Albany Diocese details clergy abuse compensation proposal

Bishop Edward Scharfenberger .

Bishop Edward Scharfenberger .

ALBANY — The Roman Catholic Diocese of Albany on Thursday fleshed out its proposal for a mediated settlement process for clergy sex abuse survivors.

Aspects of the proposal are unclear, and an attorney for 25 of the roughly 440 people suing the diocese said it raised more questions than it answered. But the diocese emphasized it is just a draft.

The diocese first publicly floated the concept June 29. It said mediated compensation could result in faster, more equitable settlements than if it had to litigate each claim in court or if it filed for Chapter 11 bankruptcy protection.

The most recent communication contained multiple references to a potential bankruptcy filing, a step four other New York dioceses already have taken.

The plan was developed by consultants including a retired judge who spent a quarter century on the federal bankruptcy bench. It creates a trust funded by available diocesan assets, proceeds from insurance carriers and insurance proceeds, and anticipated dedicated assets of co-defendants such as religious communities.

The diocese said individual parishes might also have to contribute.

A neutral, court-appointed mediator would help determine the amounts to be contributed to the trust by the diocese and insurers. After the costs of operating the trust were deducted from it, survivors would draw pro-rata payments from the trust.

The framework would be similar to what would be enacted in a Chapter 11 bankruptcy, the diocese said, but would be quicker and less expensive to implement.

The plan would be subject to approval by the court and by the survivors themselves.

The diocese said Thursday the plan would result in more money going to survivors, as the mediation plan would be less costly than either litigation or bankruptcy. 

Three years ago in New York, the long-running clergy pedophilia scandal entered a new phase as the state Child Victims Act briefly allowed civil lawsuits for decades-old incidents of abuse that had been — and once again are — far beyond the statute of limitations for a civil lawsuit.

Four of New York state’s eight Catholic dioceses — Buffalo, Rochester, Rockville Center and Syracuse — subsequently filed for bankruptcy under the financial weight of potential legal settlements or trial verdicts.

Attorney Mallory Allen, who represents 25 plaintiffs against the Albany diocese, said Friday the draft proposal raises more questions than it answers and appears to be one more attempt to conceal information that would be revealed by litigation — the diocese recently lost its appeal seeking to keep personnel records confidential.

Attorney Matthew J. Kelly, who represents just one sex abuse victim, said Friday that the diocese’s attorneys used the specter of bankruptcy at a meeting in June as leverage to get his client to settle for $750,000, saying that if he didn’t accept it, the diocese would file for bankruptcy protection, which would reduce his payout and delay it by years.

Kelly couldn’t determine the likelihood of a bankruptcy filing, so his client took the offer, a resolution that was off the radar until the Times Union newspaper earlier this week reported it as the first major settlement of a Child Victims Act lawsuit that was scheduled for trial.

Kelly’s client was abused by the Rev. Mark Haight, who now lives in Schenectady.

Kelly, of Roemer Wallens Gold & Mineaux in Albany, said he had to file 13 separate motions to pry loose evidence of how the diocese dealt with Haight, whose personnel records had been misplaced and/or intentionally relocated. 

The diocese claimed to have first learned of Haight’s misconduct in 1990, but the records showed he molested a young altar boy in Troy in 1977 and that the diocese moved him to Rotterdam as a result, Kelly said.

The diocese’s court fight to conceal evidence of abuse — at considerable cost of time, money and emotional pain for survivors — strikes some observers as being at odds with its simultaneously expressed desire to help those it acknowledges were abused. 

“Hypocrisy” is the word Kelly used.

Allen said via email:

“This is a diocese who — after fighting against survivors for years — was just recently ordered to produce their secret priest files. Instead of disclosing the files, they want survivors to stop pursuing the truth and quietly resolve their cases.”

Allen had concerns about two other provisions of the draft proposal: It doesn’t say how much money the diocese plans to contribute. And it requires survivors to blindly sign a release of claims, not knowing how much they’ll receive in return and giving up their right to appeal the amount.

“This is not a way forward,” said Allen, with the Washington law firm of Pfau Cochran Vertetis Amala. “This is an attempt by the diocese to strip survivors of their rights and keep diocesan secrets hidden.”

But she added that the proposal is in its early stages.

The diocese offered the same point to The Daily Gazette on Friday, when asked how it could set up a pot of money for sex abuse survivors in mediation when it didn’t know how many would opt into mediation, and therefore how much money it needed to reserve for litigation.

The proposal released Thursday is a draft, a spokeswoman said.

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