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6.10.06 Now IS THE TIME TO SPEAK OUT!

Metropolitan Council In The Crosshairs:
Threatened by Syosset, Warned by Lawyers,

Council To Meet June 13-14

The Metropolitan Council, 'the permanent executive body of the Church Administration', is now squarely in the crosshairs of the crisis which has engulfed the OCA. Set to meet June 13-14 in Syosset, the 28 member committee is challenged from all sides, as well as from within, as it seeks to fulfill its duty 'of implementing the decisions of the All-American Council and continuing its work between sessions'. These duties, according to the Statute of the Orthodox Church in America, Article V, Section 4 include, among others:

  • establishing the budget for the Church
  • examining all financial reports of the Church
  • supervising the collection of assessments and fees,

     and determining the allocation of such funds
  • providing for the maintenance of the central

    administration and for the allocation of the general

    Church funds
  • deciding on the purchase, sale, or mortgaging of the

     property of the Church
  • maintaining an inventory of all property of the

     Church  (Arguably, all property of the OCA –

      including real property, assets, bank accounts  etc.–

      should be included in that inventory)
  • appointing officers and committees on matters

      within its competence
  • initiating, prosecuting, and defending all legal

      matters affecting the interest of the Church.
  

Business As Usual in Syosset

A major problem facing the Council in fulfilling these specified duties is the continuing reticence of Syosset to share with the Council, or the faithful they represent, critical information. In a recent address to the New Jersey Deanery, Fr. John Nehrebecki openly complained that despite promises of change, it seems to be 'business as usual' in Syosset. (Read his address here). There is no clearer evidence of this disappointing development than a recent threatening cover letter sent by Fr. Paul Kucynda, acting OCA Treasurer, to members of the Metropolitan Council.

Nor is the letter the first such sign of conflict surrounding the Council. On April 14th, Metropolitan Council member Alice Woog (see  footnote below) wrote to Metropolitan Herman and her fellow members of the Council openly challenging the Metropolitan's actions in hiring Proskauer Rose LLP to begin an investigation. Woog wrote:

"...The recent actions of our Primate, His Beatitude Metropolitan HERMAN to secure the services of legal counsel without discussion, counsel, support or affirmation from the Metropolitan Council is extremely disturbing and in direct conflict of the Statute of the Orthodox Church in America. I am aware that His Beatitude Metropolitan HERMAN views his actions as appropriate under Statute Article IV, Section 2, Item i. However, I believe his actions are in direct conflict with the intentions of the Statute of the Orthodox Church in America, which are in place to guide and direct the administrative structure and functions of the OCA."

Woog continued:

"It has been verified to me that a $50,000 loan was taken by the OCA from an individual to be used for the audit expenses. The Metropolitan Council did not approve this loan. Nor we were advised of the intent of the loan or the repayment agreement. This action also is in direct conflict of Item F of the Statute as stated above.... We have a legally adopted Statute, which guides the work of the Church. Each identified group or individual in the Statute has specific areas of competency. The recent actions by our Primate, Metropolitan HERMAN have dismissed and marginalized the competency of the Metropolitan Council."

The Metropolitan was not amused; but he did not deny Woog's claim of an unsecured loan. In a move that harkened back the silencings in the early days of this scandal, (Read story here) Metropolitan Herman demanded Woog refrain from further letters and "repent".  +Herman wrote:

"With regard to the money needed to cover the expenses arising from the audit and the investigation; this money was acquired in a manner that was neither in direct conflict with the statue, nor in blatant disregard for the competance of the Metropolitan Council. Rather, the money was acquired so that the investigation and audit could go forward. If, in accordance with the canons and the statute, I can initiate the investigation, then I must also be able to make the necessary arrangements for the investigation to go forward. Again the statute is silent on this point but certainly does not preclude my actions..."

The Metropolitan concluded:

"However, by this action you do harm to the very well being of the Church you have worked so hard for. In the light of this, I insist that your refrain from sending any further such letters and repent of sending this lettter."

Kucynda Threatens Punishment

As the situation in Syosset becomes more strained as the audits and investigation unfold, so too does the tone of the correspondence. In response to questions from Metropolitan Council members  before the loan regarding the conference call on May, members of the Metropolitan Council received the following cover letter from acting OCA treasurer Fr. Paul Kucynda. Fr. Kucynda wrote:

"Christ is Risen!

Dear Metropolitan Council Members,

In response to the questions I received from some of you, I have tried to offer objective, factual answers.

