Diocese of Gallup to declare bankruptcy

By Elizabeth Hardin-Burrola
Gallup Independent (New Mexico)
September 3, 2013

GALLUP — Catholics across western New Mexico and northern Arizona received bombshell news while attending Mass over the Labor Day weekend.

The Diocese of Gallup announced it will petition for Chapter 11 reorganization in federal bankruptcy court because of mounting clergy sex abuse legal claims, according to a statement issued by Bishop James Wall.

“After considering all of the options and consulting with advisors inside and outside the Diocese, I have determined that filing a petition for Chapter 11 reorganization for the Gallup Diocese of Gallup (sic) is the most effective and thoughtful course to take in light of the claims from those who were abused,” Wall stated.

Priests across the diocese, which includes parishes in six counties in New Mexico, three counties in Arizona and seven Native American reservations, were given the task of delivering the bad news by reading the bishop’s letter during weekend Masses.

With this announcement, the Gallup Diocese will become the ninth U.S. Roman Catholic diocese or archdiocese to seek financial reorganization through bankruptcy court as a method of dealing with clergy sex abuse claims and their associated costs. Two Catholic religious orders have also done so.

“Under Chapter 11, the Diocese will have the opportunity to present a plan of reorganization that provides for a fair and equitable way to compensate all those who suffered sexual abuse as children by workers for the Church in our Diocese those who are currently known, those who haven’t yet made the decision to come forward, and those who might come forward in the future,” Wall said.

The bishop promised to “be open and transparent” during the bankruptcy process. He said he would be available to meet with concerned individuals or groups, and he invited people to email or write him about the decision.

“It is very important to me that you all understand that I have not taken this step to avoid responsibility for what happened or to hide anything,” he said.

Questions about the bishop’s announcement were emailed to the diocese Sunday. The Rev. Tim Farrell, the diocese’s media liaison, said he forwarded the questions to the bishop, who agreed to provide responses. However, Farrell said, the bishop recently returned from a vacation in Spain and first needed to consult with his diocesan attorneys about his answers.

‘Not coincidental’

Robert Pastor, a Phoenix attorney who has filed 13 clergy sex abuse lawsuits against the diocese, expressed surprise at the announcement when contacted Saturday. He said he has not received notice from diocesan attorneys about their intent to file the Chapter 11 petition.

Pastor’s first lawsuit, which involves abuse allegations against the late Rev. Clement Hageman, is scheduled to go to trial Feb. 11, 2014. As part of discovery for that case, the Gallup bishop and the Rev. Alfred Tachias are scheduled to be deposed Sept. 18. Tachias served as an assistant to Hageman in Kingman, Ariz., where Hageman allegedly sexually abused many Catholic school children and altar servers.

“If the diocese files a petition for bankruptcy, typically any case pending in any state or federal court will be stayed or put on hold,” Pastor said in an email Monday.

As a result, all of Pastor’s clergy abuse cases, the upcoming deposition of Wall and Tachias, and the scheduled trial could be halted.

Pastor described the timing of the bishop’s letter, less than three weeks from the bishop’s scheduled deposition, as “not coincidental.”

“We have seen time and time again that Catholic bishops will file bankruptcy to avoid having to answer questions about a systemic and cultural pattern and practice of covering up clergy sexual abuse,” he said. “Our clients deserve to hear their Bishop explain under oath why so many pedophile priests were allowed to hurt children even though the bishop knew these priests were a danger.

“Chapter 11 bankruptcy was designed to help companies restructure debt,” Pastor added.

“Bankruptcy was never intended to be a tool to help Catholic Bishops hide other perpetrators or the knowledge it had about pedophile priests working in the diocese.”

Advocates’ concerns

A number of national advocates for clergy sex abuse survivors were contacted by email about the Diocese of Gallup’s decision. Several of them expressed concern that abuse survivors might miss the “bar date” that will be set once the Chapter 11 process begins. It is the date by which claims against the diocese must be filed.

“The negative aspects are that if survivors do not come forward soon they are forever time barred,” Patrick Wall said.

Patrick Wall, a former Catholic priest not related to the Gallup bishop, works as an advocate and researcher for Jeff Anderson & Associates.

Joelle Casteix is the Western Regional Director for the Survivors Network of those Abused by Priests. “If victims are not ready, not aware or not healthy enough to come forward by the bar date, they lose the opportunity to expose their abuser and hold wrong-doers accountable,” Casteix said.

“The bar date and notification will be important early concerns, because of the size of the diocese and the special effort that will be required to reach a far-flung and diverse population,” Terence McKiernan, president and founder of the Bishop Accountability website, said. Noting the bishop’s mention of victims “who might come forward in the future,” McKiernan said, “It is also important that Bishop Wall make good on his commitment to honor future claims.”

Casteix and McKiernan, both citing examples from the bankruptcy cases of the Diocese of San Diego and the Archdiocese of Milwaukee, expressed concern that the Gallup Diocese might attempt to hide some of its assets or divert money or assets to other entities. In addition, McKiernan said, Milwaukee Archbishop Jerome E. Listecki has fought to disallow claimants, prevent the release of documents and avoid the release of an accurate list of accused clergy.

“Given these precedents, Bishop Wall will be closely watched in the early stages of the Gallup reorganization, to determine whether he is seeking a ‘merciful and equitable’ reorganization, as he says in his letter, or whether he will resort to the tactics developed by the Milwaukee archdiocese,” McKiernan said.

Open and public

The Chapter 11 bankruptcy process holds some positive features for abuse survivors, the advocates agreed.

David Clohessy, director of the Survivors Network of those Abused by Priests, said a higher percentage of victims receive some financial help through the bankruptcy court. And Patrick Wall said abuse survivors whose claims were previously barred by the statute of limitations in both Arizona and New Mexico can come forward.

Bankruptcy court hearings are open and public, Casteix said, and witnesses and whistleblowers tend to be more inclined to come forward and report.

“Survivors will have an opportunity during the reorganization to require a full release of pertinent documents, a full listing of accused clerics, a binding commitment to reporting and transparency, and other nonmonetary conditions of settlement,” McKiernan said.

Patrick Wall said it remains to be seen whether the Gallup Diocese will finally release the results of its audit of priest personnel files. In 2009, James Wall announced the review of more than 400 personnel files, and he promised to publicly release the audit’s findings about abusive clergy. More than four years later, he has yet to release the information.

Pastor said he expects that to happen now. “I expect the bishop to release the names and files of pedophile priests,” he said. “Anything less would be just another attempt by the Catholic Church to hide the truth.”

Pastor, a former prosecutor, said he also expects the Gallup Diocese to turn over information to law enforcement officials about the whereabouts and alleged crimes of living and credibly accused clergy.

“We not only will insist, but I believe the law in Arizona requires that they inform law enforcement,” he said.