The Curious Case of Carlos Urrutigoity (II)
Grant Gallicho August 21, 2014 - 9:09am
This is the second in a series of posts on the Urrutigoity case. Read part one here.
“Dream with us,” read a 1999 Society of St. John promotional mailer, “of a small city with winding streets scattered with warm homes, fields with children playing, an amphitheater with drama and music, a schoolhouse and markets.” The city has a “magnificent church,” where daily “the bells call the families up the hill” for Mass, and a college, where students receive “the best of Catholic education.” This place—dreamed up by the Society of St. John and its founder, Fr. Carlos Urrutigoity—would stand as a beacon of “healthy civil life in our declining society.” It would, according to the brochure, be nothing less than “a new foundation for Catholic culture.” It would also require something the Society of St. John evidently had no idea how to handle: money.
If the Society of St. John was going to build a seminary, a Catholic college, and a city, it would need breathing room. The SSJ turned to its lay advisory board, which had been recently established to help manage the organization’s financial affairs. These advisers were laypeople “who had a certain stature among those attached to the Latin Mass,” according to a 2007 report written by James Earley, then chancellor of the Diocese of Scranton. They included prominent conservative Catholics like John Blewett, president of the Wanderer Forum Foundation (now called the Bellarmine Forum), and Howard Walsh, then president of Keep the Faith, another conservative publishing company.*
In consultation with the advisory board, the Society of St. John eventually settled on a thousand-acre piece of land in rural Shohola, Pennsylvania. With the permission of Bishop James Timlin, the SSJ purchased the land for nearly $2 million on September 16, 1999—just two days after the diocesan Review Board had considered an accusation of sexual misconduct against Urrutigoity, and found the evidence inconclusive.
Diocesan property is customarily deeded to the bishop, but the Society of St. John neglected to put Timlin on the title. Instead, the property was put in the name of the Society of St. John, which had incorporated as a separate nonprofit organization. On September 8, 1999, Fr. Eric Ensey of the SSJ wrote to Timlin to assure him that “we·will gladly follow your advice on all points”—including putting his name on the title as trustee. But days later the SSJ claimed that they weren’t sure how to put the bishop on the property—and the closing date was too near to add him. Timlin gave them a pass. “Rather than cause any kind of difficulty, it is perfectly all right with me to proceed as you requested,” he replied.
The deal, as it turns out, was a near thing. One of the Society of St. John’s earliest financial supporters was Matthew Sawyer; he also served on the advisory board. As a generous donor to several Catholic causes, he was enthusiastic about the group’s mission. He seems to have been instrumental in speeding the purchase of the Shohola property—even though some of his fellow board members feared he was moving too quickly, and they weren’t sure the price was right. “Any action taken by Tony Myers [a SSJ member] and myself,” Sawyer wrote to the board after the land purchase was complete, “was done on explicit instructions from Fr. Urrutigoity and was done for the good of the Society of St. John.” He continued: “We had to overcome many, many obstacles during the course of the negotiations, any one of which could have killed the deal altogether if we had not acted in an expeditious and professional manner.”
The main obstacle: the down payment Sawyer thought he was negotiating with ended up being about $140,000 short. “Initially, we understood that there was $340,000 in the bank for the purchase down payment,” Sawyer wrote. “Tony and I negotiated confidently with this figure in mind, and concluded the purchase on Friday, July 9, for $2.2 million. The following Monday, we were informed that in fact there would be only $208,000 available.” The only way Sawyer could persuade the bank to agree to 10-percent financing was with a guarantor of at least half a million dollars. He was that guarantor. He even loaned the SSJ $40,000 of his own money to cover unanticipated closing costs.
Society of St. John members began moving from St. Gregory’s Academy, where they had been living and teaching, to two houses on the Shohola property. But the residences needed to be furnished. That’s when Sawyer’s commitment to Urrutigoity’s vision collided with common sense. Between September 20 and 30, 1999, the SSJ had spent nearly $190,000 on furniture and décor, according to invoices later released by a former employee. That included a $7,000 bar, an $8,000 entertainment center, a $13,000 desk, and a $26,000 dining set. Some board members strongly urged the SSJ to curtail spending—the dining set alone was nearly double the monthly mortgage payment—but no one could get through. Sawyer was livid. In December, he phoned the diocese to complain, and got hold of then-Chancellor James Earley.
“I feel betrayed,” Sawyer said, according to Early’s notes about the call. “Carlos [Urrutigoity] is living in splendor,” Sawyer continued, when the SSJ ought to be “humble and hardworking.” He was mortified not only by the purchase of furniture, which “does not even look right,” but also by purchases that made no sense, such as backup generators—two of them, at $10,000 apiece. Sawyer informed Earley that the SSJ had begun paying ten employees a total of $20,000 a month. He worried that such spending was “encumbering the land,” and warned Earley that because Urrutigoity was “ignoring the advice of the board” other board members were “going to walk.” Perhaps, Sawyer suggested, “Bishop Timlin can stop this foolishness. No one else can get through to Fr. U. He will listen to no one.”
