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5.21.08

COUNCIL PAPERS REVEAL TROUBLES, PROGRESS
& OPEN QUESTIONS

The recently published Minutes of the Metropolitan Council and appended documents, which are a welcome sign of increasing transparency and accountability in the OCA, nevertheless reveal that by their own admission, the OCA has a long way to go toward resolving the current crisis.
(The Minutes may be viewed here)
(The Appendices may be viewed here)

Movements Towards Financial Transparency and Accountability

The lurching movement toward transparency and accountability in the OCA is evidenced by the description in the Metropolitan Council Minutes of Treasurer Fr. Michael Tassos’ report:

“When asked if he was confident that there are sufficient financial controls to prevent any potential mismanagement of OCA funds, Fr. Michael said that the vast majority of controls are in place, but this does not mean that the system does not require supervision. There are still policies that need to be put in place for some of the day-to-day practices and he is working with the Audit Committee to draw up a list of them.”

The further controls, systems and supervision required were then spelled out by Fr. Tassos.

According to the new Treasurer: “One person was terminated in February due to a lack of understanding of basic accounting and poor performance.”

In addition: “After struggling for two months to properly implement the Blackbaud software program and not really making progress in the time that was required to produce the 2007 financial reports, I made the decision to switch course and use Quickbooks for Not-for-Profits. This decision was based upon: (1) the fact that numerous mistakes were made in the original implementation of the OCA’s financial records,

(2) the personnel at the time did not have the accounting knowledge or experience to properly utilize such a software program, (3) we were under a tremendous time crunch to produce an accurate financial report for 2007, and (4) going forward the staff in place was at much more at ease with Quickbooks than Blackbaud, and (5) the ongoing costs of training (approx. $9,000 per year) and software upgrades, (approx. $7,000) were significantly more than the cost of Quickbooks (the total cost was approx. $3,000).”

In short, the financial records were in disorder, the new, highly-touted, and very expensive ($65,000 +) software was unusable, the staff, unqualified. While some of these problems were inherited from the Kondratick regime, others were clearly the result of poor decisions made at great expense by the Metropolitan’s hand picked “Transition Officer” and “Reorganization Team” over the past two years in their hurried effort to just “move-on” from the scandal. Consider the following: the implementation of the new Blackbaud financial software was accomplished by Fr. Jonathan Ivanoff, who was then terminated by Paul Bodnar, the former Secretary of the OCA, who felt he could handle Syosset’s computer needs. Thus, the one person familiar with the Blackbaud software was let go. Instead of hiring an account temp with Blackbaud experience, they hired someone who only knew Quickbooks; and then Bodnar himself was terminated (at the cost of an additional $60,000). Now, Fr. Tassos, who has done yeoman’s service towards cleaning up the OCA’s finances, announces he is leaving Syosset to return to his family in California, although he hopes to continue working part-time for the OCA.

As a result, the Reorganization Committee’s envisioned “quartet” of officers (that was to run the OCA under the guidance of an on-site Metropolitan) is still founding, almost two years after the idea was first sold to the Council. With Fr. Tassos leaving, the new OCA Secretary, Fr. Tosi, arriving, the “quartet” remains a “trio” with an absentee conductor continuing to live in Pennsylvania.

The Minutes reveal an interesting request to Fr. Tassos. The Council asked that in “future financial reports, .....Fr. Michael Tassos include a listing of salaries and benefits for all Chancery managers.” This too is a welcome step toward continuing transparency and accountability.

Toward this same end, Fr. Michael raised a question about the financial status of St. Catherine’s Representation Church in Moscow, Russia. The Minutes report: “Fr. Michael stated that as the rector is paid a salary by the Church, and that is the official representative of the OCA in Russia, that financial affairs of St. Catherine’s should be reported in the Church’s books.” It is not reported in the Minutes why some on the Council or in the Administration would object to such disclosures; but the Minutes confirm no action was taken. They state: “This is a matter for further consideration.” From the beginning of the ADM diversions with the phony “Andreas Conference Center”, through the attempted Beslan diversions that led to the still secret Kondratick Moscow tape, St. Catherine’s has a real role in the OCA scandals. Fr. Michael is correct: any serious effort to resolve them must include accurate reporting of this institution’s finances, now and in the future.

The Minutes of the Council also revealed other significant financial news. According to Fr. Tassos:

“ From my conversation with Fr. John Reeves, I learned that there is still the sum of $176,500 that is potentially outstanding. Until the issues with Robert Kondratick are resolved we will remain in limbo. I would like to suggest that we begin paying some amount of money beginning in 2008 to help repay this additional missing amount. If we ever collect from Mr. Kondratick or if he ever shows some documentation that he properly expended these funds then we can stop. My suggestion is that we start by paying $25,000 this year.”

