Suits costly for dioceses

David Schmidt was horrified by the questions he had to answer.

An alleged victim of clergy sexual abuse, the Coulee Dam resident said he felt “revictimized” during his deposition when an attorney for the Archdiocese of Portland asked him, in Schmidt’s words, if he “enjoyed being raped.”

“I was devastated,” Schmidt said, recalling the “aggressive” tactics used by the archdiocese’s attorneys. He said he sat there for five minutes, suppressing the urge to lash out. In the end, Schmidt was able to control his outrage and simply responded, “no.”

Schmidt, 60, said he was abused by two priests in Mount Angel, Ore. – one when he was 7 years old and the other when he was 14. The CEO of the Coulee Dam Credit Union blotted out the painful memories for years until they resurfaced during an intense therapy session, he said.

His lawsuit against the Portland Archdiocese, the Mount Angel Abbey and the order of Benedictine monks that founded the abbey was dismissed in April by a Multnomah County judge, who determined that the archdiocese and the abbey could not be liable for the alleged actions of the priests – one who died eight years ago at age 89 and the other who is now in his mid-80s and living at the abbey.

Schmidt is appealing the decision. It’s unclear whether the appeal will be affected by the Archdiocese’s recent bankruptcy filing, but Schmidt is determined to keep fighting. The Portland Archdiocese hasn’t offered to pay for his counseling, he said, unlike other dioceses, like Spokane.

“They’ve shown no kindness or consideration or concern over what happened to me,” said Schmidt, who drives to Spokane twice a month to attend meetings of the Survivors Network of Those Abused by Priests.

To protect itself against millions of dollars in potential sexual-abuse claims, the Portland Archdiocese this week became the first in the country to declare bankruptcy. The announcement came on the same day that two plaintiffs had been scheduled to go to trial. In the past four years, the archdiocese has paid more than $53 million to settle more than 130 claims.

Although the Spokane Diocese is facing 17 lawsuits representing 50 alleged victims, it’s not known how much the suits may eventually cost the diocese. Because its financial records aren’t public record, the diocese’s ability to withstand potential multimillion-dollar payments also is unclear.

Bishop William Skylstad “is committed to negotiating fair settlements that are within the means of the diocese to pay and yet will allow the diocese to continue its ministry to the people of Eastern Washington,” the Rev. Steve Dublinski wrote in an e-mail response to questions from The Spokesman-Review. “At this point, any speculation regarding the means of funding those settlements is just that: speculation, whether regarding the impact on parishes, bankruptcy or any other legal matters.”

The vicar general said that the diocese is working with seven insurance carriers that cover the period of claims, some dating back to the 1950s. One of those insurers is in receivership, Dublinski said, and none of the carriers has committed to provide coverage to settle the claims. If the insurance agencies were to agree to do so, the coverage levels would vary depending on the carrier and the time period.

“It is also important to understand that some of the claims are from a period of time that we have no insurance coverage at all,” Dublinski wrote.

In earlier interviews, diocese officials indicated that written policies for the 1970s were destroyed during a flood more than a decade ago at Maloney, O’Neill, Corkery & Jones Benefits Inc., the insurance broker.

It was during this time that many of the accusations were made against Patrick O’Donnell, a priest who allegedly molested dozens of boys.

Property records show that the diocese owns land assessed at $32.5 million in Spokane County, plus other parcels across its 13-county territory. According to Dublinski, the figures reflect the assets of individual parishes, not diocesan holdings. Canon or church law dictates that the bishop does not control those holdings.

Although the diocese owns farmland near Rosalia and Walla Walla, most of those parcels have been borrowed against already, Dublinski said.

The Diocese of Spokane reported $16.3 million in investments for the 2002-2003 fiscal year. According to Dublinski, $4 million of this total was in outstanding loans and only $2.5 million was available to the bishop for settlements. At the end of the 2003-2004 fiscal year, most of that $2.5 million had already been spent on operations, litigation costs, settlements and counseling for victims.

The sex abuse scandal cost the diocese $625,191 during the 2002-2003 fiscal year, with most of that money going toward legal fees and a public relations firm, according to the diocese’s finance report. No settlements were paid out during that year.

During 2003-2004, the diocese spent $135,000 on three settlements. Although the diocese has asked insurance carriers to reimburse those claims, it is still awaiting a response from the insurance companies, Dublinski said.