(CNN) -- Catholic Bishop Robert W. Finn and the diocese of Kansas City-St. Joseph have been indicted by a grand jury on a charge of failure to report suspected child abuse by a priest, prosecutors said Friday in Missouri.
The class A misdemeanor carries a potential sentence of up to a year in jail and a fine up to $1,000 for Finn, 58, and a fine for the diocese, said Jackson County prosecutor Jean Peters-Baker. Both pleaded not guilty Friday.
"The fact that this is a misdemeanor complaint should not diminish the significance of this charge," Peters-Baker said. "This is a significant charge. To my knowledge, a charge like this has not been leveled before."
The prosecution alleges that Finn "had reasonable cause to suspect a child may be subjected to abuse" by Father Shawn Ratigan, a priest from Independence, Missouri, who was indicted in August on 13 counts related to child pornography. Finn "had reasonable cause to suspect a child may be subjected to abuse due to previous knowledge of concerns about Father Ratigan and children," Peters-Baker told reporters. That reasonable cause included the discovery of hundreds of photographs on the priest's laptop, "including a child's naked vagina, upskirt images and images focused on the crotch area and violations of restrictions that were placed on Father Ratigan."
Finn allegedly knew about the pictures beginning December 16, 2010, but they were not reported to authorities until May 11 of this year. An official in the diocese made the report.
Ratigan, who has pleaded not guilty in federal court, is in custody in Kansas City, where he is awaiting trial.
The indictment, dated October 6, was returned under seal because the bishop was out of the country until Thursday night, she said. It was made public Friday.
"Bishop Finn denies any criminal wrongdoing and has cooperated at all stages with law enforcement, the grand jury, the prosecutor's office, and the Graves Commission," said Gerald Handley, counsel for Finn, in a statement released by the diocese. "In response to these charges Bishop Finn said, 'Months ago after the arrest of Shawn Ratigan, I pledged the complete cooperation of the diocese and accountability to law enforcement. We have carried this out faithfully. Diocesan staff and I have given hours of testimony before grand juries, delivered documents, and answered questions fully.'"
The indictment of a U.S. bishop appears to be without precedent, said John Allen, CNN's senior Vatican analyst. "Clearly, it indicates two things," he said. "There is a new willingness to go after the highest officials in the church and hold them accountable."
Allen called Friday's announcement indicative of "a sea change. It used to be that bishops enjoyed a lot of deference -- from courts, police, the media. Obviously, all that has changed."
Though the U.S. Catholic Church tolerated such abuse for far too long, he said, most dioceses have adopted in recent years aggressive policies of prevention and detection, he said. "At the same time, I think, it does indicate that those places that aren't being extremely vigilant are going to pay a much steeper price," he added.
Most Catholics have learned to distinguish between their faith and the human leaders of the church, "whom they recognize can sometimes screw up spectacularly," but Friday's announcement represents another blow to the bishops, who are supposed to be moral leaders on such issues as abortion, gay marriage, immigration, war and peace, said Allen. "It's very difficult to take a bishop seriously when he's facing a criminal indictment," he added.
Barbara Dorris, outreach director of the Survivors Network of Those Abused by Priests, called Friday's indictment "a good start."
"We believe others on the church payroll also concealed crimes, misled parishioners and endangered kids. They too should face consequences," Dorris said in a statement.
Finn's next court date is December 15.
CNN's Tom Watkins contributed to this story