As It Pays for the Past, Diocese Tries to Move on

By Beth Miller
News Journal
August 7, 2011

Bishop W. Francis Malooly\'s house in Wilmington\'s Highlands is among the Catholic Diocese of Wilmington properties that must be sold to help pay settlement costs for abuse survivors. Malooly says survivors and their families have faced \"devastating harm\" -- but also parishioners and \"the overwhelming number of good priests.\"

Bishop W. Francis Malooly -- shown in the living room of the house the diocese is selling -- started moving last week to a Brandywine Hundred home in the Immaculate Heart of Mary parish. He is buying the home with his own savings and a mortgage.

The trauma remains for survivors of sexual abuse by priests in the Catholic Diocese of Wilmington. They still have nightmares. Many relationships remain broken beyond repair. Some have lost jobs, homes, mental stability, and only God knows what else. Some are dead.

But 150 of those survivors have had their days in court. They didn't face their attackers in a criminal court, as they more likely would now. It wasn't before a jury in a civil court, either, as some of them hoped after Delaware lawmakers opened the courthouse doors to their claims.

It was in U.S. Bankruptcy Court, where the 143-year-old Catholic Diocese of Wilmington sought protection as it attempted to settle the more than 130 lawsuits filed against it during a two-year legal "window" opened for cases that otherwise would have been barred by the statute of limitations.

Bankruptcy court reduces damages to dollars and cents -- in this case, a pot of money that has grown to just over $100 million, including $23.5 million from a settlement reached Thursday by the Oblates of St. Francis de Sales Inc. and 37 victims of its priests. It is a cold way to settle such accounts, Judge Christopher Sontchi said.

But the diocese's bankruptcy plan, which includes a $77.4 million payment to the Settlement Trust Fund, will keep it solvent and prevent wholesale closings of schools, parishes and other church ministries.

Now even higher prices must be faced. The scandal -- what the diocese has admitted was decades of child abuse, cover-up and quiet transfers of offending priests from one parish to another -- staggered the faithful in the pews, the priests who served them and those who evaluated the church's message by the response of its messengers.

"Survivors and their families have suffered devastating harm," said Bishop W. Francis Malooly. "While we know that dollars will never be able to take away the harm that has been created, we pray that the settlement will provide some source of healing for those who have been terribly affected by the crimes of some Catholic priests."

Parishioners and "the overwhelming number of good priests" also have suffered, Malooly said.

"Faith has been shaken as God's people have contemplated the harm caused by these terrible crimes," he said. " ... But notwithstanding this crisis, the faith of the people remains and the loyalty and good services of our priests continue."

Malooly's three-bedroom brick residence at 1307 Bancroft Parkway in Wilmington's Highlands neighborhood is among the diocesan properties that must be sold to help pay settlement costs. The house, purchased by the diocese in 1978, was appraised at $550,000 but now is listed for $525,000.

Saturday, a pair of tall, wooden croziers -- the staff the bishop carries as a symbol of his role as shepherd of the flock -- still stood in a corner of the entry hall and a third was in a black carrying case on the floor. But Malooly said he started moving last week to a Brandywine Hundred ranch home in the Immaculate Heart of Mary parish. He is buying that home, he said, with his own savings and a mortgage.

The diocese is selling off several other properties, too -- including the site of the now-closed Seton Villa and the Children's Home in Claymont. It plans to stop publishing its weekly newspaper, The Dialog, and will lay off 22 diocesan employees. Malooly said none of the recent Catholic school closings or mergers was done because of the settlement.

But perhaps the most significant financial hit comes with the liquidation of the Catholic Foundation of Delaware, an 83-year-old fund started by the late DuPont Co. executive John J. Raskob. The fund provided decades of emergency funds and support for diocese programs, schools and facilities. It will be drained of more than $54 million and have less than $1 million -- in funds restricted by donors -- remaining.

Attorney Stephen Jenkins, whose firm provided more than 1,500 hours of free legal assistance to Catholic organizations in the case, said the loss of the Catholic Foundation was one reason St. Paul's School closed, leaving many low-income city residents without that church-based education.

"As terrible as what those abuser priests did, I do know that not one of those kids at St. Paul's School had anything to do with that," he said.

Malooly said donations have remained steady in the parishes and have increased in most. The Annual Catholic Appeal is over its target by 10 percent, with more than $4.4 million pledged to date, he said.

The Very Rev. James Greenfield, provincial of the Oblates of St. Francis de Sales, said insurance will cover more than half of the Oblates' costs. The rest will come from Oblate funds, he said. No money from Salesianum School or other donor money will be used for that purpose, he said.

