And a second Roman Catholic diocese -- this one in Tucson, Arizona -- could soon declare bankruptcy. The diocese faces lawsuits demanding more than $20 million in damages from victims of priestly sex abuse. The Archdiocese of Portland, Oregon, filed for bankruptcy last month. Bankruptcy would allow a judge to determine what assets a diocese must relinquish to compensate victims. But it's a step that raises a number of questions, including issues related to the separation of church and state. Judy Valente reports.JUDY VALENTE: On this particular morning, Bishop Gerald Kicanas is doing what he calls his most important work -- being pastor to the people of Tucson. The occasion: the funeral of a popular 16-year-old who died of leukemia. Though sad, the occasion marked a rare chance for the bishop to escape his most pressing problem: how the keep the diocese functioning and still compensate victims who were sexually abused by priests.
To stave off a financial crisis, Kicanas is considering following in the footsteps of the Archdiocese of Portland by filing for bankruptcy protection.
Bishop GERALD KICANAS (Archdiocese of Tucson): There should be every effort made on the part of a diocese to try to compensate those who have been hurt, to seek their forgiveness. But sometimes the expectations of those who have been hurt are far beyond the assets or ability of the Church to respond to what they feel is needed in order to bring their healing about.VALENTE: Two years ago, before Bishop Kicanas took over, this sprawling diocese serving 350,000 Catholics agreed to pay $14 million to 11 victims of sexual abuse. But now the diocese is facing 20 additional lawsuits seeking millions more in compensation. And that may not be the end of it.
LYNNE CADIGAN (Victims' Attorney): The ages of the victims that I represent -- the oldest is 45, and the youngest is only 10 years old.
VALENTE: Lynne Cadigan is an attorney who has 14 sex abuse cases pending against the diocese. She says she is seeking approximately $6 million for her clients, who include 3 sets of brothers from Hispanic farm worker families.
Ms. CADIGAN: To file for bankruptcy does two things. It re-victimizes the victims and makes them look like the predators; they're the ones chasing down the Church for money. It delays their lawsuit; it further prolongs their agony.For these boys to come forward was very difficult. The parishioners ostracized them, called them "faggot," and they've had to switch schools. They had to testify in a criminal hearing. It's ruined their lives.
VALENTE: Cadigan's clients say the priest who abused them is this man: Father Juan Guillen, who is already in prison serving a 10-year sentence for sexual misconduct with a minor.
Other lawsuits against the diocese name this priest: Monsignor Robert Trupia. Although Trupia has not been convicted in a court of law, the Vatican recently forbade him to act as a priest after finding the sexual abuse allegations against him were credible.
Bishop KICANAS: Our litigation system is a first-come, first-serve system, and therefore the first people who come forward are compensated, and then there may be little or nothing left to help those who come later, who may be as hurt [as] or even more hurt than those who have come before.
VALENTE: For the diocese, one of the main benefits of filing Chapter 11 is that all the pending cases would be consolidated in one court -- the bankruptcy court, where a judge would determine just how much money the diocese can reasonably afford to set aside for settlements with present and future plaintiffs.THOMAS ZLAKET (Outside Counsel, Archdiocese of Tucson): Let an independent federal judge decide what assets there are, and then let that same judge divide those assets among the very many claimants. Tell me, what is unfair about that?
VALENTE: A diocese filing for bankruptcy is entering uncharted legal territory. A bankruptcy court judge could conceivably question a bishop's management decisions and order assets to be sold. A bankruptcy filing would also give victims' attorneys -- and the public -- unprecedented access to a diocese's financial records. Those records could help determine just how much the diocese's assets are worth. The argument is likely to center around property.
JOHN SHAHEEN (Property Manager, Archdiocese of Tucson): Look around you. There are no utilities, no phone poles. The water table itself could be 300 to 400 feet deep. We're in the middle of the desert, so it makes it very difficult.
VALENTE: The Tucson diocese says much of the land it directly controls, like this parcel, is scorched desert property with limited resale value. It estimates this and the other property it owns is worth about $3.2 million. But that figure does not include the diocese's 74 parishes, and herein lies the major battle to come in any bankruptcy proceeding: a potential showdown between canon law and civil law.Bishop KICANAS: In canon law, it is very clear that I as a bishop have absolutely no right to demand the assets of the parishes. Those were given by people in trust to their own parish for its mission and for its work.
VALENTE: But county real estate records list the "Bishop of Tucson" as the owner of parish properties, including parish schools. That property has an assessed value of $48 million. Victims' attorneys maintain the market value of that property would be more than double that amount.
Mr. SCHWEIGERT: There is a significant amount of equity in those parishes, and I believe the diocese could borrow certainly enough money against the equity in those parishes to pay any settlements contemplated. They could pay back that money over a period of time through the money generated by the diocese, and this would mitigate any effect on either schools or parishioners or anybody else, and at the same time take care of the legitimate obligations of the parishioners.
Monsignor CAHALANE: I would consider it inestimable because of the fact that it was donated by my family and has very, very priceless sentimental value.
Father RAUL TREVIZO (St. John's Catholic Church, Diocese of Tucson): This church building -- the parishioners built it, pretty much. They came and they laid the bricks. It's a legacy to a lot of people's commitment, in the past and in the present.
Mr. SHAHEEN: That's the mission of the Church. We're supposed to be expanding the educational opportunities for the children of the diocese. That's the Christian thing to do, but because of the original lawsuits, we had to sell the property.
Mr. ZLAKET: This is an issue that has never been decided in the history of this country. We're talking about a legal issue that is a first in 200 years of legal history, and it is certainly a first for the Catholic Church in America, so it ought to be given the utmost consideration.
