08.11.06 Latest News
Acting OCA Treasurer Fr. Paul Kucynda let it be known Thursday August 10th that the $1.7 million loan from the Honesdale National Bank, scheduled to close on August 3rd, has been delayed. In response to an August 8th email by Dr. Faith Skordinski inquiring about the status of the loan Kucynda said information requested by the New York State Attorney General's office could not be processed in time to complete the loan by the August date, and thus, the Honesdale Bank has agreed to extend their offer one month, until September 3rd.
Kucynda began his response with a disclaimer that all the questions Skordinski has posed during the last month will not be answered. (Read about Skordinski's questions here.) Kucynda writes:
Though I have included your initial email to Metropolitan Herman and to me concerning the loan offer from The Honesdale National Bank, my comments to you are not personal, but rather for the entire MC.
While some may still feel that every question asked individually during this difficult period in the history of our Church should be answered by Metropolitan Herman or me simply because they were asked, as
Secretary of the Church and as the Acting Treasurer, all such questions will be answered in a timely way to the extent that the information is available and can be shared with the entire membership of the Metropolitan Council. Any responses coming from me in the present and future will be for the edification of all and in as professional a way as I can.
Since the Metropolitan and I are privy to confidential information that for various reasons must be kept confidential until we are informed that the investigation (which includes the 2004 Independent Audit as
well as the review of the Regular and Special Appeals from 2001 to 2005) is complete, questions concerning some topics cannot and therefore will not be addressed."
The Loan Delay Explained
Kucynda then implies that this need for confidentiality stems from his position as Secretary of the OCA. He does, however, offer an explanation as to why the loan is delayed, yet again:
"The following practical example can be used to illustrate the rationale for the position as the Secretary of the Church, I am obliged to take.
SECURING A LOAN TO CONSOLIDATE OUR DEBTS
All of the items included in the loan offer from The Honesdale National Bank are legitimate debts that must be dealt with immediately if our financial house is to be returned to good order and we can function
with some acceptable level of normalcy. To this end, the teleconference was scheduled in May to accept or reject the offer. The vote taken can be viewed in two ways: with the proxy votes included or with only the
vote of those who actually participated in the call. In both instances, the majority of the votes favored accepting the offer."
Although approved by the members of the Metropolitan Council, there was a technical problem with the loan. As Kucynda explains it:
"Upon the advice of The Honesdale National Bank located in PA, and because our OCA corporate address is in NY, a NY State-based real estate attorney was needed to organize the title searches, appraisals
of the properties, and other related legal matters in preparation for accepting the loan offer. Attorney Michael Sahn was engaged shortly after our May meeting for this purpose.
It was Mr. Sahn - in his own conservative way - who requested that we revote at our June meeting since our Statute does not specifically address the issue of teleconference voting. The previous votes were not
necessarily null and void. However, he advised us to take the vote again to make sure that we were conforming to our OCA Statute and its silence concerning teleconference voting on issues of major importance."
And so the vote was retaken in June. Kucynda continues:
"Of the 25 eligible members of the MC as of the June meeting (this does not include the offices of Chancellor, Secretary, or Treasurer who, according to a similar reading of the Statutes are voting members-and
NOT ex-officio members as assumed by some, though I did not vote at the June meeting though I should have: at the time of the vote, 18 members voted with 13 in favor, 3 against and 2 abstentions. This again should
have completed the process."
The question of who voted, when they voted, and how they voted became important because of the provisions of New York state laws regarding these matters which state a majority of all board members must vote
their approval: not just a majority of a quorum, or a majority of those present. As Kucynda explains:
"In NY State, it is the case that all not for profit organizations-religious or secular-must submit their intentions in a complete and formal way to the Office of the State Attorney General before the closing on such a loan can take place. The Attorney General's office received an inquiry from a member of the OCA who as a practicing attorney in another State cited particular NY State law which requires that a majority of the ENTIRE eligible voting membership of the body legally authorized by the organization to deal with financial matters-in this case the MC-must vote in favor . Since 13 votes is a simple majority (even with voting officers excluded), this inquiry was able to be answered in the affirmative."
Kucynda did not identify the 'out of state' OCA attorney who raised the question - but clearly it was enough to cause the Attorney General's office to review their endorsement to the Court that must issue final approval for the application for the loan. Until that endorsement is received, the Court cannot approve; and without court approval the loan cannot be finalized. Hence the need to extend the loan offer. As Kucynda concludes:
"Due to this inquiry, our completed application had to be re-filed to affirm that the vote did comply with NY State law. As a courtesy, The Honesdale National Bank extended their offer with the same terms as
before, to September 3, 2006.
Additional information will be share with all of you as it becomes available.
