From the Worldwide Faith News archives www.wfn.org
ANGER MOUNTS IN WAKE OF FINANCIAL SCANDAL
05 May 1996 13:05:04
95152 ANGER MOUNTS IN WAKE OF FINANCIAL SCANDAL
IN THE EPISCOPAL CHURCH
by Gustav Spohn
Religion News Service
NEW YORK-- How does a church react when confronted with a massive financial
That's a question Episcopalians are asking in the wake of accusations
by national church leaders that former treasurer Ellen Cooke embezzled $2.2
million over five years, at a time of massive cutbacks in church programs
"I know a lot of people are discussing forgiveness. Can something like
this be forgiven?" asked Margaret Larom, who was among 51 people who lost
their jobs at the Episcopal Church Center here in a 1991 wave of cutbacks.
On Monday, Presiding Bishop Edmond Browning announced the results of a
three-month investigation of church finances that he said showed Cooke used
church money to buy expensive real estate in New Jersey and Virginia,
jewelry, clothing, limousine service, trips abroad and private school
tuition for her children.
About $90,000 was improperly transferred into accounts of a New Jersey
church where Cooke's husband, an Episcopal priest, served as rector,
Cooke's actions, Browning acknowledged later, probably contributed to
budgetary shortfalls that led to the staff and program cuts.
"We know we're supposed to forgive, but it's betrayal and it's not one
little slip or one little moment of temptation," Larom said of Cooke's
actions in an interview Wednesday. "There are all those feelings which, I
think, have church people in a whirl."
Meanwhile, experts in church and nonprofit finances predicted the
scandal will hasten the trend of shifting donations to local and regional
levels and away from national church agencies that are viewed with
"I think anything which causes people to question the reliability of
the denominational office will only make the situation worse," said Dean
Hoge, professor of sociology at Catholic University of America in
Washington, D.C. "And I think this case is one of those. ...
"All the denominations should go into damage control," said Hoge, who
has extensively studied church giving under a Lilly Endowment grant.
One traditionalist group, Episcopalians United of Solon, Ohio, has
called for a broader, independent investigation of the Cooke affair,
warning in a statement issued Wednesday, "The integrity of the Episcopal
Church, its most precious asset, is at stake."
Lyle Schaller, a leader in the "church growth" movement that has led
to the creation of independent megachurches of thousands of members in
high-growth parts of the country, predicted that the scandal will not be
seen simply as the failure of a single individual but also as "the failure
of an institution to function in an effective way."
"I would think that one of the first things the Episcopal Church needs
to do is to be able to honestly, authentically assure people that there are
controls where this could not possibly happen again and that we do have a
good fiscal management system," said Schaller.
In an age of increased consumer consciousness, he said, believers
expect a denomination to keep its financial house in order. "People who are
in a business where there are good fiscal controls wonder, If we can do it
[keep control of finances], why can't they do it?'"
In his statement Monday, Browning blamed Cooke for the alleged
embezzlement. He said the church was working to recover the lost funds and
promised that "every measure that can be taken will be taken" to improve
the church's financial controls, based on recommendations from Coopers &
Lybrand, the accounting firm that examined church records after Cooke's
But in the wake of Browning's disclosure, Episcopalians and church
finance experts are asking: How could it have happened?
"Somebody wasn't watching the system," said Hoge. "I can't believe
that anybody could steal that much money and not be detected in the
According to Browning, Cooke used a variety of specific methods to
avoid detection. But the key factor in the alleged embezzlement was that
she had "absolute control of the auditing and reconciliation functions of
the treasurer's office."
In other words, Cooke checked on everyone else, but no one checked on
Browning also said he could not say whether he would press for
criminal charges against Cooke.
In a statement issued through her lawyers, Cooke acknowledged
wrongdoing and expressed "deep remorse and regret" for her actions. She
blamed her behavior, in part, on "the pain, abuse and powerlessness" she
felt during her employment at church headquarters here as one of the
denomination's highest-ranking women.
James Solheim, director of the Episcopal News Service, said church
officials were receiving calls from Episcopalians across the country who
want Cooke prosecuted.
"I'm surprised at how really angry they are -- not at us but at her,"
said Solheim. "At least at this stage we're being strongly urged to
Larom said she and other laid-off employees never imagined the staff
and program cuts could be linked to financial malfeasance.
"We all just believed giving was down," said Larom, who is now working
as an editor of religious books. She expects to be rehired by the church in
a position comparable to her former job in world mission information and
"I'm just shocked and angered from the first time [in January, when
church officials said Cooke may have misused funds] and shocked and angered
again as you know the amount," she said.
Forgiveness will not be easy, she observed.
"If it had been one awful slip, a temptation she couldn't resist, and
she repented, whatever, fine. I can understand temptation and that's easy
to forgive. But systematic looting over time and the personal betrayal,
the betrayal to the church, the betrayal to the presiding bishop and all
the people she worked with? That's a different thing. That's why I think
this whole question of prosecution is very interesting, because I'm not
sure that full restitution is going to cut the mustard."
Hoge predicted that the effects of the scandal will extend beyond the
Episcopal Church. The loss of $2.2 million from the coffers of a mainline
church is likely to affect people who already distrust large institutions
of any kind.
"The average guy in the small town in Ohio or Oklahoma would say, Oh,
just like we thought. Those big guys in New York, they can't be trusted,'"
Virginia Hodgkinson, vice-president of research at Independent Sector,
a Washington, D.C.-based research organization that produced a major report
on congregational finances in 1993, is more sanguine about the effects of
Hodgkinson said the Cooke affair will be seen as a "contained
incident" involving a single individual.
"It's not a mass scandal in the church where there have been
misappropriation of expenditures, people living off fat salaries ... a
deliberate sort of policy to use money differently from how the donor
intended," she said.
But Hodgkinson did say she believes it will cause people across
denominational boundaries to ask, "What are the financial controls of the
For more information contact Presbyterian News Service
Presbyterian Church (U.S.A.), Louisville, KY 40202
phone 502-569-5504 fax 502-569-8073
E-mail PCUSA.NEWS@pcusa.org Web page: http://www.pcusa.org
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