Proposed sex-abuse settlement more than just money

In a settlement offer that goes beyond a sizable dollar amount, the Diocese of Spokane would pay 75 sex-abuse victims nearly $46 million, apologize to them in writing, give them a forum to speak and write about their ordeal, and disclose to parishioners the names of offending priests.

The proposal, if approved by victims and U.S. Bankruptcy Court, calls for one of the largest average per-victim payouts of such cases in the country.

Exactly where the $45.7 million would come from remained to be worked out Wednesday, but a lawyer for the diocese said it would probably be through a combination of insurance money, the sale of diocesan property and contributions from parishes.

The diocese filed for bankruptcy in December 2004.

Bishop William Skylstad announced the settlement offer at a news conference in Spokane Wednesday. Earlier in the day, a committee of victims announced it would recommend to all 75 victims that they accept the proposal.

"We feel like this is pretty much what we wanted," said Mark Mains, an Edmonds resident who said his abuser was former Spokane priest Patrick O'Donnell. Mains is a member of the Tort Litigants Committee, representing those victims who've filed lawsuits.

Under the proposal, the victims themselves would decide how the money should be split among them, he added. "It's a dollar amount that will provide an opportunity for healing while holding the diocese accountable."

Proposed settlement provisions


The Diocese of Spokane would pay nearly $46 million to 75 sex-abuse victims, with 80 percent to be paid by Oct. 1, 2007, and the balance over the following three years. Other provisions would require Bishop William Skylstad to take the following steps:

Go to each parish where a victim was abused and name the offending priest or clergy member.

Stop referring to victims as alleged victims.

Allow victims to address parishes and to write about their experience in the diocesan newspaper.

Write letters of apology to victims and their family members.

Advocate for the abolition of statutes of limitation on sex crimes.

Nonfinancial details

Perhaps more important, Mains said, were the parts of the offer that had nothing to do with money. Those include the diocese no longer referring to victims as "alleged" victims, its giving space in the diocesan newspaper to victims to tell their stories, and adding to a diocesan board that reviews sex-abuse complaints two members acceptable to the victims' committee.

In addition, Skylstad would advocate for lifting the criminal statute of limitations on child sexual abuse and would go to parishes where abuses occurred to identify the abusive priests.

Those provisions provide "a whole lot of attempts at healing and protection," Mains said.

Lawyers for the victims and the diocese hope all 75 victims will agree to the proposed settlement. If they are not unanimous, more negotiations are likely.

Skylstad, who is also president of the U.S. Conference of Catholic Bishops, said at the news conference that the proposed settlement "is not the end, but the beginning of the end. Much work remains before this settlement will become a reality."

120 days to decide

The settlement proposal would cover only the 75 victims who have filed lawsuits, giving them 120 days to decide whether to accept the offer.

The diocese knows about an additional 15 victims who have not yet filed suits, and others may also come forward before a March 11 cutoff date to be part of the bankruptcy proceeding.

In addition, a trust fund will likely be created for those who now are minors and those with repressed memories who may come forward after March 11.

The U.S. Bankruptcy Court must also approve the proposed settlement as part of the diocese's larger reorganization plan.

The proposal calls for the diocese to pay 80 percent of the $45.7 million by Oct. 1, 2007, and the rest by Oct. 1, 2010.

But what nobody seemed to know yet is exactly where the money would come from. When the diocese filed for bankruptcy a year ago, it claimed assets of about $11 million and total liabilities of about $81 million, with $76 million of that in unpaid sex-abuse claims.

The diocese's assets have since gone down to about $8 million, in part because of the ongoing legal proceedings, said Shaun Cross, a bankruptcy attorney for the diocese. Those assets would be sold, including the chancery and bishop's residence, Cross said. Its current estimate of known sex-abuse claims has been amended to about $50 million, Cross said.

Insurance coverage

While church officials hope their insurance companies will pay a significant amount of that, some of the diocese's leading carriers are balking. Five owned by the same large insurance organization, CNA, filed a lawsuit in November 2004, saying they should not have to pay for settlements in sex-abuse cases involving five former Spokane priests.

The diocese is in discussion with those carriers, hoping to reach a settlement. Cross said any settlement amount would "probably not be close" to $50 million but "hopefully it will be a significant sum."

Parishioners, though, are "going to have to make a significant long-term sacrifice to make this settlement work," Cross said. "Parishioners are going to have to give a lot of money and raise a lot of money. I'm not sure how it's going to be done at this stage."

If the insurance companies don't come through with enough, "it's a possibility that some parish properties will be sold," Cross said.

Selling churches?

U.S. Bankruptcy Court Judge Patricia Williams decided in August that parish churches are owned by the diocese and therefore subject to being sold, if necessary, to pay settlements to sex-abuse victims.

The diocese has appealed that decision, and arguments in that case could begin in May.

But if the settlement proposal is approved by the 75 victims, and by the bankruptcy court, the diocese would seek to put that appeal on hold.

Spokane's proposed settlement is among the larger average per-victim payouts since such cases have been settling around the country.

By comparison, the Seattle Archdiocese has paid about $20.4 million so far to settle with 204 victims.

Among other settlements:

• In 2003, the Boston Archdiocese reached an $85 million settlement with 552 people.

• In 2004, the Diocese of Orange, Calif., agreed to pay $100 million to 87 victims.

• In June 2005, the Diocese of Covington, Ky., agreed to create a $120 million fund to compensate hundreds of victims.

• And in November 2005, the Archdiocese of Hartford, Conn., agreed to pay $22 million to 43 people.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. Information from The Associated Press was included in this report.