During a public inquiry into abuse at Mount Cashel in October 1989, Shane Earle - a former resident of the orphanage - testified he saw something in Lahey's home as a teenager that disturbed him and caused his hospitalization for depression.
The inquiry heard that the incident happened in 1985 at Lahey's home. Earle said he lost control after spotting something in the house, but at that point inquiry lawyer Clayton Powell quickly warned him not to mention what he had seen.
Police in Newfoundland and Labrador are reviewing the allegation including audio and video records of interviews with "victims and offenders" from the investigation of sex abuse allegations at the Mount Cashel orphanage.
Today the Archdiocese of St. John's said last Thursday it became aware of Earle's testimony.
According to a news release, it states that since hearing the media reports, Archbishop Martin Currie asked for a review of what officials in the Archdiocese might have known at the time.
In the Hughes Inquiry Report, it is written: "He (Shane Earle) went to Portugal Cove and spoke to Father Kevin Molloy, telling him stories of Mount Cashel that upset the priest who promised to make inquiries."
Based on this information, Currie contacted Molloy and was informed by Molloy that he had met with Earle and that the conversation between them included reference to Lahey.
Molloy said he passed on the information he learned from Earle to then Archbishop Penney.
The latest scandal has hit the Catholic Church hard.
Lahey's laptop and other media devices were seized by border guards when he was returning to Canada at the Ottawa airport on Sept. 15. Ottawa police charged him with possession and importing child pornography on Sept. 25 after a forensic investigation found images that police say were of "concern."
In his testimony to the public inquiry, Earle said senior officials of the Christian Brothers at Mount Cashel - including Lahey while he was still a priest - were told about sex involving boys and brothers at the orphanage.
Earle said he told Lahey that he had seen a brother having sex with several boys and the priest told him he had recommended to a member of the order's executive council in Toronto that the brother be removed from the orphanage, which was run by the Roman Catholic lay order for decades.
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