Tuesday, September 14, 2010

Just How Much Has ECUSA Spent on Lawsuits? And How Much Will It Spend?

[N.B.: This is the sixth of a multi-part series entitled: "ECUSA and its Attorneys: a Runaway Train". The previous posts are the Introduction, Part I, Part II, Part III and Part IV.]

(H/T: AAC.) In the video above, which I believe is taken from a press conference at or following General Convention 2009, you hear Bishop Stacy Sauls addressing the question: "How much money has the Episcopal Church spent on lawsuits related to property litigation?" His answer is: "I don't know the answer to that." Then he continues: "I have seen the answer to that, as a member of the Audit Committee. But I also think -- if I'm not mistaken, it's in the budget -- as well as the financial results for last year. But I don't know the figure off the top of my head."

For Bishop Sauls, this is truly a remarkable answer to have given. Not only is he a member of the Executive Council's Audit Committee, but he also serves on the Executive Council and the Joint Standing Committee on Program, Budget and Finance as well. If there were one person who was uniquely situated to know just how much the Church is spending on lawsuits, it would surely be Bishop Stacy Sauls.

But there is another reason why this is such a remarkable answer: with all his unique access to the Church's financial data, Bishop Sauls still gives a wrong answer -- "It's in the budget." As readers of this series will know by know, the actual amount which the Church has spent, and is spending, on lawsuits over Church property is not in the Church's official budget, and never has been. The numbers shown in the budget are simple placeholders, and are constantly revised upward long after the fact.

Moreover, even when the numbers have been audited, they still are not the actual numbers. The annual audited statements swallow all the legal expenses under a line item for "Canonical and missional programs" -- see, for example, page four of the 2009 audited statements. But as explained in this previous part of this series, the Church is now also lending money to remnant groups to finance litigation against former dioceses and their parishes, and thus these sums show up as an account receivable, and do not count toward the total expense. They are misleading as a receivable, however, because they are unlikely ever to be repaid.

Moneys spent on Church-initiated lawsuits are not "missional" -- unless ECUSA has repudiated the sixth chapter of First Corinthians (which I sometimes think it has, de facto). If you make it your "mission" to steal when the Bible you espouse commands the contrary, then you are making a mockery of the word "mission." 1 Corinthians 6:5-7 says in part:

6:5 I say this to your shame! Is there no one among you wise enough to settle disputes between fellow Christians? 6:6 Instead, does a Christian sue a Christian, and do this before unbelievers? 6:7 The fact that you have lawsuits among yourselves demonstrates that you have already been defeated.
It would likewise be a mockery of Scripture for a Church to claim that the prosecution of lawsuits is an essential feature of its "mission." Are the lawsuits "canonical", then? Where, pray tell, does it say anything in the Canons about the Church taking its members or former members to court? It is surely one of the greatest ironies of the Presiding Bishop's massive resort to the civil courts in recent years to note that Canon IV.14.2 provides (with suitable emphasis added):

Resort to secular courts. No Member of the Clergy of this Church may resort to the secular courts for the purpose of interpreting the Constitution and Canons, or for the purpose of resolving any dispute arising thereunder . . .
"Any dispute" should mean "any dispute" -- including a dispute arising under the meaning and application of the Dennis Canon. But as we shall see in a minute, the Presiding Bishop has caused the Church to spend millions and millions of dollars in open violation of this Canon. It is thus a failure on the part of the Church's independent auditors to accept management's characterization of lawsuit expenses as part of its "canonical and missional programs." Such expenses are neither regular, canonical, nor missional, and ought to be called out for separate identification as the extraordinary expenses they are.

With the information gained from the previous posts in this series, let us see if we can make a stab at answering the question which Bishop Sauls avoided answering. Just how much has the Episcopal Church spent to date on lawsuits relating to Church property? Here are the pieces we have identified thus far:

Item: Amounts spent under Presiding Bishop Griswold in aiding property litigation in the Dioceses of Los Angeles, South Carolina and Long Island:

For the years 2001-2004, we must estimate these amounts, as the detailed monthly statements of operations for those four years are no longer online, and the audited financial statements for the same period do not break out expenses in any detail. Nevertheless, we know from the year-end 2005 statement of operations that the total so expended in that year was $ 453,013. (There were not any significant proceedings under Title IV at the national level in that year, so we may take this amount as reflecting nearly all litigation expenses incurred in the lawsuits pending in the three dioceses named above.) Based on this number for just 2005, when the Los Angeles lawsuits were incurring a good deal of expense, we probably would not overestimate too much the total expenses for the previous four years combined if we assumed it was another $ 450,000, for a total for all five years of $900,000.

Item: Amounts spent on "legal support to dioceses" for calendar 2006 -- thus mostly spent on Bishop Griswold's watch: $ 443,519; amounts spent on Title IV litigation (deposing bishops and clergy): $ 430,648 (the source is the year-end monthly statement for 2006).

Item: Amounts spent on "litigation assistance to dioceses" under Presiding Bishop Katharine Jefferts Schori, 2007 to 2009 (the source is the same year-end monthly statements):

2007 - $ 902,921

2008 - $ 2,060,211

2009 - $ 2,346,452

This three-year total comes to $ 5,309,584. But wait - we are not done yet.

