21 Feb 2011

Lawyer suggests Milwaukee archdiocese shielding assets to avoid paying compensation to clergy abuse survivors

Journal Sentinel - Milwaukee, Wisconsin     February 11, 2011

Archdiocese accused of moving funds

It says $75 million transfer is not an effort to shield assets

By Annysa Johnson of the Journal Sentinel



An attorney for victims of clergy sex abuse suggested Friday that the Archdiocese of Milwaukee moved as much as $75 million off its books over the last six years in an effort to shield it from sex abuse settlements - allegations denied by the archdiocese.

Attorney Jeffrey Anderson of St. Paul implied the archdiocese engaged in a shell game during a bankruptcy hearing before Assistant U.S. Trustee David Asbach.

Anderson questioned archdiocese chief financial officer John Marek about the whereabouts of a $75 million account that last appeared on the archdiocese's audited annual financial statements in 2003-'04. And he questioned the transfer of a separate $55 million into a newly created cemetery trust in 2008, a year after the Wisconsin Supreme Court opened the door for victims to sue the archdiocese for fraud.

Marek, who was hired by the archdiocese in 2007, could not answer questions about the $75 million. He said the cemetery funds had previously been in an account under the control of the archbishop but had always been "treated as a trust."

"We have serious questions about what we've seen and heard today," Anderson said after the hearing at the federal courthouse. He vowed to depose current and past bishops, including New York Archbishop Timothy Dolan, in an effort to get answers.

In an e-mail response to questions from the Journal Sentinel after the hearing, a spokeswoman for the church denied it moved assets to shield them from victims.

"To the contrary, the archdiocese has been liquidating all nonessential assets for years to help pay for the costs of therapy and voluntary settlements," Julie Wolf said.

Wolf said the $75 million belonged to parishes and was held by the archdiocese in an investment account until 2004, after which it "ceased providing such services." Archdiocese bankruptcy attorney Daryl Diesing said he believes the money was returned to the parishes.

She quoted the bankruptcy financial statements to explain the cemetery trust, saying it was created in 2007 to "formalize the existing trust relationship" that dated to the early 1900s.

The archdiocese filed for Chapter 11 bankruptcy protection in January, saying it was the best way to equitably compensate victims of clergy sex abuse and maintain the essential missions of the church. Its financial statements, filed with the court this week, list $40.7 million in assets and $24 million in liabilities, including $13.7 million for a health care plan for retired priests.

The church maintains that the vast majority of its assets are in trusts and restricted accounts, leaving only about $7 million for settlements, though it became clear Friday that victims intend to challenge that.

So far, the courts have barred the archdiocese from tapping insurance to fund settlements because the allegations involve fraud, rather than accidents. However that is on appeal to the Wisconsin Supreme Court.

Friday's meeting was the first opportunity for creditors to question the archdiocese about its finances.

Anderson, who travels the country handling priest abuse cases, and Los Angeles bankruptcy attorney Gillian Brown dominated the hearing with a line of questioning aimed at undermining the archdiocese's assertions that its parish assets and trusts - including the $105 million Faith in Our Future campaign trust - cannot be used for settlements.

Diesing, the archdiocese's bankruptcy attorney, objected repeatedly, arguing the questions strayed beyond the scope of the hearing, which is intended to focus on the financial statements. Asbach, who had given Anderson some leeway to proceed, eventually reined him in.

"We're not turning this into a deposition," he said.

Brown suggested no asset would be overlooked, asking Marek at one point about the value of bishops' rings, crosses and other jewelry, which was listed as "unknown."

Diesing and Marek agreed to provide information about the appraised value of the items, along with several other documents requested by the victims and Asbach.

But Marek suggested the jewelry - which includes the rings of past bishops - has greater sentimental, rather than economic value.

"You'd look at it and say, 'It's a nice cross,' but I wouldn't give you $10 to wear it to a party tonight."

This article was found at:

http://www.jsonline.com/features/religion/116026364.html

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New York Daily News - February 13, 2011

Archbishop Timothy Dolan slams charges that his old diocese hid millions to avoid paying victims

BY DAVE GOLDINER  |  DAILY NEWS WRITER



Archbishop Timothy Dolan slammed as "ludicrous" Sunday allegations that his old diocese in Milwaukee hid $130 million to avoid paying child abuse victims.

