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Catholic Medical Center IRS filings make no mention of Arsenault contract

New Hampshire Union Leader

May 07. 2013 8:02PM

MANCHESTER - Annual reports that Catholic Medical Center files with the IRS make no mention of a consulting contract between the hospital and the Rev. Msgr. Edward Arsenault, the Catholic priest under investigation for possible financial improprieties and an improper relationship with an adult.

The financial reports appear to contradict a statement released Monday, when the Manchester hospital acknowledged it signed a contract for consulting services with Arsenault in 2009, after he resigned from the hospital board of directors.

A hospital spokesman on Tuesday said he could not comment, citing an investigation by the New Hampshire Attorney General into Arsenault, who sat on the hospital board for 11 years.

"We covered what we needed to in the statement," said Alex Walker, general counsel for CMC. "Because of the pending investigation, we can't discuss it further."

However, two former high-ranking associates of CMC - former outside general counsel Ovide Lamontagne and former executive vice president Raymond Bonito - said they had no knowledge of the Arsenault contract.

"I did not know about the contract when it was entered into," said Lamontagne, who served a general counsel for the hospital before resigning earlier this year to accept a position as General Counsel for Americans United for Life in Washington, D.C. He said no such contract was reviewed by his firm, as was the practice for all but the smallest of hospital contracts.

"It doesn't ring a bell," said Bonito from his Florida home. "If there was a contract, it couldn't have been of any significance."

The IRS requires non-profit organizations to report their finances every year on Form 990 - Return of Organization Exempt From Income Tax. The disclosure includes salary and other compensation paid to top hospital officials, as well as trustees and members of the board of directors.

The IRS requires non-profits to report "the organization's former directors or trustees that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and of any related organizations."

The forms are signed under penalty of perjury, and penalties for false reporting include loss of tax-exempt status, said IRS spokesman Peggy Riley.

The IRS 990 forms for Catholic Medical Center, accessed via the website, cover three fiscal years of reports, from July 1, 2008, to June 30, 2011.

In its statement released Monday, CMC said it entered into the contract with Arsenault after he resigned from the board in 2009. The contract ended in 2010, and the statement gives no dollar amount.

Lamontagne said Arsenault was the bishop's delegate to the hospital board.

"To the extent the bishop's office had things that need to be approved or weighed in on, Father Ed conveyed the bishop's decision on that matter," Lamontagne said. Lamontagne praised Arsenault's work in the restoration of CMC as a viable hospital in the early 2000s.

According to previous Diocesan statements, Arsenault was also active in the Diocese's response to the priest-sex crisis later in the decade. He established a review board, developed a sexual misconduct policy and wrote code of priestly conduct.

Arsenault held top administrative positions in the Diocese from 1991 to February 2009, when he resigned to take a sabbatical, according to Diocesan spokesman Kevin Donovan. On October 2009, he took a job as president and chief-executive at St. Luke Institute (see related story, Page A1). In August 2010, the Vatican elevated him to monsignor.

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