The Climax of the Struggle
he struggle between the loyalists and the dissidents climaxed in September 1995, when the Archdiocese of Washington announced its findings. Cardinal Hickey visited Mother of God and held a tense, private meeting with the Difatos. Then he walked across a courtyard to speak to several hundred community members.
He called the community "a gift from the Lord" that allowed members "to take your faith much more seriously, to grow in your relationship with the Lord Jesus Christ." But Hickey then announced that he had found numerous problems, and that he had asked the Difatos to step aside from Mother of God's leadership.
Hickey said that because of Mother of God's practices, "members were led to speak of very personal things in a manner that did not protect their right to privacy and confidentiality and which had the effect of leaving them vulnerable. Great damage has resulted from this."
ickey cited "the children and young people in the community, some of whom have been seriously harmed by the systematic undermining of parental authority." Hickey also requested "that anyone who has personal information about other members-in notebooks, in computer files, in whatever form-that you destroy it, lest it be the source of future embarrassment or harm. All of you must cease using any personal information about others gained from previous pastoral practices."
For all his pointed criticisms, and his affirmation that the problems outlined by the dissidents were serious, Hickey tried to make clear that he did not wish to destroy Mother of God, but to reform it. Hickey appointed a new committee to head the community, and charged it with establishing a democracy. For the first time, community leaders would be elected, and they would rotate.
If Hickey felt he had compelling moral and theological grounds for his pronouncements, his legal standing at Mother of God was less clear. The community was formally organized around two nonprofit corporations that had no ties to the archdiocese. These corporations were controlled by the Difatos; family members served as officers and directors and appointed allies to key posts. If the Difatos were to leave, they would have to go voluntarily-the church had no means other than negotiation and persuasion to push them out. In fact, no sooner had Hickey publicly declared that the Difatos were stepping down than the real bargaining began.
y now, scores of Mother of God members were questioning the Difatos' motives. As this happened, the members began to think about money. They realized they knew next to nothing about the community's finances. Even some directors of Mother of God corporations, such as Judith Tydings, say they were in the dark. Tydings says that for years, there were no regular board meetings.
Dissident members began to gather and examine community financial records, zeroing in on the issue of how much the Difatos had earned during their tenure. It turned out to be more than Mother of God members had imagined.
In 1993, the year before the rebellion began, Joseph Difato drew salaries from each of Mother of God's two main nonprofit corporations totaling $70,100, according to the corporations' public tax returns. Difato claimed to be working 30 hours a week for one nonprofit and 30 hours a week for the other. One of Difato's brothers, Michael Jr., earned $74,600 that year working for the community's magazine. The youngest Difato brother, Jack, earned $32,000 from Mother of God in 1993. In addition, various Difato family members also received money from at least some of the community's for-profit spinoffs. For years, Joseph Difato worked a day or half a day each week at Orange Systems, a computer company employing Mother of God members. A source with knowledge of Orange's finances said that in the company's peak years, Joseph Difato's salary and pre-tax profits from Orange would have easily topped $100,000 a year. Edith Difato's husband, Michael-Joseph's father-worked full time at Orange for several years and held an ownership stake in the company. Michael Difato Jr. also worked at Orange and owned a piece of the firm.
oth Orange and the nonprofit corporations paid some expenses for Difato family members. For instance, the Orange Systems source said the company paid membership dues to the Bethesda Country Club for Joseph Difato.
Former Mother of God members say their labors also helped the Difatos in other ways. For years, they say, community members who held the Difatos in awe would go to their houses to cook, clean, wash clothes and help take care of their children. People with medical degrees could be found walking the Difatos' dogs; young adults who had been to college could be found scrubbing their toilets, the former members say.
In 1994, as the Mother of God rebellion was gathering steam, Joseph Difato approached the other owners of Orange Systems. He said he wanted to sell his stake in the company, which stood then at 28 percent. Documents obtained by The Washington Post show that the Orange owners agreed to pay $1.3 million for his share. Other documents, from a court file, show that Joseph Difato's father and brother later got smaller buyouts totaling several hundred thousand dollars. (Orange recently ran into financial difficulty, filing for bankruptcy reorganization, and it seems unlikely that Joseph Difato will get his entire $1.3 million. But documents show that he received more than $300,000 in late 1994. He is expected to receive $50,000, possibly more, as part of the Orange bankruptcy case.)
Many of the dissident Mother of God members were disturbed when they learned of the Orange Systems transaction. They were even more upset when documents came to light showing that on at least three occasions, funds belonging to tax-exempt Mother of God corporations had been lent or transferred to for-profit ventures in which the Difato family held ownership stakes.
In one case, a memo written by one of Mother of God's lawyers says that "a large sum" of funds from one nonprofit was invested in Orange. The transaction was later reversed when an outside lawyer said it was improper. In another case, a Difato family member temporarily received $100,000 from a community nonprofit, money that was eventually repaid with 5 percent interest. Finally, documents show that the Difatos invested in a chain of pizza shops in Britain, and used about $127,000 belonging to the English office of the community's magazine, The Word Among Us, to make a temporary loan to the chain. The Difatos declined to discuss any aspect of Mother of God's finances and did not respond to written questions about these transactions.
any former Mother of God members feel that, at the least, they do not have enough information to judge whether the community's interests were well represented in the transactions. Why were funds from the nonprofits shifted even temporarily to for-profit ventures? How much, exactly, did the Difatos earn from various community-related businesses?
Some paths of inquiry were closed off early last year by the terms of a settlement under which the Difatos finally agreed to leave Mother of God. The Difatos and other directors of Mother of God's main nonprofit corporation, Potomac Charismatic Community Inc., all resigned, and new directors approved by the archdiocese were appointed in their place. The new directors made certain guarantees in writing to the Difatos and the other departing directors. They agreed to indemnify the old directors against lawsuits by disgruntled Mother of God members; they agreed to buy an insurance policy to cover judgments in such lawsuits; and they agreed to seal the community's past financial records. The records are locked up today in a warehouse in Rockville.
By the time of the settlement, Joseph Difato had left The Word Among Us, the community's prime cash engine. But people loyal to him succeeded in separating the magazine from the Mother of God community, and they retain control of it to this day.