Cronyism: Part II

We are working hard to keep our cool after getting yet more reports of cronyism in the Archdiocese of Boston.  With so many former Abington Bank employees now working in key roles at the Pastoral Center, “Fr. Ned” wrote and asked us to sponsor a contest to rename the archdiocese.  His two submissions were “Abington Bank Employee Alumni Association” and  “Archdiocesan Bank of Boston.”  If readers have other ideas, feel free to send them via confidential email or public comments.

You read in Conflicts of Interest Part I and Part II about how Ann Carter, a former Abington Bank board member whose PR firm is paid perhaps as much as $1 million/year or more from the Archdiocese, played a key role in hiring former Abington Bank CEO James McDonough as Chancellor.  (Ann did PR for Jim at the bank and made lots of money when the bank was sold, and now Jim watches over how much Ann’s firm is paid after she helped hire him).  We wrote to the archdiocese and Ms. Carter asking for answers to a few questions about the conflict of interest and are still awaiting a response. Earlier this week you learned how a former head teller and branch manager at Abington Bank, Judy H, became executive assistant/office manager for Cardinal O’Malley with no prior church experience after a “worldwide search.”  There is more we can barely keep up with.

The director of real estate for the Archdiocese today is Ms. Deborah D, who replaced a long-time archdiocesan employee.  Here’s what they do:

The Real Estate office assists in the sale, purchase or lease of all Archdiocesan real estate as well as all parish property. The Real Estate office acts a liaison between the realtors, attorneys, tenants and the parish. The Real Estate office facilitates the hiring of all appraisers, realtors and counsel, when needed. Additionally the Real Estate office will manage all approvals for sale/lease/purchase transactions.

Where did Ms. D work before this that prepared her for her job in the church selling real estate?  You guessed it–she was at Abington Bank, as Loans Review Officer.

Then there’s the new “executive assistant” in the Chancellor’s office, Ms. Joanne S.  Where did Mrs. S. work before this?  She  is listed as “clerk” in this Abington Bank proxy statement.  Many insiders report that Chancellor McDonough’s exec admin makes more than $100K/year.  Apparently a loyal, long-time admin for the chancellor’s office was pushed out on “early retirement” to make room for the newcomer.

The Chancellor’s office also has on staff a full-time “operations associate,” Mr. Jed H.  We are told he is a  recent college grad with no prior church experience getting paid a salary well above normal college grad starting salaries and more than many long-time Pastoral Center employees. We are trying to determine exactly what he does that is different from the administrative staff in the Chancellor’s office. [UPDATE: We have been told he may no longer be at the archdiocese]t

Is anyone wondering how much of the 18% tithe they need from parishes is going toward these sorts of expenses?  Didn’t they just lay people off to save money and balance the budget?

Not to be forgotten about is Mrs. Carol G, the Executive Director of Human Resources, who oversees all of this hiring.  She of course reports to the Chancellor himself.  Mrs. G has also become a protege of Fr. Bryan H, who apparently authorized having Ann Carter (the PR vendor) on the search committees for both  the Chancellor and the communications secretary despite the clear-cut conflict of interest.

It is normally a positive sign when a business leader attracts former employees who want to work for him or her again–BUT that holds when it is a similar business or organization.  If Jim McDonough were CEO of another bank, it would be a good thing for him to bring former “rock-star” employees experienced in banking to work for him again where their experience would help the business.  But this is the Catholic Church, not a bank.  It’s a non-profit that can’t afford to pay high salaries with a mission to spread the gospel and carry out the saving ministry of Jesus Christ, not a bank where people get paid high salaries and the goal is making money.

To summarize for today, we reference several of the Pastoral Center Operating Principles

We seek to give glory and honor to God and rebuild trust in Christ’s Church, following the guidance of the Holy Father and Archbishop of Boston.

We treat each other and those whom we serve fairly, with dignity and with honor, holding ourselves accountable for our commitment to service.

In consideration of the grave conflicts of interest this blog has reported already, we welcome your comments on how you think the archdiocese is doing in the trust and accountability departments these days?

