Months after Roman Catholic Bishop Remi De Roo retired in 1999, church officials shocked the country with accusations that the popular theologian had misspent millions of dollars from a nuns' trust fund buying land in the U.S. for a quick flip.
Six years after the explosive allegations were made, a jury in the Superior Court of Washington has vindicated the bishop.
Contrary to allegations by church officials, the jury decided the bishop, who was head of the Victoria diocese, had made a solid investment. During the 2½ week trial in Olympia, the state capital, the court heard that the land at the centre of the controversy may have increased in value as much as fivefold since its purchase.
The church had no grounds for violating its contract with U.S. businessman Joseph Finley after Bishop De Roo retired, the jury found in a vote of 11 to 1.
The jury awarded $8.2-million (U.S.) to Mr. Finley for damages caused by breach of contract and $4.2-million for breach of fiduciary duty. A date has not yet been scheduled for a judge to confirm the jury's verdict and set the payment that Mr. Finley will be entitled to receive.
"They have exonerated him. The decision validates [Bishop]De Roo's financial judgment," Patrick Jamieson, managing editor of the Island Catholic News, said yesterday in an interview. "This judgment proves he was not such a bad administrator."
Mr. Jamieson said the controversy arose from church politics. Bishop De Roo was well known for his liberal views on gays, married priests and women in the church. The Catholic Church has become more conservative in recent years, Mr. Jamieson said. "He was caught in a back tide."
Church officials who did not support the former bishop on church issues were too quick to accuse him of fiscal mismanagement, Mr. Jamieson added. None of the church leaders in Canada spoke in Bishop De Roo's defence when allegations of fiscal mismanagement first surfaced. The land deal would have worked out if the church had honoured its deal with the U.S. businessman and had not attacked the former bishop in public, he said.
Bishop De Roo, 81, was not available for comment yesterday. He apologized publicly in June of 2000 for his "errors." Recently, according to his website, he has been lecturing and holding retreats.
Victoria Bishop Richard Gagnon said yesterday the Catholic Diocese of Victoria plans to appeal the jury's decision.
"The diocese does not agree with the decision by the jury. . . . The diocese believes an appeal will lead to a reversal of the verdict and dismissal of Mr. Finley's claims," he stated in a prepared statement sent to The Globe and Mail in response to a request for an interview.
Bishop Gagnon did not comment on the possible impact of the court award on the diocese.
However, Mr. Finley's lawyer, Randy Gordon, said Mr. Finley is not looking for the church to sell assets to pay out the court award.
The church's obligation could be met without interrupting its good works, Mr. Gordon said.
The sale of the property at the centre of the controversy for its true value may be more than enough to take care of the court award, he said.
Mr. Finley would like to work with the church to reach a settlement, he said.
"Our goal is not to hurt the church, just to have [it]fulfill its legal obligations."
However, if the church pursues its appeal in the court, "all bets are off," Mr. Gordon said.
The land at the centre of the controversy is a 65-hectare industrial site in Lacey, Wash., a community of about 30,000, outside the state capital Olympia. The land was bought at a foreclosure sale for $5.3-million in 1997 by a partnership formed by the Victoria diocese and Mr. Finley.
Mr. Finley put the deal together; the diocese provided 100 per cent of the financing.
The partnership took out a mortgage on the property for $7.5-million in 1998 and anticipated reselling the property within 24 to 36 months for about $15-million.
But months after the bishop retired in 1999, his successor, Bishop Raymond Roussin, said the diocese did not have funds to make the mortgage payments. He tried to break up the partnership and accused Bishop De Roo of financial mismanagement.
After the diocese defaulted on payments, the mortgage holder imposed severe penalties, accelerating the debt. The diocese eventually raised $13-million (Canadian) from parishioners to pay off mortgage holders.
The Washington state jury received two appraisals of the land. Mr. Finley's lawyers called an appraiser, who said the land was worth $28-million (U.S.).
The diocese appraisers valued the land at $15.5-million to $20-million.