Tucson diocese considers bankruptcy: some say move would dodge responsibility to clergy sex abuse victims

National Catholic Reporter, July 2, 2004 by Renee Schafer Horton

The financial cost of the clergy sexual abuse scandal may force the Tucson diocese into bankruptcy, Bishop Gerald F. Kicanas said in a letter read in parishes here June 19 and 20. Bankruptcy, he said, "appears to be the only option."

The diocese hopes Chapter 11 bankruptcy will protect parish assets while also allowing "for a more just response to [victims of sexual abuse by clergy] than would be possible in the current situation."

Currently, 19 suits for sexual abuse are pending against the diocese, and Kicanas told NCR June 22 that efforts to mediate these cases have been unsuccessful.

Attorneys for victims and representatives from the Tucson chapter of Survivors Network of those Abused by Priests--SNAP--said the announcement by Kicanas was a ploy to gain sympathy.

Kim Williamson, a lawyer for victims in the 19 pending cases, said she thinks the diocese is "crying poor" to keep future victims from coming forward.

Kicanas denies these charges. "This is not my first choice and this is not us trying to shirk our responsibility to the victims," Kicanas said. "We see Chapter 11 as perhaps the only orderly way to respond to the pain and hurt of victims [but] we also have an important mission that has helped the community in numerous ways educationally, socially and spiritually, and that mission is important and should continue as well."

The diocese serves 300,000 Catholics in 75 parishes.

Kicanas' letter said he would be consulting with priests, laity and religious over the next few weeks while he determines whether to file for protection under federal law. He invited any group or individuals with suggestions for alternatives to bankruptcy to contact him by phone or e-mail. He told NCR that he'd spent the past six months consulting with other bishops "because whatever the diocese of Tucson does would set a precedent."

If the Tucson diocese follows through with bankruptcy filing, it will be the first U.S. Catholic diocese to do so. Barry MacBan, the lawyer for the diocese in the pending lawsuits, said Kicanas would go forward with Chapter 11 no later than the end of August if he decides to file.

Jim Parker, co-leader for the Tucson SNAP chapter, told NCR he is skeptical. Bankruptcy "has been talked about in about 25 dioceses over 10 years and no one has followed through," he said. SNAP "will probably" communicate with Kicanas about the issue, he said.

The major problem with the diocese filing for bankruptcy is the differences between civil and canon law.

"They [the diocese] claim that under canon law that they do not own the parishes, but we don't agree," said Williamson. "We've been asking them to see what every parish has [in assets] and they won't give it because they say they do not own those schools and parishes. Well, if we go into bankruptcy court, they'll have to show us those things. Canon law doesn't mean anything in civil court."

Kicanas disagrees.

"A bishop doesn't have the right to take the assets of a parish, they are the property of the parishioners who comprise that parish. That will be contested I'm sure, surely to the Supreme Court because it is a constitutional issue of significant proportion--what are the assets of a diocese?"

MacBan said the discussions during a daylong mediation session May 17 hit a wail when the plaintiffs would not accept that the diocese has limited assets. According to its annual report for 2002-03, the diocese has an operating budget of approximately $5.5 million, long-term debt of $4.7 million and a deficit of $7 million.

"If the bishop doesn't get protection under Chapter 11, he will be forced into bankruptcy by the trials because this particular diocese does not have the money," said MacBan. "The plaintiffs' lawyers would have us put a 'For Sale' sign on every school and parish and we can't do that."

Williamson contends that the diocese "lowballed" the victims with its settlement offer during mediation, but she refused to say what that offer was. "The bankruptcy would revictimize the victims," he said.

Msgr. Robert Fuller, pastor of St. Frances Cabrini Parish in midtown Tucson and an outspoken supporter of victims' rights, said he understands how victims and their lawyers might view Chapter 11 as avoiding responsibility, "but I don't see it like that."

"The only other option would be to do nothing, to allow the lawsuits to go to state court and then the attorneys, as they have already said, would go after parish assets," Fuller said. "The problem is the court system operates on a first come, first served basis and the first victims have taken most of the money. This way, with Chapter 11, there would be a more equitable way to meet the demands of these next groups of victims and others who come after and to protect the mission of the church at the parish level."

Terry Carden, head of the Tucson chapter of the Voice of the Faithful, said his group has met "numerous times" with Kicanas. "I don't see how this issue can be settled without going to bankruptcy court," Carden said. "The problem is that this diocese was on the ropes for a long time before this. ... It isn't like Boston or Chicago where there is some choice property to sell."