Abuse scandal costly to church

Catholic dioceses' settlement of claims approaches $1 billion

March 17, 2002|By John Rivera | John Rivera,SUN STAFF

The U.S. Roman Catholic Church faces harsh financial fallout from recent revelations of sexual abuse of minors by dozens of priests across the country.

Church officials have paid no less than several hundreds of millions of dollars -- with estimates as high as $1 billion -- to the victims of sexual abuse since 1984, bringing at least one diocese to the brink of bankruptcy. As more victims come forward, no one knows what the final price tag will be.

The effect has been and will be devastating to local dioceses. And with insurance companies putting limits on what they'll pay, bishops are being forced to sell land, borrow money from churches in other cities and solicit donations from an increasingly angry flock.

"I don't think the church is very close to being threatened with bankruptcy. But I think it will hurt a great deal," said A.W. Richard Sipe, a former priest and a psychologist who has extensively studied sexual abuse among Catholic clergy. "I don't know whether it's going to hurt enough for them to change or not."

The estimates of how much the sex abuse scandals have cost the American church vary widely.

"In looking at what we've seen and in doing the math ourselves, we believe the amount is in the range of $300 million, with most coming from insurance," said William Ryan, a spokesman for the U.S. bishops' conference, an administrative body that sets nonbinding church policy.

But Sipe says he believes the total to be at least $1 billion. The bishops' conference counts only settlements that have been made public, but the majority of church payouts have been made confidentially. Sipe also adds legal fees and the cost of the therapy the church offers victims.

"I've been involved in cases where I've walked into a bishop's office with a victim, and he came out with a check for $200,000," he said. "They don't count those things, but these things are in the pot."

The Archdiocese of Boston is the latest to face financial distress. Last week, the archdiocese announced that it would pay between $15 million and $30 million to settle lawsuits filed by 70 victims molested by a now-defrocked priest, John Geoghan.

The Boston Globe earlier reported that the archdiocese paid $15 million to 40 of Geoghan's victims. And it faces dozens more lawsuits stemming from allegations against Geoghan and other priests.

Cardinal Bernard Law of Boston, who has come under fire for allowing Geoghan to continue serving in parishes and for his handling of the ensuing scandal, has pledged he will not use funds from parish collections or fund-raising campaigns to pay for the settlements.

In covering its liability, Boston is on its own. There is no "American Catholic Church" to foot the bill.

"Each of the dioceses is autonomous. They answer to the Holy See" in Rome, said Ryan, the bishops' conference spokesman. "There is no obligation on the part of a diocese to give to another diocese, although sometimes they'll help out if asked."

Church officials in Boston have stated that insurance will cover only a portion of the settlements, forcing the archdiocese to raise money from its benefactors and sell property -- possibly including one of its seminaries or the cardinal's residence, according to The Boston Herald. Catholic dioceses typically do not have a lot of cash available to cover such expenses.

"In reality, a lot of the church's wealth is tied up in things that aren't liquid," said Charles E. Zech, a Villanova University economist who studies church finances. "They have a lot of nice buildings, but they have to pay to maintain those buildings."

For a lesson in how to survive, Boston can look to churches in the West that were nearly ruined by sexual abuse payouts but have since righted themselves. The diocese to come closest to bankruptcy was that of Santa Fe, N.M., which settled more than 165 cases of sex abuse in the early 1990s and removed 20 priests from ministry. The Santa Fe Archdiocese has never disclosed the total it paid, but it acknowledged in a 1993 letter to its parishes that settling 40 of the cases cost $50 million.

Archbishop Michael J. Sheehan, brought in to fix the mess, balanced the books by borrowing from his parishes and selling church property, including the sale of a beloved retreat house. In December, Sheehan announced that the Santa Fe Archdiocese was finally out of debt.

Dallas Archdiocese recovers

In 1998, the Archdiocese of Dallas was hit with a $120 million judgment for several former altar boys molested by a priest who had been transferred from parish to parish instead of being fired and prosecuted. Fearing that the church would file for bankruptcy, the plaintiffs settled for about $30 million. Insurance covered about two-thirds, leaving nearly $11 million for the archdiocese to pay.

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