Diocese Debt Forces Halt in Construction

Dipping into funds reserved for parishes and schools has pushed the debt of the Roman Catholic Diocese of Santa Rosa to more than $15 million, forcing a halt to all construction.

The grimmest assessment yet of the financial crisis facing the diocese, which stretches over Northern California from Petaluma to the Oregon border, was given Wednesday by Archbishop William Levada, who took over when Bishop G. Patrick Ziemann resigned in the midst of a sex scandal.

Levada said church investment standards were relaxed under Ziemann in a futile effort to raise money to cover escalating spending on new church programs, construction projects, new personnel, and cash payments to settle sexual misconduct claims against priests.

“It is still unclear what the precise outcome of these riskier investments will be, but it seems certain that the diocese has sustained a loss to its investment portfolio,” Levada said.

Despite the notoriety surrounding cash payments to settle sexual misconduct cases against priests, Levada said the primary cause of the financial turmoil was spending $11 million during the past three years on new church ministries, school subsidies and administrative overhead.

Meanwhile, the Archdiocese of San Francisco has sued Patrick O’Shea, a former monsignor who was relieved of his duties four years ago amid sexual abuse and fraud allegations. The suit says O’Shea embezzled $252,000 from the church.