Clergy abuse: Catholic Diocese of Erie fund pays $16.6M to victims; total costs: $31.35M

Bishop Persico says diocese completed payments to victims through compensation fund, which started taking claims in 2019. Payments were $16.6M; diocese had other abuse-related costs, adding to total.

Erie Times-News, Pennsylvania/May 18, 2021

By Ed Palattella

The emotional and long-term costs to victims are most often incalculable in cases of clergy sex abuse, but the abuse scandal has produced a dollar figure for victims in the Catholic Diocese of Erie: $31.35 million.

The 13-county diocese has spent that much investigating abuse cases and making payments to victims, according to data released on Tuesday.

Erie Catholic Bishop Lawrence Persico provided the numbers as the diocese announced that it had made a total of $16.6 million in payments to abuse victims through the diocese's compensation fund, launched in February 2019 in response to the devastating August 2018 Pennsylvania attorney general grand jury report on clergy sexual abuse of minors in the Roman Catholic Church statewide.

Persico said the fund made its final payments in March. The final payments closed out the program and further clarified how much the diocese has spent on clergy sex abuse cases. The rest of the spending was on investigations and other payments, leading to a total cost to date of $31.35 million.

A breakdown, including previously released figures, according to the diocese:

  • $16.6 million in payments from the victims' compensation fund, called the Independent Survivors' Reparation Program.
  • $750,000 paid in settlements and assistance to abuse victims, such as counseling, prior to Persico's consecration as the bishop of the Catholic Diocese of Erie in 2012. Persico succeeded Bishop Donald W. Trautman, who took over as head of the diocese in 1990.
  • $4 million spent on experts, including lawyers, to review the diocese's abuse files; prepare for the grand jury investigation; update the diocese's child-protection policy; and create, starting in April 2018, a public list of clergy and laypeople in the diocese credibly accused of improper behavior with minors, prohibiting them from working in the diocese.
  • $2 million paid in 2019 to settle an abuse case against David L. Poulson, the now-defrocked priest who was sentenced to state prison in January 2019 after pleading guilty in Jefferson County to molesting two boys while he was serving as a pastor in 2002 and 2010. Poulson, 67, is serving a sentence of 2½ to 14 years at the State Correctional Institution at Mercer.
  • $8 million paid to the Pittsburgh law firm K&L Gates and others to complete an investigation of the diocese's abuse files, a task that Persico was essential to establishing the compensation fund and administering it. Persico said the review provided the most complete and updated understanding of the abuse crisis in the diocese.

The diocese has created an endowment with the Catholic Foundation of Northwest Pennsylvania to continue to provide therapy for victims and others and to as assist with costs of maintaining the diocese's Office for the Protection of Children and Youth its safety measures for minors, Persico said.

The diocese hired nationally known mediation experts Kenneth Feinberg and Camille Biros to administer the compensation fund. The two, based in Washington, D.C., are best-known for administering the compensation fund for victims and survivors of the 9/11 terrorist attacks.

Data on claims

The Catholic Diocese of Erie announced the formation of its compensation fund in November 2018. Starting in February 2019 it took claims for six months, ending in August 2019.

Feinstein and Biros interviewed the claimants; investigated and reviewed the claims; received additional documentation from the K&L Gates law firm, if necessary; and determined payments based on the severity of the abuse and other factors, Persico said.

"They had complete control," Persico said of the administrators. "That is the way we wanted it, so that the diocese would not be an influence on their decisions."

A breakdown of the handling of the claims before the compensation fund, according to the diocese:

  • 181 applications for compensation received.
  • 134 claimants received offers and accepted them.
  • 10 claimants were found to be ineligible for the fund, such as because they were not minors when the abuse was alleged to have occurred.
  • 30 claimants received no compensation from the fund's administrators, largely based on credibility issues.
  • Seven claimants declined to accept offers from the fund administrators.
  • More than 90% of the "credible allegations" pertained to incidents that occurred before 1990.
  • One allegation pertained to an incident that occurred after 2010 — the Poulson case, in which court records and other information show that the diocese cooperated with law enforcement.
  • Claimants could also review the diocese's files involving their cases.

The diocese paid victims using a line of credit secured with the diocese's historic investments, investment income that might otherwise have gone to diocesan programs. But, Persico said relying on that money prevented the diocese from using parishioners' offerings to pay victims.

