DENVER — A senior Vatican official has spoken out regarding a dispute between Denver Archbishop Charles Chaput and state legislators over a bill that would restrict religious freedom.

The conflict could have wide-reaching effects on the ability of religious organizations throughout the United States to remain religious if they accept tax dollars.

Archbishop Chaput has threatened to shut down Catholic Charities over the matter.

Asked by a reporter in Rome about Archbishop Chaput’s standoff, Cardinal Paul Josef Cordes, head of the Pontifical Council Cor Unum, defended it.

“The bishop [Archbishop Chaput] is doing the right thing,” Cardinal Cordes said in Italian, based on a published report. “Theologically, charitable activity and the good deeds of the faithful are always connected to the proclamation of the Word.”

The bill — championed by Colorado House Majority Leader Alice Madden, a Democrat from Boulder — would prevent religious-based charities from hiring based on religious preference, if the position is tied at all to government-subsidized services.

The measure has elicited strong reactions from Archbishop Chaput, Colorado Springs Bishop Michael Sheridan, Colorado Springs-based Focus on the Family, the Denver Rescue Mission and leaders of other religious charities throughout the state.

In a column for the Denver Catholic Register, Archbishop Chaput said some Catholics find the proposal “bigoted” and “designed to bully religious groups out of the public square.”

“Faith-based nonprofits are spurred to social action by their deeply held religious beliefs,” said Jim Pfaff, president of Colorado Family Action, at a rally of the bill’s opponents at the Colorado Capitol Jan. 29. “Asking them to compromise their convictions not only breaches their religious liberties, but it is asking them to deny the very tenets that compel them to social action.”

Religious charitable organizations have received government funds since former President Bill Clinton introduced a faith-based initiative in his second term. Under President George W. Bush, subsidies to religious charities have grown exponentially.

Supporters of government funding for religious charities argue that public-religious partnerships are the most efficient way to channel tax money to the needy because religious organizations provide a vast network of existing, low-cost charities.

The Archdiocese of Denver’s Catholic Charities, for example, bills itself as the largest provider of charitable and social services in the Rocky Mountain region. If the government wants to feed the poor, it can get the biggest bang for its buck by using organizations such as Catholic Charities of Denver, which runs everything from soup kitchens to homeless shelters to hospices to psychological services for the poor.

“When it can no longer have the freedom it needs to be ‘Catholic,’ it will end its services. This is not idle talk,” Archbishop Chaput wrote in a recent column for the Denver Catholic Register.

Opponents of the funding arrangements believe they should be prohibited under the “separation-of-church-and-state” concept loosely defined by some federal court cases involving the First Amendment to the Constitution. The First Amendment prohibits government from establishing an official religion — and from interfering with the free exercise of religion.

In a written statement, Madden said “a last-minute floor amendment” in 2007 caused the exemption that religious charities are using to make religious-based hiring decisions for charitable work that receives government funds.

“That needs to be fixed,” Madden said, adding that her bill would “not change the real-world practices of organizations such as Catholic Charities.”

Bishop Sheridan said government funds about 3% to 5% of the budget for Catholic Charities of Colorado Springs. He plans to refuse all government money if the law forces him to forgo religious preference in hiring.

As Colorado law states, private charities receiving government funds cannot discriminate in hiring on the basis of race, gender, sexual orientation, national origin or ancestry, age, disability, color, sex or creed. Though the law forbids discrimination based on religion, another phrase exempts religious organizations from the discrimination clause “with respect to employment of individuals of a particular religion.”

Bruce DeBoskey, regional director of the Anti-Defamation League in Denver, said the law seems intentionally obscure.

“For whatever reason, the archbishop thinks he can’t serve soup if we remove that exemption,” DeBoskey said. “We don’t think that’s the case. We’re just saying that if the job is tied to government funds, you can’t base hiring on religious preference.”

Christopher Rose, president and chief executive officer of Catholic Charities of the Archdiocese of Denver, said the Madden bill would hurt all faith-based organizations, including Jewish Family Services, a ministry with a mission statement that bases its services “on Jewish values.”

Rose said supporters of the bill are stretching things by arguing that religious-based hiring violates the First Amendment’s establishment clause if a charity receives government funds.

“The Denver Rescue Mission and the Salvation Army don’t miraculously become government agencies because they work with Mayor Hickenlooper to end homelessness,” Rose said in a written statement. “If they do, then every private citizen becomes a government actor upon reaching age 65 and receiving Social Security benefits.”

Cardinal Cordes explained that the conflict in Denver points to a contemporary problem that Cor Unum will try to address at a June retreat for directors of Catholic charities in North and South America.

“Thanks to the generosity of many donors, the charitable agencies of the Church are able to do their work,” the cardinal said. “But this carries a risk that the spirit of a Catholic agency can become secularized, doing only what the donor has in view.”

Wayne Laugesen is based in

Boulder, Colorado.