My answers have been directed to questions received from Metropolitan Council members as they relate to the offer from The Honesdale National Bank.

In some cases, I did try to answer other unrelated questions where I am able to do so.

PLEASE REMEMBER THAT THIS INFORMATION IS STRICTLY CONFIDENTIAL AND ONLY FOR YOUR CONSIDERATION. ANY DISTRIBUTION BEYOND THOSE WHO NEED TO MAKE THE DECISION TO ACCEPT OR REJECT THE LOAN COMMITMENT FROM THE HONESDALE NATIONAL BANK COULD BE HARMFUL TO THE CHURCH AND THE INVESTIGATION AND AUDITS UNDERWAY.

IF IT IS DISCOVERED THAT ANY AMONG US IGNORE THIS REQUEST FOR CONFIDENTIALITY YOUR MEMBERSHIP ON THE METROPOLITAN COUNCIL MIGHT BE IN JEOPARDY."

At least one Bishop has complained about this letter and written to the Metropolitan asking for an apology for this threat. There is no doubt that while the Metropolitan may claim extraordinary powers during this crisis, stripping duly elected members of the Metropolitan Council of their right to participate in the Council is clearly not one of them.

The Plan

At the center of the current Administration's announced plan to restore integrity to the OCA Chancery are a) a new committment to transparency, exemplified by the trumpeted adoption of new financial policies and b) a committment to repay all the charities from which money was diverted from 2001-2005. Yet, transparency remains elusive, since no financial records or reports have been released in the past six months. As one frustrated priest put it: "What is needed is transparency, what is being offered is invisibility. They are not the same thing, and in the end the invisibility being offered is going to lead to the disappearance of the OCA."

The second goal of the plan is being actively pursued through acceptance of a $1.7 million loan from the Honesdale National Bank, referred to above by Fr. Kycynda.  (The Honesdale National Bank is located in Honesdale, PA, county seat of Wayne County PA, in which St. Tikhon's Monastery and Seminary are also located.) However,  there may be problems with that loan.

The Griswold Estate

According to the OCA website, the current headquarters fo the OCA in Syosset was formerly known as the Griswold estate. The OCA states:

"On December 31, 1957, the Church purchased part of the former Griswold estate for the nominal amount of $1.00. Mrs Ruth Griswold, a widow who could no longer maintain her large home and property, was seeking to consign the estate located in the Long Island Gold Coast community of Oyster Bay Cove to a charitable organization which would put it to good use. The Church was able to acquire the mansion and the surrounding 15 landscaped acres of what was a much larger property."

The property is currently worth millions. Thus, it was no surprise that when questioned as to what was being used as collateral to secure the $1.7 million loan, Metropolitan Herman has stated on several ocassions, that the Syosset property, as well as the Church-owned home at 216 Martin Drive in Syosset, were being used.

To some with long memories, such use could be problematic. According to several persons active in the Church in the late '50's, the Griswold estate came with a stipulation, common in donations of large properties to charitable organizations, that if the property could not be used by the Church, it would revert to the estate. In short, the property cannot be used as collateral; to do so would be deceptive and invite potential litigation should the church ever default.

This question was raised at both the Synod and the Council; and in both cases the restriction was acknowledged. Its importance, however, was dismissed. A quick search of the most recent land title, in which Metropolitan Theodosius as 'President' of Holy Virgin ProCathedral in New York City transferred the property from himself to himself as 'Primate' of the OCA, reveals no such restriction. But this is not conclusive. Only the 1957 title and deed could lay this question to rest, and at the time of publication, that title search has not been completed.

Unanswered Questions About The Loan

Without the Syosset property, the loan may be called into question; and without the loan, the plan may go awry. But can this attempt to restore financial stability be predicated on deceiving the bank of the status of their collateral if the Griswold deed restriction remains? Is this still the way the OCA conducts business?

Nor is the status of the Syosset property the only question about the loan that remains unaswered. In order to encourage the members of the Metropolitan Council to approve the loan application in the May teleconference, Syosset told Council members that vendors were getting ready to sue for lack of payment. Among these was the Sheraton Hotel in Toronto, still owed $43,000 from the 2005 All American Council (AAC), for suites of rooms used to house dignitaries. This debt raises multiple questions.

