Parishioners Welcome Settlement Priest Sex Abuse - a $75 Million Plan Has Both Pluses and Minuses for the Portland Archdiocese, by Ashbel S. Green and Aimee Green, The Oregonian [Portland OR], December 20, 2006

Parishioners Welcome Settlement
Priest Sex Abuse - a $75 Million Plan Has Both Pluses and Minuses for the Portland Archdiocese

By Ashbel S. Green and Aimee Green
The Oregonian [Portland OR]
December 20, 2006

http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/1166588723281960.xml&coll=7

[See also Secret Files on Abusive Priests Will Be Released, by Ashbel S. Green and Steve Woodward, The Oregonian (April 18, 2007); Diocese to Release Documents As Part of Abuse Settlement, by Bill Bishop, Register-Guard (April 18, 2007); Archdiocese Releases Secret Documents on Priest Sexual Abuse, The Oregonian (June 6, 2007) with links to documents.]

The Archdiocese of Portland's $75 million settlement plan was met Tuesday with a mixture of praise by experts and a sense of relief among parishioners.

"Hopefully, this is the end of it," said Anna Stufano, a member of All Saints Parish in Northeast Portland. "Hopefully, it will be a new era. And we'll have a different church."

Photo by Michael Mode/The Oregonian

Stufano also likes to think the settlement will help the victims, who were sexually abused by priests decades ago.

"They need to move on -- it will be good for them," she said.

The 135 pages of settlement documents reveal both wins and losses for the archdiocese in the bankruptcy process. Unsettled and future claims could come in far lower than the money set aside, reducing the total settlement to under $50 million -- that's less than the $51.75 million pledged by the insurance companies.

On the other hand, paying the bankruptcy attorneys for all parties probably will end up costing the archdiocese $17 million beyond the settlement.

Fred J. Naffziger, a professor of business law at Indiana University South Bend, noted approvingly that the Portland Archdiocese's plan to spend $40.7 million settling with 143 priest sex-abuse accusers was similar to midrange average payments in other such cases across the nation.

"I would think that the diocese would be pleased," Naffziger said.

In addition, the plan protects parish property and doesn't require parishioners to come up with extra money at the plate.

"Parishioners aren't going to have to get together for any special appeal," he said. "There's good news there."

Others questioned how much money attorneys would get. In addition to the money needed for bankruptcy lawyers, attorneys for the plaintiffs probably will receive at least 25 percent of the $75 million in potential settlements.

"The attorneys are the ones coming out of this ahead -- that bugs me," said John Ringle, a member of St. Mary's Parish in Corvallis.

And even though insurers could end up paying for the bulk of the settlements, Ringle said he was skeptical of the archdiocese's ability to pay without hitting up parishioners.

"I think there's going to be a challenge," Ringle said.

Talks lead to plan

More than two years after becoming the first Catholic diocese to seek bankruptcy protection from priest sex-abuse litigation, Portland revealed the details of its new settlement late Monday night.

The archdiocese previously proposed a plan to emerge from bankruptcy, but the new one reflects more than three months of settlement negotiations and the apparent approval of the majority of priest sex-abuse accusers.

A gag order prevents the parties from discussing the plan until it is approved.

The documents filed in U.S. Bankruptcy Court late Monday indicate that the $75 million is a soft number.

The archdiocese is setting aside $13.75 million for 26 accusers who have not settled, but the plan estimates the actual value of the claims is $5 million. In addition, the archdiocese will put up $20 million for future claims, but it expects to pay between $1.6 million and $12.1 million in today's dollars.

Beyond the finances, the plan calls for a corporate makeover of the archdiocese that will turn the parishes and schools into nonprofits and transfer property to them.

That will provide parishioners and parents with more control, said Jonathan C. Lipson, a professor at Temple University's James E. Beasley School of Law.

The archdiocese will "have to comply with a variety of state-approved rules," said Lipson, who has written about church bankruptcy. "There's a bunch of stuff that they have to do that will create some transparency and accountability."

Although the plan appears to have the support needed to win approval early next year, U.S. Bankruptcy Judge Elizabeth L. Perris also must address a lay challenge to the archdiocese's authority to settle sex-abuse claims with money donated to the church for other causes.

Lipson said he did not think the move would work because Perris has already ruled on a similar issue that parishes could have been used to settle cases.

"Assuming she confirms, once that happens, it's very, very difficult to undo a plan," Lipson said. And "appellate courts don't like to upset plans once they have been confirmed."

Chuck Zech, an economics professor at Villanova University, said he thought the archdiocese gambled when it entered bankruptcy in July 2004 because it put schools and churches at risk to be sold. But by settling and reorganizing, the archdiocese has fixed that problem for the future, Zech said.

"I think this is a message to every diocese in the country: If you haven't started reorganizing your schools and parishes, start now to protect those assets," he said.

Sympathy for victims

Parishioners were sympathetic to priest sex-abuse victims. Transferring abusive priests to new jobs at new parishes was an "incredible scandal," said Robert Gregor, a member of St. Clare Parish in Southwest Portland.

But Gregor also was looking forward to a return to normalcy.

"I'm terribly relieved it's settled after two years," he said. "I was afraid we'd have to buy our parish back before this was all over," Gregor said.

Others questioned whether paying large sums of money solved anything.

"I know it's not going to facilitate the healing," said Annette Lackaff, a member of St. Ignatius Parish in Southeast Portland, saying that's what she's most concerned about for the victims. "Healing is about what's happening in their hearts and their souls. . . . I just feel sad it has come down to money."

And although the settlement is hefty, Lackaff said the church will endure.

"In many ways, it's going to set the church back a little bit," Lackaff said. "But it's not going to ruin the church."

Moving on

Theresa Willett, an All Saints parishioner, said she had eagerly awaited the settlement because it represents the closing of a rough chapter in the church's history.

"Most members of the Catholic community were emotionally overwhelmed, initially, by the scandal and by the bankruptcy," Willett said. "It was always at the forefront of everyone's minds."

After the diocese filed for bankruptcy, parishes were asked to put major building and charitable projects on hold, Willett said.

"I think a lot of people worried, 'If I give to the school to build the gymnasium, will that money be taken in the bankruptcy proceedings?' " Willett said.

Being upset over the scandal and the halt to major fundraising took its toll on parishioners. "It saps your energy. It saps your enthusiasm," Willett said. "It's a spirit-buster."

At first, Willett said, she was surprised by the diocese's bankruptcy filings and didn't think it was appropriate. But now, she said, she sees it as a financial move that the church had to make.

Willett added that she sees the millions of dollars that will go to victims as "a loving gesture to bring everyone some closure."

Steve Woodward and Nancy Haught of The Oregonian contributed to this report. Ashbel "Tony" Green: 503-221-8202; tonygreen@news.oregonian.com