Holy Synod of Bishops reviews investigation, financial reports, loan; announces joint meeting with Metropolitan Council in December 2006

The fall session of the Holy Synod of Bishops met in the St. Sergius Chapel, Syosset, NY, October 24-25, 2006.

SYOSSET, NY [OCA Communications] — His Beatitude, Metropolitan Herman, chaired the fall session of the Holy Synod of Bishops of the Orthodox Church in America at Saint Sergius Chapel at the Chancery here October 24-26, 2006.

In his opening address to the hierarchs, Metropolitan Herman emphasized that, while the allegations related to the financial matters of the Church continue to be investigated, it is important to recognize the excellent work being done by the Church’s departments and ministries in service to the dioceses and parishes, coordinated by the Central Church Administration. He also acknowledged the dedicated efforts and effective ministry of the bishops, the clergy and laity, and of the entire OCA during this difficult period in our history. He expressed his gratitude to all in the Church who are attempting to fulfill their call to follow Christ.

Metropolitan Herman also asked for the prayerful patience of the bishops, since some matters addressed in the course of the investigation have proven to be quite complex. While resolution of some aspects of the investigation might be possible in the near future, others may still arise.

Major issues discussed by the members of the Holy Synod included the following.

The Investigation by the law firm of Proskauer Rose. Metropolitan Herman reported that, in response to a motion made by members of the Metropolitan Council at their meeting of September 28-29, 2006, a meeting was held on October 19, 2006 with Proskauer Rose attorneys Sarah Gold and Celia Passaro, who were engaged on March 11, 2006 by Metropolitan Herman, on behalf of the Orthodox Church in America, to conduct the internal investigation of allegations relating to the finances of the Church.

During a three-hour meeting, held at the offices of Proskauer Rose in New York, NY, an oral report was presented concerning their findings to date. In addition to Metropolitan Herman, His Grace, Bishop Seraphim of Ottawa and Canada, secretary of the Holy Synod, was present as representative to the meeting from the Holy Synod. The Very Rev. George Hasenecz and Mr. John Zoranski attended as representatives from the Metropolitan Council. Father Paul Kucynda and Attorney James T. Perry, a parishioner of Saint Mary Magdalene Church, New York, NY, also were invited by the Metropolitan to attend.

Attorney Perry addressed the members of the Holy Synod and shared some of the findings of the investigation, which is still in process. Having presented a summary of the information offered during the October 19 meeting with Proskauer Rose, he answered all questions posed by the hierarchs, assuring them that, based upon the comments made by Attorney Sarah Gold during the meeting, Metropolitan Herman, as Primate of the Orthodox Church in America, and Father Kucynda, as secretary and acting treasurer, are neither “stonewalling,” nor are they ignoring the concerns of the bishops, clergy, and laity of the Church. They are supporting the work of those involved in the investigation, since they too are seeking factual answers to the many questions concerning the financial activities of the Church from about 1996 to 2005. However, they have been instructed by the Proskauer Rose attorneys to maintain confidentiality concerning whatever they know about the investigation until it is complete.

With regard to the lawsuit filed on October 2, 2006, by Protopresbyter Robert S. Kondratick and his wife, Elizabeth, against the Orthodox Church in America and seven defendants listed in the Summons and Notice of Motion for Summary Judgment, Attorney Perry noted that he had offered to defend the Church in this matter on a pro bono basis. In an engagement letter dated October 16, 2006, Metropolitan Herman accepted his offer. He reported on the civil implications of the lawsuit, and informed the bishops that a Notice of Discontinuance dated October 13, 2006 was received from Harry H. Kutner, Jr., Esq., attorney for the Kondraticks. The lawsuit could be re-filed at a latter date if the Kondraticks decide to do so.

The Rev. Alexander Rentel, assistant professor of Canon Law and Byzantine Studies at St. Vladimir’s Seminary, offered a presentation that included the canons and canonical norms germane to the lawsuit, as well as a number of other issues that have arisen from the investigation.

The Honesdale National Bank loan. Father Kucynda reviewed the process that led to the closing on a $1,700,000.00 loan transaction with The Honesdale National Bank, Honesdale, PA. A document was presented that notes the specifics of the loan: the summary of outstanding debts; disbursements made at the time of the closing; the disbursements made on behalf of the Church by Sahn Ward & Baker, PLLC at the time of the closing; and the disbursement to Saint Tikhon’s Monastery in full payment of a loan and interest received by the Church on November 17, 2005 to pay the outstanding 14th All-American Council expenses to the Sheraton Centre, Toronto, ON, Canada. Also included was the identification of a transfer to the general checking account of the Church on September 29, 2006 for distribution to the three seminaries of the Church.