Other advisory board members raised alarums. On January 10, 2000, James Blewett, chairman of the Building and Administrative Committee, called James Quinn, the diocese’s chief financial officer. In a memo to Bishop Timlin, Quinn related Blewett’s serious reservations about Society of St. John’s finances. Donors were frustrated that they couldn’t obtain financial records from the SSJ. Blewett called the SSJ’s development plans “ill conceived,” and said they had lost the support of the board. The SSJ’s balance sheet indicated that the organization had taken a $60,000 loss in November 1999, Quinn wrote.
That only increased the urgency of Urrutigoity’s fundraising drive. A November 1999 promotional mailing touted the reception of four novices into the Society of St. John. “We will need new buildings to provide housing for them,” Urrutigoity wrote, along with a liberal-arts college, “where they can begin their formation.” But before they could break ground, he explained, “we must first complete payment on the land.” According to an SSJ financial summary, for the month of November the organization owed creditors $182,000. The letter did not mention the organization’s financial or logistical challenges.
Urrutigoity scheduled a January 15 meeting to discuss building plans with members, supporters, and potential donors. Yet Blewett, who was still chairing the Building and Administrative Committee, had not been consulted on those plans. In an irate letter to Urrutigoity the day before the meeting, he reminded the cleric that three board members were still waiting for the SSJ’s financial records and that Sawyer should be repaid the $40,000 he loaned the organization. (Blewett previously wrote to Urrutigoity on December 3, 1999, but had not yet received a response.) He also raised questions about the status of the proposed college, given the fact that the SSJ’s advertising suggested the school would soon be operational. Blewett had no idea who was running that part of the project.
Urrutigoity replied later that day with a six-page letter. He began by informing Blewett that his and Sawyer’s “attitude” suggested that “the best way to proceed” was to wait for “calm to be regained.” The financial situation of the Society of St. John was not nearly as dire as Blewett and others alleged, Urrutigoity wrote. He reiterated his “right to appoint” board members, and reminded Blewett that the SSJ is not answerable to its board of advisers. Would he pay back Sawyer’s loan? He asked two others—neither of whom was Sawyer—and both assured him that it was a gift, not a loan, but even so he’d return the money as soon as possible (six months later, Sawyer still hadn’t received it). Regarding the furnishing expenses, Urrutigoity would not be moved: “I have decided to keep our first decision.” The cost of the furnishings, after all, paled in comparison to fundraising expenses, which, he said had already run to half a million dollars.
The January 15 meeting didn’t go very well. Urrutigoity had invited representatives from the diocese, including Bishop Timlin. But Earley, then chancellor, and Quinn, then CFO, came without him. “I recall this preposterous, outlandish, absurd, absolutely unbelievable plan to put a city up there,” Earley testified in a 2008 deposition. Urrutigoity had brought in architects and environmental engineers. But they weren’t impressed either, according to Earley: “They were eye-rolling and all of that.” The topography presented quite a challenge to Urrutigoity’s plans. “It’s the tallest rockiest place,” Early said. “You could never put the infrastructure needed to put roads, sewage, water…. On its face anybody who knew anything should have fled the scene early on.” Earley and Quinn shared their concerns with the bishop.
But to read the Society of St. John’s account, which appeared on its website soon after the meeting, you’d never know that anyone doubted the proposal. “Remarks were given by Mr. James Earley of the Diocese of Scranton, who spoke for Bishop Timlin and expressed the diocese’s interest and enthusiasm for the Society’s project,” according to the report. At the bottom of the page the reader was invited to click a button to donate to the SSJ.
As the months went by, the Society continued its fundraising efforts—and Matthew Sawyer threatened to sue. He wanted his name taken off the loan, and he still wanted his $40,000 back. The SSJ found a new guarantor. But they didn’t want his name shared with anyone because they feared some critics, such as Sawyer and Blewett, would “try to persuade the man not to support the Society,” according to a February 25, 2000, memo from James Earley to Bishop Timlin. The guarantor’s name was Carl Sciambra. (His son would later testify in the 2002 lawsuit against Ensey and Urrutigoity.)
Sawyer was pleased to be freed from the loan, but he continued to inveigh upon Urrutigoity to get his financial house in order. Sawyer was disturbed that the SSJ was still securing loans from unsuspecting Catholics. “I recently received a telephone call from a Mr. Peter Pagan,” Sawyer wrote to Urrutigoity in July 2000, “who expressed grave concern about your…ability to handle money.” Pagan had given the SSJ a loan—a sum so significant that, according to Sawyer, “he expressed deep concern about the fate of the money which he is depending on for his future security.” Sawyer accused Urrutigoity of being deceptive “about the real intended use of our donations.” He continued: “You were squandering our money on expensive furniture, travel, and other non-related items at a staggering and disgraceful rate.” If the SSJ continued on that path, it was “heading toward disaster,” Sawyer predicted. “You must reevaluate what is happening before it’s too late.”
