When no one is minding the store

National Catholic Reporter, March 9, 2007 by Joe Feuerherd

Questioned as to why he robbed banks, robber Willie Sutton reportedly replied, "Because that's where the money is."

He should have gone to church.

The United States' 19,000 Catholic parishes collect $6 billion annually in donations. That's more revenue than candy maker Hershey and retailer Sports Authority, just shy of agricultural giant Monsanto and tool manufacturer Black & Decker.

It's a big business frequently managed like a mom-and-pop shop. The church's "internal controls"--administrative methods dioceses and parishes employ to ensure that collections go where they are supposed to--are severely lacking. In too many cases, it seems, no one is minding the store.

One key "measure of [the] effectiveness" of church internal controls is the "the amount of embezzlement that has occurred in [a] diocese in recent years," say Villanova University researchers Charles Zech and Robert West. Of the 78 dioceses that responded to their survey on church management issues, 85 percent reported embezzlements over the past five years (NCR, Dec. 29).

No system is perfect, but there are basic steps that should be taken to protect church donations, the researchers said.

"Oftentimes, embezzlements occur when trusted employees have access to both assets and financial records," wrote Zech and West. "A fundamental tenet of internal accounting controls is to keep the financial recordkeeping duties separate from those individuals that have access to assets, especially cash."

The two months following release of the Villanova report offered little solace to those who found the 85 percent figure disconcerting. Some of the more notable cases during this period include:

* Fr. Marian Drozd of the Metuchen, N.J., diocese was charged with third-degree theft for reportedly stealing more than $10,000 from St. John the Evangelist Church. Parish staff called the diocese after noticing a drop-off in collections. The diocese then informed the Hunterdon County district attorney's office. Drozd is due back in court March 22.

* Former Cleveland Archbishop Anthony Pilla and other diocesan officials were accused in a Feb. 16 court filing of maintaining off-the-books accounts that were used to pay for personal items and compensation above and beyond their salaries. One such account--the "Anthony M. Pilla Charitable Account"--contained more than $500,000, according to the court filing on behalf of Joseph Smith, the archdio cese's former chief Financial officer. Smith is accused, along with another former church employee, of engaging in an elaborate kickback scheme that garnered him and his accomplice more than $700,000 in ill-gotten gains over seven years. Smith has pleaded not guilty, saying that church officials were aware of the situation and wanted to provide him with additional compensation so he would not take a job in the private sector, but did not want to disclose those payments. The archdiocese, in a statement, denied the accusations. The case goes to court next month.

* In the Bridgeport, Conn., diocese, Fr. Michael Moynihan stepped down as pastor of St. Michael the Archangel in January following an audit that revealed more than $500,000 in parish revenue was unaccounted for. The Moynihan case follows on the heels of 2006 allegations that Fr. Michael Jude Fay, former pastor of St. John Church in Darien, used $1.4 million in parish funds over six years to fund an extravagant lifestyle.

* In Omaha, Neb., prosecutors charged Feb. 16 that Fr. Stephen Gutgsell, until recently pastor of St. Patrick Church, stole more them $125,000 over the past five years from the parish. Gutgsell reportedly used the money to finance vacations and credit card purchases. He will be sentenced next month.

* In Las Vegas, Fr. William Kenny was removed as pastor of Christ the King Parish following revelations that he spent more than $300,000 of an elderly parishioner's money. The women gave Kenny control over bank accounts, according to reports in the Las Vegas Review-Journal, which obtained a copy of records related to the case that were sealed by a court in 2006.

* In the diocese of Richmond, Va., Fr. Rodney Rodis was charged in January with diverting more than $600,000 over five years from the two parishes where he served as pastor to bank accounts he controlled. He reportedly used the money to support his family. Rodis lived with a woman court documents identify as his wife and with three children in Fredericksburg, Va., and not at, a parish rectory.