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The Most Reverend Leo Thomas Maher, Roman Catholic Bishop of San Diego, wields complete authority over a diocese comprising San Diego and Imperial counties, with total assets of at least ten million dollars.

Bishop Leo Maher. “No bishop has ever been required to be open about finances. But Bishop Maher is a lot more open than most other bishops.”

Bishop Leo Maher. “No bishop has ever been required to be open about finances. But Bishop Maher is a lot more open than most other bishops.”

The well-spring of Maher’s authority is the code of canon law — which is the legal constitution of the Catholic Church — and the autonomy granted Maher by Pope John Paul II, who is, according to church doctrine, the direct successor to Saint Peter: As the Pope’s local delegate, Bishop Maher is both king and prime minister of all he surveys. He can profoundly influence the lives of the 360,000 Catholics in his diocese, and he holds a tight rein over the 300 priests and 500 nuns who answer to him. But unlike an elected public official, Maher does not have to answer to his constituency in other than a moral and spiritual way. Fiscally, administratively, personally, he is under no legal obligation to account for his decisions. So by almost any measure of power, Maher is unsurpassed in the church by any one man south of the Los Angeles archdiocese.

“He holds the power of life and death over us,” explains one local priest, “if you regard the difference between having the church in La Jolla or the one in Calexico as life or death.” The bishop is regarded by priests as much more than a boss; he’s the chief shepherd, the father, the policeman, and he’s bound to them by bonds of law as well as brotherhood. He holds legislative, executive, and judicial power over the affairs of the diocese. Priests take a vow of allegiance to their bishop, and this, combined with his absolute authority over them, makes it difficult for the clerics to criticize Bishop Maher. If priests have serious questions about the way Maher handles diocesan affairs, and many do have those questions, they are not free to air them with impunity. “Efforts to correct anything in the diocese have to come from lay people,” says a priest who has held high positions within the San Diego diocese. “He [Bishop Maher] keeps you pretty well in the fog.”

The questions that have been raised about Maher and the diocese he governs are mostly practical, and center on the bishop’s handling of finances and personnel. The bishop alone decides what key financial information is distributed to priests and laymen, and though some priests laud him as being the first bishop here to give them any information on diocesan finances, in the same breath they say the information they get is incomplete and unclear. Compared to other, more open dioceses, the San Diego diocese offers little in the way of public accounting of its complex monetary affairs. Every year the only information Maher offers is a brief balance sheet printed in the diocesan newspaper, the Southern Cross. “It’s deceptive,” says a former employee who worked in the diocesan accounting department. “The diocese isn’t getting a true and complete disclosure of the financial picture.” Another question that has circulated for years within the diocese concerns the bishop’s treatment of favored employees. He has, for example, granted loans to certain individuals, sometimes with very low interest rates and sometimes with no interest charged at all. Furthermore, through his patronage, Maher’s secretary, Elvia Aguilar, has acquired a house and a condominium under questionable circumstances.

Perhaps it is understandable that these are matters the bishop would rather not discuss publicly. Attempts to interview Maher have been unsuccessful. His attitude, conveyed by spokesman Barry Crane, is that these questions should not concern anyone outside the bishop’s chancery office.

Maher's authority derives directly from the Pope, who extends him the most useful power there is: the power of silence.

Sixty-nine-year-old Maher has lived only a few years of his life outside the company of priests. Born in Iowa to a large family which ultimately produced three clerics, Maher left home before he had finished grade school. He went to San Jose, California, and lived in a rectory with his uncle, who was a priest. Maher stayed in California to complete high school, attended St. Joseph’s College in Mountain View, and St. Patrick’s Seminary in Menlo Park, then was ordained a priest in December of 1943 by San Francisco Archbishop John J. Mitty. Maher soon became the archbishop's protege; after serving as a parish priest for only two years, he became Mitty's diocesan secretary, and ultimately rose to the second-in-command position of chancellor. It was a heady time to be part of the team directing the Bay Area Catholics, whose numbers doubled to more than one million in those postwar years. Maher became chairman of the building committee and oversaw the creation of seventy-five new parishes and more than a hundred new schools.