2004-2005 Financial Audits. Father Kucynda, Acting Treasurer, commented on the written report of the accounting firm of Lambrides, Lamos, Moulthrop LLP dated October 5, 2006, concerning their engagement to audit the financial statements of The Orthodox Church in America for the years 2004 and 2005. The report explains that, due to “the lack of adequate documentation….. supporting transactions recorded in the general ledger could lead to material misstatements.” A complete and certified independent audit of 2004 and 2005, as well as a complete and certified independent audit of all annual and special appeals from 2001 to 2005, as initially requested, are not possible.

Six-month Financial Report for 2006. Father Kucynda presented the statement of budgeted income and expenses of The Orthodox Church in America for the six months ended June 30, 2006 in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. He noted that this report is publicly available on the web site of The Orthodox Church in America. He also reported that a nine-month compilation report will be available in mid-November, and that a final 2006 year-end, independently audited report will be available as soon as possible after December 31, 2006.

Seminary and Mission Appeals. Father Kucynda reported on all income, expenses, and disbursements for these funds from 2003 through to the present, adding that these reports are publicly available on the web site of The Orthodox Church in America.

Pension Fund Report. His Grace, Bishop Nikon of Boston, New England, and the Albanian Archdiocese, chairman of the Pension Board, reported that the pension fund, which is managed independently from any other funds of the Church, is healthy and growing. He stressed that it is important to note that while other funds of the Church are being reviewed due to the lack of independently audited reports for years 1999 through 2005, the pension fund has been independently audited and certified annually between 1999 through 2005. He also stressed that the assets of the pension fund are not commingled with any other funds of the Church or otherwise.

Benefits Programs. The Orthodox Church in America Pension Fund has been and continues to be managed by a Pension Board elected by the 14th All-American Council. Until recently, however, the Administrative Secretary employed by the Pension Board was also employed as a Chancery staff member to administer the health and life insurance programs and the Personal Assistance Program (PAP) available to all OCA clergy, spouses and children.
While the three programs remain in force, the administrative needs related to the appropriate management of the programs, must be resolved as soon as possible.

The Best Practices Project. Father Kucynda reported on the status of the Best Practices project, initiated under the direction of Protodeacon Peter Danilchick. This initiative was authorized by members of the Metropolitan Council at their 2006 Fall Meeting.

Draft texts dealing with various areas of concern were received and approved by the Metropolitan Council at its September 28-29, 2006 special meeting, subject to review by an attorney who is knowledgeable in New York State and Federal Law that relates to not-for-profit entities. At this time, Attorney Perry is coordinating the review at the request of the Metropolitan Council.

Statute Revision. In keeping with the recommendation of the Lesser Synod of Bishops at their September 29, 2006, meeting, Metropolitan Herman proposed the appointment of His Eminence, Archbishop Nathaniel, as chair of the Statute Revision Commission, with the Rev. Alexander Rentel, assistant professor of Canon Law and Byzantine Studies at Saint Vladimir’s Seminary, as the project manager. It was decided that Archbishop Nathaniel and Father Rentel will determine the scope of their work and establish a working schedule.

The 15th All-American Council. In consideration of the proposal of the Lesser Synod of Bishops, it was decided that the 15th All-American Council will be convened in the fall of 2008. In light of numerous requests, the Council will be of a more modest means, lasting about three days.

Joint meeting of the Holy Synod of Bishops and the Metropolitan Council. Having heard a request from the members of the Metropolitan Council for a joint meeting with the members of the Holy Synod of Bishops, it was decided that a joint meeting will be convened by Metropolitan Herman on December 12-13, 2006 in New York.

Administrative Reorganization of the Chancery. In a letter dated September 7, 2006 Metropolitan Herman instructed Father Kucynda, as secretary of the Church, to organize a task force to review the present organizational structure and staffing of the OCA Central Administration and to make organizational recommendations for improving the efficiency and effectiveness of the staff. Task force members were also asked to consider the anticipated income for 2006 and 2007 when making their suggestions. The letter also asked the task force to provide Metropolitan Herman with an appropriate organizational chart, job descriptions, and related structural/staffing proposals to replace the one in use since 2001. The report is to be received by November 1, 2006.

Directly involved in the task force are Mr. Robert Kornafel, chairman, and Deacon John Zarras, Mrs. Carol Wetmore, and Mr. Al Wetmore. The task force’s preliminary report was presented to the hierarchs by Deacon John Zarras.

Deacon Zarras reported that, while according to the 2001 organizational chart the Metropolitan was listed as the head of the organization, all others were directly responsible in one way or another to the chancellor.

The task force proposed an organizational chart that, while acknowledging the Metropolitan as the head of the organization, lists the chancellor, treasurer, and secretary as officers of The Orthodox Church in America, equal to one another and directly responsible to the Metropolitan. In this organizational model, all financial matters are managed by the treasurer, who is directly accountable to the Metropolitan. The secretary and chancellor would be in no way directly involved in financial matters.

