The Diocese of Fr. Fay:

The pastor of St. Michael Church resigned after a preliminary financial audit uncovered more than $500,000 in spending that the Archdiocese of Bridgeport is still trying to account for, officials announced yesterday.

Bishop William Lori told St. Michael’s parishioners yesterday that he asked for and received the resignation of their pastor, the Rev. Michael Moynihan. Though the 54-year-old remains a "priest in good standing," Moynihan will likely never be the pastor of a diocese church again, Lori said.

"After a long and thorough process, I have reluctantly but firmly concluded that any new assignment cannot entail financial administration," Lori said. "To put it mildly, parish financial records were badly tangled and at points not yet well explained, intertwined with Father Michael’s personal finances."

Moynihan is accused of keeping at least two "off-the-books" bank accounts, which only he knew about and had control of, Lori said. About $1.4 million in transactions passed through one account — half a million of which auditors cannot account for because checks were used to pay for some of Moynihan’s personal credit cards, various vendors and in some cases made out to cash. The diocese said that though the money may have been used for parish purposes, Moynihan had difficulty providing documentation proving that.

Parishioners at yesterday’s Masses received a document detailing the preliminary audit results and Moynihan’s resignation letter. In his letter, Moynihan said the audit "will illustrate my deficiencies as a financial administrator."

"I believe at the end of this process that there will be no findings of impropriety or wrongdoing on my part as your pastor," he said in the letter. "If the final report should indicate unresolved or questionable expenditures, I will, to the extent that I can, make an appropriate financial contribution back to the parish I love so much."

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In an interview, Lori said questionable accounting practices were first raised with Moynihan during an internal review of St. Michael’s books in 2004. Moynihan was told to implement some changes, including hiring a parish accountant and never making checks out to cash.

Lori, who said he had believed Moynihan was making those changes, had intended to follow up by conducting a more comprehensive review of every parish’s finances as part of a larger initiative to improve financial accountability in the diocese, but then other matters arose that took away part of his attention, including settling sexual abuse lawsuits.

"Between schools and parishes and other entities, I have 130 entities," Lori said. "I was vigilant. I had assurances that things were going well, that recommendations were being followed. The financials showed even, steady performance."

But then, last year a scandal broke involving the Rev. Michael Jude Fay, former pastor of St. John Roman Catholic Church in Darien. Fay allegedly spent $1.4 million in parish funds over six years, some of it to buy gifts for a man who was allegedly his lover. That discovery prompted diocese officials to respond by setting up a system of external audits and other financial controls that they had intended to institute sometime in the future, but because of the Darien scandal, now had to set up sooner than expected. They initially targeted seven churches, including St. Michael.

"I expected this to be routine," Lori said, adding that it was during that review last summer that officials uncovered the first unauthorized bank account.

Lori recounted much of the same story to parishioners yesterday, saying that in August, the diocese found out about the existence of the first bank account and stripped Moynihan of his authority to write checks or manage finances at the parish. Still, Moynihan remained a pastor and assisted accountants in tracking down documents proving that the money was spent for the purpose of the parish, Lori said.

"I wanted to give him every opportunity to provide the documents and explanations," Lori said. "He did provide additional information, documents, explanations and the gap of unexplained expenditures narrowed, somewhat. As that happened, I held out the hope that this nightmare might possibly have a happy ending, but that was not to be."

In December, the diocese discovered a second unauthorized bank account that Moynihan had never mentioned, Lori said.

"This second sad discovery led me to the inescapable conclusion that despite all his talents, priestly generosity, Father Michael was unable or unwilling to lead the parish to a new day of financial accountability and transparency and it is the role of the pastor to provide just that kind of leadership."

Several parishioners were in tears as they sat and listened to Lori, though many were critical of the decision to ask for Moynihan’s resignation. One man even stood up after Lori spoke to give his own opinion, drawing thunderous applause from other parishioners.

"I cannot help but believe that when the words you use — ‘inappropriate’ — did not speak of illegal, did not speak of immoral — that somehow the terrible experience the diocese has seen in Darien is a large part for what looks like an overreaction here," the man said. "Frankly there’s not a lot of Christianity in the behavior and it doesn’t seem right and it doesn’t seem appropriate," he said of Moynihan’s resignation.