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Sex, God & Greed

Forbes Magazine, Daniel Lyons, 9 June 2003

Pedophile priests have sparked a litigation gold rush. The Boy Scouts, day care firms and Hollywood may be next.

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Asbestos, tobacco, guns, lead paint. What's the next jackpot for tort lawyers? It could be sex.

The focal point of this tort battle is the Catholic Church. The Church's legal problems are worse even than most people realize: $1 billion in damages already paid out for the victims of pedophile priests, indications that the total will approach $5 billion before the crisis is over. But this wave of litigation does not end here. Is there any reason to think that the priesthood has a monopoly on child molestation? The lawyers who are winning settlements from Catholic dioceses are already casting about for the next targets: schools, government agencies, day care centers, police departments, Indian reservations, Hollywood. Plaintiff lawyer Roderick MacLeish Jr. and other litigators have parlayed the priest crisis into a billion-dollar money machine, fueled by lethal legal tactics, shrewd use of the media and public outrage so fierce that almost any claim, no matter how bizarre or dated, offers a shot at a windfall.

The lawyers are lobbying states to lift the statute of limitations on sex abuse cases, letting them dredge up complaints that date back decades. Last year California, responding to the outcry over the rash of priest cases, suspended its statute of limitations on child sex abuse crimes for one year, opening the way for a deluge of new claims. A dozen other states are being pushed to loosen their laws.

"There is an absolute explosion of sexual abuse litigation, and there will continue to be. This is going to be a huge business," MacLeish, age 50, says. A Boston-based partner of the Miami law firm of Greenberg Traurig (2002 billings: $465 million), he has won upwards of $30 million in settlements for more than a hundred plaintiffs in lawsuits in the past decade. With a hit man's style and a gift for TV sound bites, he has played a key role in unearthing (and exploiting) the priest scandals of the past two years, prompting a nationwide cascade of similar reports.

In the resulting wave of lawsuits the majority of cases are legitimate, even officials of the Catholic Church concur. Dioceses will pay dearly for covering up the most abominable crimes and failing to prevent future offenses.

Overdue justice. But it could lead to a legal morass marked by extortion as much as fairness, in which a small cast of liars cashes in on the real suffering of victims. "Just think how this ripples out: day care, babysitters, Boy Scouts, Girl Scouts, summer camps, study-abroad programs. You start thinking about it, and it boggles the mind," says Patrick Schiltz, associate dean of the law school at the University of St. Thomas in Minneapolis, Minn. "There is impact in the tens of billions of dollars."

For Roderick (Eric) MacLeish, sex litigation is a big business. MacLeish says he represents 240 people bringing abuse claims against the Roman Catholic Archdiocese of Boston. His most celebrated current case also is his most dubious one: three young men who tell lurid tales of being viciously and repeatedly assaulted in the 1980s by the Rev. Paul R. Shanley. Shanley, 72, has denied the charges but declines further comment. He makes an easy target: In 1994 the archdiocese paid out settlements to an undisclosed number of people, including two clients represented by MacLeish, who said Shanley had molested them when they were teenagers. As part of the settlement Shanley had to be removed from ministry while he got treatment.

There's just one problem: MacLeish's three new clients were friends and former classmates, and all three claim they had blocked out all memory of these brutal anal rapes for more than a decade--what some psychologists call "repressed memory."Is it possible that the very notion is bunk? (See box, p. 72.)

Moreover, MacLeish's client, Gregory Ford, 25, of Newton, Mass., has spent time in 17 mental institutions and halfway houses and is on antipsychotic medication and unable to work, his parents say. In the past he has threatened to kill his father. Archdiocese lawyers believe Greg may previously have said he was molested by his father and a cousin; his parents deny it. Yet a Massachusetts Superior Court judge has allowed this case to proceed, which attests to MacLeish's considerable skills in court and in front of news cameras. "These are strong cases, and we are pushing them to trial," MacLeish insists. "We are going to pound and pound and pound."