Reaction to Layoffs and Trust

Based on the emails we are getting–over yesterday’s Boston Globe puff-piece about mandatory payments from all parishes to the diocese, the Caritas sale, and layoffs–it feels like the archdiocese is in a very tenuous situation right now.  Here is a small sample of what we received in the last few days:

From “Carol”

Two truths:
1.  The Roman Catholic Archdiocese of Boston has no business paying anyone more than $150,000.00, and then only when there is great demonstrated competency.  The schools are going down the drain (Grassa-O’Neill), the chancellor and Mr. Hehir work for Jack Connors (a/k/a Partners and Boston College) and Mr. Donilon, based on his news releases, struggles with English as a written language (e.g. in today’s email about the Wangsness soft-toss, it’s “assess,” not “access” when you’re evaluating parish financial health).  When salaries have benefits and FICA/Medicare employer contributions added in, the top salary is over $350,000.00.  How many people are paid over $100,000?  What’s the total payroll for those people?  What’s the average salary of those paid less than $100,000?

2.  Skimming from parish revenue (offertories, rents and all other donations except bequests) to the tune of about 24% per annum (schools tax + RCAB tax)is just plain wrong.  When salaries in Braintree look more like the paychecks of those giving the money, we can talk.  Parishioners have already caught on and begun plans to find other ways to support their parishes.  Why didn’t the Globe article interview someone besides those whose job it is to sell the plan, and those who were most caustic about parish closings?  There are hundreds of priests (particularly pastors) and thousands of lay people who are saying, “Not so fast.”  The Globe didn’t seek them out it seems.

Meanwhile, why has no one asked what the RCAB spends on heating, plowing, mowing and capital repairs to the not-really-occupied former parish churches?  My guess is $750,000.00 per year, based on what it costs to maintain one parish church — and they are maintaining a half dozen of these places at a residential standard.  Show us the common sense, RCAB, and then maybe we’ll show you the money.

Last, but not least, who would be willing to take the bet that Cerberus has had discussions or some pre-existing agreement with Partners to sell the hospitals in 2012?  $25M is a drop in the bucket to buy off the “Catholic” part of the deal.  How can the cardinal sleep at night?  Or is he asleep all the time?

From “Paul”

What Boston Catholic Insider is doing is a good start, but you guys have barely scratched the surface on the corruption in the Pastoral Center.  Talk to some more chancery workers and pastors.

One of the laid-off staff members has been at the Archdiocese for 30 years; she is the main source of family income as her husband is ailing and they rely on her insurance…all that will be gone in 4 months…Not that the Archdiocese should employ everyone if there is simply no job.  But, hey, J. Bryan Hehir: What about social justice for the little people, not just more big “ideas” to solve the “complex” multi-dimensional problems in our  complex pluralistic society?  Meanwhile, there are at least 20-25 people earning 6-figure salaries, not including benefits.  Not one was laid-off.

The Clergy Retirement Fund has been mismanaged.  Based on what was promised when it was created, it needs more like $200 million to be funded as promised, but what’s a promise anyway?  That is not alot of money when you’re flushing millions down the toilet elsewhere, like for PR, law firm fees, Catholic school superintendent and associate superintendent salaries and at schools to educate mostly non-Catholics (like Pope John Paul II Academy in Dorchester) or  hospitals and charities that are mostly not Catholic any more and will disappear in a few years anyway.  How exactly they will close even a $100 million retirement fund gap is still mostly smoke and mirrors.

The annual report for the year ending June 2009 came out in June of 2010.  The Chancellor is paid $250,000/year and has a $100K+/year administrator and it takes them a year to issue a financial report?  FY 2010 just ended.  People should ask when they will see the 2010 report and all of the supplemental reports missing from 2009 still. Because the Chancellor controls the money, everyone kow-tows to him.

Meanwhile, older priests still in active service have been pushed off private medical plans  onto Medicare at a considerable extra out-of-pocket cost to the priests for office visits and prescription medications. 

 If 1/3 of the pastors stood firm and said they would NOT participate in the new mandatory parish payment program and curtailed the money-flow from parishes to the chancery, that would immediately stop the insanity.   If Boston Catholic Insider has a way to communicate with more priests and pastors, you guys will get an earful, and you should definitely publish what you hear.

Layoffs

We pause from our previous discussion of the Caritas Christi acquisition to talk about the Chancery layoffs.  The layoff notices hit.  21 positions were affected—about 10% of the pastoral center staff.  Of those, some were open slots that will no longer be filled, some people had salaries reduced, and 11 people were actually laid off.  This has been discussed for several months, so inside the Pastoral Center, it was not surprising, but it still affects people you know and have worked with for a while.  Vicar General, Fr. Richard Erikson sent an email to the Pastoral Center staff, which we excerpt below.

