By Asia Fields / The Seattle Times

In 2012, Washington’s Department of Social and Health Services received a report that a 4-year-old girl said she saw a man in her previous foster home expose himself. About a year later, the state placed two more girls there.

The next report the department received about the home came a year later from the foster father himself. In 2014, John Henry Phillips called a social worker and said he had sexually assaulted the sisters, starting soon after they moved into his Arlington home at the ages of 9 and 14.

Phillips, now 49, admitted to sexually abusing a third girl in his care at the time. He pleaded guilty in 2015 to two counts of first-degree rape of a child, third-degree rape of a child and third-degree child molestation, and a state investigation has since found he likely also abused the girl referenced in the 2012 report when she was 3. Phillips is now incarcerated at Monroe Correctional Complex, with a projected earliest release date of 2036.

Attorneys representing the sisters believe the state failed to properly investigate the earlier report of potential abuse and that a “cascade of mistakes” by multiple state employees led to the girls being placed in Phillips’ home. The state agreed to pay the girls $8.5 million as part of a stipulated judgement, which was signed last month by a Snohomish County Superior Court judge. It also agreed to review its processes for investigating similar cases.

“The agency and its leadership are committed to reviewing the effectiveness of our practices and adopting new ones when needed to protect children,” said spokeswoman Debra Johnson said.

Attorney Michael Pfau, who represented the girls along with Bellingham attorney Paula McCandlis, said he’s cautiously optimistic.

“I’m worried the state is making the same mistakes in its care of its most vulnerable children that it’s made over the last 30, 40 years,” he said. “I’ll take the state at their word, but what I would like to see is a stronger statement that because of how poorly they handled this case, they will use this to make policy changes.”

In July 2012, a DSHS intake worker received a call from the aunt of a 4-year-old girl who had lived in Phillips’ home for about four months. She said the child told her a man had exposed himself and that she saw him engage in a sexual act with someone.

The intake worker and his supervisor decided that because the child denied being abused, the allegation did not qualify for investigation by Child Protective Services, according to their declarations filed in court. Instead, it would be investigated as a potential foster-home licensing infraction.

A social worker interviewed the 4-year-old in August. According to the worker’s notes, the girl said yes when asked if Phillips “did something” with his genitals, but would not go into further detail. The interview ended when the girl said she was done talking. The worker did not schedule a follow-up interview.

In September, Phillips and his wife were interviewed by a foster-home licensor, who spent about half an hour interviewing the couple together. She said it was mostly Phillips’ wife who spoke, and she denied the girl had been exposed to sexual behavior.

When assigned the report, the licensor told a CPS supervisor she thought it was more appropriate for CPS to handle, she said in deposition. She said she left the interview uncomfortable, wondering if more follow-up should be done. But she said she was told further interviews, including with the children, were not necessary because it was a licensing complaint.

She closed the case, finding the report “not valid.”

In an email obtained by the girls’ lawyers, a DSHS placement coordinator wrote that she was “stressing” about finding placement for the girls. The email was dated a little over a week before they were placed with the Phillipses in June 2013. The coordinator said she wasn’t familiar with the family, but heard good things and saw the couple had no open investigations.

In August 2014, Phillips called a social worker and said he had sexually abused the girls. One of the girls had just told his wife, and he said he would report himself.

The girls were taken out of the Phillipses’ care.

Phillips told detectives that he was aware that the girls were sexually and physically abused before they were placed in his home. He said he sexually abused them, as well as the other girl in his care, from fall 2013 through the summer, according to court documents.

The girls were placed with another family, who adopted them. In March 2016, they filed a lawsuit against DSHS. The case went on for years, with the state arguing they followed their processes and that their duty to investigate the 4-year-old’s report did not extend to the sisters.

The sisters’ attorneys argued that state employees made mistakes at every step in the process.

The state agreed to settle in September, the month the case was scheduled to go to trial.