Catholic leader reflects on recent events
STEUBENVILLE — The past four years have tested the patience and faith of the 31,000 parishioners of the Catholic Diocese of Steubenville, still in recovery mode after the bishop’s second-in-command and a former comptroller stole hundreds of thousands of dollars in diocesan funds and dangerously understated its financial condition.
Former Vicar General Monsignor Kurt Kemo, 64, and former comptroller David Franklin, 69, admitted stealing well over three-quarters of a million dollars from the diocese: Franklin, who also failed to turn over about 12 years of federal tax withholdings to the IRS, was sentenced to 18 months behind bars and agreed to make $532,115 in restitution. Kemo has already repaid $289,000 he took and was sentenced to six months at Eastern Ohio Correction Center.
The co-conspirators “had control and authority to manage the affairs of the diocese,” including bank accounts, bills paid from those accounts and payroll, prosecutors said.
Both have agreed to help authorities identify others who may have defrauded the diocese in the scheme, a study in deception, theft and betrayal dating back to at least 2008.
Bishop Jeffrey Monforton, who was present for both sentencings, decried the impact their crimes had on the diocese’s “ability to serve,” pointing out, “this is not what we’re about.”
“It was very disturbing, (their) intent was to defraud the Body of Christ, the church,” he said. “It’s outrageous. I know of parishes up in Michigan where pastors defrauded the parish … some were removed from the priesthood, some went to jail. On our scale, for it to happen to the diocese itself, it was inexcusable but I can’t dwell on it. Without question, it was disappointing, it was discouraging — but at the end of the day, I have to remember what I’m here to do as bishop, which is to evangelize.”
Monforton became the fifth bishop of the Diocese of Steubenville in 2012, about eight years after prosecutors say the financial misconduct began and a little more than six years before it was documented by a forensic audit he ordered.
Prosecutors said Franklin had kept a set of books to show higher-ups that painted a rosy picture of diocesan finances. Those books didn’t show the hundreds of thousands of dollars that had been diverted from their intended uses, the secret account where he and Kemo stashed that money or the hefty tax bill the diocese owed because he hadn’t turned over millions of dollars in withholding taxes to the IRS.
Monforton said the diocese had a financial review done every year and appeared to be operating in the black, “but we were really in red. When I arrived, we were hemorrhaging money (and no one knew it).”
He said the conspirators managed to conceal the diocese’s fiscal condition not just from him and others at the diocese, but also his predecessor, Bishop R. Daniel Conlon, the archbishop and the Holy See.
It wasn’t until they decided to declare mission status that the irregularities came to light. Mission status requires a more rigorous audit, which uncovered irregularities though they weren’t told what they were.
“(But) had we not discovered it, 30 months later we would have been ‘cash zero’ — we would have had to declare bankruptcy, because we were living well beyond our means,” Monforton said. “Mission status saved us on a lot of fronts.”
Franklin retired in 2017 and Monforton, admittedly uneasy, brought Patrick Henry in to be chief financial officer for the diocese, tasking him with reorganizing the financial department. It didn’t take him long to discover the 12 years of unpaid employee income tax withholdings. The diocese was forced to liquidate $3.5 million in unrestricted funds to cover the debt to the IRS. Four finance department employees lost their jobs, and hiring and wage freezes were instituted.
A forensic audit, paid for by the diocese, also was commissioned. When it was done, the results were given to state and federal prosecutors. The federal probe ended with Franklin’s indictment and guilty plea to federal tax crimes, but county prosecutors pushed forward with charges at the state level against him and Kemo.
Monforton said Henry, who left the diocese a few months ago to become CFO of the Wheeling-Charleston diocese, “did a fantastic job of realigning the finance office and working with the Schneider Downs,” the Pittsburgh accounting firm that did the forensic audit.
At their recommendation, the diocese implemented a series of safeguards to ensure it never happens again:
* Independent audits are now conducted yearly
* A third-party payroll system was set up
* All new personnel were hired for the finance office
* Two signatures are now required on every check issued by the diocese.
“I’ve been signing all the checks for the diocese for the last four years,” Monforton said. “Two signatures are required, but what’s most important is that I sign every check — if my signature is on top of that check, I know where it’s going. I go through the register for checks as well, so I see where everything is going. I have to approve the register, too, not just the checks.”
He sees the conspiracy as another example of “the fallen nature of humanity, another example that shows Adam and Eve definitely ate from the tree.”
“There’s no how-to book for bishops with something like this,” he said. “We did not learn about this in baby bishop school. I’m not going to forget this, but part of being a church is forgiving. Forgiving doesn’t mean we have to be naive. I have forgiven all involved, but I have to do what is right and just — the diocese deserves nothing less.
He said his advice to new bishops is to conduct a forensic audit before they do anything else.
“This could have been avoided if I’d come into Steubenville and decided to take everything apart and do a forensic audit, but there wasn’t evidence of a problem then and a forensic audit is expensive, it costs more than $100,000, and I was given assurances that the diocese was solvent by everyone from the Vatican to the local finance office,” he said. “Everything appeared normal when, in fact, it was anything but.
“This is something I would never have imagined would happen. Had I known (in 2012) what I know now, I still would have said yes to being bishop of the Diocese of Steubenville. This is still home … obviously my home has been trashed; it’s my job to clean it up. We’ve still got to live in this house.”