Boston archdiocesan pay hits cathedral heights

The Boston Herald on Friday ran an article about the excessive pay for Boston Archdiocesan lay execs.  Coincidentally, on Saturday, Pope Francis said he wanted to see the church be poor, and for the poor. 

At the rate the Boston Archdiocese is paying salaries, giving pay increases to the already overpaid execs and running up debt, we are well on the path to being poor–but for reasons much different than Pope Francis apparently intends. The excessive salaries inhibit the ability of the Boston Archdiocese to carry out her mission–namely, salvation of souls and continuing the saving ministry of Jesus Christ.

Here is the Herald article.  The biggest thing to note after you read the article is the explanation for how the Boston Archdiocese is dealing with this situation. [Hint: to address a problem of excessive salaries, the solution should be to reduce them.]  Read on:

Archdiocesan execs pull in top salaries: Pay hits cathedral heights

Friday, March 15, 2013

Nearly one-third of the Archdiocese of Boston’s top execs ranked among the highest paid people in their field, according to a compensation study that prompted church officials to take a hard look at many of their six-figure salaries — and withhold some merit-based raises.

The study, performed by a third-party firm at the archdiocese’s request and released with its 2012 financial report, is the first in the archdiocese’s history, according to church officials, examining how their pay stacks up to nine comparable archdioceses, other Catholic organizations and a mixture of nonprofit and for-profit groups.

It found that five of the 16 lay executives making more than $150,000 are paid above the 75th percentile when compared to those in similar jobs, while six more make between the 50th and 75th percentiles.

The five remaining have “attributes that are unique to our archdiocese,” officials wrote in their financial report, adding that they are “paid comparably” to those with similar levels of responsibility.

The committee’s goal, officials said, is to have “most” of the top-earning executives be paid around the 50th percentile, though John Straub, the archdiocese’s chief financial officer and chancellor, acknowledged that can’t happen “overnight.” He declined to release additional details, including exactly where the executives fell in comparison or which ones outpaced their peers.

“I wouldn’t say anyone was surprised … about it,” Straub said. “It gave (the compensation committee) a clear path to make the recommendations they wanted to make.”

The findings, Straub said, have already prompted changes. No senior lay executive at or above median pay got a performance-based raise this fiscal year. Meanwhile, two new hires and one promoted employee — Straub — are being paid at the 50th percentile.

It still didn’t quiet critics, including Peter Borre, chairman of Boston-based Council of Parishes, who called the salaries “appalling, without getting into percentiles.” The archdiocese’s general counsel, for example, made more than $340,000 in 2011, its secretary of education more than $360,000 and eight others topped $200,000.

“In absolute terms, an institution that is downsizing itself with church attendances down … shouldn’t be lavishing money to this extent,” Borre said.

Readers probably know by now that it took years of public complaints in order for them to finally do this study. They then claim they are capping merit increases for people who are overpaid, meanwhile, they had just given a number of people salary increases before they decided to cap the excessive salaries.

Did they think that no one would notice how some of the bloated salaries have increased in the past year? Of the “senior lay executives,” some have salaries that have increased at a rapid pace. The committee writes about its “philosophy” in the annual report, and they claim the first step in dealing with excessive salaries is to withhold merit increases. But how does that explain the following?:

• Mary Grassa O’Neill, schools superintendent, getting her pay increased from her $325,000 original salary now up to $343,705?
• Beirne Lovely, general counsel, getting his pay raised from his original $300,000 now up to $311,219?
• Carol Gustavson, exec director of benefits reported at $169.200, who was previously paid $149K, meaning her raise was at least 12.8%.
• Terry Donilon, communications secretary. having his salary jump 13.4% from 2010 to 2011 ($162.5K to $184.4K)

As we wrote in “Fleecing the Flock,” Mass attendance continues to drop in Boston, Central Operations is running a $6M annual deficit, the diocese has almost a $140M debt, the financial situation in parishes continues to get worse with 40-50% unable to pay their bills, and Catholic schools are being closed. Yet, the salaries remain excessive and some are increasing.

Michael Voris explained the situation well in this recent video:

The right solution is to start reducing the salaries of the people. At 10% every three months, it will not take too long to get them all down to the right level. But that will not happen at the rate we are going.

Furthermore, it is clear that the Boston Archdiocese is violating the Motu Proprio from Pope Benedict XVI that says salaries and operational expenses are to be in “due proportion” to the analogous expenses of the diocesan Curia. The Boston Archdiocese says they want to be responsible stewards of donor funds, but overpaying lay execs would directly contradict that ideal. It is also clear that no one at the Pastoral Center, including Cardinal O’Malley or Vicar General Bishop Deeley, is going to take meaningful action.

For today and generations to come in the future, it is important that the Catholic Church have the financial resources to spread the Gospel of Jesus Christ and continue the ministry of Jesus Christ to save souls and help people grow in holiness, become saints and get to heaven. What can faithful Catholics do? Take a moment to forward this blog post to the Papal Nuncio, Archbishop Carlo Maria Vigano <nuntiususa@nuntiususa.org> and ask him to intervene to address this breach of fiduciary responsibility and squandering of precious donor funds.  Also, pray for Cardinal O’Malley and the diocesan leadership.

This is what BCI thinks. What do you think?

Fleecing the Flock in Boston

As we continue exposing the violation of fiduciary responsibility in the Boston Archdiocese, we wanted to share with you another excellent video by ChurchMilitant.TV, called “Fleecing the Flock.”

Here are some highlights from the Michael Voris video:

[Voris] “The Boston Archdiocese .. which it needs to be stressed, has been a hotbed of dissent and wildly unorthodox treatment of Church teachings .. not to mention the epicenter of the homosexual clergy sex abuse crisis ten years ago .. also, unsurprisingly finds itself over a hundred million dollars in debt. That’s what you get when you depart from the truth – Catholics falling away like snowflakes in a blizzard.

A dozen chancery personnel are each making gross amounts of money for the work they do. The top dog on the list is the secretary for education. This woman needs a wheel barrel to take home her pay each week .. get this .. over a third of a million dollars each year in pay. Compare that to the NY City Superintendent of Public schools .. who only makes $250,000 a year.”

[BCI] Are there published, measurable goals for Catholic schools?  Are they being met?  What is the program and what are the standards for Catholic faith formation in Catholic schools? Why has the excessive salary of Schools Superintendent Mary Grassa O’Neill increased in recent years? What exactly has she achieved?

[Voris] And as you move down the list of Boston Archdiocese workers .. the numbers .. the gross salaries are nothing if not .. well gross. It’s one thing to make a living wage .. its another thing to be cashing in on dying particular church. 16 people are pulling down nearly 4 million dollars between them in annual pay and benefits.

A little history beyond the numbers here will help. A couple years back when lay people began complaining about the exorbitant salaries being paid .. out of a sense of embarrassment, the archdiocese put together a “committee” to look into it. One gets the sense that this is NOT what Our Blessed Lord meant when He said .. do not let your right hand know what your left hand is doing.

So this committee canvassed other archdioceses around the country and came up with a salary range for each position. It found that many of its workers were on the high end of the range, so in response .. the archdiocese just halted some pay raises.

[BCI] The “committee” is, once again, how Cardinal O’Malley removes himself from responsibility or accountability for fleecing the flock.

[Voris] That people who are working for the Church are in fat cat positions .. whether in Boston or other places smacks of unethical or immoral .. if not down right sinful. Armed with this knowledge .. one begins to wonder if the reason so little actually changes in chanceries all over the country is because those who work in have a VESTED interest .. a REALLY VESTED interest in not rocking the boat.

Why on earth would they rock the boat and risk a quarter million dollar pay check and retirement plan? Another question – Is it even just for people in the Church to be making
that kind of money, when they have so clearly failed, in epic fashion to advance the Church, grow her numbers, heck even hold serve.

The Church is in all out retreat across the country, thousands of parishes closed, many hundreds of schools shuttered, millions having walked away from the faith and yet the
people who operate the machinery and pull the levers are practically laughing all the way to the bank. This situation is approaching spiritually criminal.

The money that goes into these people’s paychecks and retirement plans comes from the faithful and the collection basket. How many are sitting in those pews struggling in a
wrecked economy .. only to be feeding a bloated bureaucracy and not even really aware of it.

And what about the idea of working for the Kingdom, also, primarily being a vocation? Not that a living wage can’t be earned, of course it should be. But isn’t a hundred
thousand dollars a year enough. After all, that’s more than TWICE the average income for a family of four in the United States. Would $75,000 suffice. All over the country .. good hard-working faithful Catholics labor away to advance the truth of the faith .. to help save souls .. to preach the kingdom.