Since the All American Council in Orlando in 2002 Syosset has claimed that AAC's lose money. Yet, in preceding years profits were made, with many dignitaries' rooms being "comped" by the hotels, given the large block of rooms taken by attendees.  So even with claims, since Orlando, of ever-increasing attendance, huge deficits are being incurred for certain rooms? Since no financial accounting has ever been produced for the last two All American Councils, how is the Metropolitan Council to consider the veracity of such expenses? And what of the unrecorded $67,000+ debt owed the US Military Chaplains "Bibles for Russia" fund – for Bibles that the OCA never donated – that is not listed as part of the repayment schedule to be taken out from the loan? Or the status of the disputed $125,000+ from the Kondratick promissary note, a potential repayment that is not included in the loan? The list goes on...

The Lawyer's Letter

Such financial, administrative and legal questions led a group of eight lawyers, all members of the OCA, to write a letter to the Metropolitan Council in early March. The letter reads:

March 10, 2006

Your Beatitude Metropolitan Herman

and Members of the Metropolitan Council:

Seeking the well being of the Church and the spiritual well being of all the faithful of the Orthodox Church in America, we seek your archpastoral blessing as we humbly submit our concerns to you.


As members of OCA parishes and as attorneys, we write to bring to your attention certain legal and ethical obligations that you have as members of the Metropolitan Council. As you well know, very serious allegations regarding financial misconduct have been leveled against the OCA administration. Said allegations have been made by credible individuals with first hand information, namely by Fr. Deacon Eric Wheeler and confirmed in material part by Mr. Paul Hunchak. The need for an independent investigation is patently obvious. At least one sitting Bishop has requested that the allegations be addressed and numerous Archpriests in an open letter have echoed that request. Yet to date, the Metropolitan Council has refused to act.

It is for this reason that we are compelled to point out that your failure to insist upon an immediate, full and independent investigation into these allegations is a breach of your legal duties as members of the Metropolitan Council. As such, you may be found personally liable in a court of law for breaching your fiduciary duties to the OCA.


The task of overseeing the finances of the OCA is specifically delegated to the Metropolitan Council, which is the Òpermanent executive body of the Church Administration.Ó OCA Statute, Article V, 1 & 4.

Specifically, the Statute requires that the Metropolitan Council:
c. Examine all financial reports of the Church;


d. Supervise the collection of the assessments and fees established by the All-American Council and determine the allocation of such funds;


e. Organize plans for obtaining voluntary contributions for the satisfaction of the needs of the Church;


f. Provide for . . . the allocation of the general Church funds;


g. Decide on the purchase, sale, or mortgaging of property of the Church, except in cases covered in Article X [The Parish], Section 8 [The Parish Council];


h. Maintain an inventory of all properties of the Church;


j. Determine the forms and books necessary for the keeping of records;


k. Appoint officers and committees on matters within its competence;


l. Initiate, [and] prosecute . . . all legal matters affecting the interest of the Church.


OCA Statute, Article V, 4. These duties are non-delegable, even to the Holy Synod, which is granted neither the competence nor the jurisdiction to oversee the finances of the OCA. See OCA Statute, Article II, 7.

Moreover, the March 1, 2006, statement of the Holy Synod to 'encourage financial accountability' is completely inadequate to address the issues raised for a host of reasons, not the least of which is that it limits the audits to the last two years, when the alleged improprieties took place prior to that time.


In addition to your organizational responsibilities, New York state law requires you to act in good faith to resolve the matter or face the personal legal consequences of your inaction. See generally, N.Y. Not-For-Profit Corp. Law, Article 7, 717.


Many people within the OCA, both lay people and clergy, expect you to fulfill the responsibilities that you accepted when you agreed to be a member of the Metropolitan Council. The law makes this expectation a duty. We urge you to immediately initiate an independent investigation. We are ready to assist with this task and we encourage you to contact either myself or Alexandra Makosky to coordinate this effort.


Very truly yours,

James Thomas Perry, Esquire
St. Mary Magdalen Orthodox Church
New York, New York

Alexandra Makosky, Esquire
Holy Apostles Orthodox Mission
Mechanicsburg, Pennsylvania

Chris Banescu, Esquire
St. Innocent Orthodox Church
Los Angeles (Tarzana), California

William T. Shulick, Esquire
St. John the Baptist Orthodox Church
Black Lick, Pennsylvania

John Petronko, Esquire
St. Gregory Palamas Orthodox Church
Glen Gardner, New Jersey

Hon. Nicholas Palos, FCSM
St. Mary Magdalen Orthodox Church
New York, New York

Nicholas Skovran, Sr., Esquire (Retired from practice)
Holy Transfiguration Mission
Raleigh, North Carolina

Thaddeus Wojcik, Esquire
St. Mary Magdalen Orthodox Church
New York, New York

No independent investigation was undertaken; nor were the attorneys asked for their assistance, nor even given the courtesy of a reply. However, Proskauer Rose was engaged that same week by the Metropolitan, and on March 16th, Fr. Kondratick was dismissed as Chancellor.

