Monday, January 16. 2006
Since the reactions have reached 50+ in number, let's start at new thread for week two. Your comments are welcome!
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To our Orthodox Faithful:
Let us truly thank God that the Church is passing through this crisis so that it can be corrected. As a Church, we continue to go through painful, but necessary, growing pains. Financial accountability is absolutely essential to survive spritually, let alone as a material entity. However this crisis is resolved, from the resignation or retirement of a few clergy, to the selling of Syosset to make restitution for improperly managed funds, to even possible incorporation into the Antiochian archdiocese, we can thank God that we are held to high levels of accountability. Any temporary embarrassment is miniscule as compared to healing a cancer. A person who has a bald head through cancer treatments goes through the painful healing regiment to manage and then finally conquer the cancer. The Church can then return, with greater stength and credibility, to better serve its intended purpose for God, its people, and its divine mission to the world.
SVS Master of Divinity 1990
#1 Patty Schellbach on 2006-01-16 12:14
Be sure to check out Gregg Nescott's two essays , just posted in our Reflections section (#4). Gregg resigned from the OCA Metropolitan Council in July 2005. Read why......
#2 Editor on 2006-01-16 20:46
I commend you for creating this forum, Mark. Don't be intimidated by those who have suggested that you created it without the blessing of priest or bishop, that what we all should be doing is repenting of our own sins instead of focusing on this scandal, or that the resolution of this matter is best left to the archdiocese, etc. Those who make such arguments are likely only concerned about deflecting attention away from HQ, where the light now deservedly shines. Keep up the good work -- and the pressure -- until this matter is fully resolved, whatever the cost.
#3 Christopher Little on 2006-01-17 15:34
Thanks, Chris. Fortunately, I don't have to keep up the pressure. The documents themselves reveal the deeds and patterns that have engendered and sustained this scandal. Let us all pray that the Lesser Synod turns the light on this matter Friday!
#3.1 Editor on 2006-01-17 18:53
Greetings from Orthodoxchristianity.net. As the largest Orthodox message board on the Internet, we wanted to voice both support and encouragement for your website. We have provided a public link to your site and we wonder if it would be possible for you to reciprocate.
Let us know if we can be of any use.
#4 Robert on 2006-01-17 18:54
Thanks for the link, and support. We'll be happy to reciprocate.
#4.1 Editor on 2006-01-17 18:56
I just posted Fr. Jason Kappanadze's wonderful letter to his fellow priests of November 21st. You can read it in Reflections (#5). (Reprinted with permission)
#5 Editor on 2006-01-17 19:14
What a wonderful job of uncovering and reporting, fairly and accurately, on this mess. I can't express how sad I am, yet happy to see the improprieties of the leadership exposed. My heart was gladdened to see the response of His Eminence, Archbishop JOB, to these accusations of improprieties. His questions are entirely appropriate, and deserve a detailed response,
As you know, I am a CPA. I have an extensive background in auditing and to a lesser degree in forensic accounting. The key word in this whole series of events is transparency. It is rarely mentioned (I think I read it in one document). I daresay given the review that one can only conclude that inappropriate, and potentially illegal, acts have transpired.
The common thread in all this is Chancellor Fr. Kondratick. It appears that while the heirarchs might be guilty of sins of omission, the Chancellor is involved in acts of *comission*. Had the actions as outlined here occurred in the corporate world, the concept of "discretionary account" would be called "embezzlement".
In looking at the documents, I observed that the Las Vegas attorney, David Chesnoff, has connections and clients that are reputed mob figures, as well as celebrities. My thoughts instinctively would look for a connection between Fr. Kondratik's personal finances and the clientelle served by Mr. Chesnoff. Hopefully an investigation would not uncover anything of
substance in this regard, but without an investigation, can we dismiss such a possibility?
The scenario I present is a standard scenario presented to auditors, particularly fraud auditors. It is a common reason frauds are perpetrated. An individual runs into financial difficulty, "borrows" a small amount with full intent to repay, then progressively larger amounts.
I would gladly offer my services to the OCA as an independentconsultant/financial manager and assist in restoring the transparency necessary to restore trust in the central administration of the OCA.
My initial thought is that no investigation, nor reform effort, will be successful until Fr. Kondratick is no longer in control in Syosett. Any reform-minded individual, such as myself, would be unsuccessful without the full authority and control necessary to effect change, and I doubt seriously any retention of the current leadership would allow for such authority and control to be manifested.
