Comments, Clarifications, and Corrections

September 30, 2010

We have gotten a lot of email from people with feedback on the blog lately, and in this post we just want to share a few pieces of feedback we have received, and also make several corrections and clarifications.  We appreciate and value all of it, even if we do not have time to respond personally to every email.  The feedback is either directly quoted or paraphrased, and our response follows with >>> (Apologies for lack of hyperlinks today)

Sham Searches

“It does seem like a fait accompli… If and when it happens, you have every right to demand and expect a transparent explanation for why an exhaustive search did not take place.”

“Ms. Driscoll, the apparent lead candidate for the Secretary of Institutional  Advancement role is bright, capable, and worked hard as the chair of the Priest Appreciation Dinner,  contributing much of her time, talent, and treasure to ensure the success.”

“She probably cannot be faulted if she is offered the job and even if she takes it.”

>>>We have nothing against Ms. Driscoll and acknowledged she may be a capable person.  No disputing that she worked hard (in her paid job) to chair the dinner.  No disputing that she worked hard (in her paid full-time job) to run the Campaign for Catholic Schools and raise nearly $50 million.  In fact, we hear she probably came in to the Catholic Schools job under certain assumptions and then discovered the landscape was very different after she took the original job, and still may not want the new job.  We do not think we have criticized her personally in any way, and regret if any of our criticism of the sham search suggests we have been critical of her.  But if she knows the process is flawed, that she would be tapped for the job because of the Jack Connors relationship to be another agent of the Jack Connors agenda, and her appointment would be tainted by common knowledge that there never was a proper search, then is she completely free from fault if she is offered the job and takes it?

This “sham search” has big implications for the future of the Boston archdiocese—big enough that we are going to share this insightful reader comment from a week ago, with one or two Boston Catholic Insider notes.

“…go back 8-plus years to January 2002, when the crisis broke. Connors was one of the most vocal lay critics of Cardinal Law, railing that despite his privileged position within the business community in Boston, that he had no real influence in the Church to oust Law or effect other change. [BCI note: Connors did actually have influence to rally business leaders to withdraw support for Law and withhold contributions.  See Globe article, The Invisible Hand of Jack].  Witness his attempts to change that through involvement in the National Leadership Roundtable, a group of business executives trying to tell the bishops that the Church should be run like a corporation, and the Church in the 21st Century program at Boston College, where he joined with his fellow travelers at Voice of the Faithful to gin up a grassroots demand for change in the governance of the Church. Neither were particularly successful. [BCI note: The National Leadership Roundtable is still around and may be more successful than you think at impacting how the Church runs, but just not so “in your face.”  Fr. Bryan Hehir is a part of that organization as well. Do not write them off as irrelevant at all.]

Fast forward to 2010. Connors and his buddies have control of the largest fundraising initiative in the archdiocese with the 2010 Initiative. They have control of the archdiocesan finance council. They have control of the chancellor. They have control of the process to select the new head of institutional advancement. (He’s the chair of the search committee.) As you’ve said above, his favored candidate appears to be Kathleen Driscoll, a former employee at his old ad agency and the head of his 2010 Initiative. She was also recently co-chair of the Priest Appreciation Dinner this week, which benefits the priests’ benefit trust. It is not inconceivable that we will see her hired as head of institutional advancement, where she will control the annual Catholic Appeal, will retain control of the 2010 Initiative, and will be given control of fundraising for the priests’ fund. That would effectively put Jack Connors and his buddies in control of all fundraising for the archdiocese.

He who controls the purse…

Have you also heard, as I have from some pastor friends, that there is a move afoot to change the focus of the annual appeal from a broad parish-based campaign to a focus on major gifts, that is, those in the four and five-figure range? Why would you refuse the widow’s mite and put all your eggs in one smaller basket, to mix a metaphor? My hunch is that this would further consolidate the power of the purse in the hands of Connors and his rich buddies.

Once all this is done, the next time something happens in the archdiocese that Connors or his buddies don’t like, they can really put the screws to the cardinal and bend him to their will.

This is already happening.  Witness the first response to Fr. Rafferty  over the St. Pauls Hingham flap, when Mary Grassa O’Neill, Jack Connors, Terry Donilon, and the Catholic Campaign staff all threw an outstanding priest/pastor under the bus for doing what he judged to be the right thing while the Cardinal was in Portugal traveling.  Regardless of what you think the right final decision is on that issue (and please, let us NOT go there in comments) the initial response has Jack Connors’ name written all over it, as evidenced by Jack Connors Boston Globe interview. 

There is much blame to pass around if this is the direction the archdiocese continues going and the new head of development plays into it.  The questions to be answered about the search have already been raised here many times.  Given the shadow that already exists over this search, we feel it needs to be made transparent and re-tooled immediately–before an appointment is announced, not after.

Tone of Comments

“Your blog does a great service for the Church, calling it to accountability, but as owner of the blog you are accountable for holding your commenters to a respectable standard.” 

“Your commenters often lack charity, and make ad hominem attacks on people – things that start with ‘I’ve heard …’ and go on to say something really nasty about some person at RCAB that often times is a good person, works hard, and does quality work.” 

“I know of many people within and outside the RCAB who agree with your positions, but have given up reading, purely because you allow commenters to say most anything, even if it is an uncharitable opinion.”

