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?