Stockton Bishop Says Diocese Is Almost out of Cash

Mercury News
June 15, 2013

STOCKTON, Calif.—The Roman Catholic bishop of Stockton has warned parishioners that his diocese might run out of money before it has paid damages to all of the people who have sued over clergy sex abuse, a newspaper reported Saturday.

Bishop Stephen Baire said in a letter read last weekend to the 35 parishes he oversees that as a result, the Stockton Diocese might have to file for bankruptcy, but that a decision would not be made for a few months, The Modesto Bee said (

Baire told The Bee that the main reason the diocese's finances are in such bad shape is because of the $32 million it and its insurers have so far paid out to settle 34 lawsuits arising from the actions of former priests. Of that amount, nearly $27 million went to victims of Oliver O'Grady, a former priest who worked in parishes in San Joaquin, Stanislaus and Calaveras counties from 1971 until 1993 and was defrocked amid abuse allegations two decades ago.

"What he did was an enormous harm to the people he abused, as well as the diocese he was serving. The consequences will be with us for a long, long time," Baire said. "I know personally many of those who have been hurt by him. I just cry when I speak to them. It should never have happened."

In 2010, O'Grady began receiving retirement benefits from the church—about $788 a month as part of the deal in which he agreed to be defrocked.

Blaire, who arranged the payments, said he wanted to make sure O'Grady could never again use his priesthood to damage families.

The largest single award of $3.75 million went to a former altar boy at a Stockton church whom a civil jury decided last year had been abused by another priest, the Rev. Michael Kelly, during the early 1980s.

Four lawsuits remain outstanding—two involving O'Grady, who was imprisoned in Ireland this year on child pornography charges and two involving Kelly, who returned to Ireland last year after he was removed from leading a Lodi church.

"We have to figure out how to meet the needs to provide compensation for anyone who has been victimized or hurt. These victims . deserve compensation," Baire said. "We've paid out over $15 million of diocesan money, plus all the insurance money, plus the attorney fees. The point is, we've reached the end of our ability to provide that compensation."

John Manly, a California lawyer who represents clergy abuse victims, disputes that the diocese is insolvent and accused the bishop of trying to preserve some of its assets by moving them into accounts other than the one from which the abuse settlements have been paid.

"The fact is the Stockton Diocese has about $40 million in liquid assets," Manly said. "Our estimation is they have between $75 million and $100 million in diocese and parish accounts."

One of O'Grady's victims, Nancy Sloan, told The Bee that a bankruptcy filing that deprived other plaintiffs of justice would be "one slap too many."

"The diocese is not poor, except in judgment," Sloan said. "Sell properties, get rid of ornate possessions, live in action as Jesus did."


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