wfn.org | ANGER MOUNTS IN WAKE OF FINANCIAL SCANDAL

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26-May-95

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 
scandal? 
 
     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 
and staff. 
 
     "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, 
Browning disclosed. 
 
     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 
increasing distrust. 
 
     "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 
departure. 
 
     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 
process." 
 
     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 
her. 
 
     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 
prosecute." 
 
     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 
education. 
 
     "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,'" 
Hoge said. 
 
     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 
the scandal. 
 
     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 
church?" 
 
 

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