Monday, March 8, 2010

Episcopal Church creates fake entities to hide lawsuit spending. Press catches Bishop in a lie.

1. Lying is not a best practice. An Episcopal bishop, leading a paper "diocese" with a handful of people but given large sums to sue various other churches, said that the lawsuit funds were not being used against individual church members. Then a local newspaper looked at the legal papers and found that the money was, in fact, being used to sue lay church members individually. The Bishop called the lie a "misstatement."

2. Money laundering is not a best practice. Here's the paper bishop's budget. Notice line 64. DFMS is the "Domestic and Foreign Missionary Society," a legal name for The Episcopal Church. Then look at lines 72, 73 and 76 - the paper church in CA is using up that $400K grant, plus a Line of Credit (LOC) of $200,000 to carry on these lawsuits... really, it is the Presiding Bishop and the "national church" bureaucracy suing people, but they've set up deniabiblity in the form of a front company (the paper diocese) to do the suing. Scan the rest of the paper budget and you will see that programs and staff are being cut - the paper diocese exists primarily to file lawsuits.

If you are interested in more legal detail, including the way the paper diocese was recognized without meeting the requirements of the Episcopal Church's Constitution and Canons, go here.


The Underground Pewster said...

The budget paints a picture of a doomed "diocese."

One thing to note is that no money is flowing from the "diocese" to TEC. The line item for Province VIII went from pathetic to empty.

The willful attempt of this "diocese" to not give its fair share to TEC must be grounds for the PB to send her legal team in for an investigation. ;)

Connie said...

Y'know, where I'm from, a parish that can't support itself isn't classified as a parish; it's classified as a mission, and has a vicar, not a rector.

So how come this top heavy non-diocese needs a bishop, a canon, an administrator, and an administrative assistant. I suppose they just all get paid to keep up with the lawsuits and paperwork.

Looks, too, like they're PLANNING to end up in red ink in 2010. Is this any way to run an organization?

Anonymous said...

I think the reason the lawsuit spending is being pushed through the dioceses is merely to get around the clauses on trust funds.

Before the latest round of budgeting there was no official budget for lawsuits. Trust funds were tapped, but they probably got legal advise that spending trust funds to sue their members was not a proper use of the trust funds. The trust funds only allowed for the money to be used for mission.

So instead, they got the dioceses to spend nothing on mission - the whole diocese budget goes on lawsuits, and then 'mission' is funded by grants from those trust funds.

A nice little accounting ploy to get past an inconvenient trust fund provision. Thats my theory anyway, but it is only speculation.