>>Valid complaints.  We regret if some people have stopped reading the blog because of certain comments by other readers.  We try our best to be objective in reporting information and share verifiable facts about situations, and we want the availability of user-offered comments to serve as an open forum for sharing feedback and venting if desired.  In our opinion, most of the comments are fine as they are posted, but some have gone too far with angry-sounding personal attacks. That anger may well be very justified, but when you are commenting on a post, we would ask that you keep your comments focused on the post and free from personal attacks (ie please don’t say “John Smith, who works for the archdiocese as ___,  is a liar and is incompetent”).  If you had a negative experience with someone, feel free to drop us an email about it so we might investigate it further confidentially, but please do not wage a personal attack in the comments, lest we have to actively moderate or shut-off comments.  We will take more care in the future to moderate any inappropriate comments.

That being said, the best way for the archdiocese to avoid the problem of angry comments is to work towards avoiding the problem of angry people who feel they are not listened to and need this blog as an outlet.  Change the culture to be one of openness and transparency without the culture of deceipt, cronyism, conflicts of interest, and retaliation for speaking ones mind.  Implement a credible whistleblower policy as we have outlined.  Make the blog go away by doing the right thing and operating like a Catholic Church should, and you will eliminate the problem at its source!

Pastoral Center Staff Meeting

We did not mention that the main content of the Pastoral Center staff meeting of last week featured a presentation and discussion of “Catholics Come Home.”  This blog was not a focal point of the meeting, and was just one topic discussed, though in the context discussed, the Vicar General still failed to acknowledge the underlying issues the blog has been raising.  Also, regarding the healthcare cost increase for the October 2010-September 2011 year, there is good news for employees in that Archdiocese is absorbing that increase, but it is likely that employees will need to pay more after October 2011.

Priest Appreciation Dinner

“Your comment about not knowing all of the expenses for the dinner when The Pilot article was written was indeed ‘nitpicking.'” 

>>> Valid complaint.  We have since learned that all expenses were not known at the time, and The Pilot article was to share the good news and raise awareness and support for our hardworking priests so it is understandable if Joe D’Arrigo did not give the reporter a accounting statement for the event.  In the end with follow-on donations, we are told that the event will probably realize a profit of about $1 million. We agree and take back our criticism.  In hindsight, that was a nit, and we should have just focused on the bigger issues. 

“With regards to Joe D’Arrigo’s compensation, your criticism of him is unjustified.  Joe did not create the problem of the funds burning cash, he was asked to fix it.”

>>> Valid complaint.  We have never met Joe and apologize if our comment came across as minimizing his contributions.  Indeed if he has done what was described to us and you can get a 100X ROI for the investment in his services, that sounds like a good deal, even if he does not necessarily work a 5-day work-week for the Archdiocese.  Our main point is that the fund has suffered from major trust issues with the clergy.  The expensive Towers Perrin historical report on the funds (including proper use of Easter/Christmas collections)  commissioned by the Chancellor was not a true “audit” so a number of priests still do not trust its findings.  Names of the trustees have never been released.  The cost structure of the management of the fund is undisclosed.  This archdiocese declared that the way to rebuilt trust is “transparency.”  Why is the fund not operating transparently? 

“Your blog criticized John Kaneb and The Pilot for not reminding people about the ‘Titanic-sized iceberg of future benefits they have not yet figured out how to pay’…John Kaneb did indeed attempt to brief the attendees on the need in the future, and the need for continued fund-raising…perhaps the dinner is not the best place to outline it with detailed, frankly boring , financials.”

>>> Valid complaint.  This all probably should not have happened at a Priest Appreciation dinner, where the emphasis was on ‘priest appreciation’  We agree our expectation was unrealistic and take back our criticism.  In hindsight, we should not have gone there.

“You guys do a great job!  Thanks for calling it like it is.   I don’t know how you keep on top of all this stuff.  As a priest who has been complaining about much of this for years with no response, it gives me hope to see an open venue like this.  I pray that the Cardinal and his Cabinet are reading this blog daily and acting on the issues you raise for the good of the Church.  God bless you.”

>>>Thank you!!


Sham Searches: Part 2

September 28, 2010

Before we continue our series on “Sham Searches” with a doozey we have a couple of notes:

First is a correction to our post from yesterday.  We mentioned the search for the new head of the Mass Catholic Conference was a “sham search, ” but we did not realize that Bishop Coleman of Fall River is in fact heading that search.  We corrected that yesterday, and will withhold further comment while we eagerly await word this week of who else is on the search committee.

Secondly, for those who missed last week’s Pastoral Center staff meeting and have not yet been briefed on the meeting, here are a few highlights.

  • Health care costs will be increasing next year for employees
  • Fr. Erikson and the Cardinal appreciate the help of Pastoral Center staff who worked on the bishop’s ordination and Priest Appreciation Dinner.
  • Regarding the Catholic blogs, Fr. Richard Erikson is sickened by personal attacks on great priests, he is distressed by disloyalty of staff reporting to bloggers, and he will no longer read the blogs.  Instead he will have Father Parrish read them and report to him.

We have not made personal attacks on any great priests so we assume that does not refer to us, and we are glad he did not say anything about “unfounded claims” on our blog.  Fr. Parrish, since you are apparently the blog liaison, if you are reading this post, could you do us a favor and let the Vicar General know that his comments suggest he may still not get it? Next time, could he consider saying something like the following?

“I am distressed by the reports of cronyism, conflicts of interest, ethical lapses, and corruption here at the Pastoral Center which we have pursued further and found to be legitimate.  They are contrary to Gospel values expected from people who work for the Catholic Church, and they also contradict the ‘rhythm of prayer that marks each day’ at the Pastoral Center I just wrote about in The Pilot. We are taking serious steps to address the underlying issues the blogs are reporting on.  We expect everyone here to join with us in operating more like the non-profit Catholic Church spreading the gospel of Jesus Christ for the salvation of souls, rather than an ethically-challenged for-profit business.  Anyone who is here mostly for personal gain and who does want to carry out the saving mission of Jesus Christ should start looking for a new job elsewhere.”

