|Judge Backs Landmark
By Ashbel S. Green and Steve Woodward
April 14, 2007
* The Portland Archdiocese's $75 million plan solves the money issue, letting it pay accusers and protect parishes, but the case is far from settled in emotional terms
A judge's decision Friday to approve a $75 million Portland Archdiocese settlement plan all but ends years of uncertainty for western Oregon Catholics and will provide at least financial relief for about 175 people who say they were sexually abused by priests.
The archdiocese secures its financial future, collecting $52 million in insurance money and paying priest accusers without selling churches or schools. The archdiocese also limits how much money it would pay to any sex abuse victims who come forward in the future.
But if parishioners seem pleased with the results, priests' accusers may not be happy simply because financial terms have been settled.
"The fact that there may be a settlement in monetary terms may not, in fact, cure or remedy all the underlying harms," said Jonathan C. Lipson, a professor at Temple University's James E. Beasley School of Law. "There's a limit to what money can buy."
Those feelings might surface Tuesday when U.S. Bankruptcy Judge Elizabeth L. Perris is expected to sign an order making the settlement official and lift a gag order that has prevented accusers, church officials and their lawyers from talking publicly since August.
And there are questions about how the church will reorganize. The bankruptcy plan calls for the archdiocese to separately incorporate parish churches and schools to protect them from future lawsuits. That will be legally complicated, and additional independence of the parishes could at some point cause friction with the archbishop.
"It's a Pandora's box here that the dioceses have to deal with," said Chuck Zech, a professor at Villanova University. Bishops, he said, will have to ask, "How are we going to maintain control of the parishes?"
Still, most experts agree that the Portland Archdiocese's decision to seek bankruptcy protection in 2004 --seen as a highly risky move at the time --turned out to be an unqualified success from a financial perspective.
"This works for them. They can put it behind them," said Carl Tobias, a professor at the University of Richmond School of Law. "And it could have been a lot worse."
Church buys time
In July 2004, Archbishop John G. Vlazny faced a choice: Go forward with a priest sex abuse trial seeking $135 million or become the first archdiocese in the country to seek bankruptcy protection.
Bankruptcy bought time, but it exposed and ceded control of the church's inner workings to a secular court. It also sparked a legal showdown of constitutional proportions over the assets of the church. Under canon law, the archdiocese merely holds parish assets in trust and cannot sell them to pay for sex abuse settlements.
In late 2005, the bankruptcy judge ruled that the archdiocese owned nine churches and a school and could sell them. The decision --which implicated all church property --rattled church officials, not just in Portland but throughout the country.
Joseph Claude Harris, a noted Catholic Church financial analyst based in Seattle, said the parish property issue could have taken 10 years to resolve.
"If it had gone on trial," Harris said, "you're on a slippery slope to the Supreme Court."
The turning point came late last summer when Perris appointed two mediators: Lane County Circuit Judge Lyle C. Velure and U.S. District Judge Michael R. Hogan. They issued a gag order and dragged everyone to Eugene to negotiate an agreement.
In December, Velure and Hogan announced a tentative $75 million settlement that involved the bulk of the priests' accusers, the archdiocese, insurance companies and groups representing parishioners.
By the time Perris held a final hearing earlier this week, all of the sex abuse claims had been settled. The only objection came from a family who sued the archdiocese after their son was expelled from St. Thomas More school in Southwest Portland.
Although the financial aspects of the settlement are largely tied up, Harris said separately incorporating the parishes and schools could spark disagreements over who gets control.
"They probably haven't thought about that for a long time," Harris said. "They just assumed that the bishop owned the parishes, and they did what they were told."
Advocate blasts Vlazny
There also could well be some pent-up anger by accusers who were forced to keep silent during the mediation.
Barbara Blaine of Chicago, president of the Survivors Network of those Abused by Priests, said in a statement that she hoped the settlement would bring "some well-deserved and long-overdue healing for some of the hundreds of deeply wounded adults who were sexually assaulted as kids by Oregon priests."
But Blaine blasted Vlazny, accusing the archbishop of using the bankruptcy system "to keep a lid on the Catholic hierarchy's cover-up of horrific child sex crimes."
Blaine said that the archbishop "has avoided what he so desperately feared: He won't have to face tough questions under oath in open court about his role, and the role of top church staff, in transferring predators, destroying evidence, threatening witnesses, shunning victims, ignoring police and deceiving Catholics," she said.
Lipson, the Temple professor, said the bankruptcy process is designed, in part, to wear down the parties to make them settle. But typically, all that is really at stake is money.
"I think the really heart-wrenching thing about these cases is that they're not just about money," he said.
Zech, the Villanova professor who has followed the five Catholic bankruptcies around the country, said the church may never regain the trust of the victims of sex abuse and parishioners who lost faith in the church's handling of the crisis.
But from a financial perspective, the Portland Archdiocese could not have landed much better, he said.
"Sounds like they really dodged a bullet," he said. "When we first started talking about it, I thought there was no way they could avoid selling some worship sites."
Ashbel "Tony" Green: 503-221-8202; email@example.com
Steve Woodward: 503-294-5134; firstname.lastname@example.org
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