"To think . . . like Dolan's got some off-shore account in the Cayman Islands or something, this is just ludicrous," Dolan said after Mass Sunday at St. Patrick's Cathedral.

Dolan said he was "saddened" by the claims, which were raised by lawyers for alleged victims of pedophile priests.

"Darn it, I think the archdiocese has done a good job," he said. "And Lord knows, I worked my hardest."

The lawyers want to depose Dolan and other top Catholic leaders over the funny-money charges.

Dolan said the allegations have tarnished the good names of those on a financial oversight panel and insisted he welcomes any probe.

"These are terribly irresponsible charges," Dolan said. "Any law enforcement officers want to talk with me, be my guest. I have nothing to hide."

Dolan led the Milwaukee archdiocese for seven years--as accusations of priestly misconduct grew--before being named spiritual leader of New York's 2 million Catholics in 2009.

A lawyer told the Milwaukee Journal-Sentinel paper that the Milwaukee archdiocese played a financial shell game to hide $75 million. An additional $55 million went to a cemetery fund.

The Milwaukee archdiocese, faced with a flood of child sex lawsuits, filed for bankruptcy last month.


This article was found at:


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6 comments:

  1. 500-plus sex-abuse claims filed against archdiocese as deadline looms

    By Annysa Johnson, Milwaukee Wisconsin Journal Sentinel February 1, 2012

    More than 500 people have filed sex abuse claims in the Archdiocese of Milwaukee bankruptcy in advance of today’s 4 p.m. deadline. It is the largest number of claims among the eight Catholic dioceses to seek bankruptcy protection since 2004 in response to sex abuse allegations, and on par with a Jesuit bankruptcy that covered five states.

    Victims and their attorneys called the numbers staggering and just the tip of the iceberg, noting that statistically only a small percentage of sex abuse victims come forward.

    Archdiocese spokesman Jerry Topczewski said the church had cast a wide net for victims in compliance with the court's instructions, and had no expectations regarding the numbers that would come in. He reiterated Archbishop Jerome Listecki’s assertion that it would seek to bar all claims it is not obligated to cover under bankruptcy law, regardless of whether the abuse occurred.

    Bankruptcy Judge Susan V. Kelley will consider the first of the archdiocese's motions for summary judgment objecting to three claims from the 1970s and ‘80s involving two priests and a choir director at a hearing Feb. 9. The archdiocese argues they should be thrown out because they were filed beyond the statute of limitations, involve a victim who received a prior settlement and a perpetrator it says was not a direct employee of the archdiocese.

    Victim attorneys have characterized the trio of motions as a test case that, if successful, the archdiocese will use to bar the vast majority of claims in the bankruptcy.

    The archdiocese has asked the court for permission to establish a $300,000 therapy fund to assist those who were abused but whose claims are dismissed. Topczewski said the fund could be replenished as needs arise.

    http://www.jsonline.com/blogs/news/138504549.html

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  2. 8,000 instances of abuse alleged in Archdiocese bankruptcy hearing

    By Annysa Johnson, Milwaukee-Wisconsin Journal Sentinel February 9, 2012

    Sealed documents filed in the Archdiocese of Milwaukee bankruptcy identify at least 8,000 instances of child sexual abuse and 100 alleged offenders - 75 of them priests - who have not previously been named by the archdiocese, a victims' attorney said Thursday.

    Archdiocese spokeswoman Julie Wolf said she did not have enough information to respond to the assertion, made by attorney Jeffrey Anderson during a pivotal hearing before U.S. Bankruptcy Judge Susan V. Kelley. Anderson represents about 350 of the 570 victim-survivors who have filed claims in the case.

    But Peter Isely of the Survivors Network of Those Abused by Priests speculated that some are likely members of religious orders, such as Capuchins or Franciscans. Order officials do not typically make public the names of their accused members, and the archdiocese claims it is not responsible for them, though they have historically helped to staff its parishes and schools.

