Diocese offered $20M to settle
The disclosure by attorney Michael L. Costello came during public court conference
ALBANY — A longtime attorney for the Roman Catholic Diocese of Albany inadvertently disclosed during a court conference last week that it had recently offered $20 million toward a “global settlement” involving hundreds of alleged child sexual abuse victims who have filed claims against the organization or the priests and other employees accused of sexually assaulting them.
The amount of the offer — the second by the diocese — was supposed to remain confidential under a court order.
The disclosure by Michael L. Costello, the diocese’s attorney, came during a public court conference before state Supreme Court Justice L. Michael Mackey and revealed how much money the diocese had privately offered to settle the hundreds of remaining lawsuits.
But the recent offer was not accepted because the “plaintiffs liaison committee,” a group of attorneys who were facilitating mediation talks on behalf of the alleged victims, had already officially disbanded — a decision that came after they had accused the diocese and its insurers of dragging out the process and making offers that the committee at one point described as “insultingly low.”
A source familiar with the matter said the diocese’s first offer, made last summer, had been about $8 million.
“I’m just going to be careful to confine myself to information that is not beyond the restrictions of the mediation referral order,” Costello told the judge during Wednesday’s conference, when describing the diocese’s offer. “I received an email from mediator (Simone) Lelchuk in which she indicated that our $20 million — strike that. She indicated that the (plaintiffs committee) no longer exists, that it was disbanded effectively, and that the enhanced offer we had advanced was obviously not accepted.”
When asked after the proceeding about his disclosure of the $20 million figure, Costello responded in an email to the Times Union (and copied the judge’s chambers):
“My comments ... during the conference with Justice Mackey and counsel were provided under the privilege of the mediation referral order (issued in September),” he wrote. But the Times Union is not subject to the confidentiality order. Costello also was not supposed to disclose the offer during a proceeding that included the public as well as numerous attorneys who were not part of the plaintiffs liaison committee.
It’s unclear whether the $20 million offer includes money that would also be contributed by the diocese’s parishes and schools, locations where many of the sexual abuse incidents are alleged to have taken place. In addition, the offer does not include compensation that could be contributed by the diocese’s insurance carriers.
Last month, as the mediation began to collapse, Costello had asked for a 120-day stay of cases nearing trial dates. He said the additional time was needed because they were working with their insurance carriers and also trying to ascertain the amount of funds that the schools and parishes within the 14-county diocese could contribute to a mass settlement.
Mallory C. Allen, an attorney whose firm represents 22 clients with claims pending against the diocese, said that because the diocese had disclosed its most recent confidential recent offer, “The public can see why the process has broken down: The diocese is grossly undervaluing the claims against them — claims which involve horrific conduct by the diocese which has profoundly and permanently impacted hundreds of people’s lives.”
“Whether or not the disclosure was inadvertent, we believe that the diocese should have been transparent about its mediation offers from the beginning,” Allen said. “To date, the diocese has broadcast to the public that it is making strides towards resolving the numerous cases against it and represented that it has made ‘significant’ offers, while simultaneously keeping the details of those offers (as well as full financial disclosure) from the public. How did the diocese expect over 400 survivors to accept an offer in its mediation program when they had failed to share the monetary amount of that offer with the public, and have still not opened their financial records to the public, so that they can gauge whether the diocese’s offer was, in fact, fair?”
Cynthia S. LaFave, whose firm along with Jeff Anderson & Associates represents 190 plaintiffs who have pending claims against the diocese, responded to Costello’s remarks during Wednesday’s court conference by noting that Anderson’s firm had recently conducted an analysis of just the Albany diocese’s real estate assets — relying on public records
— and determined they are worth roughly $500 million.
She said that amount does not include all of the diocese’s property and assets, such as cash in bank accounts or the holdings of various foundations.
“It doesn’t include the schools ... it just includes the diocese and the parishes,” LaFave said. “And so here we are looking at that in the context of this enhanced offer that we received from the diocese. ... But as a committee, the PLC, is disbanded we find that with the enhanced offer the word ‘enhanced’ shouldn’t even be used for that offer, and we just feel that it cannot go any further.”
Costello scoffed at the $500 million estimate put forth by Anderson’s firm (which subsequently forwarded to him its 87-page report), saying he suspected
it was based on assessed valuations. LaFave responded that the estimate is based on market values of the real estate holdings, which she said are “real numbers.”
“As many of us know, there are constitutional protections with respect to these institutions, and the viability to free exercise, practice their religion,” Costello said. “... We shouldn’t be looking at this in a liquidation format. But the number is astounding. We’ve never seen or heard anything like that.”
The conference ended with Costello indicating the diocese would continue negotiating settlements with the plaintiffs who are willing to do so. He indicated that the diocese also would be open to conducting settlements with groups of plaintiffs and their attorneys to expedite the process.