Following more than six months of investigation into how funds were routed from the Presbyterian Church (USA)’s 1001 Worshiping Communities area to an outside organization, four employees are “no longer with the Presbyterian Mission Agency,” and one of those four men has already filed a defamation lawsuit against the denomination.
During a 4 p.m. (EST) conference call on Monday with various news organizations, PMA Board Chair Rev. Marilyn S. Gamm read the following statement:
At its April meeting, the Presbyterian Mission Agency Board empowered attorney John Sheller to work with the Executive Committee and Executive Director to take appropriate steps to resolve employment issues with four staff following the 2013 creation of an independent corporation related to the Presbyterian Centers for New Church Innovations, Inc. The four employees are no longer with the Presbyterian Mission Agency. Because this is a private personnel matter, we cannot provide any other details. These four individuals have made significant contributions to the Presbyterian Mission Agency and to the wider denomination over the years. They have been and continue to be faithful servants of the church.
The four, now former, employees are:
- Roger Dermody, deputy executive director for mission
- Eric Hoey, director of Evangelism and Church Growth;
- Philip Lotspeich, coordinator for church growth, and
- Craig S. Williams, staff person for the western regional office of the Presbyterian Centers for New Church Development
When asked if the employees had resigned or been terminated, Gamm refused to say, calling it a private, personnel matter and reiterating that “they are no longer with the PMA, effective today.” She said that the four employees did not receive any financial or severance packages from the PMA, but did receive approximately $242,000 while they were on paid administrative leave during the six month investigation.
The four employees were put on paid leave on Nov. 15, 2014, following an internal investigation which revealed the formation – without PMA authorization – of an independent organization called Presbyterian Centers for New Church Innovation Inc. A $100,000 grant orchestrated by one or more of the identified staff to that corporation. Another grant was stopped before it could be sent to the new corporation after the scheme was discovered.
A report from the PMA’s audit committee stated that if fully developed, the plan would have removed a major mission agency program from the PMA’s oversight.
Linda Valentine, executive director of the PMA has said that the grant money was returned in full after the investigation began. She also stated in the past that there was no indication that any of the four employees were trying to benefit personally from the plan.
Lawsuit filed
According to Leslie Scanlon of The Presbyterian Outlook, Dermody filed a lawsuit on May 29 “against the Presbyterian Church (USA) A Corporation (which is the denomination’s corporate identity) in Jefferson County Circuit Court in Louisville. The lawsuit alleges that PCUSA statements that he and done something ‘unethical’ were ‘false and defamatory, have caused Dermody substantial public embarrassment and shame, and have substantially compromised Dermody’s future employment and financial prospects.’”
Dermody claims in the lawsuit that he didn’t know that the other employees had set up an unauthorized independent corporation or that PCUSA funds had been sent to it.
Scanlon reported that Dermody is seeking “a jury trial; a judgment against the PCUSA for defamation; and ‘an award of compensatory damages in an amount, to be proven at trial, that will compensate him for public embarrassment and humiliation, compensate him for the adverse effects on his future employment prospects and career, and compensate him for the adverse effects on his future earnings and financial stability.’”
Costs of investigation
Gamm said that legal fees for the investigation into the $100,000 grant to the outside corporation have cost the PMA approximately $850,000, but that total, she said, does not include all the fees owed to the current lawyer — John Sheller – who is now representing the PMAB.
It was an “expensive way to go about it,” said Gamm, but the PMAB felt it had “an obligation” to conduct an independent investigation into how the church’s funds were used.
The fees will be paid from the unrestricted reserve fund, or the Presbyterian Mission Program Fund (PMPF), said Gamm. That account, however, is an area of concern for the board’s financial committee. Projections by the committee indicate that the PMPF will total less than $1 million over the required minimum by the end of the year and that by 2017, there may not be enough money in the reserve account to balance the PMAB’s budget. Depletion of the reserve account is already having a negative impact on World Missions.
Scanlon also reported that during an April 10 conference call, the PMAB voted to remove all documents and articles about the 1001 investigation from the PCUSA web site. She wrote that the board voted “to instruct Barry Creech, the Presbyterian Mission Agency’s director for policy, administration and board support, to ‘identify and remove from the public domain’ documents related to the investigation, with the action to be taken by April 15, and ‘to create a list of those documents for inclusion in these minutes’ of the April 10 meeting. The documents that were removed from the PCUSA website included minutes of board and committee meetings and Presbyterian News Service articles related to the controversy.”
Related articles:
Why wasn’t Linda Valentine’s resolution good enough in the 1001 debacle?
