$73m hidden in sex-abuse scandal

New York Cardinal Timothy Dolan. Photo / AP

Vatican allowed US cardinal to move money into cemetery trust fund to protect it from compensation claims

America's most senior Catholic cleric obtained permission from the Vatican to move US$57 million ($73 million) of church funds into a trust to shield it from sexual abuse victims seeking compensation.

Cardinal Timothy Dolan, the president of the US Conference of Catholic Bishops, told Vatican officials in a 2007 letter that the transfer offered "improved protection of these funds from any legal claim".

Dolan, the Archbishop of New York, has been credited with helping to root out a serious sexual abuse scandal in his previous archdiocese of Milwaukee, Wisconsin. He has long insisted that he never deliberately sought to protect church funds from victims of abuse by clergy in the archdiocese, where he was archbishop between 2002 and 2009.

However, on June 4, 2007 he proposed moving the assets to "an autonomous pious foundation" he had established a month earlier to fund the upkeep of cemeteries. The letter was published among more than 6000 pages of documents released as part of a settlement between the archdiocese and lawyers for 570 people with lawsuits pending against it.

Dolan's request was approved by the Vatican five weeks after his letter, according to the files. The church was facing hundreds of lawsuits over alleged child molestation at the time.

The released documents include extracts from the personnel files of 42 members of the Milwaukee clergy against whom there were "substantiated" allegations of sexual abuse going back 80 years. Lawyers for the alleged victims accused Dolan of helping the archdiocese to carry out fraud by filing for bankruptcy after moving the money to the cemetery fund.

"These documents show that if they want to move money to protect it from survivors they can act quick as a fox," said Jeff Anderson, one of the lawyers.

A spokesman for Dolan described the disclosures as "old and discredited attacks".

The spokesman said the documents showed that bishops had kept promises such as "permanent removal from ministry of any priest who abused a minor; complete co-operation with law enforcement officials".

However, the letter threatens to challenge the reputation of the cardinal, who earned praise from within the church for his handling of the Milwaukee scandal after being appointed to resolve it.

Supporters pointed to other documents in the released files that showed that in 2003, the cardinal pleaded with the Vatican to defrock a priest who had been accused of repeatedly abusing children.

"Our new-found awareness of the severity of damage caused by sexual abuse at the hands of clergy makes it impossible for us to ignore this situation."

However, documents also showed that the Milwaukee archdiocese paid off paedophile priests with tens of thousands of dollars or transferred them elsewhere instead of removing them from the church.