Philly Archdiocese Expects to Pay $126 Million in Priest Sex-abuse Reparations

By Harold Brubaker
Philadelphia Inquirer
May 5, 2020

https://www.inquirer.com/business/catholic-archdiocese-philadelphia-sex-abuse-payouts-reparations-fund-20200505.html

David Maialetti / Staff Photographer

The Roman Catholic Archdiocese of Philadelphia said Tuesday that it expects to pay $126 million to sexual-abuse victims under a reparations program announced in 2018.

The archdiocese said its Independent Reconciliation and Reparations Program has received a total of 615 claims, and had settled 208 of them for $43.8 million as of April 22. That averages out to about $211,000 per claim, which is in line with what other dioceses have been paying under similar programs.

The archdiocese said it still has $20 million on hand to pay claims and will raise the rest of the money through loans or property sales. The diocese made the $126 million estimate as part of an audited financial statement for the year ending June 30, 2019.

“I deeply regret the pain and suffering of survivors and any decisions that failed to protect them," Archbishop Nelson J. Perez wrote to parishioners in a letter Tuesday. "The pain and damage are profound.”

The financial statements for the archdiocesan Office of Financial Services, which functions as a sort of financial clearinghouse for related church entities, provided some detail on how the church raised the money so far.

Last summer, St. Charles Borromeo Seminary — which a year ago sold its 72-acre campus in Wynnewood for $43.5 million to Main Line Health — provided a $7.5 million loan. The archdiocese expects to repay that loan this summer with initial proceeds from the development of portions of the cathedral block at 17th and Race Streets in Center City.

In December, St. Charles Borromeo Seminary, Catholic Social Services, and the Office for Catholic Education paid $28 million to the archdiocese to help cover reparations. In addition, Catholic Social Services, which provides adoption, homeless, addiction-recovery, and other services, has committed to lend the archdiocese $15 million to help pay claims, the financial statement said. That loan will be secured by archdiocesan real estate.

When the fund was announced, then-chief financial officer Timothy O’Shaughnessy identified these sources of loans: a trust to pay for the perpetual care of cemetery lots, a pension fund for priests, and a benefits trust.

Church officials in the Dioceses of Pittsburgh, Allentown, Harrisburg, Greensburg, and Scranton unveiled plans for similar funds in late 2018, following a failed bid by some lawmakers in Harrisburg to open a temporary window for older abuse victims to sue.

Victims advocates have criticized the compensation funds as a move to undermine legislative efforts to give victims a chance to take their claims to court. By accepting money from the compensation fund, victims give up their right to sue if lawmakers ever lift the civil statute of limitations for old claims. For those claims, victims who were abused before their 18th birthday have until they turn 30 to sue.

Under a 2019 law that is not retroactive, victims have until age 55 to sue for abuse that happens after the new law took effect this year.

The Diocese of Harrisburg in February joined the ranks of at least 20 U.S. dioceses that have filed for bankruptcy protection because of priest sex-abuse claims. The most recent was the Archdiocese of New Orleans, which filed Friday.

The annual financial report for the Archdiocese of Philadelphia showed that its central Office for Financial Services had $2.8 million in operating income in the year ended June 30, 2019. That number excludes such extraordinary items as the liability recorded for the payouts.

That was the second year in a row of profit for the central office after six years of losses, as the archdiocese under former Archbishop Charles Chaput dug out of the deep financial hole he inherited from his predecessor, Cardinal Justin Rigali.

Perez, from Cleveland, took over from Chaput this year.

Among the expenses excluded from the $2.8 million operating gain were $2.23 million in costs related to a federal grand jury investigation that started in 2018 after a statewide grand jury report that year alleged widespread abuse and cover-ups at six Catholic dioceses in Pennsylvania.