Contributions to the Pallattine Fathers religious order have dropped dramatically since a financial scandal broke around the order in the 1975. Still, the religious group managed to send three times more money to its missions last year than in 1975.
The turnaround in the order's handling of contributions came in 1976 after the Rev. Guido John Carcich the fund-raising mastermind of the order, was removed from his position by Baltimore Archbishop William D. Borders. Carcich pleaded guilty last month to mishandling more than $2 million of the order's charitable funds.
Study of Pallottine audits ordered by the archbisop and released yesterday revealed striking comparisons in the use of money donated for the poor.
The Pallottines, with Carcich mounting a massive direct mail campaign, collected more than $20 million in an 18-month period ending in December, 1975. But only $1.5 million - about 6 cents on the dollar - reach the order's missions in that same period. The bulk of the contributions, more than $16 million, was spent on fund raising expenses.
In 1977, the Pallottines raised about $4.5 million and managed to distribute about $4.7 million to foreign and domestic missions, according to a recently completed audit.
They were able to do this by cutting their fund raising expenses and dipping into their investments to send more to the missions, according to the Rev. John Geaney, spokesman for the Baltimore Arch-diocese.
The reprt, ordered by Archbishop Borders, said that the order has "made signficant progress in approaching conformity" with fund raising and investment guidelines issued by the archbishop in 1976.
At that time, with the release of the 1975 audit, Archbishop Borders denounced the Pallottine activities as "immoral," and said that "people of good will were led to believe that their money would go directly to missions."
Instead, money from people responding to pleas for the poor was poured into investments in motels, factories, town houses and shopping centers in half a dozen states.
The December 1977 audit revealed that the Pallottines during that year sold its interest in a limited partnership and condominiums of Sanibel Associates Ltd, for $625,000. But the order still owned a 60-unit motel and one trailer park located in Florida, according to the audit.
The audit also revealed that the Pallottines sold its investment in PSA, Inc., a computer services firm specializing in direct-mail processing, to PSA for $88,000.
Under his plea-bargaining agreement, Father Carcich conceded that he had received monthly consulting fees from the company that ultimately totaled more than $52,000.
Yesterday's report to the archbishop said that the Pallottines had "made progress" in divesting themselves of such private investment ventures, which are considered unusual for nonprofit organizations.
But "the majority of these investments are still held by the order," the report noted.
To deal with this, the report recommended that a "blind trust" be established to sell out these investments for the Pallottines. Such a trust would be managed by an institutional adviser, such as a large bank, and an attorney for the Pallottines, but the order would have no control over the trust's decisions. The order would be entiled only to received the proceeds from the sales for investments.
Archbishop Borders said he "agreed with the idea of the blind trust," but felt that a corporte board, modeled along the lines of hospital boards with members who are financial experts, would meet this recommendation.
The Pallottine Council, the order's governing board, recently agreed to a proposal that such a broard be set up.