Render Unto Rome (43 page)

Whatever the precise nature of Wright’s relationship with Ruane, he helped her find work, routing funds through a subcontractor for compensation, according to Kushner. Kushner charged that the diocese “routinely gave additional compensation to employees” outside the conventional payroll methods, “including many of the witnesses in this case, such as Father Wright.… [and] Bishop Pilla.” John Wright and Joe Smith had played golf together, sometimes with Anton Zgoznik. Now, it was every man for himself. Smith was pulling out what he knew about the clergy old-boy network and its ethical liabilities to mount a defense. Kushner wanted the diocese’s copy of IRS findings from a late-1990s audit because, he alleged, “the IRS determined that the Catholic Universe Bulletin had consistently failed to report additional income paid to individuals”—more off the books! As the evidence scrimmage pitched back and forth, Kushner accused the diocese of destroying records, a charge unproven. His discovery requests did not yield all of the materials he suggested would exculpate his client;
¹²
but he planted the unmistakable impression that
Pilla had a rewarding relationship with his ex-quarterback on money, Joe Smith:

The Anthony M. Pilla Charitable Account [has] assets in excess of $500,000 … It has never appeared on the [diocese’s] books and records. Bishop Pilla withdrew money from the account for his own use in a manner designed to conceal the transactions and his use of the funds.
¹³

Jones Day attorney Stephen Sozio accused Kushner of a fishing expedition. Kushner had indeed tossed juicy bait to the press: “After the indictment in this case, Bishop Pilla resigned and filed amended tax returns which account for some of the activity in this account.” Pilla had written a check payable to cash for $180,000 from the account and deposited it with the diocese, asserted Kushner. The diocese attacked Kushner’s “scurrilous accusations.” But for all of the church’s pushback, the persona of Pilla–as–gentle pastor faced a competing image: the bishop who lived like a lord. For as the
Plain Dealer
tracked the money, some $78,000 that attorney Kushner said “was secretly funneled” to the bishop, reported Mike Tobin, went to

furnishing and remodeling a spacious Geauga County home that was to be used as a getaway spot. Pilla kept many of the household items—including a large-scale television—after the diocese sold the Munson Township house and 30-acre lot in 2003. Movers took the furnishings to a home Pilla owns in Cleveland Heights …

Diocesan spokesman Bob Tayek said private donations paid for improvements at the Munson property. After the sale, items in the home were split among diocesan headquarters, St. John Cathedral and the Cleveland Heights residence that Pilla inherited after his mother died.

“The diocese is responsible for a retirement residence for him,” Tayek said.

The Munson home was donated to the diocese in 1995 by Larry Dolan, now the owner of the Cleveland Indians, who suggested it
be used as a retreat house for the Cleveland bishop. The house was intended for whoever was serving as bishop of the Cleveland diocese, not just Pilla, Tayek said.
¹⁴

The diocese had sold the house in 2003 for $696,000 to a company managed by Peter Carfagna, a board member of the Catholic Diocese of Cleveland Foundation and a high-level professional sports attorney. Of the $383,000 in renovation to the large home, Tayek said that it had all come from private donations. Jim McCarty of the
Plain Dealer
had done research on the house for an earlier report.
¹⁵
The reporter had spoken with one of the six Dolan siblings who had grown up there. “I kind of ambushed Matt Dolan, a lawyer and former assistant county prosecutor,” McCarty told me, “and asked him about the decision to give the estate to the diocese. Dolan said the intention was to convert the home into a diocesan retreat house or an old priests’ retirement home, although those provisions weren’t written into any sort of agreement.”

Joe Smith told me, “Pilla felt he had earned the house through his time as bishop. His mom would stay out there with him. The Dolans were pissed at us and they should have been: the purpose was for priests to get away from the parish, and relax—a house in the woods with six bedrooms upstairs, a pond and a creek and tennis courts. Pilla wanted the property in his name. I went to see Pat McCartan, Jack Newman [another Jones Day top partner], and Peter Carfagna to figure a way to do this without all of us winding up in the can. It was the damnedest thing. Pilla had complete access to the place; he was afraid that when the next bishop came he would throw him out. He wanted the house in his name. Then it came out in the press, so we’re selling it. I think Peter Carfagna decided to help Pilla out of the jam. Pilla tells me, ‘You go out and clean it up.’ So I’m spending days in this fricking house, making sure it’s cleaned, bills paid, overseeing Jimmy jobs on repair … He wanted someone he could trust. He was so concerned about his image.”

