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Special Investigative Committee Releases Phase II Saint Nicholas Report

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Source: Greek Orthodox Archdiocese of America

NEW YORK – The Greek Orthodox Archdiocese of America, keeping with her on-going commitment to transparency and accountability, has posted on its website, the results of Phase II of the PricewaterhouseCoopers Advisory Services LLC (“PwC”) investigative report (the “Report”) regarding the rebuilding of Saint Nicholas Greek Orthodox Church and National Shrine (“St. Nicholas”).

On October 16, the Special Investigative Committee (SIC), authorized by the Archdiocese to conduct an independent review of the St. Nicholas project, released Phase II of the Report to the Archdiocese along with a summary communication based on the Report. (see below for links)

As reflected in the Report, after extensive investigation, it has been determined that:

  • There is no evidence that St. Nicholas funds were improperly paid to any individuals employed by or associated with the Archdiocese.
  • There is no evidence or allegation that fraud was committed in connection with the St. Nicholas project.

The SIC has recommended that the St. Nicholas rebuilding effort be spearheaded by a new legal entity, which will do the fund-raising and overseeing of the project, that may be affiliated with, but is independent from the Archdiocese, with separate bank accounts and an appropriately qualified board.  Incorporation documents for a new legal entity, the “Friends of St. Nicholas,” have been prepared and will soon be filed.  More information on the Friends of St. Nicholas will be available in the coming weeks.

His Eminence Archbishop Demetrios of America expresses his enormous gratitude to the members of SIC and to Mr. George Stamboulidis of BakerHostetler, counsel to the SIC, and Mr. David Daly of PricewaterhouseCoopers Advisory Services LLC for their tireless efforts in compiling this Report.

Please see these links:
The results of the Phase II Report
The SIC’s summary communication regarding Phase II, is available at this link. (and see below)

Special Investigative Committee
for the Rebuilding of the
St. Nicholas Greek Orthodox Church and National Shrine
October 16, 2018
His Eminence Archbishop Demetrios, Geron of America
Mr. George Tsandikos, Esq., Vice President, Archdiocesan Council of
the Greek Orthodox Archdiocese of America
Your Eminence and Mr. Tsandikos:
As you know, our Committee was appointed as an independent body to investigate issues
relating to the use of funds raised for purposes of rebuilding the St. Nicholas Greek
Orthodox Church and National Shrine (“SNCNS”).
In connection with this effort, the Committee engaged George A. Stamboulidis of
BakerHostetler LLP, who in turn retained PricewaterhouseCoopers Advisory Services LLC
(“PwC”) under a Kovel letter to preserve attorney-client privilege. We are deeply indebted to
both of them for their devotion to this task and for their assistance in completing our work.
The Committee’s investigation was comprised of two phases. On May 15, 2018, Mr.
Stamboulidis sent us the PwC Phase I investigative report, which concluded that $3,504,550
(excluding interest) of the amount raised for the SNCNS rebuilding effort was used to fund
the Greek Orthodox Archdiocese of America (“GOA”) operating deficit. We understand
that this amount has since been repaid by the GOA, with interest, plus some $681,268 in
investment returns earned on SNCNS restricted gifts from 2001 through 2012. We further
understand that the GOA elected not to charge SNCNS some $820,000 in expenses that
either could not be supported by adequate documentation ($245,000) or that related to
SNCNS fundraising, travel and transportation activities ($575,000). We welcome these steps
by the GOA.
Enclosed is a copy of the Phase II report (the “Phase II Report”) from PwC. For purposes
of fully disclosing, in a transparent and robust manner, to our Church leadership, clergy and
laypeople the findings of our investigation, and fostering a positive and Christian
atmosphere to help restore faith in our Church institutions and confidence in the effort to
rebuild the only house of worship destroyed in the terrorist attacks of September 11th, we
waive privilege in connection with this document and recommended that you publicly
release it in its entirety.
As reflected in the Phase II Report, after extensive investigation, there is no evidence that
SNCNS funds were improperly paid to any individuals employed by or associated with the
Archdiocese. The Phase II investigation also revealed no evidence or allegation that fraud
was committed in connection with the SNCNS construction project.
Rather, the SNCNS cost overruns appear to have been the result of change orders agreed to
by GOA decision-makers to address architectural concerns or enhance the design of
SNCNS. Although these modifications to the original design may have been made with the
best of intentions, and may result in a structure befitting of a church and national shrine, the
project will have a final cost that is significantly greater than that originally contemplated and
publicized.
The increased cost caused the GOA to run out of funds for the project, resulting in a
construction halt that continues today. Of course, this is a cause of frustration for clergy and
laity alike. To avoid a similar situation from occurring in the future and to establish best-
practices, we recommend that the rebuilding effort of SNCNS be spearheaded by a new legal
entity that may be affiliated with, but is independent from, the GOA. This entity should have
bank accounts that are separate from those of the GOA, and a board comprised of members
who have the appropriate qualifications to oversee the project, including reviewing and
approving any design modifications with the attendant cost considerations in a thoughtful
and thorough manner.
It has been our honor to serve on this Committee and it is our fervent wish and prayer that
these reports provide some finality to these matters and lead to the completion of the most
important collective construction project in the history of our Church in America.
Very respectfully,
Nikiforos Mathews
John Pappajohn
George S. Canellos

The earlier Phase I Report is posted at this location

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