Thirdly, we have harped on the need for the Archdiocese to publish the names of anonymous people serving on important committees.  A number of people have been appointed to the Boston Archdiocesan Finance Council in the past 12 months (since the 2010 Boston Catholic Directory went to press) whose names are still…anonymous.  Who are they?  What agendas might they bring?  Are any of them past associates of the Chancellor–meaning the council that approves or disproves of his performance might be getting stacked with people who are not objective and impartial?  How did they come to get nominated to the council? In case the archdiocese is struggling to figure out how to present this information, here is how the Manchester Diocese posts the members of their Finance Council.  Why is Boston unable to do something similar?  Why is the current Boston Finance Council membership a secret?  Is the archdiocese afraid we will find and expose more corruption there, and that will turn donors away?  We hope the Archdiocesan Pastoral Council brings this up on Wednesday evening.

Now back to Sham Search #2: We give the new Sham Search #2 to the position of Vice Chancellor that the archdiocese has been trying to fill.  Apparently, Jim McDonough, the current Chancellor, believes he needs a #2 person to help with the all of the day-to-day administrivia of his $250,000/job so he can free up time to become CEO of the Archdiocese of Boston, kind like he was President and CEO of the Abington Savings Bank for about 14 years. Never mind the fact that functions of such a role, if it were even to exist, should actually be carried out by the Cardinal Archbishop or Vicar General.  (By the way, did we ever mention that this Chancellor apparently has a signed letter that authorizes him reporting directly to Cardinal O’Malley and not to the Vicar General?)

Anyway, so the “nationwide search” has been underway to fill the position, supposedly using a search firm who will collect a nice commission when the position is filled.  This one is different from the Secretary of Institutional Advancement search and most of the other “worldwide searches” in that instead of announcing the search and then choosing whomever they knew and wanted while pretending there was an open search, this one has been done in “stealth mode.”  No job posting.  No way to officially submit an application.  Is this the same archdiocese that touts transparency, or did we confuse them with another diocese?  The pay is expected to be in the range of $150-175K/year.  We hear that the new position will be paid for from “savings” by having Carol Gustavson’s salary now paid “off the books” by the Benefits Trust, and also no longer having the expensive recent college grad “operations associate” (Jed H) on staff.

Despite all this, we hear that a couple of good people have actually learned about the position, applied and been interviewed. At least one  solid candidate had a great resume, with no connections to Jim McDonough, and was recently turned down.  Maybe they were too Catholic and wanted to really serve the Church, which, along with no prior relationship to Jim or Jack Connors, would probably make them ineligible. See our Job Seeker video if you would like an idea of what it is like applying for a position.

We have more to say about this position and how it relates to the feifdom of the Chancellor but will save that for another time.  Those who have additional insights on the above can feel free to post them as comments.  Tune in for more on this and other sham searches in one of our next exciting episodes.

Sham Searches: Part 1

September 27, 2010

One of the things that most upsets us here at Boston Catholic Insider is when the Boston Archdiocese is knowingly deceptive. They pretend they are open and “transparent,” yet they say and do things that may be flat out wrong, intentionally vague, or cloaked in secrecy.  The so-called “searches” to fill key positions are among the most egregious examples of this, but it goes well beyond that.  A “sham” is defined by various sources as a “trick that deludes,” “counterfeit purporting to be genuine,” “fraud or hoax,” “pretended.” So we are calling the archdiocese’s recent and ongoing way of filling many key positions “sham searches.”  Today we talk about Sham Search #1 (Secretary for Institutional Advancement).  UPDATE: We thought Sham Search #2 was going to the search for the Exec. Director of the Mass Catholic Conference, but were incorrect based on new information we received today. Apologies for the mistake.

But before we cover that, let us look at the September 24 issue of The Pilot for some other examples of deception.  This is not a criticism of The Pilot–it is a matter of what officials tell The Pilot and let them publish.

The Priest Appreciation Dinner, held on September 16 “raised over $1 million dollars for the Clergy Funds” according to the front page photo caption.  That’s awesome!  Cardinal Sean on his blog said they realized a profit of about $1 million, but Clergy Funds Advisor Joe D’Arrigo (expensive consultant, whose contract compensation is still undisclosed) said final tallies on the net “amount raised were unavailable at press time since dinner expenses still needed to be accounted.” Sorry for nit-picking guys, but that last part is just bogus. You know how much the food cost per person when you signed the event contract, and there is a final billing invoice signed usually the evening of the event, or a day afterwards. Here is the catering menu for the Seaport World Trade Center. The event costs were probably around $70-80/person, so for 1,500 people, take $100K-$120K off the top.   They know exactly what the event netted and apparently just do not want to tell us.  Luke 16:10 reminds us to be trustworthy in small things so as to be trusted with big things.  (By the way, we are still waiting for disclosure of the names of the trustees of the Clergy Retirement Fund).

