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ACNS 3016 - MEXICO - 7 June 2002

Funds misused in the Anglican Church of Mexico

By Steve Waring

[The Living Church] For years many responsible Episcopalians were concerned
that a lack of adequate financial controls made the millions of dollars that
the church disburses annually overseas vulnerable to theft, and it would
appear that in the Anglican Church of Mexico their worst fears have been
confirmed.

The Most Revd Samuel Espinoza, Primate of Mexico and Bishop of Western
Mexico, as well as the Rt Revd German Martmnez Marquez, Bishop of Northern
Mexico, have been asked to resign after a thorough independent audit of
diocesan finances revealed that since at least 1995, as much as two-thirds
of all money designated for those two dioceses has been diverted for the
bishops' personal use or for that of family members and associates.

"They ran their own corporations," said the Revd Federico Sierra, treasurer
for the Anglican Church of Mexico. "We are still not sure where all the
money went."

In addition to less-than-enthusiastic co-operation from the two bishops,
recovery of funds is further complicated by historical and accounting
anomalies, according to Fr Sierra.

According to the Revd R J Smith, a priest in the Diocese of Northern Mexico,
after the 1910 Mexican Revolution, it became illegal for the church to own
property in its own name. For approximately the next 80 years title to
property was often held by the bishop. The law was changed recently, but
many diocesan properties in Western and Northern Mexico remain in the name
of the two men suspected of abusing their offices. Also, when the Church of
Mexico became independent in 1995, it borrowed its constitution and canons
from those of the Episcopal Church, in which there are few causes, short of
a criminal conviction or abandonment of the faith, for which a bishop can be
removed. The other problem for the Church of Mexico is proving that the
funds in question were actually misappropriated. According to Fr Sierra,
most of the misappropriated money came from the Episcopal Church in the
United States, meaning that the party actually injured is based in another
country.

"We have asked them to consult with us," Fr Sierra said, "but they told us
that they don't want to interfere with the internal affairs of another
province."

The Revd Canon Patrick Mauney, director of the Anglican and Global Relations
Office at the Episcopal Church Center, acknowledged that in the recent past
a variety of factors contributed to a decline in the quality of supervision
given to overseas mission grants.

"It's very difficult to determine some things unless you are willing to take
the time and money to inspect them personally," Canon Mauney said.

After the 1994 financial scandal involving Episcopal Church treasurer Ellen
Cooke, a number of Church Center staff positions were eliminated, including
the overseas auditor for missions. A replacement was appointed only
recently. Even now, Canon Mauney noted, unless the Episcopal Church is
willing to fund on-site inspections, an auditor based in New York City is
somewhat limited by the quality of information that autonomous provinces are
willing and able to provide.

"You don't have the tight controls that used to exist when these provinces
were still part of the Episcopal Church," Canon Mauney said. "I think it
underlines the complication of monitoring fund transfers between provinces.

"One of the things that is sad about all this is that it may create
suspicion about all missionary support. There is a lot of good work going on
out there."

This year the five dioceses in the Province of Mexico are due to receive a
combined total of $717,000 from the Episcopal Church. This represents
approximately 70 percent of total operating revenue for the Anglican Church
of Mexico.

The thread of alleged deceit began to unwind last August when Bishop
Martmnez decided that the retirement house he was constructing in an
exclusive suburb of Monterey would be impractical. He proposed to the
standing committee that the Diocese of Northern Mexico should purchase the
residence for $220,000. Of the standing committee members present, only the
bishop's son, Jose de Jesus, was in favour. The motion was tabled until
November when the diocesan administrator, Adriana Garcia proposed to the
standing committee that it should also purchase her parents' Monterey home
for $245,000. The only real estate purchase the standing committee
authorised was $17,000 for a rectory in Chihuahua.

In January, however, Bishop Martmnez asked the Revd Miguel Angel Cristerna,
the president of the standing committee, to sign a letter addressed to the
Episcopal Church requesting release of an unspecified amount of money from
the Venture in Mission endowment fund. After the letter was signed, the
bishop and his administrator then included in the mailing a second page
requesting $465,000 to purchase two rectories. Several concerned priests in
the Diocese and Glenn Polhemus, a US Episcopalian who has helped construct
several churches in the Diocese of Northern Mexico, began to compare notes.
By the time of the Northern Mexico diocesan convention in March, they were
convinced they had irrefutable evidence that fraud was being committed. They
contacted several members in the finance department of the Episcopal Church
Center in New York City.

The Church Center moved quickly to place a temporary freeze on all further
release of funds to the Province of Mexico, pending completion of a thorough
audit, and that is when the widespread abuses in Western and Northern Mexico
were revealed.

This was not the first time that Bishop Martmnez obtained Venture in Mission
funds under false pretences if the audit is to be believed. According to Fr
Sierra, members of the audit team inspected several abandoned diocesan
properties which had reportedly been improved with endowment money.
Practically all of Bishop Martmnez' personal and non-church-related business
expenses as well as those of his extended family were reimbursed from
diocesan money. The average annual clergy salary in the diocese is $3,600.

In perhaps the most unusual development, the audit investigation also seems
to have confirmed rumours that Bishop Martmnez had either abandoned the
Anglican Communion or indeed never genuinely left the Roman Catholic Church
in which he was ordained. On the 30 or so Sundays a year when he does not
have an episcopal visitation scheduled, Bishop Martmnez reportedly attends
Mass at the Roman Catholic cathedral in Monterey, the same cathedral where
all his children were baptised and married. There is no record of Bishop
Martmnez-Marquez pledging at any time to an Anglican church. Several clergy
in the diocese confirmed that Bishop Martmnez' wife, Maria, never did
convert to Anglicanism and has at times been verbally abusive to the wives
of diocesan clergy because they are not part of the "true catholic faith."

Neither diocese apparently ever presented its clergy and lay deputies with
any meaningful financial details at diocesan conventions. No payroll records
were allegedly found during the audit at either diocesan office.

In Western Mexico, Fr Sierra, said the amount of money missing is even
greater, at least $1 million. There it appears that Bishop Espinoza obtained
large kickbacks from building contractors for work that was never performed
and that he also laundered title to diocesan properties then reinvested the
proceeds from the kickbacks and property sales in commercial real estate
with clear title in his own name.

This is not the first or the only foreign Anglican province or
extra-territorial Episcopal diocese where concerns about financial
mismanagement have been raised. Some members of the Joint Standing Committee
on Program, Budget and Finance have been moving to increase accountability
in recent years, including in 2000 a requirement for periodic on-sight
inspections of property. The momentum for increased accountability has,
according to one joint standing committee member (who preferred not to be
named), been slowed by bureaucracy and concern with the negative impression
that might be caused by wealthy Episcopalians dictating how other provinces
should manage their affairs.

The committee member said the issue shouldn't be whether money is sent to
foreign provinces. Some provinces accomplish great good with mission money.
The issue is how can the Episcopal Church know whether the money it sends is
actually being used for what it was intended.

_______________________________________________
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