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Diocese payouts stay secret

A U.S. Bankruptcy Court judge has denied a Spokesman-Review request for access to records detailing millions of dollars in upcoming payouts from a trust to victims of priest sexual abuse in the Spokane Catholic Diocese, saying the claimants were promised confidentiality before agreeing to a legal settlement this spring.

The battle over public access was argued Monday by lawyers for The Spokesman-Review, the diocese and various committees of people claiming sexual abuse. Bankruptcy Judge Patricia Williams denied the newspaper’s request in an oral ruling on Tuesday.

The Spokesman-Review, in a motion filed in April, sought release of the sealed proofs of claims filed and details of payouts to victims, who will be paid from the special trust established in the diocese’s recent bankruptcy settlement. The newspaper, which has a policy of not naming victims of sexual abuse, asked for copies of claims in which names of victims had been edited out, or redacted.

“There are multiple reasons here to deny the request,” Williams said, citing several confidentiality agreements forged by lawyers and a mediator since 2004. “There is no judicial involvement in the determination of the disputed claims under the plan, so there is no public record.” .

“I’m very pleased she ruled as she did,” said Shaun Cross, a lawyer for the diocese, after Tuesday’s ruling. “It was the right decision.”

On June 1, Bishop William Skylstad signed documents and $20 million was wired to the trust – an action that allowed the diocese to emerge from Chapter 11 bankruptcy protection filed Dec. 6, 2004, in response to the priest sex abuse scandal. The trust will ultimately contain $48 million and pledges to pay lawyers’ fees and compensate victims. At issue in the newspaper’s motion was what paper trail from the diocesan bankruptcy proceedings the public is entitled to see.

Duane Swinton, attorney for the newspaper, complained to Williams in his arguments on Monday that confidentiality agreements forged by lawyers representing the diocese, the bishop and claimants’ groups are far too broad, preventing the public from learning details of the payouts to victims and which priests were perpetrators of the worst abuse. Some priests accused of sexual abuse are still within the diocese ministry.

“This entire process has proceeded in absolute secrecy. I don’t believe that was the court’s intention,” Swinton said.

The Spokane Diocese “chose to go into court and use the bankruptcy process. When it does that, like it or not, it subjects itself to public review of the process,” Swinton said.

The unique arrangement agreed to by all parties allows people who say they’ve been abused to present their claims to an independent reviewer who will decide whether their accusation has merit and whether they should be paid. No information about the payouts – including the names of priests whose actions resulted in the claims being paid – will be listed in court documents.

An array of lawyers working for the diocese, its parishes and various creditors’ committees unanimously urged Williams to reject the newspaper’s motion, saying it is far too late to undo the confidentiality agreements that underlie the settlement, approved in April.

The Spokesman-Review has no legal basis for undoing those agreements, said Joe Shickich, a Seattle attorney representing one group of victims called the Tort Claimants’ Committee.

The settlement plan set up a “non-adversarial process,” where a former U.S. attorney, Kate Pflaumer, reviews all the claims, Shickich said. Pflaumer alone will decide which of the claims merit payouts from the trust – and the claimants’ files she reviews are confidential.

Her decisions have no binding legal effect on the truth of the allegations, according to lawyers for the diocese, and the diocese’s own review board retains authority on whether a priest has been “credibly accused.”

Of the 184 tort claimants, one has withdrawn, 36 have settled and the rest are being interviewed by Pflaumer, Shickich said.

“The plan is consummated, the money paid, the property transferred. The motion needs to be denied,” Shickich added.

Arguing for the diocese and for Skylstad, Spokane attorney Cross said the lawyers who forged the settlement tried to balance public disclosure with protection of innocent victims of sexual abuse, and the victims unanimously agreed with the confidentiality provisions.

“It hasn’t been a perfect exercise, but it was conducted in good faith. … There has been a panoply of confidentiality orders not for the purpose of protecting pedophiles, but for protecting victims,” Cross said.

Now that the claims of sex abuse victims have been transferred to the claim trust and funded with cash, property sales and $10 million in pledges from parishes, the diocese “will never know what the individual claimants will be paid under the plan,” Cross said.

The Spokane diocesan bankruptcy required the pledge of millions of dollars from parishioners, in contrast to wealthier dioceses nationwide that have large sums invested in real estate and investment accounts.

Cross had harsh words for the newspaper for reporting confidential details of the claims, including names of several priests who had not been previously identified.

The Spokesman-Review, in accordance with its policy not to name victims of sexual abuse, has never disclosed the names of abuse victims unless they have come forward voluntarily to tell their stories, Swinton countered.

Swinton objected to a portion of Cross’ argument where he said Spokesman-Review reporter John Stucke recently “hacked” into court records to obtain some names of abusing priests and claimants.

There was no hacking, the names were in court records due to a filing mistake by Cross’ own law firm, the court was notified of the mistake and Cross’ version of what happened is a “red herring,” Swinton said.

“The issue is the public’s access to public records. We filed our motion on April 17. We wouldn’t have had standing before that. We sought our motion before the plan was approved,” Swinton said.