Parishes giving $1.5 million toward settling sex cases

Catholic parishes are contributing $1.5 million toward a broad legal settlement expected to help the church resolve clergy sex abuse claims and avoid the foreclosure of churches and schools.

It’s the second settlement in five years that has been billed as ending the bankruptcy of the Catholic Diocese of Spokane, which has struggled with more than a decade of scandal.

A three-page letter written by Bishop Blase Cupich and distributed to parishioners on Sunday sought to assure churchgoers that the threat of foreclosure had passed. The $1.5 million was far less than initially feared to clear up lingering bankruptcy issues – most notably more than two dozen unresolved claims filed by former Morning Star Boys’ Ranch residents who said they were abused.

Cupich said now that the cases have been settled, he will review the accusations of abuse against Morning Star’s longtime director, the Rev. Joseph Weitensteiner, and at the same time refer the matters to a diocesan board that vets such allegations to determine whether they are credible.

“It’s up to us, now, to make that determination, which we will do in a respectful way,” Cupich said. “Father Joe has not been formally withdrawn from ministry. And I am going to make sure that I act responsibly in all of this.”

Watch John Stucke talk about the story to KHQ’s Dave Cotton

Weitensteiner has been at the center of the Morning Star abuse accusations since the issue erupted seven years ago.

As the number of accusations and lawsuits against the priest and the ranch for troubled boys mounted, Weitensteiner’s defense steeled for a legal fight.

Known as Father Joe, a jury ruled against one alleged victim two years ago, handing the ranch and Weitensteiner, who has denied the accusations, a legal victory.

The case also helped set the stage for mediation.

Cupich took over as bishop in September 2010 and within months had orchestrated the beginnings of mediation under the guidance of U.S. District Judge Michael Hogan of Oregon. Hogan was assisted by Sandpoint bankruptcy attorney Ford Elsaesser, who advised Cupich, and attorney Dillon Jackson, a Seattle attorney who helped coordinate and advise the plaintiffs.

It was Hogan and Elsaesser who were credited with piecing together the successful mediation between the family of Otto Zehm and the city of Spokane.

Hogan brought a reputation for success. He mediated an end to the bankruptcy settlement of the Archdiocese of Portland years ago and has honed an expertise in resolving child sex abuse cases.

“All sides in these matters have to have confidence that something can and should be done,” he said in an interview Tuesday. “In many ways it comes down to my belief in reconciliation. It is one of the higher qualities you can call everyone to.”

He noted the animosity of the Morning Star cases as a significant hurdle.

“You have to be able receive the emotions and you must appreciate them for what they are,” he said, “because feelings are real and you have to treat them with respect.

“Only then can you move ahead and see if there is a basis for agreement. That’s what happened in this matter.”

The settlement amounts in the Morning Star cases have not been publicly released, but the Morning Star and six insurance companies all contributed to a fund to settle the cases.

Cupich, who came to Spokane from Rapid City, S.D., said that having “a fresh set of eyes” on the legal problems aided the effort.

“Maybe that newness provided some energy and another chance,” he said. “There was a lot of complexity and moving parts involved. In the end we needed to work together as adults.”

Hogan said that the bishop was instrumental in bringing the sides together.

“He regretted these things that made the claims possible or necessary,” Hogan said, “but also was really willing to take a businesslike approach to getting things done.

“While he represents an interest and strongly defended the church, nevertheless he didn’t defend inappropriate activity. And he was a tremendous partner in finding resolution of these matters.”

The diocese initially settled its bankruptcy case in 2007, pooling together insurance policies, parishioner gifts and cash from the sale of miscellaneous assets and property. The $48 million sum was divided among nearly 180 victims of clergy sex abuse from decades ago and lawyer fees.

It was supposed to mark the end of the case.

But the settlement fund was drained when some victims were allowed to file late claims, sparking worries that some parishes might be subject to foreclosure to settle the cases.

Hogan noted that the initial settlement may have been overly optimistic.

“Probably all the sides were a little too confident about there not being future claims when they reached the first settlement,” he said.

After the bankruptcy case was reopened, a series of legal arguments among lawyers led to appeals all the way to the 9th U.S. Circuit Court of Appeals.

All of those issues will be abandoned as part of the settlement, Hogan said.

The judge will now review any new claims to determine validity and a potential award. A new trustee, Maggie Lyons, will be appointed to process new claims and make payments.

In his letter to parishioners, Cupich wrote: “This is an important and significant turning point in a very sad chapter of our diocesan history. We can never forget the harm done to children, who deserved better from the Church and her ministers.

“Once again, I apologize to the survivors of sexual abuse by clergy and to the families of survivors. We will not waver in staying vigilant and making sure that our churches and school remain safe environments for our young people.”