A handful of parishes in the Roman Catholic Diocese of San Diego deliberately concealed or inappropriately handled about $500,000 in funds in sometimes “purposeful attempts” to circumvent federal bankruptcy proceedings, the Associated Press reported today. The San Diego diocese filed for chapter 11 bankruptcy Feb. 27, just hours before going to trial in more than 140 lawsuits alleging sexual abuse by priests. The auditor’s report said that “openly questionable activities” appear to be limited to a small number of parishes, and most pastors and lay personnel demonstrate a good-faith effort to comply with church financial procedures. Still, the 175-page report published late Monday found no overall system of accounting throughout the diocese. “As a result (church officials) are often woefully unaware of the specific financial operations of individual parishes,” the report said. Bankruptcy Judge Louise DeCarl Adler ordered the examination of the diocese’s finances in April.

Former Qwest Communications CEO Joe Nacchio was sentenced to six years in prison Friday for making $52 million in illegal stock sales while a multibillion-dollar accounting scandal brought the telecommunications company to the brink of bankruptcy, the Associated Press reported on Saturday. U.S. District Judge Edward Nottingham also ordered Nacchio to forfeit the $52 million within 15 days, imposed a maximum $19 million fine and ordered him to serve two years’ probation after serving his sentence. The judge denied Nacchio’s request to be granted bail while he appeals his conviction. He ordered Nacchio to report to authorities within 15 days once a federal prison is chosen for him.

Putting another nail in the coffin of the troubled High-Grade Structured Credit Strategies hedge fund, lenders at Bear Stearns Cos. have seized most of the fund’s collateral following its failure to meet a recent margin call, the Wall Street Journal reported today. Bear’s move came after more than a week of waiting for additional cash or collateral to repay Bear’s $1.6 billion line of credit, leaves the High-Grade fund with little or no remaining capital and few assets of any value. Both the High-Grade fund and a more-leveraged sister fund have seen the value of their holdings decline precipitously in recent weeks, as the market for risky subprime mortgages, on which the funds bet heavily, has weakened. Bear is now saddled with some of the same troubled securities that hobbled the hedge fund and is in the process of unwinding the more leveraged fund, known as the High-Grade Structured Credit Strategies Enhanced

A group of auditors and banks secured a major victory Tuesday when a judge dismissed foreign plaintiffs’ claims that they are liable for securities fraud due to alleged their roles in aiding bankrupt Italian dairy giant Parmalat SpA’s market manipulation, Bankruptcy Law360 reported yesterday. Judge Lewis A. Kaplan of the U.S. District Court for the Southern District of New York dismissed foreign purchasers of Parmalat securities’s charges against four financial institutions. Judge Kaplan found that these plaintiffs did not sufficiently argue that the banks had committed culpable actions in the United States, and therefore ruled that the district court lacks subject-matter jurisdiction. The judge also ruled that Grant Thornton and Deloitte Touche, whose accused role in Parmalat’s alleged fraud involves auditing, lie outside of U.S. jurisdiction because the plaintiffs do not sufficiently accuse them of violating United States securities laws in the U.S.

A group of Comair pilots have filed a lawsuit for a portion of the $61 million its union negotiated in a settlement of claims during the airline’s bankruptcy proceedings, Bankruptcy Law360 reported yesterday. The 11 senior pilots claim the Air Line Pilots Association is withholding the spoils of the deal negotiated as part of Comair’s bid to modify employment agreements and exit chapter 11 protection. The suit, filed Monday in the U.S. Bankruptcy Court for the Southern District of New York, claims the labor organization is retaliating against the pilots for enforcing Comair’s tough new sick leave policy. It has called for an order directing the airline to distribute to the pilots their “fair share” of the settlement proceeds, which amounts to about $600,000. The pilots allege that ALPA breached its fiduciary duty to them as both their collective bargaining representative and their representative during Comair’s chapter 11 proceedings, during which time their employment contracts were modified. Kentucky-based Comair, a subsidiary of Delta Airlines Inc., exited bankruptcy with its parent company on May 1.

Lawmakers are preparing legislation that would significantly expand federal aid to the workers whose jobs have been moved offshore or are lost to foreign imports, the Washington Post reported today. Under a Senate bill to be introduced today, computer programmers, call-center staffers and other service-sector workers who make up the vast majority of the nation’s workforce would for the first time be eligible for a generous package of income, health and retraining benefits currently reserved for manufacturing workers who lose their jobs to international trade. Democrats say the expansion of the Trade Adjustment Assistance (TAA) program would begin to reweave the social safety net for the 21st century, as advances permit more industries to take advantage of cheap foreign labor — even for skilled, white-collar work. A similar bill is nearing completion in the House, and Democrats hope to approve the expansion before the program expires Sept. 30. Trade Adjustment Assistance typically gets strong bipartisan support; Sen. Olympia J. Snowe (R-Maine) is co-sponsoring the bill with Sen. Max Baucus (D-Mont.).

Pfizer Inc. warned that it will have to undertake further restructuring to strengthen its results as it faces increased generic competition amid the expiration of its drug patents on Lipitor and other products. That would be on top of plans to trim its payroll and shutter plants announced in January. The announcement of further downsizing comes as the big Manhattan, N.Y. drug company reported its second quarter results. Net income sank 48% in the periodÐto $1.3 billion, including restructuring and other charges of about $1.1 billion. Sales fell more than 5%Ðto $11.1 billion.

Forty-eight members of the House and three from the Senate had more than $10,000 in family credit card debt last year, with some carrying balances totaling more than $50,000, according to their personal financial disclosure reports, the Politico reported yesterday. The recent filings reflect both one-time large charges paid off promptly and longstanding debts carried on the same cards over years. In the latter cases, credit cards are often a poor choice because of their high interest rates and hidden fees, personal finance experts said. The average interest rate paid on credit cards nationally in 2005 was 14 percent, according to creditcards.com, well above the rate for other forms of personal debt. Most of the lawmakers with high card debt, though, denied they were poorly managing their own finances, saying they were beating the prevailing rates and avoiding the high fees. Although most said they were keeping a close eye on their credit scores, some said that the rating was not a concern to them because they weren’t planning to borrow money soon.

Some lenders are eliminating what until recently was the most popular type of home-mortgage loan for subprime borrowers, the Wall Street Journal reported today. Countrywide Financial Corp., Option One Mortgage Corp. and Merrill Lynch & Co.’s First Franklin Financial unit told employees and mortgage brokers this week that they would no longer offer so-called 2/28 subprime loans, ones that carry a relatively low fixed rate for the first two years and then jump to a much higher, floating rate, often more than 10 percent. Lenders sell most subprime loans to packagers of mortgage-backed securities and thus typically offer only loans that investors are eager to buy. Investors have soured on 2/28 loans over the past few months because of a surge in defaults. At the same time, regulators and rating agencies are pushing lenders to be more conservative in granting loans.

San Diego City Attorney Michael Aguirre proposed a plan yesterday that even he admitted would be a tough sell – persuading current and future city retirees to give up at least $400 million worth of benefits, with one crucial condition: The city must raise revenues to fully fund the remaining value of the pension obligations, the San Diego Union-Tribune reported today. Aguirre wants to present the plan to four employee groups involved in his court case to eliminate pension benefit increases he alleges were granted illegally in 1996 and 2002. He estimates that $800 million of the pension system’s $1 billion deficit can be attributed to those changes and that his proposal would wipe out at least half of the costs of the two rounds of benefit boosts.