Breaking the Faith – A Close Look at Covenant House

(From a village voice story, and you thought you knew John aka Bruce Ritter?)

By Russ Baker

Recent revelations of insider loans from an unregistered trust fund to board members and friends of Father Bruce Ritter, including a $131,000 loan to Father Ritter’s sister, Cassie Wallace, have splintered the management of Covenant House and raised doubts about the future of the $85 million charity. But the Voice has learned that the pattern of favoritism didn’t end there: Father Ritter’s niece, Ellen Wallace Lofland, was given the exclusive contract to decorate and furnish Covenant House crisis centers throughout the country, overseeing hundreds of thousands of dollars in expenditures annually. In addition, Lofland’s husband Tandy was hired to manage multimillion dollar construction and remodeling projects at the Houston and Fort Lauderdale Covenant Centers.

The spreading financial scandal has already led to the forced resignations of two board members, including Ritter’s personal physician, James T. Kennedy, who left after his loan from the hidden trust was revealed by The New York Times. But the Voice has learned that Kennedy remains Covenant House New York’s medical director, earning $100,000 a year for his 20-hour-a-week position. The increasingly compromised board has descended into charges of scape­goating over the extraordinarily high per client costs and huge salaries for top administrators. But the central question is how such a wasteful and ill managed program could become the brightest of a thousand points of light beamed on the problems of troubled youth of right wing "voluntarism" by accident. Working closely with former board member Robert Macauley, a wealthy businessman and life long chum of President George Bush, Ritter built a network of well-connected allies across the country to help pave the way for Covenant House’s rapid expansion. He made friends with many Reagan­/Bush friends, like Peter Grace, the conservative billionaire head of W. R. Grace, William Simon, the former Treasury secretary, and Charles Keating, chief of California’s failed Lincoln Savings and Loan, which is under federal investigation for influence peddling in Congress. Many of these new friendships went well beyond a hefty Christmas contribution. Keating’s company, for example, made so many “substandard” loans - as much as $40 million worth - to Covenant, that the S&L took out a $10 million “key man” life insurance policy on Father Ritter, based on his proven ability to raise money via direct mail appeals.
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