Parishes Attempt to Shield Assets from Seizure in Bankruptcy of Archdiocese
A Group Forms to Help Churches Seek Legal Standing Amid Debate over What Could Be Used to Pay off Clergy Sex-Abuse Suits

By Nancy Haught and Steve Woodward
The Oregonian [Oregon]
September 9, 2004

At least two dozen Roman Catholic parishes in Western Oregon are moving to shield their churches, schools and financial investments from being seized to pay off millions of dollars in lawsuits alleging clergy sex abuse.

The Committee of Parishes, representing about one-fifth of parishes in the Archdiocese of Portland, has hired two lawyers to help it seek legal standing in the archdiocese's 2-month-old bankruptcy.

John H. Rickman, retired president of U.S. Bank and a longtime member of St. Pius X Parish in suburban Cedar Mill, said the parishes want to ensure that their assets may still be used for the mission work of the church.

Generations of Oregonians have worked and contributed to build parishes that participate in the Catholic mission, Rickman said.

"To live as Jesus taught us," Rickman said, "to pass that on to our children, to help the poor, work for the sick, console those who grieve, educate the young and old and, on a weekly basis, to worship God. That is the real heart of Catholicism."

The committee is sympathetic to victims' claims, Rickman says.

"We ache for our brothers and sisters who are victims of sex abuse by a small number of our clergy, and we pray that those victims will respect the legal rights of parishioners who seek to ensure that property specifically devoted to charitable and religious missions will continue to serve those needs."

Albert Kennedy, attorney for the creditors' committee, which includes sex-abuse plaintiffs, says it's too early to tell who the Committee of Parishes represents and what role it might play in the case.

The committee represents 26 of the archdiocese's 124 parishes and expects to add more before it files papers with the U.S. Bankruptcy Court, probably by early October. Represented are large and small parishes from Milwaukie to Medford.

The Archdiocese of Portland filed for bankruptcy protection in July, the first diocese in the United States to do so because of mounting clergy sex-abuse claims. A key issue in the case is whether Archbishop John G. Vlazny has access to parish assets for the payment of abuse claims. He has said he does not. Attorneys for claimants argue that he does.

Attorneys work on strategy

Rickman said the committee has hired two attorneys, Douglas R. Pahl and Steven M. Hedberg, both of the Perkins Coie law firm in Portland, to represent the parishes. Pahl said late last week that they are working on a legal strategy but hadn't chosen a course. It was possible, he said, that parishes would seek standing as creditors, in contrast with the archdiocese's standing as debtor.

Attorney Scott L. Jensen is monitoring the case for St. Therese Parish in Northeast Portland, according to court filings.

Mary Jo Tully, chancellor of the Archdiocese of Portland, said that the archbishop understands the parish concerns and has no objection to their getting legal counsel.

Rickman said all the parishes in the archdiocese had been contacted by letter, and some had already sent representatives from their parish, financial or school councils to meetings. Committee members have met a few times, weighing their options.

The parishes that have signed on have done so without being sure what the costs would be. Pahl said committee members are working on a financial formula, but until they know how many parishes might be involved, their relative size and the extent of the legal work the case would require, they don't have any firm figures.

St. Anthony Parish in Tigard has given its blessing to a one-year commitment to the committee and has approved expenditures "not to exceed $12,000," according to a letter written by the pastor, the Rev. Leslie Sieg, in the church's Aug. 22 parish bulletin.

"A question that is of great concern to many parish members is that of the security of parish assets, particularly those that are held in archdiocesan accounts," Sieg wrote to parishioners. "Can parish monies and property be used to settle abuse claims against the archdiocese?

"Since this question has not been answered," he continued, "and since the interest of parishes is not always the same as that of the archdiocese, many parishes have been exploring the value of hiring separate legal representation that would seek to protect the assets of parishes."

Other protection measures

Some parishes are taking other steps, such as putting fund-raising campaigns on the back burner.

St. Clare Parish in Southwest Portland has halted its capital campaign after raising $500,000 in pledges toward a $3 million goal. The money is earmarked for building a parish hall and some offices.

The Rev. Tom Farley, St. Clare's pastor, said the parish leadership is setting up a standing committee to monitor the bankruptcy.

"It's hard to make decisions when all you get are questions," Farley said of the bankruptcy's complexity.

St. Michael the Archangel Parish in downtown Portland is negotiating with its architect over the budget for a significant restoration and seismic upgrade. Fund raising for the project, estimated roughly at $2.5 million, began a year ago after the parish set up a separate corporation, St. Michael's Historic Restoration Foundation, to manage the project.

The Rev. Paul Peri, St. Michael's pastor, said Italian immigrants built the church in 1901 and their descendants and other parishioners continue to maintain it.

"That's why the thought of somebody saying it doesn't belong to them is just incomprehensible," Peri said. "They don't believe the bishop owns this parish. It's theirs."

Similarly, what holds the Committee of Parishes together is the parishes' obligations to prior and present members who have given generously, often for specific purposes. Diane Welter, a fifth-generation member of St. Boniface Parish in Sublimity, flipped through a book detailing a hundred years of her church's 125-year history.

"We have compassion for the victims," she said, but she pointed to black-and-white photographs of St. Boniface's early members. "We have a commitment to continue what they have started."


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