ST. FRANCIS – On Jan. 4, 2010, the Archdiocese of Milwaukee celebrated the installation of its 11th archbishop, Archbishop Jerome E. Listecki. As he became leader of the Catholic community of more than 650,000 members, he did so with the knowledge that the sin of clergy who sexually abused children decades ago might have serious financial ramifications for the archdiocese. He even mentioned it in his installation homily.
One year later, Jan. 4, 2011, Archbishop Listecki, in a letter to members of the Catholic community and at a media conference, made an announcement similar to one that has been heard in seven other U.S. archdioceses/dioceses over the last six and one half years: “After consultation with archdiocesan advisors and after my own prayerful consideration, this morning I directed attorneys for the archdiocese to file a petition for a Chapter 11 reorganization of its financial affairs under the U.S. Bankruptcy Code.”
Milwaukee is the largest archdiocese to file for Chapter 11. The Archdiocese of Portland, Ore., with approximately 390,000 Catholics, filed for bankruptcy in July 2004. In February 2007, the Diocese of San Diego, with nearly 900,000 Catholics, filed for Chapter 11 protection.
| Questions about the
A special e-mail address has been set up by the Archdiocese of Milwaukee to handle any questions regarding the Chapter 11 reorganization petition filed Tuesday, Jan. 4. Questions may be e-mailed to firstname.lastname@example.org.
Opportunity to achieve goals
The archbishop said that Chapter 11 reorganization is the best way to achieve two goals.
“First, we want to do as much as we can, as fairly as we can, to compensate victims/survivors with unresolved claims – both those with claims pending and those who will come forward because of this proceeding,” he said. “Second, we want to carry on the essential ministries of the archdiocese so we can continue to meet the needs of our parishes, parishioners and others who rely upon the Church for assistance.”
The reorganization makes it possible for the archdiocese to use its available funds to compensate victims/survivors with unresolved claims “in a single process overseen by a court, ensuring that all are treated equitably,” according to the archbishop.
“In addition, by serving as a final call for legal claims against the archdiocese, the proceeding will allow the Church to move forward on stable financial ground, focused on its Gospel mission,” Archbishop Listecki wrote.
While emphasizing that the archdiocese will continue to provide outreach to victims/survivors, the reorganization should bring closure to the financial burden the pending lawsuits would have placed on the archdiocese, according to Mark Doll, chairman of the Archdiocesan Finance Council.
“This can restart the archdiocese with a new vision going forward,” he said. “The way it was going, it was difficult to see an end in sight.”
Doll noted that when mediation failed, Chapter 11 reorganization appeared to be the only remaining option for the archdiocese.
“The mindset of victims’ legal counsel coming after the archdiocese had big thoughts of big payoffs; it got to the point where it seemed inevitable that we would end up in this place,” he said.
Archbishop Listecki wrote that, since the late 1980s, the archdiocese had worked “to meet the needs of victims/survivors without taking this drastic action (Chapter 11 reorganization).”
“We have directed increasing resources toward providing financial, psychological, pastoral and spiritual support to victims/survivors … we have spent more than $29 million to cover costs associated with this tragedy,” the archbishop said.
Since 2002, the archdiocese has sold property, liquidated savings and investments, eliminated ministries and services, cut staff by nearly 40 percent, and put all available real estate on the market in order to provide resources.
“As a result, we have succeeded in reaching mediated settlements with more than 190 individuals,” Archbishop Listecki said. “But in the end, our available resources fell short.”
Doll, a member of St. Eugene Parish, Fox Point, agreed.
“Archbishop Listecki, as did Archbishop Dolan, realized that the way things were trending, it (bankruptcy) was probably inevitable. We gave it the best effort by going to arbitration, but when the dollar numbers on individual settlements continued to go up, it became clear to us for some time that there may be no other choice,” he said. “Archbishop Listecki was well aware of the situation. He was realistic up front.”
Neither defeat nor failure
Fr. Ralph Gross, pastor of St. Bruno Parish, Dousman, and a member of the archdiocese’s college of consultors, said the archbishop had discussed the matter with the consultors before making a decision.
“Archbishop Listecki had spoken about the fact that he was concerned about the future and was getting advice from different representative people if we want to continue our mission and want to help victims/survivors, we maybe need to take this type of action of reorganization,” the priest said.
Fr. John Yockey, pastor of St. Jerome Parish, Oconomowoc, and a consultor, noted that the group was not surprised by the possibility of Chapter 11.
“All of us had seen handwriting on the wall for some time. While we’re not lawyers or professional accountants, all of us could do the simple math – if the final mediation ($4.6 million offered to 16 victims/survivors in November) was rejected, there really wasn’t any other alternative,” he said.
Neither Fr. Gross nor Fr. Yockey viewed Chapter 11 reorganization as a defeat for or a failure by the archdiocese.
