Inside the corporate structure of a Catholic order that ran 48 residential schools | CBC News

“Their valuables are more important than humanity,” said Korkmaz, a survivor of St. Anne’s Indian Residential School, the notorious institution in northern Ontario she was forced to attend and where she was abused as a child. 

For years, Korkmaz has sought records and reparations she says the church owes her and other survivors. It’s a campaign that took her to Rome in 2019 for a Vatican summit on sexual abuse.

“They’ve claimed to be poor, bankrupt. I went to the Vatican — they are far from bankrupt,” said Korkmaz, who has received some compensation but is still involved in litigation against the groups that operated residential schools.

They’ve claimed to be poor, bankrupt. I went to the Vatican — they are far from bankrupt.– Evelyn Korkmaz, residential school survivor

Those who have sued the church for past wrongdoing say seeking justice is a herculean task, made all the more difficult by the complex corporate structure that they say is designed to protect Catholic entities.

WATCH | ‘It is time that reparations are made’

‘It is time that reparations are made’

Donald Worme, a Saskatoon lawyer and former lead counsel for the Truth and Reconciliation Commission, says it’s frustrating that the Oblates of Mary Immaculate may have used methods meant to shield assets from lawsuits. Oblate Father Ken Thorson has denied these claims. 1:06

A CBC investigation into one important entity — the Missionary Oblates of Mary Immaculate (OMI), which ran 48 residential schools across Canada — reveals an elaborate network of more than two dozen corporate holdings with at least $200 million in assets and cash, with a priority to take care of a dwindling number of aging priests in the face of looming liabilities.

In fact, an internal church bulletin from 2007 cited the containment of liabilities as one of the main reasons for an order’s corporate restructuring.

‘That’s unfair’

The Oblates are among the dozens of Catholic entities that together promised $25 million for a fund approved in 2006 to compensate survivors for the emotional, physical and sexual abuse, as well as systemic violations of basic human rights, suffered in residential schools run by Catholic priests and nuns.

But the Catholic groups said they were only able to raise $3.9 million through the Indian Residential School Settlement Agreement (IRSSA), and in 2015, the federal government released the Catholic Church from its settlement obligations.

A year before that controversial deal, the Oblates sold a large acreage along the Rideau River in Ottawa, earning a handsome profit that critics say is further evidence of the church’s priorities.

“They sold property in Ottawa to the tune of $32 million. We know that they spent over $110 million on the refurbishment of St. Michael’s Cathedral in Toronto. We know that in Saskatoon, they built a $29-million-plus cathedral. At the same time as they’re claiming poverty and unable to pay the reparations. I say that that’s unfair,” said Donald Worme, a Saskatoon lawyer and former lead counsel for the Truth and Reconciliation Commission.

Worme now represents clients seeking information regarding unmarked graves at former residential schools. The three recent rediscoveries in Kamloops, B.C., Marieval, Sask., and near Brandon, Man., are all on properties once run by the Oblates. 

“When you sign an agreement and say that you are going to give money to people, it’s a contract,” said Korkmaz. “What right does Canada have to allow the church off the hook?”

Elderly priests ‘a major priority’

Headquartered in Ottawa, the Oblates of Mary Immaculate say they paid their portion of what was due.

“Under the terms of the settlement, the amount each entity paid was not made public,” Oblate Father Ken Thorson said in an email to CBC. “Along with the other Catholic entities, the OMI have contributed a commensurate proportion toward the IRSSA.” 

There are only 300 Oblate members living in Canada today; most are elderly and some are in need of care, said Thorson. 

Yet with that dwindling membership of priests and brothers, the order has more than 25 corporations in Canada with assets in the hundreds of millions of dollars. Around half share the same corporate addresses in Ottawa and Richelieu, Que., according to financial documents filed with the Canada Revenue Agency (CRA).

No one’s called them to task because they’re the church, they’re the good guys, they’re a charity.”– Rob Talach, lawyer

All the Oblate corporations run as charities, which pay no income tax. Their assets include several properties that also generally escape provincial taxation. Some are also exempt from making their finances public, which makes it impossible to calculate the exact value of their holdings, potentially making the real value of the assets higher.

“Some of the prior corporate structures (i.e., corporations) remain functioning, and not shut down, to serve a designated need, such as the housing and/or local care of elders,” wrote Thorson. “Attending to the needs of our elders has become a major priority.