A Second Letter From The Attorneys

Seven of these lawyers have now written the Metropolitan and Council again. They state:

"We remain concerned that the Council continues to passively permit the circumstances to unfold, failing to perform the non-delegable duty to directly oversee all financial matters of the Church. Thus, it is with a great sense of urgency that we again write to encourage you to fulfill your respective duties as members of the Metropolitan Council and to become actively involved in the investigation and resolution of the financial problems within the OCA."

This call to the Metropolitan Council to seize the initiative is given concrete shape in the form of an list of topics that should be covered at the upcoming meeting. The lawyers write:

It is our understanding that there is a Council meeting scheduled for June 13-14, 2006. You should be prepared to discuss in detail at that meeting[1], and you should be provided[2] all documents pertaining to, the following items:

• The terms and conditions of $1,700,000 loan should be fully disclosed and discussed, including the specific collateral for the loan, the repayment schedule and a detailed explanation of where the money that is now to be repaid was spent. Cash flow projections and assumptions should be presented and analyzed. For a fruitful discussion to take place, it is imperative that each member personally examine all financial reports, not summaries of reports, and demand their complete production at least one week before the meeting.


• The fully executed promissory note for repayment of the repairs done to the Martin Drive property, where Father and Matushka Kondratick have been residing, should be produced along with the minutes of all meetings wherein the matter was discussed and approved.


• Information about the future plans for the Martin Drive property should be discussed, including whether the property should be sold or mortgaged. Because financial matters, by the express terms of the OCA Statute, are exclusively vested with the Council, the Council must actively be involved in the decision making process for the acquiring, retaining, and selling of real property.


• An audit of the accounts related to the St. Sergius Chapel Fund must be conducted immediately. The Council should inquire as to why cash transfers of thousands of dollars per month were directed from the General Operating account of the Church into this account in 2005 and the years preceding, without proper audits of those transfers ever being performed.


• The Council should obtain and review all other statements and other relevant documents pertaining to all financial accounts that are in the name of the OCA, under the control of the OCA, under the control of any OCA staff member or other individual acting at the behest of the OCA or any OCA staff member (either former or current). All accounts, discretionary or otherwise, must be identified and audited for both expenditures and deposits, including any and all OCA pension-related accounts.


• The Council should also obtain and review statements identifying all assets and investments of the Church, including records relating to all bequests and annuities.

• While the Administrative Committee is permitted 'to discuss normal church administrative procedures,' (Art. V, 1), it is not responsible for the sweeping scope of control over financial matters that it has assumed over recent years. The Statute expressly requires the Administrative Committee to 'report back to the Metropolitan Council concerning all actions and decisions.' (Id.) Thus, the minutes of the meetings of the Administrative Committee for the last seven (7) years should be distributed to the Council. The Council should also consider whether the Administrative Committee has usurped the Council's authority and has isolated you from the free flow of information.


• As the corporate body responsible under the OCA Statute for the financial well-being of the Church, you must exercise your fiduciary responsibilities to assure that the results of the ongoing audits and the Proskauer Rose investigation be shared fully with you, and then expeditiously with the entire Church. Insofar as attempts appear to have been made by certain members of the central Church administration to curtail the flow of information from both the investigation and the audits to the Council and to the Church-at-large, you should reject these attempts. In light of the precarious position in which the Church now finds Herself, openness and full disclosure of information must be the standard of practice with only very few exceptions."

The letter concludes with a warning and a promise to Metropolitan Council members:

"While the task of verifying all of the financial matters of the Church is a difficult and time-consuming one, this responsibility came with your election to the Council. You also, especially the clergy on the Council, may feel pressure to not ask the important questions or risk retribution. This situation is most regrettable, but one that at present cannot be avoided. We ask you to keep in mind that you are directly responsible to the All-American Council or the Diocesan Assembly that elected you[3] and that full disclosure is the only way to overcome the lack of confidence and suspicion with which the OCA leadership is viewed. We pray for your courage and strength as you address these issues. In the event that you find yourself unable or unwilling to fulfill your legal obligations or your own personal welfare, as well as that of the Church - we recommend that you immediately resign from your position.

