Charges of Corruption in Cleveland
If you read the New York Times today, you probably saw the story about the trial of the former assistant treasurer of the Diocese of Cleveland, who, along with the former chief financial officer of the diocese, is accused of various criminal charges, including money laundering and tax evasion. Both men have implicated former diocesan officials, including Anthony Pilla, the former bishop, and Rev. John Wright, the diocese’s former financial and legal secretary.
The trials are likely to be very ugly and many in Cleveland are bracing for the worst. Anticipating the negative press coverage that is likely to ensue, Richard Lennon, the current Bishop of Cleveland, sent a letter to diocesan priests several weeks ago about the upcoming trials. Some priests read the letter from the pulpit this past weekend. The text of the letter can be found below.
Dear Father X,
I am writing to make you aware that the trial in the case of The United States of America v. Joseph H. Smith and Anton Zgoznik is currently scheduled to begin on 15 August 2007. The trial is likely to generate coverage by the media.
We pray that the defendants receive a fair trial and that media coverage is fair and balanced. Given the nature of various pretrial motions and statements by the defendants’ counsel, however, it is reasonable to assume that the defendants may try to portray the Diocese and those associated with it in a light favorable to the defense. As a result, media coverage may at times seem sensational.
As you follow the developments in the trial, please keep in mind that:
• The Diocese of Cleveland is not on trial; it is the victim of crimes alleged against the defendants.
• The Diocese produced thousands of documents and has cooperated fully with the Department of Justice, which thoroughly examined various allegations and brought the criminal charges it determined were warranted.
• Any suggestion that those involved with the administration of the Diocese knew or approved of the activities charged against the defendants, or engaged in similar conduct, is false.
• The Diocese does not condone criminal activity; as soon as we became aware of the allegations, we informed the proper authorities, and we conducted a thorough internal investigation.
• The Diocese was defrauded by a person who held a position of trust and by his business associate. While it is difficult to protect against fraudulent conduct, the Diocese has implemented steps since this matter was first discovered to strengthen its financial controls.
• Catholics and all others who generously support the spiritual and social work of the Church can be confident of continued good stewardship by the Diocese.
Should you receive inquiries from parishioners, you may wish to share these thoughts with them. If you have any questions, please feed free to contact Bob Tayek at 216-696-6525, extension 4460.
Sincerely yours in Christ,
The Most Rev. Richard G. Lennon
Bishop of Cleveland
That’s not how you do it.
You pass out postcards that say “The People of the State of Ohio vs. (defendants)” in huge type on one side.
On the other side, you say:
THE DIOCESE OF CLEVELAND IS
*INNOCENT
-(bullet point)
-(bullet point)
*ACCOUNTABLE
-(statistic)
-(bullet point)
*RESPONSIBLE
-(statistic)
-(statistic)
I confess that it is hard not to be cynical about the Bishop’s talking points.
The URL for the NYTimes article today is http://www.nytimes.com/2007/08/20/us/20cleveland.html?_r=3&ref=us&oref=slogin&oref=slogin&oref=slogin
Lennon’s letter leaves me the impression that the Diocese produced thousands of documents in a cooperative manner. In fact, it fought bitterly to keep them secret, and only turned them over pursuant to a court order.
See several pages of articles on BishopAccountability.org for a broader review:
http://search.bishop-accountability.org/search?ie=&q=%22Joseph+Smith%22+%22Anton+Zgoznik%22+Cleveland&site=ba-prod&output=xml_no_dtd&client=ba-prod&btnG=Search+BishopAccountability.org&access=p&sort=date%3AD%3AS%3Ad1&lr=&ip=75.67.218.242&proxystylesheet=ba-prod&sa.y=8&sa.x=31&oe=&start=0
Trials are adversary proceedings, not a search for the truth. So, I hope the truth does come out somehow.
This is a sordid affair, as witnessed by the documents under review:
* The Anthony M. Pilla Charitable account, which had more than $500,000. The diocese contends the account was the bishop’s personal savings account, while Smith claims it was a secret account that alternated between using Pilla’s personal tax number and that of the diocese. Pilla later amended his tax returns to reflect using the account, attorney Philip Kushner said in court documents.
* Payments of $78,000 to renovate and furnish a spacious Geauga County that was to be used as a retreat house. Smith and Zgoznik claim the Munson Township home was to be used primarily by Pilla and should be considered “additional compensation” because many of the furnishings, including furniture and a large-screen television, later went to Pilla’s personal house. The diocese contends it is responsible for furnishing a retirement residence for the bishop.
* Payments of $27,200 to the family of former Deacon Jerry Bals, who was ousted from the clergy after being indicted on charges of gross sexual imposition and assault against former students at Lake Catholic High School. The diocese called the payments an effort to assist Bals’ struggling family. Smith and Zgoznik claim the payments are proof that diocesan officials were free to make payments, with little oversight, to whomever they deemed fit.
* Wright’s confidential personnel files maintained by the diocese. Smith’s lawyers said past discipline against Wright could be used to question his credibility. The diocese said there are no documents in the file that would reflect on his credibility.