They work in apostolates like this .. I can assure you making NOTHING even approaching those kinds of pays. They work in Crisis Pregnancy centers .. home schooling centers .. new and upcoming colleges committed to the faith .. high schools that had to be started because the Professional Catholic crowd has failed both miserably and spectacularly in every aspect of their job .. other than negotiating their professional sports sized compensation packages.

Just how much does an Archdiocesan Communications director make in NY or Los Angeles, or Philly or Chicago? How about the Human Resources Director or the Education Czar in these places – are they all making massive six figure salaries?

And if they are – where are the results? In the private sector – it is argued, that the enormous salaries are paid because of the person’s expertise and skill and that the
company is growing and raking in profits and the top brass are responsible for that and so they SHOULD be handsomely compensated.

[BCI] Not a single one of the people below, not all even Catholics, will rock the boat. What results are they delivering? Mass attendance continues to drop in Boston, Central Operations is running a $6M annual deficit, the diocese has almost a $140M debt, the financial situation in parishes continues to get worse, and Catholic schools are being closed, yet the salaries remain excessive and some are increasing.

Whose fault it is? The blame rests ultimately on Cardinal O’Malley, then on Vicar General Deeley, Chancellor  John Straub, and Finance Council Vice Chair Jack McCarthy. Next it rests on all of the “Professional Catholic” and non-Catholic lay executives who have asked for these salaries and are willing to participate in “fleecing the flock” by accepting the fat paychecks. Pastors should be complaining at vicariate and Presbyteral Council meetings and start refusing to fork over their IFRM payments. And the people in the pews need to stop donating to the Catholic Appeal, complain to their pastors and ask their pastors to complain to the archdiocese.

Debt-Ridden Boston Archdiocese Pays Lay Execs $3.7M, Violates Fiduciary Responsibility and Motu Proprio

The Boston Archdicoese, saddled with $137 million in debt and operating deficits of $11 million in the past two years, paid their top lay executives $3.7M in salaries and benefits in the past year. They acknowledge many are overpaid, and to add insult to injury, they even gave raises to some overpaid execs last year. This excessive spending on salaries violates the diocese’s fiduciary responsibility to make proper use of donor funds, and it also violates the recent Motu Proprio from the Pope Benedict XVI. Because the Massachusetts Attorney General has oversight for Non-Profits and their use of donor funds, she has reason to intervene.  Meanwhile, Cardinal O’Malley appears to be fiddling, as the fiscal and moral version of “Rome” is burning.

There is enough content here to take multiple blog posts. We will cover as much as possible today and continue in subsequent posts.  That Boston was paying excessive six figure salaries to lay execs has been a public complaint for more than three years. That nothing is being done about it, even with the window-dressing of a “Compensation Committee” formed in 2010 is an even bigger travesty, especially even after publication of the Pope’s “Motu Proprio.” First we cover the “Motu Proprio” and diocesan code of conduct guidelines, then the salaries, the Compensation Committee report, and then examples.

“Motu Proprio”

Signed on November 11, 2012 by Pope Benedict XVI and officially in effect December 10, 2012, the Motu Proprio says salaries need to be in due proportion to analagous expenses of the diocesan curia.

§ 4. In a particular way, the Bishop is to see that the management of initiatives dependent on him offers a testimony of Christian simplicity of life. To this end, he will ensure that salaries and operational expenses, while respecting the demands of justice and a necessary level of professionalism, are in due proportion to analogous expenses of his diocesan Curia.

Priests in the Boston curia are paid about $41K annually.  How can anyone in the Boston Archdiocese claim that the $300K+ salaries of their top execs are in “due proportion” to the analogous expenses of the diocesan Curia? Here is our December blog post describing the violation.

Archdiocesan Code of Conduct

The diocesan Code of Conduct says:

“Church Personnel will be responsible stewards of the resources, human and financial, of the Archdiocese and any Archdiocesan Affiliated Organization with  which they are associated, observing both canon and civil law, and making decisions concerning the disposition of resources that reflect Catholic social teaching.”

Salaries Disclosed in 2012 Annual Report

The 2012 Annual Report released on Friday, January 18, reports that 16 lay executives are paid more than $150,000 a year, and on top of that, another 10 are paid $100K or more a year. The salaries of the top-paid execs can be found in pages 77-82 of the pdf.  12 of the 16 people paid $150K+ are listed in the report, but it is easy for anyone to determine with high certainty who the other 4 are from the Pastoral Center directory based on titles.  (BCI knows several are paid $200K+ and the others a little less than $200K, so we assumed an average of $200K for their salaries in the table below).  To make it easier for you to see all 16, we have arranged the publicly available data in the table below (click on image to zoom):

Compensation Committee Report

The short version of the story here is that the “Compensation Committee” formed in November 2010 to study compensation and address the complaints about excessive six-figure salaries spent tens of thousands of dollars of donor funds and accomplished next to nothing.  Their “report,” if you can call it that, is on page 83 of the Annual Report.  They hired a consultant, AON, to do a study, which probably cost a minimum of $30K.

“We determined that the competitive environment varies by position. Depending on the job, the arena in which we compete for talent includes some or all of the following: other Catholic organizations, other not-for-profit groups, and for-profit organizations. The peer group against which we measure ourselves is tailored for each position. The consultants accessed numerous data bases containing applicable information, and conducted a custom survey of Catholic dioceses. The results of the study are as follows:

a. Six of the senior lay executives are paid between the 50th and the 75th percentiles;
b. Five of the positions have attributes that are unique to our Archdiocese, and are paid comparably to peers in the Archdiocese with similar levels of responsibility; and
c. Five of the senior lay executives are paid above the 75th percentile.

“The Committee believes that, over time, most senior lay executive positions should be paid at approximately the median compensation (or 50th percentile) identified in the salary study, as updated from time to time.”  There is more, but wait a moment.

In other words, a) 6 of 16 people are slightly to somewhat overpaid, c) 5 of 16 people are way overpaid (note, there is no upper limit specified, so some could be off the charts overpaid), and b) 5 other people are overpaid comparably to their Boston Archdiocesan peers who are overpaid, but we justify it based on their “unique attributes.”

Hmm.

Now the “unique attributes” justification:

“There are, however, factors that may require pay at levels that differ from the median, and the amount any particular individual is paid should reflect such factors. These include the nature of an individual’s experience to include the time and performance in the role, the uniqueness of an individual’s qualifications, the scope of the position relative to those included in the salary study, the strategic importance of the position, and the urgency and seriousness of any problems that need to be addressed. All individuals in the group are currently paid at a level that is consistent with our compensation philosophy.”

So, once they determined that basically everyone was overpaid, then they apparently created a “compensation philosophy” to justify overpaying everyone. That philosophy is summed up here:

“Our philosophy is based on the belief that senior lay executives are employed by the Archdiocese to advance the mission of the Church, and that accomplishing this goal requires competent, compassionate, efficient and effective leadership. The purpose of the compensation system is to enable the Archdiocese to attract and retain individuals whose personal goals and achievements are in harmony with the Church’s teachings, and whose motivation, talents and capabilities will assist the Church in achieving its objectives. This means that our pay practices must be: (i) competitive, so that we are able to hire people with the requisite qualifications; (ii) equitable, so that our employees are paid fairly relative to one another; and (iii) realistic, so that they reflect economic conditions in the Archdiocese and in the wider world.”

Without seeing the actual AON study, there is no proof they achieved (i) or (ii) and lots of other evidence they did not, and it is abundantly clear they have not achieved a compensation scheme that reflects the economic conditions in this archdiocese, where 40-50% of parishes cannot pay their bills and Central Operations lost $11M in the past 2 years. They apparently missed the “Motu Proprio” and should go back to work to add a new item “(iv) pay in due proportion to analogous expenses of the Boston diocesan Curia.”

The poster-child for excessive compensation, Mary Grassa O’Neill (see “Up in alms over salaries”), is perhaps the highest-paid lay Catholic diocesan employee in the country, making far more than public school superintendents in New York and Los Angeles who have 10X+ more responsibility. She just had her pay upped from $325K to $341K. Just one more quick example of the evidence they are over-paying is:

Carol Gustavson: Executive Director Lay Benefits: $169,190. A proud ex-Catholic whose previous experience was as a labor attorney for a newspaper. When they slashed lay pensions in 2011, readers reported she was unable to respond to basic questions about pensions in the public meetings. As reported here, she was making $149,999 before her job as Executive Director of HR was reduced by about 2/3 in 2011. Other archdioceses we surveyed said they were not paying their head of HR nearly what Carol was making when she was responsible for HR and paid $149,999–coincidentally, just enough to fall below the $150K limit for reporting in past years.   Jim DiFrancesco is “Director of Human Resources” and Carol is largely just responsible for Pension/Medical Trust (minus the prior work of dealing with plans for 10,000 Caritas Christi employees who now are Steward Healthcare’s responsibility).  A pension/medical plan administrator for an archdiocese like Boston makes around $80-85K.  Amount of excessive pay: $70-80K.  Oh, we forgot, she is also responsible for bringing yoga into the Pastoral Center.

