Analysis: Vatican finally confronts abuse covered up by its cardinals

The turmoil surrounding thousands of allegations of child abuse by priests has become too serious for the hierarchy to ignore

The first story about a paedophile priest in the United States broke as long ago as 1983. It was written in the country's leading independent Roman Catholic newspaper, the National Catholic Reporter. No one in the church hierarchy took much notice.

The first story about a paedophile priest in the United States broke as long ago as 1983. It was written in the country's leading independent Roman Catholic newspaper, the National Catholic Reporter. No one in the church hierarchy took much notice.

Nor did the leaders react in 1985 when the paper disclosed that the Church was being forced to stump up millions of dollars in secret payouts to families whose sons had been molested by Catholic priests. Silence was bought with confidentiality clauses. Church heads, the paper's editorial complained, were developing no national policy to protect children from predator priests or restore trust in the clergy.

Nor did the authorities respond through the 1990s as victims' groups began organising and the paper continued to write regularly on the subject. By 1997 it was complaining that bishops' response was driven by legal and financial imperatives rather than by concern for the victims.

Always it was ignored. Bishops continued settling cases out of court and giving priests moral counselling before moving them on to new jobs and new victims. Only now – 19 years after the alarm was first raised – has the scandal become such a burning public issue that the Pope has been forced to intervene personally, summoning all American cardinals and top bishops to Rome.

For three days from next Tuesday they will meet in the Vatican to try to find a way out of the turmoil that has engulfed the US Church. As many as 3,000 of the nation's 40,000 priests, according to some reports, now face allegations of interfering with children. Hundreds have been removed from their posts. Secular prosecutors have begun asking dioceses for their records of past allegations. Police authorities have set up investigative units.

Hundreds of individuals are coming forward with new claims that they had been abused by priests when they were children. And the archbishops of Boston, Cardinal Bernard Law, and of New York, Cardinal Edward Egan – who hold the two most important posts in the US Catholic Church – are being urged to resign for covering up the abuse.

So what has changed to turn a scandal swept under the carpet into a national controversy? Two things, according to Tom Fox, editor of the National Catholic Reporter ( NCR) from 1980 to 1997. First a powerful newspaper, The Boston Globe, took up the story in January. Second, it uncovered official church documents that had been put before the courts in one case. "It's like the Nixon tapes," Mr Fox said. "Anyone can see from the documents the course was not pastoral. It was defensive and legalistic."

Among other things, court documents have revealed that Cardinal Egan did not report allegations of clergy sex abuse even though a 1971 law required him to do so. Perhaps more damning are 880 pages of church files that disclose Cardinal Law had been protecting and even promoting priests linked to child abuse throughout his 18 years in Boston. In one case, warnings about a priest had been given as long ago as 1977. The evidence that cover-up was official policy within the Church was now unequivocal.

In the early years, the hierarchy's supporters have previously said, few people understood the true nature of paedophilia. It was thought to be a moral failure rather than a sexual pathology that may not be curable. Bishops thought that expressions of contrition followed by spiritual rehabilitation were sufficient.

The extent of the warnings revealed by the documents has undermined the credibility of that excuse. The issue has become not one of sexual deviancy but the abuse of power. And ironically the bishops' anxiety to protect the Church's image from scandal – and its financial, legal and moral costs – is now threatening to damage the very things they sought to safeguard.

The talk is now of possible bankruptcy of sections of the Church, which is the largest non-government organisation in America. The ensuing financial crisis could hit every aspect of its work – from the Catholic schools that educate 2.6 million children to the church hospitals that treat almost 20 per cent of the country's patients. Legal settlements, already estimated at more than $1bn (£700m), could be huge.

The fear is that donations from the faithful could now dry up. Catholics may defect to other denominations; there are already some reports of that. The damage to the Church's moral authority could be significant. The crisis is now about more than sex and power.

On the liberal wing of the Church many see the scandal as a symptom of a deeper malaise necessitating reform on such previously unthinkable issues as celibacy, women priests and church governance. More conservative voices insist the crisis is exaggerated – and is being fuelled by people who oppose the Church's teachings on birth control, abortion and much else. Celibacy is irrelevant, they say, because most paedophiles are married men.

Vatican officials mutter about the hidden agenda of critics whose prime target, Cardinal Law, is a conservative, the Pope's closest ally in America and a staunch opponent of reform. They hint that many of those alleging abuse are motivated by a feeding frenzy to make money through litigation.

They even suggest that there is some kind of Anglo-Saxon anti-Catholic conspiracy, noting that the preponderance of lawsuits, media reports and public outcry is in Australia, Canada, Ireland, England, Wales and America. (That may well be explained more by the tort law system in those countries, which makes it relatively simple to establish corporate liability.) The Catholic Church in North America has weathered sexual abuse scandals before, they say. Why the sudden crisis?