But far worse than that is John Kaneb’s comment regarding progress of recent events to raise money for the fund.  The Pilot reports that Kaneb discussed how “in 2008 the fund had a $10 million operating deficit and by next year the fund will be operating at a near zero deficit.”   That is an interesting spin to describe the condition of the fund, given that the Boston Globe reported in May 2009 that as of the end of the 2008 fiscal year, the fund had a $114 million shortfall, and officials said the pension fund will run out of money in two years without major change.   This past June, the funding gap for 2009 was reported at $109 million.  It is great that they have “trimmed” annual operating expenses today, so what comes in is about what goes out.  But they just coincidentally neglected to remind people at the dinner or in The Pilot about the Titanic-sized iceberg of future benefits they have not yet figured out how to pay, or about how the trimming or operating expenses and putting priests on government programs is working out for the clergy.  By the way, Kaneb was a dinner co-chair, is CEO and chairman of HP Hood, and according to Boston Magazine’s “The 50 Wealthiest Bostonians” is worth $600 million, so he could wipe out the fund shortfall with one check that would barely dent his net worth if he wanted to.

Back to the sham searches. Sham Search #1 is for the new head of institutional advancement for the Archdiocese.  Jack Connors, who played a key role in the cabinet rearrangement that moved out the previous Cabinet Secretary for institutional advancement, is running that search committee. By coincidence, the 2010 fund-raising initiative for his Campaign for Catholic Schools is now winding down (around $20M short of its goal) and some of the people from that campaign may be now looking for jobs.  Coincidentally, Kathleen Driscoll, President of the Campaign for Catholic Schools was named event co-chair for the Priest Appreciation Dinner, which gave her a good chance to exercise her talents and interact with a lot of priests and Pastoral Center staff.  Ms. Driscoll is a Boston College alum (just like Jack), formerly worked with Jack Connors at Hill Holliday from 1984-1992, and then went to work for John Hancock Financial Services. John Hancock became a big client of Hill Holliday, and Jack’s friend, David D’Alessandro, was chairman, president, and CEO while Kathleen was there.  Water cooler buzz around the Pastoral Center has suggested for a while that the “fix is in” for Kathleen to get the job.  After she was introduced to people at the Pastoral Center, some were advised to “be nice” to her, given she might be working closely with them in the future and/or might be their next boss. By coincidence, very few other candidates have been interviewed by a broad group of people at the pastoral center. A commenter on this blog observed that her appointment would further squeeze and pressure Cardinal O’Malley to conform the archdiocese to the vision of Jack Connors, since Connors or his cronies would control virtually all fundraising—Catholic schools, clergy retirement fund, and the Catholic Appeal.  If Connors controls all of the money flow, how could the Cardinal not kow-tow to his demands? Ms. Driscoll may be a very capable person.  Nonetheless, if we were Cardinal O’Malley, we would remove Jack Connors from the search committee and ensure that no one beholden to Jack is named to this position before it is too late.

UPDATE: We thought Sham Search #2 was going to the search for the new Executive Director of the Massachusetts Catholic Conference, but we were wrong–this one is OK, at least for right now.  MCC is the public policy voice of the Catholic Church in Massachusetts, and the person in that role needs to be energetic, articulate, solid in their faith, enthusiastically embrace Church teachings, and be passionate about bringing Church teachings and positions into the public square.  We already reported on the controversy over the search that selected the late Ed Saunders as the last MCC head.  The Pilot tells us that the well-qualified Gerry D’Avolio has been lured out of retirement to serve as interim MCC head while the search is underway for a permanent leader, and that is a good move.  Although we had heard nothing about the search for the new person, we missed the MCC press release that said Bishop George Coleman of Fall River is leading the search. Our bad. The names of people on the search committee are expected to be announced within a week.

We still suggest the Archdiocesan Pastoral Council take the matter of the “sham searches” up with the Cardinal when they meet on Wednesday evening, along with the other issues in our most recent Open Letter.  Anyone reading this post, please drop an email to Sr. Marian Batho and ask her to put all of the Open Letter points on their agenda, would you?  ( and We published the first Open Letter on August 23, and are still awaiting answers to the points raised, so hopefully by now, the archdiocese has a comprehensive response ready for the APC.

Stay tuned for more sham searches next time.

More Connors Conflicts of Interest

September 24, 2010

“…an 80-year-old grocer who credits a parochial school in Roslindale, MA with helping his family when his mother died, said yesterday he is giving $20 million to…revitalize struggling Catholic schools.” (March 16, 2010)

“Catholic education was a great gift in my life. When I saw the number of Catholic schools that were closing, we wanted to help.”

The $20 million gift by the founder of Roche Brothers to address the problem of Catholic schools closing sounds like it would have been perfectly suited to the Campaign for Catholic Schools building a new academy in nearby Dorchester, does it not?   And it would have closed that $20 million fund-raising gap we have talked about in the last few posts and made it a no-brainer to pay back the loan from the Archdiocese?    Where did this generous gift go instead?  Boston College, where Jack Connors is on the Board of Trustees and was former Chair of the Board.

Patrick Roche’s story is an inspiring and uplifting one.  He lost his mother at a young age, the local Catholic school provided support and a safety net for him and his brothers, he built a supermarket chain on sound principles of great customer service and treating employees well, made a profit, and has been generously giving back to Catholic schools.  Wow!  People have nothing but the very best to say about Patrick Roche, his family and their benevolence, so this post is not about the Roche family. Roche was a long-time benefactor to Boston College and to Peter Lynch’s Catholic Schools Foundation, so the final decision of where to give money was his to make and clearly could have gone either way.

But, we just do not understand how so many conflicts of interest can continue, and how those conflicts benefit this struggling archdiocese. And as you can imagine by now, we have a number of questions about how the Archdiocese of Boston and the Campaign for Catholic Schools missed out on this one.

