Judgment day for the Rev. Armstrong 

For the Rev. Don Armstrong, life appears to have rolled along smoothly these past five months.

The rector at St. George's Anglican Church in northwest Colorado Springs has exuded total self-confidence, giving every outward impression that he has weathered the judicial storm over how he handled parish finances during his 20-year reign at Grace and St. Stephen's Episcopal Church.

The 61-year-old is as comfortable as ever in pushing his conservative theology from the pulpit, as in his sermon Feb. 6 when Armstrong chastised the daughters of George W. Bush and John McCain for "speaking out in favor of same-sex marriage," adding, "how quickly we should see it as human-centered thinking, not God's teaching."

Though his tone has grown more strident as the years have progressed, parishioners say, this self-assuredness is vintage Armstrong.

While continuing as rector at St. George's, Armstrong has downplayed any negative ramifications from his plea agreement last September, when he gave a no-contest plea to a felony theft charge and what's known as an Alford plea to a misdemeanor allegation. (An Alford plea is similar to no-contest, wherein you don't admit guilt but acknowledge the case against you.) That was the end result of a 20-count indictment from 2009, which focused on $291,000 in allegedly mishandled Grace Church funds that mostly paid college expenses for Armstrong's children over a seven-year period.

After those pleas, Armstrong proclaimed his courtroom victory to the St. George's congregation (which split from Grace in 2007 to stay with him) in two separate statements, referring to his charges as "fictitious."

But the case isn't finished yet. Armstrong still must appear today and Friday, Feb. 24 and 25, for a sentencing hearing before District Judge Gregory Werner, who could accept all or part of the plea bargain while also determining possible fines, restitution, and either the recommended four-year probation or possible incarceration.

Meanwhile, in addition to that $291,000 from the grand jury indictment, Grace and St. Stephens' lay leaders have filed an extensive "victim impact statement" with Werner, more than 50 pages outlining Grace funds either missing or unaccounted for, which could amount to more than $1 million.

"That was our original estimate: $1,199,000," says Dr. John E. "Chip" Hill, one of Grace's vestry leaders. "But it doesn't take into account everything. The truth is, we'll probably never know the exact number. And nobody knows when it really started, or whether it was going on from the start [in 1987]. But it became a real drainpipe.

"We thought the documents would be released publicly, and we still hope they will be, but now we're hearing that's up to the judge, and he might seal them. There's a lot of information, and I have to say, it's well-referenced."

The alleged lost money includes:

$261,703 — college and related expenses for Armstrong's children;

$136,354 — clergy discretionary funds used, according to church documents, "for his personal benefit and for improper operating expenses," including travel, parking tickets and tax withholding payments;

$110,920 — other personal expenses for Armstrong's family members;

$81,588 — unpaid loans from Grace to Armstrong, with no interest;

$52,021 — undocumented petty cash checks;

$41,864 — car payments, life insurance, parish reimbursement and payment

Other issues or uncertainties involve eight leased vehicles (four for Armstrong's family, four for staff), which were costing Grace $45,000 a year; extensive travel, including to a Grace-sponsored seminar in Paris; and Armstrong selling four houses owned all or in part by Grace for a total of $927,850 — without permission and with no apparent accounting, church sources say, for where the net proceeds went.

In addition, Grace has calculated: "Between 1998 and 2005, at least $548,097.27 in compensation and benefits to Fr. Armstrong was not reported on Form W-2s submitted to the IRS and Colorado Department of Revenue."

"There was serious financial damage done to the parish," says Clelia deMoraes, formerly Grace's senior warden. "That's why we are asking for restitution."

Yet, the story of what happened at Grace Church is not just about money. Far from it.

Total turnaround

To understand the depth of Don Armstrong's influence and impact on Grace, one must go back to his arrival in 1987, when he took charge of a congregation for the first time after lesser roles elsewhere.

"Don resurrected what was basically a dead church, an empty church," Hill says of the New York native who served as an Army helicopter pilot in Vietnam before entering the ministry. "He was very dynamic, and the level of his pastoral care was incredible. I said all that in my letter to the judge. Many of us thought he was possibly building what could have been one of the largest Episcopal churches in the nation."

Hill relates a personal memory from when his wife Brenda died suddenly of a brain aneurysm in 2001. It was 3 a.m. when they arrived at the emergency room, Hill says, yet Armstrong was there. He returned at least 12 times over the next 60 hours until Brenda passed away, Hill recalls, "comforting us and reading through the services of the church." Armstrong also saw to it that family members were met in the Denver and Springs airports, and that someone was always at the Hills' home to prepare and serve meals.