Fr. Erikson writes, “Every effort was made to reduce operational costs where possible in order to minimize the number of positions impacted.”  Well, maybe not every effort.  It is noteworthy that the salaries of top earners—people like schools superintendent Mary Grassa O’Neill, general counsel Beirne Lovely, Chancellor James McDonough, Communications Secretary Terry Donilon, Catholic Media Secretary Scot Landry, and others–which had been reduced by 5-10% from 2009-2010 “until conditions permit restoration to their agreed upon salary” were raised back up to their previous levels.   With the archdiocese trying to close a $3.5 million budget shortfall, they lay off a dozen low-level people, keep everyone making six-figures and up, and they raised back the salaries of everyone earning more than $100K because now “conditions permit restoration to their agreed upon salary.”  (You can see what a sample of those cost savings were for selected people at the end of this post).

That last part does not make sense. What “conditions” have improved?  There was a $3.5M budget deficit.  People are being laid off.  In the last few days, we have heard news reports that weekly jobless claims are up, May home sales hit a record low—the lowest level in 47 years, and consumer confidence cratered by almost 10 points in June, which means consumer spending could tumble and the economy could be further imperiled. With layoffs and all of  these negative economic indicators and a bleak job market, one would think that the archdiocesan bean-counters would just tell all of the higher-paid employees that with private sector employees losing their jobs left and right, frankly they are lucky to have a job, so suck it up and accept the slightly reduced salary from when you started for another year, because you’re probably not going to find something better out in the private sector right now.

Anyway, here are excerpts from the email message that Fr. Richard Erikson sent out this week. If you have perspectives on the layoffs, please share them via comments or private email with us. Also try taking our new poll below.

Good Afternoon,

At our April, May and June Pastoral Center Staff meetings, we presented updates on the budget challenges and processes as we are wrapping up this fiscal year and, as of 1 July, beginning another.

The focus of our budget process and consultations has been on strengthening our mission in areas that are in line with the priorities established by Cardinal Seán and the Cabinet.  Mission priorities include a strong commitment to evangelization, improved parish support, strengthening our Catholic schools and support for our social service ministries dedicated to improving the lives of our most vulnerable.  Efforts are well underway to address the stability of the clergy pension fund, and we are addressing long-term needs related to our lay pension fund.  Pastoral planning is an essential component of where we are heading as an Archdiocese in the years ahead, and we continue to dedicate resources to this critical mission.

In finalizing our Fiscal 2011 budget we have met our commitment of a balanced budget despite an original projected shortfall of $3.5 million. Over the past few months, all offices and ministries were asked to reduce overall operational expenses.  Similar to Fiscal 2010, significant budget reductions across the board will be implemented.  I am grateful and inspired by the collaborative approach to the budget process and tackling these challenges by Agency Directors, Department Heads and Cabinet Secretaries.  Similar to last year, over 40 of our offices and ministries came to round table meetings with our budget and finance staff to review and discuss the mission and budget of each office. Approved budgets [and in some cases revised] will be provided to Agency Directors and Department Heads no later than Friday, July 16, 2010.

Everyone is deeply concerned about personal impact of our decisions, especially on our colleagues who are losing their jobs.  At the same time we are all committed to continuing the work of rebuilding and healing our Archdiocese. We pray for and work toward a day in the near future when these tough choices are no longer necessary.

The following is a brief listing of measures taken that will impact Pastoral Center staff members and operations:

• For the third year in a row, our lay staff will not receive an increase to their base wages.
• Priest and Religious staff members will receive a 2.8% stipend increase.
• Individuals paid $100,000 or more who had their pay reduced for one year by 5% and in some cases 10% during FY2010 will have their pay restored to previous levels as agreed to last July.
• Nearly all travel and conference budgets have been reduced.
• Operational expenses have also been cut in order to preserve jobs. I ask again in FY2011 that you remain diligent at conserving expenses and to think about the costs associated with things like catering, office supplies, printing/copying, etc.
• In recognition of the third consecutive year of a pay freeze for our lay staff members, many of whom have had to take on additional duties since 2007 and who, as a result, have taken minimal time off, we will be releasing our Pastoral Center staff at 1 pm on Fridays from July 2 through September 4.  This decision is made primarily as a way to honor your hard work and dedication.  It will also allow us to lower our energy consumption during the peak energy consumption months.

