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Church weighs borrowing to settle claims

Plaintiffs pressing to depose cardinal after deal rejected

By Stephen Kurkjian and Michael Rezendes, Globe Staff, 5/5/2002




Among the properties the Boston Archdiocese could mortgage are, from top, Our Lady's Hall in Milton, Pope John XXVIII Seminary in Weston, and the Cardinal Cushing Center in the South End. (Globe Staff Photos / Dominic Chavez)

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Some say 'no' to Law's appeal

The chief financial officer of the Roman Catholic Archdiocese of Boston said yesterday that the church is considering mortgaging some of its real estate to help raise the tens of millions of dollars it would need to fund a proposed global settlement with alleged victims of clergy sexual abuse, including those molested by pedophile John J. Geoghan.

Chancellor David W. Smith said the archdiocese will need at least several months to determine how much it will need to finance such a fund. But the lead lawyer representing Geoghan's alleged victims said he would ask a Suffolk Superior Court judge tomorrow for permission to depose Cardinal Bernard F. Law and will consider filing suit to enforce the $15 million to $30 million agreement rejected Friday by the 15-member archdiocesan Finance Council.

''There is no trusting these people,'' said lawyer Mitchell Garabedian. ''They have breached their contract with me and my victims, and I will be making that case in court.''

As pressure grows to pay for the clergy sexual abuse cases, parishioners are being asked today to donate to the Cardinal's Annual Appeal, which last year raised $16 million.

The possibility that the archdiocese would mortgage some of its real estate - including church buildings, schools, hospitals, and facilities used by charitable agencies - was one of several scenarios that emerged yesterday after the Finance Council rejected the settlement announced in March.

Law had urged the council to approve the settlement. But council members, who are appointed by Law, voted to reject the agreement hammered out by lawyers for the archdiocese and Garabedian to settle the claims of 86 alleged victims of Geoghan, a former priest and convicted child molester accused of abusing more than 130 children.

Council members said the archdiocese does not have the money to cover the agreement and additional settlements with hundreds of other potential victims who are stepping forward to say they were abused by Geoghan and other priests.

The vote Friday represented the first time the Finance Council had turned down a proposal by Law in his 18-year tenure as head of Boston's archdiocese.

Smith declined to put a figure on the amount the church would need to fund a proposed ''nonlitigious global assistance fund.'' First, he said, the archdiocese must estimate the number of new potential claims and gauge available insurance overage.

But one member of the Finance Council said the archdiocese would need about $50 million for the fund.

On Friday the Finance Council agreed to establish a separate $5 million fund to pay for psychological counseling for victims, according to an adviser to Law. That fund would be managed by former Fidelity fund manager Peter Lynch and Mario J. Gabelli, another investment specialist.

Winning the support of victims and setting the groundrules for financial awards appear to be major hurdles for the archdiocese. Nearly every lawyer representing clergy sexual abuse victims has criticized the council for rejecting the Geoghan settlement, although some of them did not specifically find fault with the idea of a global settlement fund.

Members of the Finance Council interviewed after Friday's meeting said they had voted against the Geoghan settlement in part because it provides for payments of more than $400,000 for some rape victims, which would set a precedent that they believe the archdiocese cannot afford.

''Critical services of the archdiocese - parochial schools, hospitals, and churches - would be jeopardized if we paid future claims according to the Geoghan limits,'' one adviser to Law said. The adviser said that although the council has not capped payments to victims, it will consider a cap of $200,000 for those who have suffered rape or other especially serious forms of abuse.

The adviser said the Finance Council is seeking to avoid selling any highly visible church properties, such as the chancery and the cardinal's residence, both in Brighton, and Pope John XXIII Seminary in Weston.

Instead, Smith said the archdiocese is hoping to mortgage some of its real estate holdings, to dip into an insurance reserve estimated by one adviser at $7.5 million, and to raise additional funds through donations.

But first, Smith said, archdiocesan officials will try to determine the number of alleged victims. Last month, the Globe reported that more than 500 people who say they were molested by priests have retained legal counsel since the scandal erupted in January.

The dates of the alleged molestation are important, because the archdiocese's insurance coverage is depleted for the 1950s, '60s, and '70s. Therefore, claims for abuse in those years would have to be paid by the archdiocese.

The insurance coverage limit for molestations that occurred in the 1980s has not been reached, although most claims involved molestations that allegedly occurred in the 1970s, according to an official involved in church insurance payments.

