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Presbyterian Mission Agency Board receives report on new church initiative

Actions resulting from independent investigation delivered at spring meeting

April 16, 2015

Louisville

The final report of an independent investigation into the incorporation and funding of a California 501(c)(3) nonprofit corporation by Presbyterian Church (U.S.A.) evangelism and church growth staff was delivered to the Presbyterian Mission Agency Board at its April 15-17, 2015 meeting.

After receiving the independent external investigation report and meeting in closed session, the board took the following actions:

  1. That the Board empower attorney John Sheller and team to work with Executive Committee and Executive Director to undertake appropriate steps to resolve employment issues with four named staff.

  2. That the Board communicate to the PCUSA our intention to be as transparent as possible as soon as sensitive personnel and legal matters are resolved.

  3. That the Board take appropriate action to ensure that the Incorporation Criteria are posted on CenterNet with other key PMA policies and that the Incorporation Criteria are linked on the PMA website to make them readily available.

Alston & Bird LLP, with lead attorney Mark T. Calloway, was hired in December 2014 to conduct the investigation surrounding the establishment of the Presbyterian Centers for New Church Innovation, Inc. (PCNCI). The initial attorney, George V. Crawford III of Butler Snow, LLP, is chair of the board of directors of a foundation for which a Mission Agency board member is executive director. Crawford was removed from the case to avoid any perception of conflict of interest, though the Mission Agency board's Executive Committee asserts they found no actual conflict of interest.

The decision to pursue the investigation was initiated by the Executive Committee of the Presbyterian Mission Agency Board during its November 14, 2014 teleconference at which the board specified the following actions:

  • Authorized an independent investigation into the incorporation of PCNCI, Inc. and the transfer of $100,000 in funds to that corporation.

  • Recommended to Linda Valentine, Executive Director of the Presbyterian Mission Agency, that she place the four employees named in the audit report on paid administrative leave during the investigation with direction to fully cooperate with the investigation.

  • Directed that the minutes of the Executive Committee be posted within 24 hours of the meeting.

 An October 8, 2014 report from Valentine to the board of the Presbyterian Mission Agency noted that PC(USA) legal services became aware of the corporation and $100,000 grant in March 2014. The results of an internal audit ensured the grant funds were fully returned to the PC(USA) in April, further grants were halted and the corporation disbanded. The complete audit report was delivered to concerned parties on August 13.

The report also states the “corporation was formed without following the Presbyterian Mission Agency policy on incorporation, without knowledge or approval of the Leadership Cabinet or the Board and without consultation with the Agency’s Legal Services. The employee who formed the corporation also applied to the Internal Revenue Service for 501(c)(3) status. This was done with knowledge of the supervisor and the supervisor’s supervisor.”

Following this report, Valentine issued a statement November 12, 2014 titled, “A word of regret and hope from Linda Valentine,” in which she provided information on her recommended course of action regarding those involved in establishing the PCNCI and affirmed her commitment to the 1001 New Worshiping Communities initiative. While not disclosing details of personnel actions, Valentine indicated her response to the findings included “some changes in job responsibilities, internal reorganization to provide closer supervision, additional financial oversight, ongoing review of policies and procedures, and the addition of an experienced financial manager to assure that financial controls are in place and that budget systems provide information for better management of funds and activities.”

Two days later, the Executive Committee of the Presbyterian Mission Agency Board took the actions noted above: initiating the external investigation and placing the four employees named in the audit report on paid administrative leave.

The Finance and Accounting office of the PC(USA) reports paid administrative leave for the four employees, inclusive of salary and benefits from November 14, 2014 to April 4, 2015, is $205,452. The cost of legal fees to date is $80,526: $4,424 to Butler Snow, LLP; $34,505 to Alston & Bird LLP; and $41,597 to Document Technologies Inc. The estimate of total legal fees, provided by PMAB chair Marilyn Gamm, to be paid to Alston & Bird LLP for the completion of the investigation is $500,000 to $750,000. No estimate of attorney fees to be paid to John Sheller of Stoll Keenon Ogden PLLC for the resolution of employment issues is available at this time.