    "This is a public safety crisis, a child safety crisis that needs to be investigated," Isely said at a news conference on the federal courthouse steps, surrounded by fellow survivors and reporters.

    "We need to know who they are and where they are. How can there be 8,000 crimes committed by over 100 offenders and there be no accountability?" he said.

    Kelley let stand, at least for now, two survivors' claims that the church had sought to bar, arguing they were beyond the statute of limitations.

    In the split decision, Kelley also granted the church's motion for summary judgment, effectively dismissing a third claim in which a victim had signed a prior settlement agreement with the church.

    In an emotional preamble to her ruling, before a packed courtroom, Kelley expressed a reverence for the Catholic Church and compassion for the victims, saying she was "brought to tears more than once" reading the accounts of the men and women who allege they were sexually abused as children by priests, deacons, nuns, teachers and others over the past 60 years.

    "But I cannot let compassion be the basis for my decision. It must be governed by law," Kelley said.

    Archdiocese attorney Frank LoCoco acknowledged the gravity of the allegations at the outset of the hearing.

    "This will be the most difficult professional decision you will ever make," LoCoco told Kelley.

    Kelley made it clear that her rulings applied to the three individual cases at hand, not broad classes of claims they may represent. Allowing the two claims to stand doesn't guarantee they will be paid in the bankruptcy, only that the legal debate over when the statute of limitations begins ticking must be decided at trial.

    The archdiocese had sought the dismissal of three claims involving two priests and a parish choir director who were accused of molesting boys in the 1970s and '80s. Church lawyers argued that the cases were beyond the statute of limitations and involved a victim who signed a previous settlement agreement and a perpetrator - the choir director - who was not a direct employee.

    Victims' attorneys had characterized the church's objections as a test case that, if successful, would have eliminated 95% of the claims in the bankruptcy.

    Kelly disallowed the claim involving the prior settlement because the victim didn't meet all of the criteria for voiding a signed agreement.

    continued in next comment...

    http://www.jsonline.com/features/religion/archdiocese-bankruptcy-judge-allows-two-claims-to-stand-me44pue-139044534.html

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  3. continued from previous comment:


    Much of the debate Thursday centered on how to apply the state's six-year statute of limitations on fraud allegations. LoCoco argued that the clock began ticking at the latest in 2004, when the archdiocese posted its online list of 44 priests with substantiated allegations of abuse.

    Anderson said the victims didn't know they were defrauded until 2006 and 2009, when they learned, in some cases through documents released as part of a California settlement, that the archdiocese had lied to them about their abusers' histories.

    "When a few did go forward and asked questions, what were they told? Lies," Anderson said.

    Anderson raised the issue of the 100 additional accused offenders, culled from his own clients' claims, as part of his defense of the claims.

    The archdiocese has said that it turns over all new claims of allegations involving living priests to the appropriate district attorney's office, though it is not clear whether that includes religious order priests and others it doesn't consider its employees.

    The victims were not identified in court or in the documents filed on the issues raised Thursday. The claims of all but about 30 victim-survivors are filed under seal as part of a court order intended to protect the identities of any victim seeking anonymity.

    The three cases at issue Thursday involved:

    The now-defrocked Father Franklyn Becker, who had served as pastor at Holy Family Parish in Whitefish Bay. The victim alleges Becker abused him between 1972 and '74, when the victim was 13 to 16 years old.

    Father David Hanser, also since laicized, who is accused of molesting a 7-year-old boy in 1977-'78 when he was associate pastor at St. John Vianney Parish in Brookfield.

    Robert Schaefer, then-choir director at St. Catherine Parish in Milwaukee. Schaefer is accused of repeatedly molesting a boy from 1976 to 1982, beginning when the boy was about 10 years old.

