July, 2006

Independent investigation of financial wrongdoing at Saint John Parish in Darien is completed; report is a "major step forward" to restore trust and confidence, and strengthen controls in place

Diocese of Bridgeport thanks the Carmelite Sisters for their dedicated service to St. Joseph's Manor

Diocese of Bridgeport announces the re-opening of Sacred Heart School in downtown Stamford as a premier Catholic pre-school

Vatican Radio interviews Bridgeport Diocesan pilgrims, Betty Anne Casaretti and Father Bob Weiss, at World Meeting of Families in Spain

 

BRIDGEPORT, Saturday, July 29, 2006, 9:45 a.m. - Calling this "an occasion for re-examination, reflection, and renewed commitment," Bishop William E. Lori says that the long-awaited independent report on financial wrongdoing at Saint John Parish in Darien "represents a major step forward in restoring confidence and trust, and an opportunity to strengthen financial controls and procedures in place at all of our parishes."

Deloitte Financial Advisory Services LLP was engaged by the Diocese of Bridgeport in May to conduct a complete, thorough, and independent investigation of parish finances at Saint John's under the stewardship of its former pastor, Father M. Jude Fay. Deloitte issued its report to Day, Berry & Howard LLP, counsel to the Diocese, on Thursday afternoon.

Fulfilling a pledge made by Bishop Lori to share this report with members of the parish, the entire report was copied and mailed was mailed yesterday to every registered family in Saint John Parish, more than 1,700 households. It should arrive at homes today.

The report was also sent by Day, Berry & Howard to the U.S. Attorney's Office yesterday, which is conducting its own investigation.

"Sending this report to every parish household is the right thing to do," Bishop Lori said. "It's tough to read this level of detail, but it is essential that people know the truth, and the specific steps the Diocese has taken, and will take, to make things right. This is a key moment as we chart a better day for Saint John Parish."

Restoring Trust

A cover letter to parishioners from Bishop Lori was included in the report mailing (and reprinted below). Acknowledging the anger and disillusionment felt by parishioners, Bishop Lori offered an apology and pledged the full support of the Diocese to move beyond this crisis.

"This is a sad and difficult time for all of us," Bishop Lori says. "The anger and disillusionment you rightly feel resonates deeply in my heart and in the hearts of my brother priests and deacons. Such behavior cannot be justified or excused. It undermines trust, weakens the unity of the Church, and impedes the mission of Christ.

"At the same time," Bishop Lori continues, "this tragic event is an occasion for re-examination, reflection, and renewed commitment on my part and yours. As your bishop, I accept responsibility in this matter and pledge to do everything possible to restore your confidence and trust. Sending you this report is a step in that direction."

Detailed Timeline Revealed

The focus of the Deloitte investigation is the period January 1, 2000, to April 30, 2006. Deloitte chose this period as it is when the most significant spending appeared. The potential financial loss to Saint John Parish is estimated at $1.4 million. Of this amount, $720,000 was expended from a hidden bank account unknown to the Diocese and the Parish Finance Council.

The report includes a detailed timeline, revealed for the first time, of the discovery of financial wrongdoing by the Diocese. When the existence of the hidden account and allegations of improper credit card payments were first reported to the Diocese in late April, it acted promptly to protect the parish from further harm.

The Diocese has directed its legal counsel, Day, Berry & Howard LLP, to seek restitution of the misappropriated funds. Through his counsel, Father Fay has indicated that he is willing to cooperate in this process.

Rapid Response by Diocese

Relying on specific statements in the independent report, Bishop Lori strongly refuted any suggestion that the Diocese did not act quickly enough to respond to the situation and misconduct by Father Fay.

"In the early months of 2006, failure of the parish to meet its obligations raised concerns in the Diocese about what was thought to be mismanagement but not defalcation," he points out in his letter. "The report shows that the Diocese took immediate and decisive action as soon as it was notified of the wrongdoing in late April. It also shows that, in the critical days following this notification, the Diocese remained in very close communication with those who were then responsible for the administration of the parish, sharing with them the steps the Diocese was taking, and was about to take, to address this distressing situation."

Among the measures taken by the Diocese, as documented in the report, were:

• On April 28, Diocesan officials reviewed Father Fay’s financial activities, including credit cards transactions, with Father Michael Madden and Bethany D’Erario, the Parish Business Manager.

• Between April 28 and May 2, the Parish bank account was frozen and Father Fay was removed as signatory; financial institutions were alerted of Father Fay’s potential financial misconduct, and steps were taken to close Parish bank and credit cards accounts and open a new Parish bank account.