"Then, after it was over, he conducted a beautiful service," Hill says wistfully.

Other families have similar stories of how Armstrong helped them through the most difficult of times.

"But that just made it all the more devastating," Hill says, "because while Don was providing such great pastoral care for his congregation, he also at the same time was stealing. The guy just robbed us all."

One of the first unusual indications, some members say, came in 1995. Armstrong went to the vestry, wanting the church leaders to divide the ownership of his home between the church and him. That was highly irregular, because Episcopal churches — not their clergy — were supposed to own all property. But the sanctuary was full on Sundays, the church was "bulging at the seams," as Hill puts it, so the vestry went along without causing a stir.

"All of us were hoodwinked," says David Watts, head of Grace's finance committee since the upheaval. "He did an outstanding job of building the church up his first 10 years. We flourished. Our membership grew, we had programs that were exciting, Don was charismatic and stimulating, and the adult classes were packed.

"But eventually, there was a steady, growing suspicion that things were not being handled properly."

Armstrong slowly took total control of all the church's finances, even to the extent of opening all the mail and handling the Sunday offerings, according to numerous sources. There were also 15 loans, capped by one in 2006 for $170,000 — most of which Armstrong never has begun to repay, according to documents prepared by the Episcopal Diocese of Colorado. And state law prohibits nonprofits from loaning money to any officers.

Also, after the split, Armstrong continued to use the tax number for Grace, but without reporting withholdings for staff, leading to the Internal Revenue Service filing two liens against Grace property, the most recent just a few months ago. A 2008 IRS letter to Grace characterized that as "corporate identity theft." (See "A taxing struggle," News, Oct. 2, 2008.)

"It seems that things got bad when Don realized he needed large sums of money," deMoraes says. "The oversight was not as good as it needed to be, but he really had control over everything, and for a long time he wasn't giving the vestry a clear picture. ... It's hard for people to question business practices when they've put their trust in somebody. But Don had never run a church before, and I don't think he was disciplined in that way."

'Violation of trust'

As for the college expenses, more than $125,000 came from an account called the Bowton Trust, funded by $300,000 from a Grace member's estate and intended to provide college scholarships for students in the church. It did, sporadically, until Armstrong's children went to college starting in 1997.

Armstrong directed regular payments from the trust to pay for tuition, expenses, vehicles and even housing — month after month, year after year, until 2003. Thereafter, those payments came from other Grace funds until 2006, totaling $123,047. Yet, despite requirements that the vestry approve all such payments, including from the Bowton Trust, church records show that the money for Armstrong's children never was officially approved or discussed.

"It really was a violation of trust," says Chuck Theobald, now the Grace congregation's lay leader as senior warden. "It was not about being conservative or liberal. This was about the Ten Commandments: Thou shalt not steal. Thou shalt not bear false witness. But his actions went beyond just the church, violating the laws of civil society."

Whenever he was asked about it, members say, Armstrong would insist that such practices as paying children's college expenses were common in larger Episcopal churches. But according to those interviewed for this story, nobody has ever found that to be the case.

It all came to a head in 2007, when the Episcopal Church took action against Armstrong, and he responded by pulling Grace out of the Episcopal Church of the United States, labeling his congregation as "secessionist" and affiliating with the Africa-based, arch-conservative Convocation of Anglicans in North America. He also filed suit to retain control of the Grace property on North Tejon Street, forcing those who opposed him into a very real exile for two full years.

As the concerns mounted over Grace's finances, Armstrong began preaching that the Episcopal diocese was politically motivated to attack him, and members say he referred to the Colorado bishop as an "atheist" and "neo-pagan."

"That last year, many people didn't like the vitriol coming from the pulpit," deMoraes says.

Meanwhile, Colorado Springs city police began investigating Armstrong's actions. In April 2009, a court ruling gave the Grace property back to the Episcopal diocese and Armstrong's opponents. With that, Armstrong and his faction left and formed St. George's Anglican Church, though they had to pay $164,000 to the IRS for that withholding issue and more than $325,000 in legal fees. Pueblo's district attorney office took over the case against Armstrong — because then-local District Attorney John Newsome was part of the Grace vestry — and eventually brought the indictment.

The plea bargain

Last September, special prosecutor Stephen Jones of Pueblo brought Armstrong's plea agreement to court — and there was little to give Grace's members satisfaction.

No trial, 20 felony counts reduced to one with a no-contest plea, a misdemeanor count with a similar plea. No recommended incarceration, just four years of probation, with restitution to be determined.