The evidentiary motions fed deeper coverage in the
Plain Dealer
. “The Anthony M. Pilla Charitable Account wasn’t a secret fund but rather the former bishop’s personal savings account,” reported Mike Tobin, referring to a fund at $500,000 plus. Stephen Sozio of Jones Day, for the diocese, accused Joe Smith of trying “to impugn Bishop Pilla by arguing that the
transactions … on which he actually advised the bishop were somehow untoward. They were not.”

But why was Pilla’s account secret? Why so many secret accounts? And how does a bishop amass half a million dollars plus in private savings?

“Smith was comfortable receiving additional compensation in this fashion because Bishop Pilla had a similar investment account,” wrote Kushner, implying a bishop in harmony with secret payments to upper-echelon personnel.

On June 14, 2007, Judge Aldrich ordered the diocese to provide many of the financial records the defense requested, though not the IRS findings. The files included payments of $27,200 to the family of a deacon who had lost his job at a high school for making sexual advances to girls. The disclosure of payments included a loan approved by Father Wright for $60,000 in church funds to another female secretary. Kushner was taking off the gloves as Jones Day lawyers positioned Pilla and Wright
as victims
.

Judge Aldrich framed the core issue of the approaching trial:

The defendants’ position is that while the evidence sought would cast doubt on the credibility of Bishop Pilla, Father Wright and the Diocese, it
also
and
primarily
serves to rebut the factual assertions Bishop Pilla and Father Wright make—that the Kickback Scheme could not have been authorized, was not authorized, and was not similar to common, questionable practices used by the Diocese.
¹⁶

“Bishop Pilla, Father Wright, Joe Smith, they were all stealing,” Charlie Feliciano told the
New York Times
. “It was a corporate culture that was corrupt at almost all the top levels.”
¹⁷
Disappointed that Pilla and Wright escaped indictment, Feliciano took comfort that his thwarted civil case of defrauding a religious charity would be distilled into a federal criminal proceeding.

A thorny legal issue arose: a tape recording as prosecution evidence.

In January 2004, with the diocese in damage control over the secret files, Anton Zgoznik was at a conference in Las Vegas. Stunned to hear Joe Smith had been sacked, Zgoznik made his first call to the priest who had blessed his marriage and later his infant son: John Wright, who confided
that he had gotten an attorney.
Hang in there
, he recalled the priest saying.
Remember that Joe worked for you
. Anton Zgoznik felt alone on an island.
¹⁸
When he reached out to Zrino Jukic, both men smelled trouble. On January 12, two days after the story broke, Zrino lodged a digital tape recorder into his right sock. Anton, as he said later, “was the type of person that could have tried to blame me.”
¹⁹

They met in a parking lot, which is rarely a good sign.

“The fucking assholes,” Anton snarls to Zrino. “See, this is what happens when nobody communicates. Okay, Joe’s trying to claim it’s a consulting fee from us.” Anton confides that lawyer Steve Sozio, for the diocese, has asked him why he paid Joe Smith all that money. “Obviously, you and I would never give a kickback,” Anton says. To which Zrino says, “No.”

“It was executive compensation,” continues Anton Zgoznik. “Cause that’s exactly what we have to say.”

“Right.”

“Father Wright is behind this. You know that as well as I do.”

“He is?”
blurts Zrino Jukic.

“They hooked us into their system,” says Zgoznik, of the diocese.

“Right.”

Zgoznik gets down to the point. “But you gotta help me out with Joe and Father and say that they authorized this.”

“They did,” replies Zrino Jukic.

