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Church CFO: No Funds For Settlement

Aug 5, 2002 | AP

The Boston Archdiocese's chief financial officer testified Monday that the church doesn't have the funds for a multimillion settlement with alleged sexual abuse victims of defrocked priest John Geoghan.

Chancellor David Smith's testimony came during the third day of a hearing to determine whether the settlement, worth $15 million to $30 million, is binding.

He painted a dismal picture of the church's finances, saying the archdiocese has already used more than half of a $17.5 million line of credit to pay day-to-day operating expenses.

"We owe $9 million of that to the bank and they've said 'no more,'" Smith said.

Attorneys for the 86 alleged Geoghan victims are asking Judge Constance Sweeney to order the archdiocese to honor the agreement, which was announced publicly by the archdiocese in March.

In May, the archdiocese backed out of the deal after its finance council refused to fund it, saying it was too expensive in light of hundreds of other pending or expected abuse-related lawsuits.

Cardinal Bernard Law, testifying Friday, insisted he never considered the agreement a final deal because it required the signatures of both the victims and the archdiocese's finance committee. In the March statement, Law was quoted as saying he hoped the deal would bring closure to the victims.

The archdiocese announced in June that it planned to cut its budget by a third, eliminate 15 jobs and cut aid to parishes, schools and hospitals.

In other testimony Monday, a former top administrator for the archdiocese said he didn't sign the Geoghan settlement agreement because he did not consider it a final agreement.

Bishop Robert Banks of Green Bay, Wis., who served as vicar for administration for the archdiocese from 1984 to 1990, is one of Geoghan's former supervisors and is a defendant in the lawsuits.

Banks said he understood the settlement agreement to be a "draft" and "very preliminary."

Under cross-examination by Mitchell Garabedian, a lawyer for the alleged victims, Banks acknowledged he hadn't read the agreement carefully.

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