To what extent was Jack Connors involved in this deal?  If he was involved, where did he suggest Patrick Roche give his money—to Boston College (specifically the Lynch School of Education), or to the Archdiocese’s Campaign for Catholic Schools?

Patrick Roche said in the BC press release, “Catholic education shaped who we are today, and when Boston College gave us an opportunity to help strengthen Catholic education through this center, we knew we wanted to help.”

In “The Invisible Hand of Jack” we heard “Who is going to say no when Jack comes calling?”  Jack was quoted in the Boston Globe article about the Roche donation saying, “We’re going to kind of draw a line in the sand, and we don’t think we should close any more schools.”

Did Jack call Patrick Roche and urge him to use this opportunity to help by giving the $20 million towards the Campaign for Catholic Schools?  Did Mr. Roche say “no” to Jack?  Did Jack never ask?  Or did Jack guide Mr. Roche to give the $20M to his wealthy alma mater, Boston College?

If the goal was to provide continuing education for Catholic school teachers, why not give the money to the Boston Catholic schools and restrict it to grants for continuing ed for Catholic teachers, or maybe salary increases for the ones who complete continuing education programs?   Those teachers could take classes at nearby Emmanuel College, where many Catholic teachers already benefit from tuition discounts and the fine work at the  Carolyn A. Lynch Institute, which, by coincidence, “provides a range of collaborative programs and services that enhance the professional development of urban teachers and enrich the education of PK-12 students in the city of Boston.”  But then the tuition dollars would have been going to Emmanuel instead of BC.

As an aside, we wonder how Peter Lynch, the incredibly generous and tireless advocate and fund-raiser for Catholic education, managed to deal with the minor conflict of soliciting $20M for the newly renamed Roche Center for Catholic Education at BC’s Lynch School of Education, while he also coincidentally serves on the Archdiocese’s Finance Council that would have approved the infamous $26 million loan to Jack Connors’ Campaign for Catholic Schools.

To be fair, Roche  may have decided that he wanted advance the goals of providing professional instruction, technical assistance, and research to teachers, which his contribution to the BC center is supposed to support.  But still, his quotes in the article and choice of where to give money just do not really add up to us.

Roche yesterday credited his parochial school with providing a critical safety net when his mother died, leaving his father to raise four sons, ages 6 to 12. Roche, who was 9 at the time, remembers his parish and school embracing him and his brothers as family would.

“Everybody at the school was just fantastic,’’ he said. “All our friends and neighbors went to the school, and they just became closer to us.’’ Attending Mass so often, he added, “kept you closer to God, I’d say.’’

Does this sound like the kind of guy who wants to ” develop curriculum for an increasingly diverse student population“?  We hope and pray that the profound impact which Catholic education had on Patrick Roche can  be duplicated through his contribution to BC.  Unfortunately, the record from BC in this area and some of the initial comments by the newly-hired executive director of the Center for Catholic Education make us question whether that will happen, but that is a topic for another time.

For now, can someone let us know how Jack Connors and his fund-raising team are doing with that $20 million fund-raising gap?  And can someone also let us know what the consequences will be to the Chancellor and others if that $20 million loan is not repaid?  A commenter on our last post, Moving Money, Building Distrust, suggested that heads should roll.  What do you think?

Moving Money, Building Distrust

September 22, 2010

For new readers or those not following the past few posts, you may find our recent Lending Money Part 1, Lending Money Part 2, and Archdiocesan Accounting/”Fuzzy Math” posts useful background for our post today. Today we revisit the 26-million-dollar question:  how did that $26M loan to the Campaign for Catholic Schools come about and get approved?   (More hyperlinks and references to be added later, so check back).

In short, the archdiocesean Revolving Loan Fund, a virtual savings and loan intended not long ago primarily for parishes who need money on a short-term basis for various expenses, loaned about $26 million to the Campaign for Catholic Schools in the 2009 fiscal year to help build a new $70 million dollar Catholic academy in Dorchester, one of many inner-city areas where the Catholic population has been dropping for years. The loan was secured against promised pledges, and as the Campaign’s 3-year fund-raising initiative nears its end, it appears that the campaign is still about $20 million short of their fund-raising goal based on most recent published information.  One key question is how the loan will be repaid if the money has already been spent on construction and the pledges simply are not there.  Equally important are the questions over where the funds originated,  who actually approved this loan, and how it was determined that this was the best use of funds vs something like, funding employee pension plans, for example.

The blogging research team is still hard at work trying to verify everything, so we will just get you the high points in this post.

Way way back in the 2003-2006 timeframe, the archdiocese closed 66 parishes.   A lot of property was sold, and at first, it seemed canon law dictated that the welcoming parishes should assume the assets and liabilities of the closed parishes.  (Here is how the The Pilot reported on that canonical conundrum in October 2005, and here is a separate report in 2006 from Catholic News Service.) That would have had problematic results for a variety of reasons—the forgiveness of parish debts in the Jubilee Year 2000 left the Revolving Loan fund at a deficit; employee pension plans for parish, school, and chancery employees were underfunded; and there would be inequities of merging two poor parishes with debt into one very poor debt-laden parish while two wealthy parishes merged to make one very wealthy parish.  The archdiocese solved this problem by jumping through a big canonical hoop and getting most pastors to agree that the archdiocese could assume the assets of the closed parishes.  A special fund, the “Reconfiguration Fund” was established, separate from other archdiocesan central funds.  The idea—at least, in principle–was that it would receive and manage these monies and assure they were used for the appropriate past, present, and future parish obligations and programs.  There was even a Reconfiguration Fund oversight committee formed.  Sounded fine in principle.