Anton tells Zrino to confect a document to show that.
²⁰

Zrino Jukic drove home in the toxic residue of a Christmas dirty trick and put the tape in his dresser drawer where it slept for several months until he met with the federal prosecutor, John Siegel. As Anton Zgoznik’s business crashed, Jukic hoped his tape would keep him from being indicted.

Judge Aldrich ruled that the recording was hearsay damaging to Smith, who was not present. Thus, separate trials for Zgoznik and Smith.

Anton Zgoznik’s trial began the last week of August 2007.

Joe Smith sat in the audience, taking copious notes each day.

Zrino Jukic, as the prosecution lead witness, testified that while in Zgoznik’s employ, Anton “told me that Joe was asking for a percentage of the business that the company was getting from the Diocese … ten percent.” Jukic claimed to have no “control over the situation. So I can’t say I challenged him.” Pressed by prosecutor Siegel as to whether it “would be legal for you” to help facilitate such payments, he said, “No.”

Siegel rejoined: “Did you agree to go ahead and do it anyway?”

“I did.”

As he gave more answers, Zrino Jukic showed himself still hurting from the jilt.

I started to realize that I was not an owner in the company … I was being reviewed and treated like an employee just like everyone else. My salary was determined by Anton. I didn’t come in and say, “These are my clients and [I] brought in so much as revenues; as a partner, that’s mine.” No, that was not the story.

Jukic several times mentioned “kickbacks” to Joe Smith, finally eliciting an objection from defense attorney Robert Rotatori over a term yet unproven. Rotatori jabbed at Jukic for his failure to file personal income taxes “in 1997, 1998, 1999 and 2000”—he had finally filed them, several years later. A detached observer might see why Zgoznik subjected him to a job review, and wonder how a guy who failed to file his tax returns qualified as a financial adviser. Rotatori in trying to attack his credibility sought to portray Zrino Jukic as a snitch.

ROTATORI:
What’s your expectation as you sit here today about your
being prosecuted with regard to your personal tax returns that you
described in your testimony?

JUKIC:
I have no expectations.

You don’t believe you will be prosecuted?

I don’t control that. I have been asked to cooperate as a witness, and that’s what I’ve done … Nothing was promised to me.

In contrast to the corpulent Jukic who double-crossed his friend, the slender Father Wright in his Roman collar was a bland personality. He wore glasses; his silver-gray hair was carefully parted. He had entered seminary after law school and a broken romance. By virtue of his background and education, Pilla had made him secretary for legal
and
financial affairs. The job ran nineteen years. Cemeteries was less demanding than the chancery post: more time to be a pastor, more time to be with friends. From lawyers’ huddles came the agreement not to grill Wright about “the girlfriend,” since he was not on trial.

“We were friends,” Wright said of Joe Smith. “I relied on him totally for his financial experience. I felt Joe was a hard worker and he did a good job.”

When Rotatori questioned him about payments to a computer consultant with money routed through Zgoznik’s company, Wright said, “I was not aware of that.” Did he know how the subcontractor was paid? “I never really inquired … I assumed the diocese was paying him directly.”
²¹

Wright admitted to arranging a $60,000 loan for one of his secretaries, Maria “Mitzy” Milos in the late 1990s. He cleared it with Pilla: “We didn’t work out the specifics, but he told us to work it out.” Mitzy Milos’s loan was not on church ledgers; when she fell behind on payments, Wright paid the $50,000 balance from Cemeteries. Mitzy Milos repaid it through paycheck deductions.

Against the image of a benevolent boss, Wright was a cipher on questions of deep money. He had no recollection of Zgoznik’s contractual ties to the diocese; he did not remember signing the first $185,000 bonus check for Smith in 1996, when his salary was $70,000. When Smith assumed his job as Wright moved on to Cemeteries, in 2000, he knew Smith was earning $135,000. “He said that he was going to negotiate his salary with the canonical advisors,” said Wright. That much, he remembered.

On the fulcrum issue of why and how in 1996 Wright approved a total bonus of $270,000 for Smith not to seek private sector work, he was hazy.

ROTATORI:
Did you not ask Anton Zgoznik to check with universities and hospitals and see what they were paying their chief executive officers?