While a $17.5 million embezzlement scandal plays out in court, the fighting has reached the highest ranks of the diocese — and appears to be closing in on former Bishop Anthony Pilla and the diocese’s former chief accountant, Father John Wright.
It began in 1997, when ex-CFO Joseph Smith and Anton Zgoznik are alleged to have begun a massive kickback scheme. The U.S. Justice Department claims the two men steered $17.5 million in diocese funds to Zgoznik’s companies, which in turn kicked $784,000 back to Smith for “consulting.”
Since 2004, when the scandal forced Smith from his job, Pilla and Wright, the longtime head of the diocesan Financial Office, have generally invoked a “we trusted unscrupulous individuals” brand of defense. But lawyers for Smith and Zgoznik say their clients were merely following orders from the two priests.
Now the gloves are coming off.
Defense attorneys want to subpoena financial records from the diocese and other institutions connected to the case. At issue is whether it was common practice for church leaders to use off-the-book accounts to reward valued employees. It’s an argument at least partially supported by the feds.
Smith’s indictment refers to a special fund — created in 1996 by “the then diocesan financial and legal secretary” — which paid Smith $270,000 in unreported income in addition to his regular salary. Wright was not only the financial and legal secretary at that time, but his name was on the account, according to the feds.
Philip Kushner, Smith’s lawyer, also asserts the diocese used creative bookkeeping to pay Wright, his friends, and relatives over $700,000, and that Pilla had his own secret account in excess of $500,000 that “has never appeared on the [diocese’s] books and records.” The “Anthony M. Pilla charitable account,” as it was called, was used for large cash withdrawals by the bishop, according to Kushner.
In a church press release, Pilla calls the accusations “scurrilous.” Smith and Zgoznik “have resorted to false statements, half truths, and innuendo against [Pilla and Wright],” says the statement.
The U.S. Attorney’s office has filed motions to halt the release of diocese financial data. Church lawyers are also trying to suppress the request.
But for a church widely stung by the secrecy — and subsequent payouts — of its massive pedophile scandal, attempts to once again bar a public viewing of the diocese’s inner workings have a familiar ring.
“I would think that when you’re a large, nonprofit religious organization, that you’d want all your parishioners . . . to know precisely every detail of the financial transactions you’ve ever made,” says Robert Rotatori, Zgoznik’s lawyer.
In the meantime, the revelations just keep getting worse for Father Wright. On March 15, Rotatori filed a motion that singles out Marilyn Ruane, an employee of the Catholic Cemeteries Association. (Church officials refuse to say what Ruane’s job entails.) Wright, who now heads the CCA, described Ruane as a “friend” in a 2005 interview with prosecutors. He also admitted that he helped the woman get a job at Resultant Corporation, a company that did unexplained business with the diocese.
Rotatori asserts that Wright arranged for Resultant to be paid over $290,000 through Zgoznik’s companies between 1997 and 1999, “in large part for [Wright’s] personal purposes.” The motion seeks Resultant’s financial records to establish how much of that money went to Marilyn Ruane.
According to a Justice Department interview with Zrino Jukic, an associate of Zgoznik, “Ruane . . . was on the payroll at Resultant Corporation, but didn’t work there.”
More to the point: “Ruane was Father Wright’s girlfriend.”
That may explain why, according to Rotatori, Ruane made $31,500 when she started at Catholic Cemeteries in 1997, but had catapulted to $81,000 by 2004. If the raises seem a bit outsized for a religious entity funded by the dollar donations of little old ladies, Ruane isn’t talking. “I really don’t want to comment about that,” she said sweetly when contacted by Scene, “but thanks so much for calling.”
Wright’s lawyer, Kevin Spellacy, calls the girlfriend claim “a cheap shot,” saying it’s unfounded. But when asked expressly if the claim is false, he declined comment and refused to put the direct question to Wright.
In the meantime, Catholics are left to wonder if the same men who ran the pedophile cover-up were draining the collection basket in their spare time.
This article appears in Apr 4-10, 2007.
With regards to the article on the Cleveland Catholic Diocese, I have to say many things have now been enlightened for me. It’s like a huge puzzle you have a hard time putting together and all of a sudden, pieces start falling into place. As a life long catholic (I’m 38 years old), I’ve been struggling with my faith in what I thought was only one priest, but after reading this article, I now realize it’s most likely a “trickle down” affect. It would be really interesting to know what the “smaller” parishes within the diocese are doing with their finances, but from I understand, it’s none of the parishoners business. I guess they will answer to God when the time comes.
Thanks for the article!