Many people thought the closings were about the Archdiocese of Boston getting money, and so to address the “considerable pain and misunderstanding” over this, then-Vicar General, Bishop Richard Lennon, wrote a letter in July of 2004 to clarify the usage of the funds.  See page 6-7 of this document distributed at the March 2006 Archdiocesan Pastoral Council meeting.  Note how the document coincidentally opens on page 1, “Communication Builds Trust.”)  Here is what Bishop Lennon said:

The funds raised from the sale of suppressed properties will be used to address past due obligations and employee benefits of the suppressed parishes, including:

1. Monies due employees of suppressed parishes for past work and separation assistance;

2. For vendors who are owed monies from suppressed parishes;

3. For amounts for past employee benefits and parish insurance due from suppressed parishes;

4. For run-out costs of health insurance for separated employees;

5. For repayment of revolving loans from suppressed parishes; and

6. For expenses involved in the closure of suppressed parishes.

In addition, these funds will be used to assist in rebuilding our Archdiocese as we go forward:

1. For assistance to parishes that are unable to fund needed church repairs;

2. For expenses to provide current direct and indirect support services to parishes;

3. For establishing an endowment fund for parish support for those parishes that cannot beself-supporting;

4. For covering unfunded pension liability for lay employees and clergy of all parishes; and

5. For restoring the $28 million of equity to the various funds that provided “Jubilee Year”debt forgiveness

If you look at the annual reports and the Reconfiguration report, we see parishes sold and assets and liabilities assumed by the archdiocese.  Debts to pension funds and to the Revolving Loan Fund were repaid.   In the 2006 Annual Report and  2006 audited results we see  a gain of about $40 million from sale of properties, and the Revolving Loan Fund was paid-back $14 million from the sale of properties.  But something noteworthy happens after the Reconfiguration Fund Oversight Committee was disbanded and subsequent reconfiguration funds were moved to the Central Fund, like the archdiocese disclosed would happen.  Once centralized, it became possible for those funds to be granted or loaned to parishes or other entities outside the decree zone or unnamed in the decree without anyone really watching.  For example, in the 2008 annual report we see this:

“On August 13, 2007 as part of the parish reconfiguration process $2.5 million was transferred to Trinity Catholic Academy Brockton, Inc.”  a newly formed related organization that consolidated the operations of certain parish schools in Brockton.”

Maybe we missed something.  How did Jack Connors’ new Catholic Schools program suddenly become part of the previous “parish reconfiguration process”?  Does this mean that funds originally intended for parishes were instead directed to the Brockton project, a newly formed “related organization”?  Then in 2009, when the Campaign for Catholic Schools, Inc., another separate but “related” corporate entity, needed cash to pay construction bills, somehow $26 million in Revolving Loan funds–some of which came through the revolving door from Reconfiguration–revolved right back out the door to Jack Connors’ pet project.  We keep going through the list of 11 usages for reconfiguration funds and must be missing something.  Can anyone point out where building new non-parish-affiliated archdiocesan Catholic academies by a different but “related” corporation fits into this list of usages?  Maybe we are dead wrong and auditors can show where absolutely zero reconfiguration-related funds were used to finance this grant, but based on what we described in our last post, we would be surprised if that is the case.  Have any and all reconfiguration funds been used consistent with the original decrees? Who has provided independent oversight and accounting for use of those funds since the oversight committee was disbanded in 2006?  Was any canonical approval needed and granted, or was the repurposing of these assets totally fine once the archdiocese claimed the money?

So to summarize where we are, we have a $26 million loan made with Revolving Loan funds (principally intended for parishes) to a separate but “related” corporate entity and for a purpose rather different than what we were told any reconfiguration-related part of those funds would be used for when parishes were closed.  $70 million is spent on one school that may never reach the envisioned potential due to known demographic shifts and other reasons.  We have some portion of $26 million loaned to that school from parish-based funds which may never be repaid, while we have hundreds of hard-working school and parish employees who got an anonymously-signed letter a few weeks ago telling them their pensions are being cut because the archdiocese doesn’t have the money to keep funding them.

Which Cabinet official or officials made the recommendations and decisions to use parish and donor funds this way?  We do not know but we can guess.  Who are all of the current members of the Finance Council who approve of this manner of moving around and managing donor funds?  We do not know because the current membership is about as anonymous as the people blogging at Boston Catholic Insider.  (At least with this blog, you can send us an email and we will respond.  How do you write to the Finance Council?)   Was an assessment conducted to compare a variety of ways to use this money, and this project of all possibilities was determined to best advance the mission of the Catholic Church in Boston?  Who is in a position to inform Boston Catholics as to the likelihood of the loan being repaid and the consequences if it is not?  Regardless of whether there was or was not any canonical “cutting of corners” to make this happen, does anyone besides this blogging team feel as though this use of funds represents a breach of trust with donors?

But not to worry.  This is just another day with business as usual in the Archdiocese of Boston.

Archdiocesan Accounting and “Fuzzy Math”

September 20, 2010

The Gospel reading from yesterday, Luke 16:10, said, “The person who is trustworthy in very small matters is also trustworthy in great ones; and the person who is dishonest in very small matters is also dishonest in great ones.”   By coincidence, we will explore this reading in a real-world situation below.

Q. If something costs you $1.1 million one year and $1.4 million the next year, has the cost increased or decreased year to year?

A. The cost has decreased–that is, if you are paid $250,000/year to run finance for the Archdiocese of Boston and issue the annual report a year after the fiscal year has closed.

Read on to see how the Gospel reading and the Q&A might coincidentally be related.

