Diocese Ex-CFO to Get Same Job in Columbus
Cleveland Official Resigned under a Cloud of Suspicion

By James F. McCarty
Plain Dealer
August 20, 2004

The deposed chief financial officer of the Cleveland Catholic Diocese has a new job as the next CFO of the Diocese of Columbus.

Joseph Smith resigned from the Cleveland diocese in January under a cloud of suspicion, accused of accepting more than $750,000 from an accounting firm he had hired to work for the diocese.

The FBI is investigating the payments, and the diocese’s insurance company reportedly has filed a claim against Smith to recoup the money — neither of which apparently deterred the Columbus diocese from hiring him as its new finance director.

A Cleveland diocesan official said the Columbus diocese was made aware of the criminal investigation, as well as the circumstances of Smith’s leaving after more than 20 years of employment in the state’s largest diocese.

“No recommendation concerning employment was requested, and none was provided,” said spokesman Bob Tayek, reading from a news release.

Few people involved were willing to talk about Smith’s hiring when contacted Thursday.

Several phone messages left with Smith were not returned. Real-estate records show he has listed his five-bedroom, 5 1/2 -bathroom brick home in Avon Lake for sale. Asking price: $579,900.

Tayek confirmed there is a criminal investigation but declined to comment further. FBI special agent Bob Hawk declined to acknowledge that an investigation exists.

Robin Miller, a spokeswoman for the Columbus diocese, confirmed that Smith recently was hired as its director of finance, and that he would take over the job from the outgoing chief financial officer in October.

Miller could not confirm Tayek’s claim that Columbus diocesan officials were told of the criminal investigation.

Bishop James Griffin, head of the Columbus diocese, previously served as assistant chancellor in Cleveland before taking over the Ohio capital diocese in 1983. He was attending a bishops conference in Michigan on Thursday and was unavailable for comment.

Several lay people with ties to the Cleveland diocese, but who asked not to be named, said Griffin is well-acquainted with Smith, 47, the Cleveland diocese’s former highest-ranking and highest-paid lay employee.

Smith owns a marketing firm called Tee Sports Inc. that runs golf tournaments, including charity events for the Columbus and Cleveland dioceses.

Smith’s downfall in Cleveland began after documents were sent anonymously in December to the diocese and a lawyer. The documents detailed the flow of money from a Mentor-based accounting business operated by Anton Zgoznik to companies affiliated with his friend, Smith. Checks for “consulting fees” totaling $750,000 were written to Smith’s companies over six years.

The accounting firm of Ernst & Young recently completed an investigation of the Zgoznik-Smith transactions, and the findings were turned over to the diocese’s insurance company for review, Tayek said. He declined to provide details.

A layman with knowledge of the case said the insurance company paid an unspecified damage claim to the Cleveland diocese, then filed a claim against Smith to recoup the money.

If Smith fails to pay, the insurance company likely would sue Smith for damages, the layman said.

To reach this Plain Dealer reporter: jmccarty@plaind.com, 216-999-4153