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Ex-chancellor admits stealing from diocese, CMC, friend's estate

New Hampshire Union Leader
Union Leader Correspondent

February 03. 2014 8:52PM

Rev. Edward J. Arsenault answers a reporter's question at a 2002 press conference as then-Bishop John McCormack listens. Arsenault, who became chancellor of the Diocese of Manchester in 2000, will serve at least four years in prison under a plea bargain in relation to charges that he stole money from the diocese, Catholic Medical Center and the estate of a fellow priest. 

MANCHESTER — A priest who held one of the highest positions in the Diocese of Manchester in the 2000s will plead guilty to charges of stealing undisclosed sums of money from the Diocese, Catholic Medical Center, and the estate of a fellow priest, state and federal prosecutors announced Monday.

Edward J. Arsenault III has agreed to spend at least four years in New Hampshire State Prison, according to terms of a plea bargain that prosecutors disclosed Monday. The deal must be approved by a judge, and Arsenault is scheduled to plead guilty and be sentenced in Hillsborough County Superior Court-North on April 23, three days after the Christian holy day of Easter.

During most of the 2000s, Arsenault held top administrative offices in the diocese, including chancellor, a post that had him as the right-hand man to former Bishop John McCormack. The job frequently put him in front of cameras during the priest-sex abuse scandals of the decade.

In 2009, he left New Hampshire to take a $170,000-a-year job at St. Luke Institute, a Maryland-based institution that delivers psychological and spiritual care to priests. He resigned in May, when the investigations came to light.

In a letter emailed to fellow priests and friends on Monday, Arsenault admitted "crimes in the exercise of my responsibilities as a priest" and apologized.

"I broke the law and violated the trust of others. I am prepared to accept the consequences for having done so, to make restitution and to face the penalty for having committed these crimes," the letter reads.

More arrests possible?

In May, New Hampshire State Police and the FBI started investigating Arsenault, when the Diocese of Manchester announced that allegations had surfaced about Arsenault's involvement in illegal financial transactions and an "inappropriate adult relationship."

Monday's statement did not disclose the specific amounts stolen. It says the amounts in each of three cases exceed $1,500, the legal benchmark that makes each theft a Class A felony.

Jane Young, who oversees criminal prosecutions in the Attorney General's Office, said Monday's announcement concludes the investigation into Arsenault.

"The investigation will continue to determine if there is any criminal liability on anyone else's behalf," Young said. "This is the first facet of the investigation."

In their announcement, prosecutors said they would recommend a reduced sentence for the Catholic Medical Center-related theft case as long as Arsenault continues to cooperate with the investigation.

In a statement released Monday, CMC acknowledged it had entered a "specific contract for consulting services" with Arsenault in 2009, after he resigned from the hospital board of directors. The agreement ended in 2010.

"We look forward to a full public disclosure at the conclusion of the Attorney General's investigation. In the meantime, however, because this matter remains pending, we cannot comment any further," said the CMC statement, which the hospital attributed to President Dr. Joseph Pepe and Joseph Graham, the immediate past chairman of the board.

Like CMC, the Diocese of Manchester issued a statement saying it had cooperated with authorities and further comment would follow once the case was closed. "The diocese will offer more information when it is appropriate to do so," the Diocese said in its statement.

Monsignor's estate

According to files at Rockingham County Probate Court, Arsenault was the executor for the estate of the Rev. Msgr. John E. Molan, who died on June 13, 2010. The records give no hint of impropriety. Arsenault reported that he paid himself $7,500 from the $277,000 estate for executor duties.

Several beneficiaries — including Catholic Charities of New Hampshire, a Manchester convent, several churches, St. Anselm College, Child Health Services and New Horizons for New Hampshire — shared $132,800.

The remainder — $144,200 — went to the Manchester bishop, then McCormack, to use as he saw fit.

Monday's statement was issued by New Hampshire Attorney General Joseph Foster and U.S. Attorney John Kacavas. It said thefts from the Diocese took place between 2005 and last year.

Under terms of the plea bargain, Arsenault is to make restitution to all three victims. Arsenault's lawyer, Cathy Green, would not comment on the statement.

The Survivors Network of those Abused by Priests said clergy sexual abuse victims and Catholics were betrayed and misled time and again by Arsenault, his colleagues and supervisors.

"Msgr. Arsenault has attacked victims, deceived parishioners and defended the indefensible," said David Clohessy, director of SNAP. "He has repeatedly blamed media and others for the on-going abuse and cover up crisis."

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