    Becker and Hanser have well-established histories as serial sex offenders; both were laicized by the archdiocese and appear on its list of offender priests. At least one other man has accused Schaefer of abusing him as a teenager. Schaefer is not listed on the archdiocese's website.

    http://www.jsonline.com/features/religion/archdiocese-bankruptcy-judge-allows-two-claims-to-stand-me44pue-139044534.html

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  4. Explosive sex abuse lawsuit against Vatican dropped

    by John L Allen Jr., National Catholic Reporter Feb. 11, 2012

    ROME -- A Wisconsin sex abuse lawsuit against the Vatican, which helped trigger a global firestorm in early 2010, was withdrawn late Friday. It marks the formal end of a case that seemed to cast doubt on Pope Benedict XVI’s role in the abuse crisis, and shifted focus from local bishops to an alleged cover-up in Rome.

    Lawyers for the victim filed a notice of voluntary dismissal on Friday, effectively abandoning the lawsuit. It had named not only the Vatican but also Pope Benedict XVI and two senior Vatican officials, Cardinals Tarcisio Bertone and Angelo Sodano, as defendants. The suit had been filed by Minnesota-based attorney Jeffrey Anderson, who has frequently represented sex abuse victims against the church.

    Anderson said at the time the case was filed that he hoped to take formal depositions from Benedict XVI, Bertone and Sodano, concerning the Vatican’s role in the sex abuse crisis. Bertone is the current Secretary of State, the top official in the Vatican after the pope, a position formerly held by Sodano.

    Anderson told NCR on Saturday that the decision to withdraw the case was "pragmatic and practical," based largely on the fact that as a result of proceedings related to the bankruptcy of the Milwaukee archdiocese, he had already obtained most of the files regarding the Vatican's involvement he could have gotten through a separate lawsuit. Those documents are presently under seal, he said, but he said they paint an "ugly picture" of the Vatican's role.
    "We have not in any way abandoned our effort to hold the Vatican legally and fully accountable," Anderson said.

    While Anderson said he does not plan to refile the Wisconsin case, he still hopes to pursue depositions of Vatican figures such as Bertone and Sodano as part of other litigation. In the meantime, he said, he plans to depose Cardinal-designate Timothy Dolan of New York, a former archbishop of Milwaukee, about his role in the Wisconsin case.

    The Vatican’s lawyer, California-based Jeffrey Lena, nevertheless welcomed the withdrawal of the case.

    “A case like this, which was held together by a mendacious web of claims of international conspiracy, amounts to what appears in its aftermath to have been little more than a misuse of judicial process and waste of judicial resources,” he said.

    With the collapse of a similar case in Kentucky in 2010, Friday’s dismissal leaves only the Doe v. Holy See case in Oregon, originally filed in 2002, as an active sex abuse claim against the Vatican in American courts. (Another lawsuit in Chicago has been filed but not served on the Vatican through diplomatic channels.)

    Anderson said that another reason for dismissing the Wisconsin case is that it allows attorneys to concentrate on the litigation in Oregon.

    In terms of jurisdiction, lawyers for the Vatican argued in the Wisconsin case, as they have in others, that the Vatican is immune because it’s a sovereign state. Substantively, they contended that under church law, responsibility for supervising priests and other church personnel rests with local bishops, not in Rome. ...

    read the rest of this article at:
    http://ncronline.org/blogs/ncr-today/explosive-sex-abuse-lawsuit-against-vatican-dropped

    read the Vatican's response at:
    http://ncronline.org/blogs/ncr-today/vatican-lawyers-statement-end-sex-abuse-case

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  5. Milwaukee archdiocese to give $21 million to survivors of clergy sex abuse

    by Marie Rohde | National Catholic Reporter August 4, 2015

    The Milwaukee archdiocese has agreed to give survivors of clergy sex abuse $21 million, a move that is expected to end the four and a half years that church has been in bankruptcy court.
    In a statement issued by the archdiocese, 330 of the 575 survivors will share in the compensation. They will receive varying amounts to be determined by an outside administrator. There will also be a $500,000 therapy fund established and it will be paid for by all of the parishes in the archdiocese. The agreement otherwise protects parishes and schools from future lawsuits.

    Milwaukee Archbishop Jerome Listecki acknowledged that the projected total legal and professional fees will be about $20 million when the bankruptcy is complete. That does not include the amount Jeff Anderson & Associates, the law firm that represents many of the survivors, will receive.

    The funds will come from a variety of sources, including $11 million from insurance and $16 million from the controversial Cemetery Trust Fund.

