Church Embezzlement

One day this past summer I was walking along a mountain trail when I ran into a pair of hikers. We talked a little and before I knew it they were telling me about their church in a wealthy neighborhood of Connecticut where the priest had been caught embezzling millions of dollars to support his boyfriend’s lavish lifestyle.

I guess I kind of filed away the story in the back of my mind until I read a New York Times story the other day titled “Embezzlement Is Found in Many Catholic Dioceses“:

A survey by researchers at Villanova University has found that 85 percent of Roman Catholic dioceses that responded had discovered embezzlement of church money in the last five years, with 11 percent reporting that more than $500,000 had been stolen.

I am tempted to think about these stories in the same way that I used to think about Enron. Will the people demand reform? Will there be new accounting guidelines, including data processing controls, perhaps like applying SOX to churches? (Perhaps I should also ask whether the people who benefited from the fraud will become President of the US?)

Then I read quotes in the Times such as this:

“We think if you work for a church — you’re a volunteer or a priest — the last thing on your mind is to do something dishonest,� Mr. Zech said. “But people are people, and there’s a lot of temptation there, and with the cash-based aspect of how churches operate, it’s pretty easy.�

Is that really true? I thought the church was to help people who needed help, and to avoid assumptions about people being naturally inclined to make the right decisions on their own when faced with temptation. Perhaps financial sins and commandment violations are now regarded as less significant than topics like marrying someone of the same sex.

Hmmm, wonder what would happen if a church discovered that its priest was embezzling money from gay couples. The money would be tainted, but if it helped support the church’s mission…unless of course the priest was also gay and supporting his secret lover….

Back to the story, I think this quote makes a great deal more sense as to why so much fraud has been found:

“Churches have a tendency to be in denial about the potential for this conduct in their midst,� Mr. Knapp [director of the Southern Institute for Business and Professional Ethics, at Georgia State University in Atlanta] said. “When ethics seminars or ethics codes are proposed in churches, they are often met with resistance from people who say, ‘Why in the world would we need this? After all, this is the church.’ Whereas in business, people readily recognize that this sort of thing can happen.�

Indeed, although I have to say my experience has been that good people do bad things more than bad people lurk around waiting for the right moment to flex their unethical behavior. In other words, people seem to go off the rails when they self-rationalize actions under duress of externalities or environmental changes, or any number of odd motives. So it is probably not so much about universal ethics and dissuading people from the evils of temptation as it is figuring out who believes that they have justifiable “need” or can become righteous in seeking “salvation”. And from that perspective, it might be even easier to see why Churches would be in denial about it being a problem.

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