The Catholic Diocese of San Diego, currently in bankruptcy reorganization, has been threatened with contempt by the bankruptcy judge for misrepresentations and attempts to illegally shift assets. On April 9, the bankruptcy court issued a Order to Show Cause as to why the diocese and various officials should not be held in contempt. At issue are attempts by parishes to obtain new taxpayer identification numbers and transfer parish accounts to them without court approval. The responses filed (1, 2, 3) said that there had been misunderstandings of what the court had approved in a prior hearing.
Yesterday's Washington Post reports that Diocese lead attorney Susan Boswell apologized for misunderstanding how parishes could protect their cash flows, but said: "We are not dealing with a commercial enterprise-- we are dealing with a church. What it does is give money to the parishes. This is not a nefarious function." The San Diego Union-Tribune also reports that Boswell was unaware of Bishop Robert Brom's regularly receiving bank statements for 770 bank accounts of the separate parishes when she told the court otherwise during a March 1 hearing. At an April 11 hearing, bankruptcy Judge Louise DeCarl Adler ordered an external audit of the Diocese.