Indeed, during Maher’s last few years in San Francisco, years in which Mitty's health failed, Maher became known as the real power behind the giant Bay Area organization. In 1971 Rome ordered that organization split into two entities, with a new Diocese of Santa Rosa to include the counties of Sonoma, Solano, Napa, Lake, Mendocino, Humboldt, and Del Norte. Maher's apparent reward for his service in San Francisco was appointment as the new bishop of the new territory. His formal elevation to the episcopate came in 1962.

His eight years in Santa Rosa were characterized by an extraordinary amount of construction: eighteen churches, fourteen rectories, three high schools, three parish halls, two parochial schools, two high school gymnasiums, and two cemetery mausoleums, with eleven new parishes created at the same time. But today, in retrospect, the wisdom of undertaking a building program of that scope is still a subject of debate. While some priests who worked with Maher in northern California praise his business acumen and shrewd decisions, others point to the fact that the construction spree left Santa Rosa with a debt of more than $12 million — a debt whose scope no one except Maher and one bookkeeper was fully aware of until after Maher had departed for San Diego, according to the San Francisco Examiner, which ultimately revealed news of the debt.

Critical comment was prompted by more than just the size and hidden nature of the debt. Part of the money owed by the Santa Rosa diocese had been borrowed from a Sonoma County boys center. The center had been funded with enough public money to spur Attorney General Evelle Younger’s office into investigating the loan. Even more controversial was the revelation that at the same time the Santa Rosa diocese was accruing the huge debt, Maher had been completing construction of a palatial bishop’s residence in the exclusive Montecito Hills district of Santa Rosa. Maher had bought the four-acre estate in 1964 for $90,000 at a time when it included a swimming pool, guest house, cabanas, a three-car garage, and a twelve-room, three-bathroom residence, but he then ordered construction of a new wing containing another bedroom and bath, a library, a chapel, and a wine cellar and bar. By the time Maher’s successor, Bishop Mark Hurley, put the mansion up for sale (to help pay off the diocesan debt), the asking price was $275,000 (including $75,000 for the furnishings). The property finally sold in 1973 for an undisclosed price to “ Peanuts” cartoonist Charles Schulz.

When the revelations about Santa Rosa were published in the Bay Area in 1972, Maher was living in another mansion, this one in the exclusive Mission Hills section of San Diego. He had taken over the San Diego diocese in 1969, and had moved into the official diocesan bishop’s residence. Also greeting him upon his arrival was a substantial debt, the legacy of Bishop Charles Francis Buddy, who founded the diocese here in 1936. Buddy had had a dream of building ‘‘the Notre Dame of the West” on the hill overlooking Mission Bay. His dream, which eventually became the University of San Diego, even included a football team and a medical school. (He was finally dissuaded from building the medical school; many football fans wish he’d been talked out of the football team, too.) Priests and laymen who were here at the time describe Buddy as a hard-headed visionary whose ambition outpaced his business sense. He built the campus, but in doing so forced the diocese deeply into debt. The priests are said to have respected him, but they resented his appropriating each parish’s entire money collection one Sunday out of every month. By the time the campus was ready for students in two separate colleges — one for men and one for women — Buddy had borrowed tens of millions of dollars. By 1963 the debt was more than $20 million, and the Pope was alarmed. The Pontiff took the unusual step of sending an “apostolic administrator” to take over control of the diocese before it collapsed into insolvency. Bishop Buddy, who thought the new bishop was going to be an auxiliary, is said by priests to have never recovered from the shock when the man formally presented his orders from Rome. Buddy was essentially fired. He died three years later.

