Catholic Charities to close foster care program

Decision hinges on settlement, inability to purchase liability insurance

By Michelle Martin
STAFF WRITER

Catholic Charities of the Archdiocese of Chicago has begun dismantling its foster care program after announcing that it will stop providing foster care services as of June 30.

The decision, which Catholic and state welfare officials called "tragic," came after Catholic Charities was unable to get liability insurance for its foster care program.

Catholic Charities and other private agencies recruit and trains foster parents to be licensed by the state, place children with the foster parents they have trained, and provide monitoring, casework and social services to the children.

When the closure was announced April 16, about 900 children were in the program, said April Specht, a spokeswoman for Catholic Charities. One hundred and fifty-six staff positions were to be cut as well.

The decision came after Catholic Charities was unsuccessful in finding liability insurance to cover the program. Its current carrier agreed to continue providing coverage of all of Catholic Charities' services except foster care.

The agency approached 25 providers besides its current carrier; 24 turned it down, and one didn't respond, Specht said.

The insurance company's decision came after Catholic Charities settled a lawsuit over alleged abuse of three children in a foster home in the 1990s for $12 million.

The insurance company capped its liability at $10 million, and Catholic Charities had a $1 million retention fund, said Walter Ousley, Catholic Charities' director of operations. That left the agency scrambling to come up with the rest of the money.

Catholic Charities and the Illinois Department of Children and Family Services have both formed transition teams to transfer the children and their foster parents to either the state agency or other private agencies that continue to work in partnership with DCFS, said Kendall Marlowe, spokesman for DCFS.

Charities hopes that some of its foster care workers also can move to the agencies that will work with their young charges, in essence moving children, parents and workers together as a block, Ousley said.

Marlowe acknowledged that such a process would be ideal, providing the least disruption to the children, but said the agency cannot make any such guarantees.

"DCFS recognizes that there is a great deal of skill, expertise and a high level of qualifications among the outgoing staff," Marlowe said. "We wouldn't want to lose the skill, care and love those people bring to child welfare. Acting director Erwin McEwen, when he was talking about this, said it was a sad day in the history of child welfare in Illinois.

"The reputation of Catholic Charities is excellent. Their performance has been exemplary."

Those staff members reacted to the news that the program would close with grief and shock, Ousley said, and with concern, above all, for the children.

"They were concerned about the kids first," he said. "Even though this is their livelihood."

Catholic Charities has been providing substitute care for children since 1921, and was among the agencies that advocated for the creation of DCFS in 1963. It has continued to advocate for the welfare of the state's most vulnerable children since then, Marlowe said.

In the meantime, Marlowe said, his agency will continue to work with Catholic Charities of the Archdiocese of Chicago to continue to provide services to children who live with their parents.

The state is not worried about absorbing the foster children from Catholic Charities' program into other programs. The number of children in residential or foster care in the state is about 16,000, down from a high of about 52,000 in 1998, so the state's child welfare agencies have the capacity to take these children in.

The drop in the number of children in foster care was the result of a concentrated effort and changes in federal law in the late 1990s to keep families together when possible, and to return children to their parents or make them eligible for adoption more quickly when they were taken into foster care.

At that time, Catholic Charities was among the leading child care agencies at moving children into permanent homes, either with their biological parents or with adoptive families, said archdiocesan Chancellor Jimmy Lago, a social worker by training and former head of Catholic Charities.

"It's a real tragedy that one of the proven best providers in this area can no longer provide services," Lago said. "This is a singularly important event in the terms of child welfare in Illinois."

Jess McDonald, a former director of DCFS, said the decision could have wider ramifications for private agencies providing foster care services in Illinois.

"If this were to spread as a movement, you could see the eventual end of the private sector in this role," he said. "It is an incredible blow to the child welfare system."

It's a system that has long relied on a public-private partnership, with community-based agencies providing up to 70 percent of the services. Such agencies have strong community ties. Some, like Catholic Charities, can also offer additional resources. Catholic Charities supplemented the state contract to provide foster care with $1.7 million in private donations this year.

But while state law indemnifies DCFS from lawsuits, private agencies have no such protection in Illinois, one of only two states that do not protect private child welfare agencies working under contract to the government from lawsuits, Ousley said. Catholic Charities' insurance carrier-whom Ousley would not name-provides coverage for foster care in 48 other dioceses, but none of them are vulnerable because they operate under different state laws.

Archdiocesan officials approached legislators about changing the law, but their efforts went nowhere, Lago said.

Add to that the negative publicity from the clerical sexual abuse scandal, the state's decision to remove its wards from Maryville Academy and the perception that Catholic Charities, and by extension, the Catholic Church, has vast financial resources, and Catholic Charities could be seen as an appealing target for a lawsuit, Ousley said.

"This came at the end of a perfect storm," he said, adding that another suit, based on an alleged incident in a foster home in 2000, was recently filed.

The issue for liability, Ousley said, is that plaintiffs are seeking to hold the agency liable for incidents that happened when there was no Charities staff member on the scene.

"It's not humanly possible for our staff to be in the homes 24/7," Ousley said.

"We felt we could not put the rest of the agency at risk because of something that might happen in a foster home. I'm sick over this. I feel terrible that I have to be a part of this."