Child sexual abuse litigation will probably not generate anything like the settlements for, say, asbestos claims ($54 billion to date). But, like asbestos litigation, it has the potential to snowball, with profits from early settlements financing the recruiting of an ever-widening ring of plaintiffs. Among the cases in this gold rush:

* In Florida, a lawyer who has filed numerous suits against Miami's Catholic archdiocese filed a class suit on behalf of up to 100,000 Native Americans who allegedly were mentally, physically and sexually abused in government-run boarding schools. Attorney Jeffrey M. Herman says the suit, filed in April in the U.S. Court of Federal Claims in Washington, D.C., asserts that damages could run as high as $25 billion. Canada faces a similar claim from up to 18,000 Native Americans and estimates it will spend $1.2 billion (U.S.) to settle it.

* In California, Beverly Hills lawyer Raymond Boucher, who has filed more than one hundred claims against various dio-ceses, recently filed a sex suit against the Elite modeling agency. His client is a former fashion model who claims Elite's founder, John Casablancas, impregnated her 15 years ago when she was a teenager. The Los Angeles Superior Court tossed out the claim against Casablancas because he doesn't live in California, but it let the case against Elite go ahead. Boucher says he has more claims coming against Elite, and that he may pursue cases involving Hollywood, where sexual abuse of children, he asserts, has been rampant for decades.

* In Los Angeles a man claiming recovered memory and exploiting the lifted statute of limitations has sued the police department and the Boy Scouts of America. He alleges that, 25 years ago in a Police Explorers program, he was molested by David Kalish, now the city's deputy police chief. The city has suspended Kalish with pay. A grand jury is investigating. Meanwhile, the Los Angeles archdiocese faces a claim based on an incident alleged to have occurred in 1931, though it says it has never heard of the priest named in the complaint. Last year a nun sued the diocese and charged that, 19 years ago, a priest raped her and fathered her son--in the Philippines. The case was tossed out.

* In Vernon Hills, Ill. two women sued a Children's World day care center, accusing a staff member of molesting their two daughters, ages 5 and 11, and seeking $15 million each. Police dropped related criminal charges as unprovable--but the day care center settled civil claims for an undisclosed amount.

* Two Arizona women have sued the Tucson diocese, alleging a priest molested their two brothers, causing the brothers to then molest them. In Louisville, Ky. a former topless dancer has sued the Church, claiming a priest kissed her 20 years ago. In Rockville Centre, N.Y. a lawyer seeks $1.6 billion from the diocese--on behalf of only 11 men, one of whom says he was molested once (see box, p. 71).

The frenzy stems from a decadelong campaign by plaintiff lawyers, says Schiltz of St. Thomas University, who has defended religious organizations in more than 500 sex abuse lawsuits. "It's like warfare," he says. "Phase One was for plaintiff lawyers to maximize bad publicity and destroy the credibility of the Church. Phase Two is to use that publicity to push for legislative changes. Phase Three will be to collect." The problem, he says, is that fraudulent claims could get paid off with legitimate ones. "Who's going to doubt them? I worry about the person who was an altar boy 30 years ago, and his life has been a disappointment, and now he realizes he has a lottery ticket in his pocket."

More than 500 cases are pending against the Boston archdiocese, with at least a thousand more claims against Catholic dioceses nationwide. Some lawyers estimate as many as 20,000 people were molested by Catholic clergy in the U.S. in recent decades. And for every Catholic victim, Schiltz estimates even more may have been harmed by clergy of other faiths. These cases, moreover, MacLeish says, will prompt more victims of nonclergy abuse to come forward as people feel less stigmatized.

The lawyers help make that possible. In Los Angeles Raymond Boucher has 220 clients and is trying to form a class action. His Web site boasts a list of priests who have been convicted or accused of sexual abuse and a "secure victim form" that lets visitors click their way to a confidential complaint. Boucher's office also provides space to a "victim advocate," who has been contacting hundreds of possible victims, though Boucher insists this is for outreach, not for recruiting.

In Minnesota, attorney Jeffrey Anderson, with more than 700 past clergy cases and 250 pending, aims to use the Racketeer Influenced & Corrupt Organization Act (RICO), arguing bishops conspired in a coverup. He also is trying to sue the Vatican, complete with a complaint he had translated into Latin.

Some of these cases are likely to bankrupt some Catholic dioceses, but this legal assault seeks even deeper pockets: big insurers. Put aside the pious talk about protecting kids, and the racket boils down to this: Plaintiff lawyers are going after old insurance policies written decades ago under entirely different circumstances. Boucher says he has found two insurers with big exposure in Los Angeles. Pacific Indemnity, a subsidiary of Chubb Group, wrote policies from the early 1950s to 1967 and could be on the hook for several hundred million, Boucher says. Chubb says any effect won't be material. Allianz Insurance Co., a U.S. subsidiary of Munich-based Allianz Group, wrote policies from 1979 to 1986 and could be responsible for more than $20 billion, Boucher insists. Allianz calls this estimate "grossly off-base."

