c. 2005 Religion News Service

PORTLAND, Ore. _ In a preliminary decision with overtones for the bankrupt Archdiocese of Portland and other U.S. dioceses, the Vatican has told the Archdiocese of Boston that it erred in seizing and selling hundreds of millions of dollars in parish assets.

The decision, acknowledged by Boston church leaders on Aug. 10, in essence means that the Vatican considers parish real estate and investments to belong to the parishes, not the archdiocese.

The Vatican’s finding echoes arguments used by Portland church leaders who, in an attempt to protect parish property from being sold to settle sexual-abuse lawsuits, said the property was off-limits because it belonged to parishes.

In July 2004, Portland became the first and largest of three U.S. dioceses to declare bankruptcy under the weight of sexual-abuse claims.

The Portland case is currently being fought in U.S. Bankruptcy Court, where 124 parishes and nearly 400,000 parishioners have found themselves named as defendants in a class-action lawsuit to determine property ownership.

What remains unclear _ both in Portland and in Boston _ is whether church law or U.S. civil law will have the final say in determining who owns the parishes, and by extension, who could sell them or claim their value.

“We have not seen (the) decision from the Vatican,” the Portland archdiocese said in a statement, “so we are unable to specifically comment on it. However, as Archbishop (John G.) Vlazny stated on July 6, 2004, `under canon law, parish assets belong to the parish. I have no authority to seize parish property.’

“This is what we have stated all along in the bankruptcy proceedings.”

As a practical matter, it remains to be seen whether the Vatican action has any impact on the Portland situation.

“The Vatican is a sovereign nation and can’t determine U.S. law,” said Marci Hamilton, a constitutional lawyer, professor and adviser to the legal team that represents sex-abuse plaintiffs in the Portland bankruptcy.

She added that the Vatican decision has no legal effect on events that happened previously. Property ownership, she said, is determined by actions and writings over the course of time. “It’s a non-event,” she said of the recent ruling.

Lawyers for abuse claimants have asked Bankruptcy Judge Elizabeth Perris to declare that parish assets belong to the archdiocese, which would expand the church’s ability to pay by boosting its portfolio. A decision in that case is months away.

In the meantime, those involved in the Portland bankruptcy have been watching the Boston archdiocese, where Archbishop Sean O’Malley has closed more than 60 parishes. Reasons include deteriorating finances, population declines and fewer priests.

In contrast to Portland, the Boston archdiocese has seized and sold off parish assets for its own benefit, arguing that the assets belong to the archdiocese. The closures have triggered widespread protests, including dramatic takeovers of churches by parishioners.

After the Vatican decision, O’Malley asked pastors to voluntarily turn over their assets and liabilities for the greater good of the archdiocese. One pastor already has done so.

The preliminary Vatican ruling, said a Boston spokesman, confirmed that O’Malley properly handled the closures and reconfiguration of the archdiocese. But there was disagreement on the interpretation of church law that determines property ownership _ at least among the eight parishes that appealed their closures directly to the Vatican.

“We’re in communication with the Holy See,” said Terrence C. Donilon, spokesman for the Boston church. “They have not issued a final ruling.”

Douglas R. Pahl, one of the lawyers for the Portland parishes and parishioners, called the Vatican decision a “very positive thing” for affirming parish rights. “The archdiocese can’t swoop in and take it for any purpose,” he said.

But the lead lawyer for the sex-abuse claimants committee in Portland, Albert N. Kennedy, said the case will ultimately be settled through U.S. law, not the canons of the Catholic Church.

“It’s very interesting, but totally irrelevant,” Kennedy said. “Until the United States government, either through congressional action or a constitutional amendment, or the state government, through legislative action or a constitutional amendment, adopts the internal canons of the Catholic Church, the canons are absolutely irrelevant.”

_ Kevin Eckstrom contributed to this report.

KRE/PH END WOODWARD