“The goal is to eventually wind down as many of these original corporations as possible for efficiency,” he wrote.

But Rob Talach, a lawyer in London, Ont., believes the Oblates set up its current structure to avoid potential liabilities.

For more than 20 years, Talach has filed at least 400 historical sexual abuse cases against Cathlolic entities across Canada.

He points to a 2007 bulletin written by Frank Morrisey, a well-respected Oblate priest, lawyer and scholar of canon law, which details “lessons learned from restructuring within the Roman Catholic Church.”

“At times, because of potential lawsuits, rather than merging units or setting up a union, we have had to create a new entity and leave the current one dormant, until the suits are settled. Otherwise, the assets of the new entity become contaminated and subject to loss,” wrote Morrisey, who died in 2020.

Talach believes this is exactly what the Oblates did in the early 2000s, after the federal government set up the Office of Indian Residential Schools Resolution Canada — the bureau tasked with settling thousands of former students’ claims, including some against the Oblates.

In 2003, the Oblates set up what is now its new, main corporation: OMI Lacombe Inc. 

“They basically set up a brand new corporation, transferred assets,” Talach alleges.

WATCH | ‘They cry poor:’ Lawyer explains how Catholic order may be using corporate restructuring 

‘They cry poor:’ Lawyer explains how Catholic order may be using corporate restructuring

Lawyer Rob Talach explains how the process of corporate restructuring may have helped the Oblates of Mary Immaculate protect church entities and avoid liability in the face of mounting lawsuits. Oblate Father Ken Thorson has called these allegations “simply inaccurate.” 0:57

‘Cried poor’

When Oblate leaders assigned to legacy corporations were subsequently sued in civil court for sexual abuse crimes, Talach says they “cried poor.”

“What they say is, ‘Look, the entity you’re suing is empty. We’re going to be gracious and we’re going to pay you something from the new entity, but it has to be highly discounted because a) we’re poor and b) we’re not really the corporation that caused the harm,'” said Talach. 

“No one’s called them to task, because they’re the church; they’re the good guys, they’re a charity.”

Thorson takes issue with Talach’s assessment, calling it “simply inaccurate.” 

“Restructuring is not a process unique to the Oblates. Many religious congregations have done the same — expanding or reducing the number of administrative units in response to ministry needs and the number of members,” he wrote in response to CBC’s questions.

The issue was further explained in the 2007 memo from Morrisey, in which he referenced a hypothetical “naughty boy” scenario.

“A very common — and unfortunate — situation that we have to face is when a diocese is … reconfigured, and a priest is now assigned to Diocese ‘B’, although he was previously part of Diocese ‘A’ … It now comes to light that while the priest was in Diocese ‘A’, he was a ‘naughty boy.’ Who is responsible for the case? We have found it most helpful to have this spelled out in the agreement finalizing the division.”

Liabilities continue

Just who is responsible is the focus of a newly certified class-action case in Quebec that alleges historical sexual abuse by five Oblate missionaries against children and women in a northern Quebec Indigenous community from 1941 through the 1980s.

The lawsuit, which represents at least 220 plaintiffs suing seven Oblate corporations in Quebec, was certified by a judge on Nov. 16.

The Oblates’ operations in Quebec are overseen by another senior priest, but records show overlap and relationships between the various entities. 

The Oblate leaders in Quebec would not comment, “given the fact of legal and judiciary matters we are dealing with at this moment.” 

Debts still owed

Canadians, especially Catholic parishioners, need to play a role in pressuring church leaders to take action, said Worme. “They must encourage their religious entities to do the right thing.”

This isn’t just about money, he said. Many have called for the release of any residential school records held by the church, saying they could provide closure for survivors or the families of those who never returned home.

“Reparations are really secondary,” said Worme. “What is important is the production of those records that hold the keys to the unanswered questions of the missing children and the unmarked graves.”

An apology from the Pope is also essential, he said, because without it, there will continue to be “obfuscation and denial.”

But survivor Evelyn Korkmaz wants more than an apology.

“He better come with the documents that are owed to us — our history,” she said. “And he better come up with the money that was promised in the agreement.”

Support is available for anyone affected by the lingering effects of residential school and those who are triggered by the latest reports.

A national Indian Residential School Crisis Line has been set up to provide support for residential school survivors and others affected. People can access emotional and crisis referral services by calling the 24-hour national crisis line: 1-866-925-4419.