What does the cover up child abuse within the Catholic Church do to the authority of the Pope?

Catholicism consists of a hierarchy of the Pope, Bishops and Priests and teaches that these can act as intermediaries between God and humanity, that they are in some way chosen by God and can grant (partially at least) salvation and absolution through confession (and in the Middle Ages salvation could be bought through indulgences). However how can Catholics really believe the Pope is chosen by God if for example Pope Benedict XVI knowingly covered up child abuse and did not take sufficient means to stop it from happening. In any other institution if one found ones colleagues were abusing children one would not hesitate to contact the police. Surely if these men are supposedly chosen by God they would not advocate child abuse? Isn't the very fact that the Pope did not act combined with the many failures of past popes (the uncomfortable ease at which they did not oppose fascism or the holocaust) surely an insurmountable objection to the Vatican and the entire Catholic Church having Godly authority? In The Times today Cardinal Jose Saraiva Martins claimed that the allegations of abuse are merely a 'conspiracy' and even defended the secrecy and cover up by comparing it to not wanting to 'wash your dirty laundry in public'. Surely such apparently 'Godly' men would realise that the of children was a little more serious than dirty laundry and making this comparison is an insult to the 1000's (or more) that have suffered throughout the centuries.