Orthodox Church 'stunned' by extent of financial abuse

Leaders of the Orthodox Church in America, who had long resisted callsfor an investigation, have acknowledged a history of financial abuse atchurch headquarters in Syosset, N.Y.

"Large amounts of church funds were used to improperly pay for personalexpenses," said a joint statement yesterday from the Holy Synod ofBishops and the Metropolitan Council, a governing body of clergy andlaity.

The statement was issued at a special meeting that ended yesterday.Church leaders heard from attorneys and accountants hired in March toinvestigate allegations raised by a former church treasurer and others.Their statement said they were "stunned by the magnitude of today'srevelations."

It does not cite the amount of money and does not name a culprit,although it said the bishops will discuss possible disciplinary action.

"The severity of some of the problems could not be fully determined dueto a lack of documentation. However, these abuses of church trust weredetermined to be centered on and around one individual and were notfound to be widespread among the employees of the church," it said.

The investigation will continue under a special committee led byArchbishop Job of Chicago, a leader in the calls for investigation. Itwill include Greg Nescott, a Pittsburgh attorney who had also pressedfor investigation.

No one from the headquarters of the 400,000-member denomination wasavailable to comment on the statement, which was posted on the church'sWeb site.

But Mark Stokoe, a layman from Dayton, Ohio, whose Orthodox Christiansfor Accountabilty had documented the allegations on its Web site, wasjubilant. He said he expected more details when the investigatingcommittee reports to the entire church next year.

"It's a great day for the OCA. It's beginning to restore integrity tothe institutions that have really been challenged. A lot of people hadbeen losing hope that things could be changed. This shows they can be,"he said.

The OCA is a daughter of the Russian Orthodox Church. About 40 of its 600 parishes are in Western Pennsylvania.

Former insiders claimed that from 1996 to 2002 millions of dollars ingrants and charitable gifts were siphoned into two unaudited accounts.One was controlled by former Metropolitan Theodosius, who retired tohis native Canonsburg in 2002. The other was controlled by the Rev.Robert Kondratick, the church's treasurer, who was dismissed in March.Father Kondratick has said he was a scapegoat.

Also in March, the church's administrative committee hired the New Yorklaw firm of Proskauer Rose, known for expertise in investigatingcorporate misdeeds, to track any missing money.

Yesterday's report said financial controls had been circumvented sinceat least 1998. It cited "numerous unsubstantiated cash withdrawals." Itsaid credit cards were abused, trips were reimbursed without properdocumentation, there were attempts to divert money from charities andfinancial reports were poorly documented, untimely and sometimes evenfalsified.

"The Metropolitan Council will oversee the implementation ofappropriate accounting procedures in the OCA's accounting office, whichwill include the replacement of antiquated accounting systems," thestatement said. "But the new direction is clear -- changes need to bemade in order to bring the church to the high level of accountabilitythat is expected of it."

(Ann Rodgers can be reached at arodgers@post-gazette.com or 412-263-1416. )