Item: Amounts billed for legal services in 2007-2009 by Goodwin Procter, but then donated to ECUSA in exchange for tax deductions for the charitable contributions so established. We have these exact amounts thanks to the Notes to the Audited Financial Statements for these three years, under the heading "Contributed Services" (see, for example, Item 11 under Note B to the 2007 financial statements, at page 9):

2007 - $ 1,136,000

2008 - $ 1,015,000

2009 - $ 932,000

This adds a further $ 3,083,000 to the total for legal services in the first three years of the Jefferts-Schori era. (Even though the Church in effect received a donation with which to pay for them, it still incurred those legal services, and as noted in its audited financials, it booked them as expenses in order to offset the corresponding donation.)

Thus, from 2001 through the end of 2009, the Episcopal Church spent the following amounts on attorneys' fees to sue other Christians:

2001-2004 (estimated): $ 450,000
2005 - $453,000
2006 - $444,000
2007-2009 (paid): $5,309,584
2007-2009 (incurred additional [donated] fees): $3,083,000.

This comes to a total for the nine years of $9,739,584. And we still are not done, because the Episcopal Church has budgeted another three million dollars for the next three years:

Amounts spent or budgeted for litigation with other Christians, 2001-2012: $12,739,584.

To that princely sum we now should add the accumulated $ 2,133,000 spent on Title IV proceedings since 2006, when Bishop Jefferts Schori began her savage campaign to depose bishops and clergy without following canonical procedures. As the proceedings had were all illegal under the canons (or, as in the case of Bishop Bennison, futile), she should be charged with the full amount. And next, we add in the $1,003,000 she has budgeted for further depositions and Title IV proceedings. So that brings the total thus far to $ 15,875,584.

And (sigh) we still are not done! For now we have to add in the amounts loaned by ECUSA to the remnants in the former dioceses, so that they can continue to maintain their lawsuits to recover diocesan property. These amounts are not recorded as expenses, but as receivables -- even though they likely will be repaid only if the lawsuits are successful -- and even then, only if willing buyers are found for the properties (if any) recovered.

From the minutes of the Executive Council, we know that a total of $575,000 has been made available thus far to Bishop Lamb's group in San Joaquin, on top of the $1,200,000 in grants for "clergy salaries" in San Joaquin, Pittsburgh and Quincy. Because those grants replace money from pledges and plate collections, they represent at the same time money spent on litigation, and so it is appropriate to add them to the total as well. And while we are adding money spent by the dioceses, we should add $2 million spent thus far by the Diocese of Virginia, and a similar amount spent by the Dioceses of Los Angeles and San Diego.

We thus arrive at an estimated total of some Twenty-one Million, Six Hundred and Fifty Thousand Dollars ($ 21,650,000) dedicated thus far by the Church of Katharine Jefferts Schori to lawsuits and illegal disciplinary actions. That is quite a negative achievement for someone who has been in office for not even four years yet. If the spending continues at the same rate, by the time her term is up in November 2015 (and assuming her last budget is like those before it), she will have committed the Church to an impossible-sounding Sixty-Four Million Dollars in legal costs.

Those in the positions of power in the Church who are standing idly by and allowing this to happen are just as responsible as is the Presiding Bishop for this debacle. To continue on the current course may result in some victories, but they will be Pyrrhic ones, because the Church itself will be unable to bear the final cost of such a ruinous policy.

There is only one word for what has gripped the Episcopal Church at its highest national and diocesan levels since Bishop Jefferts Schori came into office, and that word is madness.

Quos deus vult perdere, prius dementat.


  1. Who would presume to raise charges of violation of Canon IV.14.2?

    And what is the process of discipline for clergy guilty of violating Canon IV.14.2?

  2. Man, a bear in most relations—worm and savage otherwise,—
    Man propounds negotiations, Man accepts the compromise.
    Very rarely will he squarely push the logic of a fact
    To its ultimate conclusion in unmitigated act.

    Fear, or foolishness, impels him, ere he lay the wicked low,
    To concede some form of trial even to his fiercest foe.
    Mirth obscene diverts his anger—Doubt and Pity oft perplex
    Him in dealing with an issue—to the scandal of The Sex!

    But the Woman that God gave him, every fibre of her frame
    Proves her launched for one sole issue, armed and engined for the same;
    And to serve that single issue, lest the generations fail,
    The female of the species must be deadlier than the male.

    (from Rudyard Kipling)

  3. You paint some very grim pictures here, Curmudgeon! The irony is that the Episcopal Church leadership would make the claim that they are upholding their "fiduciary duty", etc., etc., ad nauseum.

    So much for that bit of self-deception!

  4. My understanding is that Haley and Bilheimer is handling Schofield et al v. The Superior Court of Fresno County. (The Anglican Diocese of San Joaquin case)
    Has the date for argument of the case been finalized and will you be arguing the case?

  5. Emily, I assume you meant your comment for this post, and no, argument has not been rescheduled as yet. If you want more information, please email me; anything further would take us too far off the topic of this current thread.