“All of us feel downhearted of any kind of thing that looks on the surface to the people, like defeat. In all honesty, this particular action is not a defeat,” Fr. Gross said. “Among the consultors, there was disappointment that we need to move in this direction but at the same time listening to these things and how it can benefit the arch and victims/survivors, we all felt pretty much the same way: If it has to be, then this is the healthiest way to go to serve the arch and the victims/survivors.”
Fr. Yockey saw it as a starting point for the archdiocese.
“I look upon it as a very courageous, realistic step forward. We reached a point because of the horror, the sexual abuse tragedy, where we cannot carry on financially under the present demands,” he said. “We’re seeking a legal reorganization that will fairly allow us to take care of our temporal responsibilities. Having done that, we can turn corner and move into new chapter in history of the archdiocese.”
No impact on parishes, schools
The Chapter 11 reorganization affects solely the archdiocese itself. Under state law, parishes are separate civil corporations. According to information provided by the archdiocese, “Neither the pending lawsuits against the archdiocese nor the Chapter 11 filing involve parishes or parish schools.”
All of the archdiocesan high schools are separate corporations, too. While some have long-term leases with the archdiocese, these will not be affected by the reorganization filing.
The building that houses the archdiocese’s administrative offices, the Archbishop Cousins Catholic Center, has been on the market for more than four years. According to the archdiocese, it will remain on the market if the court and the archdiocese’s creditors agree.
| Did you know?
In June 2002, the U.S. bishops adopted the Charter for the Protection of Children and Young People. The Charter adopted a “one strike” policy with regard to priests serving in any active, public ministry, and also included:
Each diocese in the United States is subject to an annual review of compliance with the articles of the Charter by an outside, independent audit agency.
Information provided by the archdiocese notes, “The property currently carries a $4.65 million mortgage, which was taken out in 2006 to help pay the archdiocesan portion of a resolution of lawsuits filed by victims/survivors in California.”
As for assets, a statement from the archdiocese said, “We have, and will continue to maintain, an open-book policy when it comes to our finances.”
The audited financial statement for the fiscal year ending June 30, 2010, showed total assets of $98.4 million, but more than $90 million of that is restricted by donors for designated purposes or are offset by corresponding liabilities. (See related story).
Outreach dates to 1989
The archdiocese’s outreach to victims/survivors began in 1989 with the establishment of Project Benjamin. It was a group of judicial and law enforcement representatives, social workers and therapists, health care professionals and victims’ advocates who shared their expertise in assisting the church as to how to respond to victims/survivors in order to bring about healing.
Among initiatives implemented by the archdiocese as part of its outreach included:
- A Code of Ethical Standards for Church Leaders, which must be read and signed by all church personnel.
- Hiring a full-time victim assistance coordinator to implement the archdiocesan response to sexual abuse through the Sexual Abuse Prevention and Response Services office.
- Provide counseling referrals, spiritual direction, therapy support and other services to assist people who have been abused or affected by abuse.
- Hiring a full-time Archdiocesan Safe Environment Coordinator to oversee mandatory safe environment education for all priests, deacons, staff and volunteers in all parishes and schools
- Conduct national and state criminal background checks on church personnel and volunteers who work with children.
- A Community Advisory Board that reviews and improves the response of the archdiocese to those who have experienced or been affected by sexual abuse by church personnel.
- Intensive background screening as well as psychological testing is required for those wishing to enter the seminary.
- Establishment of a Diocesan Review Board.
Good things could happen
While the U.S. Bankruptcy Court might determine how the archdiocese executes its mission in the months and years to come, Fr. Gross sees potential in the outcome.
“I believe that a more positive kind of response is going to come. People are going to see a new lease on life,” he said. “The idea of having a sword over our head is lifted, and our ministry to victims/survivors is going to continue.”
Fr. Yockey, who plans to speak about the Chapter 11 filing at all of his parish’s Masses this weekend, alluded to a recent article in Newsweek written by George Weigel.
“What is needed is a renewal of a strong Catholic faith, not less of an experience of Catholic faith,” the priest said. “(Weigel) attributes the whole sexual abuse crisis to a breakdown of a real, lived practice of the Catholic faith. When we’re stronger through this, our identity, our practice of faith, will be deeper, better.”
Archbishop Listecki acknowledged, “This can be a difficult time to be a Catholic,” but added that he was encouraged by the Catholics who came to Mass, supported parishes and schools, do good works and contribute “at record levels to support the mission of the Church.”
“With you, the Church will continue to serve hundreds of thousands of people, making major contributions to our communities, even as we proceed with this reorganization,” the archbishop said. “You carry on because you understand that while the human dimension of the Church mirrors all of humanity’s failings, the Holy Spirit guiding her ultimately prevails.”