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New York's Attorney General has filed a lawsuit against the Buffalo Catholic Diocese, alleging its leaders protected priests accused of child sex abuse.

Attorney General Letita James said the diocese and two now-retired leaders failed to refer over two dozen accused priests to the Vatican for removal.

In response, the diocese pledged "full cooperation" with authorities.

It is the first suit to come from a state inquiry that began in 2018. Seven other dioceses are under investigation.

Announcing the lawsuit on Twitter, Ms James promised to bring those responsible to justice.

"While we will never be able to undo these horrific acts, we will do everything in our power to hold the Buffalo Diocese and its leadership accountable and ensure this never happens again."

The lawsuit, which included a 218-page report on the two-year investigation into the diocese, alleges that though leaders found sex abuse complaints to be credible, they protected the accused.

They also failed to properly supervise or monitor these priests, the lawsuit claims.

By instead marking them as "unassignable", the accused were able to retire or take leave, while receiving benefits, rather than being potentially removed from the clergy by the Vatican.

New York and other states have launched new investigations in recent years.

The Buffalo diocese said it would review the suit brought by Ms James and cooperate fully. "In the meantime, we wish to reiterate that there is zero tolerance for sexual abuse of a minor or...of sexual harassment of an adult in the Diocese of Buffalo by any member of the clergy, employee or volunteer," a spokesman said.

What does the lawsuit say?

In 2002, US Catholic churches adopted policies to protect minors from clergy sex abuse, following a Boston Globe newspaper investigation that put the issue in the national spotlight.

The state says sexual abuse complaints in Buffalo "continued unabated" from 2002 onward, but the diocese "operated to conceal the actual nature and scope of the sexual abuse allegations".

Ms James' office argues in the suit that there must be independent review mechanisms, external oversight, and mandatory reporting to the Attorney General for five years.

By failing to refer priests, the diocese prevented "determination of the merits of the allegations", and "deprived the accused and victims of an opportunity to be heard", the report states.

In addition, the suit seeks to hold the two bishops who oversaw the alleged cover-up, Bishop Richard Malone and Auxiliary Bishop Edward Grosz individually responsible.

They are accused of violating nonprofit and estate, powers and trusts laws.

The two former leaders would be barred from any future service in a secular leadership role in the state, and the state is also seeking damages against them for the waste of "charitable assets caused by their misconduct".

They do not face any criminal charges.

Bishop Malone resigned last December amid accusations of covering up abuses, while Bishop Grosz retired this March.

What are the abuse allegations?

The state report says in a number of instances, priests were allowed to remain in ministry or falsely classified as retired, on medical leave or sabbatical when they were in fact removed over allegations of abuse.

One priest was allowed to remain in ministry out of state even after the diocese learned of eight alleged sexual abuse cases involving young girls, the report states.

Another who was found by the church to have groomed a minor and "engaged in inappropriate sexual misconduct with adults" was also allowed to remain.

Other priests in the diocese were accused of other abuses, including taking minors to see pornographic movies, discussing inappropriate topics, and molesting young girls and altar boys.