Bishop Francis J. Furey, the apostolic administrator, immediately set to work retiring the debt. He sold off property, began the process of merging the two colleges into one (which was completed under Maher) as a cost-cutting move, laid off several employees, and initiated a three-year moratorium on new construction. This allowed him to reduce the diocese’s assessment from parish tills to fourteen percent of collections, which still stands. Priests think of him as having “saved” the diocese, and evidently Rome was impressed. In 1969, when the San Antonio diocese was rocked by a priests’ revolt in which sixty-eight clergymen petitioned the Pope to retire their bishop, Furey was transferred and elevated to archbishop of San Antonio with its 500,000 Catholics. After a selection process in which the names of three candidates were sent by the Apostolic Delegate (the Pope’s ambassador in Washington, D.C.) to Vatican City, Bishop Maher was selected to replace Furey in San Diego.

Maher inherited a $15 million debt. Much of that was carried on the university’s ledgers, and in 1972, when the diocese and the university separated their formal ties, the diocese’s debt was reduced to about five million dollars. That same year Maher made what he said was a complete financial disclosure by going before diocesan priests with the chief bookkeeper and explaining the monetary situation. Priests had received no such information from either Buddy or Furey, and Maher has made that point repeatedly over the years. Father Barry Vinyard, vice chairman of the local priests’ council, concurs. “No bishop has ever been required to be open about finances or anything else,” he says. “But Bishop Maher is a lot more open than most other bishops.” Also in 1972 Maher established the Stewardship Program, in which each parish has an assigned goal of several thousand dollars it must raise yearly, depending upon the financial resources of its parishioners. This program was originally set up to help retire the debt, and priests were under the impression that it would be in effect for only one year.

But twelve years later it is still a major source of funds for the diocese (producing almost two million dollars a year), and many parishes this year have been told by the bishop that their assessment has doubled.

Soon after arriving in San Diego Maher also began publishing yearly financial reports in the diocesan newspaper. Those reports have continued regularly, prepared by the auditing Firm of Arthur Young and Company, and have given some hint of the diocese's current financial clout. They show a steady increase in total assets, to today’s ofFicial figure of ten million dollars. Besides praising Maher for presiding over this diocese during the period in which it regained solvency, supporters of Maher also claim that the annual Financial reports indicate his openness. Neither church nor civil law requires Maher to tell anyone much of anything about the local diocese’s multimillion dollar assets and financial activities. And these activities are robust. County property records show that the diocese is more or less constantly buying or selling land, and building or expanding on it. Maher must make disclosures and pay taxes to certain tax agencies, but these payments are as private as those of any individual taxpayer, not revealed to either the local clergy or the laity. For instance, since church-owned structures not used solely for religious purposes are subject to property taxes, the diocese has one of the highest property tax bills of any entity in the county. And virtually all employees of the diocese, including priests and nuns, are subject to state and federal income taxes.

The reason Maher is not legally obliged to tell his congregation members anything about diocesan finances is because he alone fills a role known as the “incumbent” in something called the ‘‘corporation sole” — a role which legally authorizes him to govern all diocesan financial affairs single-handedly. Not all Catholic dioceses in the United States are organized in this manner. One 1981 survey indicated the corporation sole approach was being used in dioceses in only sixteen states (including all of the West, Washington D.C., and the giant Chicago diocese, where the late Archbishop John Cody drew national criticism for funneling diocesan money to a lifelong female friend under the veil of secrecy afforded by the corporation sole arrangement). Although canon law states that the assets in any given diocese “belong” to the people of that diocese, the practical question arises: how should those goods best be managed? The corporation sole approach puts all management and decision-making power in the hands of the bishop.

The other major approach used by Catholic dioceses in America was pioneered in the state of New York. Under the New York arrangement, each individual parish is incorporated separately, with the bishop and two other diocesan officials sitting on each corporate board. This gives the bishop influence, even veto power, over each parish’s financial affairs, but it also means the bishop must share that authority. “This is the system that’s actually preferred by the church [in Rome] because it retains control by the bishop but it also respects the rightful status of the local congregation,” says the Rev. James A. Coriden, a professor of canon law at the Catholic University in Washington, D.C. (A 1911 papal pronouncement from Rome explicitly advised all American dioceses to adopt the New York model.)

