Diocese Will Pay $9.8 Million to Alaska Abuse Victims
Bankruptcy: Freed Money Will Go to Victims, Outing of Guilty.

By Lisa Demer
Anchorage Daily News
January 25, 2010

FAIRBANKS (AK)-- The Catholic Diocese of Fairbanks is emerging from bankruptcy under a plan that will provide nearly $10 million -- and maybe much more -- to sexual abuse victims, send the bishop traveling to parishes where abuse occurred, and put names of suspected abusers on the diocese Web site.

Under the plan for reorganization, $9.8 million will go into a fund for close to 300 victims. Another $2.5 million is going to lawyers, accountants and other professionals. Payments to individuals will be decided case-by-case by a mediator, depending on a variety of factors including the nature and severity of abuse, the age of the victim at the time it started, and whether the perpetrator was in a position of trust.

U.S. Bankruptcy Judge Donald MacDonald approved the plan at a hearing Monday morning in Anchorage.

"I've never had a case like this in my nearly 20 years on the bench," the judge told the lawyers and Catholic church leaders gathered in court. The sexual abuse claims made this bankruptcy especially challenging, he said.

The diocese filed for reorganization in March 2008 in the wake of more than 100 state-court lawsuits accusing priests and volunteers of sexual abuse. After the bankruptcy case was filed, the claims grew. Many arise from abuse decades ago.

Most creditors supported the plan, including 256 out of 258 clergy sexual abuse victims who voted on it.

Exhibits filed in Bankruptcy Court name the suspected perpetrators, most from the Jesuit order. Under the settlement, for the next 10 years the diocese must post on its home page a link to the names of the suspected abusers "and any other known perpetrators (admitted, proven or credibly accused), including deceased perpetrators."

One list filed in court names those whom multiple people accused of sexual abuse: 15 priests, a deacon, two brothers, two nuns, and two volunteers. They include the late church volunteer Joseph Lundowski, accused of molesting dozens of children in Western Alaska villages in the 1960s and 1970s. A second list names those accused by one person: 11 priests, five nuns, a deacon, a brother and three volunteers.

Bishop Donald Kettler, who sat in at the hearing, said afterward that what happened to people victimized by priests and lay volunteers was tragic. He said the diocese has tried to start the process of healing but that he couldn't do much when the case was in court. Now, he can reach out, and in fact must do so, under the reorganization plan.

He said he would try to connect with every victim and will travel to every place where the abuse occurred.

"I will be visiting their villages. I will invite them to come see me one-on-one. I will invite them to come to some church and community healing services. And I will have listening sessions with them and then the whole community," Kettler said.

Under the plan, he also must read a statement of apology from the pulpit in every affected parish.

The diocese pieced together money for the settlement mainly from the sale of properties to its own endowment. The diocese will still be able to use those properties, which include Catholic schools, the diocese offices, and the Kobuk Center, where the bishop lives. In addition, parishes are paying $650,000 and Alaska National Insurance Co. $1.4 million.

Kettler said operations of the vast diocese have been affected by the lawsuits and the bankruptcy. The diocese has cut subsidies to parishes for training, fuel oil and other basics, he said. The diocese staff has been reduced by 25 percent, and those left have taken pay cuts and unpaid furloughs. The bishops' pay is now just $1,400 a month, plus room and board, said Susan Boswell, the Tucson, Ariz.-based lead bankruptcy attorney for the diocese.

The victims also will pursue claims against two insurance companies that didn't pay into the settlement, Travelers Casualty and Surety Co. and Catholic Mutual Relief Society of America. Ken Roosa, an Anchorage lawyer who has represented dozens of abuse victims in state lawsuits, said the size of the fund for victims could grow substantially.

"We're not done," he said.

Find Lisa Demerat: or call 257-4390.


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