In the marble administrative offices of Vatican City, Cardinal Edmund C. Szoka spoke with BusinessWeek's Rome Bureau Chief Gail Edmondson about the Vatican's finances and the possible effect of lawsuits on the Church. A former Archbishop of Detroit, Szoka was appointed in 1990 as Pope John Paul II's top finance man. Within two years, Szoka had turned around a 23-year string of net deficits at the Holy See. Now the chief administrator for Vatican City, Cardinal Szoka continues to advocate financial transparency.
Q: Ultimately, could the financial problems for the U.S. Church from the sex abuse cases affect the Holy See's finances?
A: The concern here is over the problem of pedophilia and the harm of that publicity to the Church. Our main concern is not financial but to the faith of the people and the harm to individuals. I recognize the pain of the victims. But the amount of publicity given has been a little unfair. Pedophilia exists among all groups in the population, and there is not any greater propensity in the Catholic Church. I understand that we are targets because we are supposed to be good and holy. But we are all tainted by Original Sin.
Q: Is the Holy See as wealthy as many people believe it to be?
A: When I arrived in Rome in 1990, there was a lot of talk about the great wealth of the Church. I worked hard to dispel the mythology. The Holy See ran a deficit from 1970 to 1992. It operates on a very thin budget. The Holy See is [now] more transparent than some large corporations.
Q: Many argue it's time for the Church to make its finances more transparent.
A: As a bishop in Michigan, we published an audited financial statement every year. We sent the statement to every pastor and published the results. This kind of transparency is very common in the Midwest.
Q: Why doesn't the Church require the same practice at all dioceses?
A: Each diocese is autonomous. A bishop is not the representative of the Pope. He is the representative of Christ.
Q: If U.S. courts award large settlements to the victims of sexual abuse by Catholic priests, threatening the finances of certain dioceses, would the Holy See provide some assistance?
A: It is not the practice of the Holy See to bail out dioceses. In the past when dioceses have suffered financial problems, other dioceses have helped them with no-interest loans. It's their responsibility.
Q: So the Church is very hierarchical when it comes to doctrine, but very decentralized when it comes to finance.
A: We are centralized in the sense of Church doctrine, which is based on the revelation of Christ. However, we are decentralized not only in administration and finance but in pastoral care given to our people. Put simply, the reality of the Catholic Church exists in the practical sense in the parish. That's where people come together and learn about doctrine.
Q: But how does the Church manage itself as a financial organization?
A: We are not a business nor a corporation. The financial aspects exist to fulfill the mission of the church. The U.S. has become very secularized. Perhaps that's why the Church is viewed by some as a financial entity.
Q: What country provides the greatest contributions to the Holy See?
A: When it comes to the bishops' contributions, Germany has been the biggest contributor since the early 1980s, but the U.S. will soon overtake Germany. The U.S. is also by far the biggest when it comes to the annual collection for foreign missions.
Q: Do priests or bishops get any kind of formal training in accounting?
A: You don't have to be a professional accountant. But anyone in charge of church finances at a local level should learn at least to read a financial statement, so they can spot something that doesn't look right. As archbishop in Detroit, I asked my parishes to produce financial statements, and I kept after them about that.
Q: So transparency is important for the U.S. Church.
A: The U.S. Church depends on the free will offerings of its members. It doesn't own a lot of property, and state taxes to support religion don't exist. We are totally dependent.