How to Settle 575 Cases of Clerical Sexual Abuse and
Remain Financially Unscathed in Milwaukee.
(Adapted and abridged by Brian Hennessy from a report in the Catholic National Reporter).
In less than two hours a US federal judge approved a plan that allowed the Milwaukee Archdiocese to emerge from bankruptcy after nearly five years of legal battles. Archbishop Jerome Listecki spoke briefly on 9th November 2015 in a courtroom packed with sexual abuse survivors and more than 20 lawyers. Listecki praised the abuse victims for coming forward, saying they had raised the consciousness of the archdiocese and elsewhere. He said, “There is no resolution that will bring back what they have lost,” and he added that he hoped the confirmation of the plan will turn the corner for the archdiocese, allowing it to focus on charitable, educational and spiritual work. “When we have a strong church, we have a strong community”, he said. What he did not say was that the diocese, in filing for bankruptcy, had got off almost scot-free!
Yet, of the 575 abuse survivors, about 120 received only $2,000 each; 336 shared what remained and the remaining 119 got nothing. The archdiocese had reviewed the claims themselves and had assigned the claimants to the various categories. It was a process criticized in court by survivor Steven Schmidt. The survivors were then required to vote on the plan. Some 93 percent of those in the group who were to receive the larger settlements voted to approve the plan – but only 61 percent of the group due to receive the smaller amount approved it. One survivor was placed initially in the category of those who would receive nothing because he could not identify his abuser by name. After he filed a formal objection with the court, the archdiocese identified his abuser. He then questioned how thoroughly the archdiocese had looked for unnamed offenders, thus denying some victims payment. “They knew who these offenders were and covered up their crimes,” he told the National Catholic Reporter. “If you cover up the crime, you shouldn’t be allowed to investigate it.” A dozen other survivors gathered on the steps of the courthouse and vowed to continue their fight for justice. Peter Isely, the Midwest director of Survivors Network of those Abused by Priests (SNAP) and one of the first Milwaukee victims to come forward more than 25 years ago, charged that about 100 priests named in the claims filed by victims remain unnamed by the archdiocese.
Peter Isely also called for an investigation into financial fraud, particularly pertaining to the transfer of some $57 million into a trust fund for the perpetual care of the archdiocese’s cemeteries. As for the allegations, the archdiocese filed for bankruptcy protection in January 2011, but Archbishop Timothy Dolan, who was named head of the New York archdiocese in 2009 and a cardinal in 2012, had been talking about the possibility of filing for bankruptcy as early as 2004. However, in 2007, before filing for bankruptcy Archbishop Dolan removed $57 million from the diocesan general fund into a Catholic Cemetary trust fund shortly after the Wisconsin Supreme Court opened the door to lawsuits. At the time, Archbishop Dolan’s letter to the Vatican and the latter’s rapid approval of the plan for the Cemetary trust fund made international headlines. In an editorial, The New York Times called the revelations “shocking.” Peter Isely asserted that the trust fund was created by the Archbishop, in part, to prevent courts from compensating victims of clergy sex abuse and that there seemed to be sufficient evidence and justification, to warrant an investigation.
A lawyer, David Asbach, confirmed that he met with Isely and others from the group but said he could not comment on the case or on whether he made a referral to the U.S. Attorneys Office for prosecution. Jack Ruhl, a professor of accountancy at Western Michigan University who has extensively studied Catholic diocesan finances said that the transfer of the money was unusual. He told the National Catholic Reporter that he had never seen a “reclassification” of funds like this one, albeit one California bishop had been scolded by a bankruptcy judge for not being forthcoming with financial data, and the Minneapolis-St. Paul archdiocese had renamed a fund, making it the property of parishes, before filing for bankruptcy. “It probably has been done in the past in other dioceses, but it’s hard to detect,” Ruhl said. “They don’t have to release any financial data and what is released is not useful.” Ruhl also said the lack of information on how the Milwaukee archdiocese arrived at the amount of money needed for the perpetual care of the cemeteries was not transparent. “I found no explanation in the court documents for how they arrived at that number,” he said.
The losers in the bankruptcy case were not only the Victims who each received meagre payouts – or nothing at all because the diocese would not or could not identify the abusers, but also the State court lawyers who worked for years without pay and will receive up to 40 percent of each of their clients’ settlement. While those lawyers will receive something, they have battled in state courts for 20 years without compensation. The Messmer High School, an independent Catholic school that serves Milwaukee’s African-American community, lost $3.4 million in support that the archdiocese had pledged when the school took over two feeder schools from the archdiocese in 2007. “We Energies”, the provider of electrical power, lost revenue of $129,437 – a sum to be picked up by the other ratepayers in the area. The Milwaukee Water Works lost revenue of $25,589, a sum that will be paid by other users. The Green Bay diocese’s tribunal lost $15,000. The U.S. Conference of Catholic Bishops lost $9,621. A number of contractors, office suppliers and other vendors lost between $773 and $9,888. In fact, all creditors were to be paid up to $5,000 of their bills, but lost the rest.
The winners of the legal settlement are, as always, the bankruptcy lawyers representing both the archdiocese and the creditors – who will receive about $20 million. Another $4.5 million will go to the lawyers involved in the cemetery trust litigation that the archdiocese says should not be included in the cost of the bankruptcy. Each of the parishes contributed $2,000 to a therapy fund for abuse victims and, as a consequence, those parishes bought immunity from future lawsuits. The Milwaukee archdiocese gained a fresh start without debt; it sold no property to reach the settlement. It emerged from the bankruptcy settlement largely intact. The diocesan cemetary fund is $57 million better off!