FBI Wraps Up Investigation on Pilla - Plain Dealer Story Expected on Thursday

http://catholiccleveland.blogspot.com/ ^ | Saturday, June 04, 2005 | Finbar Elwood

[Diago]

We have learned that as early as this Thursday, the Plain Dealer will be reporting on Bishop Anthony Pilla and his involvement in a major new financial scandal involving the Diocese of Cleveland. The story is believed to include new information which will be very damaging to the bishop and include charges completely unrelated to the earlier scandal involving former Diocese of Cleveland CFO Joseph Smith.

For some time now, Clevelanders have been wondering what ever happened to the FBI investigation into the activities of former Cleveland Catholic Diocese CFO Joseph H. Smith. Smith, you will recall, was put on a leave of absence by Bishop Anthony Pilla, and subsequently resigned, for allegedly receiving $750,000 in payments from firms that did business with the Diocese of Cleveland. According to the Cleveland "alternative magazine," "The Free Times," Smith had stated "he's not going to take it alone,” and was prepared to give the FBI evidence implicating Pilla in perhaps illegal activity.

Shortly after threatening too not go down alone, Smith became the financial director of the Diocese of Columbus under Bishop Pilla's good friend, Bishop Griffin. As reported by the Cincinatti Enquirer:

A man who resigned as chief financial officer for the Cleveland Catholic Diocese amid financial controversy has been hired to supervise the finances of the Columbus Catholic Diocese.

Joseph H. Smith, 47, of Avon Lake, near Cleveland, will become the diocese's finance director in October, said diocesan spokeswoman Robin Miller.

Smith resigned from the Cleveland diocese in February after he was accused of accepting about $750,000 from an accounting firm he hired to work for the diocese. Smith has not been charged.

Cleveland diocesan spokesman Robert Tayek said the Columbus diocese has been told that a federal investigation of Smith is continuing. Special Agent Robert Hawk of the Cleveland FBI office would not comment on whether there is a probe of Smith. Miller said she does not know whether the Columbus diocese was told of the allegations. She referred questions about Smith's hiring to Bishop James A. Griffin, who was attending a meeting of bishops and unavailable for comment. Late last year, documents sent anonymously to the Cleveland diocese and a lawyer detailed how money from a Mentor accounting firm allegedly made its way into companies affiliated with Smith.

The following excerpts appeared in the Free Times last year, including an explanation as to why the FBI investigation was not receiving coverage in the Cleveland Plain Dealer - - which happens to share a public relations firm with the Cleveland Diocese.

The FBI investigation into the activities of suspended Cleveland Catholic Diocese CFO Joseph H. Smith … who was put on a leave of absence by Bishop Anthony Pilla for allegedly receiving $750,000 in payments from firms that did business with the church … is also actively questioning how Pilla could not have been aware of Smith's activities, according to a source who has had contact with the federal probe. The Free Times hears that the connection between Smith and a well-known insurance broker, who is close to the bishop, is also under study, as well as other businesses possibly run out of the church. In addition, sources tell the Free Times that at least 40 priests were encouraged to take their automobile business, after the monthly car allowance was increased by the bishop, to a relative of the bishop — and what's more, that the Plain Dealer has sat on this story for way more than a year. Word has it that Cleveland, which once had one of the highest churchgoing rates in the country, has seen it drop nearly in half over the last few years. Could it be because of the priest-pedophile issue and how the local diocese has handled it?

An earlier Free Times Story 3-24-04: Mr. Smith Goes to Church … Word is that suspended Cleveland Catholic Diocese CFO Joseph H. Smith … who was put on leave because of accusations that he allegedly received $750,000 in payment from firms that did business with the diocese… has let it be known to people at St. John's Cathedral that “he's not going to take it alone.” The Nose continues to hear that 60 Minutes II is collecting information about the Smith Affair and has increased interest in doing a follow-up story after Bishop Anthony Pilla's recent comment that he may have transferred “about three” alleged pedophile priests … a statement that was refuted in a Free Times story by former diocese top lawyer Charlie Feliciano … who appeared in a 60 Minutes story in 2002. In regard to Smith, legal sources tell the Free Times that the FBI is looking into self-dealing, as well as expensive, no-bid contracts for services and insurance that were steered to friends and relatives. Feliciano told the FT , “How Smith can avoid being indicted is beyond me.” The Cleveland Diocese ranks with Boston as having one of the biggest pedophile priest problems in the U.S. So why has it been ignored by Cleveland's establishment media ?

Free Times 1-24-04: Is Part 2 in the Works? … Word reaches The Nose that in the aftermath of the Free Times publication on 12/24/03 of the cover story, “ The Bishop's Lawyer: A Question of Faith ,” 60 Minutes II and Ed Bradley are considering doing a follow-up on the Cleveland Catholic Diocese and its treatment of Bishop Pilla's former in-house legal counsel, Santiago “Charlie” Feliciano … What is also sparking renewed interest by 60 Minutes II are the recent reports about the suspension of diocese CFO Joseph H. Smith for questionable business practices, including allegedly receiving $750,000 in payments from firms who do business with the diocese ... In addition to his other “business,” The Nose has been told by several sources connected with the diocese that Smith allegedly ran a for-profit tax preparation service for priests within the diocese and charged them for doing their taxes. This came about, sources tell The Nose, after Smith had the diocese declare its priests “independent contractors” in order to limit liability in the case of lawsuits. Of course, sanity prevailed when the IRS said priests were employees of the diocese. Previously, The Nose has been told that tax assistance was performed as a free service by the diocese legal office.

Of course, Bishop Pilla has proven to have nine lives. Can he survive one more scandal? We await the details from the upcoming Plain Delaer "expose." Will the left wing anti-Catholic rag finally cut Pilla lose and shine some light on his misdeeds or should we prepare ourselves for another whitewash?

[Diago]

A friend put this together and assures me the Plain Dealer is set to report a very damaging story on Bishop Pilla this week. We shall see. I will be up early Thursday morning to post any related story.

[Diago]

ping! Lot's of rumors have been flying around. This is another one. It seems to me that none of them ever pan out (e.g. early retirement, coadjutor). I do believe that he and Pope Benedict do not get along going back to Pilla's reign as President and "Always My Children" , but whether or not we get a new bishop soner rather than later - - I can not confirm.

[88keys]

One week later...

I saw the more recent post (thanks for the *ping*, dub!) so tried a "search" here for more info...what's going on?

I haven't seen anything in the PD, but I did get a rather "cryptic" message from a friend "in the business"...he just said things were pretty interesting around there lately...(??)

[letusprey]

Pilla has been served a subpoena for videotaped deposition.
Examiner- Bill Crosby.
Any information? Please PM me with synopsis, and I will provide contact information.
Thank You.
Chris Kodger