The whole situation is frankly, preposterous.  It will take us multiple blog posts to address the depth of the problem.  Now that the Boston Archdiocese has just finished giving fat raises to most of overpaid people (a topic for the next post), all the Compensation Committee is doing is the following:

At the Committee’s recommendation, no merit increase was granted for FY 2013 to any member of the senior lay executive group whose salary was at or above the applicable median. In the future, compensation should be limited to levels that satisfy our compensation philosophy through tools such as renegotiation of contracts, sunsetting of current pay and/or salary freezes.

In the future?  How about in the present while the archdiocese is $137M in debt (not counting the $50M in lay benefits owed to former employees, off the books entirely now), is running a $6M annual operating loss, and has half the parishes in the red? Why not immediately start reducing salaries by 10% as of 90 days from now, with successive 10% cuts every 90 days until they get overpaid execs where they need to be?

Every Catholic, plus the Attorney General and Vatican should be up in arms about this financial scandal. If you care about the future ability of the Boston Archdiocese to carry on the saving mission of Jesus Christ, click below to send a copy of this blog post via email to the Papal Nuncio  [nuntiususa@nuntiususa.org] the Massachusetts Attorney General Division of Public Charities [charities@state.ma.us] and the Boston Globe [newstip@globe.com].

Boston Archdiocesan Execs Fail to Support Defeat of Assisted Suicide

In our last post, “Inside the Defeat of Question 2”, we talked about defeating Question 2 (physician assisted suicide) from the perspective of the public campaign waged by diocesan PR firm, Rasky Baerlein.  Today we shift perspectives to tell you who from the Boston Archdiocese contributed financially to the campaign and who did not.  Public records show that nearly all of the Boston Archdiocese lay executives who are paid $150K+ a year from the archdiocese did not contribute financially towards the diocese-supported issue advocacy campaign to defeat physician assisted suicide.  For those high-paid lay diocesan execs who neither contributed financially to the campaign nor worked to defeat the ballot measure in other ways, this raises a number of questions.

This report from the Massachusetts Office of Campaign and Political Finance (OCPF) gives a listing of everyone who contributed to the main opposition initiative, the Boston archdiocesan-backed Committee Against Physician Assisted Suicide, whose strategy and campaign was run by Rasky Baerlein.  The total contributions were $4.3M.  When you look at who gave and did not give, the inevitable conclusions are astonishing.

Here is who gave personal contributions from their own bank account:

• Vicar General, Bishop-elect Robert Deeley (who makes about $41K/year) gave $200.
• Secretary for Faith Formation Janet Benestad (who makes $140K/year) gave $500.
• Secretary for Social Services and Healthcare Fr. Bryan Hehir (a Harvard Kennedy School professor paid $0 by the RCAB and paid only by Harvard, where the average professor salary is $198K) gave $200.
• Pro-life Office Director, Marianne Luthin (who makes considerably less than $100K) gave $1,000.
• Catholic Schools Campaign Vice President of Development, Mary Myers (Flynn) gave $100.

That is as far as we can tell quickly, but perhaps we missed someone. While we see a St. Johns seminarian, who earns no income and is planning to give his life to God, gave $200, only one of the 17-odd people making six-figure salaries above $150K gave a buck or more to this important initiative. (See “Up in Alms over Salaries” and “Bloated Payroll: Inaction).

Here are the highest-paid lay executives people who earn about $150K or more and who made no financial contribution to the campaign:

• Mary Grassa O’Neill, Secretary for Education/schools superintendent: $325K
• Beirne Lovely, General Counsel: $300K
• Scot Landry, Secretary for Catholic Media: $250K
• Kathleen Driscoll, Secretary for Institutional Advancement: $230-250K est.
• John Straub, Chancellor: $200K-$225K est.
• Mark Dunderdale: Director of Office of Professional Standards: $200K
• James Walsh, Assistant Schools Superintendent: $185K
• Francis O’Connor: Assistant Gen. Counsel: $180K
• Terry Donilon: Communications Secretary: $162k
• Jim McEnness: Director of Risk: $154K

The other people who make $150K+ a year have not had their salaries publicly published yet, but they include:

• Joseph D’Arrigo, Executive Director, Clergy Benefits
• Mary Doorley, Vice President of Development
• Carol Gustavson, Executive Director, Lay Benefits and Building Services
• Steven McDevitt, Director of IT

Add them all up, and, as we said in “Bloated Payroll” earlier this year, you get about $3.5M in salaries, not counting benefits.  A year ago September, their boss, Cardinal O’Malley called on Catholics to oppose physician-assisted suicide, saying, “We are called upon to defend the gospel of life with courage and resolve.”  Yet except for one lay exec, none of them could even muster $50 to give to a campaign to stop an initiative that Cardinal O’Malley recently called a “terrible assault on human life.”

A lot of people should be asking why these high-paid lay executives did not give anything to the campaign. (Nor, curiously, did anyone who works for Rasky Baerlein, the folks who ran the campaign give to their own campaign).  One can only guess it must have been one of the following reasons:

1. They knew about the campaign and its importance, but did not necessarily agree with the Rasky Baerlein strategy or how Rasky was spending money, and instead contributed their time and energies to other ways of helping defeat Question 2.
2. They were somehow oblivious to the campaign, its importance and need for donations
3. They felt they were working toward the defeat of Q2 in their day-job already and thus did not need to give any personal contribution
4. They wanted to contribute but did not have the personal funds to give anything, despite earning $150K/year in salary, so they prayed instead
5. They knew about the campaign, its importance and need for donations, but felt enough other people and organizations were giving, so their contribution was unnecessary
6. They view their employment with the archdiocese as a job, not a vocation or part of contributing to the mission of the Catholic Church. They do their job and collect their substantial paycheck, and that is it.
7. They did not support the defeat of Question 2, and were in favor of physician-assisted suicide
8. Some other reason not listed above

Note, there were two other campaigns opposing physician-assisted suicide–those run by Second Thoughts or the MCFL-backed Massachusetts Against Doctor Prescribed Suicide- No on 2.  We checked both of those lists, and did not find donations by these lay execs there either. If someone gave but did not make it to one of these reports, please let us know and we will issue a correction.

If the reason above for folks not contributing was #1, that makes good sense, and we take back any implied criticism for those in that category.  Furthermore, BCI cannot judge what is in the hearts and minds of these lay executives who work for the Boston Archdiocese. But, for the vast majority of these people, their day jobs had them doing nothing whatsoever to help defeat Question 2. So, unless these execs were out there in the trenches trying to sway people in their local region (which our sources say most were not), it is tough to understand why they did not at least do something for the cause by contributing.  For someone paid extremely well by the Boston Archdiocese who embraces the saving mission of the Catholic Church, why would they not be able to dig into their pocket to donate even $50 to this crucial initiative that the Cardinal Archbishop was obviously very committed to and their own moral compass should have told them to oppose.  What does that say?

The problem of high paid lay archdiocesan execs is allowed to continue, in part, by folks who BCI will call “the enablers.” These are the big donors and supporters of the Catholic Appeal who keep giving and keep encouraging other Catholics to give money, when no action has been taken still to address the problem of excessive six-figure salaries (or many other problems) that have gone on for many years.  They never tell Cardinal O’Malley, “I am stopping my donations to the appeal until you take dramatic, visible action to cut the excessive six-figure salaries that are wasting my contributions.”Nor do they tell the Cardinal, “I am stopping my donations to the appeal until you remove people from your team and advisory circle whose efforts work against the Catholic Church in the public square.”  Instead, they attend or sponsor gatherings of big donors and get their photos taken with the Cardinal.  An example is seen in a recent blog post by the Cardinal and Pilot pickup.  John and Kristine DeMatteo recently hosted a Cardinal’s Leadership Circle event in their Wellesley home.  As best as BCI can tell from here, they are known to be solid Catholics with a strong commitment to their family and pro-life and pro-family causes.  John contributed $5,000 to the Committee Against Assisted Suicide. They give a lot to the Catholic Appeal and their names appear on lists of donors to other pro-life and pro-family causes. They will, no doubt, be upset to see their names published here at BCI.

