Archdiocese Avoids Bankruptcy with Sex-Abuse Settlement
By Brian T. Olszewski
September 7, 2006
ST. FRANCIS, Wis. (Catholic Herald) - In early July, Archbishop Timothy M. Dolan prepared Catholics in southeastern Wisconsin for the worst financial fate that could befall the Archdiocese of Milwaukee – bankruptcy.
That was the result he and his advisors anticipated if the first of 10 cases of sexual abuse of minors by two former priests of the Archdiocese of Milwaukee, Franklyn Becker and Siegfried Widera, went to trial in California Nov. 6.
His concerns were put to rest around 1 a.m., Tuesday, Aug. 29, when, according to Archbishop Dolan, Judge Charles W. McCoy brought the plaintiffs' attorneys, him and other people representing the archdiocese into a Los Angeles County courtroom and said, "What we have been discussing is acceptable."
Those words culminated mediation that had begun at 9 a.m. Aug. 28. In addition to the archdiocese and the plaintiffs' attorneys, representatives from 14 insurance companies were also involved in the mediation process that had been ordered by Los Angeles County Superior Court Judge Haley J. Fromholz. The judge, who will preside at the trial that will adjudicate more than 500 clergy sexual abuse cases, had appointed McCoy, a supervising judge in the Los Angeles County Superior Court, to handle the mediation.
What they had been discussing was a settlement in which the California sexual abuse victims of Becker and Widera will receive $16.65 million, of which $8.4 million will be paid by insurance providers and $8.25 million will be paid by the Archdiocese of Milwaukee.
In approaching an issue in need of resolution, Archbishop Dolan said that he asks, "What is going to be for the good of the kingdom, for the good of the church, for good of the archdiocese, and for good for God's people?"
Those questions were the impetus for five goals that he developed as he prepared for the mediation. The first was to ensure that victims/survivors were treated with "respect and dignity."
"We could not blame this on the victims/survivors," he said.
The second goal was to avoid a court proceeding "that would only further hurt the victims/survivors and ourselves."
"Neither side wanted to go to court," he said.
The third goal addressed the "financial integrity" of the archdiocese.
"I had a supreme responsibility to protect, as the sound shepherd and steward, to protect the resources of the Archdiocese of Milwaukee," he said.
The fourth goal was to have the insurance companies assume financial responsibility for their part of the settlement, and the fifth goal was to resolve all of the cases.
"We needed to settle all the cases so that the California chapter could come to a resolution," the archbishop said.
Borrowing a phrase that he said Barbara Anne Cusack, chancellor of the Archdiocese of Milwaukee, uses to describe her mediation with victims/survivors, Archbishop Dolan called his meeting with the 10 victims in California a "sacramental moment."
"They are moments shot through with God's grace," he said.
Throughout Aug. 28, a day he described as one involving "a lot of waiting and praying and debating, and lot of wondering and anticipation," the archbishop had an opportunity to meet with the victims.
"It was very inspirational, very emotional," he said of meeting them.
Noting that this was the first time he had ever participated in court-ordered mediation, the archbishop credited McCoy with making the process work.
"Judge McCoy gained our trust, was impartial, fair, objective, and kept things going," Archbishop Dolan said.
While the $8.25 million is less than what the archdiocese might have had to pay had the cases gone to trial, it represents a significant commitment by the archdiocese, which has paid $11 million over the last 10 years in compensation to victims of clergy sexual abuse.
Part of the archdiocese's settlement will come from the sale of the Archbishop Cousins Center. That building, opened as De Sales Preparatory Seminary in 1963, was built for $8 million. Depending upon the money the sale of that facility generates, the remainder of the settlement will be fulfilled by selling investments.
According to Jerry Topczewski, the archbishop's chief of staff, that matter will be studied by Wayne Schneider, archdiocesan treasurer and chief financial officer, and the archdiocesan finance council.
"How best do we generate the money to make this payment and what is the best mix of holdings that can be used for this purpose?" Topczewski said.
While the archdiocese had prepared to sell Cousins Center before the California cases were settled, it had planned to use the revenue from that sale to renew the endowment of St. Francis Seminary, pay for the move of archdiocesan offices to the seminary campus, and to endow the needs of the Cousins Center offices.
The archbishop spoke of "sacrifices in operations and ministries," but added, "I would be reluctant to see any cuts in services or apostolates. The cuts might come in the means we have to deliver those services, like buildings and property."
He added that the archdiocese had already sold $6 million worth of property for voluntary mediation in sexual abuse cases.
What could have happened
Neither Archbishop Dolan nor Topczewski would speculate on what kind of settlement the archdiocese faced had the cases gone to trial. In the Diocese of Dallas, victims were awarded $118 million in 1998.
"If we didn't arrive at resolution that meant Nov. 6 the court case would begin. What the plaintiff attorneys were going to do was not only sue us for civil damage, but for punitive damages… Whatever that jury would have awarded that first victim - times 10 what amount that would have been - I don't know," the archbishop said.
Acknowledging that the $8.25 million portion of the settlement will have a negative impact upon archdiocesan resources, Archbishop Dolan knows the outcome could have been worse.
"As much as a wound as that is, as staggering as that is, as much of a sacrifice as that is going to entail, for the good of the archdiocese, that was infinitely better for the archdiocese than going to court and that's to say nothing about the bad PR," he said.
The archbishop said that the first case was scheduled to be televised by Court TV.
"Neither the victims/survivors nor the archdiocese would have been well served by this going to trial," he said. "We couldn't do that. The morale of our people…. That would have jeopardized all the progress we have made, to say nothing of the towering costs, and the impact on the victims (of having to go to trial)."
With what he called "terrible storm clouds of California that have haunted us for three years" gone, Archbishop Dolan said that the big challenge that weighs upon him pastorally is moving the archdiocese forward.
"When it comes to renewing the faith, hope and confidence of the people of God in the Archdiocese of Milwaukee, that's what weighs most heavily on these shoulders," he said. "Everywhere I go, people say, 'Archbishop, let's move on, let's continue to deal realistically and compassionately with the implications of this terrible scourge of clergy sexual abuse. We're making progress, we appreciate what you're doing, we know there's a lot to be done, but darn it, the work of the church must go on.'"
Archbishop Dolan expects the archdiocese to move forward with its mission, but not to forget what has happened.
"One of the ways we move on here is by realistically and maturely never forgetting what happened, and by admitting that we have to continue to learn from that. We can't say, "Oh, that's taken care of; let's move on.' This is a continual challenge; there are continual issues that have to be met. And we can't forget it. If we do, it will be at our peril," he said.
In addition to the archbishop, Cusack, Topczewski, and Schneider, archdiocesan attorney John Rothstein was part of the archdiocesan team to participate in the Aug. 28 mediation.
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