Bishop Tikhon On The Promissory Note
(Editor's Note: Bishop Tikhon of the West has written OCANews with new details regarding several aspects the OCA's financial scandal. In this second of a three part series OCANews examines the Bishop's claims regarding the Kondratick Promissory Note. Part Three will conclude the series with new information concerning the existence of a rumoured videotape of Fr. Kondratick.)
Immediately following the meeting of the Synod of Bishops, Bishop Tikhon raised the question of the existence of a $250,000 promissory note, signed by members of the Administrative Committee of the Metropolitan Council, owed to former Chancellor Fr. Robert Kondratick for repairs undertaken on his OCA-owned home in 1991. The issue is not minor: as the OCA has only budgeted $110,000 for repayment of the debt, the note would suggest that more than double that amount is owed. If that is correct, the debt of the OCA grows to $1.85 million rather than the $1.7 million previously announced. Even more disturbing, is the mere existence of the note, and of the house to which it refers. The house was purchased by the Church without authorization of the Metropolitan Council; improvements were made to the house without authorization; and now a promissory note was apparently given for those improvements without the authorization of the Metropolitan Council, the only body with statutory authority to do any of the three.
Bishop Tikhon On The Note
On May 25th +Tikhon wrote:
"After a couple of highly placed persons in the Central Administration had said that they had never seen any promissory note whereby the Administrative Committee had promised to reimburse the former Chancellor annually, beginning in 2002, for $250,000 dollars of work on the church-owned residence in Syosset, work done at the direction of the Metropolitan Council and for which all receipts and invoices were on file in the Administrative offices, that is, after maintenance work was done at the request of the OCA for work on the OCA's house by the Kondraticks, and after the work was done and the OCA could not pay the Kondraticks, because Matushka had paid for it herself out of the money left to her in a family bequest, they issued a promissory note for $250,000 dollars which ***promised*** them pay back in annual installments beginning in 2002. The promissory note was signed by all members of the Administrative Committee, Metropolitan Theodosius, Father Dimitri Oselinsky, Father Paul Kucynda, Alice Woog, JUDGE Harold Kalina, and Father Paul Kucynda a second time, and the signatures were notarized."... (Emphasis in original.)
The following day, OCANews asked Bishop Tikhon the date of the note. Writing directly to OCANews on May 29th, Bishop Tikhon expanded his comments:
"I suggest that the oca.news.org editor ask Archpriest Paul Kucynda, who signed as a co-signer of the Promissory Note and member of the Administrative Committee, and signed it again as the OCA Treasurer (that should give a clue as to the date), for the information deemed crucial to the editor.
And, it is not the Promissory Note that directed any repairs (sorry, I have to underline something for those challenged in the reading department) be done. What an idea! The Note referred to repairs ALREADY accomplished... The Promissory Note was executed only AFTER the OCA had failed to pay the Kondraticks even with all the invoices and receipts on file (at least before the Chancellor was fired), and they generously did not demand immediate reimbursement but allowed the Treasurer and the rest of the administration to offer a plan of installments.
Even that plan was not followed, and the Kondraticks had even more cause to sue for the money, or take out a LIEN on that property until Bette got her money back. But they did not sue, they did not demand anything. They've never demanded anything, and when they were so frightened by the constant demands to RESIGN (one such demand was phrased as a request to go on 'administrative leave' but that was a total exception) and the suspicion that the lawyers had been engaged long ago, even before the Holy Synod or Metropolitan Council knew of its being planned, that they thought they could apparently be subjected to any indignity, including a fishing expedition to try and find criminal charges, they engaged a lawyer OF Their OWN to respond to the engagement of lawyers by The Primate, personally, as the Decider.
I recklessly and carelessly and foolishly, apparently, surrendered my copy of the promissory note to the Secretary of the Holy Synod last week. I somehow doubt that this action will be divulged in any minutes.
I believe, though, that another copy of that promissory note is in a safe place. Just look at all the documents missing! I suggest that the first question to ask is this: Cui bono? Cui bono? Cui bono?