Do the DeMatteo’s and others like them not believe their donations to the Catholic Appeal are being squandered on excessive six-figure salaries?  If so, what do they do to change that?  We also wonder how they will feel knowing they gave a generous contribution to defeat the ballot measure, but at the same time, none but one of the archdiocesan execs whose $150K+ salaries are, in part, paid by the DeMatteo’s generous support of the Catholic Appeal, gave a penny to that campaign.  If anyone knows the DeMatteos, drop them an email or drop a dime and ask them to bring this matter up with Cardinal O’Malley directly.

To be clear, our issue in this post is not about priests, who make low pay and work tirelessly in their parishes or other ministries, or with lay people who worked against physician-assisted suicide in ways other than financially contributing to the campaign. But when it comes to high-paid archdiocesan execs, BCI thinks Catholics should be rip-roaring mad that most of them neither gave a penny to support a highly visible, extremely important campaign opposing a “terrible assault on human life” nor gave their time and energies to opposing the measure in other ways.  If their job function did not give them a role to work against the measure,  and their financial means permitted it, the least we should expect is that their moral conscience and commitment to the saving mission of Jesus Christ and the Catholic Church would have compelled them to do something or contribute financially. We think this is a big part of the problem in the Boston Archdiocese today. What do you think?

How Boston Archdiocese Justifies Keeping Obama Fund-Raiser Around

We shift back to Boston, to share with you today an explanation from the Boston Archdiocese about how they justify keeping Jack Connors on the Finance Council, despite his public fundraising for political figures who oppose the Catholic Church.

BCI has posted a number of times about Connors in the past.  In Stop the Scandal in 2011, we raised the concern that Conners was publicly supporting and raising money for pro-abortion politicians (ie. President Obama) at the same time he is raising money for Catholic schools, has Finance Council oversight for archdiocesan fundraising and is influencing the direction of Catholic education. Nothing happened. This past June in our post on Fortnight for Freedom, we raised the concern again–this time, when Connors hosted a $40,000/person fundraiser for President Obama this afternoon.  We asked, how is it we can have a member of the Archdiocese of Boston Finance Council responsible for Institutional Advancement who is working against the Catholic Church by publicly fundraising for a politician who wants to violate our religious freedom?  It seemed to BCI that was scandalous.

Well, an alert BCI reader apparently agreed and filed a complaint via Ethicpoint, the anonymous whistleblower program set-up for reporting violations of the archdiocesan Code of Conduct. The archdiocese was obliged to respond. The complaint says that these public actions by Connors violated the archdiocesan Code of Conduct policy, which says Church personnel should ensure their behavior “promotes the welfare of the archdiocese” and “exemplifies the moral traditions of the Church.”  Below is the original complaint, the response by the archdiocese, and a response by the complainant, to which the archdiocese never responded.

ORIGINAL COMPLAINT

Report Submission Date
6/28/2012

Reported Company/Branch Information

Location	Public square and in mainstream media
City/State/Zip	Braintree, MA, U.S.

 

Violation Information
Issue Type
	Misconduct or Inappropriate Behavior
Please identify the person(s) engaged in this behavior:
	Jack Connors – Archdiocesan Finance Council, Chair, Campaign for Catholic Schools
Do you suspect or know that a supervisor or management is involved?
	Do Not Know / Do Not Wish To Disclose
If yes, then who?
	Cardinal O’Malley
Is management aware of this problem?
	Do Not Know / Do Not Wish To Disclose
What is the general nature of this matter?
	The Code of Conduct says that church personnel will ensure their behavior “promotes the welfare of the archdiocese” and “exemplifies the moral traditions of the Church.” Jack Connors has just done the opposite. On the same day when Cardinal O’Malley hosted a town hall forum to rally support for religious freedom and opposition to the Obama administration’s mandate that Catholic institutions pay for contraception coverage, Mr. Connors very publicly raised $1 million for the campaign of President Obama, who is leading the charge to violate our religious freedom: http://www.boston.com/news/local/massachusetts/articles/2012/06/26/president_obama_to_visit_boston_for_fund_raising_monday/ Church personnel raising money for a politician whose policies serve to undermine the welfare of the archdiocese sounds like a violation of the code of conduct. It says “Church personnal will conduct themselves in a manner that is consistent with the teachings of the Roman Catholic Church as enunciated by the Holy Father and the Bishops in communion with him; more specifically, Church Personnel shall, in all such matters, accept, rely upon and defer to the teaching authority of the Archbishop in all matters of faith and morals.
Where did this incident or violation occur?
	June 25, 2012
Please provide the specific or approximate time this incident occurred:
	4pm. see: http://www.boston.com/news/local/massachusetts/articles/2012/06/26/president_obama_to_visit_boston_for_fund_raising_monday/
How long do you think this problem has been going on?
	More than a year
How did you become aware of this violation?
	Other
If other, how?
	newspaper articles
Details
	4pm fundraiser on Monday, June 25 for President Obama. http://www.boston.com/news/local/massachusetts/articles/2012/06/26/president_obama_to_visit_boston_for_fund_raising_monday/ “Obama spent more than an hour inside Hamersley’s Bistro, whose front windows were covered, while hundreds of people waited on Tremont Street for a glimpse of him. Boston’s police commissioner, Ed Davis, joined the heavy-security team of city police, State Police, and Secret Service on Clarendon Street, where the president’s limousine was parked. At the restaurant, 25 supporters, hosted by Boston advertising executive Jack Connors, paid $40,000 each to attend.” http://www.boston.com/politicalintelligence/2012/06/21/president-obama-will-make-campaign-swing-through-boston-monday-for-series-fundraisers/xsNzFx2AGik11AuhVSGd0H/story.html Obama will first attend an intimate campaign roundtable at Hamersley’s Bistro in the South End with 25 supporters who paid $40,000 each to attend, said a campaign official. The afternoon gathering will be hosted by Boston advertising magnate Jack Connors, who last spring held a $17,900-a-head dinner at his Brookline home for the president.

Follow-Up Notes
There are no additional notes for this report.

RESPONSE FROM THE BOSTON ARCHDIOCESE:

Follow-Up Questions/Comments
Jul 10, 2012, 9:43 AM
Comment: Members of the Archdiocese of Boston Finance  Council provide the Archdiocese of Boston with  their well-established business acumen and  experience in productive, fiscally stable organizations. As they do so, these individuals donate generously of their time and talent. The Archdiocese of Boston asks these individuals to serve in this and other capacities with full confidence that they adhere faithfully to the teachings of the Roman Catholic Church, act in a manner which is fully in accordance with the Archdiocesan Code of Conduct, and conduct themselves as all Catholics are called to—with care, concern and compassion for others,
especially those who are in need.

In their support of organizations apart from the Archdiocese, Finance Council members find themselves immersed in diverse settings, replete with the full variety of moral beliefs and human behaviors. As free and private citizens, Finance Council members are at liberty to invest their time and energy in any manner they deem fit and to support those programs and policies, and at times individuals, which they have determined contribute to the common good and the well-being of society. The Archdiocese believes that the support of these programs, policies, and/or individuals reflects the Finance Council members’ own understanding of the human condition, the moral responsibility of each individual, and the collective responsibilities of the populace.

As individuals who value their privacy, Finance Council members are not obligated to make public the rationale behind their decisions to support various organizations, programs, and persons. The Church respects the right of the individual to personal conscience formation. The reality of this personal moral and ethical worldview informs Cardinal O’Malley’s solicitation of the Finance Council members’ service to the Archdiocese and, at times, acceptance of their generous financial assistance. That a Finance Council member may offer his/her backing to a politician or political candidate who is in support of pro-choice policies does not define or exhaust a Finance Council member’s position on issues pertaining to respect for life. Instead, it objectively speaks to the Finance Council member’s willingness to engage with and find value and merit in the opinions, ideals, and visions of individuals with a wide variety of moral stances, which at various times are more or less in line with the teachings of the Church. Furthermore, though he/she may provide his/her time and support to certain institutions which allow for individuals to elect to participate in activities that do not respect the Church’s teaching on the sanctity of life, no current Finance Council member has publicly advocated abortions as suitable moral options for these individuals. To assume that a Finance Council member is pro-choice and actively in support of abortions because of his/her political affiliations and/or institutional support is an unfair assumption and not one the Archdiocese is willing to use in judging candidates for the Council.

