Legal Bills Top $1 Million in Priest Abuse Case Taxpayers Likely Wont Have to Cover the Bill, Officials Say, by Alan Gustafson, Statesman Journal, July 22, 2007

Legal Bills Top $1 Million in Priest Abuse Case
Taxpayers Likely Won't Have to Cover the Bill, Officials Say

By Alan Gustafson
Statesman Journal
July 22, 2007

http://www.statesmanjournal.com/apps/pbcs.dll/article?AID=/20070722/NEWS/707220308/1001/NEWS

Oregon has shelled out more than $1 million to a Boise, Idaho, law firm hired to defend the state in sexual-abuse lawsuits brought against the Rev. Michael Sprauer of Salem.

State payments to the firm of Greener, Banducci and Shoemaker totaled $1,036,317 from October 2005 through May 2007, according to documents obtained by the Statesman Journal through a public records request with the state Department of Justice.

Leading the state-hired defense team is William Tharp, a former Oregon assistant attorney general who left the Department of Justice in 2005 to join the Boise firm.

Tharp is one of eight lawyers at the Idaho firm hired by the DOJ to work on civil suits filed against Sprauer and the state, according to a review of state contracts with the firm. The lawyers have been paid at hourly billing rates ranging from $160 to $215.

Paralegals, clerks and legal assistants with the Boise firm have been paid $90 per hour.

The $1 million payout for outside counsel is part of a larger state-paid legal bill connected to Sprauer litigation.

State attorneys have racked up costs and expenses totaling $485,060. And the state has paid $372,348 in legal fees to Thomas Cooney Sr., a Portland-area attorney representing Sprauer.

The cumulative legal tab comes to $1,893,725.

The Statesman Journal learned Friday that in addition to the legal fees, Sprauer's accusers recently reached an out-of-court settlement with the state.

The state agreed to pay $1,050,000 to 14 men who sued Sprauer, alleging that he sexually abused them in the 1970s at the MacLaren Youth Correctional Facility in Woodburn, said Salem attorney Daniel Gatti, who represents the men.

Gatti said all parties have agreed that there will be no appeals. Stephanie Soden, a spokeswoman for the state Department of Justice, confirmed the settlement but said it still was being finalized.

Reimbursement expected

If all goes according to state plans, private insurance — not Oregon taxpayers — will cover the legal bills and settlement stemming from Sprauer litigation, Soden said. The state's insurer during the 1970s is expected to provide full reimbursement.

"We plan to have all the costs reimbursed by the insurer from that time period," Soden said. "We expect, in the end, for all of the costs to be covered."

The legal fight began in 2003-04, when Sprauer was named in a series of sexual abuse lawsuits filed on behalf of 15 men alleging that the priest abused them when they were teen-age inmates at the MacLaren Youth Correctional Facility in the 1970s. One plaintiff died from a heroin overdose in December 2004.

Case history

Sexual abuse accusations against the Rev. Michael Sprauer of Salem were brought in a series of civil lawsuits filed in 2003-04.

In all, 15 men claimed that they were sexually abused by Sprauer while he was chaplain at a state-run reform school during the 1970s.

The original suits named Sprauer and the state, which employed him as chaplain at the MacLaren Youth Correctional Facility in the 1970s, as well as the Portland Archdiocese.

The archdiocese settled with Sprauer's accusers as part of a $70 million plan to emerge from its groundbreaking 2004 bankruptcy.

Settlements with the archdiocese, totaling $600,000, didn't prevent Sprauer's accusers from pursuing their claims against him and the state.

In May, Randy Sloan, 49, of Aumsville; Robert Paul Jr., 49, of Salem; and Norman Klettke Jr., 44, of Portland became the first accusers to bring to trial their accusations against Sprauer.

Capping a two-week trial, a Multnomah County jury concluded that Sprauer sexually abused Sloan and Paul and awarded them nearly $1.4 million in damages. The jury cleared Sprauer of sexually abusing Klettke.

Recently, the state agreed to pay $1,050,000 to the 14 remaining plaintiffs — one died in 2004 — to settle their claims against Sprauer, said Salem attorney Daniel Gatti, who represents the men.

Sloan, Paul and Klettke are covered by the settlement, Gatti said. He declined to specify how much money they will receive.

In May, Randy Sloan, 49, of Aumsville; Robert Paul Jr., 49, of Salem; and Norman Klettke Jr., 44, of Portland became the first plaintiffs to take to trial their accusations against Sprauer. The civil suit was the first Roman Catholic priest sex-abuse case to go to trial in Oregon.

After a two-week trial that included graphic descriptions of coerced oral sex and molestations, a Multnomah County jury concluded that Sprauer sexually abused Sloan and Paul and awarded them nearly $1.4 million in damages. The jury cleared the priest of sexually abusing Klettke.

Because of legal limits on state liability, Sloan and Paul were unlikely to receive anywhere near the amount of jury-awarded compensation, Gatti said. When the $1,050,000 settlement with the state is finalized, it will supercede the jury award.

Gatti declined to say how much money Sloan and Paul will receive. Klettke also is covered by the settlement, he said.

Gatti maintained that money wasn't the main motive behind the sex-abuse litigation.

"Certainly, they deserved to have some compensation," he said. "They need therapy. They need to get on with their lives. But the biggest benefit my clients got, by unanimous agreement, was the jury's verdict, which said we believe you. That meant more to my clients than anything."

