Church May Mortgage Properties to Compensate Abuse Victims

BOSTON – The Archdiocese of Boston may mortgage church real estate to raise tens of millions of dollars needed for a global settlement with alleged victims of clergy sexual abuse, according to the archdiocese's chief financial officer.

Chancellor David W. Smith told the Boston Sunday Globe that it will take months to determine how much will be needed to finance such a fund.

He declined to estimate the potential size of the "non-litigious global assistance fund," saying that the archdiocese must first estimate the number of new claims and the extent of insurance coverage.

The possibility of mortgaging real estate is one scenario that has emerged since the archdiocese decided Friday to pull out of a settlement with 86 alleged abuse victims of former priest John J. Geoghan.

Cardinal Bernard Law's Finance Council refused Law's request to sign the Geoghan settlement, estimated to be worth $15 million to $30 million, saying it would leave too little money for people making future claims.

The rejection, the first time the council has rejected one of Law's requests, stunned victims' advocates and spurred promises of legal retaliation from attorneys representing accusers.

Attorney Mitchell Garabedian, who negotiated the $15 million to $30 million settlement for 86 clients, said he will ask a judge to approve a swift deposition of Law. He also said he is exploring suing the church for breach of contract.

The agreement was reached in March after 11 months of negotiations.

The Boston archdiocese already has paid an estimated $15 million to 40 alleged Geoghan victims.

The Geoghan lawsuits sparked the archdiocese's abuse scandal. Geoghan is serving a 9- to 10-year sentence after being convicted of molesting a 10-year-old boy.

An advisor to Law said that the Finance Council members concluded that the settlement's $400,000 per victim would set a precedent that the archdiocese could not afford as new victims emerge.

The unnamed adviser told the Globe that the council wants to avoid selling high-profile real estate, such as the cardinal's residence and chancery in Brighton, or Pope John XXIII Seminary in Weston.

Smith said the archdiocese instead hopes to mortgage other real estate holdings, dip into an insurance reserve, and raise additional funds through donations.