Audit: W.Va. Catholic Church Claimed $2 Million in Federal Small Business Relief Funds
The Diocese of Wheeling-Charleston received an almost $2 million loan from federal COVID-19 relief, according to an audit released Friday.
As the church faced a considerable revenue decline due to the pandemic and corresponding economic recession, it applied for a federal Paycheck Protection Program (PPP) loan in April and secured $1,996,372 through the program.
“There was no reason for our church employees, who pay taxes, to lose their jobs and possibly their homes when the government was making funds available precisely to keep people at work,” wrote Bishop Mark Brennan in a letter released with the audit Friday.
The funds were used to pay employee salaries and healthcare, according to accompanying documents. PPP loans are eligible for forgiveness if used for payroll and other select expenses, and the diocese plans to apply for forgiveness from the federal government.
While many dioceses rely on local parish contributions to fund operations, the West Virginia diocese relies on stock investment and mineral rights. Brennan wrote that the diocesan financial portfolio took a significant hit in the early months of the pandemic as both the stock market and oil prices declined.
As a result, the diocese cut staffing costs through early retirement options and attrition, restructured the diocesan health care plan, and permanently closed pastoral centers in Huttonsville and Kearneysville, leaving just the Charleston center open.
Brennan wrote that the diocese does not plan to apply for the second round of PPP funding under the latest federal relief bill passed in December.
“Some parishes, schools and Catholic charities do need that help, however, and the diocese will help those who qualify apply for it,” he wrote.
While the church received $2 million in federal relief it likely won’t have to repay, it finished the fiscal year 2020 with assets totaling $205 million in the form of cash, securities and mineral rights, according to the audit.
This was down from $223 million in total assets in 2019. The audit found that the diocese aims to draw only 5% of total assets annually but from 2019 to 2020 drew down around 8%.
An Associated Press investigation of the PPP published earlier this week found the Roman Catholic church nationwide received upwards of $3 billion while sitting on over $10 billion in cash, making it perhaps the largest single beneficiary of the program intended to provide loans to small businesses
In the past fiscal year, the diocese continued to untangle the financial and sexual scandals of the former bishop Michael Bramsfield.
The controversial Bishop’s Fund, a $17 million non-profit created by the former bishop to funnel money into projects around the state, was dissolved in early 2020 and the proceeds were used to formally separate the Wheeling hospital from the diocese.
As Pope Francis forbid Bramsfield from residing again in the state, the diocese also sold the former bishop’s residence for $1.2 million and canceled the lease on his Wheeling retirement home. Combine with $441,000 the disgraced bishop paid in restitution, a $1.6 million account was created for outreach to victims of sexual assault and abuse.
“Money cannot heal emotional and religious wounds, however, so we must keep praying and reaching out to victims and others affected by sexual harassment and abuse,” wrote Brennan.
Oil and gas royalties are a primary source of liquidity for the diocese, according to the audit. Mineral rights owned by the diocese on oil and gas in Texas, lost $3.2 million in 2020 and an additional $6.4 million in 2019.
“The current international energy environment enhances the volatility of the oil and gas industry,” Auditors wrote. “Changes in this environment could also have a significant impact on both the value of the assets recorded and the oil and gas royalties received.”
During a conversation on the economy and climate change with community leaders and Sen. Joe Manchin (R-W.Va.) in December of last year, Brennan said the diocese was considering divesting in oil and gas companies and was critically examining its mineral rights assets.
He expressed concern over climate change and the economic stability of these assets.
“To immediately let go of our ownership of the land that produces the gas and oil that sustains many of our parishes and schools and other agencies, that's not going to happen tomorrow,” Brennan said. “But we are going to take a real look at it.”