Also at risk are the big companies that run day care centers, such as KinderCare (otc: KDCR - news - people ) and Bright Horizons (nasdaq: BFAM - news - people ), both publicly held, and Children's World, which recently was acquired by Michael Milken's Knowledge Universe. These companies already are feeling the crunch: In some cases their insurance costs have risen by 20% to 30%, and a trickle of new abuse lawsuits has begun. The flow could quicken if more states lift their statutes of limitations, making it easier for repressed memory cases to proceed and all the harder for the accused to disprove allegations.

The False Memory Syndrome Foundation, a Philadelphia debunking group, says at least 100 clergy cases involve people who claim they were molested or raped, blocked it out for decades and now suddenly remember. "The notion that the mind protects itself by banishing the most disturbing, terrifying events is psychiatric folklore," declares Richard J. McNally, a Harvard psychology professor who has conducted a six-year study of abuse victims and has written a book, Remembering Trauma, to dispel myths of memory repression. "The more traumatic and stressful something is, the less likely someone is to forget it."

Yet in MacLeish's biggest case his three clients claim they recovered their memories only after the Boston Globe ran a long story on Jan. 31, 2002, describing other people's complaints against Shanley. He had been a popular "street priest" who wore jeans, grew his hair long and preached to street urchins and runaways. Ordained in 1960, he served in several parishes around Boston before moving in 1990 to California and working part-time as a priest in San Bernardino. He was dismissed in 1993 after the first charges surfaced in Boston.

The Globe story painted a plausible picture of a monstrous serial rapist who preyed on teenage boys, anally raping several victims and luring one to his bedroom for a game of strip poker. In Newton, Mass. Greg Ford's parents, Rodney and Paula Ford, read the article and immediately concluded that Shanley must have molested their son. For years they had wondered what had gone wrong with Greg, who they say was a healthy, normal boy until he was 13. Shanley had been a priest in their parish, St. Jean l'Evangeliste, from 1979 to 1990, by which time Greg was 12.

As his parents tell it, in years of therapy Greg had tried, unsuccessfully, to recall being molested by anyone. When his parents showed him the Globe article, he didn't remember Shanley or recognize his photograph. The Fords persisted, showing Greg a snapshot from his First Communion with Shanley. At last Greg collapsed, sobbing, and said that from age 6 to 11 he had been raped by the priest.

Later he estimated this happened 80 times. He alleged that Shanley took him from his one-hour Sunday school class, raped him, then returned him to his classmates. Verona Mazzei, who was director of the Sunday school program, says she never saw Shanley take any kids from class. The Fords say Greg never exhibited any unusual behavior during these years. "As soon as it happened, each time he left that room, he forgot about it," Rodney Ford says. "The specialists he sees now are amazed that he could block this out, that he had such control."

When the Fords contacted MacLeish, he signed on. His first clergy killing came in 1992--a multimillion-dollar settlement on behalf of 101 clients in Fall River, Mass. A couple of years later he negotiated two settlements against Shanley, which were described in the Globe article. As MacLeish began to check out Ford's complaint, the case took an amazing twist: Two of Greg's friends also began to recover memories about Shanley assaults.

Paul Busa, 26, an Air Force policeman in Colorado, says that after hearing about the Globe story he, too, began to recover long-buried memories of being raped by the priest. Greg's parents said Busa called them. MacLeish says Busa called him too. Soon afterward MacLeish bought Busa a plane ticket to Boston, had him evaluated by a shrink, then took him on as a client.

In March 2002 MacLeish and Greg Ford met with Anthony Driscoll, also of Newton, Mass., and discussed a story Ford told about sitting on a pencil that Driscoll had placed on his chair in Sunday school class when they were 11 years old. Greg had received medical treatment, but now he claims that while he was waiting to go to the hospital, Shanley raped him. Doctors who treated the wound made no mention of sexual assault. "Even the doctors missed it," Rodney Ford says.

