The Special Committee to study Corporation Sole was commissioned by the 2015 Convention of the Diocese of Los Angeles in the wake of a bitter property dispute between St James the Great Episcopal Church in Newport Beach and Bishop Bruno of the Diocese of Los Angeles.
The Committee reported on July 31 on the legal definitions, properties held in Corp Sole, and canonical implications of such holdings. In brief, they found that
- The Diocese of Los Angeles includes two legal corporations: The Corporation of the Diocese and Corporation Sole (“Corporation Sole” or “Corp Sole”).
- A corporation sole is a legal corporation with just one incumbent – the Bishop. Some denominations use them as a legal mechanism for conserving and transferring the property of a church entity (usually but not always a diocese) upon a change in incumbent Bishop or other superior.
- The existence of Corp Sole in the Diocese of Los Angeles is an accident of history.
- The existence of corp sole structures is not contemplated by national Episcopal Church polity.
- Corp sole structures have been the subject of controversy or amendment in other California dioceses of the Episcopal Church in recent years.
- Simple dissolution of Corp Sole and transfer of its assets and liabilities to another entity poses possible legal, economic, and tax risks.
The Committee is unambiguous in its assessment of the transparency and accountability of Corp Sole.
- In the Diocese of Los Angeles, the finances and activities of Corp Sole, the Corporation of the Diocese, and parishes and missions of the Diocese, are extensively intertwined.
- Significant financial transactions in both directions take place between Corp Sole and the Corporation of the Diocese.
- While the policies, decisions, and financial statements of the Corporation of the Diocese and its parishes, missions, and institutions are subject to extensive oversight and transparency requirements, none of these requirements have historically been applied to Corp Sole. Corp Sole accordingly operates without outside governance oversight, and without transparency.
- In the Diocese of Los Angeles, the Bishop has historically been allocated unilateral decision-making power over Corp Sole, its activities, and its assets.
- The financial statements of Corp Sole have been prepared by the Bishop’s staff. These accounts are audited annually by an outside firm, but have not historically been disclosed or published.
- The lack of transparency and oversight of Corp Sole is not consistent with national church policy, the policies included in the Constitution and Canons of the Diocese of Los Angeles, or current required practices in the corporate or non-profit world.
- The lack of transparency and oversight of the activities of Corp Sole poses legal, financial, pastoral, and other risks.
The Committee’s proposed solution to the problem is to bring Corp Sole under the same checks and balances as all other diocesan transactions and corporations.
This approach, modeled on the action taken by the Diocese of California …, can resolve the governance and transparency issues surrounding Corp Sole. It has administrative efficiency, by relying on existing governing bodies and processes rather than creating new ones. Finally, it would unite all financial and other decision-making in the same place, which should contribute to improved short and long-term planning. It is the solution recommended by the Committee.
Report: Diocesan Corp Sole Committee Report 7-31-16 (wait for the download – may be slow)
Bishop Bruno is facing an ecclesiastical trial over the disposal of a Corp Sole property, that of St James the Great in Newport Beach. The date for the hearing has not yet been set. More background and updates can be found at savesaintjamesthegreat.org. Previous coverage in the Episcopal Cafe:
July 14, 2015, A complaint of misconduct has been filed against the Rt Revd J Jon Bruno, Bishop Diocesan of Los Angeles
July 31, 2015, Title IV charges against Bishop Bruno sent to Reference Panel
August 6, 2015, St James the Great files more charges against Bishop Bruno
October 17, 2015, A family’s memorial gift is caught in the crossfire over St James the Great, Newport Beach
April 7, 2016, Forty weeks in the wilderness
July 27, 2016 Los Angeles Bishop to stand trial
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There is a scribd link here. https://www.scribd.com/document/321389883/Diocesan-Corp-Sole-Committee-Report-7-31-16
We have reposted the report as a pdf. If it does not open right away, it may be in your downloads folder. Thank you for your patience!
Thank you, I downloaded and read it, and now think I have my head wrapped around this enormity. The question I had all the while reading was “Why in heaven’s name didn’t the Corp Sole of the Dio of LA begin the changes now being recommended years ago, especially after the Dio of CA had enacted theirs?” But “…there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones.” (Machiavelli)
I also get the “no preview available” message.
Even assuming that +Bruno’s actions in the St. James the Greater matter were all appropriate, it doesn’t seem like a good idea for one individual to have unsupervised control over church property.
https://www.scribd.com/document/321389883/Diocesan-Corp-Sole-Committee-Report-7-31-16
I also get “No preview available” message; otherwise have no trouble with Google Docs.
https://www.scribd.com/document/321389883/Diocesan-Corp-Sole-Committee-Report-7-31-16
Links work for me – on macbook