Archdiocese Asks for Big-name Legal Help

By Jon Collins
Minnesota Public Radio
June 17, 2015

http://www.mprnews.org/story/2015/06/17/archdiocese-joseph-dixon

The Archdiocese of St. Paul and Minneapolis will have the help of a former federal prosecutor to fend off criminal and civil charges filed against the archdiocese in Ramsey County earlier this month.

The federal judge overseeing the bankruptcy of the Archdiocese of St. Paul and Minneapolis approved the hiring of Joseph Dixon III Wednesday afternoon.

Dixon, of the Fredrikson & Byron law firm, will cost the cash-strapped archdiocese about $400 an hour, which Dixon said in an engagement letter "represents a substantial discount" over his normal rates. The assistance of a second associate at the firm would cost the archdiocese $320 an hour.

The archdiocese asked the bankruptcy court to allow the expenses in order to protect its assets from repercussions of the Ramsey County charges.

"The County Attorney Actions are directed against the Archdiocese as an entity, rather than against any individuals within the Archdiocese organization, and require immediate response by the Archdiocese," according to documents filed by the archdiocese Tuesday. "The County Attorney Actions may affect the availability to the estate of insurance coverage for claims based on the same facts."

The archdiocese also argued that a conviction in the criminal case could increase the archdiocese's liability in claims related to clergy abuse.

"The criminal action against the Archdiocese could have serious repercussions on the estate's finances, which relies on the goodwill and support of parishioners," according to court filings by the archdiocese.

Dixon gained prominence in the legal world as an assistant U.S. attorney for his part in the prosecution of businessman Tom Petters for operating a Ponzi scheme that cost investors more than $3.5 billion.

In a filing with the court supporting his employment with the archdiocese, Dixon argues that his prosecution of corporations associated with Petters gave him experience with issues involved in the prosecution of similar entities.

"I am fully familiar with many of the concepts, issues and complexities that are appropriately considered and measured as part of an organizational response to criminal charges in the context of parallel proceedings," Dixon wrote in the court filing.

After leaving the U.S. Attorney's Office for the district of Minnesota, Dixon was a top attorney for UnitedHealth Group. He joined Fredrikson & Byron last month.

The archdiocese filed for Chapter 11 bankruptcy in January in the face of huge potential costs related to claims of clergy sexual abuse.

The financial outlook for the archdiocese has been troubled since Minnesota lawmakers lifted the statute of limitations related to clergy abuse. In fiscal year 2014, the archdiocese showed a deficit of $9.1 million. The year before, it had shown an operating loss of almost $3.9 million, compared to a $1.5 million surplus in fiscal year 2012.

The most recent financial statement filed with the court showed that archdiocese paid out about $1.5 million in legal fees for just the month of April.

Leadership at the archdiocese has also been in flux. Archbishop John Nienstedt and another top official announced earlier this week that they had resigned.