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	Conflict Escalates between Diocese, Dissident Pastor By Jean Torkelson Rocky Mountain News [Colorado] March 29, 2007 http://www.rockymountainnews.com/drmn/local/article/0,1299,DRMN_15_5450039,00.html An investigation by the Episcopal Diocese of Colorado into accusations of "financial wrongdoing" by the Rev. Don Armstrong of Grace and St. Stephen's parish alleges the theft and misuse of hundreds of thousands of dollars in church money over about 10 years, the bishop said. The allegations are listed in a March 27 letter to parishioners of the 2,000-member Colorado Springs church from Bishop Rob O'Neill. Armstrong could not be reached for comment. On Monday, he explained to the Rocky Mountain News in broad terms the allegations and denied wrongdoing. The bishop's letter was sent a day after Armstrong and nine of the parish's 11-member governing board voted to secede from the Episcopal Diocese of Colorado and from the national church as well. At the same time, Armstrong took back control of the parish, which he lost in December when O'Neill launched an investigation into what the diocese called "misapplied funds." According to O'Neill's letter, an attorney hired by a diocesan committee reviewed six volumes of documents, evaluated a forensic accounting firm's report and conducted about 45 interviews. The report was delivered to the committee the same day leaders of the church seceded. Among the allegations: • Theft from the church of $392,409 in "unauthorized payments for educational and personal expenses" for Armstrong's family. • Tax fraud involving $548,097 in non-salary income and benefits not reported to the IRS and Colorado Department of Revenue. • "Unlawful extension and receipt" of $122,479 in loans to Armstrong. • Improper use of $136,354 in clergy discretionary funds. Armstrong released a written statement to The Associated Press denying the allegations. He also said that an independent audit of his taxes and the church's books was being conducted and that he would explain his side of the story April 14 at a previously scheduled meeting to discuss the split. "I fear that Bishop O'Neill's monomaniacal pursuit of the politics of personal destruction may ultimately result in the financial demise of the Diocese of Colorado and the loss of his episcopacy," he said. O'Neill said he has removed vestry members and all parish officers and said he will provide "new pastoral leadership." "That the vestry decided to restore Father Armstrong to a position of leadership - particularly in light of the allegations against him - and has justified that decision on the basis of safeguarding the church's moral integrity defies comprehension," O'Neill wrote. The bishop and the diocese also have demanded that Armstrong return the parish to the Episcopal Diocese, under threat of a possible civil lawsuit. Armstrong said he's been targeted because he's a nationally recognized conservative who's clashed with O'Neill over such issues as gays in the church. Since the Episcopal Church voted to support same-sex blessings and an openly gay bishop at its 2003 convention, about 45 to 50 parishes have left the American church. Many are entangled in lawsuits over property. The fight between O'Neill and Armstrong escalated just as Christians are preparing for Holy Week observances. The Episcopal Diocese clarified Wednesday that Palm Sunday services it is planning for Grace and St. Stephen's parishioners will be at an alternative location, not the church itself. "We're not going to be in a standoff with Don. The bishop would never seek to do that," said Beckett Stokes, communications director for the diocese. The diocese will announce the new location in time for parishioners who don't stand with Armstrong to make plans for the Palm Sunday services. "We want to make sure those parishioners who are loyal to Grace and St. Stephen's have a place to worship together," Stokes said. She said it hasn't been determined whether Bishop O'Neill will be there. Armstrong announced that he will greet parishioners at Palm Sunday services - his first visit to the parish since O'Neill banished him while the diocese conducted the investigation. It also isn't clear how many parishioners will follow the mutineers. Armstrong and the vestry mailed letters this week to all members, inviting them to begin a 40-day period of "discernment" to determine if they wish to stay in the parish or go elsewhere. Individually, Armstrong and the nine vestry members have left the Episcopal Church to align with an alternative conservative movement, Convocation of Anglicans in North America, a Virginia-based network of 34 churches and 53 clergy protesting the national church's actions. Armstrong and the vestry have been accepted into CANA, but the parish itself can join only with a majority vote of the congregation, CANA spokesman Jim Robb said Wednesday. O'Neill said individuals can leave The Episcopal Church - but parishes cannot. Allegations Here's how the Rev. Don Armstrong described the allegations against him in an interview Monday: • He didn't pay taxes on the home provided by the diocese: Not true, he said. • He didn't report funeral and wedding stipends as income: Not true, he said. "Most of what I get I give away (to the needy), and what I do keep I declare." • The vestry, the parish governing board, provided undergraduate scholarships for the Armstrong children: "A very typical gesture" in large churches, he said. • The parish reimbursed him for entertainment. The parish had allowed Armstrong to use discretionary funds for entertaining until the diocese determined several years ago it wasn't proper. Armstrong said the practice ended immediately. "They're coming after me for something we stopped a long time ago. They're stretching to find something to get rid of me with." torkelsonj@RockyMountainNews.com or 303-954-5055.
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