BUFFALO, N.Y. — How much?
That is the question for Buffalo’s Catholic Diocese these days. How much will it cost to resolve dozens upon dozens of claims of sexual abuse at the hands of priests?
“People ask me that all the time and we’re not sure,” said Buffalo Bishop Richard Malone in his interview with Maryalice Demler earlier this month.
The Bishop has said repeatedly it is the compassionate thing to do to address claims even if they date back decades and the legal statute of limitations has expired. But 2 On Your Side is told money was also a factor.
A source tells us there was an interested within the Diocese hierarchy in clearing as many of these cases as quickly possible “at Buffalo prices”, meaning, cheaper than potential civil lawsuits against the Diocese.
There are few clues about the financial picture of the Diocese in its annual financial statement. We asked the chairman of the Canisius College Accounting Department, Ian Redpath, to have a look.
Redpath notes the Diocese is unique among non-profits. Because of its status as a religious organization, it is not required to file with the IRS, the New York State Department of Taxation or the state Attorney General’s office.
The Diocese discloses what it chooses to disclose.
The financial statement is reviewed by Bonadio & Company, a large accounting firm. But Redpath points out the review Diocesan finances is not a forensic audit.
“A lot of it is essentially checking the box. You say you’ve spent this. They say they got it. Okay. Fine. We checked the box, it’s not to discover fraud,” says Redpath.
NOT FROM HERE
Bishop Malone said this when asked where money would come from to compensate sex abuse victims, “Nothing is coming from the Catholic Charities appeal money or the capital campaign (Upon This Rock) money to go to our attorneys or victim settlements.”
So, that money would seemingly come from other sources. One significant source of revenue is the parishes. Offerings collected by churches are subject to assessments.
These assessments are essentially a cut of money collected by a parish. A Diocesan spokeswoman says on average, churches hand over 20% of collections. But, some parishes we contracted report having to part with up to 30%.
Could this money be used to compensate victims? It could. Again, the Diocese has not articulated its plan for payment.
“WE’RE NOT SURE”
Is there a plan in place, an estimate, a budget for victim compensation?
Bishop Malone acknowledges he is asked this question all the time, but has yet to produce any kind of answer.
Earlier this month he said, “We’re not sure because we don’t know what the range or spectrum of payments might be.”
The final price tag for the Diocese will also depend on the number of claims. When Malone announced the compensation program back in March, it was anticipated 100 claims might be files.
Almost twice as many came in: 191 claims. It’s a number Bishop Malone described at a “tsunami”.
For an idea as to how much victim compensation could cost the Buffalo Diocese, 2 On-Your-Side had a look at the Ogdensburg Diocese. It also began a victims compensation program this year.
It resolved 37 claims for just under $5.5-million. That comes out to less than $150,000 per claim.
If the Buffalo Diocese could resolve all 191 of its claims at the same price, the potential price tag is more than $28-million.
This is 2 On Your Side’s estimate, not from the Diocese. But, whatever the number is, it almost certainly about to go higher.
CHILD VICTIMS ACT
It appears all but certain that the Child Victims Act will become law in New York State in 2019. Versions have passed the Democrat-controlled Assembly but always hit a roadblock in the Republican-controlled State Senate.
The 2018 elections swung State Senate power to Democrats, and Governor Andrew Cuomo told 2 On Your Side earlier this month he wants the Child Victims Act soon.
“I do believe there should be a recognition, and justice done for the victims.”
The proposed law would allow civil lawsuits to move forward against private entities where statutes of limitations may have expired.
If the Child Victims Act were signed into law, the Buffalo Diocese faces the prospect of a new, large wave of expensive civil litigation.
Even Bishop Malone concedes such a law could cost the Diocese a lot more money.
So, where might that money come from?
The Buffalo Diocese does have insurance to cover claims.
Diocesan attorney Terry Connors has pointed out even with a Child Victims Act in place, ”you would have the possibility of insurance companies stepping-up to meet their obligations.”
The Diocese says it has two kinds of insurance. It has money it sets aside annually to resolve claims. The last reporting on that fund was about $7 million.
There is also coverage through a policy with National Catholic, an Illinois-based risk retention company that provides limited coverage for sexual misconduct.
But, National Catholic does not cover acts prior to its creation, which was back in 1988. Based on limited disclosures from the Buffalo Diocese, it appears the vast majority of it sex abuse claims were pre-1988, so seemingly not covered.
We know the Diocese is selling things, possibly to get ready to pay claims.
The Bishop’s Residence, with an estimated $1 million value, was placed on the market earlier this year.
And Buffalo Business First reports the Diocese has sold off two dozen other properties, taking in $8.7 million. That seemingly fall short of what will be needed.
The Diocesan financial report shows some $41 million worth of investments, which it could sell also.
But, as we’ve stated throughout, Bishop Malone and the Diocese have offered nothing about how they expect to pay, and Buffalo-area Catholics are waiting for clear answers.
“I think people who have skepticism, rightfully so have skepticism and we won’t know unless there’s full disclosure.”