Events of last week brought out much of what is good happening in Boston Archdiocese, as one commenter (“Catholic School Advocate“) observed on our last post. But, unfortunately, our most recent posts and the associated flood of comments and emails also brought out much of what is holding back or even threatening the archdiocese from being able to continue its good works. First the good, then the not-so-good.

The good. The Daughters of St. Paul event to raise money for evangelization, and a challenge from an anonymous donor who offered $100,000 if the Daughters can match his/her donation by the end of 2010. The ordination of two new auxiliary bishops, Bishop Arthur Kennedy and Bishop Peter Uglietto. The Priest Appreciation Dinner on Thursday evening. The “shout outs” of appreciation to more than 70 priests on this blog. This Wednesday, September 22 is an under-publicized garden party fund-raiser to raise scholarship monies for seminarians studying at Blessed John XXIII Seminary in Weston.

Now the not-so-good. Read Lending Money: Part 2, and check out some of the comments, especially this one that talks about the failed promises of the 2010 Initiative, and this one, which talks about how the leadership of the archdiocese, Cardinal O’Malley in particular, could become even further beholden to certain large donors if the role of a new secretary for development goes, as expected, to yet another crony of Jack Connors. Even more not-so-good comes as we touch on topics that concern managing money and moving money around.

Yesterday’s Boston Globe article about the exhausted appeals and parish vigils at closed/suppressed churches prompted a number of readers to ask us exactly how much money has been spent maintaining closed churches. We went to the “transparent” annual reports from the archdiocese from recent years transparently found on the finance website and here is what we found. The sum total between 2005-2009 appears to be in the range of $9-10 million dollars. And, someone responsible for the annual reports would benefit from having someone else proofread the report for “fuzzy math” errors before it is published, or maybe even within 1-2 years after it is published.

Here is what the audited annual reports show for Reconfiguration Operation Expense. Some of this is no doubt administrative, but most of it is the heating, cooling, electrical, taxes, snow removal and other facilities-related expenses associated with the closed parishes:

2005:   $2,693,860
2006:   $2,917,245
2007:   $1,785,000
2008:   $1,377,617
2009:   $1,496,277
Total: $10,269,999

If we look at the 2007 and 2008 reports, there is a place in the notes where the exact amount is detailed. P. 14 of the 2007 report says the amount was $1.1 million, and page 29 of the 2008 report says it was $1.4 million, so we feel comfortable deriving from the archdiocese’s own audited numbers that the total is somewhere in the range of $9-10 million. Anybody else curious as to where that $9-10 million came from to pay those bills?

Besides that, there is the matter of why 2009 increased instead of decreased if reconfiguration is winding down. And why is there an explanation of the expense in the 2007 and 2008 reports, but no explanation in 2009 whatsoever, let alone for the increase in the expense? Then there is the “fuzzy math” error.

The 2007 report says “The $1.1 million or 39% decrease in expenses in 2007 is a reflection in the reduction of the number of properties being maintained as the reconfiguration process nears an end.” (see below, click to enlarge)

The 2008 report says, “The $1.4 million expense for the year ended June 30, 2008 was a 23% decrease as compared to the prior year.” (see below, click to enlarge)

Does anyone else wonder how you can spend $1.4 million for something in 2008 vs $1.1 million for the same something in 2007 and communicate it as a 23% DECREASE in expense?  Does anyone feel the statement that reconfiguration expenses decreased is an “unfounded claim.”  In fact, by my math, it works out to be a 27% INCREASE.  Now, I do not profess to have the accounting or financial management skills of a $250,000/year Chancellor and former president of a bank sold for $1 billion. I do not claim to have the skills of a highly-paid audit firm.  Math was, shall I say, never exactly my strongest subject in school. Yet, one cannot help but wonder if they cannot get correct something as simple as conveying the difference between an expense increasing vs decreasing from year to year in telling us about the financial condition of the diocese, what else are they getting wrong or communicating in a deceptive way?

Maybe it was a typo or an honest error–people are not perfect.  Maybe it was an inadvertent omission that the detail in the notes about reconfiguration costs that appeared in the two previous years is inexplicably absent in the 2009 financials.    Yet, oddly, this minor problem with communicating a decrease vs an increase and a number in the explanation consistent with the audited report is found not by the $250K/year Chancellor, who along with his staff cost an estimated $1.6M per year in salaries.  Instead it is found by the anonymous  blogger trying to simply add up year-to-year total reconfiguration costs to serve the needs of the blog readers, who feel they have nowhere to turn in the archdiocese for a straight answer without fear of repercussions.  Critics of this blog will call it a nit or say it is “absurd” that the blog is complaining about an error in the financial report like this.  Yes, it may be a small thing.  So be it.  We simply will prayerfully ponder the passage from Luke 16:10: “The person who is trustworthy in very small matters is also trustworthy in great ones; and the person who is dishonest in very small matters is also dishonest in great ones.”

Besides that, why did the expense go up in 2009 if the reconfiguration process is nearing an end? And what was it in 2010?

The bigger issue which came up in the last post and the associated comments regarding whether it is permissible to take parish funds from Reconfiguration, move them to the Revolving Loan Fund, and then revolve them out to the Campaign for Catholic Schools will be taken up again in the next post.

Lending Money: Part 2

September 17, 2010

Before we resume our discussion about lending money and the Catholic Schools campaign, we have some late-breaking news to report.