Sheller and Gamm confirmed that no legal action is currently pending against the PMAB. Sheller said he expects the resolution of employment issues to take approximately one month.

Editor's Note: Links to stories and reports listed above have been removed as these items no longer exist for public display on PC(USA) web sites. An April 10, 2015, action of the Presbyterian Mission Agency Board instructed the board chair to work with Barry Creech, director for policy, administration and board support, to identify and remove from the public domain relevant documents pertaining to the PCNCI investigation and the four named. The documents listed in this action were to be removed by April 15, 2015.

  1. It should be noted that the "report" referred to in this article and quoted in it is NOT the infamous Alston & Bird report given to the Board on or about April 13, 2015. The A&B report is still being withheld, even from the lawyers for the four individuals, who demanded its release.

    by Rev. Schuyler J. Olt

    June 1, 2015

  2. If the 501(c)(3) corporation was formed with the knowledge and approval of the staff member's supervisor and that individual's supervisor, who presumably determined that there was no impropriety, then it would be a logical conclusion to an investigator that the Presbyterian Mission Agency policy on incorporation was obtuse, at best, or woefully deficient in terms of interpretation, at worst. Once it was determined that the "offenders" stood to experience no personal gain and the grant funds were returned to the PCUSA, the expenditure of $120,000 in legal fees to date and the suggestion that additional legal fees could be in the range of $500K to $700K should be cause for the Executive Committee and Board to be investigated for malfeasance and breach of their fiduciary duties to church members. In some circles, what has already occurred would be described as a "witchhunt", and what the Executive Committee and Board are doing now as "chasing their own tail" all at the expense of church members. Any need to ask me what I really think?

    by Paul Hibberd

    May 19, 2015

  3. Unfortunately, I suspect this is nowhere close to being over. Paid leave for this length of time actually provides even more fodder for counter suits. Their reputations have now been damaged by this entire process. And, if/when, we see punitive lawsuit awards, I wonder if there will be more "lessons" to learn by PCUSA.

    by Marc Satterthwaite

    May 18, 2015

  4. And let's pray for the families of the employees who are hung up in this mess.

    by Mark Hebert

    May 17, 2015

  5. Just so I understand - these employees didn't follow proper policies and procedures while trying to expand PCUSA ministry. When the improper grant was discovered the employees admitted their mistake and cooperated with the investigation, which found that none of the employees had any conflict of interests or would gain anything personally from the grant. If I've got my basic facts correct from reading prior materials (and I might not) then I'm failing to see the fireable offense here. Some employees with good intentions made a mistake, admitted it and the money was recovered. As a former investigative reporter, if this happened in government it wouldn't have been worth my time to investigate and it certainly wouldn't rise to the level of calling for one's head on a platter. I'm wondering what happened to grace and forgiveness in my church.

    by Mark Hebert

    May 17, 2015

  6. Remembering all in my thoughts and prayers and hope an equitable solution is achieved. You all are good folks with good intentions ...don''t let systems hurt people ...this has happened too many times. Peace Helen

    by Helen Morrison

    April 22, 2015

  7. >>>The report also states the “corporation was formed without following the Presbyterian Mission Agency policy on incorporation, without knowledge or approval of the Leadership Cabinet or the Board and without consultation with the Agency’s Legal Services. The employee who formed the corporation also applied to the Internal Revenue Service for 501(c)(3) status. This was done with knowledge of the supervisor and the supervisor’s supervisor.”<<< The painful truth. This says it all. Trust has been broken. Sometimes a mistake cannot be fixed but becomes a lesson to be learned. Of course they did not do it for monetary gain, but they DID circumvent the system which is tragic, deceitful and unethical. Eight months of paid administrative leave is enough. It is time to move on and rebuild trust in this initiative. PLEASE. Now is not the time to waffle with indecision. May God continue to be present to all involved. We are praying for you and PCUSA.

    by Erin Thomas

    April 17, 2015