Even with the reforms requested/demanded, I think it is still possible for the Metropolitan to retain his episcopal authority. I seriously doubt that anyone would deny the Metropolitan's request for legitimate expenditures. The goal should not be to undermine this authority in any way, but rather to simply provide transparency for the financial transactions of the OCA.
If you believe I can help, in any way, please feel free to let me know.
Martin D. (Marty) Watt, CPA
#6 Marty Watts on 2006-01-19 06:34
Thanks for speaking out, Marty. Your professional insight, reasoned judgements, and desire to help, are welcome indeed. Where others are ranting, you are offering solutions.
Let's hope the Lesser Synod takes up your offer tommorrow and agrees to a Commission and audit.
#6.1 Editor on 2006-01-19 06:42
I agree with many of your comments. I believe they show wisdom and insight. Not knowing much about financial practices in this regard, would it not be wise to have a a full time CPA hired at Syosset (and at least one other second person hired off site) that would both be accountable to a reputable accounting firm (an entire reputable CPA staff) besides (or other than) a Synod or Metropolitan Council? As a CPA that seems familiar with fraud, if someone reported this entire matter the the New York Distric Attorney (or other appropriate federal or state law agency), what could ultimately happen to the OCA? Perhaps this could be better sketched out. Thanks for your reply.
#7 Patty Schellbach on 2006-01-21 22:07
There is a potential for a loss of tax-exempt status of the OCA, however I think that option unlikely in this case. Given the numbers of uninvolved ("innocent") participants in the Church, I suspect the IRS would most likely go after individuals involved.
I cannot speak to the legality/illegality of the actions involved. In other cases of churches, and individuals within churches, accused of criminal behavior, prosecutors have been reluctant to prosecute. Civil lawsuits have been the norm, and I don't believe anyone would benefit from civil litigation.
The comments of your CPA friend are accurate. I would say, though, that rather than reporting to an audit firm, the structure would be to have an independent CPA, reporting directly to the Metropolitan Council and the hierarchs doing the financial leadership in Syosett. There are standards that will need to be brought into play to ensure integrity and transparency of reporting. Those standards would then be audited annually by the independent audit firm. "Independent" is defined by the American Institute of CPAs Code of Ethics.
On some level, you have to have some body/person involved in oversight and responsibility for the administration of the Church. A properly constituted and informed Metropolitan Council, confirmed at All American Council (or diocesean councils, as appropriate) should be that authority. The authority of the Metropolitan, indeed any Bishop, exists in matters of doctrine and faith, and then only in Synod with brother bishops. The Metropolitan Council should alleviate the responsibility the Metropolitan feels to properly administer the Church.
I think several things must occur:
First, the Chancellor must retire/resign/be removed. Consideration should be given to limiting the role of the Chancellor in the future, or even abolishing the position, given our diocesean structure.
Second, the Metropolitan Council must be given the information it needs to perform its statutory role.
Third, an independent accounting firm should be retained by the Metropolitan Council to examine all accounts under the control of the OCA, in accordance with Generally Accepted Auditing Standards.
Fourth, as has been mentioned before, a Commission should be established by the Metropolitan Council to investigate the financial controls in the central offices of the OCA.
Finally, a financial leadership ("controllership") position should be created or an existing full-time position reworked, and someone with a CPA certificate hired into the position, reporting directly to the the Metropolitan Council. The charge for this position will be to develop, document and implement systems within the OCA to establish financial accountability and transparency, enabling the Metropolitan, the Holy Synod, and the Metropolitan Council to discharge their fiduciary responsibilities in an effective manner.
The watchwords of the effort should be full disclosure and full transparency.
A note: Transparency should not demand compromise of anonymity. Neither should anonymity be a "shield" to prevent transparency.
Martin D. Watt, CPA
#7.1 Marty on 2006-01-24 11:58
I believe you are sketching out some very sound and wise financial principals for the OCA to implement. I believe that what you wrote, along with the editors, a commission, is within our grasp to be able to implement and accomplish, so that the OCA is less of "not of this world" that remains in such sadness.
The matter that lies before us is how to relate this to the OCA Church and in a timely and on-the-record manner. There may still be some very good ideas out there that could be consolidated and brought together as a formal letter/request that the OCA Church be able to act on.
I guess the Spring Session of the Holy Synod meets May 23rd to the 25th. This is not too far off, after Pascha.
