Sunday, May 31, 2009

Abusers paid by insurers
How the orders got more than they bargained for
The government talked tough but then it backed down and gave the religious a better deal on abuse compensation than they had expected
By MAEVE SHEEHAN Sunday May 31 2009
IN August 2000, a short newspaper report in the Irish Independent caught the eye of Sr Elizabeth Maxwell. A colleague had brought it to the nun's attention and she read it with interest. It was over a year since the Taoiseach, Bertie Ahern, had apologised for the abuse inflicted on children raised in homes and orphanages run by religious orders. Mr Ahern set up a commission to investigate the abuses. What Sr Elizabeth was reading now added another dimension: money. The commission intended to compensate the victims.
Sr Elizabeth was then director general of Cori, an umbrella group of religious orders. More than a dozen of them were facing claims of mistreating children, including her own order, the Presentation Sisters. Presumably, the State's plan to compensate some of those people would not help their defence.
Sr Elizabeth rang the only contact she had in the Department of Education, Tom Boland. Mr Boland, who now heads the Higher Education Authority, was on holidays. A few days later, Fergus Costello, another official in the Department, called her back. Mr Boland was still on holidays but would the religious orders be interested in meeting? Sr Elizabeth agreed.
Their first meeting was on September 25, 2000, in the Attorney General's office. Present at the meeting was Sr Elizabeth and Sr Helena O'Donoghue, provincial of the Sisters of Mercy, another order accused of abusing children. The AG was represented by Liam O'Daly and Chris Boudren, with Tom Boland and Fergus Costello from the Department of Education.
"It was made very clear to us that the scheme was being put in place whether or not we contributed," Sr Elizabeth later told the Public Accounts Committee. "The phrase used was: 'It is not predicated on your becoming part of it or not'. I recall it because it was such a Latinate word."
With curious detachment, she recalled how the scheme was "something we felt could be of interest to us". The alternative, spelt out to them by the government's representatives, was that the State would pay abused former residents, and then tell them to go after the religious for the rest, she said.
"That would still require the claimants to endure the rigours of cross-examination in court. We all agreed this was not attractive to former residents," she told the committee.
And so the negotiations began; the nuns and Brother Kevin Mullan of the Christian Brothers and a battery of advisors were ranged against officials from finance, education and the AG's office. The talks centred on money; how much the Church was willing to give, not how much the abuse of those children was worth. Being financial negotiations, the records make little or no mention of the plight of those who had been abused.
The religious orders played hardball. Initially government officials were unequivocal; they wanted nothing less than a 50/50 deal. They calculated that compensating victims would cost €254m and wanted a minimum of €127m from the religious orders. Privately they acknowledged that they would cap the religious orders' contribution but this bargaining position was withheld from the orders.
The religious orders had done their own sums. They counted up all the legal claims against the orders, calculated which might win and what they might cost and came up with between €50m and €60m.
That was their bottom line. In June 2001 they made their offer: €57m in cash, property and counselling services. Throw in a range of properties worth €51m that the religious orders had already donated to the State and charities in the past 10 years and their contribution came to €108m.
Most importantly, they wanted open-ended indemnity. They drew up their own draft document setting out the terms by which they wanted the State to protect them from being sued by former residents.
"We put an offer on the table. We were probably quite assertive about it and we said it was our final offer, but we expected a response from the Government. That was in June of that year. No response came," said Sr Elizabeth.
Perhaps the Department of Education thought it unworthy of one. A Department memo said it fell "far short of the working objective of the negotiations from the State's viewpoint, which was a minimum contribution of £100m (€127m)".
The Minister for Finance, Charlie McCreevy, told Michael Woods, the Education Minister, that it was "quite disappointing", fell "far short" of a "meaningful contribution" and was "quite inadequate". On top of that, the potential costs were escalating. By June, for instance, a Department memo stated it could reach €508m.
The frosty relations between Church and State further soured when the religious orders saw details of the confidential offer splashed all over the News of the World. "Today the Irish News of the World reveals that the Government is furious at the attitude of negotiators acting for the religious orders," thundered a leader column, while revealing the offer towards the compensation fund for victims.
