bank, said he believes charitable giving will be affected by the settlement scandal.

"People will use that as an excuse to discontinue giving," he said. "Unfortunately, for the most part, it's going to hurt the people who need the help the most, as opposed to 'disciplining' the archdiocese."

The impact may not be as severe as some predict, added Mahoney.

"The majority of the people see that the real needs that are out there are continuing, in spite of their concerns," he said. "My own feeling is that the archdiocese has gotten the message, and I have a lot of faith, from what I've seen so far, in the new archbishop, and I would assume that things are going to be run the way people want."

In an effort to help Weakland repay the archdiocese the settlement amount, a group of local Catholics began the "Friends of Weakland" campaign. One of the organizers, former Catholic Herald associate publisher Ethel M. Gintoft, said that as of July 30, the archdiocese has received over $315,000. She stressed that this amount comes from Friends of Weakland as well as from private donations.

"I think the real story is not the fund-raising," said Gintoft. "I think the story is the compassion and the forgiveness and understanding on the part of the people that gave."