Craig Williams responds to 1001 announcement
Dermody files lawsuit: PCUSA’s statements were false and defamatory
Read the complaint: Roger Dermody v. Presbyterian Church (USA), A Corporation
13 Comments. Leave new
Who signed the check(s)? I would also assume that there was written memo/authorization for the check(s). Who signed the authorization?
I understand the idealism and zeal of those who committed a part of their careers to this effort not wanting the fund, once committed to 1001, to be usurped by another program. As the money and membership dwindle, their is more pressure for eyeing someone else’s budget. However if 1001 failed because the resources were shifted; then that is on the PMA. Additionally, the time spent would not be for naught, it would have been a learning experience and some new churches would have been birthed.
Mr. Mowat,
All the parties involved were employees in the 1001 New Worshiping Communities silo. If you think of a ladder with rungs, Mr. Williams is the bottom rung, then up a step to Mr. Lotspeich, up another rung to Rev. Hoey and the top rung is Rev. Dermody who was second in command to Linda Valentine who heads the Presbyterian Mission Agency. It does not seem that there was any attempt to move money dedicated to the New Worshiping Communities to another purpose. The unauthorized entity was established to foster the same. Ultimately, no money was actually “lost.” The $850K referenced in the article is the amount spent to date by the PMA Board on its own investigation.
That is an outrageous amount of legal fees spent on the investigation. And I say that as a lawyer.
Having followed a number of similar cases of alleged mishandled funds, poor oversight, lawsuits, discovery and depositions, this case is sadly familiar in today’s America. I pray for all involved to find a just resolution. I’m keeping an open mind; the former employees could have been totally clean, or they could have been sloppy, or worse. We just don’t know enough. PCUSA hasn’t had a chance to state its case, so in the meantime, (discovery and depositions), I’ll pray for all involved. These cases always look bad for the defendant at first, because the plaintiffs fire the first shots, so to speak. Even after a trial, there could be appeals, etc. Could take four or five years to sort out.
The article says the 4 made $242,000 during approximately 6 months of paid leave. That translates to $484,000 annually, or an average of $121,000 per person for the 4 employees annually. I have worked with and for quite a few non-profits and to have 4 out of 4 employees with none at the very top of the organization averaging $121,000 in salary seems rather high, especially since that organization is talking about not being able to fund operations the way they currently do in another year or two.
The PMA is dysfunctional on many levels. The 1001 Worshiping Communities registering non-worship activities as part of those communities. Mission giving is down, and I suspect that this year they’re going to see less given in the Special Offerings, due to the nitwits who sent out the One Great Hour of Sharing materials three weeks into Lenten Period when its collected, as well as the Pentecost offering materials that arrived the week after Pentecost !!!
If this whole situation does not show how much the louisville sluggers need to be replaced, nothing will, and this is just one instance, but our very very humble stated clerk, and our round robin moderator tell us how the pcusa is impacting the world, oh yeah, this is just like a Billy Graham crusade, instead of heading to the podium to repent, we got this.
At some point something’s got to give. Who’s investigating louisville, their own hand picked attorneys at already 850k, is this an investigation, or a cover up?
Exaxctly what my mind was mulling over when I read that, David!
When looking at government or non-profit employee compensation/pay, always ask for ‘total compensation costs.’ The director or government official will look at you bewildered when you ask for total compensation figures, which includes hidden costs such as benefits, pension, health care, matching social security, etc.
Those legal bills seem a tad bit high, ya think? If this was a small business operator (which often is the case) that business owner would be ruined financially and somewhat emotionally. Shows why so many businesses have either shuttered, sold out, or left the USA for friendlier foreign soil.
The four top leaders of a very important part of the mission of this denomination were just let go. That is years and years of experience and
represents the vision of this department. This will affect every employee at PC(USA) in any administrative position. It affects the morale, team work, unity, and progress of evangelism, church growth and outreach.
The lack of grace is disappointing! The lack of leadership from above these four is disconcerting because there was no team spirit being built, nor unity of vision, and absolutely no trust. Now it will take years and years to build up what is lost by letting these four people go at a time when there is already chaos? The lack of stewardship is unbelievable. Then there is a lack of love for your own employees who made a mistake, and I believe made without malice. It is a sad day for all.
Okay wait, let me see if I’ve got this….
2015 Youth Triennium budget is overspent by approximately 15%. Net loss: $287,213.
Action of PMA: Conduct internal audit, publish the results of the audit, and agree to restructuring of future procedures.
1001 grant of $100,000 is returned. Net loss: $0
Action of PMA: Conduct internal audit, do not publish the results of the audit, and fire four staff members.
$850K spent by PMA to date to conduct the above audit. Net loss: $850K
Say what?
Typo: 2013 Youth Triennium