This is the first time the OCA has publicly admitted that an additional $176,500 in 9/11 donations remains to be disbursed. The Kondratick regime denied the existence of this sum, the Kucynda administration debated its existence, while the Garklavs administration, to its credit, is admitting the truth. The Council, and Fr. Reeves, Chairman of its Charity Committee, should be applauded for doing the right thing by its motion:

“9.4. MOTION [re: initiating payments to the 9/11 Emergency Fund] — G. Nescott/Fr. M. Sherman: That the OCA begin disbursing the balance of the 9/11 appeal monies collected, with the first $25,000 being disbursed as a general line item this fiscal year. CARRIED UNANIMOUSLY”

Finally, an attempt to move the OCA’s $2 million investment fund from Wachovia to the Honesdale Bank - seen by some as a reward for giving the OCA the $1.7 million loan - was defeated. As the Minutes state:

“It was the position of the Council that Item 3, the recommendation to move the OCA’s portfolio from Wachovia Securities to Honesdale National Bank, required more due diligence before a decision is made. Fr. Tassos will work with the Investment Committee to determine further details of such a move, including potential penalties for moving investments, before this item is addressed.”

Legal Moves

The Council made a significant legal move as well, one that will have a financial impact no matter how the litigation is resolved. The Council agreed to counter-sue former OCA Chancellor Robert Kondratick and his wife, Bette. The motion reads: “10.3. MOTION—Fr. M. Sherman/D. Solodow: That, subject to the approval of the Holy Synod, the Metropolitan Council hereby authorizes the law firm of Sahn, Ward and Baker to commence a civil action against Robert S. Kondratick and family members for monetary damages arising out of their relationship with the Church. CARRIED UNANIMOUSLY “. The decision is important, not because of the $2+ million that may or may not be recovered, but because it sends a message to the current and future Church administrations that alleged wrongdoers will be held accountable for the stewardship of the funds and resources entrusted to them by the Church.

Accountability comes with a price, however, and in this case, it will be steep. The Minutes note: “Unfortunately, the legal fees for this matter have already exceeded our budgeted amount of $25,000 by approximately $30,000. If this matter actually goes to trial we may be looking at upwards of $50,000 to $100,000 more in legal fees.” The Council then raised the legal budget to $125,000 - as the Kondratick lawsuit will not be the only legal issue the OCA will be dealing with in 2008. The Equal Employment Opportunity Commission (EEOC) may levy fines and seek civil punishments following its investigation - not to mention the fees for the Koumentakos case, or additional litigation that may arise in the course of the coming summer.

Ethics

In the Minutes it would be easy to overlook the following:

“15.2. Summary of Pending Ethics Concern – see Attached. Council Members reviewed the summary of an ethics concern regarding the process of hiring and releasing of Paul Bodnar as OCA Secretary. It was noted that although future reports may not be publicized in full, this particular concern should be made public.

15.2.1. MOTION: Fr. M. Searfoorce / Fr. M. Tate: To accept the Ethics Committee
report on the Ethics Committee Concern regarding Mr. Paul Bodnar and to post it on the OCA.org. website. Carried Unanimously.”

This was the first ethics complaint lodged under the new practices; and a test of both accountability and transparency. The result was clearly mixed. That it was published is welcome; that the determination that future complaints may not be, is troubling.

The issue before the Ethics Committee concerned the hiring, service and termination of former OCA Secretary Paul Bodnar. In reviewing the whole sad episode the Committee delivered a rebuke to Syosset for its actions, stating that there was little difference between the “new” administration and the “old” in how this whole affair was handled. Or, as the Committee put it:

“The Ethics Policy requires a higher standard than practiced in the past by the Central Church Administration. This investigation demonstrates that the Central Administration still has work to do to meet the standards of the Ethics Policy.”

Being even more pointed, the Committee stated:

“Problems occurred with Mr. Bodnar’s tenure with the OCA due to an incomplete culture change with too much reliance on precedents of the past at the Central Administration. This investigation determined that, while personnel at the Central Administration have changed, the manner of doing business has not changed sufficiently to conform to the recently approved Ethics Policy.”

Specifically, the Committee found that:

“In past years, the Central Administration had a practice of finding legal interpretations favorable to directions in which the Central Administration wanted to go.” To the Committee’s dismay, they found little had changed. The Transition Committee and Administration, or as the Minutes footnote it, “the Chancellor, Secretary, Treasurer, Director of Ministries and Communications, along with the Reorganization Task Force and the Transition Officer ( Dn. John Zarras)” heard what they chose to hear.

They also apparently chose to reveal only what they wanted to reveal, leading the Committee to honestly admit to its own failure:

“In advance of the October 2007 Metropolitan Council meeting, the Reorganization Task Force issued a status report that did not contain an account of Mr. Bodnar’s immigration problems. The reasons for this failure to fully disclose Mr. Bodnar’s status were not discovered.”