The religious orders were "hurt" at the portrayal of their contribution as "paltry" and "mean", the Public Accounts Committee heard. "We felt -- and I am on record as saying -- that we were being treated shabbily by somebody on the State's side. Efforts were being made to bounce us from the offer we had made to a higher figure," Sr Elizabeth later told the Public Accounts Committee which investigated the deal in 2004.
When talks resumed on October 16, a different civil servant was in the chair. He was Paul Kelly, an assistant secretary in the Department of Education. It was now the State's turn to play hardball.
"It was a very different style of meeting at which it was put clearly to us that it was £100m (€127m) or nothing. There was no use talking about anything else, £100m was required from us. There was no point in talking unless we were in a position to agree to that. Frankly, we were not in a position to agree to it. So that meeting ended rather unsatisfactorily," Sr Maxwell recalled.
At this point, Michael Woods, a devout Catholic, took matters into his own hands. That afternoon, his official, Tom Boland, telephoned Sr Elizabeth, inviting her to meet with Dr Woods. She agreed to meet him on November 7.
The Education Minister -- who has denied links to Opus Dei or the Knights of Columbanus -- later claimed credit for "kick-starting" the talks. "My religion was an asset. They knew me and they knew my work," he told the Sunday Independent in 2003.
The night before her meeting with the minister, Sr Elizabeth received an unexpected reply. The letter changed the whole substance of the State's negotiations with the religious orders. The official, who had appeared so unequivocal to the nuns a couple of weeks before, now took a "very different" tone, according to Sr Elizabeth.
The letter agreed to several of their demands. The State would provide a "permanent indemnity" against litigation in cases which would come under the remit of the Redress Board. It would also accept part of the contribution property it had transferred in the past, along with other bits and pieces. And even though the State estimated the likely cost at €254m to €508m, the congregations' contribution could be capped at €128m, which represented 50 per cent of the lowest cost estimate.
The next day, the nuns and Brother Kevin Mullen met with Michael Woods and the Department of Education Secretary General John Dennehy. "The minister asked that we meet without our advisors," Sr Helena O'Donoghue told the Public Accounts Committee.
A second meeting followed on January 7 and the deal was done. The religious orders brought their legal advisor. Michael Woods and John Dennehy didn't. They tinkered with the educational package and the counselling of victims. They discussed the press release that would be issued after the cabinet meeting to approve the deal, and the figures it would contain.
"It was a question of presenting our package and putting all the elements together to equate with £100m or €128m because we had just crossed into euros at that stage," said Sr Elizabeth.
The only outstanding issue was protecting the religious congregations who contributed to the pot from being sued. The nuns tried to raise the indemnity but Dr Woods later said he refused to discuss it without legal advice from the AG's office.
There is no contemporaneous record of either meeting. Sr Elizabeth took "scrappy" notes during their meeting, as she had been feeling under the weather, she later said.
Michael McDowell, who was the attorney general, later angrily claimed he had been excluded from the meetings Dr Woods later claimed: "The legal people simply couldn't have attended -- it was a no-go area for them -- they had fallen out with the religious."
The deal was agreed in principle by the cabinet on January 30; along with the Taoiseach, Bertie Ahern, Mary Harney, who is now health minister, Noel Dempsey, Dermot Ahern, now justice minister and the Tanaiste, Mary Coughlan, were amongst those who approved it.
By the time the deal was signed by the 18 religious orders in June 2002, the religious had achieved even more than they initially bargained for. They paid €128m in total -- comprising €28.44m in cash, €12.7m in an education fund, €40m in old property transfers, €36.54m in new property transfers, and €10m in counselling services.
A post-script to the negotiations is revealing about the attitude of religious orders. Six months after the deal was done, an insurance company agreed to cough up €6.5m claimed by the religious orders as cover for the abuse claims.
Noel Dempsey, who succeeded Dr Woods as minister, asked the religious orders to contribute this money to the scheme. They refused. Sr Helena told the Public Accounts Committee that the congregations believed the insurance money was "a means of recouping the losses they had experienced".
They never did relinquish that €6.5m.
Irish Independent

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