Diocese of Providence Issues Statement in Response to Fraud Lawsuit
Sunday, June 24, 2018
The lawsuit filed alleges that the Diocese was a key player in a fraud that now leaves the pension fund with a gap of an estimated $118 million.
The Diocese of Providence Statement Reads:
As you know, the ongoing dispute about the status of the pension funds of St. Joseph Health Services of Rhode Island (the former operator of St. Joseph Hospital and Fatima Hospital) has emerged in the news once again with the filing of a class action lawsuit. The suit names corporations related to the Diocese of Providence along with approximately 12 other defendants. Although some litigation about this matter was expected, we are surprised and disappointed that the Diocese is included.
As we have explained before, the Catholic Church ended its administrative role with the hospitals several years before the pension problem developed. In fact, the two legal complaints (each over 100 pages in length) acknowledge and repeat much of what we have said previously. One paragraph references “the diminished or nonexistent roles of Bishop Tobin and the Diocese in SJHSRI’s governance after the 2009 merger” with CharterCare. The next paragraph notes that “Upon the conclusion of the 2014 Asset Sale, the Diocese had no meaningful role in the governance of SJHSRI. To the contrary, the only rights it had concerned the “Catholicity” of SJHSRI’s operation of the hospital and provision of health care.”
The pension fund was in effect “orphaned” when Prospect Medical Holdings, a multi-billion dollar, for-profit corporation, purchased CharterCare which had been previously formed by the combination of St. Joseph Health Services and Roger Williams Medical Center. Prospect assumed responsibility for all aspects of the hospital management – except for the pension fund.
Please keep in mind that these corporate transactions took several years and involved detailed negotiations of boards of directors, hospital administrators, attorneys, actuaries, consultants, and canonists. They were fully vetted and approved by state officials, including the Attorney General and the Department of Health, and were supported and recommended for approval by the nurses’ union.
The litigation is part of the ongoing process which began almost a year ago. The lawsuit is long and very complex and will involve multiple attorneys and corporate entities. It probably will take considerable time to be resolved. The Diocese will be fully engaged in this process and will vigorously respond to the inaccurate claims contained in the lawsuit.
In the meantime, while this unfortunate litigation follows its own discrete path, the work of the Church will continue unabated. We will continue our mission of gathering the faithful for worship, preaching the Gospel, educating children, serving the poor, and advocating for a better and just society. As always, your prayerful and personal support will be important and greatly appreciated. The words of Jesus spoken to his disciples at the Last Supper are as relevant now as ever: “Do not let your hearts be troubled, but have faith in God and faith in me.” (Jn 14:1)
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