Millions intended for residential school survivors spent on Catholic Church lawyers, administration: documents

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The Roman Catholic Church spent millions of dollars that were supposed to go to residential school survivors on lawyers, administration, a private fundraising company and unapproved loans, according to documents obtained by CBC News.

The documents contain a host of other revelations. They appear to contradict public claims by the Catholic Church regarding money given to survivors.

“There are also a large number of serious accounting discrepancies that are alarming for Canada,” said a document, a 53-page federal “brief” summarizing the evidence in a 2015 court case.

None of the other churches involved in the 2005 Indian Residential Schools Settlement Agreement – Anglican, United, and Presbyterian – engaged in any of these practices. They have all paid the full amount agreed years ago without incident.

The Catholic Church has never ended up having to legally justify its activity. On the eve of the 2015 hearing on the matter, Saskatchewan Court of Queen’s Bench Judge Neil Gabrielson approved the church’s controversial buyout proposal, and the case was dismissed.

Advocates for survivors say they are disgusted and the Catholic Church must be held accountable.

“It’s incredibly, absolutely disgusting. This is completely false, ”said Mary Ellen Turpel-Lafond, former Saskatchewan Provincial Court judge and director of the Indian Residential School History and Dialogue Center at the University of British Columbia in Vancouver. She reviewed the documents at the request of CBC.

“How could anyone do something like this?”

None of the lawyers involved in the 2015 case could be reached for comment on Wednesday.

Mary Ellen Turpel-Lafond is a former Saskatchewan Provincial Court judge and director of the Indian Residential School History and Dialogue Center at the University of British Columbia in Vancouver. She reviewed the documents at the request of CBC. (Mike McArthur / CBC)

The Canadian Conference of Catholic Bishops (CCCB) refused an interview request. An official noted that the CCCB was not a party to the settlement. Dioceses and individual orders have created a society to oversee the agreement.

However, the official said the bishops of Canada “are committed to continue to engage and listen.” She noted the “historic delegation” that was traveling in December to the Vatican.

The delegation plans to ask Pope Francis to visit Canada and apologize for the residential schools, a call first made several years ago by Indigenous leaders, some bishops and the Truth and Reconciliation Commission.

Document says where church claims money went

The brief and other documents obtained by CBC News were part of the court record in the 2015 case involving the federal government and the Catholic Church. A source directly involved in the case has verified their authenticity. CBC News does not name the source because they fear repercussions.

The first paragraph of the brief states that the Catholic Church “failed to meet its obligations under the Indian Residential Schools Settlement Agreement”.

Besides the failure of a $ 25 million fundraising campaign, the church was required to pay $ 29 million in cash with strict criteria for its use. The church was also allowed to meet its final commitment of $ 25 million with “in-kind services.”

The brief, written by federal attorneys Alexander Gay and Anne McConville, listed the following expenses and deductions claimed by the church. Many of those details are also listed in the transcribed cross-examination of the Catholic Church accountant, also obtained by CBC News.

For the $ 29 million cash payment:

  • $ 2.7 million was paid to lawyers for legal work and unapproved “representation” unrelated to the indemnity agreement. Two of the law firms receiving a total of 80 percent of this money also had lawyers on the board of directors of the national Catholic corporation which approved the spending. One of these lawyers charged legal and consulting fees to attend the same events.
  • $ 2.3 million was spent on administration costs. Although no other Christian church claimed administration costs, the Catholic agreement allowed the federal government to reimburse “reasonable” claims. The government agreed to pay $ 1 million of this amount.
  • $ 1.6 million was claimed for donations made outside of the approval process for projects with a “First Nations” component. No explanation or invoice is provided as proof.
  • The church deducted more than $ 8 million for monies paid to survivors before the 2005 settlement agreement was reached. This appears to be permitted in the agreement, but it has not been publicly mentioned by officials of the Church. church when asked about the $ 29 million.
  • The Catholic Church did not file annual financial statements with the government as required until 2012, five years after the start of the agreement.

For the $ 25 million in in-kind services:

  • The Catholic Church accountant testifies that $ 25 million in services were provided, “even though he has not audited these records and accounts, has no basis on which to assess these services and relies only on minutes of meetings ”provided by Catholic officials.

