By DINESH RAMDE and GRETCHEN EHLKE (AP) – 2 hours ago

This 1974 photo shows Rev. Lawrence Murphy. The Vatican on Thursday March 25, 2010 strongly defended its decision not to defrock Murphy, an American priest accused of molesting some 200 deaf boys in Wisconsin and denounced what it called a campaign to smear Pope Benedict XVI and his aides. (AP Photo/Milwaukee Journal Sentinel ) MANDATORY CREDIT

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ST. FRANCIS, Wis. — Arthur Budzinski says the first time the priest molested him, he was 12 years old, alone and away from home at a school for the deaf. He says he asked the Rev. Lawrence Murphy to hear his confession, and instead the priest took him into a closet under the stairs and sexually assaulted him.

Budzinski, now 61, was one of about 200 deaf boys at the St. John's School for the Deaf just outside Milwaukee who say they were molested by the priest decades ago in a case now creating a scandal for the Vatican and threatening to ensnare Pope Benedict XVI.

Some of the allegations became public years ago. But they got renewed attention this week after documents obtained by The New York Times showed that Murphy was spared a defrocking in the mid-1990s because he was protected by the Vatican office led by Cardinal Joseph Ratzinger, now the pope.

The Vatican on Thursday strongly defended its decision not to defrock Murphy and denounced what it called a campaign to smear the pope and his aides.

In recent weeks, Benedict has also come under fire over his handling of an abuse case against a priest in Germany three decades ago when he was a cardinal in charge of the Munich Archdiocese.

In the Milwaukee-area case, Murphy was accused of molesting boys in the confessional, in dormitories, in closets and during field trips while working at the school for the deaf from the 1950s through 1974. Murphy died in 1998 at age 72.

Budzinski, now a bicycle and furniture assembler at a department store, said Murphy preyed on him during the 1960s. The priest was fluent in sign language and often told the boys they were handsome, Budzinski said Thursday during an interview in which his daughter interpreted his sign language.

He said he avoided Murphy as much as he could afterward, but when he went to Murphy's office the following year to make another confession the priest led him to an adjoining room and sexually assaulted him again.

"It seemed like my father would be walking into a trap every time," said Budzinski's 26-year-old daughter, Gigi Budzinski.

He said Murphy assaulted him a third time the next year in Budzinski's bed in his dormitory room. Other boys were similarly assaulted, he said.

"They would sleep in a large open room in bunk beds," Budzinski's daughter said. "My father saw other boys being molested, too. They'd never talk about it."

Church and Vatican documents showed that in the mid-1990s, two Wisconsin bishops urged the Vatican office led by Ratzinger to let them hold a church trial against Murphy.

However, Ratzinger's deputy at the time decided the alleged molestation occurred too long ago and said Murphy — then ailing and elderly — should instead repent and be restricted from celebrating Mass outside of his diocese, according to the documents.

Murphy's alleged victims also included at least one teen in a juvenile detention center in the 1970s.

Donald Marshall, now 45, said Murphy visited him several times a week at the detention center where he was sent at age 13 for burglary. Murphy seemed nice when others were around, Marshall said. But Marshall said he was later isolated in a cell after a fight — and the priest paid him a visit there.

"He was sitting on my bed, reading the Bible to me, and he put his hand on my knee," Marshall said. "He leaned over and started kissing me. That's when he tried to put his hand down my pants."

The Associated Press does not normally identify victims of sex crimes but Budzinski and Marshall allowed their names to be used.

One of the documents, written by the Rev. Thomas Brundage and dated October 1997, said some of Murphy's assaults began in the confessional, where he began by asking the boys about their being circumcised. Brundage said at least 100 boys were involved.

"Odds are that this situation may very well be the most horrendous, number-wise, and especially because these are physically challenged, vulnerable people," Brundage wrote.

Another deaf student, Steven Geier of Madison, said Murphy molested him four times in a St. John's closet in the mid-1960s starting when Geier was 14. During the first assault Murphy demanded Geier remove his pants, and when he refused Murphy pulled them off, Geier said through a sign language interpreter.

"Father Murphy put everything into the context of God. I felt like I was really brainwashed," Geier said. He spoke in harsh terms about the pope, calling him "stupid" for allowing the abuse of children even though he is supposed to be doing God's work.

The Archdiocese of Milwaukee entered mediation in 2004 with a number of people who claimed to have been victimized by priests. The archdiocese has paid compensation to Murphy's victims, but spokeswoman Julie Wolf would not say how much. Budzinski said he received $80,000.

Through mid-2009, the archdiocese said, it paid out $28 million to settle allegations of clergy sexual abuse.

"Murphy's actions were criminal and we sincerely apologize to those who have been harmed," the archdiocese said in a statement Thursday.

Budzinski said that when he was 26, he and two others victimized by Murphy went to police. He said the police investigated Murphy but didn't arrest him.

E. Michael McCann, then the Milwaukee County district attorney, said his office reviewed the case but couldn't file charges because the six-year statute of limitations had run out.

Budzinski said he suspected that Murphy targeted deaf boys whose parents weren't deaf. Back then, he said, those parents didn't know how to communicate with their deaf children, so those youngsters were less likely to expose Murphy's actions.

The Vatican issued a strong defense of its handling of the Murphy case. The Vatican newspaper L'Osservatore Romano said there was no cover-up and denounced what it said was a "clear and despicable intention" to strike at Benedict "at any cost."

The Vatican spokesman, the Rev. Federico Lombardi, issued a statement noting that the Murphy case did not reach the Vatican until 1996 — some 20 years after Milwaukee church authorities first learned of the allegations. Lombardi said the absence of more recent allegations was a factor in the decision not to defrock Murphy.

On Thursday, a group of Americans who say they were sexually abused by clerics held a news conference outside St. Peter's Square in Rome to denounce Benedict's handling of the case.

Peter Isely, the Milwaukee-based director of SNAP, the Survivors Network of those Abused by Priests, called the Murphy case the most "incontrovertible case of pedophilia you could get."

"The goal of Cardinal Ratzinger, now Pope Benedict, was to keep this secret," he said.

Ehlke reported from Milwaukee. Associated Press writers Todd Richmond in Madison and Carrie Antlfinger in Milwaukee contributed to this report.

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