Coriden is one of a number of national church scholars who have criticized the corporation sole approach for being non-participatory, exclusive, and monarchical. “It sort of disregards the congregational nature of the church,” Coriden explains. “It makes it look as though the diocese is the bishop’s own personal fiefdom. ... It gives him, we think, too much power.”

Closer to home, some Catholics in the San Diego diocese contend that despite the claims of Maher’s supporters, the fact that Maher set up a diocesan “Finance Council” and publishes an annual balance sheet has not signified any fundamental alteration in the financial power he wields. Although the new canon law which went into effect last year (the first large-scale revision of the church's governing statutes since 1917) says the Finance Council is supposed to review the entire diocesan budget. Finance Council activities up to now have been limited to scrutinizing certain narrow ranges of diocesan operations — namely, budgets of organizations which receive money raised by the Stewardship Program every year. Moreover, one person who worked in the diocese accounting department and observed the Finance Council in operation states, “Frankly, the bishop never shared all the information with the Finance Council, and they were never aggressive enough to ask for it. . . . They tended to put blinders on. After all, who wants to be critical of the bishop?”

This source was unwilling to be identified for fear that Bishop Maher could cause personal problems in the future, but still offered detailed criticisms of the annual balance sheets printed in the Southern Cross newspaper. The scanty one-page summaries, says the source, “don't tell you very much; they obscure.” The financial statements don’t even include two elements found in all corporate annual reports: a profit-and-loss statement, and a statement of changes in financial position. “The diocesan statements don't impart any sense of continuity.”

This accounting department source says one specific example among many of misleading figures contained in the financial statements is the entry for land, buildings, and equipment owned by the diocese. Last year the value of those items was listed at $5,914,408, “horribly understated,” according to the source, who explains that the figure only reflects the value of the property at the time it was acquired. “A raw piece of acreage that was given to the diocese let’s say ten years ago when it cost $100,000 may be worth a million now. But it’s on the books at $100,000. ... A good statement would try at least to give you some idea of what the current value would be.” The source estimates that the true value of total diocesan assets is closer to $35 million to $40 million, instead of the official figure of $10 million.

Another example of misleading accounting is the treatment of bequest, endowment, custodial, and trust funds in the published balance sheet. Although the published figures suggest that the diocese maintains separate accounts for each endowment, bequest, and so forth, “there is no real fund accounting taking place,” says the source. “This is a contrivance.” For a given scholarship fund at the University of San Diego, for example, “the bishop could no more provide me with an accounting of that money than jump from here to the moon. ... It is very slippery and fast accounting.”

The annual balance sheets offer no breakdown on such things as the money spent on Maher’s own salary and expenses, or monies garnered from collections throughout the diocese. Such figures are contained in supporting documents which are reviewed every year by the outside auditors at Arthur Young and Company. However, these figures are confusing and even deceptive, according to the diocesan accounting source. Maher’s modest salary (the diocese refuses to disclose the exact amount) “is spending money,” since virtually all the bishop’s living expenses are paid for separately. Maher holds various credit cards which are charged to the diocese, but whose receipts are never allowed to be scrutinized by anyone other than Maher or his chief assistant. Chancellor I.B. Eagen. Some of Maher’s expenses are logged in a fund labeled “clergy support,’,' but Maher routinely charges various personal expenses to other budgets, the source says. As a result, although only $57,676.88 was logged under “clergy support” for the fiscal year ending June 30, 1983, the source estimates that Maher’s true expenses for that year actually exceeded $100,000.

