Diocese to Sell Headquarters to Help Settle Abuse Claims

Published: May 26, 2006

The Roman Catholic Diocese of Spokane, Wash., is selling its headquarters and other property valued at about $11 million as part of its effort to settle claims by victims of sexual abuse by members of the clergy.

The diocese is one of three in the country that have filed for bankruptcy; the others are those in Portland, Ore., and Tucson.

Although the Spokane diocese announced its intention to sell diocesan assets when it filed for Chapter 11 bankruptcy protection in December 2004, the fact that those assets are now going on the market underscores the financial strain many dioceses face as they address hundreds of millions of dollars in claims by victims of sexual abuse.

"I think it is symbolically significant," said the Rev. John J. Coughlin, a Franciscan priest and a law professor at the University of Notre Dame, specializing in civil and canon law. "The diocese doesn't need the physical building to exist. But the sale shows that the effects of the sex abuse crisis are serious, for this and other dioceses as well."

In a report issued in March, the United States Conference of Catholic Bishops said that in 2005, dioceses in the United States paid $399 million in settlements with victims of sexual abuse and $68 million in legal fees and support programs for victims, a sharp increase from the year before.

The church's total payments resulting from the sexual abuse scandal have surpassed $1 billion, and many dioceses have yet to reach settlements with victims.

The number of victims has exceeded 12,000. Nearly 5,000 priests have been implicated in abuse dating from as long ago as 1950. Most of the abuse occurred from the mid-1960's to the mid-1980's.

Each diocese has tried to find a way to address the many claims against it, including filing for bankruptcy. Barbara Dorris, victims' outreach director for a group called Survivors Network of Those Abused by Priests, said bankruptcy was a way to avoid answering charges in court that officials might have covered up sexual abuse by their clergy.

But the experience of the Spokane diocese exposes some of the perils of bankruptcy, Father Coughlin said. The diocese faces 185 claims totaling more than $200 million, said Shaun Cross, a lawyer for the diocese with the Paine Hamblin firm of Spokane.

Recently, a federal bankruptcy judge ruled that the parishes and schools in the diocese belonged to the bishop's office and could be sold to settle abuse claims, Mr. Cross said. The diocese, which argues that the bishop holds those properties in trust, is appealing the ruling to avoid selling the properties.

Those properties are valued at about $80 million, and the judge has yet to rule on seminaries, retreats and charities in the diocese.

The diocesan headquarters, called the chancery, has an asking price of $1.5 million, Mr. Cross said. Once it is sold, the diocesan staff could stay there until the end of 2007.

Spokane's bishop, William S. Skylstad, president of the bishops conference, himself faces an accusation of sexual abuse brought by a woman that dates to the early 1960's. Bishop Skylstad has denied wrongdoing.

By filing for bankruptcy, the Spokane diocese may have thought it would be limiting its financial liability, Father Coughlin said, though that has not been the case so far.

"One of the things that a bishop has to consider is once a diocese files for bankruptcy protection and goes under receivership, then the federal bankruptcy judge has control of all the assets," Father Coughlin said. "Many bishops rightly are reluctant to hand that kind of authority to a federal judge."