Erie Diocese’s Abuse-related Costs Rise to $12 Million

By Ed Palattella
Times News
December 10, 2019

https://www.echo-pilot.com/news/20191210/erie-dioceses-abuse-related-costs-rise-to-12-million

Catholic Diocese of Erie’s compensation fund payouts reach $5.9 million, adding to previous costs of about $6 million.

The Catholic Diocese of Erie’s financial reckoning over the clergy sexual abuse crisis has reached nearly $12 million, rising by about $3 million over the past four months.

The diocese’s newly created victims’ compensation fund has paid out $5.9 million since the fund started accepting claims on Feb. 15.

The $5.9 million includes $3 million in payouts the fund has made since around the time the deadline for filing claims expired in mid-August, Bishop Lawrence Persico said in the most recent update.

The $5.9 million is in addition to more than $6 million that the diocese previously paid to cover abuse claims and associated expenses.

? The diocese spent $4 million in legal fees and related costs to investigate and publicize claims of abuse in advance of the release, in August 2018, of the groundbreaking Pennsylvania grand jury report on the abuse crisis in the Roman Catholic Church statewide.

? The diocese also paid about $750,000 to abuse victims, mainly for counseling, before the creation of the compensation fund, which is designed to cover claims in old cases.

? And the diocese in March paid $2 million to settle a claim with a victim of David L. Poulson, a former priest in the 13-county Catholic Diocese of Erie. The claim was not part of the compensation fund because the Poulson case was new enough to fall within the statute of limitations for filing civil suits.

Poulson pleaded guilty in October 2018 in Jefferson County to molesting the victim and another man when they were boys and Poulson was serving as a pastor in 2002 and 2010. Poulson, 66, was sentenced to 2? to 14 years in state prison in January.

The Catholic Diocese of Erie’s costs are still increasing. The six-month claims period for its compensation fund, called the Independent Survivors Reparation Fund, ended on Aug. 15, and the diocese’s independent administrator continues to process hundreds of claims, Persico told the Erie Times-News.

Other Pennsylvania dioceses, including the Diocese of Pittsburgh, also set up compensation funds. Those who receive payments from the funds must waive their rights to sue. The Erie diocese has not disclosed how much money it has available for its fund, though Persico has said the diocese is covering the payouts and related expenses using budget surpluses and income from investments rather than giving at the parish level.

A total of 181 claims were submitted to the Diocese of Erie’s fund, and as of late last week, 50 victims or survivors had received settlements and another seven had their claims rejected, according to the diocese. The total of $5.9 million has been paid out in sums ranging from $5,000 to $400,000, the diocese said. The average payout is $118,000.

Overall, the diocese has paid out about $3 million for every 25 claims that were accepted. Leading up to the Aug. 15 deadline, 52 victims or survivors had applied to the fund and 23 had received payments totaling $3 million, the diocese said in August, days before the expiration of the deadline. Payments to the other 27 victims or survivors totaled $2.9 million, raising the total payout to $5.9 million.

The diocese, with 202,000 members, had said it expected a surge in claims leading up to the Aug. 15 deadline. Persico said he was not certain when the independent administrator, the firm of Ken Feinberg, a Washington, D.C.-based lawyer and expert on compensation funds, will finish its review.

Persico said Feinberg’s firm is investigating each claim with assistance from diocese’s law firm for abuse cases, K&L Gates, of Pittsburgh. Persico hired K&L Gates to handle the earlier investigation he used to publicize the names of abusive priests and laypeople connected to the Catholic Diocese of Erie.

Persico said he is not involved in evaluating the cases before the compensation fund.

“I don’t interfere,” he said.

The diocese’s insurance carriers are not covering the claims, though Persico said the diocese’s financial situation remains stable “so far.”

“Depending on where this goes, that could be another story,” he said. “Right now we are good.”

To save money, he said, he asked the diocese’s department heads to cut 15 percent of their budgets for 2020. Persico said the cuts will result in unfilled positions and, in some cases, smaller diocesan grants. Persico said he wants to ensure that the diocese remains financially viable while also compensating victims for abuse.

“I have a responsibility to protect us from going into bankruptcy or from people losing their jobs,” Persico said.

New laws

The creation of the compensation fund, combined with how the state General Assembly handled the clergy abuse crisis, most likely will help the Catholic Diocese of Erie avoid bankruptcy and large judgments that juries or judges award in court. Victims and their advocates have criticized those developments.