* A $63,000 loan of church money Wright made to his secretary that Smith said was done without approval from the diocese.
The diocese was also ordered to turn over the internal investigation it commissioned by attorneys at Jones Day after receiving an anonymous letter in late 2003 outlining financial wrongdoing by Smith and Zgoznik.
Sorry, I should have put the above document list in quotes from a News Dealer blog article (6-15-07) at http://blog.cleveland.com/metro/2007/06/judge_orders_catholic_diocese.html.
I did a copy/paste in haste.
Paul, I think it’s hard not to be cynical about yesterday’s second collection for Catholic Communications. Where does that money go?
Not to derail the thread or anything. Have at it.
I’m no lawyer, but from the documents Carolyn points to, it looks as though a suit was brought against Bishop Pilla, and dismissed.
I thought this section of the Sept. 12, 2005 was especially interesting:
“{129} Plaintiff’s counsel correctly notes that, as Bishop, defendant Pilla ” . . .was the employer of Mr. Smith, Mr. Kelley, and Mr. Zgoznik.” However, counsel leaps from that assertion to the claim that any misconduct by them per se supports a charge of negligent supervision as to Bishop Pilla . We are not dealing here with an area where the law imposes absolute liability ; rather, there must be specific facts alleged that would show-once again-that the Bishop either was aware of such misconduct, or was derelict in not becoming aware of
it, or that he was culpably deficient in his oversight . None of this is present here.”
The Aug. 13-20 issue of “America” has (a) a short piece on what a bankruptcy judge calls the “Byzantine accounting” practices in parts of the San Diego diocese, and (b) a pointed Andrew Greeley review essay of “American Catholics Today,” a book by Dean Hoge et al. This book is the latest of several volumes issued by the Life Cycle Institute at the Catholic University of America. Greeley writes in part: ” The Life Cycle Institute at the Catholic University of America has produced in the last decade much data and wise insight into the condition of the Catholic Church in this country. It is not clear to me that priests and hierarchs have paid much attention….So the Life Cycle Institute, I hear, is being phased out at C.U.A. Thanks a lot, fellows, but no thanks..”
So the beat goes on…. Is it any wonder that I hesitate to let my kids know that I still long for a hierarchy that can provide consistent guidance with a straight face?
In very few dioceses and parishes is there financial accountability. The fact is pastors and bishops are given carte blance to do what they want. When there are no strict, enforceable, guidelines you have carte blance.
People are starting to get it. There is a drum beat which is growing and there will come a time when even honest pastors or bishops will have a hard time receiving credibility.
In the 1920′s Eugenio Pacelli (Pius XII) gave Spellman over $90,000 dollars to put in an American bank. Quite a lot of money at that time. Especially by the Servant of the Servants of the Lord. Not many things could be done in New York without running it by the Powerhouse, a euphemism for Spellman’s chancery.
Bishops and pastors hardly ever had hard financial times. No wonder Donald Couzzens says the people of God are treated like serfs.
One thing is for sure if the hierarchy has gotten away with this all these years, they had to have a complicit laity defending them. Not without compensation.
Neither am I a lawyer, thank God, because I would find it so difficult to have evidence excluded, despite its truthfulness.
Kathy is correct about the dismissed lawsuit. It was filed however by fhe former lawyer for the diocese for 20 years, who is convinced of illegalities. His parishioner clients lacked standing.
Unfortunately, the dismissal occurred almost two years before the release of some diocesan financial documents this year. The current defendants seek the release of “reams” of additional documents but the diocese opposes it. Those documents may hold the key to the whole case.
Yesterday, the Plain Dealer reported, “The defendants were hit with several trial setbacks on Friday. U.S. District Judge Ann Aldrich rejected their attempts to prevent introduction of financial records that prosecutors say document Smith and Zgoznik’s elaborate kickback scheme.
But defense attorneys could prevail on a more significant issue if Aldrich permits them to show the jury reams of documents dealing with hundreds of off-the-books church bank accounts, including several controlled by Bishop Anthony Pilla, now retired. Defense lawyers hope the documents will convince the jury that under-the-table employee compensation was common practice at the diocese.”
Let all documents sought by both sides be examined in open court. Did the diocese destroy or hide records, as the defendants claim?
For the legal beagles, this BishopAccountability.org URL has all the filings, exhibits, motions etc. at http://www.bishop-accountability.org/docs/cleveland/financial.htm. The website is indispensable as an archive of the church’s activities.
My head aches already.
Oops, the URL above has a period at the end of it and that is why it does not work.
Try http://www.bishop-accountability.org/docs/cleveland/financial.htm instead.
If there is any trouble with that, go first to http://www.bishop-accountability.org/ and then enter the URL.
Sorry for the error.