My request is for a timely formal letter sent by the Orthodox Christians for Accountability, or even a few named persons, to be able to formally present yours and others ideas to the Church so that they could reflect upon these in the near future. If they had the ideas before the Spring session of the Synod, perhaps this would motivate them to come to, and act upon, similar resolutions.
(Perhaps the OCA may come up with these ideas, but to be able to present them may really help, as well. Even if OCA administration is reading this web site, ideas seem to be curiously not thought of, forgotten, or considered impractical, if not continually asserted for and brought to the forefront.)
#7.1.1 Patty Schellbach on 2006-01-24 20:06
In the spirit of lasting, sound, wise, true, full, and firmly established principles of accountability, I fully agree: "A full Commission called by the Holy Synod to fully investigate the situation, unqualified audits where necessary, and then an open report to the Church, so that those responsible can be held accountable, would be a start."
This would most likely have to be overseen by a legal, reputable, and wise accounting firm who will know to look for and recommend, and hopefully help the church establish, sound financial principles (as this area does not seem to be the church's stong suit on it own). As a CPA friend of mine said, the ENRON scandal now assures us that accountants also now account for and look for fraud.
I also am waiting to hear and understand what could happen if someone went to the legal authorities with this. In casual conversation with a CPA, I am told that the worst thing that could happen is that the OCA would lose its non-profit status and end up owing millions on taxes and properties. "It would be a hurricane Katrina."
Is there not several best things that could happen out of accountability, such as, besides getting our house in order, creating sound financial principles that could actually trickle down to the local church level, re-gaining the trust of our faithful, and paving a stronger and better path for a future that glorifies God in a more a holy way?
Sound and wise financial principles are a very high priority to exactly be "not of this world." I don't think any organization is above financial legality, as we saw from ENRON to Martha Stewart.
Who could write the letter to the appropriate person or clergy to make a formal request that the Holy Synod form this Committee at their Spring session? (I don't think the idea may occur independently apart from a formal request).
Patty Schellbach. (M.Div., MA, Doctoral Candidate)
#8 Patty Schellbach on 2006-01-23 19:40
As the auditors continue their task auditing the past two years at the Central Church until March 31st, the Orthodox Church will be going through Pre-lent and into Lent. What a time for the central church to seriously reflect and finally resolve to get its house in order with its financial affairs. March 31st is the Repose of St. Innocent, Metropolitan of Moscow and Apostle to the Americas. That Sunday, the 2nd of April, the Church commemorates St. John Climacus. Hopefully, the results and recommendations from the audit group will be coming out no later than the end of Lent. What a God-send, if not a heavenly sign, for the OCA administration to finally take hold of a true repentance and really turn a new page for the OCA.
The OCA cannot function fully, wisely, spiritually, or with the future in clear view, without strong, sound, wise, and firm financial principles. Let us all pray that our leaders will do what it takes to fully embrace honest, wise, and responsible accounting principles for the welfare of its faithful and its future.
#9 Patty Schellbach on 2006-01-28 12:07
Dear Fr. Michael:
You raise an interesting question regarsding the possibility that this scandal could, if unchecked, result in the los of the OCA's autocephalous status.
I am unsure of your logic regarding this point, mainly because If His Holiness Alexei II revokes Autocephaly exclusively for this reason, he would then be opposing his signiture on the Tomos in 1970, which among other things signifies that he agreed with the Holy Synod of the Russian Orthodox Church that the Metropolia should recieve Autocephaly do to its spiritual and administrative maturity.
However, in light of this situation, and the upcoming All-Diaspora Council, at which it is believed that R.O.C.O.R. will unite with the Mother Church, it is possible that a voulntary relinquishing of Autocephaly might be wise.
Let me be crystal clear on this point. I am solidly behind every Bishop, Priest and Layman who believes that there should be an Autocephalous church in this country. However, I also believe that old differences betwen the OCA, R.O.C.O.R, and the Moscow patriarchate must be permanently resolved before the three present "Russian" jurisdictions can unite peacefully, become Autocephalous, and possibly elect the first Patriarch of North America.
Perhaps this scandal can be a blessing in disguise to allow the the OCA, Patriarchal Parishes and R.O.C.O.R. to unite as an Autonomous Church under Moscow, and then recieve a new autocepha;y to begin a new chapter in our exisstance.
As with you other brother priests, you are absolutely correct that a cull investigation of the financal problem is mandatory (word choice mine) in order to correct the situation.
Thank you for taking a principalled stand along with Archbishop Job in requesting that this occur.
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