• On May 8, following Ms. D’Erario’s return from vacation, a Diocesan internal auditor was deployed to Saint John’s to investigate the Parish’s financial transactions with Ms. D’Erario’s assistance.

• On May 9, Diocesan officials met with Father Fay, who had been instructed by Bishop Lori to return from Florida. At this meeting, Father Fay was asked to provide explanations for his credit card charges, the hidden bank account, and other Parish financial transactions. Father Fay denied any wrongdoing. Diocesan officials requested and subsequently obtained authorizations from Father Fay to gain access to his bank and credit card accounts.

• On May 12, the Bishop advised Father Madden in writing that (i) Father Fay should not be exercising any financial and administrative responsibilities at the Parish, and that Father Madden would assume those responsibilities; (ii) Father Madden was made a signatory to the new Parish bank account; and (iii) Father Madden should contact Norm Walker, Chief Financial Officer for the Diocese, should Father Fay attempt to initiate any credit card or other Parish transactions.

• The Diocese, through its counsel, subsequently contacted the U.S. Attorney’s Office and retained Deloitte Financial Advisory Services LLP to conduct an independent investigation.

• Father Fay was asked by Bishop Lori to resign as pastor on May 17.

Moving Forward

Looking ahead, Bishop Lori says that continuous improvement is a priority for the Diocese. There are learnings to be gleaned from the report which will be considered for implementation in every parish throughout the Diocese.

"Much has already been done across the Diocese to strengthen diocesan finances and to improve parish financial procedures, including greater controls on parish operating accounts and major capital projects," Bishop Lori says. "Building on the internal parish financial reviews already conducted, we are now working with external accounting firms with the goal of reviewing all the parishes of the Diocese as soon as is practicable."

A special task force, comprised of lay professionals on the Diocesan Finance Council and three pastors, is also at work to review the recommendations in the Deloitte report and formulate a plan for strengthening financial controls for all 87 parishes in the Diocese. These controls will involve everyone connected with parish finances, from the Bishop and his pastors to the Parish Finance Councils, parish managers, bookkeepers, and ushers. The Diocesan Parish Financial Services Office will be strengthened.

Announcement of the plan is expected in September.

"This is good business practice," Bishop Lori says. "It is the right thing to do to restore trust and confidence."

Priestly Life

Finally, in his letter, Bishop Lori reminds the faithful of the expectations of every priest, in light of the revelations concerning Father Fay's lifestyle and behavior.

"Let me say, loud and clear, that you have every right to expect me and my brother priests to lead lives of integrity, holiness, celibate chastity, and simplicity, rooted in prayer and free of extravagance," he says. "You have every right to expect from us prayerful, joyful and generous service in accordance with the faith of the Church. This is what we pledged on the day we were ordained. This is how we are to put our lives at your service. We ask your forgiveness and your prayers as daily we seek the mercy of God in our lives and in the lives of those we serve.

"As a parish family, we will get through this," Bishop Lori concludes, "and emerge stronger."

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Back to Breaking News

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Letter from Bishop William E. Lori to the members of Saint John Parish, Darien,
mailed with a copy of the independent Deloitte report

Friday, July 28, 2006

Dear Members of Saint John Parish,

I appreciate this opportunity to write to you directly so as to focus on highlights of the enclosed report just issued by Deloitte Financial Advisory Services, and to share some thoughts with you on moving forward. This report, the result of an independent investigation, concerns financial wrongdoing on the part of your former pastor, its impact on your parish, and its resolution. It is thorough, and I encourage you to read it carefully. It has also been sent to the U.S. Attorney’s Office, which is conducting its own investigation.

This is a sad and difficult time for all of us. The anger and disillusionment you rightly feel resonates deeply in my heart and in the hearts of my brother priests and deacons. Such behavior cannot be justified or excused. It undermines trust, weakens the unity of the Church, and impedes the mission of Christ. At the same time, this tragic event is an occasion for re-examination, reflection, and renewed commitment on my part and yours. As your bishop, I accept responsibility in this matter and pledge to do everything possible to restore your confidence and trust. Sending you this report is a step in that direction.

As you know, I have refrained from commenting publicly on this situation so as to preserve the integrity of Deloitte’s independent investigation. I wish to thank those who have similarly cooperated with this fair and thorough process and have avoided misleading or confusing public comment. Now that the report has been issued, we can move forward on the basis of accurate information.

In that spirit, let me first ask you to approach this report with an open mind. In recent weeks you have read and heard many things about your parish, the Diocese, and the investigation. This entire matter is deeply troubling to all of us; however, much of what has been reported in the media and by word of mouth is untrue. This has been frustrating for you, for me, and for all those seeking truth and reconciliation.

