Dearly Beloved in Christ,

Various public forums have recently been criticizing my administration as the ruling bishop of the Diocese of Alaska. It has been difficult for me to read these unfounded allegations and it must be perplexing for you to differentiate between what is truth and what is fiction. Assaulted by these false allegations on an almost daily basis, I have struggled with deciding whether to simply ignore these accusations or to address them directly. My usual response to unwarranted and unfounded criticism has always been to be forthright and to face difficulties and misunderstandings head-on. The present situation is no different. Because I deeply value the steadfast support and trust that you have placed in me, I believe it is important for you to hear from me personally and to have the facts, which only I can provide. This letter may stir up even more criticism, but I am willing to accept that knowing I have conscientiously fulfilled the responsibility that has been entrusted to me to care for the God-protected Diocese of Alaska. Through a generous donation by a friend of the church, who did not want diocesan funds used to answer these questions, I am presenting you these facts for consideration.

On November 14, 2001 I was elected by the Holy Synod of The Orthodox Church in America to be the ruling bishop of this God-protected Diocese. By the Grace of God, I have now exercised that responsibility for more than five years. This is a position I never sought, nor even imagined at this time in my life. But this responsibility and burden was placed upon my shoulders and I accepted it as the will of God. I can sincerely say that I am continually aware of and give thanks for this awesome responsibility and privilege. I can also say that I am constantly aware that with this privilege and responsibility comes the accounting that I will be called to give at the dread judgment. Only I will be held accountable for what has been entrusted to my stewardship. It is in this light and with this awareness that I am now relating my accountability to you as a matter of fact.

Upon my arrival, I was met by clergy and faithful, who sang, carried banners and offered words of welcome. On that day I was welcomed as the Bishop of Baltimore, Auxiliary to His Beatitude, Metropolitan THEODOSIUS in the role of diocesan administrator. It was the longest day of the calendar year; a day full of brightness, filled with sunshine and light, during that time of year when it never really gets dark, referred to in Russia as the “white nights.” After this brilliant welcome, I literally had to “hit the ground running.” I needed to quickly acquaint myself with the geography of this vast Diocese and acquire a sense of place, economy and climate where the faithful of the Diocese resided. I had to discover and educate myself on the diversity of cultures—Aleut, Yup’ik, Tlingit and Athabaskan. I knew that Alaska possessed a rich and holy history spanning centuries during which saints, both recognized and unknown, had labored. And so I arrived in Alaska with an awareness of the Diocese’s spiritual inheritance and cultural legacy.

Sadly, I was also aware that I would be faced by another reality - a recent history within the Diocese that was anything but bright. Tragically, clergy and faithful in the Diocese had grown apart, even within families. There was a palpable feeling of anxiety, suspicion and animosity. My predecessor, Bishop INNOCENT (Gula) a former auxiliary within the Diocese still resided here. I was the new hierarch sent to replace him. Bishop INNOCENT had close supporters who no doubt viewed me as an enemy and usurper. There were those who had been deeply wounded by capricious actions and unorthodox behavior. Therefore my first priority was to establish order both spiritually and practically. It was probably the clergy who had suffered most. Healing, rebuilding, and educating could not be accomplished immediately, and I had to accept that it would be a long but worthwhile process.

It is an unfortunate fact that, when I arrived as vicar bishop, no provisions had been made for me to receive any stipend from our Central Administration or any other source of income. I was virtually “on my own” in this respect. However, thanks to the kind intervention of Bishop TIKHON and the Diocese of the West, I was provided with a salary through June 2001. Upon my arrival in Alaska, there was less than $100.00 (one hundred dollars) in the diocesan bank accounts. After some investigation, we discovered that over $300,000.00 had been withdrawn from all the diocesan accounts. We now know that $200,000.00 of that was used to pay off debts at Saint Herman Seminary, but, for the remainder, there is no record, only withdrawal receipts.

