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Diocese to mortgage seminary, cathedral

Loans to temporarily finance settlement

The Catholic Archdiocese of Boston has agreed to mortgage St. John's Seminary, as well as the Cathedral of the Holy Cross, and has dipped into funds for retired clergy and cemeteries as part of an elaborate plan to finance the estimated $90 million the church has promised to pay to victims of clergy sexual abuse.


In a letter faxed to priests over the weekend, Bishop Richard G. Lennon said that, in addition to the $85 million the church has pledged to settle cases brought by 540 victims of abuse, the archdiocese has agreed to pay between $3 million and $4 million to a small number of victims who filed claims on their own, without lawyers, and were not part of the larger settlement.

Lennon -- the vicar general, or chief administrative officer, of the archdiocese -- sent the financial details to priests after the weekend snowstorm caused Archbishop Sean P. O'Malley to postpone a meeting at which O'Malley had planned to share the details with archdiocesan priests.

Some of the details had previously been reported in the Globe on Friday, and others were reported in the Herald on Saturday.

In the memo, the archdiocese expresses confidence that it will ultimately come up with the $90 million from two sources: the sale of 27.6 acres in Brighton, including the mansion that once housed Boston's cardinals, and proceeds from two insurance policies that covered the archdiocese from 1977 to 1989.

But the archdiocese needs the money this month, before it can sell the property or settle with the insurance companies, so it is borrowing from four sources: $65 million from Citizens Bank, $10 million from Century Bank, $15 million from the Clergy Retirement Disability Trust, and $7.5 million from the Cemetery Association Perpetual Care Trust.

"While we had hoped to borrow the entire $90 million from the banks, that proved impossible because of our overall financial situation and our commitment not to pledge parish assets," the fax from Lennon said.

The chairman of Century Bank, Marshall M. Sloane, said he decided to loan money to the archdiocese as a community service.

"We are a community bank, and the archdiocese is part of our community," Sloane said. "We feel they've had some problems, and if we could be helpful in solving those problems, we'd be happy to do it. This will not be a loan we'll get rich on, but . . . we feel a definite obligation to participate in the community where we take our deposits."

Citizens Bank cited similar motivations. "We try very hard to be helpful to the communities we serve, particularly Greater Boston," said Thomas J. Hollister, president and chief executive officer of Citizens Bank of Massachusetts. "The archdiocese is a good customer, and we're pleased to be able to assist them and to turn this around so quickly for them."

The bank loans are being secured by a mortgage on St. John's Seminary, while the loan from the Clergy Retirement Disability Trust, which provides pensions and health care to retired priests, is being secured by a mortgage on the cathedral properties in the South End.

A spokesman for the archdiocese said those buildings are not at risk. "Both the cathedral and the seminary are important to the life of the archdiocese, and we would never imperil either institution," said the spokesman, the Rev. Christopher J. Coyne. "This shows how sure the archbishop and his advisers are that we will be able to pay off this loan within two years time."

One-third of the bank loans, $25 million, is also being guaranteed by one individual whom the church declined to identify. The church had been talking with four individuals about guaranteeing the loan, and the Globe has identified two of them as Peter Lynch, vice chairman of Fidelity Management & Research Company, and Robert J. Morrissey, a Boston attorney. But, Lennon said in his fax that the church decided "for mechanical reasons and to get the transaction closed" to rely on just one person.

The archdiocese is also selling properties that are expected to fetch more than $20 million, which will be used to cover the carrying costs of the loans, pay for outreach and counseling for victims and abuse prevention programs, and cover future payments in unsettled abuse cases.

Among the properties being sold, Coyne said, are a building housing the Cardinal Cushing Resource Center in the South End; the former parish hall of St. Leonard of Port Maurice Church in the North End; 12 wooded acres on Forest Lake in Methuen that were once owned by a now-closed Lawrence parish, Saint Francis; and the Cambridge property associated with another closed parish, Our Lady of Pity.

The Knights of Columbus is not participating in the current financial arrangement. Last year, the fraternal group issued a $37.5 million line of credit to the Archdiocese of Boston that is secured by a mortgage on some of the Brighton properties. The church has not yet exhausted that credit, according to Paul R. Devin, supreme advocate and general counsel of the Knights of Columbus. The president of the Boston Priests Forum, the Rev. Robert W. Bullock, praised church officials for fully disclosing the arrangement.

"It seems to be sound, and it looks to be resourceful and guaranteed and wise and prudent," said Bullock, who is the pastor of Our Lady of Sorrows Church in Sharon.

But Richard J. Santagati, the president of Merrimack College, a Catholic school in North Andover, said that everyone should understand that the money ultimately comes from local Catholics.

"The reality of reaching an agreement of this magnitude has forced them to do some extraordinary things, and I think it's the right thing to do," Santagati said. "But we should not forget that ultimately the chancery, the cathedral, the seminary all came about because of the generosity of numbers of Catholics."

Michael Paulson can be reached at

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