In the fall of 2006, Matt boarded a plane in Sacramento headed for Seattle, where his father now lives. During that trip, Matt confessed to his father that he knew nothing happened, and that he had lived with the guilt for years. Matt also met with Ray's lawyer to officially recant the testimony he made twenty years earlier.
Katie, who had started a family of her own in Sacramento, was at first apprehensive. "You don't know how to admit to him that you don't think this ever happened. How do you say that to someone you sent to prison for 20 years?"
Ultimately, she followed Matt's lead and reunited with Ray in 2007.
Matt and Katie told "20/20" that healing with their father has caused turmoil with their mother, who still believes that Ray is guilty.
"I believe what my children told me. I believe what their behavior told me. And something happened," DeAnne Spencer told "20/20."
In July of 2009, Katie and Matt were cross-examined in a hearing where they successfully recanted the testimony that put their dad in prison. They firmly and repeatedly stated that they were never abused by their father.
This year, the Supreme Court of Washington overruled the lower courts during appeals and set a date for Ray to clear his name. The Court was harsh towards the investigators, calling some of the missing evidence "difficult to fathom."
But prosecutors still had the option to re-try Ray, a decision he anxiously awaited.
In September this year, when Ray went into court to withdraw his original plea in court, prosecutors revealed to Ray's attorney they had decided not to re-try him. After the hearing, the Clark County Prosecutor's Office issued a press release that included an explanation of the decision to dismiss the case:
"First, to try the case at this time a jury would need to rely on the memory of witnesses to events from some 25 years ago. For example, the defendant's step-son, Matt Hansen [Little Matt], who is one of the victims, is now 30 years old. He was five at the time of the alleged crimes. Although he still insists he was sexually assaulted by the defendant, one cannot alter the fact that he would now be testifying to events of his very distant past, when he was a very young child. Second, even if a jury nonetheless were to convict the defendant in subsequent trial, the defendant, having already served a substantial prison sentence, would probably only have a duty to register as a sex offender with no additional post-release supervision or conditions. This is because his original sentence was conditionally commuted by Governor Gary Locke in 2004. Given this situation, the value to further prosecution would be far outweighed by the huge cost to our taxpayers of additional litigation."
With the withdrawal of his original plea and the prosecutors' dismissal of the case, Ray was finally a completely free man.
"I can't change what happened. I can't get those years back. So I have to take satisfaction in the fact that I walked out of that courtroom 25 years later a free man," he said.
But would he ever forgive his children for stripping him of twenty years of his life?