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OREGON: Episcopal Bishop of Oregon, is accused of wrongdoing in a lawsuit

OREGON: Episcopal Bishop of Oregon, is accused of wrongdoing in a lawsuit
Fired employee accuses Michael Hanley of assaulting female priest, misusing money

By David W. Virtue, DD
October 26, 2017

A woman who once worked at the Episcopal Diocese of Oregon is suing her former employer and Bishop Michael J. Hanley for $845,000, accusing him of assaulting a female priest, sex discrimination, age discrimination and appropriating funds.

Mary Macy, the former finance officer of the Episcopal Diocese of Oregon, claims she was fired for opposing Hanley's actions and wants the funds he misused to be returned to the Episcopal Bishop of Oregon Foundation. She accused the bishop of misusing money donated by the deceased grandmother of Mayor Ted Wheeler. According to the lawsuit, the foundation managed more than $10 million of her assets.

The Episcopal Bishop of Oregon Foundation is a non-profit corporation and the majority of its funds can only be used for specific purposes.

Macy says Hanley assaulted a female priest when he visited her congregation in 2014.

The Oregonian newspaper reported that Mary Macy, who was the top finance officer for the diocese, claims she was fired from her job last year because she spoke up about Hanley, the diocese's leader who oversees more than 70 churches with 15,000 congregants in western Oregon.

Macy claims in her lawsuit filed Tuesday that Hanley allegedly assaulted the Rev. Margaret McMurren in Salem while he visited her congregation, Prince of Peace Episcopal Church, three years ago.

Macy saw Hanley wrap his arm around McMurren's neck and move with her down some stairs when he came to her church in 2014 for a breakfast and service, said Matthew Ellis, Macy's attorney, reports the newspaper.

McMurren's attorney, Harris Matarazzo, told The Oregonian/OregonLive that multiple witnesses reported seeing the same thing. Witnesses also saw the bishop push the front of his body against the back of McMurren's body and heard him make disparaging comments about her age in front of congregants during the visit, he said.

Macy also claims Hanley pushed forward his own plans on how to spend a $10.7 million fund, created mostly from donations from Wheeler's grandmother -- even though the elder Wheeler had restricted the money for use by the chaplain at Legacy Good Samaritan Medical Center. The lawsuit doesn't detail what the bishop did with the donated money.

In another alleged impropriety, Hanley solicited donations from congregants to pay for his membership at the Arlington Club -- an exclusive private club in downtown Portland -- then wrongfully granted those donations tax-deductible status, Macy claims in the lawsuit.

Clergy and delegates elected Hanley as western Oregon's bishop in 2009. Hanley disputed the allegations in an email Wednesday to The Oregonian/OregonLive.

"The Diocese believes that Ms. Macy's allegations are unfounded and will defend the lawsuit vigorously," Hanley said in the statement.

Hanley said the diocese couldn't comment on "confidential personnel matters," including the circumstances that led to the end of Macy's employment.

Macy's allegations were dismissed after being investigated by the Protestant Episcopal Church in the United States and the Standing Committee of the Diocese of Oregon, he said.

Macy was fired in October 2016, according to her suit. She filed complaints with the Oregon Bureau of Labor & Industries, alleging retaliation for whistleblowing. But the bureau dismissed her complaints after the diocese presented evidence that Macy was a poorly performing employee, according to documents provided by the state.

Macy's lawsuit states that the diocese searched for ways to "gather dirt" on Macy as a pretext for termination, then pushed her out. Macy's attorney, Ellis, said the case is a classic story of retaliation against an employee for speaking out against someone with greater authority.

Among Macy's other complaints, she claimed Hanley had little financial oversight. In a 2015 report to the Diocesan Board of Trustees, Macy said the bishop was personally writing checks without documentation of where the money was going. Her report also said she spotted Hanley drinking alcohol in the office during the work day.

"They didn't want to hear it," Ellis said of the board.

McMurren, the Salem priest involved in the 2014 encounter with Hanley, referred questions about the alleged assault to her attorney.

Matarazzo said at least six people witnessed the incidents. McMurren also reported them to the church hierarchy and an investigation occurred.

A national church panel told Hanley that he must have a "facilitated conversation" with McMurren to explain himself and apologize, but that has yet to happen, Matarazzo said.

Matarazzo described the church investigation as "problematic" in part because it was led by a bishop who is a friend of Hanley's. The friend also was among the three people who ruled on the case, Matarazzo said.

Matarazzo said McMurren decided not to pursue potential criminal charges or a lawsuit "because of her strong belief in the church and its mission, including healing."

But she still feels uncomfortable being near the bishop, he said.

Macy's lawsuit was filed in Multnomah County Circuit Court.

A spokesperson for the National Church told VOL that as this is a pending legal matter there will be no comment.


In 2005 the diocese had 18,546 baptized members. By 2016 it had lost 22.5% of its members and dropped to 15,028.
ASA figures in 2005 were 7,087, by 2016 they had dropped to 5,742 a loss of 23%.
Plate and pledge held steady at just over $10 million. The diocese has 71 congregations. Confirmations in 2016 for adults and children totaled 97, some 51 were received into their churches, but burials totaled 287!
The average age of all its priests is 59, with only 17% under the age of 44.
44% of all priests are over the age of 65, with 23% aged between 55-64.
The number of full time priests of one congregation is 37%.
The number of part time priests of one congregation is 40%
The number of non-stipendiary priests is 20%
The number of full time Women Priests is 39%
The number of full time Male priests is 35%

The Oregonian, Willamette Week and KATU 2 news contributed to this story.

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