Orthodox Leaders Reject Call for Audit

By Alan Cooperman
Washington Post Staff Writer
Friday, March 3, 2006

Leaders of the Orthodox Church in America, facing allegations that they mismanaged millions of dollars, rejected calls for an immediate investigation but promised to follow better accounting procedures in the future.

The 400,000-member denomination has been reeling since October from accusations by its former treasurer, Deacon Eric A. Wheeler. He says that during the late 1990s, its top officials diverted donations from agribusiness magnate Dwayne Andreas, U.S. military chaplains and ordinary parishioners, using some of the money to cover credit card debts and pay sexual blackmail.

After an all-day, closed-door meeting Wednesday in Syosset, N.Y., the church's Holy Synod, a governing body of 10 bishops, announced that it will adopt a set of "best practices" for financial management. The synod also promised to seek outside audits for 2004 and 2005, and to review all its fundraising appeals since 2001.

But the bishops postponed a decision on whether to look into Wheeler's allegations of sloppy bookkeeping as well as misappropriation of funds in the late 1990s. They indicated they might reconsider the matter when they meet again in the spring.

"On the threshold of the Great Fast [of Lent], we exhort the faithful to remember the Holy Gospel, to conform to the example of Christ, and to live as Christians in mutual repentance and forgiveness," the synod's statement concluded.

The delay drew criticism from some lay leaders of the denomination, which is informally known as the Russian Orthodox Church in the United States but has been independent of Moscow since 1970.

"It's bitterly disappointing, because we'll have to wait another three months to see if any investigation will be initiated involving the years in dispute," said Gregory Nescott, a lifelong member of the church who is a federal prosecutor in Pittsburgh. "The bishops had the chance to instantly begin to restore trust. . . . They chose instead to attack with a toothpick the python that threatens to swallow the church."

The church's highest prelate, who has the title of metropolitan and goes by the single name of Herman, did not return phone calls seeking comment. Neither did its top administrative officer, Chancellor Robert S. Kondratick.

The most senior official who could be reached yesterday was the Rev. Paul Kucynda, who has served as acting treasurer since July. He said the synod "left the door open" for an investigation, depending on the outcome of the audits for 2004 and 2005.

"Doing the independent audits will give them a sense of direction without being judgmental prematurely," he said. "It really isn't some kind of stonewalling."

On top of the allegations of misconduct, the church faces mounting debts. Its comptroller, the Rev. Stavros Strikis, said it is considering a bank loan of about $1.5 million, equivalent to about 40 percent of its $3.9 million annual operating budget.

Orthodox Christians for Accountability, a lay group pushing for greater transparency in the church's finances, suggested that the only reason the synod asked for the 2004 and 2005 audits is that they are necessary to obtain the loan. Kucynda said that was "simply not true."

"I am not interested, nor is he [the metropolitan], to cover anything up. But we have to methodically start somewhere," he said.

Financial experts said the Orthodox Church's problems show how easy it is for churches to avoid financial scrutiny. Other tax-exempt, nonprofit organizations must file annual financial statements, known as Form 990s, to the IRS. But churches do not have to make any public disclosure of how much they receive in donations, from whom, or how the money is spent.

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