09:35 AM PDT on Saturday, July 10, 2004

By SARAH LINN, Associated Press Writer

When Archbishop John Vlazny moved here from Minnesota in 1997, he thought he was coming to a diocese where he wouldn't have to deal with allegations of sexual abuse by priests.

Portland Archbishop John G. Vlazny. (Archdiocese photo)

"Actually, I thought the problem had been dealt with here," Vlazny said Friday in an interview at his office with The Associated Press. "There was none of this concern, no cases coming forward."

Two years later, allegations surfaced that a Portland priest had molested more than 50 boys starting in the 1950s and through the 1980s.

The charges — and the lawsuits — began to pile up.

With more than $53 million paid in court settlements and roughly 60 lawsuits still pending, Vlazny decided this past week that the archdiocese had to file for bankruptcy — becoming the first in the nation to do so.

Vlazny, 67, said the move was "the only way that we could be fair to all victims, somehow handle this financial situation, and keep the church on course."

Born in Chicago in 1937, Vlazny spent most of his priesthood in the Midwest. He was rector of Loyola University's Niles College and later served as auxiliary bishop for the Chicago diocese.

Vlazny was appointed bishop of Winona, Minn., in 1987, and immediately became embroiled in handling charges of clergy sex abuse against the church.

He spent much of his stint as bishop re-examining church policy, visiting with parishioners, and holding prayer services for the victims of sex abuse, he said.

"It's humbling for me to hear how people have suffered," Vlazny said. "But it also seems to be really good for them to get it off their chest, to tell someone like me."

When Vlazny was appointed Portland archbishop in 1997, he was aware of a handful of sex-abuse allegations against priests in Oregon in the 1980s. But he thought such charges were in the archdiocese's past.

For his own peace of mind, in 1998 Vlazny ordered that the personnel files of all active priests be reviewed for child abuse complaints. None were found, said the archbishop's spokesman, Bud Bunce.

A year later, 25 former altar boys filed lawsuits against the archdiocese, all claiming they had been molested by the Rev. Maurice Grammond over a span of three decades. Grammond retired for health reasons in 1986 and was stripped of his priestly duties in 1991 after a Seaside man said the priest had molested him.

Vlazny and the archdiocese made headlines in October 2000 by settling lawsuits with 23 of the 25 men.

As part of the settlement, Vlazny issued a public apology — and had the letter read in parishes across the 356,000-member archdiocese.

Vlazny's supporters say his actions show that he cares about sex-abuse victims and about the church's reputation, and is not afraid to meet controversy head-on.

"To me, he is just an amazing composition of two qualities — ability, which an archbishop has to have, and competence," said the Rev. Joseph Jacob Berger, pastor of St. Mary's Church of the Immaculate Conception in Portland. "I stand in awe of the person."

Brother Louis DeThomasis, president of St. Mary's University of Minnesota in Winona, said that he's never known Vlazny to run away from a fight.

But many advocates for the victims of clergy abuse say that by filing for bankruptcy, Vlazny reveals that he is more interested in protecting the church's assets than helping those who were abused by paying them just settlements.

"Right now financial settlements are the only recourse for justice," said Bill Crane, who heads the Oregon chapter of the Survivors Network of those Abused by Priests.

Crane, himself a victim of priest abuse, questions Vlazny's sincerity, calling his responses to sex-abuse allegations — such as the public apologies — "pure p.r."

"Time and time again, the archbishop is willing to communicate in a public forum his support of the victims," Crane said. "Yet the actions behind those statements are empty and ill-willed."

For instance, Crane said, Vlazny turned down a request to meet monthly with the group to discuss ways to educate church members about sex abuse.

Vlazny said that kind of criticism is coming from victims "who are still hurting in life."

In the months ahead, Vlazny is facing a challenge never confronted by an American diocese — Chapter 11 bankruptcy.

Filing for bankruptcy frees the Portland Archdiocese from the threat of creditor lawsuits while it reorganizes. However, it could also open church records to public scrutiny, and could require Vlazny and other church leaders to cede some financial control to the courts.

Assessor's records say church property is worth at least $300 million, including parishes, schools and an abbey, while plaintiffs' attorneys estimate the archdiocese's total assets at closer to $500 million.

Ultimately, it will be up to the federal bankruptcy court to decide which archdiocese assets are on the table during discussions with the plaintiffs over amounts they will receive as compensation.

"There's not a hidden treasure here in this archdiocese," Vlazny said. "What property we have I've pretty much mortgaged it so I could pay off some of the claims."