Milwaukee Archdiocese to File Bankruptcy

The financial fallout from the clergy sexual abuse scandal continues to mount as the Roman Catholic Archdiocese of Milwaukee is announcing today that it will file for bankruptcy under Chapter 11, the eighth diocese in the United States to seek such protection.

The move comes after settlement talks with victims broke down, making it likely that the archdiocese would have to go to court and incur legal fees as well as payouts that would leave it unable to function. Abuse cases have already cost the Milwaukee archdiocese more than $29 million as it has addressed almost 200 claims over the past 20 years. Entering Chapter 11 would allow the archdiocese to continue to operate and pay for settlements should negotiations bear fruit.

“Since 2002, we have sold property, liquidated savings and investments, eliminated ministries and services, cut archdiocesan staff by nearly 40%, and put all available real estate on the market in order to free up resources,” Archbishop Jerome Listecki said Tuesday.

“In my installation homily on Jan. 4, 2010, I spoke of the devastation of sin and its effect on us personally and as a community,” Listecki said. “We see the result of that sin today. This action is occurring because priest-perpetrators sexually abused minors, going against everything the church and the priesthood represents.”

The Milwaukee archdiocese is one of the most storied in the American church. It was led for 25 years by Archbishop Rembert Weakland, a prominent liberal voice in the hierarchy who was forced to retire in 2002 when it was revealed he had used church funds to buy the silence of a man with whom Weakland had had an affair.

The archdiocese was then headed for nearly seven years by Archbishop Timothy Dolan, who since 2009 has led the New York archdiocese and who last fall was elected president of the U.S. bishops conference.

The claims that led to the bankruptcy announcement are from abuse cases that took place over the past 50 years.

One of the most notorious perpetrators was Father Lawrence C. Murphy, who abused some 200 boys at a suburban school for deaf students from 1950 to 1974. Weakland took Murphy’s case to the Vatican and to then-Cardinal Joseph Ratzinger in the 1990s in an effort to have Murphy defrocked. Ratzinger was elected Pope Benedict XVI in 2005. The New York Times reported last year that Ratzinger’s office forestalled action and Father Murphy passed away. The case was one of several that cast a pall on Benedict’s reputation in 2010.

Talks between plaintiff’s attorney Jeffrey Anderson and the archdiocese broke down mid-December. The archdiocese said the victims declined its $4.6 million settlement offer and Anderson said church officials refused their demand for access to decades of records on how the archdiocese dealt with abuse accusations.

“This is about protecting church secrets, not church assets,” said David Clohessy, national director of SNAP, the Survivors Network of those Abused by Priests. “The goal here is to prevent top church managers from being questioned under oath about their complicity, not compensating victims fairly.”

Archbishop Listecki disputed that view.

“There’s nothing to hide,” he said.

The other seven dioceses that have filed for bankruptcy protection are in Davenport, Iowa; Fairbanks, Alaska; Portland, Ore.; San Diego; Spokane, Wash.; Tucson, Ariz.; and Wilmington, Del. In addition, the Jesuit province of Oregon, which includes Alaska, also filed for bankruptcy.

Not all of the dioceses have been allowed to go into bankruptcy, and the filing is often a way to delay legal proceedings in order to reach a settlement between the church and the victims.

Claims from the past decade of revelations of extensive clergy sexual abuse have reportedly cost the Catholic Church in the United States more than $2 billion.