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[HoB/D] Fraud in the Misappropriation of ECUSA Funds Given in Mexico

Major fraud has been documented by an audit in the Anglican Church of two
dioceses in Mexico (Northern and Western Mexico).  Those at the scene tell
me that the amounts abused run close to US$3 million.  The audit was
requested by the Grants Office of Episcopal Church Center.

As I understand it, in response to agreements made when the Mexican
dioceses left ECUSA in 1997 to form an autonomous province, ECUSA provides
about 60% of the operating costs of the Anglicans in Mexico.  Audits of
two of the dioceses there have documented that over two-thirds of the
funds ECUSA has sent sent since 2000 have been misappropriated.  The two
culprits are both bishops, one of them the primate of all Mexico.
Mexican whistle-blowers, like Father Smith (below) and like the Mexican
provincial treasurer, are now requiring audits of earlier periods as well.

I have asked ECUSA's treasurer Ralph O'Hara to bring relevant numbers with
him to our Executive Council meeting next week, and Patrick Mauny, ECUSA's
Officer for Global Relations, will be able to bring us up to date as well.

I share Father Smith's correspondence below with his permission.  He has
been an important whistle-blower in the dreadful abuse of funds now
documented by an audit done in the two diocese of Mexico at the request of
the auditing department at the Episcopal Church Center.

ECUSA's recent history of fraud during Ellen Cook's tenure as our
Treasurer reminds us that sin is no respecter of persons.  It is important
to maintain and enforce strong measures of accountability.

As bad as the Mexican case is, it does seem to be a case where the system
worked, at least after the damage, when the audits have discovered abuse.
I understand that special tribute is due to grants auditor Jose Gonzalez
at the Church Center.  I agree with Father Smith that we need much tighter
measures of accountability in place to prevent and more quickly detect
such abuse.  Long gone are the days when bishops are to be held
accountable to God alone.


---------- Forwarded message ----------
Date: Mon, 03 Jun 2002 14:25:19 -0600
From: Robert Smith <isandres@prodigy.net.mx>
To: lcrew@andromeda.rutgers.edu
Subject: RV: A Modest Proposal

Dear Dr. Crew:

Thanks, much, for your time on the phone.  I hope this letter helps clarify
a few of the issues involved.

Pax et Bonum,

R.J. Smith

-----Mensaje original-----
De: Robert Smith [mailto:isandres@prodigy.net.mx]
Enviado el: Lunes, 03 de Junio de 2002 07:00 a.m.
Para: Glenn Polhemus; Bryan Husted
Asunto: RV: A Modest Proposal
-----Mensaje original-----
De: Robert Smith [mailto:isandres@prodigy.net.mx]
Enviado el: Lunes, 03 de Junio de 2002 06:36 a.m.
Para: Glenn Polhemus; Bryan Husted
Asunto: A Modest Proposal

Dear Friends:

As a priest, canonically resident in the Diocese of Northern Mexico, I've
spent a lot of time over the past couple of months, thinking about what has
gone so badly wrong in our Diocese.  It's a sad situation and we must find a
way to make corrections that will insure ministry instead of personal gain.

The more I think about what has happend in Northern and Western Mexico, the
more convinced I am that that the BIG story is not the theft of (possibly)
millions of dollars in Monterrey and Guadalajara.  In fact, these two
incidents are no more than the latest chapter in a very long book.  The real
issue, as I see it, is "815" and the total failure to come to terms with the
issue of theft and embezzlement of church money, over a period of many
years.  Most of us figure out, after having been burned once or twice, that
we need to change the way we grab hold of hot pots.  Maybe we need to use
towels or potholders to avoid repeating the pain.  Unfortunately, "815"
still seems to believe that bare-handed is best!

The saddest part of this story, from my point of view, is that it's a
problem that could be solved (or, at least, considerably diminished) rather
easily.  Simple transparancy would go a long way toward making a
year-after-year process of stealing money very difficult.  If, for example,
we in the Diocese del Norte had been able to see a REAL financial statement,
EVER, whistles and sirens would have sounded years ago!  Bishop Martínez,
though, was unwilling to supply us with any information of substance and
"815" was unwilling to share the "somewhat less than truthful" financial
reports they were getting from the Bishop.

Any attempt to ask questions about the finances of the Diocese have been met
with incredible hostility.  The Bishop's "huffy" reply to any and all
budgetary questions has been, in diocesan convention after diocesan
convention, "We submit a report to '815' every year and they're
satisfied--why can't you accept that?"

If (and now begins the sermon) "815" would develop a fairly simple and clear
financial statement that each diocese receiving money would have to submit
before funding was continued for the next year and MAKE THAT REPORT
AVAILABLE TO ANYONE REQUESTING IT, it would make life difficult for those
interested in long-term theft!  Fresh air and sunshine go a long way in
assuring physical and fiscal health!  How could Bishop Martínez pay his sons
and Adriana García salaries that are 6-8 times the salaries of the clergy
and include thousands of pesos a month in other benefits and then conceal
that information on an "open" financial report?  Where, on a readily
available financial statement, could he hide the purchase of several new
(and very expensive) cars?  How would it be possible to pay all of the
housing expenses (gas, electric, telephone, water, etc.) of his sons and
their families and call it "Christian Education Expenses," when everyone in
the Diocese knows that we have NO program of Christian Education?  About the
time an open and public financial report shows that 2/3rds of the money sent
from New York is NOT used to advance the mission of the Church, there will
be (1) many complaints to "815" and (2) the real possibility of open
rebellion in the Diocesan Convention.

When will we learn that secrecy invites abuse?  If New York wants to send me
zillions of dollars without guidelines or restrictions or the need to report
how I'm spending that money to the members of my congregation, you can bet
your hindquarters that I'm going to have a swimming pool in my back patio in
the very near future!

But, are we going to do something as simple as this?  I think it's doubtful.
For some reason that escapes my ability to understand, "815" considers
financial reports akin to matters of National Security.  It's so strange,
given the fact that I've found very detailed financial reports in almost all
the diocesan journals I've seen in the United States.  Some dioceses even go
so far as to list financial information about each congregation in the
diocese, with income, expenses, clergy salaries and other benefits,
available to all interested enough to run their fingers across the line on
the page.  Why, then, should money sent to Mexico (or other parts of the
world) have ""CLASSIFIED" stamped across each page?

If you know of someone (anyone) with the "clout" to raise questions in the
"Councils of the Elders," feel free to send this letter along to them.
It's too blasted hot in Monterrey to go downtown to look for a copyright
lawyer, so you may even take the credit for what I've written!  If you do
send it along, comments are welcome and criticisms will be met with only
minor hostility.

Pax et Bonum,

R.J. Smith, Vicar, Iglesia San Andrés Apóstol, Monterrey, Mexico

e-mail:  isandres@prodigy.net.mx

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