Thus the Committee rebuked the Reorganization Task Force again, and warned future administrations by stating:

“The Reorganization Task Force provided a task force update of October 1, 2007, which was forwarded on that same date to the Holy Synod and Metropolitan Council members by the OCA Director of Ministries and Communications. The update made no mention of Mr. Bodnar’s immigration status or the fact that he was neither Secretary nor an employee. In order to conform with the Ethics Policy provision requiring “provide the Council with accurate, timely, comprehensive and sufficiently detailed information so that the Council in its judgment can effectively carry out its responsibilities,” the task force update should have identified Mr. Bodnar’s status. The Central Administration must be attentive to provide accurate, timely, comprehensive, and sufficiently detailed information to the Holy Synod and Metropolitan Council in the future.”

In this case the Council was practicing what it preached. It provided “accurate, comprehensive and sufficiently detailed information” to the Church concerning its first ethics complaint and how it was handled. It is a model for future emulation, should the need arise. This is “Best Practices” as it was meant to be.

Stavropegial Institutions

The Council, following a motion first made by the 9th All-American Council (and subsequently ignored) as well as the Diocesan Council and Assembly of Eastern Pennsylvania, that stavropegial institutions of the OCA be equally open and transparent with their finances, passed the this motion:

"17.1. MOTION – D. Solodow / G. Popovich: The Metropolitan Council reaffirms the directive of the 9th All-American Council stating the following: “BE IT RESOLVED that the Treasurer of the Orthodox Church in America, on behalf of the central church administration, is hereby authorized and instructed to request and receive copies of the annual financial reports of each diocese, seminary, monastery, and church institution and to prepare an annual consolidated report on the financial status of the Church as a comprehensive whole including the central church administration to the Holy Synod, the Metropolitan Council and the diocesan assemblies.
“In anticipation of each All-American Council, the Treasurer shall prepare a summary of the consolidated reports for the previous triennium to be distributed prior to the Council to all delegates, and a full report shall be
distributed prior to the Council to all delegates, and a full report shall be available at the council for review by delegates and observers.”

Furthermore, the Metropolitan Council hereby requests copies of the financial statements and audited reports, where available, of all Church institutions listed in the above resolution for the year ending December 31, 2007, and that these reports be provided to the Treasurer of the OCA no later than six months after December 31, 2007. CARRIED UNANIMOUSLY

Will it happen this time? Consider the following plea:

“Dear Venerable Fathers, and brothers and sisters: the eyes of many look to the leadership of the Orthodox Church in America at this time. Some look expecting to see failure, fault and “business as usual.” Others look hopefully, giving us the opportunity to demonstrate, the sincerity of our desire to turn a corner in our Church’s life. Much has been accomplished in a short time, ....However, our work is far from over. In some ways it has only just begun. It is most important that we stay focused on creating an atmosphere where people feel that they can trust their leaders to carry out their responsibilities with good will in the most responsible manner possible. We seek to create an environment where those in authority see their positions as acts of service and not as places of privilege. This work will not be demonstrated by words. A tree is known by the fruit that it bears and it is our actions that will show the sincerity and authenticity of our efforts.”

These words, spoken by Metropolitan Herman to open this most recent meeting of the Metropolitan Council, set the standard by which he must be judged. Should he fail to disclose all the finances of his seminary and monastery of St. Tikhon and its related institutions (bookstore accounts, orphanage accounts, etc.) he is like a tree that bears no fruit; and his lack of action will clearly show to all a lack of integrity. He set the challenge by his own words: now it is up to him to live up to his own words.

The Metropolitan

The Council, however, decided not to wait. They have had years of fruit, or lack of same, to examine. Thus, the following motion was made:

“21.4. MOTION – R. West / Fr. M. Searfoorce: Based on the continuing failure of leadership to resolve decisively and without undue delay the crisis that engulfs the Orthodox Church in America, the Metropolitan Council respectfully requests the retirement of His Beatitude, Metropolitan Herman by no later than the opening of the All-American Council in Pittsburgh. After a lengthy discussion this motion was tabled to the next meeting of the Metropolitan Council.“

Recognizing that the Church cannot go on as it has these past six years, many on the Council wanted to send a clear message that the future of the Church was more important than one person clinging to an office despite scandal, ill health and advancing age. Many have concluded it would be best if the Metropolitan retired now, rather than be asked, or forced, to resign later. Having spent more than two hours in Executive Session with the Metropolitan to discuss his leadership and lack thereof, the Council then voted to table the issue until the next meeting in order to give the Metropolitan time to consider what had been said. The Minutes record the tally:

“21.4.1. MOTION to table Motion 21.4 to the next meeting – Fr. M Tate / W. Peters.
CARRIED -- For 10 / Opposed 5 / Abstentions 4”

The Council rejected the attempt to hide the motion by defeating a subsequent motion to delete it from the record, and thus keep evidence of the Council’s dissatisfaction secret. The Minutes record:

“21.4.2. MOTION to expunge Motion 21.4 from the Minutes – R. Schneider / W. Peters. DEFEATED --
For 7 / Opposed 11 / Abstention 1“

The motion is back on the table in July.

- Mark Stokoe

 

 
 

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