    The headquarters of the archdiocese will remain at the Cousins Center in suburban Milwaukee. The archdiocese will also voluntarily withdraw a legal action filed with the U.S. Supreme Court in an attempt to reverse an appellate decision that the more than $50 million placed in the Cemetery Trust Fund was part of the estate.

    Listecki said this of the agreement:

    "Reaching a settlement is the best way to acknowledge the hurts of the past and try to reconcile for the future. I am pleased that a settlement was reached and that both abuse survivors and the archdiocese can turn the page from this terrible chapter of our history. It is important that we never forget the pain and suffering of abuse survivors. And we will continue to hold ourselves accountable to all the elements of the Dallas Charter and the demands of our archdiocesan Safe Environment protocols."

    The archdiocese missed an Aug. 3 deadline for filing a revised plan of reorganization. The original plan had called for about $4 million for the survivors.
    According to a press release from the Anderson law firm, the committee that represents all the creditors "was forced to make a decision that would prevent the case from being drawn out longer and incurring additional bankruptcy attorneys' fees."

    "We applaud the courage of the survivors who came forward and the creditors' committee who fought every step of the way," said Anderson. "The treatment of the survivors by the Archdiocese of Milwaukee has been harsh and hurtful."

    [Marie Rohde is a Milwaukee-based freelance writer.]

    http://ncronline.org/blogs/ncr-today/milwaukee-archdiocese-give-21-million-survivors-clergy-sex-abuse

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  6. Archdiocese bankruptcy creditors raise concerns about excluded victims

    By Annysa Johnson, Milwaukee-Wisconsin Sentinel Journal August 10, 2015

    The creditors committee in the Archdiocese of Milwaukee bankruptcy is challenging the terms of the $21 million settlement announced by Archbishop Jerome Listecki last week, saying the church excluded about 73 victims who committee members believed would be compensated when they agreed to the deal, its chairman said Monday.

    Charles Linneman, who heads the five-member committee, said members understood that the only survivors who would not be compensated were those who had received prior cash settlements from the church — about 84 people.

    That contradicts the statement issued by the archdiocese last week that 157 individuals would not be compensated.

    "We want some answers about who is really in this group," Linneman said.

    Frank LoCoco, lead attorney for the archdiocese, said it is in talks with plaintiffs' attorneys to determine how their clients will be treated under the plan, which is scheduled to be filed Aug. 24. He said some of the 157 who were deemed to receive no cash payment could be compensated as a result.

    "Some of the 157 'may' move into other categories," LoCoco said in an email to the Journal Sentinel.

    The $21 million total compensation figure was not at issue in the concerns raised Monday. The archdiocese announced last week that it would pay $21 million to compensate 330 victims who were sexually assaulted as children by priests and others associated with the 10-county archdiocese as part of a plan to emerge from its over 4-year bankruptcy.

    An additional 92 victims could accept a $2,000 payment or try to persuade U.S. Bankruptcy Judge Susan V. Kelley that they should be in the larger pool of compensated victims, the archdiocese said.

    James Stang, an attorney who represents the committee, said all victims, regardless of where they are classified, would have an opportunity to challenge their treatment in the settlement agreement and reorganization plan.

    "Everyone will have a chance to be heard on the classification scheme," Stang said. "No one's going to be told the court is closed to them."

    Stang stressed that the committee "has not repudiated the settlement."

    Linneman concurred but said that might change if certain claims are disallowed.

    "If it stands the way the archdiocese is presenting it, I believe the committee would object to that."

    The archdiocese's original classification announced last week would have excluded several categories of claims, including those from victims who could not identify their abuser and cases that didn't involve sexual abuse.

    Linneman and others take issue with the church excluding individuals who sued in state court, but had their cases thrown out because of the statute of limitations.

    The archdiocese filed for Chapter 11 bankruptcy protection in January 2011. Kelley has scheduled a confirmation hearing on its reorganization plan to begin Nov. 9.

    http://www.jsonline.com/news/milwaukee/archdiocese-bankruptcy-creditors-raise-concerns-about-excluded-victims-b99554333z1-321332941.html

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