Render Unto Rome_ The Secret Life of Money in the Catholic Church - Jason Berry [147]
By 1997 Joe Smith as CFO had a base pay of $70,000, plus $12,000 from Cemeteries, plus the $250,000 bonus to cover five years of raises. Moreover, testimony from a witness given immunity confirmed that Smith pulled in $1,200 a month in a sweetheart deal from a church insurance vendor on his Florida condo. If we factor the bonus at a per annum $50,000, Smith was earning $146,400 before the profits from Tee Sports, which ran the Bishop Pilla Golf Classic and such functions. In 2000 his base pay rose to $135,000. In sum, the church was paying Smith as well as the private sector that Father Wright wanted to prevent him from joining.
The trial elicited similar testimony from Pilla as before. The jury had to decide between the prosecution’s version of a financial cover-up and kickbacks by Smith and Zgoznik—or the defense’s version of a secret deal between Father Wright and Joe Smith, with Zgoznik as the outsourced vendor routing the money, all done according to the diocese’s secret methods. The jury acquitted Smith on the fraud and kickback charges; he went down on six charges of filing false income tax returns, including failure to report $150,000 in earnings.
“At the end of the trial I thanked the judge,” says Joe Smith. “She told me, ‘I know you’re not guilty of the diocesan stuff—in fact you’re the victim.”
The self-serving words of a convicted felon? That is one interpretation. Judge Aldrich, who ordered Smith (and Zgoznik) to make financial restitutions, died before I was able to contact her about Smith’s comment. Well before that, the prosecution presented Aldrich with federal sentencing guidelines for the scope of charges on which Anton Zgoznik was convicted: ten years in prison. Aldrich gave Zgoznik the identical one-year-and-one-day sentence as Smith. A year and a day means eight months if an inmate shows good behavior. Smith and Zgoznik each served the short sentence, returned to their families, and began picking up their lives.
What does the legal resolution tell us? Pilla and Wright were never punished for running a religious charity like a set of fiefdoms, making their own rules for spending Catholic donations. Under oath, Wright admitted keeping Smith’s bonus a secret from Pilla and the supplemental pay of $784,624 over seven years. Why was Wright afraid to tell Pilla what he confided to another priest, his spiritual director? The most plausible answer is that he feared Pilla would not approve—Wright didn’t want a bishop’s scrutiny on how his barony facilitated funds to his girlfriend or Cemeteries’ Tom Kelly, just as Pilla did not want others snooping into his $500,000 savings account or the deed he coveted for the house donated by the Dolans. Secrecy ruled the financial baronies.
In the end, Judge Aldrich saw Zgoznik as a fall guy for church officials’ dishonesty. The winner was the Jones Day law firm. All those billable hours! Steve Sozio did what high-dollar defense attorneys do for dirty clients: he turned them into witnesses against smaller fish. The U.S. Attorney did what prosecutors do: move the case with the strongest evidence. The big piece was Zrino Jukic’s secret tape recording; the weak link, Wright and Pilla as victims. Had Rotatori done a better job cross-examining Jukic and Wright, and had Zgoznik never testified, his trial may well have ended differently. The Smith jury rejected the charge that his nearly $785,000 off-the-books were kickbacks. Smith told me his attorney’s fees exceeded $1 million. The Cleveland diocese surely spent several times that to protect Pilla, Wright, and what credibility they had.
ASSETS TO THE SUBURBS
As the financial scandal receded, Bishop Lennon got down to business. In March 2009 the diocese announced it would close twenty-nine Cleveland parishes outright and an additional forty-one would merge with others. Across the eight counties, fifty-two churches in all would close. The inner-city and