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Shake-up of Top Executives of the Washington National Cathedral

Shake-up of Top Executives of the Washington National Cathedral
2012 Trial Date Set For the Diocesan Termination of the Soper Trust Fund

By Sarah Frances Ives
A Virtueonline Exclusive
www.virtueonline.org
October 7, 2011

An unparalleled executive management shake-up at the Washington National Cathedral has happened this week without public notification. At the same time according to sources, Bishop-elect Mariann Budde has privately announced the departure of the Executive Vice President and Chief Operating Officer, Joseph W. Smolskis, of the Protestant Episcopal Foundation (the governing body of the Cathedral)."

Budde recently informed Bishop John Bryson Chane that he will not be interim dean of the Cathedral as soon as she is consecrated on November 12, 2011.

Chane had planned on remaining until the end of 2011 or, even longer, until the installation of the next dean. At the same time according to sources, Budde has privately announced the departure of the Cathedral's Chief Operating Officer, Joseph W. Smolskis of the Protestant Episcopal Foundation (the governing body of the Cathedral). Dean Samuel Lloyd had already departed on September 18, 2011. With this announcement, the Cathedral loses its top three executives.

Very little of this is being publicized, even as the Washington National Cathedral has asked for a national campaign to raise $25 million dollars to stabilize the building which was damaged by the August earthquake, as well as paying for its continuing operations.

This tremendous upheaval at the Cathedral reveals an emerging scandal of mismanagement or even possible financial shenanigans. A business executive not connected with the Cathedral said, "This is the Cathedral's moment of greatest need. You wouldn't change the top executives at this moment of crisis unless there were serious problems."

It is becoming clear that the Cathedral and the Diocese of Washington have two simultaneous crises. The remaining executives are manipulating the crisis of the earthquake damage in a vain attempt to hide the other.

The July 2011 rapid process of choosing Bishop Chane as the interim dean of the Cathedral appeared unusual even then. Before Dean Lloyd even handed in his resignation, Canon to the Ordinary Paul E. Cooney sent out an email announcing Chane's appointment as interim dean. It is not known whether Lloyd left under his own volition or was allowed a dignified departure.

Signs have emerged for years that both the Diocese and the Cathedral are getting into financial troubles.

The Diocese has used nearly one-and-a-quarter million dollars a year from the Soper Trust Fund to cover operating expenses. With the support of Bishop Chane, the Cathedral undertook a huge construction project for an underground parking lot that, according to internal sources, has been a financial loss. Despite the legal requirements of its nonprofit status for open financial disclosure, the Cathedral has not placed a full financial report on its website since 2008.

Many closely connected to the Diocesan Church House and the Cathedral believe that only one would survive because there could not be two significant fundraising projects requesting donations from similar sources.

Another murky issue has emerged in the quietly handled Diocesan lawsuit to terminate the Ruth Gregory Soper Memorial Trust Fund and transform it into a diocesan bank account. About $27 million dollars were present in this Trust at the end of 2007. By 2011, the Soper Trust Fund had decreased to $23 million.

With no other surviving beneficiaries to the Trust, under the leadership of Bishop Chane and Paul Cooney, the Diocese of Washington aggressively seeks to wrest the trust away from the trustees at PNC bank and take the money entirely as their own.

This lawsuit began quietly on October 8, 2010, in the US District Court of Maryland. PNC Bank (formerly Riggs National Bank) is fighting vigorously to stop this action. Because of the disputed facts about the very nature of the Soper Trust, a trial date of January 23, 2012, has been set.

On January 20, 2011, Cooney filed a declaration apparently supporting this diocesan aggression against the trust status.

In a June 6, 2011 court document, United States District Judge Peter J. Messitte stated that because the Diocese is the remaining sole beneficiary, he would allow the lawsuit to continue.

In opposition to this, PNC argued that the Trust status should be continued in case the Episcopal Church should no longer exist. Messitte asserted that it was difficult to imagine that the Episcopal Church could fail. Judge Messitte writes, "Moreover, the possibility that the Protestant Episcopal Church, which the Court judicially notices dates back to pre-Revolutionary War times in America and as part of the Church of England for centuries before that, might cease its existence or lose its eligibility as a charity is unlikely in the extreme.

"In other words, not only did Mrs. Soper not contemplate beneficiaries beyond the Diocese, the likelihood that one would ever come into being is virtually nil. Apart from the Diocese, then, as a practical matter, there appears to be no other potential beneficiaries, known or unknown, that need to consent to the termination of the Trust." (The Convention of the Protestant Episcopal Church of the Diocese of Washington plaintiff v. PNC Bank, NA, defendant, pg. 6.) Clearly the judge does not understand that TEC is rapidly shrinking and could quite likely fail.

On September 22, 2011, Judge Messitte signed a court stipulation about the impending trial. The Diocesan website makes no mention of this crucial lawsuit and their plan for the millions of dollars involved. The judge has given both sides until today, October 7, 2011, to respond to the latest motions for summary judgment.

The secrecy about this from the Diocese and the Cathedral is leading to frantic rumors and intense speculation. The possibility exists that the lawsuit over the Soper Trust has helped contribute to the rejection of Bishop Chane as interim dean of the Cathedral and the unexpected departure of Smolskis.

The Diocese appears to want the use of this remaining $23 million without the observation of PNC bank officials, although in the lawsuit they state that they want to avoid PNC management fees. These PNC fees of about one hundred thousand annually seem fairly inconsequential for the handling of this large amount of money. It also raises the question of what diocesan official has the needed expertise to invest this $23 million wisely, especially in the light of our troubled economic times. Since its creation in 1967, the Soper Trust Fund has been a major part of the identity of the Diocese of Washington. If this currently professionally-managed Trust Fund is transformed into a Diocesan bank account without separate oversight for the money, trouble looms.

Privately, diocesan officials express concern about the possible intermingling of funds between the financially-distressed Cathedral and the Diocese.

Many questions remain to be answered. An independent investigation into the full scandal about to erupt in the Diocese of Washington and the Washington National Cathedral should begin immediately.

Bishop Chane has asked for the financial support of the entire nation. Before many potential donors fall into this swamp of financial uncertainty, the Washington National Cathedral and the Diocese of Washington need to put their financial house in order and make all of it public.

The lawsuit over the Soper Trust and the current shake-up of top Cathedral executives needs to be disclosed and explained.

END

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