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Is the Archdiocese of Miami Heading Towards Bankruptcy?

The Archbishop of Miami has recently informed the pastors and administrators of the churches and schools that the Pastoral Center has serious financial problems. The Archbishop has let go more than 25 percent of the work force at the Pastoral Center. The Archbishop advised the pastors and administrators that the parishes have to pay off their outstanding debts owed to the Archdiocese, totaling millions of dollars, by taking out bank loans or using their savings which are held and controlled by the Pastoral Center. The June 30, 2007 financial report indicates $58 million is due from parishes, while the Pastoral Center is obligated for $81 million in savings held on behalf of the parishes.

Since the Archbishop owns the parish property, it is questionable how the parishes can independently obtain loans without the Archbishop’s prior approval.  No doubt any banks making such loans will require mortgages encumbering the parish property.  Since by Canon law the laity has no decision making authority, it seems rather naïve to expect them to agree to encumber the parish property, or to pay for these loans. 

Therefore, the real intent of the Archbishop must be to set the groundwork for offsetting amounts due from the parishes’ savings accounts. (As there is no indication in the financial statement that these funds are held in trust accounts, the actual use of these monies may have already occurred.) One questions whether the Archbishop has the authority under Canon law to do this.  Specifically, Canon 1267 §3 requires “offerings given by the faithful for a certain purpose may only be applied for that purpose.”  A significant part of savings may have arisen from the Vision 2000 program.

Moreover, Canon §537 mandates that each parish is to have a finance council who “are to assist the pastor in the administration of the goods of the parish.”  (see also Canon 1280 and 1281).  The Archdiocese has not enforced this requirement throughout the years.  Therefore, any debt incurred by a pastor on behalf of the parish, without the prior requisite consultation with the parishes’ mandated finance council, should be deemed a nullity and the Archdiocese should be held responsible for failing to implement or enforce Canon law.

No doubt the Archdiocese of Miami is in a severe financial crisis.  We recently reported that the Archdiocese’s liabilities, based on its most recent financial report for the fiscal year ending June 30, 2007, exceeds current assets by more than $22 million. Matters have only gotten worse since then.  The Archdiocese is beginning to shut down schools. Moreover, a judgment was recently entered against the Archdiocese for damages in excess of $14 million. The Archbishop may no doubt seek to blame the present financial condition on a downturn in the market or growing needs from the community.  A more plausible explanation points to the financial mismanagement by those in charge during the past several years. 
These new recent developments inevitably lead to the question of whether the Archdiocese of Miami is ultimately heading towards bankruptcy proceedings.