The most difficult steps we have taken this week, as in recent years, is a reduction in staff. Every effort was made to reduce operational costs where possible in order to minimize the number of positions impacted.

In total twenty-one positions from central ministries have been impacted through lay-offs, position eliminations and/or adjustments, freezing of open positions and salary reductions. For those whose positions are being eliminated, Human Resources will work closely regarding benefits advice.  Severance and additional health insurance coverage will be provided as well as outplacement services. Your departure is the hardest part of this process for you mean so much to us and to the Church.

I know that steps like this impact people, families, colleagues, departments, parishes, schools and ministries. We have taken these steps and several others to achieve a balanced budget and to be good stewards of the resources we have been given.  Ministries and Departments impacted as a result are as follows: Parish Services, Clergy Services, Cardinal’s Office, Finance/IT, Office of New Evangelization, Catholic School Office, Cultural Diversity,  Building Services, Human Resources.

Let us pray for all those who will be leaving us, and for their families, in this time of transition. Cabinet Secretaries have been asked to make sure we honor and thank those who are leaving us in a fitting way.

On behalf of Cardinal Seán and all those who have worked so hard to be good stewards of the resources entrusted to us, we offer our prayers and our support during these challenging times.

Blessings,

Fr. Rich

Salaries of Selected Top Earners in Archdiocese of Boston, and 1-Year Savings from Salary Reductions, now restored for 2010-2011.

High Paid Archdiocesan Employee	Salary	Savings
Mary Grassa O’Neill, Secretary for Education	$325,000	$32,500
Beirne Lovely, General Counsel	$300,000	$30,000
Scot Landry, Secretary for Catholic Media	$250,000	$25,000
James McDonough, Chancellor	$250,000	$25,000
Jim Walsh, Assoc. Superintendent of Schools	$185,270	$  9,264
Terry Donilon, Secretary for Communications	$166,000	$  8,300
Janet Benestad, Secretary for Faith Formation and Evangelization	$150,000	$  7,500
	$1,626,270	$137,564

POLL: Do you think the Archdiocese is making the right financial decisions?Market Research

Inside the Archdiocese of Boston

Since a layoff of about 10% of the Chancery/Pastoral Center staff is expected within the next few days to a week and with new bishop appointments expected soon, we thought we would outline what the hierarchy of the Archdiocese of Boston looked like before the layoff and reorganization.  People who have worked for the diocese for decades at relatively low to mid-level salaries will likely lose their job (maybe along with retirement benefits too) and many functions will be eliminated. It will not be pretty.  At the same time people who have worked for the diocese for just a couple of years earning six-figure salaries and with big staffs will stay.

Here is our best portrayal of how the diocese is organized but the organizational chart does not necessarily reflect how the diocese actually works and functions and what the power-base is.  Let us know what you think via comments or by contacting us.   Compensation figures are from published sources, but see note below about some 2009-2010 salary cuts to help balance the budget and save money.

High Level Organizational Chart (click on the image to zoom)

Archbishop of Boston: Cardinal Sean P. O’Malley, O.F.M. Cap.

Compensation: $33,800, paid to Capuchin priests and brothers

Boston Catholic Insider Comments: Top of the organizational chart, at least on paper.  Long-time priest-secretary, Fr. Robert Kickham, is seen as not just a chauffeur and MC for liturgies, but right-hand-man and chief-of-staff. Existing commitments to Vatican committees, his own blog posts, and increasing travel during the next year as apostolic visitor to Dublin all give a message that his role in Boston is apparently becoming more ceremonial in nature.

Vicar General: Richard Erikson, Ph.D.

Compensation: $32,400

Background: most recently was lieutenant colonel and staff chaplain in the Air Force.  Former altar boy at St. Luke’s of Belmont, graduated from Watertown High School, Saint Anselm in New Hampshire, and St. John’s Seminary in Brighton. Writes liner notes for albums in his spare time.

Responsibilities: “Taking Cardinal Seán’s vision for the Archdiocese of Boston and making it a reality. In this Archdiocese, the Vicar General is responsible for the oversight of nearly 2 million Catholics, in approximately 290 parishes, across 144 communities. As Moderator of the Curia, Fr. Erikson’s primary duties are to care for and to provide coordination of the personnel and efforts of the central administration of the Archdiocese.”

