Christian Brothers under financial pressure after paying $213 million in abuse compensation

By Farrah Tomazin And Chris Vedelago
Sydney Morning Herald
July 15, 2019

The Christian Brothers have paid $213 million to compensate victims of sexual abuse.
Photo by Angela Wylie

The viability of the Christian Brothers is in doubt as the religious order is forced to spend hundreds of millions of dollars to settle an avalanche of compensation claims stemming from decades of child abuse.

The Age can reveal the Christian Brothers’ Australian wing has already spent more than $213 million on victims’ payouts and legal expenses in the past six years, with the order expecting to outlay at least another $134 million in the future.

But as survivors continue to seek compensation under the National Redress Scheme, the Catholic order is relying on massive injections of cash from its regional headquarters to pay out people who were abused in its schools and orphanages.

Figures show that the Christian Brothers spent only $3.6 million on “legal and litigation expenses” in 2013, the year the Royal Commission into Institutional Responses to Child Sexual Abuse was established.

But this cost ballooned to $134 million in 2018 - nearly nine times what the group’s officials estimated it would be liable to pay for that year.

Despite the blowout, the order insists it will be able to meet its commitments to survivors through the continued “responsible management of our finances''.

“Responding to claims involves significant sums expended on compensation and other support
services such as counselling and psychological services," a spokesman for the Christian Brothers Oceania Province said.

“Whilst these costs are significant, any financial consideration pales in comparison to the moral imperative of making sure that we acknowledge and respond to those who have suffered so greatly as a result of the abuse that they have endured."

The royal commission found the Christian Brothers were among the worst perpetrators of child abuse in the country, with 22 per cent of its religious members being identified as alleged abusers.

Among them were brothers Gerald Leo Fitzgerald, Edward Dowlan, and Robert Best from St Alipius in Ballarat - the same school that harboured notorious paedophile Gerald Ridsdale and became one of the most shocking examples of the church’s crimes and cover-ups.

But while the Christian Brothers signed up to the National Redress Scheme in February, it has not explained how it will meet the future costs of participating in the 10-year scheme when its Australian wing has repeatedly reported huge financial losses over the past six years.

Figures show that since 2013, the group’s regional governing body, Christian Brothers Oceania Province, has pumped up the local order through funding injections worth more than $203 million, according to documents filed with the Australian Charities and Not-for-profits Commission.

Despite this, the group has continued to hemorrhage money: last year, for instance, the Christian Brothers generated nearly $22 million in revenue but spent $134 million on sex abuse claims. And even after receiving a $75 million contribution from the Oceania Province, it was still nearly $66 million in deficit.

The financial assistance came despite the Australian order holding substantial property assets and investments in the financial markets, although the profits from these have been key to maintaining their normal operations.

The Oceania Province will not disclose how these massive support payments are being funded or whether they are obligated to continue to make them.

But the fact that the Christian Brothers’ Australian wing is relying on massive funding injections to operate raises questions about the group’s future here.

Doubts emerged two years ago, when regional boss Peter Clinch told the royal commission the group was no longer seeking applications for its novitiate and suggested it could disappear from Australia within a few decades.

Asked during the inquiry if he thought the Christian Brothers would merely be a brand of schools run by lay people in 30 to 40 years, Mr Clinch replied: “I don’t even think the brand will be there.”

This is in stark contrast to a generation ago when the Christian Brothers, one of the Catholic Church's main teaching orders, ran and manned schools in cities across the nation. While many are still operating, almost all of those schools are run by lay staff dedicated to Catholic values.

The Christian Brothers’ decision to sign up to the National Redress Scheme came after years of legal battles with victims.

Last August, after a long-standing dispute, its trustees awarded Perth man Paul Bradshaw a record $1 million for the abuse he suffered in the 1950s and '60s at its Castledare and Clontarf orphanages in Western Australia.

The religious order also spent about $1.5 million funding the legal defence of Brother Best, whose victims numbered in the dozens. Some of them have since taken their own lives.

The Christian Brothers are not the only religious entity whose finances have come under the spotlight recently.

Late last month, The Sunday Age reported that the compensation scheme set up by convicted Cardinal George Pell, cost the Catholic Church $34.27 million between 1996 to March 2014  -but only $9.72 million, or 28 per cent of it, was used to compensate 307 child sex abuse victims.

The bulk of the money during that period was spent on other operational costs for the scheme, including $7.8 million for its Independent Commissioner Peter O’Callaghan, QC; $4.7 million on general legal fees; and $11 million on its pastoral arm, Carelink.

The church last week stood by the so-called Melbourne Response, pointing out that 234 victims have received “top-up payments” worth about $11 million since November 2014.




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