District Lutheran President says he 'bears responsibility' for financial mess, promises review
The president of the Alberta-British Columbia District of the Lutheran Church-Canada says he takes responsibility for the financial mess the church is now in, a situation that happened under his leadership.
“It happened on my watch,” Pastor Don Schiemann said during an interview in his Edmonton office.
He said he realized how serious the financial situation was about a year and a half ago. In March 2014, the investment fund at the centre of the problem stopped accepting deposits.
“I personally feel terrible for what’s happened and certainly, as I say, bear responsibility for it, because I’m president of this district.”
In a letter to about two thousand investors sent Jan. 5, Schiemann said the Church Extension Fund (CEF), an investment fund that has existed since 1921, has been suspended and is not able to fully pay back the $95 million owed to investors.
Two staff at the district office have been laid off, though one person left before being given a layoff notice. Schiemann isn’t ruling out more layoffs, saying “that’s on the table, if need be, we’re fully prepared to do that.”
“We made decisions in favour of ministry, and as a result there were some poor financial decisions,” said Schiemann, who has no regrets over the ministerial work done at the Prince of Peace development east of Calgary.
"Perfect storm" led to financial crisis
Schiemann said he’s still trying to understand how the district landed in such financial trouble. The financial crisis was caused by what he describes as a “perfect storm” of factors, including: investors withdrawing; outstanding loans, including the one to the Prince of Peace that in 2012, the last audit available, shows it was worth 70 million dollars; and, not having any other investments that could earn money.
The church must now start selling off assets. Investors are being asked to consider two options: liquidate the district’s assets immediately; or receive payments from Prince of Peace Manor and Harbour, while also selling off assets, such as sites purchased for new churches. There is no timeline for when a final decision will be made.