Finn denied any wrongdoing in a statement Friday and said he had begun work to overhaul the diocese's reporting policies and act on key findings of a diocese-commissioned investigation into its practices.
"Today, the Jackson County Prosecutor issued these charges against me personally and against the Diocese of Kansas City-St. Joseph," said Finn, who officials said was not under arrest. "For our part, we will meet these announcements with a steady resolve and a vigorous defence."
Finn faces a maximum penalty of one year in jail and a $1,000 fine if convicted of the misdemeanor. The diocese also faces a $1,000 fine.
After the Catholic sex abuse scandal erupted in 2002, grand juries in several regions reviewed how bishops handled claims against priests. However, most of the allegations were decades old and far beyond the statute of limitations.
Until Finn was indicted, no US Catholic bishop had been criminally charged over how he responded to abuse claims, although some bishops had struck deals with local authorities to avoid prosecution against their dioceses.
A former secretary for clergy in the Archdiocese of Philadelphia, Monsignor William Lynn, was charged in February with child endangerment. A grand jury had released a report accusing the archdiocese of keeping some credibly accused clergy in church jobs where they had access to children. Lynn has pleaded not guilty.
The grand jury report in Philadelphia and the case in Kansas City have raised questions about how closely other dioceses are following the national discipline policy the US bishops adopted in 2002. Church leaders had promised to remove all credibly accused clergy from church work.
The US Conference of Catholic Bishops child protection officers insisted dioceses have been taking swift action in abuse cases and that lapses have been rare.
Terry McKiernan of BishopAccountability.org, which manages a public database of records on clergy abuse cases, called Friday's indictment especially important because it involved a recent case. He said the charge being a misdemeanor makes it no less significant.
"The taboo against acknowledging that bishops are responsible in these matters has been challenged," McKiernan said.
Finn acknowledged earlier this year that a parish principal had raised concerns in May 2010 that the Rev. Shawn Ratigan was behaving inappropriately around children, but that he didn't read the principal's written report until this spring.
Ratigan was charged in May with three state child pornography counts, and in June with 13 federal counts of producing, possessing and attempting to produce child porn. He has pleaded not guilty and remains jailed.
After receiving the principal's concerns in 2010, Monsignor Robert Murphy, the diocese's vicar general, spoke with Ratigan about setting boundaries with children. He then gave Finn a verbal summary of the concerns and his meeting with the priest.
Last December, a computer technician found on Ratigan's laptop hundreds of what he called "disturbing" images of children, most of them fully clothed with the focus on their crotch areas, and a series of pictures of a 2- to 3-year-old girl with her genitals exposed.
Diocese officials reported the photos to Murphy, who did not report them to authorities and instead called a police captain who is a member of the diocese's independent review board and described a single photo of a nude child that was not sexual in nature.
Without viewing the photo, the captain said he was advised that although such a picture might meet the definition of child pornography, it probably wouldn't be investigated or prosecuted. It was not until this May that Murphy told police Ratigan's laptop had contained hundreds of photos.
David Clohessy, national director of the Survivors Network of those Abused by Priests, on suggested Friday that other individuals should be charged along with Finn.
"Charging only Finn might allow some to assume that he's the root of the crisis," Clohessy said. "He's not. If Finn died tomorrow, there will remain a very unhealthy, secretive church hierarchy in Kansas City. That's the bigger issue."
- AP