"This will put us in a financial straitjacket for many years," Greenfield said, "but we have done it internally, looking at our own resources, fixed assets, and looking at monetizing those. Have to do that quickly so that we can make good on the settlement."

In late September, the money will be deposited into a Settlement Trust Fund and divided up according to a formula that attempts to recognize the nature of the abuse, the severity, the frequency, the age of the child when the abuse occurred and other factors. A chunk of the money will cover millions in attorneys' fees.

The settlements don't fix everything for anyone. But they acknowledge -- once and for all -- that the abuses occurred in horrific number and at high cost to hundreds of Catholic families.

They remove a dark legal cloud that has hung like a thick canopy over much of the church's response to the scandal.

And they raise new questions for the faithful and those who have felt betrayed by their church.

What will the Catholic Church of Delaware be like when it emerges from bankruptcy?

That jury is still out, said John Sullivan, chairman of the Coastal Delmarva affiliate of Voice of the Faithful, a national Catholic layman's group that has fought for victims, offered support to priests of integrity and advocated for church reforms.

"If bishops, pastors and priests had done the right thing in the very beginning, we would not be where we are today," Sullivan said. "It's not the people who caused this settlement. It's the failure of the structured church to do what's right. There has to be transparency and accountability."

Some believe the church -- forced to face its crimes and account for them -- will learn from the scandal and emerge stronger, if smaller.

"We'll recover," said Jim Cranwell of Lewes, who is active in St. Jude the Apostle parish. "A lot of Catholics have turned away because of it, so I've heard. But there's no reason to turn away from God. ... And I've got to support my church. I've never questioned that at all."

"I think it's a great point of closure," said Hugh McNichol, a Catholic businessman and writer who grew up in South Philadelphia, studied for the priesthood and now is a member of the St. John the Beloved parish in Delaware. "The diocese can now concentrate on what it does best -- being a religion. The whole concept of bankruptcy and litigation, quite frankly, is the antithesis of what the religious should be.

"We've passed the acceptance stage, now we have to have forgiveness and move on to healing," he said. "Forgiveness and healing go hand in hand. Jesus said very little, but he did say, 'Love one another and forgive others.' ... Now we are able to release the baggage and move on to what we are primarily set to do as Catholic churches -- to proclaim the Good News and to live and seek holy lives among our priests, people and parishes."

Vatican slow to laicize

For the diocese and Oblates, the settlements clear away scores of lawsuits and prevent jury verdicts like the $41 million award granted to Navy Cmdr. Kenneth Whitwell, a 1985 Archmere Academy graduate who sued the school, the diocese, the Norbertine religious order and its priest, the Rev. Edward Smith, for hundreds of abuses he suffered while a student. Whitwell later settled with the diocese for $450,000 and with Archmere and the Norbertines for an undisclosed sum.

At least a dozen cases still are pending against religious orders, whose priests operate autonomous of the diocese, answering not to the local bishop but to a provincial and The Vatican. Still, each order priest must have the permission of the diocese to minister within its geographical jurisdiction.

The orders sued in Delaware -- the Oblates who run Salesianum School, the Norbertines who ran Archmere Academy, the Capuchins who taught at St. Edmond's Academy and have run other charitable works including the Emmanuel Dining Rooms -- were not included in the diocese's bankruptcy plan. But those negotiations laid a foundation for talks between survivors' attorneys and order attorneys, and those who sued religious orders committed their awards to the Settlement Trust Fund, even though they might have won more by pursuing separate cases.

Because those orders extend to far-flung areas around the world, some agreements made by the diocese were not adopted. The Oblates, for example, agreed to release records and to impose certain protective policies on priests of the Wilmington/Philadelphia province -- only about half of their worldwide population of priests.

And while the Diocese of Wilmington has asked Pope Benedict to laicize the nine priests it has removed from ministry because of abuse allegations, only two -- Francis G. DeLuca and Ed Dudzinski -- have had their priestly faculties stripped by the pope. The other requests still are pending.

"That process began in 2009 and I am trying to move it along," Malooly said.

Greenfield, leader of the Oblates' Wilmington/Philadelphia province, has chosen not to make such a request of the Vatican.

"We abhor the thought of abuse of any child or adolescent by anyone, particularly by one of our own," Greenfield said. "However, we Oblates feel that we are in the best position to ensure that the men who have abused children or adolescents receive spiritual guidance, that they have access to psychiatric or psychological treatment as necessary and, most importantly, to ensure that their activity is closely supervised and monitored as they engage useful work solely within the Oblate community that does not involve dealing with the public. I think this is both the socially responsible and Christian course of action."

Valerie Marek of Survivors of Abuse in Recovery worries about abuser priests who now are living in the community -- including those under supervision.