For other former associates of the Society of St. John, it was already too late. On July 13, 2000, John Blewett faxed the diocese to inform it of a “large number of inquiries” he had received about the SSJ’s “most recent telephone fundraising appeal.” (By this point, the Society was advertising in print, on television, and by phone.) Blewett included a copy of a letter he received from a concerned donor who had recently visited Shohola. He was “a little uneasy about their prospects,” because “it appears they have bit off far more than they can chew.” The property still lacked an access road, and it didn’t appear that municipal requirements could be met “at the present level of funding and exposure.” Yet “people are moving to the area” in the hope of living in Urrutigoity’s city on a hill. The letter writer “was considering moving to the area permanently…but [I] am beginning to wonder whether this is a good idea.” When he pressed the SSJ about the likelihood of attaining their goals, “they seemed rather evasive.” The “secrecy is unsettling and people are beginning to talk.”
Bishop Timlin saw Blewett’s fax. “This criticism is certainly hurting the Society,” he wrote to Earley. “We have to get a report together and send it out to anyone who asks for it—with the Society’s approval, of course.”
The diocese eventually hired an outside firm to audit the Society of St. John. Former SSJ board member Howard Walsh wanted to see the results. Over the summer, he and then-Chancellor Earley had been discussing when the report would be made available. It was completed in September 2000. When Walsh had not received the audit by late October, he wrote to Earley to share his displeasure. Urrutigoity had told Blewett that the bishop ordered him not to share the audit report with anyone, Walsh wrote. Given that he had donated $180,000 to the Society, he wanted to know how his money was spent. “Even worse,” he continued, “I am now informed that families have been making loans to the Society,” which “concerns me even more…since the families who loaned the money may be of limited means and will be expecting repayment.” Walsh promised to involve his attorney if the diocese didn’t disclose the report by November.
That did the trick. After Walsh read the audit report, he wrote to Earley to thank him for the bad news. The audit “has confirmed that the Society is insolvent, and, as it stands now, it would be difficult for them to continue,” Walsh wrote. The Society’s own unaudited report, he noted, showed it had accounts payable of $600,000, with just $9,000 in the bank—down from $28,000 at the end of 1999. Even if they had the money to build, Walsh wrote, they couldn’t because of zoning requirements. “The Society is not even allowed to have five people not related by blood living together on the property unless the zoning law is amended.”
As former board members were awaiting an account of the SSJ’s finances, some took matters into their own hands. In the fall of 2000, Thomas A. Droleskey, longtime contributor to the Wanderer, was contacted by two former SSJ board members and asked to investigate the organization’s finances. Droleskey, who is a sedevacantist—that is, he believes all popes since Pius XII have been invalid—questioned both Urrutigoity and Timlin. The cleric condemned the queries as “satanic,” according to Droleskey, and the bishop announced that he was “morally certain that there has been no wrongful, unlawful, or capricious use of funds on the part of the Society of St. John.” Droleskey ended up sending his long, unflattering report to the Diocese of Scranton. He claimed that Urrutigoity wasn’t all that committed to the old Latin Mass, provided a detailed account of his financial misfeasance, and included damning quotes from former board members.
An August 2000 article in the Washington Times was more positive. It announced the Society’s intention to raise $300 million for “one of twenty-first-century America’s more unusual social experiments.” It reported that the SSJ had a waiting list of one hundred fifty men who wanted to become priests, that its website received three hundred hits a day, and that five “families with children” had already relocated to Shohola. And then it mentioned a part of Urrutigoity’s vision that had received scant attention over the previous year: “their new college, St. Justin Martyr’s.” The college, according to the article, was “modeled after St. John’s College in Annapolis.” It “employs six professors teaching a classical curriculum based on the liberal arts,” and was set to open in the fall.
But there was no functioning college at Shohola, nor would there be come autumn. It wasn’t even clear whether the SSJ would be able to obtain the permits and credentials required to operate an institution of higher education. The man brought on to advise the SSJ on the project, Ronald McArthur, founder of St. Thomas Aquinas College in California, decided it never would. He resigned in early 2000. Urrutigoity needed someone to educate his postulants. After a search, he offered the position to Dr. Jeffrey Bond, who had taught at the university and high-school level. Urrutigoity thought he was hiring a good conservative Catholic with the credentials to help make his dream a reality. But in fact he had hired a man who would soon prove instrumental in bringing down the Society of St. John.
* This sentence was corrected. The original version erroneously stated that the Wanderer Forum Foundation publishes the Wanderer, and misidentified the Bellarmine Forum as the Bellarmine "Foundation."