Diocese raises proposed abuse payouts

Published 9:00 pm Saturday, December 31, 2005

SPOKANE – The Roman Catholic Diocese of Spokane has proposed a new plan that would increase payouts to alleged victims of priest sex abuse and resolve its thorny bankruptcy case.

The plan reveals that the diocese may have $57.5 million available without selling any church property. That’s double its initial estimate, The (Spokane) Spokesman-Review reported for a story in Saturday editions.

Diocese attorney Greg Arpin called the new estimate a “best-case scenario” that anticipates successful litigation against insurers. He said that would boost the payout to victims from about $15 million to $45 million.

The plan, proposed on Friday, also includes what the diocese hopes will be a simple and successful claim against a Catholic society called the Sulpicians, which trains clergy.

Patrick O’Donnell, a former priest who was trained by the society and worked for the diocese from 1971 until he was removed from the ministry in 1985, has admitted molesting more than a dozen boys.

In outlining a process to pay claims, the plan calls for a trust to be established for managing and administering money and claims. Two trustees would be named, and in turn would appoint three people to serve as claim reviewers.

One claim reviewer would be a doctor or psychiatrist, another would be a mental-health expert and the third would be a retired judge or attorney, diocese attorney Shaun Cross said.

Together they would weigh sex-abuse claims by reviewing questionnaires and studying depositions and other credible evidence against priests.

Claims would be valued according to five categories, ranging from clergy showing pornography to a child (which could bring a victim $15,000 or more) to intercourse with children (which could award up to $1.5 million to a victim).

Once claim reviewers placed a value on a claim, it would serve as a settlement offer. If the victim or the diocese don’t approve, they could reject the offer and send the claim to state court for trial.

Some victims have said they want their day in court so they can confront and cross-examine Bishop William Skylstad and other diocesan officials.

There’s a risk that the trust could run out of money before all the claims are paid. The diocese has given no assurance that it can get enough money from its insurers to cover all its potential claims. A trial on the policy payouts is due next October.

The diocese’s plan sets up a first-come, first-paid scenario, which means the money pooled into the trust could be quickly depleted as victims who choose to accept the claim reviewers’ offers are paid first.

James Stang, an attorney representing sex-abuse victims, said any proposal that pits some victims against others won’t fly. “They would not support this plan,” Stang told the Spokesman-Review.

While praising the diocese for offering a highly detailed plan, Stang argued it fails to move the bankruptcy toward settlement. “Rather, it sets up a protracted litigation schedule,” Stang said.

The diocese has appealed a bankruptcy judge’s ruling that parish churches, schools and other properties may be sold or mortgaged to fund bankruptcy costs and claims.

The Association of Parishes, which is seeking to have the parish property ruling overturned, credited the diocese with drafting a plan that should push the case along.

Parishioners have openly questioned the diocese bankruptcy strategy, an unusual move to handle the onslaught of lawsuits and claims that arose during the past few years.

Ford Elsaesser, an attorney for the parishes, said his clients were pleased with a plan that casts the sale or mortgage of church property as a last resort.

The diocese has proposed to selling and leasing back the chancery and other property that the diocese clearly owns. That money, along with insurance proceeds, would be put into the trust right away. If that money is disbursed, the diocese would ask its parishioners – the 97,000 Catholics in Eastern Washington – for money.

If that isn’t enough and the diocese loses its appeals, then it may be forced to consider selling churches, schools and other properties.