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At-risk groups

National | Court says Catholic Charities isn't a "religious employer," foreign firms cut into U.S. auto makers' sales, and biotech stocks lose their luster

Issue: "More than a warlord," July 21, 2001

Shades of religion
Just when the Bush administration decided that it wouldn't give money to poverty-fighting programs that were too religious, judges in California are saying that one Roman Catholic group isn't religious enough. A California Court of Appeals last week denied a petition by a regional Catholic Charities branch that would have allowed the group to exclude prescription contraceptive coverage from its employee health benefits plan. In a lawsuit filed in July 2000, Catholic Charities of Sacramento argued that the state should exempt the group from the Contraceptive Equity Act, legislation that Planned Parenthood backed and that Governor Gray Davis signed into law in 1999. The law requires all Golden State employers that provide employees with prescription drug benefits to cover contraceptives. California is one of many states that have considered or passed similar laws over the past three years. Some of the laws, such as Maryland's, include broadly applicable conscience clauses that allow "religious employers" to abstain from providing coverage for medical care that conflicts with the teachings of their religion. But California's definition of "religious employer" is so narrow that many religious groups, including Catholic Charities, do not qualify. The exemption applies only to employers that meet four criteria:

  • The inculcation of religious values is the purpose of the entity.
  • The entity primarily employs persons who share its religious beliefs.
  • The entity primarily serves people who share its religious beliefs.
  • The Internal Revenue Code classifies the entity as a nonprofit organization.

In last week's ruling, the California appeals court said Catholic Charities did not meet the criteria, since the agency acts primarily as a provider of social services and material aid for the needy. Ironically, the national Catholic Charities office often downplays the religious tradition of the organization. James F. Sweeney, attorney for Catholic Charities, called California's narrowly drawn religious exemption guidelines a "fig leaf" that masked a direct attack by legislators on anti-contraception views held by Roman Catholics. The court is forcing Catholic Charities "to act in direct contradiction of its religious, moral, and ethical beliefs," Mr. Sweeney said, "and any people of faith should be deeply disturbed." American auto woes
Bad news for the Big Three: Foreign auto makers such as Porsche, BMW, Lexis, Volkswagen, Kia, and Toyota last week reported record-breaking sales figures. For American manufacturers Chrysler, Ford, and General Motors, the foreign surge is cutting deeply into an already troubled bottom line. "The Europeans are now taking 11 percent of total passenger car sales-a record for them-and an absolute record share for sales of cars over $35,000," said Sean P. McAlinden, an industry analyst at the Center for Automotive Research in Michigan. "The Koreans are tearing up the bottom end of the market for cars under $15,000 ... [and] the Japanese have introduced a deluge of new pickups, sport utilities, and minivans they didn't have even two years ago." According to Mr. McAlinden, the Japanese now command 20 percent of the light truck market-tying their record set in 1985-while the Big Three share in the total light vehicles market dangles at a record low of 62 percent. Overall, combined sales for the Big Three are down 10 percent for the year. Biotech bear market
Last month 12,500 scientists, activists, and investors converged on San Diego for BIO 2001, the biotech industry's premiere powwow. As conference speakers reported momentous biotech breakthroughs, financial analysts predicted a resurgence of investor faith in "life science" securities. But despite the hype, an analysis of June's Burrill Life Sciences Indices shows biotech stocks across most sectors sliding further into the tank: agri-bio down 12 percent for the year; diagnostics down 11 percent; large- and mid-cap indices losing 15 and 7 percent respectively. The year's biggest loser so far seems odd considering the splashdown last summer of the completed human gene sequence. Analysts had speculated that the cracking of the human gene code by Celera Genomics Group and the Human Genome Project might spur new investment in gene-related therapies and technologies. If it has, investors are losing money: Burrill's "genomics" index has plummeted 21 percent in 2001.

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