Ask why when a member of the Administrative Committee inquired whether or not this Note was included in the amount due for which the loan was proposed, the answer she got, and which was distributed to all those who had to approve the loan, she, and they, were told that there was no such loan
'on file.' Cui bono? Cui bono? Cui bono?
Now, Monsieur Editor, that nothing of substance has appeared (and apparently will ever appear) to prove the charges of the Protodeacon, do you not find it kicky that (in desperation?) the old Alaska lands account stuff has been suddenly resurrected? Do we really want to hear what the OCA did with those lands and those accounts before the Diocesan Bishop wrested control of the property in his diocese from the Central Administration. Do we really want to go over the actions, the financial transactions of two or three previous hierarchs, one of them gone to his appropriate reward, especially when that Hierarch belonged so much to the little group of those who went after our former and disgraced Chancellor? I don't recommend it!
Do I get the oca.news.org Trophy for Transparency and Accountability or not!"
On June 1, in yet another posting to another website, +Tikhon wrote:
"The 5th Note, in the document entitled, 'Notes to the Financial Statements' of the Orthodox Church in America, December 31 2002 and 2001, reads as follows:
5. Plant Assets...Plant assets include improvements to the Church property at 216 Martin Drive, Syosset, commissioned in 1991, which totals $109,523, plus accrued interest, for a total of $240,000, represented as a loan payable to Fr. Robert Kondratick.
Since I handed my copy of the promissory note to the Secretary of the Holy Synod upon his request.... I am unable to provide at the moment, the exact date on the Promissory Note that was signed by Metropolitan Theodosius, Father P. Kucynda TWICE, Alice Woog, Judge Harold Kalinas, and notarized.....However, I feel that any dummy might be able to understand that the reason for the promissory note was the growth in the amount owed due to interest on it. The Kondraticks, it seems to me, rather than to see even more interest accrue, agreed to accept this promissory note, which promised installment payments in the near future, annually, and which specified that no interest would accrue to the amount promised."
The House At 216 Martin Drive
The property in question is a single family residence located at 216 Martin Drive in Syosset, New York. It was purchased by Jonathan Rusin, OCA legal counsel, acting on behalf of the OCA, for $235,000 in cash on November 6, 1991.
In early 1991 the head of the OCA's Finance Committee, John Kozey, suggested that the OCA diversify its holdings by putting some future assets in real estate, rather than in stocks and bonds. Later that same year Fr. Kondratick lost the lease of the Jackson street property he had been renting. At the same time, the OCA received a $270,000 bequest from an estate. In short order Mrs. Bette Kondratick went looking for a home for her family; and when she found the home she wanted, it was purchased by the OCA.
According to those involved in the transaction, Fr. Kondratick made the sole decision to extensively remodel the interior of the house before moving in, using monies from his father-in-law totaling $109,532. Neither the purchase of the property nor the repairs made to the property were agreed to, or authorized by, the Metropolitan Council, which by OCA Statute is the only authority that can make financial decisions regarding Church owned property, or can actually indebt the OCA. Protodeacon Eric Wheeler has suggested that the purchase (but not the repairs) were indeed 'run by' the Administrative Committee of the Metropolitan Council in late 1991 in an attempt to meet the spirit of the Statute, if not the letter. An examination of their official Minutes may reveal the accuracy of his recollection. However, Wheeler has never denied that the purchase has been cleverly hidden from plain view on OCA financial documents ever since. The Chancellor's new home was not listed as a fixed asset, or as a real estate asset, where one could notice it. Rather, it was tucked away in the OCA financials under 'investments', and listed as a 'real estate investment' without note or explanation. Given that the OCA's budget was just over a $1 million in 1991, a house purchase for almost a quarter of that entire amount - $235,000 - might have attracted the Metropolitan Council's unwanted attention. An unexplained increase in the existing investment portfolio would simply be cause for rejoicing....
The Attempts To Transfer Title
Between 1991-1999 there is no mention of remodeling, promissory notes, etc., in any documentation of OCA finances or records of existing debt. Indeed, there is no mention of the house at all, publicly.
