Archdiocese Digs into Reserves to Settle Sex-Abuse Claims, Settles with Insurance Carrier

April 3, 2006

The Seattle Archdiocese has dug into its reserve funds to cover the cost of settling sex abuse claims, church officials said. Meanwhile, the Roman Catholic Diocese of Spokane and one of its main insurance carriers have agreed to a $5.25 million settlement in a dispute over coverage of clergy sex abuse claims.

In Seattle, payments to victims plus counseling and attorneys’ fees now total $26 million over the past 19 years, a church audit showed. The archdiocese has paid the settlements and other expenses through a combination of insurance and reserve funds from the sale of property more than 20 years ago.

The information was released as part of a national update on clergy abuse.

The reserve fund was tapped because cumulative costs exceeded the archdiocese’s self-insurance program, spokesman Greg Magnoni said. The archdiocese remains financially solvent and has avoided the problems that caused the Spokane and Portland dioceses to file for bankruptcy protection, he said.

Last year, the cost of the claims rose by about $8 million. In 2005, the archdiocese received six new allegations of clergy child sex abuse against six previously accused priests, in addition to allegations against 12 members of the Congregation of Christian Brothers religious order. All the 2005 accusations relate to incidents from 1955 to the mid-1980s.

The Christian Brothers’ accusations center around the Briscoe Memorial School for Boys, a boarding school the brothers operated in Kent until the early 1970s. The accused priests and brothers are deceased or have been removed from ministry or defrocked.

Since 1950, 53 priests from the Seattle Archdiocese have been accused of sex abuse by 202 individuals.

The archdiocese said it was still waiting to hear what will happen concerning accusations against two inactive priests. Those cases were being reviewed by the Vatican.

In a news release from the Seattle Archdiocese, Archbishop Alex J. Brunett again apologized to victims.

“I am aware of their pain and I reaffirm my personal commitment to provide counseling and pastoral care to every victim in order to heal the wounds of abuse and bring closure to all who have been harmed,” Brunett said.

Magnoni said settlements of pending cases will determine whether the diocese needs to dip further into its reserves. He said the church doesn’t expect to have to use general operating funds or parish money.

“As long as we continue to make settlements for fair and reasonable amounts, which we have for the past 18 years, there’s no reason we shouldn’t be able to cover the costs associated with sexual abuse,” he said.

In Spokane, the Roman Catholic Diocese and one of its main insurance carriers have agreed to a $5.25 million settlement in a dispute over coverage of clergy sex abuse claims.

The proposed settlement with General Insurance Co. of America, a subsidiary of Safeco Insurance, must be approved by federal district court and bankruptcy court judges, Shaun Cross, a lawyer representing the diocese, said.

“This proposed settlement will bring an end to the diocese’s legal disagreement with General about whether or not the company is obligated to provide insurance coverage for allegations of sexual abuse by clergy in the diocese,” Cross said.

Paul Hollie, a Safeco spokesman in Seattle, confirmed details of the settlement announced by Cross, but said he could not make additional comments.

The diocese, which has filed for Chapter 11 bankruptcy protection because of sex abuse claims against clergy, has offered to settle the claims of 75 victims for $45.7 million. The General payment would be placed into an interest-bearing account and released in October 2007, when the diocese agreed to pay most of the victims’ settlement.

The proposed settlement with General is a step toward paying for the so-called “global settlement,” Cross said, adding that claims are still pending with five other insurance carriers.

“We’re hopeful that the other carriers … will see what Safeco is doing and will participate in the global settlement that we are trying to put together,” Cross said.

The settlement covers policies sold to the diocese between 1958-1972, Cross said. It would relieve General of future claims by other Catholic entities in the diocese, except the Morningstar Boys Ranch, which is operated by the diocese and has been the subject of abuse claims.

Church officials previously said they thought insurance policies might pay a total of about $15 million toward the abuse claim settlement.

“This is a major step toward healing and reconciliation,” said the Rev. Stephen Dublinski, diocese vicar general. “It also brings the diocese closer to resolution of its Chapter 11.”

Spokane Bishop William Skylstad, president of the U.S. Conference of Catholic Bishops, was in Washington, D.C., on March 9 where he released statistics related to an audit of Catholic clergy sex abuse claims for the entire country during the past 50 years.

The Spokane Diocese filed for bankruptcy protection in 2004, citing claims by abuse victims of about $81.3 million against assets of about $11 million.

The diocese serves about 90,000 Catholics in more than 80 parishes in 13 Eastern Washington counties, from Metaline Falls on the Canadian border to Walla Walla on the Washington-Oregon line.

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