Second, this report tells us that a very large amount of money was misused, much of it to fund a lifestyle unworthy of any follower of Christ, let alone a priest. Any suggestion that the Diocese tacitly condoned or condones this sort of so-called “discretionary” spending is utterly false. Please know that I have directed the Diocese’s legal counsel to seek restitution of those funds – your generous contributions – which were so wrongly spent. Through his attorney, Father Fay has indicated that he is willing to cooperate in this process. We will endeavor to recover as much as possible.

A third important aspect is the timeline which shows when the Diocese first learned of this misconduct and how it responded. In the early months of 2006, failure of the parish to meet its obligations raised concerns in the Diocese about what was thought to be mismanagement but not defalcation. The report shows that the Diocese took immediate and decisive action as soon as it was notified of the wrongdoing in late April. It also shows that, in the critical days following this notification, the Diocese remained in very close communication with those who were then responsible for the administration of the parish, sharing with them the steps the Diocese was taking, and was about to take, to address this distressing situation. A further clarification is in order. The Deloitte report indicates that Father Fay was able to conceal the misuse of funds in large part because of a hidden bank account, the existence of which was known neither to the Parish Finance Council nor to the Diocese. When its existence and allegations of improper credit card payments were first reported to the Diocese in late April, we acted promptly.

Moving forward, this report makes it clear there is work to do. Much has already been done across the Diocese to strengthen diocesan finances and to improve parish financial procedures, including greater controls on parish operating accounts and major capital projects. Building on the internal parish financial reviews already conducted, we are now working with external accounting firms with the goal of reviewing all the parishes of the Diocese as soon as is practicable.

But we can and will do more. Two months ago, I created a Task Force of lay members of the Diocesan Finance Council and pastors on the College of Consultors to receive the recommendations in the Deloitte report and to prepare a specific plan in accordance with those recommendations. This group will examine this report in great depth and will formulate a plan for strengthening financial controls for each of the 87 parishes in the Diocese. These will affect everyone connected with parish finances – myself, the pastors, Parish Finance Councils, parish managers, bookkeepers, and ushers – and the Diocesan Parish Financial Services Office will be strengthened. My goal is to announce a comprehensive plan in September and to implement it as expeditiously as possible.

The Deloitte report is about finances, but please allow me to say a separate word about priestly life and virtue. We are grieved and embarrassed to read of Father Fay’s egregious lifestyle and behavior. This “we” includes you, me, and my brother priests. Let me say, loud and clear, that you have every right to expect me and my brother priests to lead lives of integrity, holiness, celibate chastity, and simplicity, rooted in prayer and free of extravagance. You have every right to expect from us prayerful, joyful and generous service in accordance with the faith of the Church. This is what we pledged on the day we were ordained. This is how we are to put our lives at your service. We ask your forgiveness and your prayers as daily we seek the mercy of God in our lives and in the lives of those we serve.

As a parish family, we will get through this, and emerge stronger. Your parish is already on the path to renewal thanks to the leadership and example of your new pastor, Father Frank McGrath, the priests who serve with him, and the efforts of dedicated parishioners. I am grateful for all that is being done to restore trust and to renew faith. I have asked Father McGrath and your Parish Council to suggest ways I can meet with small groups in parishioners’ homes to discuss ongoing questions and concerns. We will announce those plans soon.

Finally, may we unite in offering praise and thanks to the Triune God whose love makes possible every good work and every blessing. In spite of our troubles, we are abundantly blessed with so many opportunities to deepen and live our faith in service of others. May we continue, united as one family in faith, to draw strength from Jesus Christ, who is the way, the truth, and the life. Commending you to the prayers of the Blessed Virgin Mary and asking your prayers for me and for all those whom I am called to serve, may I remain

Faithfully in Christ,

Most Reverend William E. Lori Bishop of Bridgeport

To listen to the July 10, 2006, interview click here

 

STAMFORD, Thursday, July 20, 2006 - Bucking the trend across the nation, the Diocese of Bridgeport is re-opening a Catholic school this fall in the heart of the inner-city and reaffirming its commitment to providing an outstanding, faith-based, and affordable educational opportunity for every child.

After a one-year closing for renovations, Sacred Heart School on 1 Schuyler Avenue will reopen in September as a Catholic pre-school for three and four-year-olds, thanks to grants from the NewAlliance Foundation and a generous donor. Tuition assistance totaling $100,000 will be available to all who apply and qualify. Parents of three- and four-year-olds could pay as little as $500 for the year program.

Opportunity for All

"Nationwide, inner-city Catholic schools are closing. It has become increasingly challenging to provide the financial means necessary to meet the needs of urban youth," says Dr. Margaret Dames, Superintendent of Schools for the Diocese of Bridgeport. "Here, we pride ourselves on accomplishing the impossible and ensuring that every child has the opportunity to attend one of our Catholic schools."