To critics that raises another question. Given all the warnings, why did the US Church not long ago put systems in place to clean up its act? Why have leaders such as Wilton Gregory, president of the US Conference of Bishops, only in the past few weeks announced: "We need a plan of action"?

The truth is that the current crisis comes on top of a longer and more profound one, which dates back to Humanae Vitae – Pope Paul VI's 1968 encyclical, which unexpectedly overturned a pontifical commission's recommendation to end the Church's ban on artificial birth control. It was, for Western Catholics, a watershed event. After it, Catholics began to make their own judgements rather than just taking them from church leaders.

The process has continued apace as regular large-scale surveys have shown. The US faithful are not content just to pray, pay and obey. Instead they are making up their own minds about what it means to be Catholic and seem indifferent to the institutional Church, desiring more participation in line with the Vatican II notion that the Church is all the "People of God".

Now that trend could accelerate, Tom Fox of the NCR believes. "Catholics are increasingly disillusioned. They are increasingly sceptical of their clergy. They have lost a sacred trust." One survey showed 83 per cent of Catholics were inclined to believe any new allegation made against a priest.

But do not confuse this anger and deep disappointment for an abandonment of faith. Tom Fox warned: "They want to see their Church make it through this moment – and will not look kindly upon anyone they seem to feel is trying to tear down their Church, which is much more to them than priests and bishops."

The big question now is whether Tuesday's meeting with the Pope will bring a new transparency and concern for the victims rather than the institution. The signs from many in the hierarchy are not encouraging. Celibacy is not on the table, says one Curia official; instead the talk in Rome is of barring from seminaries even those with homosexual leanings who are celibates.

The Archbishop of Denver, Charles Chaput, recently said the Church had been "too accommodating" in listening to the modern world. And the Archbishop of Omaha, Elden Curtiss, even more recently has sent written rebukes to Catholics who wrote to the local newspaper criticising his decision to reassign a priest accused of viewing internet child pornography.

Even now the lessons, it seems, have not been learnt.

Worldly assets

The Vatican Bank, Istituto per le Opere di Religione, manages £2bn of assets. It does not reveal its profits or dividends, which are paid directly to the Pope. It enjoys the status of a central bank and has a dealing room adorned with crucifixes and papal portraits where 20 traders work.

Despite the Vatican's assets, including the art collection in the Vatican Museum and the Sistine Chapel, it relies heavily on support from American dioceses.

The Pope owns more than 1,000 apartments in Rome. The Vatican's property portfolio made a profit of 25.7bn lira in 1998, equivalent to about £10m at the time.

The Vatican had a balance of 2.5bn lira in 1998, then worth about £1m. It had expenses of about 336bn lira (£106m) and income of about 338bn lira (£107m).

The 2,500 officials of the Papal curia have a combined salary bill of 140bn lira (£44m).

The 20,000 parishes in America had revenues of $7.5bn (£5.18bn) )in 2000, of which $6.5bn went to cover expenses and $1bn subsidised Catholic schools.

In the 1980s the Vatican Bank was forced to pay $241m for its part in the collapse of Banco Ambrosiano. Roberto Calvi, who had been advising the Vatican over its dealings with the bank, was found hanging from a rope beneath Blackfriars Bridge.

Cardinal Roger Mahony of Los Angeles, the man tipped to be the first American Pope, has been building a new cathedral for the past four years. The cost is now estimated at almost $200m.

Sex abuse scandal: leaders of the American church in the eye of the storm

Cardinal Bernard Law, Archbishop of Boston

Pope John Paul's ideological soulmate in the United States, a conservative who has been at the eye of the storm since January. Court documents show Cardinal Law and other church officials knew for years about dozens of abuse allegations against John Geoghan, a Boston priest, but transferred him from parish to parish. Church documents have since revealed a similar pattern of denial and cover-up in at least one other case, and 450 sex abuse victims have come forward.

Rembert Weakland, Archbishop of Milwaukee

Considered the most liberal archbishop in the United States, Cardinal Weakland hit the headlines last weekend when it emerged that he had covered up the confession of a priest who molested an altar boy in 1979. The priest, William Effinger, was moved from parish to parish over the next 13 years before he was finally defrocked. The revelation surprised many of Cardinal Weakland's supporters, since he has established social programmes for victims of child abuse.

Cardinal Edward Egan, Archbishop of New York

The most visible Catholic leader in the United States, he has largely escaped personal blame but his archdiocese has not. In Long Island, prosecutors have established a grand jury to investigate whether church leaders orchestrated a cover-up. Thirteen years ago, in Bridgeport, Connecticut, a priest impregnated a 15-year-old girl. Cardinal Egan, who was Bishop of Bridgeport at the time, did not notify police and allowed the priest to leave quietly.