Church in Murky Waters

“Strategic bankruptcy.” That’s what former asbestos manufacturers declared when seeking shelter in the 1980s from a flood of lawsuits by ill and dying workers who had inhaled their product. It is sometimes used, or threatened, by companies seeking union concessions. But no U.S. Roman Catholic archdiocese has ever declared bankruptcy, strategic or otherwise.

To start now, as the lawsuit-plagued Archdiocese of Boston has hinted it might, and as California dioceses reportedly might soon be considering, would set a terrible example for an institution based not on profit but on morality.

Lawyers for alleged victims of sexual abuse by priests in the Boston area scoff at the idea that the archdiocese is near insolvency -- a Boston Globe analysis set the assessed value of the archdiocese’s real estate holdings at more than $1.3 billion. The lawyers accuse church officials, including Cardinal Bernard Law, of trying to intimidate plaintiffs into accepting smaller settlements.

In California, dioceses expect a new wave of sexual abuse lawsuits after Jan. 1, when a law extending the statute of limitations on such abuse goes into effect. As The Times’ William Lobdell reports today, California’s bishops have prepared a letter to parishioners across the state saying the church has been falsely portrayed as having deep pockets and declaring that “the vast majority of Catholic assets belong to the people of our parishes, schools, charities, and other institutions.” That wording seems aimed at leaving all options open, including bankruptcy.

Just the threat of bankruptcy worked once before for the church, in Dallas after a jury in 1998 awarded almost $120 million to 11 victims of sexual abuse by a single priest. The archdiocese dropped the bankruptcy threat after the alleged victims settled for $31 million.

An archdiocese spokeswoman in Boston declined to rule out bankruptcy after the story broke in the Globe. Carrying out the threat would have benefits: All action in the civil lawsuits there would cease, no new lawsuits could be filed, the court would set a deadline for filing new claims and a settlement with all known claimants could be reached faster and at less cost.

Yet, to hint at bankruptcy even before insurance companies have said what they will pay in the Boston cases is, at best, premature and ethically murky. That would be doubly so in California, where dioceses haven’t yet seen the size of the problem, much less tried to settle it.

The Catholic Church is a 2000-year-old institution, an important world force that survived by taking the long view rather than looking for quick fixes. It should not further damage its moral reputation in the name of getting rid of lawsuits and protecting assets.