Where Will Settlement Money Come From?

By Nicholas K. Geranios
February 2, 2006

A proposal by the Roman Catholic Diocese of Spokane to pay $45.7 million to 75 victims of sexual abuse by priests raises a major question: Where will the small, poor diocese get that kind of money?

Church leaders acknowledge they aren't really sure. Spokane Bishop William Skylstad hsa refused to rule out the sale of parish churches, parochial schools, cemeteries or other diocese property.

"I call on the entire Catholic community to support the resolution I've proposed," he said at a Wednesday news conference.

Skylstad made the settlement offer in a letter, and a committee of five plaintiffs recommended approval Tuesday night. The 75 victims have 120 days to accept the offer, which must also win approval from the U.S. Bankruptcy Court.

The diocese has three revenue sources for the settlement:

_Cash and assets directly controlled by the diocese are worth between $10 million and $11 million. That includes the ornate Chancery building, the bishop's house and some farm property.

_Insurance coverage that the diocese had previously estimated might be worth $15 million, but now contends is much higher. Attorney Shaun Cross said the diocese believes it has $43 million in coverage.

_There are 82 parish churches, 16 schools and other property that Skylstad had argued he does not control, but which a bankruptcy judge ruled that he does control. This property could be sold or mortgaged to raise money.

"There is a theoretical possibility that down the road one of the parishes may have to be sold," Cross said.

"We are looking to maximize the return from the insurance carriers," he said. "We are trying to minimize the expenses to parishes."

Ford Elsaesser, an attorney who represents the local Association of Parishes, said his clients were not part of the settlement talks and have not decided if they will support the bishop's offer.

"We can't say one way or the other until we can be assured parishes won't be liquidated and what amount of money will be needed," Elsaesser told The Spokesman-Review in Thursday's editions. "There just simply has to be protections from the outright sale of parish property, and we don't have that."

If they contribute, the parishes anticipate offering between $6 million to $10 million toward the settlement, Elsaesser said.

A lawyer for the plantiffs said he is not worried about the money.

"Bishop Skylstad understands the obligations of bankruptcy," said James Stang of Los Angeles. "We believe that he has thought through the feasibility aspects of it."

While Skylstad is president of the U.S. Conference of Catholic Bishops, the diocese he controls is one of the smaller ones in the nation. There are about 97,000 Catholics in the Spokane Diocese, and many are served by small, rural parishes with limited funds.

The diocese budget only amounts to a few million dollars each year.

Large Catholic institutions like Gonzaga University and Sacred Heart Medical Center are not part of the diocese and are not subject to the settlement.

"We will make invitations to other Catholic entities to participate," Skylstad said.

In the end, raising the money may require parishioners to dig deep into their own pockets to fill collection plates. There could also be an assessment made on each parish to raise money.

The fact that all the money would not be due until 2010 will help, Cross said.

Skylstad said the diocese would not go after the surviving pedophile priests for money, though the victims could.

Although the settlement offer averages $610,000 per person, the plaintiffs' committee will decide how the money is split. If all 75 do not agree to the settlement, then new negotiations might occur.

The settlement does not cover at least 15 other people who have filed claims of abuse against the diocese, and any others who file between now and the March 10 cutoff date for claims.

Asked how he would deal with parishioners who did not want to contribute to the settlement, Skylstad said he would use his persuasive powers.

"My role is to positively encourage people to support the settlement," he said. "To have this resolved and behind us is very very important.

"But I can't force people to participate," he said.


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