This affair seems to mention one or more episcopal accounts that were not disclosed to the Catholics of Cleveland. Whether these are called “Slush funds” or “Accounts known only to a few,” allow me some comments. In Greenwich, Connecticut, a well-liked pastor at St Michael the Archangel parish apparently signed for Bishop William Lori a statement that he was revealing all parish accounts, but held back on revealing an account that was used for parish expenses but that he or others wished that the bishop did not learn of. To me, disclosure to the bishop is only part of accountability. It somewhat resembles a mob boss who wants to get his share of all his subordinates’ funds without revealing that the size and repetitiveness of his own “cuts.” The ordinary of St Petersburg, Florida, likewise a few years ago declared he was exempt from diocesan rules about how much money he could spend without approval of a financial council. It seems that our American hierarchy want accountability only in an upward direction, seldom with full revelation to the laity. Since some bishops cannot be trusted, I wish they could be forced to sign a legal oath that they have revealed all their accounts! I wish they had to file IRS Form 990 in toto. Religious entities are exempt from this disclosure, even though they claim tax exemption.
Joe McMahon
Lennon apparently has determined that his predecessor is innocent of any wrongdoing. But what else should we expect of a hierarch who left controversy behind in New England — and instructed a sexual abuse documentarian to get off Boston archdiocesan property?
:)
“Really, folks, you can’t make this stuff up!!!”
Re: Joseph Jaglowicz’s message about Lennon’s response to the filmmaker in the movie “Hand of God” — in light of Lennon’s letter to Clevelanders that included fear of unfavorable media coverage of the diocese:
Here, in the words of filmmaker, Joe Cultrera, brother of the abuse survivor, is a fuller description of Lennon’s demeanor and words:
“I explained to Bishop Lennon why I was at the Chancery, what had happened to my brother there (it was where he reported his abuse) and why I felt compelled to shoot the outside of the building. He wanted me to stop.
“His reaction (“Sir, if you think you’re going to make me feel bad about this, you’re not”) was about my brother’s abuse – I had not yet worked my way up to the story of my parent’s church.
“I edited out his reply to my statement about what I had done for the church (fundraising) and that my parents had put so much money and so much of their souls into the church.
“His reply to this was “You have given nothing, your parents have given nothing, it is all in your head sir, you’re a sad little man — sad little man.” ”
Joe’s prior films had helped raise about $10 million for the church. Lennon’s comment about, “You have given nothing, your parents have given nothing” was what was edited out. The rest of the quotes above remained in the film.
Joe is a man of short physical stature, and Lennon’s considerable height, especially by comparison, made the last comment particularly mean-spirited.
Respect for Lennon as a bishop? No, contempt.
Staying on track, may I present some links?
Kathy asked where national collections go. The USCCB site has a convenient list:
http://www.usccb.org/finance/schedule.shtml
Before Richard Lennon was replaced by Sean O’Malley, that is, during 1995, this is how Massachusetts churches replied to an effort in the state legislature to force public accounting by churches. The link is to a lengthy page of objections:
http://www.macathconf.org/05charitybilltestimony.htm
Another Yahoo Group, similar to Commonweal’s, speaks to financial accountability in the U.S. Catholic Church:
http://groups.yahoo.com/group/financial_accountability/
And an index of “missing money” episodes is here:
http://www.rcmmindex.blogspot.com
Joe McMahon
Thanks, Joe, but I was being facetious.
I am really tired of seeing the Church do such a lousy job of making its good works known, and playing defense for the whole game.
The bishops are not the church. I know Cyprian said so but he was sadly wrong. Cyprian was into an imperial philosophy and the Constantinia church went with him. The people ae the church.
Where goodness exists the church exists. Yes the church is composed of sinners but they hav a humility and genorosity which is redemptive. When leaders are not humble and generous they should resign or be replaced.
Bill, if you get rid of all the proud people,
where do you and I fit in?
Canon law is a changeable thing. It’s really meant to provide every good thing for all the people–but it can always be improved. So why not address the issues, instead of attacking?
Like the old song says:
Simul ergo cum in unum congregamur:
Ne nos mente dividamur, caveamus.
Cessent iurgia maligna, cessent lites.
Et in medio nostri sit Christus Deus.
The correct and full citation from St. Cyprian is: “The bishop is in the Church and the Church is in the bishop.” He wrote to his clergy at one point: “From the beginning of my episcopate I decided to do nothing of my opinion privately without your advice and the consent of the people.” He strongly defended the election of bishops by their own clergy and people. He spent part of his episcopate in exile because of one persecution and was martyred during a second.
A real imperialist, that Cyprian! Definitely a Constantinian before Constantine!
Paul Lauritzen titled this blogpost “Charges of Corruption in Cleveland.” The feds have separated the trials of the accused former employees of the diocese, Anton Zgoznik and Joseph Smith because another man, Zrino Jukic taped a lengthy conversation with Zgoznik, not with Smith. The details of this August 6th article in the Plain Dealer must be considered when anyone is accusing either Bishop Pilla or Bishop Lennon. No court is accusing the bishops. The defendants accuse them.
Link
For sure, the details of diocesan finances are of interest to Catholics, but these allegations and disclosures are part of a defense of the indicted laymen.
Joe McMahon
Link
http://www.cleveland.com/news/plaindealer/index.ssf?/base/cuyahoga/118665043499160.xml&coll=2