Privately, this was not the case. In a February 2006 interview with OCANews, former OCA corporate Secretary Paul Hunchak stated:
"Let me offer the following account relevant to the management style practiced at Orthodox Church in America, Inc. during the 1990's: You see, the Orthodox Church in America, Inc. purchased a residence for Father Kondratick - but somehow, no record of its purchase ever appeared in the minutes of the Metropolitan Council. Some people in the Church knew about this transaction --but surprise, surprise, this sale was never noted in any official documents of the Metropolitan Council or thus, made known to the Church at large. In July 1999, I became aware of secret meetings held during the Independence Day holiday about this property.
Stokoe: 216 Martin Drive is Fr. Kondratick's personal residence?
Hunchak: Yes. At the time, yes--officially a parsonage according to Nassau County's property tax roles. I wouldn't know today. A visit to the Nassau County records office confirmed in July 1999, and regularly re-confirmed until my resignation in April 2000, that this property was still owned by the Orthodox Church in America, Inc. I do not know it's status today. Given the way the property was purchased 'under the cover of darkness' it would not have phased me in the least if the property was transferred to him in a similar manner. For those interested in my concern about this matter, consult with former members of the Alaska Lands Commission about quit claim deeds. A final random thought on this matter - as a lay employee of the OCA, I always questioned about the need to provide a housing allowance to a person who was already provided a house and a salary...."
(Read the entire interview here.)
Hunchak's reference to attempts to 'transfer' ownership of the property through quit claim deed is echoed by Wheeler. In an email to OCANews in February 2006 Wheeler explained:
"During the time Kucynda was Treasurer (1991-95), RSK (Fr. Robert S. Kondratick) kept pushing him (and me) to work out a process to transfer the house to RSK. I contacted Rob Taylor and I secured many different options, from the OCA holding the mortgage to RSK having his housing allowance applied to an outstanding mortgage on an annual basis. I suggested that the home improvement amount spent by RSK of $109,523 be applied as a down payment. I asked that Bette meet with a real estate agent and determine what homes are selling for in the area of Martin Drive. And each time I came up with a recommendation, RSK would give me a deer in the headlight look.
It was not until late 1998 or early 1999 when I finally caught on to what 'transfer' really meant. MT (Metropolitan Theodosius) and RSK called me into RSK's office one afternoon and asked me if I would sign off on a quit claim deed (as the corporate secretary of the OCA) transferring the house from the OCA to RSK -- it finally hit me that transfer meant free!! Correct me if I am wrong, but with a quit claim deed, there is no need to do a title search and provide a record of sale. Irefused and left the office.
Sometime after I left the employment of the OCA in 1999, the $109,523 is turned into an outstanding loan -- my guess is that this was at least handled by the Administrative Committee and therefore should me minuted somewhere....Throughout the period of time that RSK lived in the rectory -- from 1991 until I left in 1999 -- he continued to receive a housing allowance, which in 1999 was $24,000. This was never questioned since salaries were the best kept secret at the chancery.
In the context of Wheeler and Hunchak's accounts - accounts which have never been denied by Syosset - the answers to Bishop Tikhon's repeated question seems clear. "Cui Bono?" is a Latin phrase meaning "Who benefits?" It was used by Cicero to devastating effect in ancient Rome as a means of suggesting the guilty may be found among those who have something to gain. Conversely, the guilty party may try to avoid notice by diverting attention to a scapegoat.
In the case of 216 Martin Drive the answer to "Cui Bono?" is clearly Fr. Kondratick. He gained full use of a home purchased by the Church, which was undisclosed to the statutory overseer, the Metropolitan Council. He continued to receive a $24,000 a year housing allowance as well. He did $100,000+ worth of improvements on the home, again without approval of the Metropolitan Council, for which he received a promissory note a decade later, for $240,000, being the sum of the principal at 7% a year until 2002. And this in a decade when bank interest rates on long-term CD's were less than 4% on average. Cui Bono, indeed.