Turning to political activities specifically, the support of a pro-choice politician by a Catholic has been addressed by the United States Conference of Catholic Bishops in Forming Consciences for Faithful Citizenship: A Call to Political Responsibility from the Catholic Bishops of the United States (2007). In this document, the Bishops state,

“A Catholic cannot vote for a candidate who takes a position in favor of an intrinsic evil, such as abortion or racism, if the voter’s intent is to support that position. In such cases a Catholic would be guilty of formal cooperation in grave evil. At the same time, a voter should not use a candidate’s opposition to an intrinsic evil to justify indifference or inattentiveness to other important moral issues involving human life and dignity. There may be times when a Catholic who rejects a candidate’s unacceptable position may decide to vote for that candidate for other morally grave reasons. […] In the end, this is a decision to be made by each Catholic guided by a conscience formed by Catholic moral teaching.”

In Forming Consciences for Faithful Citizenship, the Bishops recognize that the political field is not one characterized by ideal candidates who at all times and in all cases uphold the full array of Catholic moral truths. Consequently, Catholic voters are tasked with examining imperfect candidates according to Catholic teaching on matters “affecting human life and dignity as well as issues of justice and peace” and “consider[ing] candidates’ integrity, philosophy, and performance.” The whole of Catholic social teaching should be considered when a Catholic makes a valuation of a given political candidate. Although the principles articulated in the USCCB statement can find expression in differing concrete political choices by individual Catholics, one should presume that the choices have been made conscientiously and in good faith.

Through their dedicated service, the members of the Archdiocesan Finance Council have repeatedly shown their love for the Church and their desire to see it flourish and provide the framework by which the people of the Archdiocese of Boston may be nourished physically, intellectually, and spiritually. Cardinal O’Malley trusts that the moral convictions of the Finance Council members are firmly rooted in Catholic social teaching and are designed to uphold the dignity of human life from conception to natural death. The Archdiocese believes that the decisions the Finance Council members make as citizens and as Catholics, although opposed by some, are neither in violation of Catholic teaching nor do they bring about scandal. Rather, the Archdiocese feels they are a reflection of the difficult decisions which must be made in a less than perfect world, one which the Finance Council members actively and tirelessly seek to improve through their faithful service to Christ and His Church.

RESPONSE FROM THE PERSON WHO FILED THE COMPLAINT
Jul 12, 2012, 6:15 AM
Reply: Thank you for your response–however I’m a bit confused by it. I didn’t say anything about abortion and your whole response is about a Finance Council member’s support for pro-choice politicians. My complaint was about Jack Connors’ support for Obama while he is actively working to take away our religious freedom. Now that I’ve read your response, I have several follow-up points and questions.

i) Specifically what sort of positions or actions would constitute “scandal” for a Finance Council member to give their support to? For example, if the politician supported by a Finance Council member advocated for ethnic cleansing, would that still be permissible without creating scandal? If the politician advocated for legalization of premeditated murder, child pornography, or sex between adults and young children, is it still OK for the Finance Council to publicly support the politician and this does not create scandal, because the person has the right to form their own conscience?

ii) The Code of Conduct says that church personnel will ensure their behavior “promotes the welfare of the archdiocese” and “exemplifies the moral traditions of the Church.” Since President Obama and his administration opposes the freedom of religion for this Catholic archdiocese which harms the Catholic Church and could impose substantial financial penalties on us, how exactly can Mr. Connors’ fund-raising to re-elect President Obama promote the welfare of the archdiocese? How does fund-raising for the most pro-abortion, pro-gay, anti-traditional marriage, anti-Catholic and anti-religious freedom President this country has ever had–in opposition to the moral teachings of the Church– “exemplify the moral traditions of the Church”? I don’t understand your rationale. Can you explain further?

3) In your response, you said, “Cardinal O’Malley trusts that the moral convictions of the Finance Council members are firmly rooted in Catholic social teaching and are designed to uphold the dignity of human life from conception to natural death. The Archdiocese believes that the decisions the Finance Council members make as citizens and as Catholics, although opposed by some, are neither in violation of Catholic teaching nor do they bring about scandal.”

Has Cardinal O’Malley actually asked Finance Council members if their moral convictions are in keeping with Catholic moral teaching and support protection of human life from conception to natural death, as well as marriage between one man and one woman, and religious freedom from government interference? Is that specifically a prerequisite for becoming a member of the Finance Council? If not, why not? What if you asked and found a Finance Council member answering honestly said they did not agree with Catholic doctrine and moral teachings? Then what?

This report has been closed.

Follow-Up Statements
The organization sent these questions or comments before report was closed. You cannot respond.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

BCI finds the response from the Boston Archdiocese to be most revealing. At last we have some explanation for how the Boston Archdiocese justifies keeping Jack around.  As long as the money is green, it does not matter what he does in his “private” life, even if those actions publicly harm the Catholic Church.  Matthew 6:24 comes to mind, “No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other. You cannot serve God and Mammon.”

What do you think?

Boston Herald: Up in alms over salaries

The Boston Herald has an article today reporting on the high executive salaries in the Pastoral Center that is worth reading.  We excerpt from it below, and offer brief BCI commentary after the article.

Up in alms over salaries
Church asks for more as top Catholic administrators see pay spike

By Erin Smith
Wednesday, March 21, 2012

With the Archdiocese of Boston in the middle of its 2012 Catholic Appeal fundraiser, the number of church employees earning upward of $150,000 has skyrocketed by more than threefold even as the church has been shuttering parishes, a Herald review found.

In 2006, the archdiocese listed only five employees earning more than $150,000, but its latest annual report shows 17 “senior lay executives” topped $150,000 last year. Among the latest eye-popping salaries and fiscal details the review found:

•     Total compensation for Mary Grassa O’Neill, superintendent of the archdiocese’s Catholic schools, last year topped $351,000, surpassing the $323,222 earnings of Boston Superintendent of Schools Carol R. Johnson. 

•    The top archdiocesan lawyer totaled $326,169.

•    The recently departed chancellor, the archdiocese’s top financial officer, grossed $276,486.

•    Since 2006, the archdiocese has cut 50 staff members but payroll costs increased by nearly $1 million.

“To focus on salaries and not look at the broader picture is vastly unfair,” archdiocesan spokesman Terrence Donilon said about the high-priced laymen. “These folks are immensely talented people who are helping one of the largest archdioceses in the country repair itself. The church is in a much better position than it was 10 years ago and that’s in no small part due to the talented people the cardinal has brought around him.”

Donilon, whose compensation topped $193,000 last year, said that even though the payroll went from $8.3 million in 2006 to $9.2 million this year despite dramatic job cuts, the church has actually saved $250,000 in payroll costs over the past five years when taking into account inflation.

Council of Parishes chairman Peter Borre, whose group fights church closures, said the hefty payroll runs counter to “the basic spiritual mission of the Catholic Church.”

“The crushing overhead weight at headquarters is becoming an intolerable burden for many parishes, and if the archdiocese wants to cut costs, it should start with Braintree, not in the churches,” Borre said.

…

Donilon credited school superintendent O’Neill with increasing Catholic school enrollment in Boston and Lowell while slowing an overall decline.

“Mary had a great job at Harvard,” he said. “She didn’t need to take on this assignment, which is one of the toughest Catholic school assignments in the country.”

Just weeks ago, the archdiocese launched its annual Catholic Appeal — which raised about $13.7 million last year — only months after proposing a parish reorganization plan. Donilon said it’s too soon to say whether it will result in more church closures.

“The Catholics throughout Boston are expecting a major round of church closings regardless of what the archdiocese says and that’s going to make people hang onto their wallets,” Borre said. “What’s the point of throwing good money after bad if the overhead of the archdiocese is eating up the cash of the diocese?”

The Herald got most of the story correct, but there are a few details they missed.

• The Herald’s look at the number of $150K+ employees in the 2006 fiscal year incorrectly assumed there were 5 employees making $150K+, when in fact, two of those employees left that year (David Smith and Ken Hokensen) and were replaced (by Jim McDonough and Scot Landry), so the positions were double-counted by the Herald .(See 2006 Annual Report).  In reality, the number of people making $150K or more per year increased from 3 in 2006 to 17 in 2011, for an increase of almost six-fold.
• If you add up the salaries for the 3 people (Smith, Hokensen, and Donilon) making more than $150K in 2005, the year before the former Chancellor arrived, they total $553K. Add up the $150K+ salaries from 17 people for the 2011 fiscal year and you get nearly $3.5M, also a more than six-fold increase.
• The compensation for Barbara Johnson, Boston Schools Superintendent may have been misreported in the Herald article.   See this April 2011 press release announcing the renewal of the contract for Barbara Johnson, which puts her salary at $266,750.: “At Superintendent Johnson’s request, her annual salary will hold steady at $266,750 – a voluntary decrease from the original salary of $275,000 when she first arrived in 2007. Dr. Johnson has also requested the removal of a provision in the contract that entitles her to a $600 per month car allowance.  Superintendent Johnson has never accepted the stipend since beginning her tenure with BPS. She uses her own private vehicle for all work purposes. Superintendent Johnson has also never elected to accept a performance-based compensation of up to $20,000 annually that the contract entitles her to receive.”  [Update: in a private email exchange with the Herald, they maintain from this source, that her compensation is $323,222)

  By the way, Johnson has direct operational responsibility and authority over hiring, budgets, teacher contract negotiation, busing, curriculum, etc for all Boston Public Schools, while Mary Grassa O’Neill, does not have similar operational responsibility and authority over Boston Catholic schools–they are managed locally. New York and Los Angeles pay their school superintendents $250K/year to directly manage school systems that are 15-20X bigger.