Yet to be finalized are all issues related to personnel assignments, salaries, and benefits, as well as the relationship and accountability of the Metropolitan and his Chancery staff to the All-American Council, the Holy Synod, and the Metropolitan Council.

Annual Appeals. Mr. David Lucs, appeals coordinator, distributed a considerable amount of detailed information regarding annual and special appeals from 1997 to 2006. The report reveals that, while much criticism at present is directed to the alleged mismanagement of such funds during those years, the per capita amount received directly or indirectly from the dioceses, parishes, institutions, and individual members on a consistent basis has been minimal. Mr. Lucs expressed the hope that, as trust and confidence in the work of the Church improves and the management of related funds supporting such projects is officially reported with consistency and transparency, the voluntary support required for the successful completion of a variety of projects will be forthcoming.

Church Ministries report. A report concerning the various departments of our Church was presented by Mrs. Michelle Jannakos, Church Ministries coordinating secretary, and Mr. David Lucs of the Chancery staff. They noted that, despite a decrease in income, the departments continue to develop resources, host workshops and other gatherings, and work within their respective fields.

The Fellowship of Orthodox Stewards. The Very Rev. Eugene Vansuch, director of the Fellowship of Orthodox Stewards, reported that he continues to visit parishes regularly. During his visits, he explains that, while the initial funding for the departmental work of the Church comes from general funds, the more substantial work and projects of the departments is directly determined by the level of additional funding received through FOS.

The Diaconal Vocation Program. The Very Rev. Gregory Safchuk, who until spring 2006 served as director for the Diaconal Vocation Program, offered recommendations for a new program director. He noted that 32 individuals representing six dioceses currently are enrolled in the program, and that interest and participation remains stable. His Grace, Bishop Nikolai of Sitka, Anchorage, and Alaska reported on the recently established diaconal program in the Diocese of Alaska.

The retirement of His Grace, Bishop Tikhon of San Francisco, Los Angeles, and the West. Bishop Tikhon confirmed that he will retire on November 14, 2006. He reflected on his years of active service and recounted details of the retirement banquet held in his honor. As a result of this announcement and confirmation, in accordance with the Statute of the Orthodox Church in America, the Office of Diocesan Bishop in the Diocese of San Francisco, Los Angeles, and the West, was declared vacant as of November 14, 2006. Metropolitan Herman will appoint a Locum Tenens and an Administrator for the Diocese. At a time and place to be determined, a Diocesan Assembly will be called for the sole purpose of electing a new bishop.

The health of Archbishops Kyrill, Peter, and Gregory. Metropolitan Herman appraised the members of the Holy Synod on the health of His Eminence, Archbishop Kyrill of Pittsburgh and Western Pennsylvania and the Bulgarian Diocese; His Eminence, Archbishop Peter, former Bishop of the Diocese of New York and New Jersey; and His Eminence, Archbishop Gregory, former Bishop of Sitka and Alaska.

While Metropolitan Herman was pleased to report that Archbishop Gregory is in relatively good health at this time, Archbishop Kyrill continues to face the customary challenges that follow most major surgeries, while Archbishop Peter’s health remains stable, although his weakened condition has limited his daily activity.

Report on the Mexican Exarchate. His Grace, Bishop Alejo of Mexico City, reported that much work is being done in Mexico by a limited number of clergy, people, and resources. Unfortunately, the poverty of the Mexican Orthodox faithful severely limits their ability to be self-funding. He requested that the Sitka Icon of the Mother of God visit Mexico in 2007 for the strengthening of the faithful. He also requested help in acquiring vestments and necessary liturgical items for his parishes. It was decided that a prior unfulfilled $10,000.00 commitment to the Exarchate from the Missions Fund of The Orthodox Church in America should be honored. The bishops requested that the members of the Metropolitan Council at their next meeting authorize payment. In addition, they asked Bishop Alejo to develop a list of the Exarchate’s most pressing needs for further discussion and response in December.

In addition to Metropolitan Herman, Archbishop Nathaniel, Bishop Tikhon of the West, Bishop Seraphim, Bishop Nikolai, Bishop Nikon and Bishop Alejo, other members of the Holy Synod attending the session were His Eminence, Archbishop Dmitri of Dallas and the South; His Eminence, Archbishop Job of Chicago and the Midwest; His Grace, Bishop Tikhon of Philadelphia and Eastern Pennsylvania; and His Grace, Bishop Benjamin of Berkeley. Archbishop Kyrill and His Grace, Bishop Irineu of Dearborn Heights were not in attendance.

Photo gallery of the Fall Session of the Holy Synod of Bishops