Several readers wrote to tell us that Pastoral Center managers are now starting to interview their staff to ask what they think of the blog. This puts the staffers in a very uncomfortable position, and we suggest that the archdiocese discontinue this practice immediately. The officials doing the interviews will not get honest answers anyway due to the culture of corruption and retaliation, so why waste valuable staff time?  Distracting staff from their work was supposedly the reason for blocking the blog in the first place, and if you expect employees are not taking time to read the blog, why go around asking them what they think of the blog they are not reading?  We would be glad to conduct an anonymous SurveyMonkey survey of archdiocesan employees for the archdiocese to get perceptions of the blog and how things are going at 66 Brooks Drive if that would be helpful to the archdiocese—just have someone send the questions over and we will get right on it early next week and compile the results all at no charge.  Of course, if the archdiocese is trying to help us get feedback so as to further improve the blog, we very much appreciate that gesture and effort, but we feel we are all set there for now.  One reader commented privately to us, “One wonders why not just address the issues and not the messengers, but that would be hard work.”   Seriously, we would love to wind-down this blogging.  Just acknowledge and start addressing the issues and the blog will quickly fade away.

If you have not read our post from yesterday about the Catholic Schools Campaign, please read Lending Money: Part 1.  Here is the $20 million problem in a nutshell.  A decision was made to spend $70 or 71 million to create a new state-of-the-art Catholic “academy” in Dorchester.  That money was to come entirely from funds raised in the 3-year campaign. (See September 26, 2008 press release that says, “the Campaign for Catholic Schools (CCS) will raise the necessary funding for the project”).     In that press release they announced that more than $47 million had been raised towards the goal in 9 months,.  The campaign is nearly over and their last press release from May 2010 says that 18 months later, they had raised only $48.5 million of the needed $70 million. (Did fund-raising more or less stall after Sept 2008?).  Most importantly, the archdiocese loaned the Campaign $26 million in 2009.  Will that loan get repaid?

We are pressed for time today so are going to just give you a few pieces of information and questions to ponder and we will fill in the blanks later in this same post.

1) Magnitude of project in this location. The fund-raising and tapping of a limited donor pool for a sum of $70 million was a major undertaking.  Why did the archdiocese decide to spend $70 million on one school, and in an area where it is known that Catholic schools enrollment and the Catholic population in general are declining?  Did it have anything to do with Jack Connors having grown-up in nearby Roslindale, or was that just a coincidence?

2) Sustenance of the school: Given those population shifts, can the Dorchester academy be sustained at this size even 5-10 years the future?

3) Source of the $26 million loan funds.  The 2009 Annual Report says the $26 million came from the Revolving Loan Fund, described as follows:

“a cooperative savings and loan program for our parishes and related organizations. Parishes and related organizations deposit savings into the Revolving Loan Fund and earn an interest rate that is a small amount above comparable market rates during the year. Parishes and related organizations in need of short-term lines of credit and/or longer term debt borrow from this fund. These borrowings are repaid with an interest rate that is established to be competitive with nonprofit prevailing borrowing rates. The Revolving Loan Fund’s cash and cash equivalents decreased by 49% during the last fiscal year, from $77.2 million at June 30, 2008 to $39.2 million at June 30, 2009. This decrease is the result of $25.5 million of net loan advances made during the year and a $12 million allocation to longer-term investments.

Beyond the question of whether the Pope John Paul II Academy in Dorchester is a “related organization” is a deeper question of where the funds ultimately came from.  Our sources report that funds for the loan may have actually originated from another entity within the archdiocese called the Reconfiguration Corporation, which was supposed to be restricted to grants to parishes welcoming parishioners from closed parishes, once the debts of the closed parishes were paid.  Those funds were also used to maintain the “vigil” locations.  Where did the money ultimately come from?  Who did the Chancellor consult?    Who approved this?

3) Status of involvement by John Fish and Suffolk Construction.  We know that John Fish, CEO of Suffolk Construction received great public relations visibility for the project (eg. September 2008 Boston Business Journal article describing his philanthropism and role as a leader of the Archdiocese of Boston’s 2010 Initiative to improve Catholic schools).  He was also featured in Boston Magazine’s “Power 2008” described as follows:

“a man diligently following the playbook of his mentor, Jack Connors, the preternaturally involved Hill, Holliday founder who now serves as chairman of Partners HealthCare and all-around éminence grise. Fish is on the board of 11 nonprofit community groups…And like any smart Boston operator, he uses relationships developed through those efforts to fatten his bottom line

(By the way, we  also know that Fish’s father, the late Edward A. Fish, was a respected philanthropist, was highly involved in the archdiocese’s property dealings, and by coincidence,  gave $3 million to the Connors Center for Women’s Health and Gender Biology at Brigham and Womens Hospital, but that is a story for another time)

We are also told, and see validated by press articles, these were apparently single-source, no-bid deals for the contracts on school reconstruction, new construction, and demolition.  Our sources say this was  expensive in Brockton, and very expensive in Dorchester.

As best as we can determine from multiple sources, the $26M loan was because John Fish insisted that Suffolk get its construction money up-front.  We are unclear if he is still personally involved in the initiative (no PR in 2 years) or if he is no longer personally involved after having secured the construction contract, funds, and good publicity.  Sources working in the schools tell us that from a construction perspective, they cut as many corners as they could in Dorchester, and ran behind in the construction schedule.  Rumor has it that the school custodian and a well-paid employee from the Catholic schools office were still painting the evening before the school opening and dealing with a minor problem of live rodents in the building.

What is a common theme here is the question of why this project in this location, why so costly, what important works of the Church were sacrificed so key donors could be tapped for the $70 million, and what happens now if the remaining $20 million cannot be paid back?

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