Jeffrey R. Anderson, a Minnesota lawyer who has represented hundreds of victims of clergy sexual abuse, said he knows of no precedent for the global assistance fund the Boston archdiocese has proposed.

''It's never been done and never been tried as a unilateral initiative of a defendant accused of wrongdoing,'' Anderson said. ''It really just points to the arrogance of an institution that feels it's above the law.''

At first glance, the settlement fund proposed by the archdiocese appears to resemble the compensation fund the federal government established after last year's terrorist attacks on the World Trade Center and the Pentagon.

The fund was established by Congress with money from a $15 billion airline bailout bill and is set to pay the families of victims an average of about $1.85 million, with a minimum payment of $250,000.

But Anderson brushed aside the comparison. ''It wasn't the terrorists coming forward and saying: `We did wrong. Here's how we can make it right for you,''' he said. ''It was the government trying to make sure that innocent victims wouldn't suffer.''

By comparison, the $15 million to $30 million deal between lawyers for the archdiocese and the 86 alleged Geoghan victims that was rejected Friday appears to be lower than jury awards in recent cases of clergy sexual abuse in other states.

In 1997, a jury in Dallas awarded 11 plaintiffs $119.6 million after finding the diocese negligent in its handling of the Rev. Rudolph Kos, who was convicted of child molestation.

After the Dallas diocese appealed, the plaintiffs settled for $31 million, which compelled the diocese to sell off some of its real estate to make the settlement payments and ward off bankruptcy.

More recently, the Los Angeles archdiocese and the Orange County diocese made a joint $5.2 million settlement with Ryan DiMaria, a 28-year-old California man who charged that he had been molested as a minor by an Orange County priest, Monsignor Michael A. Harris. Harris has denied any wrongdoing.

But one local lawyer familiar with the negotiations that led to the settlement agreement rejected Friday said comparisons with cases in other states are not necessarily valid because Massachusetts juries cannot award punitive damages, except in wrongful death cases.

The lawyer also noted that a clergy sexual abuse lawsuit has never been presented to a Massachusetts jury. ''No one really knows what these cases are worth,'' he said.

The lawyer and others have said they doubt that church officials can hope to be protected by the state's $20,000 liability cap for charitable organizations. Many lawyers believe that the cap applies only to the archdiocese, not to individual church officials named as defendants in suits alleging negligent hiring and supervision.

The 86 Geoghan victims covered by the agreement rejected by the Finance Council did not sue the archdiocese. Instead, they filed 84 lawsuits naming Law, five other bishops, and eleven more church officials as individual defendants.

Those individuals are covered by insurance companies that could be forced to make payments higher than those that would have been made under the agreement rejected Friday.

Garabedian said yesterday that he hopes to depose Law within the next two weeks and is preparing to file 17 new lawsuits on behalf of additional alleged victims of Geoghan. He also vowed to try all of the 84 suits that were covered by the settlement agreement rejected Friday.

At a press conference, Garabedian discounted Smith's assertion that the Finance Council was forced to reject the settlement agreement because it negotiated the deal before it knew that more alleged victims of Geoghan would file suit. ''I told them for years there were going to be hundreds of victims,'' he said. ''They've been paying claims in secret for years.''

One of Garabedian's clients is Mark Keane, who has filed a suit charging that Geoghan molested him at the Waltham Boys and Girls Club. Keane said that alleged victims should not be penalized by the delay in settlement resulting from the action of the Finance Council.

''The huge cancer this has grown into wasn't the result of these victims; it was created by the church,'' he said. ''It's their fault they have this huge influx of victims, not mine.''

Keane's wife, Amy, broke down in tears before disclosing that before abandoning the settlement the archdiocese refused to pay for marriage counseling for her and her husband. ''I feel like a fool for trusting these people,'' she said.

Other alleged victims said they hope they get to face Law in a courtroom.

''I'm ready to go to court. I'm ready to sit there in a trial,'' said Tony Muzzi of Scituate, who says he was sexually abused as a teenager while a member of St. Paul's Parish in Hingham. ''I have confidence that a jury will rip the church apart,'' Muzzi said.

Jenna Russell of the Globe Staff contributed to this report. Stephen Kurkjian can be reached at kurkjian@globe.com. Michael Rezendes can be reached at rezendes@globe.com.

This story ran on page A1 of the Boston Globe on 5/5/2002.
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