By Joe Feuerherd
NCR Washington Correspondent
The $79.8 million Austin transaction was the brainchild of O’Meara, Ferguson and Kearns (OFK). The firm was founded four-and-a-half years ago by Patrick O’Meara, Franciscan University of Steubenville, Ohio, graduate, one-time seminarian and former director of young adult ministry for the Mobile, Ala., diocese. OFK is a “boutique firm” that exists primarily to serve “sectarian nonprofits,” O’Meara told NCR.
In a mid-2003 review of its activities, OFK listed 40 dioceses, eight religious orders, 15 Catholic universities, and more than a dozen other Catholic entities as among its actual or prospective clients.
Among the firms’ targets of opportunity were the Cheyenne, Wyo., diocese and the Southwest Indian Foundation, a New Mexico-based Franciscan-affiliated charity. The key firm contact on both deals, according to the documents, was OFK shareholder Scott Bloch, then deputy director and counsel in the Justice Department’s Task Force for Faith-Based and Community Initiatives, now the special counsel for the United States, a job where Bloch oversees federal whistleblower protection programs.
Bloch’s May 2003 financial disclosure form estimates the value of his OFK stock at between $5,000-$15,000.
In a statement released by his office, Bloch said that he is a “private investor in O’Meara Capitol Partners, which then later became O’Meara Ferguson Kearns. He is a small shareholder, a passive investor.”
The statement continued: “Neither O’Meara Capitol Partners nor its successor, O’Meara Ferguson Kearns, ever had any involvement in and did not seek grant money through the Faith-Based office at Department of Justice or any other department within the federal government. One had absolutely nothing to do with the other.”
In mid-2003, the Southwest Indian Foundation was listed as a “pending” client by OFK. “We are helping them on multiple fronts,” OFK said. The document continued: “We expect to get their managed money business in Q[uarter] 4, and help them with a significant number of transactions in Q1 or Q2 of next year. This is also a Scott Bloch introduction, and we are friendly with the founder and the non-executive chairman.”
In October 2003, the Southwest Indian Foundation was one of 38 secular and sectarian groups awarded grants by the Veterans Administration “to assist community-based agencies [to] acquire, renovate, or build transitional housing facilities, provide supportive services for homeless veterans and purchase vans for outreach to or transportation of homeless veterans.” In April 2005, the American Institute of Philanthropy gave the foundation a grade of “F,” saying the group spent too much to raise money (58 cents to generate every $1) and too little, just 33 cents of every dollar, on charitable programs.
Bloch’s relationship with Cheyenne, Wyo., Bishop David Ricken was also tapped by OFK.
“Bishop Ricken was introduced to us by one of his close friends, who also happens to be a [OFK] shareholder, Scott Bloch,” according to the OFK document.
Another OFK shareholder and director, former Crisis magazine publisher and Republican National Committee Catholic Outreach chair Deal Hudson, also played a role.
“Deal Hudson, our board member is also very good friends with the bishop. The [Cheyenne diocese] CFO has already laid out the two project [sic] he would like us to help out with, and we are currently trying to arrange a visit in response to their invitation to present to their Finance Council. … Deal and Scott are in Cheyenne with the bishop the first week of August 2003.”
The November 2003 issue of Crisis includes an article recounting a five-day “intellectual encampment” attended by Hudson, Bloch and Ricken.
Cheyenne diocese chief financial officer Jack Buhr did not respond to NCR’s requests for comment.
Hudson resigned his RNC position, and subsequently his job as publisher of Crisis, after NCR revealed last year that while a member of the faculty at Fordham University he engaged in an inappropriate sexual relationship with a freshman woman. On June 3, The Washington Times reported that the Bush Administration canceled a Hudson-organized White House briefing for Catholics because participation in the meeting was tied to an annual Crisis magazine golf tournament fundraiser (see story on Page 11).
Hudson declined comment for this story.
Other “active” or “engaged” dioceses back in 2003 included:
- Detroit: “Pat [O’Meara] is going to the Cardinal’s foursome on Monday and is good friends with their recently named chancellor.”
- Lansing: “We are very familiar with the hierarchy, including the CFO, and the bishop.”
- New Orleans: “Excellent relationships with the archbishop, 2 auxiliary bishops, as well as the chancellor and CFO.”
- Galveston-Houston: “I am on one of Crisis’ (Deal Hudson’s magazine) boards with … a confidant as well [as] a large donor to Bishop Fiorenza. [He] is also [a lay businessman involved with] the diocese’s new $48 million cathedral and we expect to serve as special adviser to the corporation on this debt.”
Another OFK shareholder, Msgr. G. Warren Wall, the former chancellor and priests’ council president in the Mobile, Ala., archdiocese, was considered a key contact of the firm in LaCrosse, Wis., (“Bishop [Raymond] Burke is a classmate of Msgr. Wall’s”); in San Diego (where Wall was said to have “very good connections”); in Biloxi, Miss., (where “the bishop is good friends with Msgr. Wall”); and in Springfield, Ill., where the chancellor of the diocese and an OFK representative met “while they were at Msgr. Wall’s condo at the beach.”
The Little Sisters of the Poor in Mobile were considered a prospect, according to the document. “This is another organization in which Msgr. Wall is our conduit,” reads the OFK document. The document noted that Wall is the “leading contender” to replace the current bishop of Mobile, Oscar Lipscomb.
O’Meara told NCR in a June 8 phone interview that OFK has never done any business with the dioceses listed above and that Wall has played no role soliciting business for the firm.
Wall told NCR that OFK is a firm of “committed Catholic men who are devoutly dedicated to the church and in a business capacity want to serve the church.” He and other parishioners with business experience in the parish he heads in Mobile, St. Ignatius, invested in the OFK start-up because they knew O’Meara from his youth ministry work and supported the idea of establishing a “a business that might serve the church.”
Wall said he saw no conflict in his participation in the venture “as long as they operate on a competitive basis with other people.” He described his activities “as providing general information” particularly as it pertains to his “knowledge about the church and how [a diocesan] finance office … might make financial decisions involving the borrowing of money.
“I don’t influence the decisions, I don’t contact the people,” Wall said. The OFK document does not indicate that any of these contemplated solicitations or introductions were actually made by Wall.
Meanwhile, both O’Meara and the “F” in OFK, managing director and president Frank Ferguson, previously served on subcommittees of the finance council of the Arlington, Va., diocese, positions O’Meara said they gave up so they could bid on work in the diocese.
In August 2004, they made their pitch to Arlington CFO William Kirst.
“Knowing the challenges of a rapidly growing diocese, I am confident that OFK can work with you to save the diocese time and money and strengthen its capital position,” wrote Ferguson.
According to OFK documents from 2003, the firm did some business with the Northern Virginia diocese. “We recently helped them refinance a $5 [million] note and lowered their rate from 6.5% fixed to 4.5% fixed. We are submitting the proposal for asset management consulting for their $112 [million] portfolio. We also believe that we will be able to set up a $160 million facility for the diocese construction backlog, in addition to capturing annual building business.”
In an unrelated matter, U.S. Special Counsel Scott Bloch faces scrutiny from Congress and the Government Accountability Office. On May 25 he told a Senate subcommittee that he did not have the power to enforce Bush administration civil service policies that extend civil service protections to federal employees based on their “sexual orientation.” Gay rights groups contend that Bloch has discriminated against Office of Special Counsel employees known to be gay.
Earlier this year, six House Democrats asked the Government Accountability Office to investigate a series of complaints about Bloch, including why the special counsel’s office provided a no-bid contract to the headmaster of his son’s traditionalist Catholic boarding school. The GAO report is forthcoming.