Driscoll confirmed the story--and asked MacLeish to recommend a psychologist because Driscoll, too, had been having flashbacks of being assaulted. One rape was punishment for the pencil prank, he later told archdiocese lawyers in a deposition. He also recalls Shanley sitting naked to hear his confession, then forcing him to perform oral sex. In the same deposition Driscoll describes a past that includes an arrest for credit card fraud and juvenile charges of indecent assault.MacLeish referred Driscoll to a psychiatrist--and signed him up.

In April 2002 MacLeish and the Fords staged a press conference carried live on CNN, at which MacLeish released parts of Shanley's 800-page file and rocketed the Ford complaint to the forefront of cases nationwide. Rodney and Paula Ford appeared on Good Morning America, Today, Dateline NBC, CNN and FoxNews. They gave interviews to Vanity Fair and USAToday. Journalists were calling from around the world. "France, Australia, Sweden--the phone never stops ringing," says Rodney Ford, who has taken a leave of absence from his job as a cop at Boston College to become an advocate for sex abuse victims.

They also pursued criminal charges. Within weeks Shanley was arrested in California, extradited to Boston and arraigned. In July a grand jury indicted him on ten counts of child rape after hearing from Daniel Brown, a Boston psychologist who believes recovered memories may be valid, even when they involve far-out things like Satanic ritual abuse.

Since then MacLeish has outspun the archdiocese at every turn. He has grilled bishops in videotaped depositions, obtained psychiatric evaluations and 45,000 pages of archdiocese memos and spoon-fed all of it to the press. He helpfully underscores the most lurid details. Yet he protested bitterly when the archdiocese deposed shrinks who are treating his clients--standard procedure when someone claims emotional distress.

This lawyer relishes juicy cases. In 1995 he successfully defended Harvard Medical School psychiatrist John Mack, who was threatened with losing his tenure after he published a book arguing that alien abductions were real. He successfully defended Lars Bildman, disgraced chief executive of drugmaker Astra USA, against sexual harassment complaints. He also defended a Cape Cod high school teacher who got fired for making porno films in his spare time and he generated headlines when he sued the elderly wife of an alleged pedophile, collecting on her homeowner's policy.

In his assault on the Catholic Church, MacLeish uses the press to inflict pain and then pushes for a big settlement. But instead of retreating, the Boston archdiocese has hired a killer litigator, Boston veteran Timothy O'Neill, 62, who for years has helped hospitals stave off medical malpractice lawsuits and also has defended priests against sexual abuse claims. In January O'Neill outraged victim advocates by deposing a therapist for Anthony Driscoll. O'Neill now is pursuing half a dozen therapists who have treated Greg Ford in the past.

Archdiocese lawyers say Greg Ford's medical records and a deposition from his sister indicate he previously said others had molested him, including a cousin and his own father. MacLeish and the Fords say this is nonsense and held another press conference, where they complained about the tactics. The Fords are flabbergasted that the archdiocese dares to challenge their claim. "Can you imagine the archdiocese of Boston dragging the families of abuse victims into court? Are they nuts?" says Paula Ford.

O'Neill says the Church cannot operate like an ATM machine, dispensing cash to anyone who drives up with a claim. And he is eager to put Ford, Driscoll and Busa in front of a jury. "If you have a total recovered memory case, a jury is going to have trouble with that," O'Neill says.

The Boston archdiocese--which has seen donations plunge 50%, is laying off workers and plans to sell 15 properties to raise cash--hopes to settle all 500-plus pending sex abuse claims in one group. MacLeish won't say how much money it would take for him to settle, but he insists that his three star clients won't take part in any group settlement.

MacLeish has three paralegals working on clergy cases and a database that tracks clergy sex abuse cases in the U.S. Another tech marvel: an Optical Character Recognition system that lets MacLeish zoom through 45,000 pages of Boston archdiocese records and pull up any page in the blink of an eye. "We're putting millions of dollars into this," he says. Even if the Shanley case falls apart, MacLeish will profit from it. In the discovery process he has dug up records on 139 other priests. He has gained a year of glowing free publicity, which has brought still more plaintiffs to his door.

MacLeish already is plotting his next career move. He says when the clergy cases end he will consult to businesses that want to protect themselves from sex abuse lawsuits. "This is now a hot-button issue. People will pay top dollar for experts with experience," he says. "I will spend a lot of time advising businesses on how they can avoid the experience of the Boston archdiocese." His rate: $500 an hour.