Father Paul Kucynda"
More From the Monk
Fr. Kucynda's email refutes statements by the monk James Silver which appeared on the Orthodox Forum last Friday, August 4th stating the loan had been stopped. Silver, an opponent of the loan, stated:
"This loan was no ordinary loan, and the ordinary rules of refinancing mortgaged property would not apply. This loan was truly impossible, which is why state authorities stepped in and stopped it, thank Heaven!"
It appears Silver mistook 'delayed' for 'denied'. However, in a later email on Wednesday August 9th, Silver, who often speaks as the 'voice' of Fr. Kondratick, went further and hinted more active government involvement was to come:
You should know that I learned last week about the state and the FBI and the IRS all getting interested in the OCA and its ill-advised attempts to borrow $1.7 million. As I've said all along, Met. Herman has been getting some very bad advice, and I fairly well predicted how all this would turn out, but nobody listens to me. They just get angry at the messenger.
Anyway, this information came from a friend with contacts in the government, a friend who merely wanted to give me and a few others a heads-up so we should be prepared to expect to be interviewed by the authorities.
Now, how long is it going to take for the 'Best Practices' people to be informed of all this, not to mention the bishops and the Metropolitan Council -- or for a follow-up to previous announcments about the loan to appear on OCA.org?
In fact, Kucynda's response to the Metropolitan Council appeared the following day; although it contained no mention of federal involvement. It should be pointed out that the Bishops were not copied on the letter to Skordinski; nor as of this date (August 11) has anything been posted on OCA.org.
Fr. Kucynda's update on the loan raises several disturbing questions. Fr. Kucynda wrote: "Attorney Michael Sahn was engaged shortly after our May meeting for this purpose."
Buty how can this be? In the May 3, 2006, commitment letter from Honesdale National Bank it states that the OCA is to furnish to "The Honesdale National Bank .... an opinion from Attorney Sahn in form acceptable to the Bank as to the validity of the loan documents and opinion that the Borrower has the power to enter into the subject transactions . . ."
Clearly Sahn was on board before the May meeting - and thus should have been properly advising the MC as to how the process was going to work, whether phone votes were permitted, etc., then. Something just is not right in Fr. Kucynda's current explanation.
Secondly, Fr. Kucynda states that there are 25 members eligible to vote. But by Statute there are 34 members: that is three clergy and three lay elected by the Metropolitan Council (6) ; four members of the administration (the Metropolitan as Chair, Chancellor, Treasurer and Secretary (4), and two each from twelve Dioceses (24). The Statute does make clear that the Metropolitan only votes to break ties, so 33 can be said to be the number of votes, under ordinary (none-tie) circumstances.
The problem is in the number presently eligible. The Diocese of the West has a lay seat open, the Bulgarian and Romanian clergy and lay seats are all open, and the Chancellor's seat is open, leaving 6 vacancies, meaning there are 27 voting members. But the Secretary's vote is also open. Even though Fr. Kucynda holds both acting Treasurer and Secretary positions, he cannot vote twice. Therefore, there are 7 vacancies, meaning 26 possible voting members, not including the Metropolitan, who only votes in a tie.
A majority of the entire exisiting Metropolitan Council would thus be 13 plus 1 -- or 14 votes. On what basis does Fr. Kucynda assert: "Since 13 votes is a simple majority (even with voting officers excluded), this inquiry was able to be answered in the affirmative." ? By what reckoning does Fr. Kucynda come up with only 25 members eligible to vote, such that 13 is a majority?
And what does Fr. Kucynda mean that "Due to this inquiry, our completed application had to be re-filed to affirm that the vote did comply with NY State law."? Why would they have to re-file if the numbers added up that easily on the number of votes needed? Was the application rejected?
Then there is this intriguing statement: "Since the Metropolitan and I are privy to confidential information that for various reasons must be kept confidential until we are informed that the investigation (which includes the 2004 Independent Audit as well as the review of the Regular and Special Appeals from 2001 to 2005) is complete, questions concerning some topics cannot and therefore will not be addressed."
This is the most confusing. In the packet of documents the MC members were sent in preparation for the May teleconference, the first question answered by Fr. Kucynda stated:
"The Appeals from 2001 to 2005 are completed.The 2004 Independent Audit will be completed within the next few weeks. We are not able to receive this information without payment for the work completed to date."
Is the 2004 Independent Audit complete or not? Are the reviews of the Regular and Special Appeals from 2001 to 2005 complete or not? In May they were, or at least one was and the other was very close to it, by Syosset's own admission. It is now August. Surely both are done.
What is so confidential in either series of document that they cannot be shared with the Metropolitan Council, the Administrative Committee, the Holy Synod, or even the Lesser Synod? What is so confidential that only two people - Metropolitan Herman and Fr. Kucynda - are able to read them? Sadly, their own attempt to implement 'Best Practices' - a program so eagerly defended by Protodeacon Peter Danilchick on this website this week - is now clearly in danger of being dismissed as little more than window dressing by Syosset's lack of openness and lack of action.
- Mark Stokoe