Sacred Heart School, Dr. Dames adds, will grow one grade level each year, into a pre-K through Grade 5 Catholic school. This year, she predicts that Sacred Heart will be "one of the premier three- and four-year old pre-school programs in Fairfield County. We have taken curricula from model schools, including Bank Street in New York City. Parents will be amazed at their child's academic progress."

Open Houses Scheduled

An Open House will be held on Monday, July 24, from 6:00 until 8:00 p.m.

Walk-ins will be welcome on Tuesday, July 25, from 6:00 until 8:00 p.m. All are welcome to attend.

For more information, please call Sister Elizabeth Reyes, head teacher: (203) 323-3524, or visit www.SacredHeartofStamford.org.

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The Diocese of Bridgeport administers 39 Catholic Schools throughout Fairfield County, serving more than 12,000 students, in what is the county's largest private school system. In Stamford, Diocesan schools include three elementary schools (Holy Spirit, Saint Cecilia, and Our Lady Star of the Sea), Trinity Catholic Middle School, and Trinity Catholic High School. For more information on Diocesan Catholic Schools, click here.

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THANK YOU -- Sister Michelle Anne Reho, O.Carm., Administrator of St. Joseph's Manor, visits with residents. The Carmelite Sisters will conclude their ministry on July 31. (Photo by John Glover)

BRIDGEPORT, Monday, July 17, 2006 - On behalf of generations of residents and their families in Fairfield County, Bishop William E. Lori has thanked the Carmelite Sisters for the Aged and Infirm for their 46 years of service at St. Joseph's Manor in Trumbull, and pledged that their sterling example of compassionate, Catholic health care will continue.

"The Carmelite Sisters have been an integral part of St. Joseph's Manor, touching the lives of thousands over the years by their dedication, love, and spiritual example," Bishop Lori says. "While it will be hard to imagine life at the Manor without their presence, we will honor their memory by continuing their rich legacy of compassionate, holistic, Christ-centered care."

 

Conclusion of Ministry

The Carmelite Sisters will conclude their service at St. Joseph's Manor on July 31. The Sisters declined an invitation by the Diocese to remain and oversee the Pastoral Care Services at St. Joseph's Manor and its two other nursing homes in Fairfield County: Pope John Paul II Center for Health Care in Danbury, and St. Camillus Health Center in Stamford. This decision is based on the fact that the Congregation considers it essential to integrate the Mission and Philosophy of the Carmelite Sisters into every aspect of the facility, including administration, and not solely Pastoral Care.

"We are grateful to the Diocese of Bridgeport for giving us the opportunity to serve at St. Joseph's Manor for more than four decades," says Mother Mary Suzanne, O.Carm., Superior General. "We recognize the efforts being made now in this new endeavor, and trust that St. Joseph's Manor will continue to serve its residents with compassion and love."

New Future for Catholic Health Care

On May 1, the Diocese announced it had entered into an agreement with Harborside Healthcare, one of the most respected nursing and long-term care companies in the United States, to operate St. Joseph's Manor and its two other nursing homes in Fairfield County: Pope John Paul II Center for Health Care in Danbury, and St. Camillus Health Center in Stamford.

Central to the partnership is a unique agreement that the homes retain their existing Catholic identity and mission. The Diocese will remain responsible for all aspects of pastoral care. These homes will remain Catholic, and the pastoral services residents have come to expect and love will continue, including, for example, Catholic chapels, daily Mass, dedicated Chaplains, and adherence to the ethical and moral teachings of the Catholic Church.

The agreement is expected to close on August 1.

Harborside Healthcare will announce shortly the successor to Sister Michelle Anne Reho, O.Carm., as the new Administrator of St. Joseph's Manor. In the meantime, Sister Michelle is assisting the Diocese as it organizes the pastoral care services for all three homes.

Prayers and Blessings

"We certainly regret that the Congregation's rich charism of spiritual care will not continue at St. Joseph's Manor," Bishop Lori says, "but the Catholic life and mission of all our homes will continue and flourish with the help of our priests, laity, deacons, and women religious. We part as friends, and extend God's richest blessings on the Carmelite Sisters as they go forward in the spirit of their Foundress, Mother M. Angeline Teresa, and continue to serve the needs of the Church."

"We shall continue to hold dear all those who were a part of our ministry at St. Joseph's Manor, particularly our beloved residents, who continue to reflect back to us the face of Christ," concludes Sister Michelle. "May their lives be blessed through the days ahead, and may they know that they shall always remain in our hearts and, most especially, our prayers."

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