The January-February front page headline of the Orthodox Observer read “Archdiocese Achieves Financial Stability” and was mailed to rank and file faithful throughout the nation, hoping to alleviate the noise that’s been circulating over the past year about the dire state of finances at the headquarters of the Greek Orthodox Archdiocese of America.
The misappropriation and excessive spending of monies, as well as the raiding of restricted accounts to fund operations– including those for the building of St. Nicholas at Ground Zero, the St. Michael’s Retirement Home, the Taylor Scholarship Fund for Clergy and a fund to purchase a campground for youth in upstate New York– brought the Archdiocese to its knees as one revelation after another followed in the media.
Within months, the old guard was fired or resigned and a new leadership was brought in to clean things up and begin the arduous task of rebuilding trust amongst the faithful throughout the nation.
But the damage had already been done. Several churches already threatened to withhold their annual dues to the Archdiocese until New York got its act together and could give an accounting of where the missing money had gone.
Mixed signals came from the Archdiocese.
The Archbishop, himself, claimed ignorance that he didn’t know anything about what was going on and didn’t know how such massive deficits could accrue. He blamed others for dipping into restricted funds to finance the Archdiocese’s operations and several people involved were either fired, or forced to resign. However, Fr. Soterios Baroody, who served as the Archdiocese’s Comptroller while the misappropriations were taking place, kept his job and was even promoted to Chief Financial Officer.
Volunteer-run boards like the finance committee of the Archdiocese Council were purged of many long time members with historical knowledge. They were labeled as nay-sayers, opposed to the tactics of the Archbishop’s new leadership team. Others perceived as loyalists to the Archbishop were appointed to leadership positions.
The Archdiocese promised “forensic audits” to the faithful and stated as such in official releases, but behind the scenes and at Archdiocesan Council meetings stated that such forensic audits would never take place because they were too expensive and less-expensive financial reviews of accounts would take place instead.
All the while, the Archdiocese kept promising transparency to the parishes and faithful. Their tactics did work, as numerous parishes did respond in good faith and pre-paid their annual dues, called “Total Commitment” to the Archdiocese.
Simultaneously, the Archdiocese was moving forward with its new leadership team, creating new budgets for 2018 while attempting to unravel the details from previous years that led to the deficits.
In early February, the Archdiocese needed an approved budget for 2018 in order to apply for a $10 million loan. A $22.7 million budget was prepared and submitted by Chief Financial Officer Fr. Soterios Baroody for approval.
Under normal circumstances, budgets are approved by the entire Archdiocesan Council. In this case which required expediency, the Executive Committee of the Council exercised its authority and met on behalf of the entire council to approve the budget.
The Executive Committee subsequently approved a $22.7 million budget for the Archdiocese without ever seeing an actual budget, according to numerous individuals in the meeting.
When asked to see the budget itself by a member of the committee, Lou Kircos responded that it should be ready sometime within the week.
In other words, the Executive Committee of the Archdiocesan Council was asked to approve a budget blindly, without even seeing one on paper.
Several days later, following protests and chatter amongst many of the members, a one-page outline of budget (that they had already approved) was finally sent to the Executive Committee members.
It consisted of a one page summary of income and expenses with no additional details. (Click to see the budget that was eventually presented to the committee, AFTER they had already approved it without seeing it).
This was in stark contrast between prior budgets (Click to see 2017 budget) that have been posted on the website of the Archdiocese and usually consisting of several pages, itemizing each Archdiocesan department, expenses vs budget with prior years’ information included.
Then, in early March via a front page story in the Orthodox Observer and an official release that was sent to parishes, after only a few months of deliberations, the Archdiocese claimed it had achieved “Financial Stability.”
Despite proclamations of financial stability, the Archdiocese hasn’t yet produced financial statements or reports for the periods of the alleged misappropriations or raiding of funds that led to the massive deficits.
Furthermore, no official mention of a $10 million loan has been offered to the faithful, despite media reports and anonymous confirmations from Archdiocese officials.
In the first week of March 2018, it was revealed in the New York City-based National Herald newspaper that the Archdiocese would put up its headquarter building located at 8-10 East 79th Street in the Upper East Side of Manhattan as collateral for a $10 million loan.
The loan has been confirmed by two employees involved with the process at the Archdiocese but who were not authorized to speak to the press on the matter– and in fact were admonished by their bosses NOT to speak to the press, period.
The Archdiocese has not formally announced the loan on its website.
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