"Pedophiles are pedophiles," she said. "They'll put themselves where the kids are. It doesn't matter how closely you watch them."

Powerful stories

The Diocese of Wilmington's bankruptcy case covered some unfamiliar territory.

Judge Sontchi, who steered the case through almost two years of legal minefields with mediation help from Judge Kevin Gross and retired Judge Thomas Rutter, ruled that a pooled investment account that included resources of parishes and Catholic Charities would be considered among the diocese's assets. That raised the stakes significantly.

He also allowed survivors to tell their stories in court -- a step that James Holman, a Salesianum School graduate and co-chairman of the official seven-member survivors committee, found especially powerful.

"That was not required," said Holman, who is a bankruptcy attorney in Philadelphia. "The judge has complete control. But he allowed people to sort of penetrate the wall that lawyers would otherwise put up and tell their stories on their own. When you look at the way people have been put on the shelf for so many years, finally having a chance to talk about it -- where people are taking it very seriously -- is very moving."

Holman said he originally filed suit anonymously -- as one of many "John Doe" plaintiffs. But as the bankruptcy case emerged, he realized his skills could be useful and agreed to be named as a committee member.

The committee negotiated terms that weren't financial, including appointment of an independent child protection consultant to review and make recommendations on related church policies and procedures, the release of church files on abuser priests, and more open communication about what happened -- measures meant to protect children now and in the future.

"Most of these provisions have to do with transparency and outside validation -- not one side taking shots at the other," Holman said. "It puts it on neutral territory."

Help from within

From 2002, when church records in Boston first were opened to scrutiny -- forcing the scandal into public view - some have said the problem was nothing more than anti-Catholic prejudice.

But Catholics were at the forefront of the issue in Boston, Los Angeles, Portland -- and in the Diocese of Wilmington, which includes about 230,000 Catholics throughout Delaware and the Eastern Shore of Maryland.

Wilmington attorney Thomas Neuberger, a graduate of Salesianum School, filed the first of his firm's 100 lawsuits in 2004, pushing for justice for Eric Eden, who later won a settlement for abuses by former Salesianum Principal James W. O'Neill.

State Sen. Karen Peterson, a Catholic and Democrat from Stanton, was the lead sponsor of Delaware's Child Victims Act, considered one of the toughest child-abuse laws in the nation. The law, signed by then-Gov. Ruth Ann Minner in 2007, gave survivors of child sexual abuse two years to bring claims that otherwise would have been barred by the statute of limitations.

Nuns and several priests spoke on behalf of abuse survivors to community and church groups, some -- the Rev. Richard Reissmann -- even testifying for legal reforms in Legislative Hall.

Lay Catholics in Delaware formed two chapters of the national group Voice of the Faithful, testifying for the Child Victims Act and pressing for other reforms in the church.

An extensive coalition of advocates was led by Dr. Thomas Conaty, a dentist and lobbyist whose son, Matthias, was co-chair of the survivors committee and has a suit pending against the Capuchins for abuse by Paul Daleo while he was a student at St. Edmond's Academy. Matt Conaty has become a national advocate for similar legislation.

"It was very difficult for me as a Catholic to introduce that legislation," said Peterson, a lifelong Catholic who was at St. Elizabeth High School when Francis DeLuca -- sued by 20 survivors -- was a priest there. "I offered to meet with the diocese three times and all three times they rejected those offers. If they had been willing to address it, the bill might have looked quite different. But they didn't. They thought they were above it all, untouchable. And they weren't. The harm that's been done to the victims is immeasurable. When I saw the people who came forward -- I realized if they've got the courage to tell these stores, I as a Catholic have to have the courage to try to get them some justice."

Sister Maureen Paul Turlish of New Castle, an advocate for victims and a nun with the Notre Dame de Namur order, said the legal settlement does not settle the matter, but she is glad Delaware's survivors were able to endure the process and find some resolution. She grieves for those who lost their faith.

"That's something someone will have to stand before God and answer on," she said. "There were only two times that Jesus got mad -- once when he threw the moneychangers out of the temple, and once when he talked about children and said anyone who would hurt any of these children, it would better that a rope was tied around their necks and they were thrown into the depths of the sea."

She continues her fight in Philadelphia, where continuing allegations and cover-ups have surfaced in yet another grand jury investigation this year. No effort to change Pennsylvania's statute of limitations has succeeded yet.

"If you look at what Delaware has been through -- as excruciating as it is -- there's nothing that is not either known or will be known when more documents are released," Holman, the attorney and survivor, said. "It's the exact opposite [in Philadelphia]. There's a complete firewall of information and no law that will force a different result."

"Is that better for the Philadelphia church? In some ways. But I think Wilmington is light years ahead."

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