Again, we the undersigned are willing to assist the Council in any way that you deem appropriate. We encourage you to fulfill the trust that was placed in you to protect and guard the financial integrity of the Church." (See footnotes to this letter at the end of this article.)

Latest Developments

As the letter was mailed this past week, there has been no response yet from Syosset, nor from members of the Council.

OCANews has learned that CPA Mary Buletza has been invited to attehd the Council meeting to assist in accounting and finance discussions. Married to Fr. Gary Breton of Brick, NJ, Ms. Buletza was recently appointed to the board of St. Herman's Seminary by Bishop Nikolai of Alaska. This connection has given pause to some, given Bishop Nikolai's open disdain for both the Metropolitan Council and the OCA Statute. This disdain was given more prominence this past week by Bishop Nikolai's mentor, Bishop Tikhon of the West, who publicly likened the Statute to a "sacred cow" with "mad cow disease".

The Spirit of Truth

In the Providence of God, this Sunday June 11, is the Feast of Pentecost. There can be no more fitting words for this critical Metropolitan Council meeting, than the prayer of this day, the prayer that begins every Council, every meeting in the Orthodox Church. Let these simple lines express our common prayer, our common hope, at this time:

O Heavenly King,
The Comforter,
Spirit Of Truth,

Who Art Everywhere And Fillest All Things;

Treasury of Blessings and Giver of Life,
Come And Abide In Us,
And Cleanse Us From Every Impurity,
And Save Our Souls, O Good One.

What Can You Do?

The Metropolitan Council is the one body who can demand answers - and act if they do not receive them. The OCA publishes a list of Metropolitan Council members at

http://www.oca.org/CAmetcouncil.asp?SID=8.

Much of what will take place in the OCA in the next six months will be determined by this meeting this coming Tuesday and Wednesday. The delegates, clergy and lay, represent you. If these issues, listed above, are of concern to you, we encourage you to contact your representatives to the Council and express your opinion.

                 - Mark Stokoe

--------------------------------------------------------------------

Notes:

1) Alice Woog's complaint of the 'marginalization of the Council' and defense of the 'intention of the statute' comes only after the dismissal of her long-time friend and patron, Fr. Kondratick.

Woog, a former FROC President, was first elected by the Diocese of the Midwest to the Metropolitan Council in 1992. She served two full terms. She was subsequently elected by the All American Council twice. Thus, by the end of her term, extended again through the delay of the next All American Council until 2010, Woog will have served at total of 18  consecutive years on the Council – although Statute states: "All elected members, whether representing the several dioceses or those elected by the All-American Council, succeed themselves in office for one term only."

It was Woog, as a member of Syosset's hand picked Administrative Committee since 1995, who, many would argue, has actively participated in the 'marginalization' of the Council by reducing its function to accepting prior decisions taken in the Administrative Committee. It was Woog, in 1999, who supported action being taken against the first whistleblower in the scandal, former OCA Audit Chair, John Kozey. And it was Woog as a member of the Adminstrative Council who signed the infamous Promissory Note to the Kondraticks in 2002.

Woog and Bishop Tikhon of the West have been the most vocal critics of Metropolitan Herman's dismissal of Fr. Kondratick following the auditor's report in March 2006. Only since Fr. Kondratick's dismisal has Woog been critical of the administration she served. Her criticisms must be seen in context to be fully understood.

2) Footnotes to the Lawyer's Second Letter:

[1]  "The matters raised in this letter do not purport to comprehensively touch upon all legal duties owed by you as members of the Council; such an undertaking would be well beyond the scope of this letter.  We strongly recommend, however, that each member retain your own legal counsel to discuss with you the fiduciary duties imposed on you by operation of law as the governing body of a not-for-profit organization.  In addition, legal counsel can confirm that our previous letter was not, as some have alleged, a tactic to simply threaten the Council."
 
[2]  "The practice of recent years of providing critical reports to the members of the Council by Express Mail only a day or two before meetings must be changed so that each Council member can effectively review and analyze the implications of the document
s."


[3]  As a point of order, it should be noted that under the Statute, Council representatives must be elected by All-American Councils or by their Diocesan Assemblies, and not simply appointed by their Bishops.

 

 

 
     
 

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