ALBANY — The Roman Catholic Diocese of Albany has agreed to pay $148 million to settle claims filed by more than 400 people who allege they were sexually abused as children by priests and other diocesan employees during assaults that date back decades.
The proposed settlement, which follows years of grueling negotiations, was announced by the diocese and a law firm that represents almost 200 of the plaintiffs who have filed sexual abuse cases and are also claimants in the diocese’s ongoing bankruptcy case.
The agreement must still be approved by the victims as well as a federal bankruptcy judge. It does not include the diocese’s insurance carriers, some of whom have asserted they are not responsible for paying for what they allege was criminal behavior that went on for years with the knowledge of church leaders.
“As the bishop of Albany, I want to say a clear and unnuanced statement of guilt on the part of the diocese in its handling of our predator priests and others within the diocese,” Bishop Mark O’Connell, who was installed as the diocese’s leader in December, said in a statement. “It is a shameful chapter in our history and no monetary settlement such as the one reached today will erase the pain caused to survivors. On behalf of the Diocese of Albany, I apologize and promise to be exceedingly diligent in my time in Albany to prevent anything like this occurring again.”
O’Connell, a canon lawyer, had been part of the recent mediation discussions and said that he brought extensive experience from his time at the Archdiocese of Boston, where two decades ago he was appointed as the archdiocese’s judicial vicar and served as a prosecutor for the sexual abuse cases in the church’s internal tribunal system.
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“I have been at this work for 25 years. I am the chairperson-elect of the child protection committee of the United States Bishops Conference,” O’Connell said at a news conference Friday. “When I was able to speak to some of the survivors and to their lawyers at our last mediation, I told them I know it has to hurt, I know it has to be a huge sacrifice. … I think that attitude helped people here go with me and reach the number that we had to reach.”
O’Connell also said he is “very grateful” to the diocese’s parishes, which will pay about one-third of the settlement and likely face financial challenges as a result. He said the remaining funds will come from the diocese and “various entities related to us.”
Jeff Anderson, an attorney whose law firm specializes in sexual abuse litigation and represents 186 of the claimants, issued a statement saying the “survivors on the Official Committee of Tort Claimants in this case stood firm, fighting tirelessly for all survivors.”
“Despite the emotional cost, they never wavered,” he added. “This historic outcome is the result of their courage, resilience, and commitment to justice.”
The litigation with the insurance companies will continue, including potential civil trials. The result could be millions of dollars in additional compensation for the alleged victims. But as it stands, the agreement announced Friday would mark one of the largest payments on record involving the multiple New York Catholic dioceses that have sought bankruptcy protection before reaching similar global settlements of sexual abuse claims. And while other settlements were larger, including those approved in Rockville Centre on Long Island and Rochester, they were funded primarily by insurers.
If approved, the Albany diocese’s alleged victims — or their heirs if they died while the litigation has been pending — are expected to receive varying amounts of compensation that a committee will determine after considering factors such as the extremity of the sexual abuse. For some of the victims, that abuse lasted years and may have involved more than one assailant.
The diocese and attorneys for the alleged victims said the settlement will not include payments to the roughly 1,100 former employees of the now-closed St. Clare’s Hospital in Schenectady, whose pension plan was shut down in 2018 with a $50 million shortfall. The pensioners are creditors in the bankruptcy case and also embroiled in separate litigation with the diocese.
Paul A. Levine, one of the attorneys representing the pensioners and other “unsecured creditors,” said that contrary to the statements of the diocese and the attorneys for the sexual abuse victims, “contributions of funds to the bankruptcy estate to resolve this longstanding case must be shared with all unsecured claimants, including the St. Clare’s Pensioners.”
A jury awarded the pensioners a verdict of $74 million that was recently upheld by a judge.
“The committee will continue to fight for equal distribution to pensioners and all unsecured creditors on account of their claims and will strongly oppose any plan that does not treat all creditors equitably,” Levine added.
At a news conference on Friday afternoon, O’Connell said, “that although this is not about St. Clare’s pension, that does complicate things a bit, the St. Clare’s pension, and hopefully that will be resolved relatively soon.”
The $148 million settlement followed years of negotiations between the Albany diocese, its insurers and attorneys for the victims. But attorneys who were on a committee that represented the claimants in the bankruptcy case took the lead in the negotiations, including Cynthia S. LaFave, an Albany-area attorney whose firm, along with Jeff Anderson & Associates, represents 186 plaintiffs who have pending claims against the diocese.
People familiar with the negotiations said LaFave had refused to accept lesser offers from the diocese, which at one point had offered a global settlement of $20 million. She had also long warned that too many alleged victims were dying before they could obtain justice or receive compensation for the abuse they endured.
“This settlement is more than just a significant financial outcome for survivors,” LaFave said. “It is also a public acknowledgement of the harm these survivors endured at the hands of the diocese and its trusted leaders. While no amount of money can undo the trauma they endured, this settlement proves that the survivors’ voices matter and that the diocese must confront its failures and take responsibility.”
Spurring the mediation
The negotiations intensified three years ago when the diocese filed for bankruptcy protection as it faced hundreds of civil cases that were filed under New York’s Child Victims Act, including many that had reached the trial stage. The religious organization’s leaders warned at the time that the diocese could face financial ruin if it was subjected to massive jury verdicts — an outcome they said could potentially leave many victims with no compensation for their claims.
