As bishop of La Crosse Wisconsin, Cardinal Burke permitted a transgendered woman to begin a religious community, or pious association of the faithful. As bishop, Burke said he did so in consultation with the Holy See. A concerned lay woman went over the Burke's head and complained to the Vatican. As a result, the nascent religious community was disbanded.whole post at Abbey Roads
In a letter, Bishop Burke responded to the complaint, writing:
"With regard to Sister Julie Green, F.S.J., the recognition of the association of the faithful which she and Sister Anne LeBlanc founded was granted only after consultation with the Holy See," he writes. "These are matters which are confidential and do not admit of any further comment.... I can assure you that Sister Julie Green in no way espouses a sex change operation as right or good. In fact, she holds it to be seriously disordered. Therefore, I caution you very much about the rash judgments which you made in your letter to the Apostolic Nuncio." - Source
Today some people dispute the story about Cardinal Burke, nevertheless it is true, local people know many the story well, knowing both the informant as well as the unfortunate victim.
To my knowledge Cardinal Burke has never responded to the story publicly.
I expect the Holy Father is simply trying to respond to a situation as did Cardinal Burke.
(I have no knowledge of the situation from 2002.)
Abbey-Roads posted this story in regards to Pope Francis receiving a transgender person. In the Pope Francis case, this is precisely how to minister to those brutally oppressed by the spirit of our age. Confirming a person in any particular sins they have committed is the opposite of pastoral(which I'm sure the pope showed true pastoral care).
I think everyone is on edge with the upcoming Synod. There seems to be many left leaning folks in the Church who want to implement something that opposes pastoral care of people with same sex attraction by confirming them in any particular sins they may commit. In fact, I'm not sure why same sex attraction is a topic of discussion at a synod on the family, but it does certainly seem like a topic the Church should address even in a separate synod. The many pastoral complications (like baptism of children of some kind of unnatural unions) which do require the attention of the Church. There is plenty of room for very good and very bad decisions to be made(without denying papal infallibility).