December 2009 - January 2010


Anglican business

By David Marr
Illustration by Jeff Fisher.

Sydney’s brand new archbishop wanted money – lots and lots of money – to persuade 400,000 souls in the nation’s most sinful city “to serve Christ in love” within a decade. By chance – or malign good fortune, perhaps – Peter Jensen’s passion for growth was exactly in tune with the times. In 2002, he mobilised the prayers of the Anglican diocese and put at hazard on the stock market the ample remains of the wealth bestowed upon his church in the early years of the colony.

And God smiled on the enterprise. Millions rolled in from the bourse and millions flowed out to water the fields of the Lord: in Sydney, in like-minded dioceses in the bush and Anglican provinces in Africa. Jensen’s wealth and reach made him a cleric either admired or despised in the Anglican world, as he pursued his Mission to fill the pews with true Bible-believing Christians. For Jensen and his allies, this involves absolute faith in the ungodliness of homosexuality and the subservient role of women.

The investment strategy of the diocese won plaudits for shunning gambling, pornography, armaments, tobacco, alcohol and uranium mining, while delivering a handy $10 million or so every year – for which both God and Rodney Dredge were regularly thanked by the Sydney synod. (Dredge was running the Glebe Administration Board, which oversees the vast diocesan endowment funds.) In 2007, at the height of his success, the synod declared: “In all he has done, Rodney has sought to honour God and the Gospel of our Lord Jesus Christ in and beyond this Diocese.”

Dredge had no formal qualifications in banking, finance or investment. A big man, about whom the code word “forceful” is frequently employed, Dredge was at one time a student at the Royal Military College Duntroon, didn’t serve in the army but studied science and worked at Taubmans Paints, while serving for years on synod committees and teaching Sunday school at St Paul’s Castle Hill, a hardcore mega-parish on the northern fringe of Sydney. Being offered the job of running the board in 2001 was, he said, “like a light going on. It felt like God had been preparing me for the role for the last 20 years.”

The diocese’s investments were in better shape at that time than might be expected, considering the debacle of the early 1990s. A strategy of pouring church money into Sydney office-block developments had come to grief in the recession; the losses amounted to more than $100 million. At the bottom of the market, the diocese abandoned property and headed for the stock exchange. By the time Jensen and Dredge came onto the scene, there was around $200 million to play with. This money was not for running the parishes – they essentially support themselves – but was a vast tub of wealth to serve the wider purposes of the Sydney church: spreading the Word, interfering in other dioceses and later pursuing homosexuals in Africa. Sydney was bullish for Christ.

Dredge and his team did what no other Anglican diocese in Australia risked doing: they leveraged. The borrowing was gigantic. The strategy was never a secret and had the backing of the board, the synod and Jensen himself. By 2005, the diocese was in hock to Westpac and ANZ for $150 million. While the going was good, leveraging delivered dividends of $10 million a year, on top of a $20 million windfall that was pulled out at the height of the stock-market boom to build new churches in the suburbs. There was, one member of synod told me, “euphoria at the resources available to do things”. When Dredge retired – showered with praise – in September 2007, the total assets of the Diocesan Endowment stood at over $550 million.

Dredge refused to talk to the Monthly about any of this. The stock market was already teetering as the job passed to a very different man: a mild-mannered former senior executive of St. George Bank. “God planted the seed of an idea that I should do something different with the next stage of my career,” Steve McKerihan said as he turned his back on a big bank salary to work for the church. “God provided me with a clear alternative.”  An alternative job, but not another investment strategy. Sydney evangelicals see prosperity as a sign of God’s favour. The awesome returns of the boom years showed God was on their side. And God does not change tack. So as the market went into freefall, McKerihan and the board hung on tight. “We thought we would be able to ride out the fluctuations in the market and hold the bulk of our market positions,” the board later reported. “We did not, however, envisage the severity of the falls that occurred concurrently in the various markets due to the Global Financial Crisis.”