In October, the financial exposure of the diocese became more clear when it agreed to an $8 million settlement in a lawsuit filed by a man who had said he was molested hundreds of times as a child by a former high-ranking priest who had admitted sexually abusing young boys for years.
The case was one of seven child sexual abuse lawsuits against the diocese that a federal judge last year ruled would be allowed to go to trial — part of an effort to spur mediation in the languishing bankruptcy case.
That decision by former U.S. Bankruptcy Judge Robert E. Littlefield Jr. came after attorneys for the hundreds of alleged victims with claims against the diocese had asserted that the settlement efforts had stalled, in part, because they needed trial verdicts to establish a more accurate picture of how much the victims should be compensated. The diocese’s insurance carriers have had a significant stake in those negotiations.
The proposed settlement is expected to begin to wind down the contentious and costly litigation that has drained millions of dollars from the diocese’s assets and raised concerns from judges in the bankruptcy case that it was going to result in fewer funds available for the victims.
The culmination of the settlement negotiations also followed decades in which the diocese’s former leaders had denied that they had systematically covered up the abuse or protected pedophile priests and others accused of sexually assaulting children.
Hubbard’s tainted legacy
Much of the blame for the diocese’s mishandling of the sexual abuse fell on former Bishop Howard J. Hubbard, who admitted during a pretrial deposition five years ago that he and the diocese had systematically concealed incidents of child sexual abuse and did not alert law enforcement agencies when they discovered it. Hubbard noted he was not a “mandated reporter” and that their actions were, in part, intended to avoid scandal and preserve “respect for the priesthood.”
Hubbard’s testimony was taken two years before he died at age 84 under a cloud after he had married his longtime caretaker and had his request to leave the priesthood rejected by the Vatican.
Hubbard’s request was made eight years after he had retired from his role as bishop of the 14-county diocese, a position he held for 37 years. Hubbard himself faced allegations of child sexual abuse in a series of lawsuits filed under New York’s Child Victims Act; he denied committing any abuse.
During his 2021 deposition, Hubbard was questioned for four days by attorneys representing dozens of individuals who filed abuse claims.
He was pressed by one attorney about why he didn’t call the police when David Bentley, a former priest, had allegedly admitted to him that he had sexually abused a child. Bentley was eventually removed from ministry by the diocese in 2002 over sexual abuse allegations involving multiple minors.
Hubbard testified that a county social services commissioner had contacted him and said that Bentley had sexually abused a child. He said the commissioner told him that the county was “providing assistance to the individual and the family, but they wanted us to do something about Father Bentley. … He had admitted that he had engaged in this behavior, and he was sent for treatment.”
The former bishop also had acknowledged that he sought to cover up the abuse because of his concerns about “scandal and respect for the priesthood.” In numerous instances, priests accused of sexually abusing children were sent to treatment centers run by the Catholic church
His deposition revealed the depths of the cover-up and confirmed that many of the records documenting the sexual abuse allegations were kept in secret files that only Hubbard and other top church officials could access. He had said the “sealed” files included allegations of abuse as well as records on priests accused of other forms of wrongdoing, such as financial misconduct or alcohol abuse.
Hubbard claimed he had no idea how many of the files, which were kept in a locked room at the chancery in Albany, were in the possession of the diocese. “I had no idea because I was only in that room once. It was when I was bishop emeritus,” he said, referring to the period after his retirement in 2014. “And when I wanted the sealed file, I would ask the chancellor to get the file and bring it to me.”
Hubbard added that he would review the sealed files “when there was a report of misconduct on the part of a priest … to see if there was anything prior that would substantiate a report that I received.”
‘Nobody should be afraid’
Last September, the diocese faced a reckoning when dozens of the victims who alleged they were sexually abused as children by priests and other employees were allowed to share their stories during a multiday conference in U.S. Bankruptcy Court in Albany.
Then-Albany Bishop Edward B. Scharfenberger, Hubbard’s successor, was among the many diocesan officials and employees who sat in the courtroom during the extraordinary proceeding. For three days, they listened to gut-wrenching and emotionally charged accounts from the victims who described how the sexual abuse had, in many instances, destroyed their lives.
Scharfenberger, whose retirement request was accepted by the Vatican in October, sat in the front of the courtroom at a table normally reserved for attorneys during trials and other court proceedings. His presence enabled the victims who spoke to tell their stories to the judge and to the diocese’s leader.
“I am overawed by the courage and the dignity with which so many survivors told us their stories or narratives,” Scharfenberger said after the three-day conference ended. “They deserve to be commended for telling the truth. I heard with my heart, and I could see their hearts really reaching out, albeit covered with thorns and maybe barbed wire because of the pain that they suffered, and it was totally appropriate that they share that pain and that I absorb that, too.”
On Friday, O’Connell noted that he has spent the past 25 years immersed in the church’s sexual abuse scandals and had an active role in the efforts to investigate what happened and seek justice. He also said he intends to “continue to dedicate my life” to helping the survivors.
“I was in the eye of the storm in Boston when this first hit,” he said. “I was living literally in the chancery building, and I was meeting with all the tsunami of cases and I then moved to the tribunal where I was the chief judge prosecuting cases, and then I’ve been in every part of this. … It has changed my life. It’s changed my perspective and … every part of me is sorry that our church collectively did this to these poor people that were hurt deeply.”