Whatever happened to truth? Confessionals are not to flush away recurring sins. I hope
there truly is a Heaven and Hell, and guilty parties truly spend eternity with whom they have served. When lawyers are involved to keep the truth from emerging it is time for
Christ to swing the sword of Justice. All this money spent on so few, while so many need help. So many struggling Parishes. If these men are guilty it truly shows that Satan is alive in their hearts. Two thousand and seven years of struggle undermined in one lifetime. If there are priests that are aware of injustices I beseech you to speak up as Christ would expect. Follow your hearts and not instructions of Diocese officials.
It certainly will be interesting to see how this all plays out in the courts. It would be wonderful if it weren’t true but I don’t hold out much hope that that is the case.
Sad, very sad.
It does point out that accountability and transparency are practically as non-existant in the financial areas of the church as they are in the area of the sexual abuse of minors by clerics.
It is up the the people in the parishes, in the pews to demand that real changes are made in the running of our church.
These events were prophesized by Jesus two thousand years ago.
Luke 12: 1- 4:
He began to say to his disciples first, “Beware of the leaven of the Pharisees, which is hypocrisy. Nothing is covered up that will not be revealed, or hidden that will not be known. Whatever you have said in the dark shall be heard in the light, and what you have whispered in private rooms shall be proclaimed upon the housetops.”
How perfectly this prophecy fits. First the awful truth about the rape, sodomization and molestation of children was brought into the light and now the financial improprieties of the same group are making headlines across the country. The secrets will not end until there is transparency. Transparency will not begin until the pew people take back their church from a tainted hierarchy.
Knew this all along,this only re-enforced my distust of Pilla , and the Gang downtown. It is shame when I have to perform the perpetual care on the gaves of my relatives that they “paid” for at Calvary Cemetary. The place is non, or poorly cared for, potholes, gaves not trimmed with the “excuse” that there is no money. This is the “reward ” that the Good Catholics got for Pray, Pay, and Obey. My cousin recently moved his father out of there to a better cared for cemetary. My dad is in a secular cemetary (grave blessed) along with others from our church in additon to the fact that a average grave cost a thousand more than in a “secular” cemetary due to that fact. Rome sent us a accountant ( Lennon) to make things profitable for Rome.
As the the “Cooked Books” that is the norm in the local parishes. Some not all Pastors have two sets of books, one for the IRS, and Diocease ( to get a Lower assesmant), and one with the truthful figures. It was funny during Pilla’s reign that a lot of new churches where built, or remodeled of course with aproved labor, and contractors.
Stiil a Catholic, but hold the bucks back, and don’t listen to “dowmtown” very much (at all).
Now maybe all you local people in Cleveland will open your hearts to Truth and embrace the Holy and Divine Love message and partake of the graces that are being abundantly poured out in your own back yard – see http://www.holylove.org. Look at all the trips / pilgimages from other states people took just last week to Elyria – you in this Diocese are being taken care of in such special way by Blessed Mother and Jesus – THE United Hearts. Isn’t it any wonder why they have chose you to visit humanity today when we read what was taking place in the dark by Bishop Anthony Pilla and others. Open your eyes and Thank and Praise God for this wonderful and most beautiful gift you have there now.
Pilgrimages to Maranatha Spring & Shrine April 2007
April 13-15, 2007
Pilgrimage to Holy Love Shrine from Houston, TX area
April 14-15, 2007
Pilgrimage to Holy Love Shrine from Evansville, Indiana
also St. Louis Missouri, Louisville, Kentucky, and Illinois areas close to the Indiana line & Cincinnati OH
April 12-17, 2007
Pilgrimage to Holy Love Shrine from Augusta & Saco Maine, Portsmouth NH, MA, CT, PA
April 14-16, 2007
Pilgrimage to Holy Love Shrine from Lehigh Valley, PA
April 14-16, 2007
Pilgrimage to Holy Love Shrine from PA / NJ / DE / MD
April 13-15, 2007
Pilgrimage to Holy Love Shrine from North Carolina
April 13-16, 2007
Pilgrimage to Holy Love Shrine from Fort Lee NJ, Bronx NY, Queens, NY
April 13-16, 2007
Pilgrimage to Holy Love Shrine from Atlanta Georgia
April 14, 2007
Pilgrimage to Holy Love Shrine from Columbus, Ohio
Read the Truth here: http://www.holylove.org/holy%20love%20book/truthful_history.pdf
and open your hearts once and for all. Strengthen your faith and pray for Bishop Pilla and all who were involved in this.
God Bless you all in Cleveland and surrounding areas and i extend to you all, the Blessings of the United Hearts of Jesus and Mary and individually the anointing of St. Michael.
In Holy Love,
Tom (Cary, NC)