For the $ 25 million fundraising campaign that raised $ 3.9 million:

  • The church accountant testified that many donations came with a “chain” telling him where to put the money, contrary to the agreement. “Someone will pay $ 50,000 and say, well, $ 40,000 needs to be redistributed to this project,” the accountant said.
  • $ 1.8 million was loaned from the $ 29 million cash account at the fundraising arm of the Catholic Church and the private company contracted. About $ 1.3 million has never been repaid. The church had agreed that the funds should remain separate and did not get approval from the federal government to take this step.

The brief ends with a series of petitions from federal government lawyers. He asks the judge to give the following orders to the leaders of the Catholic Church:

  • No more expenditure can be accumulated or diverted without the prior consent of the government.
  • Recover all payments made to law firms whose lawyers sat on the board of directors approving the payments.
  • Explain to the court within 10 days what constitutes the unspecified $ 2.7 million in “legal services”.
  • Have an investigator review all administration costs.
  • Declare that the Catholic Church is in default of its obligations.

The judge ruled that federal opposition to the deal was not clear enough

The hearing was to begin shortly after the filing of the brief. Catholic Church attorney Gordon J. Kuski requested an adjournment and Gabrielson granted it for one month.

Kuski approached federal attorney Alexander Gay with a settlement offer. When it became clear that churches were only offering $ 1.2 million more, Gay used phrases in emails such as “We may have a problem” and “We don’t have a problem.” agreement on the terms of the settlement ”.

After months of correspondence, there was still no written or oral agreement. Kuski said it didn’t matter, and when the case returned to court, he asked Gabrielson to state that a deal had been made.

Gabrielson sided with the Catholic Church, saying Gay was not clear enough in his opposition to the proposal and that a “reasonable person” would conclude that a deal had been made. The hearing has been canceled.

Catholic authorities paid the $ 1.2 million and dissolved the company formed to oversee the settlement agreement.

Toronto’s St. Michael’s Cathedral Basilica celebrated the completion of its $ 128 million renovation in September 2016, a year after Canadian church groups told a judge that $ 3.9 million was all it needed. ‘they could collect nationwide for residential school survivors. (Saint-Michel Basilica-Cathedral / Facebook)

Court officials refuse to disclose the case

This month, CBC News requested the 2015 case from Regina court officials. They refused, saying a formal request and a hearing were needed.

CBC News has asked Chief Justice of the Court of Queen’s Bench Martel Popescul to produce the case immediately. He also declined, saying the proper procedure is followed and that he cannot intervene once another judge is involved.

Legal experts interviewed disagree, saying the file is public and should be available immediately. The survivors say they have the right to see it. The Federation of Sovereign Indigenous Nations, which represents Saskatchewan First Nations, on Tuesday called for Popescul’s resignation.

Amid calls to boycott the church and revelations, the church spent more than $ 300 million on building cathedrals and churches during those same periods, bishops across Canada agreed to relaunch the fundraising campaign.

In recent weeks, CBC News has asked Catholic officials across Canada about the compensation deal. They admitted the fundraising campaign fell short of expectations, but several touted the $ 25 million in in-kind services, though none were able to provide a full list.

Others mentioned the $ 29 million cash payment, although none mentioned the millions apparently spent on administrators, lawyers or other expenses.

“$ 29 million – paid for by Catholic dioceses and religious orders that operated residential schools – has been completed,” an Archdiocese of Toronto official said in an email to CBC News earlier this month.

Saskatoon Catholics raised $ 28.5 million to build this cathedral in 2012, while critics say a pledge to compensate residential school survivors has been largely ignored. The story was similar across Canada. (Jason Warick / CBC)

Bishop Mark Hagemoen of the Roman Catholic Diocese of Saskatoon said in an open letter last month that there had been “a payment of $ 29 million in cash, which was intended for programs and services under the supervision of First Nations organizations and services ”.

UBC’s Turpel-Lafond said it is important that the truth is finally unveiled, but that these revelations sound like a “punch”.

She said it shows the Catholic Church was not serious about its responsibilities to survivors.

“It was meant to be a heartfelt reconciliation, not another chance to rack up expense reports and billable hours,” she said.


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