What to look for in the Milwaukee Archdiocese new bankruptcy reorganization plan

By Peter Isely
Survivors Network of Those Abused by Priests
August 4, 2015

http://www.snapnetwork.org/

New plan must fairly compensate victims and demonstrate the archdiocese no longer practices sex abuse fraud

The Milwaukee Archdiocese is scheduled to file into court soon a revised corporate reorganization plan in what is now the largest, longest and legally expensive church bankruptcy in US history.

The purpose of the archdiocese bankruptcy has always been twofold:

(1) To provide fair restitution to victims of childhood rape, sexual assault or abuse by clergy, vowed religious and other church workers assigned to or ministering within the Archdiocese of Milwaukee;

(2) To demonstrate that church officials are no longer involved in the institutional pattern and practice of fraud related to the concealment and transfer of child sex offenders.

Much is at stake in what the new plan actually proposes that is substantially different from the first one. If not, what will be resolved? Why wouldn’t the church sexual abuse crisis continue on indefinitely, become even more chronic, put children at risk, keep abusive clerics hidden, and leave complicit church officials unaccountable?

What should we look for and expect from a new plan that will prevent these terrible consequences and stop the ongoing erosion of trust in Archbishop Listecki’s leadership?

Victim Settlements

Any serious plan to compensate victims should both reflect the actual value and assets available to the archdiocese and be comparable to settlements to other victims in other church bankruptcies around the United States.

In the 1990s’, the archdiocese listed its net worth to its major insurance carrier as 1.3 billion dollars, including all of its parishes and properties. Even without those entities and assets, the archdiocese today has between $250 to $300 million dollars it could use to compensate victims, including approximately $65 million dollars in a likely fraudulently constituted “cemetery trust” created by former Archbishop Timothy Dolan before the bankruptcy filing. According to a ruling by the US Federal 7th Circuit Court the trust should be included in the archdiocese estate. But Archbishop Listecki is also likely have available to him under church law a $120 million dollar “Faith in our Future” fund, $15 million or more in property (including his lakefront archdiocesan headquarters), and $70 million dollars in a parish “investment” or “deposit” fund.

The average settlement for each survivor in the eight other US church bankruptcies is over $400,000 dollars each (note: the Fairbanks figure should also include the money from religious orders, which is sometimes not tabulated in press accounts of the archdiocesan settlement).

Total costs for a diocese depends on the number of victims, and there is a larger number of Milwaukee victims, but why would not expect a serious and fair offer from the archdiocese in its new plan would have to meet or exceed $150 million dollars.

If a new plan does not reflect these numbers or even get near them, the question will be: why would the bankruptcy court in Milwaukee treat victims so dramatically differently than other victims from around the US and how is that going to bring “healing and resolution” and not the very opposite? (Of particular importance will be the amount of money already paid to and proposed for lawyers’ fees and court costs).

Continuing Pattern and Practice of Fraud

While the issue of financial compensation of victims has, understandably, gotten much of the attention over the past four and half years in bankruptcy, maybe the more urgent question is if the Milwaukee Archdiocese has actually:

· ended its historic and demonstrated practice of concealing child sex offender clerics, dumping them into unsuspecting parishes and communities,

· is still providing incomplete and false information concerning what church sponsored ministers have been involved in criminal sex acts,

· still concealing information and documents concerning the true nature and extent of the problem,

· still covering up for complicit church officials, and

· lobbying to change state laws to provide continual exemption of clerics from criminal and civil accountability

Here, then, are three main points to look for in the new plan, which will determine, among other things, if the archdiocese is no longer involved in fraudulent practices and communication:

(1) 575 victim cases were filed into the bankruptcy now under court seal. These reports contain direct evidence of thousands of detailed acts of criminal rape, sexual assault and abuse. Of the 575 reports, according to victim attorneys, there are at least 100 never before identified clerics who are alleged to have committed child sex crimes. The alarming questions that obviously have to be addressed about these reports are: Who are these individuals? Where are they? Who is watching or supervising them? What crimes against children are they alleged to have committed? Why has not a single newly named cleric been identified to the public and removed from ministry by Archbishop Listecki for abusing a child and turned over to law enforcement?

(2) Court documents show that Archbishop Timothy Dolan, now Cardinal of New York, sought and received permission from the Vatican, in anticipation of court cases, to fraudulently conceal $60 to $65 million dollars in a hastily invented “cemetery trust” for the express purpose of not compensating victims of clergy sex crimes. Will that money be used to compensate victims and Dolan investigated for fraud?

(3) The Archdiocese is proposing a fund which gives church officials full and dangerous control over the counseling and mental health treatment of victims. Any new plan is going to have to place the management and availability of mental health services to victims in a manner completely independent from the archdiocese and in the hands of licensed and competent sexual abuse agencies and treatment providers.

When bankruptcy judge Susan V. Kelley accepted the filing for bankruptcy by the archdiocese four and a half years ago, her action halted dozens of victim cases in Wisconsin state court that would have likely resulted in widespread disclosure, transparency and accountability by the archdiocese for clergy sex abuse.

The archdiocese, in both written an oral briefs, motions and arguments has argued that not a single one of the 575 cases filed into court, cases Listecki himself urged victims to file, are valid.

In other words, if the new plan is not significantly different than the first one, why is the archdiocese even in Chapter 11 bankruptcy, especially if they continue to say there are no valid claims?

If that is the case, it’s long overdue for Kelley to dismiss the archdiocese from bankruptcy court altogether and have them investigated for filing bankruptcy in bad faith in order to avoid compensating victims and to continue significant elements of their fraudulent practice and behavior. In 2007, in the only other church bankruptcy larger than Milwaukee’s, Judge Louise DeCarl Adler did pretty much just that. Like Kelley, DeCarl Adler is a Catholic. After just 8 months in court, she dismissed the diocese from court, rebuked church officials from the bench, and called their attempt to avoid accountability and responsibility for clerical sex abuse through bankruptcy “disingenuous”. The result was that the diocese had to compensate victims for $200 million dollars. Parishes and schools did not close, corporate operations continued, and the diocese, for good or ill, has moved on.

If the Archdiocese of Milwaukee is not serious about compensating survivors and ending its fraudulent practices, expect Judge Kelley to show the same judicial authority and leadership on behalf of justice as Judge DeCarl Adler.