By September 2008, the board was in breach of bank covenants. By October, the value of the net assets had fallen to $126 million. Jensen had not been swift to grasp what was going on. “It was in November that I got the first inkling of the magnitude of what had happened to our investments,” he said. “Each successive month seemed to bring worse news.” Rather than renegotiate its position with the banks, the board decided to hurriedly liquidate $100 million in equities, repay the last bank debts and hold what was left in cash. For the second time in 20 years, the diocese sold out at the bottom of the market.

News of the debacle began to break early this year, but it was not until June that the archbishop wrote to the parishes, revealing some of the grim details of the losses and the cutbacks they would entail: “Our investments have fallen by more than half and distribution of money from our investments has been cut by 50%.” Behind the scenes, consultants from Cameron Ralph were preparing a bleak report on the strengths and weaknesses of the Glebe Administration Board. One weakness was identified to be “A culture of  ‘forgiveness’ instead of hard accountability”.

Hopes that the synod in October would be a stern reckoning were dashed when Jensen delivered to the gathered churchmen and women a florid meditation on the apocalyptic signs of war, climate change and financial meltdown. “The signs of the times may not be the prelude to the end of all things,” mused the archbishop, “but they are a pointer to the end of all things.”

His performance that night was a tour de force of clerical obfuscation. The words ‘greed’ and ‘avarice’ were nowhere in his text. He confessed feelings of disappointment, doubt, responsibility, grief and anxiety, but he could identify no fundamental wrongdoing. “I do not feel that gearing was ethically dubious, for example, though I had to have an argument with myself to come to that conclusion.” Arguments with himself ranged across a number of fronts: “It may be that the Lord is chastising us for our sins … but then it may not be our sins at all – it may be that the Lord is simply seeking to test us or perhaps He is seeking to stop us doing something which is right in itself but not in accordance with His secret will.”

After the theology came the PowerPoint presentations. A few spunky dissidents in the synod called for retribution. Shouldn’t heads roll? Susan Hooke, a member of a rich, lower North Shore parish, suggested God could not be blamed. “The losses were caused by people in this room.” But the Jensen forces were impregnable. Passed overwhelmingly – though sadly shorn of its rural rhetoric – was the motion: “Synod continues in thankfulness to and dependence on our Almighty God and Loving Heavenly Father, who owns the cattle on a thousand hills, is no man’s debtor and knows our needs better than we know ourselves.”

The financial collapse of the once-feared Anglican diocese of Sydney is colossal. But for the misadventures of 1990 and 2008, net assets would now stand at about $270 million. Instead, the diocese is limping into the new year with net assets of only $117 million. Over the next triennium, distribution from investments is to be chopped to about $5 million per year. Charity and evangelism have suffered; jobs have been slashed and programs closed. Jensen no longer heads one of the great financial powerhouses of the evangelical world. His pot of investments is still bigger than the Melbourne diocese’s $62 million, but is now way behind Perth’s $265 million. On the far side of the Nullarbor, the Lord directed Perth to get into commercial property and stay there. His ways are, indeed, truly mysterious.

Peter Jensen is planning to stick around until 2013 and his zeal for the Mission is undiminished. “We are to live by persistent, active faith,” he told synod. Fundamental to his thinking is this: the world is not a playground for evil spirits able to be controlled through magic, but nor is it empty of spirit (i.e. mechanistic and mindless matter delivering only luck and accident). The world, as Jesus understood it, is a world controlled by one great Spirit, the sovereign God Himself, who unceasingly supervises its minutest affairs.

Actually, the Mission hasn’t gone too well either. Despite the millions thrown at it in the boom years, Sydney proved deaf to the message. Church attendance is flatlining. Among the city’s women and gays, it’s a cause for discreet celebration.

David Marr

David Marr is a writer and journalist. He is the author of the award-winning Patrick White: A Life, Quarterly Essay 38, ‘Power Trip’, and co-author of Dark Victory. He has been a reporter with Four Corners and the host of Media Watch.

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