The General Assembly in late November passed a series of reform bills in response to the grand jury report on the abuse scandal. The bills, which Gov. Tom Wolf signed on Nov. 26, expand the statute of limitations for filing civil cases over child sexual abuse and they eliminate the statute of limitations for filing criminal charges in major cases of child sexual abuse.

Both of those measures, however, apply to cases going forward. In a disappointing move for child sexual abuse victims and their advocates, the legislature failed to pass a law that would immediately give victims a two-year window to sue no matter how old the allegations or the statute of limitations.

The president pro tempore of the state Senate, Joe Scarnati, a Republican from Jefferson County, blocked legislation that would have established a temporary and immediate two-year window, similar to what New York, New Jersey and other states have done. The Pennsylvania General Assembly in November instead approved a measure that would amend the state constitution to allow for the two-year window.

The amendment process will take years. The bill on the amendment must pass the state House and Senate again in the 2021-22 legislative session before it could appear on the ballot for voters to consider.

The delay created issues for clergy sex abuse victims in Pennsylvania. They had to make a choice: Should they file a claim with a diocese’s compensation fund, or should they wait on whether the state constitution is amended to allow them to sue with a two-year window?

Adding to the complexity was that the deadline for filing with the Catholic Diocese of Erie’s compensation fund expired before the General Assembly passed the legislation that started the process for a constitutional amendment.

Attorney general’s view

Pennsylvania Attorney General Josh Shapiro, whose office handled the grand jury investigation of abusive priests, said victims should not have had to choose between a compensation fund or a civil suit. His office advocated for an immediate two-year window, which the grand jury recommended in its report. The 884-page report alleged that 301 Roman Catholic priests in Pennsylvania, including 41 in the Catholic Diocese of Erie, victimized more than 1,000 minors dating to the 1940s.

“It’s a totally unnecessary delay,” Shapiro told the Erie Times-News about the legislature opting for a constitutional amendment. “To pass the statutory window is constitutional. Other states have done it.”

He said he was disappointed that an immediate two-year window received no support from the Roman Catholic bishops in Pennsylvania, including Persico, whom Shapiro has praised for appearing before the grand jury and apologizing on behalf of the diocese. Instead, Shapiro said, “The church spent millions of parishioners’ dollars to lobby lawmakers in Harrisburg to stop the civil window from passing.”

“That’s unconscionable,” Shapiro said.

“It’s not just about the money here,” Shapiro said of the victims. “What survivors really want is their day in court. They want transparency. So when the church puts these victims’ compensation funds in place, they are continuing to shield these predator priests from accountability. They are continuing the cover-up. These victims should be given the right to confront their abusers in court.”

The pope’s message

Persico acknowledged that court judgments for victims, if allowed to sue, could be larger than the sums the compenation fund pays out.

“When you get the attorneys involved, they are not going to ask for the minimum,” he said.

In supporting the creation of the compensation fund, Persico also said that fund helps ensure that victims with legitimate claims will get something from the diocese. A number of large verdicts and court judgments, he said, could risk bankrupting the diocese and reducing the amount of money available to other victims. Bankruptcy would not eliminate civil judgments, but limit how much money would be available as a diocese deals with all its creditors under the supervision of a judge in U.S. Bankruptcy Court.

A recent Associated Press report found that, due to rollbacks in the statutes of limitations in 15 states, the Roman Catholic Church in the United States is facing the possibility of more than 5,000 new lawsuits nationwide and potential payouts topping $4 billion. The AP story also cited a recent Penn State study of 16 dioceses and other religious organizations that had filed for bankruptcy protection by September 2018. That study, according to the AP, found that victims received an average settlement of $288,168.

For Persico, 69, the Catholic bishop of Erie since October 2012, much of his daily work continues to include handling the abuse crisis and talking to victims. Another reminder of the worldwide sweep of the crisis came when a group of 20 American bishops, including Persico, met with Pope Francis for 2? hours at the Vatican on Thanksgiving Day during Persico’s nine-day stay in Rome. The trip was part of a periodic visit that all bishops in the Roman Catholic Church have with the pope and Vatican officials.

Persico said the pope was familiar with the Pennsylvania grand jury report.

“He talked about that,” Persico said. “He also talked about the importance of the bishops being close to the people, not being so much as only into administration.

“And, also, to be close to victims,” Persico said of the pope’s message. “He told us how he meets with them in Rome, and, basically, if, I do it, you should be doing it.”

Ed Palattella can be reached at 870-1813 or by email. Follow him on Twitter at www.twitter.com/ETNpalattella.