Charles Street AME financial officer admits using endowment funds to pay church expenses at direction of pastor

By Beth Healy, Globe Staff

The financial officer of the Charles Street African Methodist Episcopal Church testified in federal bankruptcy court Tuesday that she used restricted grant funds to pay church expenses at the direction of the church’s pastor, and that the two kept the matter secret from other church officials.

The Reverend Opal Adams, who handles bookkeeping and accounting for the historic Roxbury church, said she tapped $825,000 from the Lilly Endowment to pay Charles Street AME expenses, including salaries, in recent years. She also testified that it was the Reverend Gregory Groover, the church’s pastor, who asked her to do so.

The matter has been the subject of hours of questioning in the Boston bankrutpcy court this week, as Charles Street AME’s lender, OneUnited Bank, seeks to prove that the church is incapable of repaying its debts as proposed under a reorganization plan.

Charles Street AME owes the bank about $5 million. The church filed for bankruptcy protection last year, after the bank threatened to auction off its property.

Lawrence Edelman, a lawyer for the bank, asked Adams whether she had tapped the Lilly Endowment funds even though she was aware it was “inappropriate.” Adams responded, “Yes,” on Tuesday.

Groover had testified to the same facts Monday and apologized for having done it. According to testimony in court, the church has repaid $288,000 of the Lilly funds so far.

The Lilly Endowment is a private foundation based in Indianapolis that supports community development, education and religion. The endowment money was earmarked mainly for a program for pastors in training, with a smaller sum meant to be distributed to other local churches in the Boston area.

Officials of the Lilly Endowment could not be reached Tuesday. In correspondence presented in court, the group said it was disappointed but monitoring the situation.

The use of the Lilly funds first became public in February, in depositions with church officials. But the extent of the borrowing of funds came out only in new depositions in May, and in court this week.