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08.23.06 Latest News

New Analysis Suggests Almost $800,000

in Bequests May Be Missing

A statement on the Orthodox Forum posted on August 14th suggests that as much as $800,000 in bequests made to the OCA over the past ten years may be missing. The claim is made from an analysis of publicly available OCA financial documents by Peter Zwick -a Syosset commentator who often posts on the Orthodox Forum. Zwick writes:

"Ten months ago, on October 17, 2005 Protodeacon Eric Wheeler addressed an appeal to Metropolitan Herman, with copies to the other members of the Holy Synod of the Orthodox Church in America, to which he appended 'A Call for Accountability'.

He discussed in that statement ' …funds which existed outside of the normal operating budget of the Orthodox Church in America….

The foundation of these funds during the first part of the 1990’s came from two main sources.  One source was the numerous bequests that were: (1) never reported to any church administrative body; (2) not provided to the auditors for review and reporting purposes in the annual financial report; and, (3) deposited into accounts which either the Metropolitan or Chancellor controlled.  These bequests were never earmarked by the donors for discretionary purposes, nor was there any discussion by any finance or audit committee as to where these funds should be directed.  Father Kondratick would randomly deposit these bequests into either the account he controlled known as the St. Sergius Chapel Account or give them to the Metropolitan for his ’discretionary account’.  As a good estimate, I would state that half of the bequests that came into the chancery during the 1990’s were never placed ’on the books’.'

(Read the Call to Accountability here)

On November 28, 2005 Archbishop Job of Chicago wrote a letter to Metropolitan Herman, with copies to the other members of the Holy Synod, to pose the question, 'Are any of the allegations true, or are they false?' He defined in that letter 'unreported bequests' as the second in his list of allegations.

(Read that letter here)

On January 18, 2006, in an interview with Mr. Mark Stokoe of OCANews, Mr. Paul Hunchak, former Corporate Secretary of the OCA, stated that:

'As an aside, I recall that Fr. Kondratick spent hours that summer [1999] shredding documents from his private filing cabinet that held, among other things, the only records of bequests given to the OCA.'
(Read Hunchak’s interview here)

On July 5, 2006, in his OCANews editorial, 'The Next Six Months', Mr. Stokoe wrote that:

'...Protodeacon Wheeler accused the former administration of hiding bequests to the OCA; and further, that these monies were being misappropriated. No one knows how much money was bequeathed to the OCA from 1992-2005; Although left to the Church, these monies appeared in no financial statements; nor were there any controls on how they were spent....Former OCA Secretary Paul Hunchak describes how he witnessed Fr. Kondratick destroying the contents of a filing cabinet wherein these records were kept....It has subsequently been confirmed to both the Synod of Bishops and to the Metropolitan Council that all these records are indeed missing.'"

Having set forth Protodeacon Wheeler’s allegation about bequests being diverted, Hunchak’s allegation about records being destroyed and the subsequent confirmation that records were indeed missing, Zwick then proceeds to ask if it can be determined how much money might be missing - assuming Protodeacon Wheeler is correct. Zwick writes:

By The Numbers

"During the years in question, what could the average contributing member of the OCA, as distinct perhaps from the average member of the Holy Synod or the average member of the Metropolitan Council, have known about bequests to the Church?

1. In 'The Report of the Treasurer' to the 11th All-American Council (Chicago, July 17-21, 1995), Protopriest Paul Kucynda, Treasurer, in a six-year review of OCA finances from 1989 to 1994, included in his income tables under the heading 'Unrestricted Income' a line item for bequests,

1989 --
1990 --
1991 $270,214
1992 $100,000
1993 --
1994 $283,440

which, for the three-year period 1989-1991 amounted to $270,214.


and for the three-year period 1992-1994, $383,440."

Zwick then finds corroboration for at least some of the amounts mentioned:

"It is now known, from Mr. Stokoe’s June 5, 2006 OCANews article, 'Bishop Tikhon On The Promissory Note”, that the major portion of the 1991 bequest was used for the purchase of the 216 Martin Drive, Syosset, New York property by Mr. Jonathan Russin, on behalf of the OCA, for $235,000.00 on November 6, 1991."