• Not mentioned in the Herald Report about compensation for Terry Donilon is the fact that he is paid about $50K more per year than the previous lay Communications Secretary–an increase of nearly 45%, for no apparent reason. The former Chancellor, Jim McDonough was paid 30% more than his precedessor. Mary Grassa O’Neill is paid 12X more than her predecessor, a religious sister.  Three fund-raising VPs today are paid in aggregate about 3X what one fund-raising secretary was paid in 2005.

• The comment by Terry Donilon that the church has saved $250,000 in payroll costs over the past five years when taking inflation into account merits more scrutiny.  First, we know that some salary expenses have been shifted off Central Operations to other related entities (e.g. sexual abuse victim counseling, clergy funds).  It is impossible from publicly disclosed reports to determine how much of the claimed “savings” is real, or how much has simply been shifted to other entities. Second, to whatever extent the total payroll-related expenses might have remained flat, it is largely due to the headcount reductions of lower-level people and freezing of lower-level salaries, while the $150K+ salaries grew.  Long-time BCI readers will recall how former Chancellor McDonough said in December 2010, “employees have not had a raise in four years,” which really meant that lower-level employees were not getting raises, while certain higher-paid employees did get raises.
• If everything is just fine with the $150K+ salaries, then why did the Finance Council form a “Compensation Committee” to review executive compensation, and why did the Compensation Committee hire an expensive consultant to work on the problem? (see “Boston Archdiocese Bloated Payroll Inaction).
• Administrative expenses have apparently grown from 26% of the total budget in 2005 to 36% in 2011. Many of these expenses are indeed loaded onto the backs of parishes who are struggling to pay their bills.  As we reported in “How Your Money is Spent, ” in the 2012 fiscal year, 36% of the budget ($9.95M out of $27.8M) is consumed by Administrative Services. By means of comparison, in 2010, Administrative Services expenses were 30% of the total budget (see “Easy Come, Easy Go“).  As a further comparison, if you look at the 2005 operating results in the annual report here, you will see that Management and General expenses (equivalent to Administrative Services, as best as we can tell) in 2005 were $10.1M out of total expenses of $37.9M, or 26% of the total.

BCI is also aware of the spin in the Terry Donilon email sent around last night. It will require a separate post to go into that.

For the ability of the archdiocese to continue her saving mission in the future and not be encumbered by high executive salaries and administrative expenses, we hope and pray that Vicar General Msgr. Deeley makes it a high priority to address the $150K+ salary and administrative expense problems in the very near future.

Catholic Appeal Accountability

BCI is on a lighter blogging schedule in March due to other pressing responsibilities.

Last weekend, Boston Catholics were treated to the sales pitch during Masses for the launch of the 2012 Catholic Appeal.  Here are a few aspects about the appeal that BCI thought faithful Catholics should know and Vicar General Msgr. Deeley might want to dig into a little more, for the sake of the future of the archdiocese.

• The 2011 Catholic Appeal raised $13.7M, against their goal announced in April 2011 of $14M.  Unfortunately, they missed their goal in 2011 for the second year in a row.  No explanation was provided and nothing was stated about what the fundraisers and archdiocese will do differently in the future so as to avoid missing again.

• The 2010 Catholic Appeal raised $13M.  That was down 14% or $2M from 2009, when the appeal raised $15M.

• Regarding the 2012 appeal, the Boston Pilot reported , “The archdiocese has not announced a goal for the 2012 appeal campaign.”

• The Boston Archdiocese has also never announced the fund-raising results for the Campaign for Catholic Schools 2010 initiative that had a goal of raising $70M by the end of 2010.

• When Boston Catholic Development Services was formed and announced in November 2010, the Boston Archdiocese said:

“The newly established 501(c) (3) organization will ensure donors of independence and accountability…BCDS will also be accountable to the respective boards representing the entities they serve such as the Archdiocese, the Clergy Fund and Campaign for Catholic Schools.”

The concept behind BCDS as pitched was to try and create a centralized more streamlined, efficient fundraising operation across several different entities, with the end goal of raising even more money at a lower overall cost per $ raised. A lot of well-intentioned people are working in that effort. Now that the archdiocese is 18 months into this experiment with two annual appeals under their belts, the Vicar General might want to dig in and see how well the costly experiment is really working.

A reasonable person might ask if the $2.3M budgeted expense in 2012 to pay fundraising staff and promotional programs is paying off as expected.  Also, how can a fundraising organization be considered ‘accountable’ when they do not announce their fundraising goals and compare results against those goals?

Is the fundraising problem still being attributed internally just  to “the economy”?  Even if that remains a factor, could part of the fundraising problem also be that Catholics have had it with the excessive six-figure salaries and bloated Pastoral Center payroll of nearly $3.5M in $150K+ salaries alone–and more people have stopped giving to the appeal? As we know from the new Catholic Appeal website, the Catholic Appeal funds 50% of the RCAB budget.

That being the case, then one might assume that the Catholic Appeal funds 50% of the $10M in administrative expenses below–either directly or indirectly via service fees charged back to the departments whose programs are funded by the appeal).

.

And one might also assume that the appeal helps fund about 50% of the $3.5M in $150K+ salaries we have discussed many times before.

It is good that the archdiocese is transparent in sharing where the money comes from and where the money goes to. But at some point, when will they take serious action to reduce the excessive six-figure salaries and reduce administrative expenses, so that more of the limited donor contributions will go to ministry programs that accomplish the saving mission of the Catholic Church instead of paying overhead?

At whatever point meaningful action is taken towards that end, hopefully people will feel more comfortable giving to the appeal again. In the meantime, withholding contributions from the appeal still appears to be the only way of trying to deliver a “wake-up call” to the archdiocese that they need to tighten their belts on the expense line. Instead, we suggest people give to their local parish and designate the contribution to pay a specific bill (e.g. heating, maintenance).  If some of the big donors in the Cardinal’s Leadership Circle would tell the fundraisers they are withholding contributions until the salary problem is addressed, we can only hope and pray that the folks at 66 Brooks will notice.

BCI hopes the Vicar General is able to address these issues, for the future of the archdiocese and ability to accomplish the saving mission of Jesus Christ in Boston in years ahead.

Did Boston Archdiocese Violate Trust with Catholics Over “Balanced Budget” Claim?

We return to local Boston Archdiocese matters to let you know the archdiocese refuses to respond to inquiries about how they claimed to have a “balanced budget” in the 2011 fiscal year when their own financial reports show they did not. With the outgoing chancellor, Jim McDonough, still there for a few days, we hope the Vicar General can get answers from him before he departs, for the benefit of the future of the archdiocese.

The subject of this post is the key point to take away.

The archdiocese set out with a plan and goal to run a balanced budget for the 2011 fiscal year, but they spent more than expected and the published financials show they ran an operating loss of $4.2M–yet still announced to 1.8M Catholics and the media that they achieved the goal of a “balanced budget.”   Plain and simple–unless there is some other data not published, what they announced appears to be untrue, and it is unhealthy for institutions that should be respected and trusted to violate that trust by saying things that are objectively not true.

Below are two emails we sent  to the vice-chair of the Finance Council, Jack McCarthy, outgoing Chancellor Jim McDonough, Vicar General Msgr. Deeley, and John Straub, interim chancellor, and a short response from Communications Secretary, Terry Donilon.

———- Forwarded message ———-
From: Jim Franklin <bostoncatholicinsider@gmail.com>
Date: Mon, Feb 13, 2012 at 8:31 PM
Subject: Budget questions
To: jack.mccarthy@neu.edu, jpm@rcab.org, John_Straub@rcab.org
Cc: vicar_general@rcab.org

Mr. McCarthy, Mr. McDonough, and Mr. Straub,

As followup to the publication of the 2011 Annual Report, could you help explain how the Boston Archdiocese justifies publicly claiming the 2011 budget was “balanced” when on an operational basis, it was not actually balanced.  I would also like to ask if you can let Boston Catholic Insider know if the attached comparison of budgeted expenses to actual expenses is accurate.

