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The Honolulu Advertiser
Posted on: Saturday, March 4, 2006

Money scandal rattling church

By Alan Cooperman
Washington Post

Allegations of financial misconduct are rocking the Orthodox Church in America, whose former treasurer says top officials misappropriated millions of dollars in donations from agribusiness titan Dwayne Andreas, U.S. military chaplains and ordinary parishioners across the country.

The highest officers of the 400,000-member denomination, an offshoot of the Russian Orthodox Church, are accused of using the money to cover personal credit card bills, pay sexual blackmail, support family members and make up shortfalls in various church accounts.

The former treasurer, Deacon Eric Wheeler, said the greatest fear of the church's leaders in the late 1990s was that Andreas, the retired chairman of Archer Daniels Midland Co., would visit Moscow and discover that they had not used his donations to renovate a church and build a conference center. So they prepared a modern-day Potemkin village, ordering a brass plaque that could instantly transform a Moscow law office into the "Andreas Conference and Communications Center," he said.

On Wednesday, the church's governing body of 10 bishops, the Holy Synod, met behind closed doors at its headquarters in Syosset, N.Y., to consider demands from some bishops, priests and parishioners for an internal investigation and an independent audit going back to 1996.

Leaders rejected calls for an immediate investigation but promised to follow better accounting procedures in the future.

After the meeting, the church's Holy Synod announced that it will adopt a set of "best practices" for financial management. The synod also promised to seek outside audits for 2004 and 2005, and to review all its fundraising appeals since 2001.

But the bishops postponed a decision on whether to look into Wheeler's allegations of sloppy bookkeeping as well as misappropriation of funds in the late 1990s. They indicated they might reconsider the matter when they meet again in the spring.

"On the threshold of the Great Fast (of Lent), we exhort the faithful to remember the Holy Gospel, to conform to the example of Christ, and to live as Christians in mutual repentance and forgiveness," the synod's statement concluded.

The delay drew criticism from some lay leaders of the denomination, which is informally known as the Russian Orthodox Church in the United States but has been independent of Moscow since 1970.

"It's bitterly disappointing, because we'll have to wait another three months to see if any investigation will be initiated involving the years in dispute," said Gregory Nescott, a lifelong member of the church who is a federal prosecutor in Pittsburgh. "The bishops had the chance to instantly begin to restore trust. ... They chose instead to attack with a toothpick the python that threatens to swallow the church."

The most senior official who could be reached for comment was the Rev. Paul Kucynda, who has served as acting treasurer since July. He said the synod "left the door open" for an investigation, depending on the outcome of the audits for 2004 and 2005.

"Doing the independent audits will give them a sense of direction without being judgmental prematurely," he said. "It really isn't some kind of stonewalling."

FINANCIAL WOES

On top of the allegations of misconduct, the church faces mounting debts. Its comptroller, the Rev. Stavros Strikis, said it is considering a bank loan of about $1.5 million, equivalent to about 40 percent of its $3.9 million annual operating budget.

Orthodox Christians for Accountability, a lay group pushing for greater transparency in the church's finances, suggested that the only reason the synod asked for the 2004 and 2005 audits is that they are necessary to obtain the loan. Kucynda said that was "simply not true."

"If anybody out there has about $1 million we could use for forensic audits, I'm sure I could persuade the metropolitan to do that," he said. "I am not interested, nor is he, to cover anything up. But we have to methodically start somewhere."

Financial experts said the Orthodox Church's problems show how easy it is for churches to avoid financial scrutiny. Other tax-exempt, nonprofit organizations must file annual financial statements, known as Form 990s, to the IRS. But churches do not have to make any public disclosure of how much they receive in donations, from whom, or how the money is spent.

"If you're sloppy or you're unethical and you're exempt from so many of the regulations, it's easy to cover your tracks for a while," said Paul Nelson, president of the Evangelical Council for Financial Accountability, a Virginia-based group that promotes good stewardship of church funds. "But sooner or later, these things come out."

DOUBT FROM MEMBERS

Although most of the church's money allegedly went astray in the 1990s, the accusations have emerged only in recent weeks. Wheeler first detailed them in a confidential letter to the bishops in October. Since Jan. 7, Orthodox Christians for Accountability has posted the letter, other documents and commentary on its Web site, www.ocanews.org.

Some of the Internet postings from church members across the country are skeptical of the former treasurer's claims. But many express frustration that the church's leaders have not publicly responded to the allegations at all, even to refute them.

"Naturally enough, the men involved have circled the wagons Cardinal Law-style," the Rev. Paul Harrilchak wrote in an open letter to his parishioners at Holy Trinity Orthodox Church in Reston, Va.

Mark Stokoe, the Web site's editor, said church leaders privately have dismissed Wheeler as a "disgruntled former employee" who was fired in 1999. But he said other insiders, including the church's former corporate secretary, Paul Hunchak, have come forward to corroborate parts of Wheeler's account.

"And the amazing thing about Wheeler's accusations is that they are incredibly detailed, and he is admitting he went along with it he's implicating himself," Stokoe said.

LEADERS IN DISCORD

The Orthodox Church in America is part of the family of Eastern Orthodox churches that separated from the Roman Catholic Church in the 11th century. Although sometimes colloquially called the Russian Orthodox Church in the United States, it has been administratively independent of Moscow since 1970.

As the scandal has reverberated through the church's 700 parishes, it has also sown dissension among the church's bearded, black-robed prelates, the most senior of whom has the title Metropolitan.

Metropolitan Herman, the archbishop of New York and Washington who is first among equals in the Holy Synod, has directed church officials not to discuss the matter publicly. Archbishop Tikhon of San Francisco has urged the synod to discipline Archbishop Job of Chicago not because Job is in any way implicated in the scandal, but because he has called for a church commission to conduct an investigation.

"My question is very simple: Are the allegations true, or are they false? And to this day I have no answer," Job said in a telephone interview. He added that two bishops privately have agreed with him that an investigation is needed, but "unfortunately they have not made that public."

In addition to serving as treasurer of the Orthodox Church in America from 1996 to 1999, Wheeler was personal secretary to its former head, Metropolitan Theodosius, who retired in 2002. Wheeler said that after the collapse of the Soviet Union, Theodosius asked Dwayne Andreas for $1.5 million to renovate the U.S. church's property in Moscow, including St. Catherine's Embassy Church and a proposed conference center.

Andreas, whose agricultural company was seeking to do business in Russia, and who had forged a friendship with Mikhail Gorbachev, began sending the money in $250,000 installments in June 1995.

Wheeler said he prepared progress reports twice a year to give to Andreas. The reports, signed by Chancellor Robert Kondratick, "were quite detailed on paper," he said in his letter to the bishops last fall. But, in reality, St. Catherine's Church was renovated with funds raised in Moscow, the conference center was never built, and Andreas' $250,000 checks were diverted to the metropolitan's "discretionary account," Wheeler said.

$3M DONOR'S THOUGHTS

Brian Peterson, senior vice president for corporate affairs at Archer Daniels Midland, said Andreas, 87, no longer gives interviews. But Peterson confirmed the ADM Foundation donated $1.95 million to the Orthodox Church in America from 1993 to 1999. Tax records show the Andreas Foundation, a separate family charity, contributed an additional $1.3 million.

"Up until now, we had absolutely no reason to be concerned that these funds weren't used for their intended purpose," he said. "If there are credible allegations, of course, we'd be quite concerned."