Boston Catholic Insider Comments: It is not clear to us what Cardinal Sean’s vision for the archdiocese is, and where we would find a written statement of that, so it is also not clear to us how anyone, including the Vicar General, would make it reality. In actuality, it is the Chancellor who coordinates personnel and central administration efforts in the Boston Archdiocese today.  It is also not clear what key initiatives or programs Fr. Erikson has actually driven or led in his time in the role.  Fr. Erikson’s effectiveness as a leader has been questioned by insiders and priests reading this blog.

Secretary for Health and Social Services: Fr. Bryan Hehir

Compensation: paid by Harvard and not disclosed publicly.  Salary in previous job as President of Catholic Charities USA was $96,092.

Background: In addition to his archdiocesan job, Fr. Hehir is Parker Gilbert Montgomery Professor of the Practice of Religion and Public Life at Harvard’s Kennedy School of Government.  He is former president of Catholic Charities USA, former head of Harvard Divinity School, and was on the staff of the U.S. Catholic Bishops conference from 1973-1992. He is a member of the American Academy of Arts and Sciences, the American Philosophical Society, and the Council on Foreign Relations. He serves on the Boards of the Arms Control Association, the Global Development Committee, the Independent Sector, the Boisi Center at Boston College, USC Institute for Catholic Studies.  He also served as advisor/consultant to Human Rights Watch.

Responsibilities: Catholic Charities, Caritas Christi, St. Mary’s Women and Children’s Center, Life Resources, Labor Guild, St. Ann’s Home, Covenant Health Care System, Pro Life Office and Respect Life Education, Catholic Relief Service

Boston Catholic Insider Comments: Seen as one of the most influential advisors to Cardinal Sean O’Malley.  Has close ties to Jack Connors, Jr.  and has been involved in Boston controversies including the honoring of Mayor Menino by Catholic Charities (2005), Catholic Charities  brokering adoptions to gay couples (2005-2006), and the Caritas partnership with Centene Corp (2009).  In the face of criticism by blogs such as BryanHehirExposed in 2010, Cardinal O’Malley reiterated his support for Fr. Hehir in his own blog.

Chancellor: James McDonough

Compensation: $250,000

Background.  Former CEO of Abington Savings Bank.  Search committee that selected him was led by Neil Finnegan, former chair of Citizens Bank and former chair of Catholic Charities and included Ann Carter of Rasky Baerlein, who was a former board member with McDonough at the Abington Savings Bank.

Responsibilities:  financial management and administration of the Archdiocese

Boston Catholic Insider Comments: seen as more powerful and influential over personnel and central administration than the Vicar General. Has been observed consulting extensively with Jack Connors, Neil Finnegan, and Fr. Bryan Hehir on decisions. Along with Jack Connors, was seen by many people as highly influential in decision to move Scot Landry out previous role as Secretary of Institutional Development.

The group above is the main power-base of the Archdiocese for key decision-making, on a formal organization chart.  Not to be overlooked are the influential roles of Jack Connors (head of the Catholic Schools fund-raising campaign, member of the Archdiocesan finance council, and head of the search for the new development secretary), John Kaneb, Chair of the Archdiocesan finance council, and Neal Finnegan (on board of Catholic TV and also on the finance council). So, the organizational chart really looks more like this:

In addition, a Cabinet “steering committee” includes Cardinal O’Malley, Fr. Erikson, Chancellor James McDonough, Fr. Hehir, former development Secretary Scot Landry (now working on Catholic Media), and a guest participant from elsewhere in the cabinet or another office to represent a specific issue being discussed.

Top 5 salaried officials according to archdiocesan disclosures are:
Mary Grassa O’Neill: Secretary for Education: $325,000
Beirne Lovely: General Counsel: $300,000
James McDonough: Chancellor and Secretary for Finance and Administrative Services: $250,000
Scot Landry: Catholic Media: $250,000
James Walsh: Assoc Superintendent of Schools: $185,270
Note: those with salaries above $200K had their salaries reduced by 10% in the 2009-2010 fiscal year to help balance the budget, but then they were raised back up to their previous level for the 2010-2011 fiscal year.

We will go into more details in another post.  For now, you can sound off about these people, the organization, layoffs, or any other issue via comments or by contacting us.