Church documents obtained by the AP show the Vatican was alerted to the accusations against the Rev. Joseph Palanivel Jeyapaul more than three years ago but did not respond.
The priest has received only a minor punishment and is currently working in his bishop's office processing teacher appointments for a dozen church schools in the diocese of Ootacamund in southern India.
"We cannot simply throw out the priest, so he is just staying in the bishop's house, and he is helping me with the appointment of teachers," said the Most Rev. A. Almaraj, the bishop of Ootacamund.
"He says he is innocent, and these are only allegations. ... I don't know what else to do."
Almaraj emphasized that Jeyapaul was engaged in only "paperwork, nothing to do with the children or anything."
The main group of clerical abuse victims in the United States has scheduled a news conference for Monday in St. Paul, Minnesota, to draw attention to the Jeyapaul case and demand he be suspended and returned to face justice in the United States.
The group, Survivors Network for those Abused by Priests, has been campaigning recently to draw attention to what it considers the Vatican's complicity in cases of abusive priests being moved around dioceses to avoid criminal prosecution.
The Vatican has denounced such accusations and has blamed the media for what it calls a smear campaign against the pope and his advisers.
The Vatican has insisted Pope Benedict XVI takes such accusations seriously and cracked down on abuse in 2001 by ordering dioceses to inform the Vatican of all such cases.
However, the Vatican hasn't issued any guidelines requiring bishops to heed civil authorities, though it insists nothing in its directives precludes such cooperation.
Jeyapaul is currently wanted on two counts of criminal sexual conduct stemming from accusations he assaulted a young, female parishioner in the fall of 2004 at the Blessed Sacrament Church in Greenbush, Minnesota, where he was working. Each charge carries a sentence of up to 30 years.
According to the criminal complaint, the teenage girl accused Jeyapaul of threatening to kill her family if she did not come into the rectory, where he then forced her to perform oral sex on him and groped her in the fall of 2004.
In a telephone call with The Associated Press, Jeyapaul denied the charges.
"It is a false accusation against me," he said. "I do not know that girl at all."
He said he had no intention of facing the charges, and Almaraj said the church had never discussed asking him to return to the United States to appear in court.
"No steps were taken. Nobody talked about that. Nobody asked about that," Almaraj said.
Officials at India's Foreign Ministry were not immediately available to discuss whether the U.S. asked for Jeyapaul's extradition. The two countries do have an agreement.
At the time the accusations against Jeyapaul first surfaced in 2005, the priest had returned home to visit his ailing mother and officials in Minnesota's Crookston diocese told him he should stay in India, Jeyapaul said.
"My mother told me to remain here, and the (Crookston) bishop also told me not to come back, because these allegations have come against you," he said.
On Dec. 21, 2006, Monsignor Victor Balke, the-then bishop of the Crookston diocese, wrote about the accusations against Jeyapaul to both Cardinal William Levada, prefect of the Congregation for the Doctrine of the Faith, and the Most Rev. Pietro Sambi, Apostolic Nuncio, the Vatican's ambassador, to the United States. The Congregation for the Doctrine of the Faith is the Vatican office that handles all abuse cases.
"I hope that for the good of the Church you are able to reach a speedy resolution to this case," he wrote to Levada, according to a letter obtained by AP.
A week later, Rev. Sambi wrote to Bishop Balke: "I assure you that this material has already been forwarded to the Holy See."
It's not clear what actions, if any, the Vatican took. Alamaraj said the Vatican was informed of his disciplinary actions against Jeyapaul, but had no input.
Almaraj said he sent Jeyapaul to a monastery for a year of prayer and asked the local parishes where the priest had worked previously if there were any prior cases of possible abuse. None came to light, he said.
Almaraj then assigned Jeyapaul to the bishop's house, where he is in charge of compiling seniority lists for teachers in the diocese's schools.
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SIC: AP