Audit Finds Anglican Priest Innocent of Theft

( [email protected] ) Oct 26, 2007 12:52 PM EDT

A clergy member of a breakaway Episcopal church was found not guilty of stealing nearly $400,000, an independent forensic auditor reported Tuesday.

The Rev. Donald Armstrong, rector of Grace Church & St. Stephen's, was accused this year of financial misconduct by the Episcopal Diocese of Colorado, which his parish split from over a leftward "theological drift," as Armstrong put it. The recent audit, however, found no theft or tax fraud.

“I am grateful for this report, for its clarity and completeness in addressing the false accusations against me and our vestry by the Diocese of Colorado, its Bishop, and their representatives,” Armstrong said in a statement.

The audit was done by Robert D. Johnson, a Colorado Springs certified public accountant, who found that six counts against Armstrong had reasonable explanations and financial transactions, including loans and educational scholarship disbursements, were all approved by clergy members or authorized staff.

“The vestry is delighted to see the good name of our rector and priest of twenty years cleared of the allegations of fraud and theft," said Grace's senior warden, Jon Wroblewski.

But the investigation of Armstrong continues as the Diocese of Colorado is skeptical of Johnson's audit. The diocese had commissioned in 2006 a Denver accountant who found financial irregularities and it is standing by its audit, spokeswoman Beckett Stokes said Tuesday, according to Colorado Springs' The Gazette.

Stokes said Colorado Bishop Robert O’Neill "today expressed his confidence that the criminal justice system will respond appropriately."

Grace Church & St. Stephen's overwhelmingly voted in May to leave The Episcopal Church and join the conservative breakaway group CANA (Convocation of Anglicans in North America). The congregation broke from the U.S. denomination to "remain true" to the wider Anglican Communion, which claims 77 million members worldwide.

The Episcopal Church had caused uproar when it consecrated an openly gay bishop in 2003 and Episcopal leaders have said recently that they will not pull back from their controversial action but will "exercise restraint" on consecrating openly gay bishops.

“I am sorry that this theological conflict in the larger Episcopal Church has reached its hand down into our own parish and played itself out to such a destructive and divisive end," said Armstrong.

An ecclesiastical court representing the Diocese of Colorado had affirmed early this month its conviction of Armstrong and also recommended that he be defrocked. The court accused Armstrong of underreporting his income to the IRS, encumbering the church with deeds of trust without approval of the bishop, stealing $392,410 from the church, receiving illegal loans totaling $122,479, and encumbering the church with deeds of trust totaling $4.5 million without approval from the bishop of the Standing Committee of the Diocese.

Armstrong has denied any wrongdoing and has said the charges are an act of revenge by the diocese. Colorado Bishop O'Neil is expected to pronounce a final sentence in the coming weeks although Armstrong has left the diocese. O'Neil can either concur or lessen the ecclesiastical court’s sentence.