Bishop Maher declined to be interviewed on the subject of finances, but said through a spokesman, “Diocesan offices are audited annually in accordance with accounting principles and reporting practices for church and church-related organizations, as per the U.S. Catholic Conference, and made public. No improprieties exist.” Richard Castro, who until last December was the finance officer for the diocese, says, “As former finance officer, I can say that the Diocese of San Diego does not provide as much information and as complete information as many other dioceses do provide, and should provide. The financial statement of the Diocese of San Diego is not adequate and not complete.” Another interesting aspect of diocese finances involves the property holdings of Elvia Aguilar, the bishop's secretary. Aguilar, who is now forty-eight, began working for the diocese under Bishop Buddy. She graduated from Cathedral Girls High School, and used a green card to commute from her home in Tijuana to work as a secretary in the chancery. After she married Ricardo Calderon in 1962, she quit working for the diocese and devoted herself to her family. Then in 1977 she went to work for Bishop Maher. Shortly thereafter, her marriage was annulled.

Aguilar’s job in Maher’s office expanded into the area of Hispanic affairs. She and Maher began to travel together regularly, and as Aguilar's job brought her into greater contact with the bishop, their friendship grew. Aguilar and her children moved into a four-bedroom home on Coralwood Court in Chula Vista in 1978, the same year that the diocese had purchased the house from its former owners. Two years later, county records show, the house was in her name, the deed signed by Bishop Maher. No trust deed (signifying a formal loan) for the indicated $110,(XX) transfer price has ever been recorded. This means that she either paid all the money to the diocese in cash, or the diocese is holding a promissory note from her, and the bishop in effect loaned her the money to buy it. Either that, or the bishop simply gave the house to her.

“I assure you there’s nothing unusual [in the transaction], but I wouldn’t feel at liberty to go into those matters,” Aguilar replied when asked how she paid for the house. She stated that financing for the purchase “was handled within the diocese. [Diocesan counsel] Barry Crane is familiar with the transaction. It was financed within the diocese. It was arranged.” Crane, who is the spokesman for the diocese, acknowledges that Aguilar acquired the house from the diocese, but added, “She’s mistaken in terms of any note. There’s no note carried on the books.”

In August of 1981, less than a year after she took title to the Chula Vista home, public records also show that Aguilar acquired, for $50,000, a condominium in the La Jolla Garden Villas project just off La Jolla Village Drive in University City. This area is known to developers as “the Golden Triangle” because of its location and development potential. County assessor rolls list the value of the condo as $169,000; when the condos were put up for sale in 1981, they sold for between $150,000 and $200,000. The condo project on the four-acre site was actually initiated by Bishop Maher, who subdivided the land the church owned there and sold it, after having obtained most of the city permits, to a development company called ICD, Ltd., in 1979. The sale price, according to public documents, was one million dollars. The chairman of the board of ICD is Domenico Bonifaci, an Italian who has extensive real estate developments in and around Rome. According to Mrs. Marlis Daddario, who identified herself as Bonifaci s agent in the United States (and is located in the sales office of the condo project), no salesman was involved in Aguilar’s condo purchase. “That unit was sold before the condos were ever built,” she said. Daddario claimed that Bonifaci made the deal with the bishop. “It had something to do with an indebtedness in the past,” she continued. “It was, ‘You do this for me and I'll give you a condo for $50,000.' It’s politics, okay?”

Aguilar declined to discuss the condominium purchase in detail, but she did offer some information that contradicted Mrs. Daddario. Aguilar said that the bishop did not arrange the purchase, that she herself did. And even though the former diocesan accounting department employee testifies to seeing a promissory note in her name for between $40,000 and $50,(XX), drawn on diocesan funds, Aguilar said the bishop did not loan her money to purchase the condo. She said the financing is “a personal matter. ... All of these matters are explainable within the proper authorities of the diocese. Nothing improper has been done. The bishop’s authority and prudence is not something that should be questioned.” □

Also contributing to this story was Bob Dorn.

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