The Annual Report shows Operating Expense exceeded Operating Revenue by $4.2M.  That means Central Operations ran at an operating loss.  See below (our blog post, ““Balanced Budget” or Unbalanced Budget?)  for the explanation we posted last week at Boston Catholic Insider.  Is there some explanation available for why the archdiocese considers this budget to be “balanced” when the financial statements show a loss?

In the absence of any explanation for this discrepancy, we would be hard pressed to not say that the archdiocese is deceiving the Catholic faithful by saying the budget was balanced when in reality it was not.

Also, attached is a comparison of budgeted expenses from the 2011 budget plan vs the actual expenses in the 2011 Annual Report.  It shows expenses up considerably over the original plan, and service fees up as well. When the budgeted spend is compared vs the higher than budgeted operating expenses, that explains the operating loss.

Boston Catholic Insider plans to publish this later in the week on Thursday and welcomes your feedback on what we are missing in our analysis or what errors we might have made.  If you do not wish to interface directly with BCI, perhaps you might find some intermediary who would be willing to share your feedback on the below and the attached via email by end of day on Wednesday.

Thank you very much.

–Jim, for Boston Catholic Insider

———- Forwarded message ———-
From: Jim Franklin <bostoncatholicinsider@gmail.com>
Date: Thu, Feb 16, 2012 at 4:53 PM
Subject: Re: Budget questions
To: jack.mccarthy@neu.edu, jpm@rcab.org, John_Straub@rcab.org
Cc: vicar_general@rcab.org

Gentlemen,

in follow-up of my email of earlier in the week, would you like some additional time in which to respond–perhaps until end of day on Friday, or Monday?  BCI is merely asking for clarification on why the financial statements show the budget is not balanced yet the verbiage accompanying the annual report says the budget is balanced. We are also wondering whether our analysis of budget vs actual spend is accurate for 2011?  Is the analysis, and are the conclusions correct?

The archdiocese says you are delivering financial transparency. We are trying to help you with that! If the archdiocese operated at a loss, why not disclose that so that the best minds available could help to solve that problem?  Jack McCarthy did a lot of work on financial transparency several years ago with the goal of restoring trust.  In the absence of any response from the archdiocese and in the presence of the data reported and our analysis (which anyone can easily do), BCI will find it difficult to not tell our readers that essentially the Boston Archdiocese has lied to the public in the financial report.

In our post, we will communicate that the audited financial results and annual report show Central Ministries operated at a loss of $4.2M, the letter accompanying the report erroneously stated that the budget was balanced when that was known to be untrue, and the actual Central Ministries expenses were higher than the budget plan by about $4.1M.  We will let our readers know that we approached you via email twice and asked for clarification and an explanation, but we received no response. We will also let readers and the press know we notified you in advance we were going to report that the archdiocese deceived the public in the annual report and received no rebuttal or correction from you.

In the absence of any rebuttal or correction by end of day on Friday, BCI assumes that you agree with our assessment of the financial condition of the diocese and the deceptive claim that the budget was balanced–and you have no problem with our publishing this.

To conclude, BCI does not wish to be in a position where we are reporting that the Boston Archdiocese has apparently deceived the public with the annual report and accompanying statement, but the apparent deception begs an explanation and clarification in order to maintain the transparency and trust the diocese says you are seeking.  We look forward to hearing from you.

————————————-
From: Donilon, Terrence <Terrence_Donilon@rcab.org>
Date: Fri, Feb 17, 2012 at 5:03 PM
Subject: FW: Budget questions
To: “bostoncatholicinsider@gmail.com” <bostoncatholicinsider@gmail.com>

“Jim” –

We have been down this road before.

We are more than happy to meet with you but only if you agree to come in and meet with us in person.

As you know we are not going to engage anonymous bloggers.

Thanks,

Terry

#   #   #   #

So, there you have it.  The archdiocese has decided that faithful Catholics do not deserve a truthful explanation for the financial status of the archdiocese or a response to questions about what they have reported.

In case anyone got lost by all the numbers, here is the summary:

If you look at page 74 in the pdf of the 2011 Annual Report, you will see the following for Central Operations Total Operating Revenue and Expense:

Yet, despite published operating results which rather clearly show a loss, the report says on p.7, “During fiscal 2011, the goal of a balanced operating budget was once again achieved. The budget was approved in June 2010 as balanced with gross operating revenue and expense of $33.9 million.”

Yes, the budget was “approved as balanced” in June 2010 at 33.9M, but the data in the report says the goal was not actually achieved. If there is other data that shows the budget was really “balanced,” it has not been published.

In response to the email from Terry Donilon, BCI blogs anonymously because the Boston Archdiocese has a well documented pattern of retaliation against those who criticize them. We know the archdiocese has consulted with lawyers and reached out to computer forensics experts to try and identify BCI and stop our efforts, so we are protecting our reputations and livelihoods by blogging under a pseudonym. We hope one day to stop blogging –when the archdiocese simply operates with transparency and integrity–however the archdiocese keeps giving us new material, such as this.

BCI does not see any point in a private meeting with the archdiocese.  If they feel comfortable deceiving 1.8M Catholics in the annual report and the secular media (e.g. Boston Globe and Boston Herald) or withholding important information, why would they feel obliged to tell BCI something more in a private meeting?

Besides withholding contributions to the Catholic Appeal, several readers have suggested we launch a campaign asking people to write and call the U.S. Apostolic Nuncio, who has a reputation for cleaning up fiscal corruption in the Vatican. We are prayerfully considering that option.

In the meantime, for today, you might try calling the office of the Vicar General, Msgr. Deeley at 617-746-5619 or sending him an email at Vicar_General@rcab.org to ask for an explanation. Let us know if you get a response.

Are faithful Catholics, and is BCI, out of line for asking that the Boston Archdiocese simply be honest and transparent in communicating the fiscal condition of the diocese?  What do you think?

Boston Archdiocese Bloated Payroll: Inaction

BCI obviously struck a raw nerve with our last post, “Bloated Payroll” about the 17 people earning more than $150K a year.  We continue today with a brief recap on that post, and then below our commentary on how the Boston Archdiocese has managed to delay acting on this problem for years and continues to delay.

By means of a recap from last time, the annual report for the 2011 fiscal year (page 83), says the number of people making $150K or more in that fiscal year was 17. In the 2006 Annual Report, there were just 2 people in the Chancery paid more than $150K. So the number of people making $150K or more per year has increased by more than 8X since 2006.

In addition, the total compensation paid to people making more than $150K has also increased by a factor of about 9X since 2006. The Boston Archdiocese is paying about $3,500,000 in such salaries today vs $393,000 in 2006–$3.1 million more to people making $150K+ a year. The archdiocese has a fiduciary responsibility to be a good steward of donor funds, and this does not appear to be happening.

Once again, here are 11 of the 17 $150K+ salaries that were disclosed or implicitly disclosed in the 2011 annual report (pages 76-80):

* Note: Kathleen Driscoll is reported at $38,462, but she was on the payroll for only about 2 months in that calendar year, so we extrapolated for 12 months to get $230K.

As we have said before, if the archdiocese were to put a salary cap of $150K on all lay executives, that would cut $1M in salary expenses alone! 

What is happening to address the bloated salaries? Well, the Finance Council approved creating a Compensation Committee to look at executive compensation in November of 2010.  That was 15 months ago.

Their charter says, “The Committee shall submit to the Finance Council an annual report on the compensation practices of the Archdiocese, which shall be included in the annual financial release of the Archdiocese.”  In the 2011 annual report, the Compensation Committee did give a “report,” but it just talked about activity, with no results yet. Here are a few excerpts (see pages 83-84 for the full text):

“The Charter of the Finance Council establishes a Compensation Committee with responsibility for overseeing and making recommendations regarding the compensation of senior lay executive employees…

The Committee has determined that all employees of the corporation sole and all members of the Cardinal’s Cabinet paid $150,000 or more in annual salary will be treated as “senior lay executives.” At present, that group comprises 17 individuals. The Committee reached that decision because this definition captured all executives heading major departments and functions, as well as others with critical areas of responsibility…

A draft statement of Compensation Philosophy for Senior Lay Executives has been prepared by the Committee and will be submitted to the Finance Council for consideration at its regularly scheduled meeting in February 2012. In developing the draft, the Committee has placed the employment and compensation of senior lay executives in the context of the Church’s mission and challenges. It is the Committee’s belief that the Church is best served by senior executives who are distinguished by their competence, compassion, efficiency and effectiveness. We believe that the compensation of those executives should enable the Archdiocese to attract and retain highly talented and motivated people whose achievements and personal goals are in harmony with the teaching and mission of the Catholic Church. We will stress the importance of compensation that is just, both in terms of internal equity and external competitiveness. External competitiveness will be measured by comparison with other organizations in the same market for talent. For all positions, this will include Catholic dioceses and archdioceses and not-for-profit organizations. Hiring for some positions requires that the Archdiocese compete with for-profit businesses, and for those jobs, compensation practices in that sector will also be taken into account. The Committee recognizes that senior lay executive compensation must reflect economic realities within the Archdiocese, as well as regionally and nationally. We think it is critical that we achieve consistency and adherence to common reward principles within the executive leadership team and that compensation for this group be based on merit, and linked to clear descriptions of responsibilities and regular performance assessments.

