Financial Crisis Grips Greek Orthodox Archdiocese of America; Millions from St. Nicholas Fund Used to Fund Deficits

Financial Crisis Grips Greek Orthodox Archdiocese of America; Millions from St. Nicholas Fund Used to Fund Deficits

written by Gregory Pappas September 27, 2017

Gross financial mismanagement and out-of-control spending at the Greek Orthodox Archdiocese of America has culminated in an unprecedented financial crisis at the century-old institution headquartered in New York City.

Although largely insulated by a close cadre of supporters, the gross mismanagement has come during the tenure of Archbishop Demetrios and an expansive network of employees and volunteer committees that were largely appointed— and some say— protected, by the Archbishop for years.

An email from Michael Psaros, treasurer of the Archdiocese, that was shared with dozens of members of the Archdiocesan Council outlines millions of dollars of deficits and an institution with an annual budget of almost $30 million that “lacked even the most basic internal controls with respect to expenditures, vendor and travel management, and other basic matters of basic corporate governance.”

What’s worse— and possibly illegal— is the fact that “to fund the deficit over the past two years, segregated/restricted accounts were invaded,” according to Mr. Psaros.

In lay terms, this means that funds that were raised and allocated for a specific purpose were tapped to run administrative expenses, like the Archbishop’s travels and other costs unrelated with the original donor intent.

An anonymous source familiar with one of the specific funds that was “invaded,” confirmed to The Pappas Post that approximately $3.8 million that was raised for the rebuilding of the St. Nicholas Shrine at Ground Zero was transferred to Archdiocese accounts to pay bills unrelated to St. Nicholas.

This raises profound questions amongst donors and faithful about how (or if) the money will be replenished, who authorized such nefarious actions, and under whose authority such activities were allowed to take place.

The Archdiocese has already fired 30 employees and has ceased publishing its newspaper, The Orthodox Observer.

In his unofficial email to fellow council members, Psaros calls the cash-flow problem at the Archdiocese “acute.”

But no official communication about the crisis has come from the Archdiocese or Archbishop Demetrios, under whose watch all of this has transpired.

Mr. Psaros’ email came after a strongly-worded email from Lazaros Kircos, a member of the Archdiocese Council from Detroit who said “It is inconceivable to me that there is this much turmoil at the Archdiocese; that the chief administrative officer resigned or was forced to resign; that “bankruptcy” is rumored; and with all that, there has been no official communication to our governing body, the Archdiocesan Council.”

“The impact of these events is devastating to our Church and worsens each passing day, Kircos told Psaros in his plea for more information, adding that “We council members cannot help our Church if we have no information.”

The Greek Orthodox Archdiocese of America is a loose overseer of affairs of the church in America, which is broken up into the independent Metropolises of Boston, New Jersey, Pittsburgh, Atlanta, Chicago, Detroit, Denver and San Francisco.

Although each Metropolis is an independent entity that governs its own administrative affairs, the Archdiocese is in place to manage national ministries like Greek education, youth and young adult activities and projects like Ionian Village.

The Archdiocese also has under its immediate administration more than 60 parishes in the New York metropolitan area called the “Direct Archdiocesan District.”

The Archdiocese, headquartered in New York City’s Upper East Side on E 79th Street, has often been accused of lavish spending, including first class travel, excess staff and even defrocked priests remaining on the payroll.

The Greek language newspaper The National Herald has been, for years, a watchdog over church affairs and first broke the story of the financial crisis back in June but went largely ignored or evaded by the Archdiocese.