Shortly before I arrived, the Seminary lost its accreditation, and with that loss we were forced to relinquish our access to valuable state funding. The complex process of reinstating our accreditation is ongoing and we are confident that this will be realized as we continue to train men and women to serve the Holy Orthodox Church. I am deeply grateful, that under these circumstances your faithful and continuing support allowed not only the seminary to remain open but to thrive. Audits for the past five years are now complete and yearly on-going audits by an external professional CPA firm continue. It gives me satisfaction to report that we can account for every dollar donated to the seminary under my administration.

The seminary buildings were in a state of disrepair. With the help of many volunteers work was begun to replace walls, add new siding and refinish the structures inside and out. There have been at least several visiting OCMC teams yearly since I arrived. There were other teams led by capable priests like Father Anthony Karbo of Colorado Springs, Colorado, and Father Theodore Pisarchuk of Jacksonville, Florida, who traveled from the “Lower 48” with their armies of volunteers, to make this effort a reality. Our own efforts, under the direction of Father Mikel Bock, transformed a run-down complex of buildings into a ‘storybook’ campus.

This transformation hasn’t been exclusively physical, but internal as well. This can be witnessed on a daily basis by observing the students’ enthusiasm, the faculty’s positive attitude and the rhythm of a prayerful seminary life. It would be impossible to assess the true value of the generous “in-kind” work that has been donated—building materials, hours of work and pure dedication. We regularly give thanks for this sacrificial work accomplished by these extraordinary workers and the generosity of our benefactors especially at the Akathist to St. Herman, which is served in every parish each Thursday throughout this Diocese.

During my first meeting with the Saint Herman Seminary Trustees in Seattle it was apparent that something had to be done for the students. There was $87,000.00 in uncollected tuition and I soon found that many of my clergy had defaulted on loans they secured for their seminary education. I made the decision that no student should or would graduate from the seminary with that debt. We immediately relied on your donations to pay for our students’ seminary education. Thanks to Almighty God, through the intercessions of Saint Herman and many other saints, this continues to be realized. The Board of Trustees is comprised of clergy and lay persons from throughout the United States; responsible, dedicated men and women who believe in the vision of Saint Herman Seminary. I am grateful for their commitment and pray for them in these dire times of criticism, that they may remain focused on our mission. Glory be to God the seminary is paid off and seminarians aren’t burdened with student loans.

It seems a great misunderstanding has arisen about “the sale of lands in Alaska.” It is natural to expect that lands have been sold throughout the years; land is part of the church. Under my administration and with the consultation of the best legal advice we could find we contracted with the former Executive Administrator of the Real Estate Commission for the State of Alaska.

A three-year process began during which we made certain that we had leases where they were appropriate and, where possible, we attempted to secure more leases and increase this portion of what God had given us. This land belongs to the Diocese of Alaska and as the bishop of this Diocese; I take seriously my administration and stewardship and will not relinquish that which has been entrusted to me. His Beatitude has stated that these lands provided income for The Orthodox Church in America, which is true. The Diocese of Alaska is The Orthodox Church in America in this state. Those lands sold previous to my arrival were not solely used for the good of this Diocese and her people. When land was sold it was the local parish and the OCA that got fifty percent each. The Diocese received nothing from those sales. This is not reasonable. Our investigation confirms that previous administrations sold parcels of land. Archbishop GREGORY established the Alaska Lands Commission in 1992 to assist him in administering the leasing and sale of diocesan lands. It was my prerogative, as the ruling bishop to dissolve this commission which has no standing within usual diocesan administration and which may further be understood to be contrary to the canons of the Church. Who has ever heard of a bishop residing on leased territory and his land controlled from outside that territory?

For the record, lands belonging to the Diocese of Alaska in 2005 netted $65,356.10. Taxes, legal and consulting fees amount to $14,377.10. Questions have recently been raised about so-called oil-rich holdings that belong to the Church. The Arctic Slope of Alaska is known for it’s vast oil and natural gas resources. The lone ‘oil-rich’ holding is a piece of land in Kenai. Every month the diocese receives a check from Marathon Oil in the amount of $181.79 for the lease on this property. The Diocese of Alaska has no oil wells.

