Catholic church borrowed over $400m from AIB to pay U.S. sexual abuse victims.
Initial story carried by John Lee and John Breslin - Irish Mail on Sunday 15th Jan 2012 (bold italics). Comments by Picasso (non Italic - non bold)
This is a truly shocking headline and even more shocking that the Irish Public now 'owns' AIB. One has to now more seriously question the seperation of The State, Business and The Church in Ireland and where the 'loyalties' of some of Irelands 'ruling class' actually lies.
It was unacceptable that a backroom deal was done between the Catholic Church and an Irish Government Minister (Michael Woods) which limited the exposure of the RC Church in the case of Irish Abuse Victims and it was agreed by a single Government Minister that the Irish Public would 'pick up the tab' for the remainder. Now we discover at a time of austerity when banks should have been stimulating the Irish economy with loans SME business (an area in which they are failing miserably), AIB has instead allocated over $400M in loans for the Catholic Church to settle claims from victims of clerical paedophilia on another continent. More than $400m of compensation to American victims of sexual abuse by Catholic priests was paid with loans and guarantees from Allied Irish Bank, it has ben revealed. The funds, in the form of loans, guarantees and lines of credit, were given specifically to pay clerical abuse victims, and led to AIB being dubbed the 'Vatican's banking arm' in U.S. legal circles. The revelation that a comparatively small Irish bank based on another continent was used to pay off victims will raise questions about AIB's links to the church.
One of the payments, of $250m to the Los Angeles diocese, emerged in a new book entitled 'Render Unto Rome: The Secret Life of Money in the Catholic Church', by Jason Berry, which outlines extraordinary links between the bank and the church. But an investigation by the MoS has established that in a few short months in 2007 AIB emerged as the lender behind abuse settlements for four separate dioceses, and the true figure was almost twice as high. It also emerges that while AIB was used to pay the bulk of the Church's abuse claims, the dioceses were able to hold on to most of their properties.
But instead of being funded by the Vatican, which is fighting court cases by denying any legal responsibility to pay, almost half a billion of the money paid out in America was borrowed from AIB in Dublin.
The chairman of AIB at the time was Dermot Gleeson and senior Director Eugene Sheehy, these men would have had the authority to approve such loans at the Dublin HQ. However one has to ask the question, if the Vatican was effectively refusing to accept direct responsibility for abuses by clerics and as the Global Abuse nightmare was continuing to unfold (liability unknown), what security was offered for the loans and is that security still in the hands of the RC Church.
It has been confirmed that all of the loans were agreed by the bank's headquarters in Dublin, and amount to as much as a quarter of AIB's €2bn exposure in America the following year.
The loans are now being quietly repaid. This revelation will prompt questions about whether the Vatican is behind the international deals, the supposedly-indebted dioceses have begun to pay off the AIB debts with money from other, unnamed, institutions. Just last month a $40m line of credit to the Diocese of Portland in Oregon was taken over by an un-named creditor. Bob Krebs, a spokesman for the Portland Diocese for many years, declined to name the new lender. Asked why AIB had been used to help fund its abuse compensation cases, he said he did not know who 'found Allied Irish for us'.
Of the deals, by far the largest line of credit was for Los Angeles, for $256m. The diocese avoided going into court with abuse victims by reaching a settlement in advance.
Therefore what is now effectively an Irish Public Company was complicit in 'buying off' the victims of clerical paedophilia. This would make sense to a certain extent as Ireland stands out as the one country where the RC Church could almost do anything with immunity, where the church had control over key players within the Irish State and where through a policy of misinformation a significant proportion of the population actually dis-believed the accusations levelled against the church - Ireland was also awash with money between the mid-90s to mid-00s and $500M would almost go unnoticed.Teen victim Esther Miller was abused by a young deacon in Los Angeles It emerged afterwards that AIB loans and guarantees accounted for almost half of total settlement.
The deal included $175m in cash and another $25m to pay the interest, and helped Los Angeles avoid selling the bulk of its properties or reveal the true value of its total assets.
In San Diego AIB gave cash and credit of some $100m, almost half the $198m paid out to 144 victims.That diocese filed for bankruptcy on the eve of the first civil trial against it, a case involving Monsignor Patrick O'Keeffe, originally from Kilkenny.
The driving force behind this series of mammoth loans may actually have been to protect the image of Ireland and Irish Priests, as it would seem many of the perpetrators in the USA were Irish Priests. Is it possible Maynooth was behind the wheeling and dealing?
The Diocese of Portland, in Oregon, also filed for bankruptcy because of compensation actions. Of a $129m settlement for victims $40m came from AIB. The loan effectively allowed the diocese to close the bankruptcy proceedings without selling any assets. A loan document obtained by the Mail details the loans in Portland. On AIB headed paper, it details how the loans were being specifically made to trusts set up to pay known and future abuse claims for the diocese. The letter was written one day before a similar letter giving credit to the Diocese of Los Angeles, again signed by its LA-based senior vice president Charles Lydon and London-based vice president John McGrath.
U.S. lawyer Jim Stang, who sat on nine bankruptcy committees charged with looking after victim creditors, said: 'We joke that AIB is the bank of the Catholic Church.'
An AIB spokesperson has stated: 'Any loans advanced were approved in accordance with AIB Group policy.'
Esther Miller was a teenager living in Los Angeles when she was repeatedly forced to commit sexual acts with a priest who went on to abuse other young girls. That period in her life still haunts her as she enters her fifties. The man who abused her – a young deacon still at seminary college – groomed her by getting close to her parents. Over the course of two years, until she was 17, the priest forced himself on her. He was later appointed principal of a Catholic high school despite questions over his behaviour. He told Esther to go to confession, but only to a particular priest. He called her evil. He later turned out to be a serial abuser of boys too. She mentioned some details of the encounters to her mother, who slapped her and told her never to speak ill of the clergy. The abuse had a profound effect on the next two decades of Esther’s life. She was married four times and had dozens of jobs.Only after the revelations in the Boston diocese in 2002 did she set off on the long road to forcing the Archdiocese of Los Angeles to reveal what it knew. Esther’s case was one of hundreds, which were finally settled in mid 2007 for $660m.
‘I was surprised at the dollar amount. I had no idea of the insurance and other ways of raising money.’ And she had no idea until this week that Allied Irish Bank had helpfully stepped in with guarantees of hundreds of millions. The deal allowed the Archdiocese to avoid going to court and opening all its documents to scrutiny.
The above underlined section is key to this AIB-RCC loan deal and by funding a 'pay-off' of victims, thus avoiding a full and proper investigation of paedophelia within some US dioceses. Funding a 'gagging' process is something AIB management should be ashamed of and is reflective of the initial attempts by the Irish Catholic Church to 'pay-off' and 'gag' the victims of abuse.
As these loans are clearly not compatible with the values of the Irish people, the Government should request AIB discuss an immediate paydown of these loans by the Catholic Church.
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