Bishop Tikhon, despite having the note in his possession, is now unwilling, or unable to provide the date it was signed. One can, from the people and dates involved, infer that it was most likely signed shortly before Metropolitan Theodosius retired in 2002, fully a decade after the work was done, and if Wheeler and Hunchak are correct, only after numerous attempts by +Theodosius and Fr. Kondratick to transfer the title of the property quietly as a free gift to Fr. Kondratick had failed. As it became increasingly unlikely, given the new administration, that the deed would be transferred, it seems safe to suggest that Fr. Kondratick's hand-picked Administrative Committee signed the note, securing him not only his money, but a lucrative investment at Church expense. Cui Bono, indeed.
+Tikhon suggests that both OCA Treasurer Fr. Paul Kucynda and Metropolitan Herman are trying to deny, or ignore the existence of the promissory note. He cites, but does not identify, one of the signers of the note (Alice Woog) as saying that Syosset denied ever having the note. Yet, as he himself points out, the debt has been listed in the financial statements since it was created - in 2002. What is at issue for the current administration in Syosset, clearly, is not the debt, but the validity of a 'sweetheart deal', for twice that amount.
What is curious in the Bishops' new comments about the note is his claim that : "The Promissory Note was executed only AFTER the OCA had failed to pay the Kondraticks even with all the invoices and receipts on file (at least before the Chancellor was fired), and they generously did not demand immediate reimbursement but allowed the Treasurer and the rest of the administration to offer a plan of installments." It has been established that Metropolitan Theodosius, if not Fr. Kondratick, were flush with ADM monies between 1994-1999 to the tune of $4-5 million. And yet, they chose not to repay this 'loan'? But then, if Wheeler's and Hunchak's accounts are correct, why pay off a loan that would reveal the existence of a largely hidden OCA asset they were seeking to transfer as a gift without notice? Cui Bono, indeed.
By 2002, when the note first appears, the OCA was still flush with money, having diverted almost $350,000 from the 9/11 funds, as well as from charity and appeal monies. Yet again, the debt was not paid. Why? Here the Bishop himself provides the needed clue: "Even that plan was not followed, and the Kondraticks had even more cause to sue for the money, or take out a LIEN on that property until Bette got her money back." The perpetual threat of suit or lien against an ever-more impoverished OCA made the promissory note a potent weapon against potential changes that could be brought on by a new administration; a weapon +Tikhon himself is now brandishing to effect. Cui Bono, indeed.
As for +Tikhon's oft-repeated charge that documents are now missing, inferring that their disappearance has occurred only since the March 16th firing of Fr. Kondratick, who this charge benefits is clear. Fully five months ago Paul Hunchak publicly stated he observed Fr. Kondratick destroying a filing cabinet of records in the summer of 1999. Now, +Tikhon seeks to blame +Herman, Fr. Kucynda, the Secretary of the Synod, among others, for lack of receipts and documentation that were under the control of the former Chancellor until the current investigation began. +Tikhon is scapegoating others in an attempt to distract attention from Fr. Kondratick. Cui Bono, indeed.
With every posting, the Bishop of the West reveals more and more the culture of half-truth and deception that has dominated the OCA during much of his tenure as Bishop. To answer the Bishop's other question: he does not win a trophy for either transparency or accountability. On the other hand, his selective disclosures of half the truth gives us not only a chance to dig deeper toward the whole truth, but the impetus to do so. Cui Bono? Who benefits? The faithful of the OCA. And for that we must be grateful.
In his conclusion to his OCANews post, the Bishop threatens to disclose information about the 'old Alaska Lands accounts'. And to those two questions he asked: ("Do we really want to hear what the OCA did with those lands and those accounts before the Diocesan Bishop wrested control of the property in his diocese from the Central Administration? Do we really want to go over the actions, the financial transactions of two or three previous hierarchs, one of them gone to his appropriate reward, especially when that Hierarch belonged so much to the little group of those who went after our former and disgraced Chancellor?") the only possible answer is: "Yes, please!"