And, in the aftermath, no remorse from Armstrong. He talked to his St. George's congregation about how he had been vindicated. And a statement that he gave to an Anglican website, virtueonline.com, said the following (with no corrections for grammar or spelling):

"Plea agreements are always slightly messy and always a matter of give and take. Bottom line here is that they started with 20 Felony counts and we walked out of the court room with a misdemeanor, not to mention avoiding a trial in which no wins from the slug fest, and in which you risk the jury spitting the baby no matter how rock solid your case is, just because they like the prosecutor or something.

"So, on Friday a fictitious 21st felony count that had no basis in fact or history was created and added to address the original grand jury indictment and to assure proper jurisdiction. I plead no contest to that and it was differed. That was a procedural means to get to the real end, a misdemeanor. A fictitious misdemeanor was added, also without content-basis in fact or history, to which I entered an Alford plea ... in other words, not an admission of any guilt but to accept the offer to reduce 20 felony counts to single misdemeanor.

"So, long story short: 20 felony counts reduced to a single misdemeanor. I still maintain my total innocence, but have avoided a lengthy trial in which everyone looses, and put an end to this religious embarrassment."

Also, St. George's posted an online response to the plea agreement (later removed from its website), which appeared to have been authored or at least approved by Armstrong, given some first-person "I" references within it.

The response said in part:

"In preparation for the now canceled trial we have become convinced even more strongly that controversies within the larger denominational church were the catalyst for the Diocese's investigation and complaint, for the purpose of silencing our bold and successful defense of orthodoxy through our parish's life, discipline, and teaching ministry...

"We further believe the disparity between the magnitude of charges made against Father Armstrong by the Episcopal Diocese and the final content of the plea agreement vindicates not only Father Armstrong, but also clearly affirms our confidence that we ran an effective and well managed church in our days at the helm of Grace & St. Stephen's Episcopal Church, and continue to do so at St. George's Anglican Church.

"With only a restitution hearing to be held in the distant future, this essentially concludes this long and expensive attempt to silence orthodox resistance to theological innovations in the Episcopal Church."

The tone of those comments clearly offended Grace's members, and Jones as prosecutor, church leaders say. They add that Jones told them he's making Armstrong's comments prominent in his pre-sentencing report to Judge Werner, which begins the hearing.

"There was simply no acceptance of responsibility that usually comes with a no-contest plea," Theobald says. "Here was an opportunity for healing to happen that Don chose not to take."

Grace leaders are united in their support of Jones' actions as prosecutor. "He did a great job explaining everything to the grand jury," deMoraes says. "He wants to see justice done as much as we do."

Talk to Grace's lay leaders, though, and it's apparent they aren't obsessed with seeing Armstrong punished to the extreme.

"So far, Don has been able to slide through all this," Hill says. "But we've pinned our hopes on him having to make a truthful statement to the court. I simply want the court to order him to tell the truth of what really happened. ... The weight of the evidence against him was tremendous."

Since those first responses, Armstrong has not spoken to media about the case, and did not respond to messages for this story.

In the aftermath

The good news from Grace is that a new rector, Fr. Stephen Zimmerman, has immediately boosted Sunday attendance, participation in other church programs, and volunteering. But lay leaders have control of Grace's money now. They're paying off Grace's debts from Armstrong's years, and they're paying all their current bills.

"It's a wonderful, thriving place," Theobald says. "We're there together doing the right things. We haven't had to deal with Don Armstrong for a number of years. We've moved on, but at the same time, we have parishioners who trusted him deeply and feel distressed by the violation of that trust. We didn't have to go to trial to know we're doing what's best for our church."

Yet, the original Grace church remains splintered. Friendships have been broken. Families have divided, even husbands and wives, between Grace and St. George's.

Those still at Grace are glad the wait for an outcome to Armstrong's case is nearly over.

"We do think Don owes us, and the world, an admission of wrongdoing and a sincere apology," Watts says. "We also hope that this will end the whole matter and we can look to the future.

"Nobody knows what will happen in court. But I know of three other instances of embezzling in Colorado Springs, and they all went to jail — for taking a lot less than we're talking about."

So the drama has built toward this climax, or perhaps anti-climax. And some of Armstrong's words in that Feb. 6 sermon seem ironic:

"As we come to order our own lives encouraged by God's pastoral grace ... it is then we have the beginning of wisdom to discern the difference between good and evil, right and wrong, to know that which is of Godly wisdom and that which is of human folly."

How well Don Armstrong has applied those words to his own life isn't a religious matter anymore.

It's now up to a judge to determine.


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