He also said the diocese used none of the operating budgets of its churches or schools to support the payment of victims. The diocese's insurance did not cover the abuse claims. Persico said. The diocese has not disclosed how much money was available in the compensation fund.

Persico said his goal was to provide fair compensation to abuse victims while still allowing the dioceses to retain enough financial resources to operate and minister to the faithful. He said the diocese's finances remain stable at this point.

"The $16.6 million is some compensation to victims, survivors," Persico said. "It doesn't make their lives free of what they experienced, but this a form of an apology.

"I can apologize and apologize, but this is an opportunity to show that we are truly sorry and tried to help them."

Compensation vs. legislation

The Catholic Diocese of Erie is not alone in creating a compensation fund.

Six of the seven other Roman Catholic dioceses statewide, including those for Pittsburgh and Philadelphia, set up separate compensation funds. The Diocese of Altoona-Johnstown does not have a fund.

Erie and the other six dioceses announced the creation of funds in 2018 as the Pennsylvania General Assembly was considering legislation that would have allowed abuse victims a two-year window to sue in old cases, no matter what the statute of limitations at the time of the incident.The payments ranged from $5,000 to $400,000 per claim, Persico told the Erie Times-News. He said he had no role in the evaluation of the claims and the determination of the payments.

The GOP-controlled General Assembly failed immediately to pass look-back legislation in response to the grand jury report. An effort to have voters approve a constitutional amendment to allow the two-year window failed this year after the administration of Gov. Tom Wolf, a Democrat, botched getting the amendment on the ballot for Tuesday's primary.

The legislature is again considering passage of a look-back law, but, for many victims, the compensation funds provided an option to seek money from the dioceses and avoid waiting on lawmakers to approve legislation that would let them sue over old cases. Claimants who receive money from the compensation funds agree not to take further legal action against the dioceses.

The creation of the compensation funds has not come without opposition. Some victims' rights advocates argue that victims would be better served by being able to sue and let a jury or judge decide on a judgment in open court, exposing the dioceses' handling of the cases to further public scrutiny.

The compensation funds are a way to keep the dioceses "in control — to control their assets and their image," said Robert Hoatson, an activist from New Jersey who is president of Road to Recovery, an advocacy group for abuse victims.

Hoatson said the use of the compensation funds shield dioceses from having to reveal their assets, as they might have to do in court, preventing victims from negotiating compensation payments knowing how much the dioceses are worth.

"I think everybody should be able to have their day in court, if they want," Hoatson said in an interview.

Lawsuits still possible

The Catholic Diocese of Erie and other Roman Catholic Diocese of Pennsylvania continue to face the potential for abuse lawsuits, despite the compensation payments and even if look-back legislation never becomes law in the state. A ruling from the state Supreme Court will decide what happens next.

The justices are reviewing the appeal of a June 2019 Superior Court decision over claims of a cover-up of abuse in the Catholic Diocese of Altoona-Johnstown.

The Superior Court ruling allowed an abuse-and fraud related suit to proceed against that diocese even though the statute of limitations had expired for the plaintiff, Renee A. Rice. She is claiming the diocese covered up the abuse allegations involving her, preventing her from suing sooner, and that she only learned of the allegations with the release of a separate grand jury report on the Altoona-Johnstown diocese in 2016.

If the state Supreme Court rules for Rice, other would-be plaintiffs could sue the Catholic Diocese of Erie and the other dioceses based on the cover-up claims. The Catholic Diocese of Erie was facing more than 30 such suits in August, when the two-year anniversary of the release of the Pennsylvania grand jury report triggered the filings. Plaintiffs in fraud cases typically have two years to sue.

The plaintiffs who have sued the Catholic Diocese of Erie under the theory in the Rice would have not received payments from the compensation fund. Not taking payments would allow them to pursue their claims in court if the state Supreme Court rules in favor of Rice. The state Supreme Court heard oral arguments in the case in October.

If the lawsuits proceed, the Catholic Diocese of Erie would be exposed to potentially expensive court judgments, adding to the $16.6 million that the diocese has already paid through the compensation fund and its total costs of $31.35 million.

"We are going to have to wait and see," Persico said, referring to the pending state Supreme Court ruling in the Rice case.

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