At our 2003 Diocesan Assembly, we agreed to be a tithing diocese. Ten percent of what is received within the Diocese is given as our diocesan tithe to The Orthodox Church in America. It is important to note that that tithe is higher than the previous revenues which were being forwarded to Syosset from land allocations. Certainly, it is not higher than any sale of land, but I do not intend to sell land simply to cover costs. It was made very clear in the Summer 2006 issue of The North Star that only two pieces of land have been sold since I became the ruling bishop and both of these properties could have been lost to adverse possession. The third was an acre for acre trade in a village that was able to install needed utilities as a result of this transaction. Villagers in this village now have the opportunity to have running water and sewer in their homes. Our ability to facilitate this modernization through a land transfer was a simple, prudent act of Christian charity.

In a typical Alaskan bush village, in which 80% of our diocesan faithful live, there is an unemployment rate of 90%, and for every hundred people there are ten jobs. Half of these jobs are filled by non-Orthodox residents—mostly school teachers and government workers. To even suggest that the Diocese pay the absurd “head tax” would be wrong. I maintain that our entire church should tithe as we are taught Scripturally and live from what God has directed. We should not make excuses that there are falling numbers of faithful. We must not allow ourselves to become “cheap” or miserly in our stewardship.

Upon my arrival as vicar bishop, I learned that as the result of a previous land sale, a local parish was holding $200,000 in sale proceeds. Since a 50/50 agreement was still in affect, whereby the local parish and the OCA’s Central Administration split proceeds from land sales 50/50, I honored it and directed $100,000 be forwarded to them but emphasized that this arrangement would not continue under my administration as the ruling bishop.

All of the findings of our lands research were organized and properly recorded. I took two copies of this recorded information back east in 2003. One was given to Protopresbyter Rodion Kondratick for the files in Syosset and the other was hand delivered by me to His Beatitude, Metropolitan HERMAN, in South Canaan.

In addition to being accused of “selling” Alaskan lands, I have also been accused of “mortgaging Alaskan properties.” First, I would like to ask, who in today’s world has not legally sold property to upgrade or reinvest the proceeds? Yes, I have done this, and all the property that has been acquired is in the name of the Diocese of Alaska. In addition, my Diocesan Council has been apprised of every action we have taken. And the results: the old chancery I inherited was appraised for $325,000. It was sold for its appraised value and a down payment was placed on a new Chancery and a small apartment complex. This apartment complex was later sold for almost twice what we paid and the new Chancery was paid off. We then invested the remainder on a downtown property that currently serves as the Russian Orthodox Museum and Holy Trinity Chapel. God willing, this will grow into a center for our Church in the years to come. In addition, we paid off the Diocesan vehicle. As of today we have an approximate $345,000.00 mortgage on the Museum property. This is the ONLY mortgage we have! That property and the current Chancery are valued at approximately $1.5 million. I think most would agree that this is pretty good return on investment over the past five years considering what we had to start.

Of course, we are not “rolling in money.” This is a huge diocese with many expenses—there are the ongoing expenses of upkeep, administration, and outreach as well as a Seminary budget of a half million dollars per year. But our investments have been made wisely and allow us to expand and build on our historic presence in Alaska. This is a presence every Orthodox Christian should support, most especially our own people in The Orthodox Church in America. The Diocese of Alaska, the starting point of the Orthodox missionary presence in North America is our heritage and legacy!

Some recent postings on public forums have directed criticism at me personally. I encourage anyone who feels I have wronged them to contact me personally. I am not difficult to reach and this would be a more productive means of resolving lingering resentments than making public accusations and rebuttals.

It is my hope that these few lines of clarification and outlining of the facts will assist those who have concerns resulting from the allegations and questions about the Diocese of Alaska and my archpastoral stewardship. In these sad days in which The Orthodox Church in America is being constantly attacked from both within and without, such baseless accusations can only work against the Church’s mission, both here in Alaska and throughout North America.

In closing, please be assured that I keep you in my prayers as we approach the holy feast of Christ’s Nativity. May we individually and collectively find renewal in His Incarnation and presence in our midst. It is my prayer that our Holy Church, which He came to build, will be renewed as we seek to do His will.

Love and Blessings,

Bishop NIKOLAI