By Dennis Kendel
Board Chair, Faith Lutheran Church Saskatoon
Our church, the LCC, is in the midst of a crisis. This is not a crisis thrust upon us by sinister external forces – this is a crisis of our own leadership’s making. If our leadership can come to humbly accept this fact, we will have taken the first painful, but vital, step toward learning from what happened and start working to heal the harm caused by what’s happened.
Sadly, I haven’t seen evidence that leaders within the LCC have come to accept this reality. What I have seen is a concerted effort by LCC leaders to suppress any honest dialogue about the crisis, an unwillingness to accept any ownership of possible contributory roles in the creation of the crisis, and a lack of proactive leadership in addressing the crisis in a transparent and accountable manner.
The few courageous clergy and lay people I’ve seen try to foster a more transparent and accountable approach to this crisis have been castigated, impugned, shunned and shamed by LCC leaders. Anyone I’ve seen try to call our leaders to account for this situation has been labeled as a traitor and an enemy of the church.
Much has already been written by very thoughtful LCC members about the roots of this crisis. These are some of the observations they have offered:
- The banking and financial investment industry is a very highly regulated industry. The integrity of the industry relies upon protection of investors from harm as a consequence of investment agency insolvency.
- The integrity of the industry is based upon informed investor decision-making about risk.
- Investors can only make informed decisions if they are given current, accurate and readily understandable information about the risk inherent in any investment.
- The duty to provide such current, accurate and readily understandable risk information rests exclusively with every investment agency and the leaders of such agencies.
- The leaders of the ABC CEF failed to meet this duty. Indeed, the publicly accessible information in the ASC Notice of Hearing asserts that ABC CEF leaders aggressively marketed the CEF to LCC members as virtually risk-free investments that offered higher return on investment (ROI) than any of Canada’s five chartered banks.
Although ASC’s Notice of Hearing explicitly named two agencies and five individuals, the culpability for this crisis in our church runs wider and deeper. For example, any pastor that actively encouraged laity to put their life savings in CEF to support “God’s work” because it was “God’s Bank” was clearly implying that God would protect their investment from loss. The Word of God has never taught that our Lord will shield us from all harm. That means any pastor that implied otherwise about the security of CEF investments wasn’t telling the truth.
CEF programs had been run responsibly in all three LCC Districts for many years, so we need to seek to understand what went wrong with the ABC CEF.
In any historical review of CEF programs in the LCC we need to remember the very sobering caution voiced by Wally Dressler in his role as the former treasurer of the CEF in the Central District. He sounded an alarm that the church was at risk of being deemed to be operating a Savings & Loan agency without being authorized to do so. He noted that this would put the church at risk of being non-compliant with industry regulations and controls. He recommended that all $21 million dollars be promptly returned to investors and the Central District Board followed his recommendation.
In the current crisis, Mr. Dressler’s earlier caution was truly prophetic. Sadly, it was ignored by the leadership of the ABC CEF. So, now the church finds itself being held legally accountable for non-compliance with laws and regulations designed to protect investors from preventable harm. In addition the is also facing litigation filed by members of the church who were harmed by its regulatory non-compliance. This is a very sad state of affairs.
I have heard claims that the root cause of this situation was ignorance of investment industry regulations rather than a wilful breach of law. While that may have been applicable for some people, it is beyond credulity to claim that nobody involved with CEF had any knowledge of the regulations the fund had to comply with in its operation, particularly given that some of these people had backgrounds in the investment and legal industries.
So, if ignorance is not accountable for this sad state of affairs, what else may be a root cause? Perhaps it was simple human arrogance on the part of leaders who somehow felt they were immune from the risk management responsibilities that are inherent in every leadership role.
This raises the possibility that we have some very fundamental gaps in our understanding of the responsibilities and accountabilities inherent in both clergy and lay leadership in the LCC.
Maybe leadership needs to humbly confess their failure to be attentive and responsive to these responsibilities and accountabilities. Having confessed these failings to our Lord and to the people harmed by our failings, maybe we can all learn to do better going forward.