Arthur Budzinski, appearing at a press conference with his daughter Gigi, said he initially reported being molested by Rev. Lawrence Murphy to the Milwaukee Police Department but no one helped him and his classmates who were allegedly molested.
When Budzinski met with the Archbishop in 1974, two members of the Vatican dismissed his allegations.
"They didn't believe him and yelled at them," Gigi Budzinski said.
Two Wisconsin bishops urged the Vatican office to let them conduct a church trial against Rev. Lawrence Murphy, but the Vatican ordered the process halted, church and Vatican documents show.
Despite the grave allegations, Ratzinger's deputy at the Congregation for the Doctrine of the Faith ruled that the alleged molestation had occurred too long ago and Rev. Murphy should instead repent and be restricted from celebrating Mass outside of his diocese.
Mark Salmon, a spokesman for the Budzinski family, said that Father Murphy was a great fundraiser so the Catholic church had a dilemma.
"The decision was to keep him in a position to raise money and worry about the kids later," Salmon said.
"It's time they step up and take responsibility and stop with these vacant apologies," Salmon added. "The pope has to fess up."
The New York Times broke the story Thursday, adding fuel to an already swirling scandal about the way the Vatican in general, and Benedict in particular, have handled reports of priests raping children over the years.
On Thursday, a group of clerical abuse victims provided the documentation to reporters outside the Vatican, where they staged a press conference to denounce Benedict's handling of the case. During the conference, a policeman asked for identification and they were subsequently detained, police said.
"The goal of Cardinal Ratzinger, now Pope Benedict, was to keep this secret," said Peter Isely, Milwaukee-based director of SNAP, the Survivors Network of Those Abused by Priests.
"This is the most incontrovertible case of pedophilia you could get," Isely said, flanked by photos of other clerical abuse victims and a poster of Ratzinger. "We need to know why he (the pope) did not let us know about him (Murphy) and why he didn't let the police know about him and why he did not condemn him and why he did not take his collar away from him."
The Vatican spokesman, the Rev. Federico Lombardi, issued a statement noting that the case had only reached the Vatican in 1996, that Murphy died two years later, and that there was nothing in the church's handling of the matter that precluded any civil action from being taken against him.
Murphy worked at the former St. John's School for the Deaf in St. Francis from 1950 to 1975. He died in 1998.
His alleged victims were not limited to the deaf boys' school. Donald Marshall, 45, of West Allis, Wisconsin, said he was abused by Murphy when he was a teenager at the Lincoln Hills School, a juvenile detention center in Irma in northern Wisconsin.
"I haven't stepped in a church for some 20 years. I lost all faith in the church," he told The Associated Press in an interview Thursday. "These predators are preying on God's children. How can they even stand up at the pulpit and preach the word of God?"
Church and Vatican documents obtained by two lawyers who have filed lawsuits alleging the Archdiocese of Milwaukee didn't take sufficient action against Murphy show that as many as 200 deaf students had accused him of molesting them, including in the confessional, while he ran the school.
CBS News correspondent Allen Pizzey reports that a small group of American victims of sex abuse in Catholic churches, representing the group SNAP, demonstrated outside the Vatican on Thursday.
SNAP members who made the trip to Rome to lay their complaints directly at the Pope's doorstep told CBS News they believe the Vatican is still withholding some evidence presented by the American church against alleged abusers.
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While the documents - letters between diocese and Rome, notes taken during meetings, and summaries of meetings - are remarkable in the repeated desire to keep the case secret, they do suggest an increasingly determined effort by bishops to heed the despair of the deaf community in bringing a canonical trial against Murphy.
Ratzinger's deputy, Cardinal Tarcisio Bertone, though, shut the process down after Murphy wrote him a letter saying he had repented, was old and ailing, and that the case's statute of limitations had run out.
According to the documentation, in July 1996, then-Milwaukee Archbishop Rembert G. Weakland sent a letter seeking advice on how to proceed with Murphy to Ratzinger, who led the Congregation for the Doctrine of the Faith from 1981 until 2005, when he was elected pope.
Weakland received no response from Ratzinger, and in October 1996 convened a church tribunal to hear the case.
In March 1997, Weakland wrote to the Vatican's Apostolic Signatura, essentially the Vatican high court, asking its advice because he feared the statute of limitations on Murphy's alleged crimes might have expired.
Just a few weeks later, Bertone - now the Vatican's secretary of state - told the Wisconsin bishops to begin secret disciplinary proceedings against Murphy according to 1962 norms concerning soliciting sex in the confessional, according to the documents.
But a year later, Bertone reversed himself, advising the diocese to stop the process after Murphy wrote to Ratzinger saying he had repented and that the statute of limitations on the case had expired. Bertone suggested that Murphy should instead be subject to "pastoral measures destined to obtain the reparation of scandal and the restoration of justice."
The archbishop then handling the case, Bishop Raphael Fliss objected, saying in a letter to Bertone that "I have come to the conclusion that scandal cannot be sufficiently repaired, nor justice sufficiently restored, without a judicial trial against Fr. Murphy."
Fliss and Weakland then met with Bertone in Rome in May 1988. Weakland informed Bertone that Murphy had no sense of remorse and didn't seem to realize the gravity of what he had done, according to a Vatican summary of the meeting.
But Bertone insisted that there weren't "sufficient elements to institute a canonical process" against Murphy because so much time had already passed, according to the summary. Instead, he said Murphy must be forbidden from celebrating Mass publicly outside his home diocese.
Weakland, likening Murphy to a "difficult" child, then reminded Bertone that three psychologists had determined he was a "typical" pedophile, in that he felt himself a victim.
But Bertone suggested Murphy take a spiritual retreat to determine if he is truly sorry, or otherwise face possible defrocking.
"Before the meeting ended, Monsignor Weakland reaffirmed the difficulty he will have to make the deaf community understand the lightness of these provisions," the summary noted.
The documents contain no response from Cardinal Ratzinger, the head of the office.
The documents emerged even as the Vatican deals with an ever-widening church abuse scandal sweeping several European countries. Benedict last week issued an unprecedented letter to Ireland addressing the 16 years of church cover-up scandals there. But he has yet to say anything about his handling of a case in Germany known to have developed when, as cardinal, he oversaw the Munich Archdiocese from 1977 to 1982.
Lombardi, a spokesman for the Vatican, said in a statement that the Vatican was not told about the abuse allegations against Murphy until 1996, years after civil authorities had investigated and dropped the case. Lombardi also said Murphy's age, poor health and a lack of more recent allegations were factors in the decision not to defrock him.
He noted "the Code of Canon Law does not envision automatic penalties" and that the Congregation for the Doctrine of the Faith suggested the Milwaukee archbishop consider such things as restricting Murphy's public ministry and requiring that he "accept full responsibility for the gravity of his acts."
The Times obtained the Murphy documents from Jeff Anderson and Mike Finnegan, attorneys for five men who have sued the Milwaukee archdiocese alleging fraud.
After Murphy was removed from the school in 1974, he went to northern Wisconsin, where he spent the rest of his life working in parishes, schools and, according to one lawsuit, a juvenile detention center.
Previously released court documents show Weakland oversaw a 1993 evaluation of Murphy that concluded the priest likely assaulted up to 200 students at the school.
Weakland resigned as archbishop in 2002 after admitting the archdiocese secretly paid $450,000 to a man who accused him of sexual abuse.
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