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Funds misused in the Anglican Church of Mexico

Posted on: June 7, 2002 4:12 PM
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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 Germán Martínez Márquez, 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 Martínez 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 Martínez 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 Martínez 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 Martínez' 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 Martínez 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 Martínez 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 Martínez-Márquez pledging at any time to an Anglican church. Several clergy in the diocese confirmed that Bishop Martínez' 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.

Article from: The Living Church by Steve Waring