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7.10.09   Part II of IV in the Series

Governing Well

“We’re a Church not a Corporation”

Of course we are a Church. 

But we’re a Church who, back in the 1940s under Metropolitan Antony Bashir, chose to form a New York corporation, contribute all of its assets into the corporation, and call that corporation an Archdiocese.  Given that Church voluntarily subjected herself to the laws of a state and enjoys the benefits of those laws (tax-exempt status, limited liability of its members for torts, etc.), should we now tolerate, as so many appear to suggest, the Archdiocese’s violation of the laws that grant us these benefits?

We’ve all heard the justifications.  Most recently on this site, Father George Washburn offered up the lemming-like “everybody does it” rationale for non-compliance.  Others have tried to justify non-compliance by intimating that the Archdiocese is above the law, even though it has expressly contracted with the state to undertake certain burdens in exchange for certain benefits.  My personal favorite is Metropolitan Philip’s 2005 rationalization of his disobedience to the Patriarch when he stated, “Our relationship with you, Master, is neither literal, nor legalistic. ‘The written code kills, but the Spirit gives life’”. He then promptly turned around and told the Patriarch that passage of the Pittsburgh Constitution was required to fill a juridical void that didn’t even exist.  By these standards, non-compliance with the law is a good thing—unless compliance with the law provides a stronger means to justify an end.

The state of New York has special incorporation rules for just about every type of religious group under the sun: Methodists, different Orthodox jurisdictions (the OCA has its very own set of rules), Roman Catholics, Apostolic Episcopalians, Protestant Episcopalians, schismatic groups calling themselves “Orthodox,” etc.  Why does the state bend over backward to accommodate the rule of its law to the needs of religious organizations?  Because it is concerned about one thing: the proper, predictable, and verifiable management of the temporal affairs of such organization.

Although New York courts won’t touch with the proverbial ten-foot pole a dispute involving matters, say, of ecclesiastical jurisdiction, you can be equally as certain that they will jump with all of their might into the midst of matters involving temporal issues, even if it means tackling a doctrinal interpretation or two.  (Rector, Etc., of St. James Church v. Huntington, 1894, 82 Hun 125, 31 N.Y.S. 91.)  For instance, according to Butler v. Sacred Heart of Jesus English Rite Catholic Church, 1998, 178 Misc.2d 851, 680 N.Y.S.2d 909, the provisions of New York’s religious corporation law are intended to provide “an orderly method for the administration of the property and temporalities dedicated to the use of religious groups and to preserve them from exploitation by those who might divert them from the true beneficiaries of the trust.” In other words, the New York legislature understood the significant potential for fraud on the public that can be perpetrated by megalomaniacs with religious titles and drafted the law accordingly.  When a religious organization subjects itself to New York law, it agrees to follow the procedures designed and mandated by the state to protect donors to and beneficiaries of the organization.  Full compliance with state law sends the message to a religious corporation’s benefactors that the religious corporation is trustworthy—that donations made will be used for proper purposes and not simply to line a hierarch’s pockets.

In most states, the President of a corporation possesses what we landsharks (candygram anyone?) call “apparent authority.”  This means that even if a corporation expressly restricts its President’s authority to enter into contracts, he can still bind the corporation contractually if the other party knows of his title and has no reason to believe that he is prohibited from entering the contract—simply because that’s a power we normally expect a corporate President to wield.  Interestingly, New York law takes the potential for hierarchical shenanigans with a religious corporation’s finances so seriously that it refuses to recognize any “apparent authority” in the case of the President of any religious corporation. New York law even prohibits any single trustee from legally binding the religious corporation individually, even if authorized to do so by the other trustees.  Sorry for the hairy legal citations, but these are the relevant cases if you’re inclined to check them out:  People's Bank of City of New York v. St. Anthony's Roman Catholic Church of Brooklyn, 1888, 109 N.Y. 512, 17 N.E. 408. See also, Hart v. Congregation Shearith Israel, 1883, 49 N.Y.Super.Ct. 523; Congregation Aushe Kesser v. Jewish Community Center of Corona, L.I., Inc., 1958, 5 A.D.2d 1011, 174 N.Y. S.2d 178; Bernstein v. Friedlander, 1968, 58 Misc.2d 492. 296 N.Y.S.2d 409; Krehel v. Eastern Orthodox Catholic Church in America, 1959, 22 Misc.2d 522, 195 N.Y.S.2d 334, aff’d 12 A.D.2d 465, 207 N.Y.S.2d 93, aff’d 10 N.Y.2d 831, 221 N.Y.S.2d 724, 178 N.E.2d 428.

The number of Trustees, their terms, and the procedures for their appointment are important to ensure that the Archdiocese is not overrun by a multiplicity of high-rolling thugs and yes-men in such a way that no one can determine who does what or whether they do anything at all—which is exactly the direction our Metropolitan, with the assistance of his Chancellor, has taken this Archdiocese.

Father George Washburn has postulated that we should accept governance irregularities on the basis of his experience in basketball: “no blood; no foul.”  I’ll grant that this may work just fine in a pick-up game on which you may have bet a dollar or two, but it has absolutely no place in a multi-million dollar religious corporation in which no one is permitted to determine whether there is any blood to begin with.  You think a gambler in Atlantic City, plays blackjack with decks that aren’t unsealed in front of his eyes?  No way!  Why?  Because he expects them to follow the rules so that he can be satisfied that everything is above-board.  If he expects this traditional courtesy from mobsters in America’s Playground when his money is on the table, shouldn’t we expect at least compliance with the law from our Archdiocese when our hundreds of thousands are at stake?

Now don’t get me wrong—I am not at all suggesting that our Archdiocese wrap its ecclesiastical governance in a legal blanket.  Just the opposite—our Archdiocese should be free of the law in ecclesial matters.  In fact, I advocate for a complete revamping of our Constitution and Certificate of Incorporation (in the course of complying with the Holy Synod’s grant of self-rule, of course) to reflect solely the concern of New York law for the proper oversight of the income and assets of the Archdiocese.  We should swiftly extricate the Archdiocese from its hopeless entanglement in a web of self-imposed rules, because those rules assert the precedence of secular law over processes that are properly governed by the Church.  We should at the same time, however, insist equally on compliance with the law in regard to temporal matters so that we may be assured of proper oversight regarding our donations and parish assessments.  The unhappy alternative may just be holding those moneys back until full legal compliance – not to mention proper financial statements and audits - is achieved.  Come to think of it, if we don’t see these things addressed in an above-board fashion by the end of the General Convention, that’s exactly what I’m going to be doing.

Feel free to follow suit.

-- An Antiochian Orthodox Lawyer







 
 

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