He continues:

"2.     In the “Report of the Treasurer” to the 12th All-American Council (Pittsburgh, July 25-30, 1999), Protodeacon Eric Wheeler, Treasurer, in a four-year review of OCA finances from 1995 to 1998, included no bequest amounts in his 'Administrative Income' and 'Program Unit Income' tables.  He did, however, ' …pay tribute to the wife of a priest, Matushka Anna Shkurin….Priest Stephen Shkurin, the husband of Matushka Anna, died on December 16, 1973.  Matushka Anna fell asleep in the Lord on January 12, 1995.  Upon her death, she bequeathed to the Orthodox Church in America approximately $100,000.   In addition, sums of money were also bequeathed to our seminaries….'

Presumably accounting for this bequest in his three-part report to the Council of the accomplishments of the Office of Development, Protopriest Joseph Fester, Director, wrote that, 'Since 1995 bequests to the Orthodox Church in America have totaled $139,000.' 

Thus for the four-year period 1995-1998 bequests amounted to $139,000."

In short, Zwick shows conclusively that the OCA has publicly admitted to collecting almost $800,000 from 1989-1998. He then continues:

"3. In the “Report of the Treasurer” to the 13th All-American Council (Orlando, July 21-26, 2000), Protopriest Dimitri Oselinsky, Treasurer since January 1, 2001 – to succeed then Archbishop Herman of Philadelphia who had been Acting Treasurer from October 1, 1999 to December 31, 2001 – in a three-year review of OCA finances from 1999 to 2001, defined in the “Treasurer’s Comments” appended to his income tables two bequests included in the line item totals for “Miscellaneous Income”,

2000    $568,249.31    
2001    $373,154.25     

which, for the three-year period 1999-2001 amounted to $941,403.56.

In the three-part report to the Council of the accomplishments of the Office of Development, Father Fester wrote that, “Since the 12th All American Council, Planned Gifts to the Church via bequests, trusts and gifts to the OCA Endowments total $2,357,965.”  But the statement is meaningless."

According to Zwick the numbers given by Frs. Oselinsky and Fester are “meaningless” in trying to determine the amount of bequests given in this later period. Among the $2 million total cited, neither Father distinguishes what among the total were bequests, which were trusts, endowments, gifts, etc. While some were surely bequests, neither Fr. Oselinsky nor Fr. Fester distinguish between restricted or unrestricted bequests, between bequests that went to operating funds, or to other funds, etc. Thus the numbers, in the context of determining the amounts of bequests given to the Church are not helpful.

In the same manner Zwick then writes:

"4. In the 'Financial Report' to the 14th All-American Council (Toronto, Canada, July 17-22,2005), Father Oselinsky, Treasurer, in a three-year review of OCA finances from 2002 to 2004, noted in the 'Treasurer’s Comments' appended to his income tables that, regarding the line item totals for “Miscellaneous Income”, 'Miscellaneous gifts for the three-year period include voluntary gifts and bequests that were made by individuals to The Orthodox Church in America.'  The statement is meaningless."

Zwick's Conclusion

In the three-year report to the Council of the accomplishments of the Department of Stewardship, there was no mention of bequests.  Thus Zwick concludes that:

"During the years in question then, the average contributing member of the OCA had enough information to determine that – in the 1990s – the Church received bequests in the reported total amount of $792,654.

If Protodeacon Wheeler’s allegation is true, and if his estimate is accurate, 'that half of the bequests that came into the chancery during the 1990’s were never placed ’on the books’', then in round numbers $800,000 in Church funds have vanished.

The Proskauer Rose LLP investigation of the Church’s financial management was completed last month.  What does the report of its findings state about OCA bequests?

- Peter Zwick"

And There Are Even More Questions

Zwick makes no speculation about what bequests, if any, are missing from 2000-2005; nor about the Unitary Trusts received by the Church from 1992-2005, that is, bequests that are supposed to pay the donor some sort of “guaranteed” income over their lifetime. Such accounts exist - but the status of these has not been reported by the OCA and remains unknown.

While Protodeacon Wheeler’s allegations about half of the bequests being missing have yet to be substantiated, Zwick’s analysis of the amounts involved are clearly accurate. And as Zwick himself points out, is not known whether some or all the relevant documents to substantiate Wheeler’s claims still exist. This, in turn, leads Zwick to his final question:

“The Proskauer Rose LLP investigation of the Church’s financial management was completed last month. What does the Report state about OCA bequests?”

A good question, indeed.

-Mark Stokoe

 

 
     
 

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