For its analysis, AP consulted experts in church finance and church law. One was the Rev. James Connell, an accountant for 15 years before joining the priesthood and becoming an administrator in the Milwaukee Archdiocese. Connell, also a canon lawyer who is now retired from his position with the archdiocese, said AP’s findings convinced him that Catholic entities did not need government aid — especially when thousands of small businesses were permanently closing.
“Was it want or need?” Connell asked. “Need must be present, not simply the want. Justice and love of neighbor must include the common good.”
Connell was not alone among the faithful concerned by the church’s pursuit of taxpayer money. Parishioners in several cities have questioned church leaders who received government money for Catholic schools they then closed.
Elsewhere, a pastor in a Western state told AP that he refused to apply even after diocesan officials repeatedly pressed him. He spoke on condition of anonymity because of his diocese’s policy against talking to reporters and concerns about possible retaliation.
The pastor had been saving, much like leaders of other parishes. When the pandemic hit, he used that money, trimmed expenses and told his diocese’s central finance office that he had no plans to seek the aid. Administrators followed up several times, the pastor said, with one high-ranking official questioning why he was “leaving free money on the table.”
The pastor said he felt a “sound moral conviction” that the money was meant more for shops and restaurants that, without it, might close forever.
As the weeks passed last spring, the pastor said his church managed just fine. Parishioners were so happy with new online Masses and his other outreach initiatives, he said, they boosted their contributions beyond 2019 levels.
“We didn’t need it,” the pastor said, “and intentionally wanted to leave the money for those small business owners who did.”
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A QUESTION OF NEED
In other federal small business loan programs, government help is treated as a last resort.
Applicants must show they couldn’t get credit elsewhere. And those with enough available funds must pay more of their own way to reduce taxpayer subsidies.
Congress didn’t include these tests in the Paycheck Protection Program. To speed approvals, lenders weren’t required to do their usual screening and instead relied on applicants’ self-certifications of need.
The looser standards helped create a run on the first $349 billion in paycheck funding. Small business owners complained that they were shut out, yet dozens of companies healthy enough to be traded on stock exchanges scored quick approval.
As blowback built in April, Treasury Secretary Steven Mnuchin warned at a news briefing that there would be “severe consequences” for applicants who improperly tapped the program.
“We want to make sure this money is available to small businesses that need it, people who have invested their entire life savings,” Mnuchin said. Program guidelines evolved to stress that participants with access to significant cash probably could not get the assistance “in good faith.”
Mnuchin’s Treasury Department said it would audit loans exceeding $2 million, although federal officials have not said whether they would hold religious organizations and other nonprofits to the same standard of need as businesses.