State: Outside counsel justified

Retracing the reasons for hiring outside lawyers, state officials said it made sense to contract with the Boise firm because of Tharp's prior knowledge and experience about the Sprauer lawsuits.

Tharp worked for the DOJ as a state assistant attorney general when the original lawsuits were filed in 2003-04. They wound up on his desk, and he performed much of the initial work on the state's defense.

In 2005, Tharp stepped down from the DOJ and joined the Boise firm of Greener, Banducci and Shoemaker.

Tharp's former bosses then scooped him up as a special assistant attorney general, hired to work for the state on a contract. His hourly billing rate: $215.

Tharp's hiring was approved by DOJ officials and state risk analysts, documents show.

Senior Assistant Attorney General Timothy Wood outlined the rationale in a Sept. 15, 2005, memo to Deputy Attorney General Pete Shepherd: "As previously discussed, Bill has handled all the priest abuse cases. Risk, DOJ and co-counsel have asked that Bill continue on the case. This contract offers a compromise: Bill will be retained for three months. We will re-evaluate what needs to be done after the three months. In all likelihood, Bill will remain on contract."

Contacted Friday, Tharp declined to comment on his contract work for the state. He referred questions to the DOJ.

Soden said the DOJ has contracted with outside lawyers before. In one notable case, she said, the agency contracted with a Portland law firm when Oregon joined a wave of state-led litigation against tobacco companies.

"There are times when we find that outside expertise is more important than bringing up to speed a new attorney general in the department," Soden said.

Defense team expands

Since the DOJ contracted with the Boise firm in September 2005, 11 contract amendments extended state funding for the firm's legal services.

The firm rang up its highest legal fees in April ($107,003) and May ($152,976). The six-figure monthly bills coincided with legal work leading up to and during trial of the first lawsuit against Sprauer.

Gearing up for the May trial, Tharp sought state approval for additional legal firepower.

Enter Richard Greener, a partner in the Boise firm.

"As I indicated to you on the phone, it is my opinion that Richard is one of the best, if not the best, trial lawyer(s) that I have been associated with," Tharp wrote in a Feb. 23 letter to Steve Bushong, the DOJ trial division chief. "Richard would be taking a significant reduction in his hourly rate to assist me in this matter. We would bill Richard out at $215 per hour, which is the same as my rate."

With DOJ approval, Greener also was hired as a special assistant attorney general.

Tharp, Greener and another lawyer with the Boise firm, Matt Hedberg, traveled to Portland shortly before the May 1 start of the trial.

The three lawyers stayed at the downtown Portland Hilton Hotel from April 29 through May 15 and 16, along with two support staffers from the firm, records show.

Collectively, the state paid $13,601 for their lodging, expense reports show.

Jury sides with two accusers

It was a trial fraught with charges and counter-charges.

On the witness stand, Sloan, Paul and Klettke recounted decades-old sex abuse and told the jury that it was inflicted on them by Sprauer.

Gatti, representing the three men, portrayed the priest as a sexual predator who repeatedly victimized juvenile inmates in the 1970s.

Cooney, Sprauer's attorney, told the jury that the sexual abuse didn't happen. He said the priest wasn't employed at MacLaren during the time frames specified by the accusers.

Sprauer took the stand, calling the allegations against him "absolutely untrue."

Tharp told the jury that the allegations were made up by ex-cons as part of a money-making scam.

Greener tried to poke holes in the testimony of a forensic psychologist, Frank Colistro, who told the jury that all three plaintiffs suffered from post traumatic stress disorder.

By 10-2 votes, jurors found that Sprauer had sexually abused Sloan and Paul. The verdict included $185,000 in economic damages, $1 million in noneconomic damages and $200,000 in punitive damages.

As part of the pending settlement with the state, Gatti said he and his clients agreed not to pursue punitive damages from Sprauer.

"It's not worth pursuing," he said. "We're just not vindictive. I want closure and so do my clients."

Gatti expressed his relief about the cases being closed.

"It's been very difficult and emotional for Sprauer, for my clients, for me, for the other lawyers," he said. "This was the most emotional trial I've ever done, and I've tried over 1,000 cases."

Sprauer support endures

On the evening of May 23, a week after the jury verdict in Portland, Sprauer met with a large group of parishioners at St. Joseph Church in Salem, where Sprauer has been a respected priest and staff member.

A Statesman Journal reporter saw Sprauer being hugged and greeted by parishioners. Leaders of the session asked the reporter to leave the meeting after she identified herself.

According to two people who attended the meeting, Sprauer told the group that he was innocent of the accusations brought against him. He apologized to his supporters for engaging in consensual sex with adult men in public bathrooms decades ago. He previously acknowledged those encounters in a pre-trial court deposition.

Parishioners broke out in applause, saying they forgave him.

A discussion of the trial ensued. Some parishioners blamed the jury and the Statesman Journal for tainting Sprauer's reputation, attendees said.

Sprauer has languished in church-imposed limbo since mid-2003, pending the outcome of the lawsuits.

Officially, the priest remains on administrative leave, with restricted duties, said Bud Bunce, a spokesman for the Portland Archdiocese.

"He's not to say Mass or minister publicly in any parish or archdiocesan ministry," Bunce said.

Bunce said Sprauer's status would be reconsidered after all the accusations leveled against him were resolved.

Contact: agustafs@StatesmanJournal.com or 503) 399-6709.