The Committee has engaged the services of a senior consultant specializing in not-for-profit executive compensation at the global firm of Aon Hewitt. At the Committee’s direction, its consultant has undertaken a survey of compensation practices at nine other dioceses and archdioceses in the United States, and reviewed compensation information in public and proprietary databases of not-for-profit institutions and for-profit businesses. The 17 senior lay executive positions in the Archdiocese of Boston are being matched, based on job responsibilities and reporting levels, with those of other organizations, and pay levels are being compared. The survey results will also be used to create recommended salary bands for each position, as guidance in future compensation decision-making. We anticipate that the Committee will be in a position to make recommendations regarding salary levels in conjunction with the annual performance reviews scheduled for the end of the current fiscal year.

BCI finds it difficult to start addressing everything that is wrong with this whole effort. Here are a few examples:

• The effort comes across sounding like they will justify many–if not all–of the high salaries on the basis that these people could be earning $X in a private sector for-profit company, and this is what the archdiocese needs to pay in order to attract “highly talented” senior executives.
• The archdiocese staff used to maintain its own information about comparable salaries in other dioceses as part of the normal course of business in years past. Now it takes an expensive outside consultant to do that work.
• Why is a comparison of salaries in for-profit businesses really relevant here?  The people are working for the Catholic Church.  If they choose to forego the salary they could make in the private sector in order to work to advance the mission of the Catholic Church, that is a noble choice, but it is their choice. The only comparable that should matter is a comparison to how other Catholic dioceses pay for these positions, consistent with what the Catholic Church can afford to pay.
• Who is writing the clear descriptions of responsibilities?
• Why are goals and measures of success not included in this?
• Who exactly is performing the regular performance assessments against goals and expected results for the likes of the Secretary for Education, General Counsel, Secretary for Catholic Media, Chancellor, Secretary for Communications, Secretary for Institutional Advancement, etc?

Even if this whole effort does by some miracle result in something meaningful, at best, they will have a report and recommended salary bands by June of 2012–more than 20 months after the Finance Council created the committee to look into this.  And we only know that they “anticipate” the Committee will be in a position to “make recommendations” around the time of the annual performance reviews.

To BCI, it certainly does not seem anyone is in a big rush to act on this, and there is no sense that anyone will really take corrective action.   We would prefer to hear something more like, “We are deeply troubled by the wasting of donor funds on excessive salaries and bloated payroll at 66 Brooks Drive, and we commit we will have the report done by March 1, and will have reduced all salaries that are out of line by March 30.”

As we have said before and will say again, 40% of parishes cannot pay their bills, many low-salaried Pastoral Center employees have lost their jobs in recent years–meanwhile, the amount and number of $150K+ salaries at the Pastoral Center have grown by more than 8X over the past 5-6 years. The archdiocese paid $393,000 in 2006 for such salaries and is paying $3,500,000 today.

Members of the “Compensation Committee” include several multi-millionaire business executives, and two priests. They include:

Paul W. Sandman, Chair
John H. McCarthy, Vice Chair, Finance Council
Rev. Michael E. Drea
Rev. James J. Ronan
Brian P. Concannon
Mary L. Ryan
Leo V. Sullivan

If a few of these people hear from you, maybe they will move more quickly to take action.  Here are four email addresses for you:

jack.mccarthy@neu.edu, mdrea@stpaulparish.org, jronan@stmarystcatherine.org, Vicar_General@rcab.org

Please take a moment and copy/forward this blog post via email to these people with a short note asking them to take action on these issues, or just hit “Share this:” and the Email graphic below to send the blog post to these people. Let us know if you hear back from anyone.

BCI predicts that little will come from the Compensation Committee and their costly report/survey effort and we predict the excessive six-figure salaries for lay executives will continue to drain precious financial resources in the future. But it is worth it to write to them and see if you can get them to do more.

For the sake of the fiscal health of the Boston Archdiocese, out of fiduciary responsibility to be a good steward of donor funds, and for the sake of the ability of the diocese to carry out the saving mission of Jesus Christ for years to come, we hope and pray we are pleasantly surprised and some meaningful change occurs here.  What do you think?

Bloated Payroll

We got word that the Boston Archdiocese is not going to answer our questions about the deceptive claim of a “balanced budget” in the 2011 Annual Report, and that will be the topic of an upcoming post.  In the meantime, we thought we would take a closer look at the bloated payroll, which contributed to what the Annual Report shows is a $4.2M operating loss for 2011. We also look at the slow pace of action by the new Compensation Committee.

Number of People Earning More than $150K

According to the annual report for the 2011 fiscal year (page 83), the number of people making $150K or more in that fiscal year was 17. If you compare that to the 2006 Annual Report, before outgoing Chancellor Jim McDonough arrived, you will see there were just 3 people in the Chancery paid more than $150K. So the number of people making $150K or more per year has increased by nearly 6X since 2006.

The total compensation paid to people making more than $150K has also increased by a factor of about 6X since 2006. In 2006, those three people paid over $150K per year were paid $553K in salaries.  According to the 2011 Annual Report as well as information from other sources, the 17 people at the Pastoral Center making more than $150K today in aggregate are paid somewhere close to $3.5M a year in salaries. Just to reiterate, that is about 6 times more than was paid in 2006 in $150K+ salaries vs 2006.  

Here are the six-figure salaries that were disclosed, or implicitly disclosed in the 2011 annual report (pages 76-80):

* Note: Kathleen Driscoll is reported at $38,462, but she was on the payroll for only about 2 months in that calendar year, so we extrapolated for 12 months to get $230K.

The names of the 6 other people paid $150K+ were not published in the annual report, but you can just look at the Pastoral Center directory for the high-ranking titles to get a good sense for the likely suspects:

Joseph D’Arrigo, Executive Director, Clergy Benefits
Mary Doorley, Vice President of Development
Carol Gustavson, Executive Director, Lay Benefits and Building Services
Mary Myers, Vice President of Development
Steven McDevitt, Director of IT
John Straub, Executive Director Finance and Operations, Interim Chancellor

Add it all up, and you get pretty close to $3.5M in salaries alone not counting benefits, which add another 15% or so on top of that.  If the archdiocese were to put a salary cap of $150K on all lay executives, that would cut $1M in salary expenses alone in one fell swoop!  But not much is happening to address the bloated salaries, and what is happening appears to be progressing at a glacial pace. It could also end up being just window-dressing.

Long time readers will recall that the Finance Council approved creating a Compensation Committee to look at executive compensation in November of 2010.  That was 15 months ago.  What has actually been accomplished since then?  Not much.  They hired a consultant who is working on a report.  BCI is not making this up. (More on that in a separate post).

At best, the Compensation Committee says they will have a report and recommended salary bands by June of 2012–more than 20 months after the Finance Council created the committee to look into this.  To BCI, it certainly does not seem anyone is in a big rush to act on this.

Even with what is reported, we only know that they “anticipate” the Committee will be in a position to “make recommendations” around the time of the annual performance reviews.  How about, “We are deeply troubled by the wasting of donor funds on excessive salaries and bloated payroll at 66 Brooks Drive, and we absolutely commit we will have reduced all salaries that are out of line by date Y?”

40% of parishes cannot pay their bills. Meanwhile, at the Pastoral Center, the amount and number of $150K+ salaries have grown by more than 6X over the past 5-6 years. They are paying about $3,500,000 in such salaries today vs $5533,000 in 2006–$3.1 million more to people making $150K+ a year. 

Are we really getting our money’s worth from these “best and brightest?”  Why is the Finance Council fiddling while 66 Brooks burns through precious donor funds in excessive salaries?  Does anyone really care about doing something to address this problem?

For the sake of the fiscal health of the Boston Archdiocese and ability of the diocese to continue the saving mission of Jesus Christ, we hope and pray something changes here, and quickly.  What do you think?