Bid to Protect Church Assets
By Richard Major
January 6, 2006
The bankrupt Archdiocese of Portland has suffered a serious blow in its struggle to keep parishes and schools from being closed to pay for massive clerical sex-abuse damages. A federal court ruled on 30 December that the parishes of western Oregon are not separate entities, but belong to the archdiocese. Parochial assets, which total an estimated $500 million (£290 million), can therefore be sold to pay for settlements being sought by plaintiffs. The archdiocese, which sought bankruptcy protection last year, has already paid out £30 million over 130 previous claims; this week a trial opened with alleged victims of a single priest, Fr Maurice Grammond, now dead, seeking £80 million.
Portland’s lawyers had asked Judge Perris to agree to a reorganisation plan which would set aside £22 million to pay all remaining sex-abuse claims. They argued that, under canon law, the archdiocese and individual parishes are all separate “public juridic persons”: the archbishop, sworn to uphold canon law, cannot seize his parishes’ property to pay further damages against his archdiocese. They also argued that the confiscation of churches and schools would amount to an “undue burden” on Catholics’ “free exercise of religion”, guaranteed by the American Constitution. The judge did not answer that question, which may well go to the Supreme Court.
Besides Portland, two American dioceses have entered bankruptcy. In Spokane, Washington State, a decision similar to Judge Perris’ has been appealed, and is unresolved. Tucson, Arizona, however, has settled with its plaintiffs and emerged from bankruptcy, and has just reorganised itself as 74 distinct corporations, one per parish, so that each parish’s assets should be secure from any future suits.
Meanwhile, the Archdiocese of Boston, where the national sex-abuse scandal began four years ago, is fighting a second wave of litigation. In 2003, the archdiocese settled with 541 alleged victims out of court, paying each an average of £85,000, of which roughly a third typically goes to lawyers. It is now offering half that rate to a second wave of 100 plaintiffs, and is insisting that some of the plaintiffs, those whose allegations it is unsure of, be cross-examined before an arbitrator. The archdiocese’s lawyer said: “Given our present financial condition, we are asking for more rigour to the process to make sure that the people we’re compensating are victims of abuse by Boston priests.” But David Clohessy, national director of Survivors Network of those Abused by Priests (SNAP) said the Church was simply hardening its stance again: “We’re seeing more and more hardball tactics and a retrenchment across the board.”
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