First published:

New Times Los Angeles | Dec. 27, 2001

"I would say that the archdiocese has screwed a lot of Catholic families. It has been extremely heavy-handed, disingenuous and disloyal."

Top: Calvery Catholic Cemetery in East Los Angeles

 

Above: Cardinal Roger Mahony pushed the deal to commercialize the Los Angeles Archdiocese's cemeteries with funeral industry giant Stewart Enterprises.

 

"I hate to say it," recalls Montebello Mayor Ed Vasquez, "but I think the archdiocese just wanted to make a lot of money."

Unholy Alliance

Cardinal Roger Mahony's secret deal with funeral giant Stewart Enterprises turned L.A.'s Roman Catholic cemeteries into a cash cow -- but it's the faithful who are getting milked

 

 

By Ron Russell

 

On the day in 1997 when Cardinal Roger Mahony blessed the ground upon which Our Lady of the Angels Cathedral would be built, he had special reason to be pleased. Although few outside the cardinal's inner circle knew it yet, three months earlier Mahony had struck a deal with the world's third-largest operator of mortuaries and cemeteries that would result in a bonanza of many millions of dollars for the Los Angeles archdiocese he governs. In an unprecedented arrangement that is even now shrouded in secrecy, the cardinal agreed to allow Stewart Enterprises Inc., based in New Orleans, to build commercial mortuaries at six of the 11 L.A.-area Catholic cemeteries. The deal would give the death-care giant a huge leg up in cornering a lucrative segment of the funeral market that the archdiocese, with its 4.5 million Roman Catholics, represents. In exchange, the archdiocese would be able to share the largess by leasing the ground beneath the mortuaries, five of which are now operating, to Stewart for 40 years.

 

Five years and -- by the time it is finished -- at least $193 million later, the lavish and lackluster cathedral complex rising among the sterile office towers and government monoliths of Bunker Hill is scheduled to finally open next Labor Day. Archdiocese officials insist that the timing of the Stewart deal is purely coincidental to the cathedral's construction. But such denials have been greeted with skepticism even among the cardinal's own clerics, some of whom have complained bitterly about his decision to use consecrated ground owned by the church for commercial purposes.

 

Indeed, Mahony has moved swiftly to silence those within the church who've had the temerity to question the Stewart compact. Eight parish priests, including Monsignor Juan Matas of Montebello, were forced to recant last year after initially siding with the project's opponents who boldly set back Mahony's plans by persuading Montebello officials to block construction of a sixth mortuary. The archdiocese has fueled suspicion about Stewart's link to the cathedral by providing almost no information about who some of the cathedral's donors are or how much they've contributed, including at least two corporate donors listed as "anonymous." It has similarly declined to reveal how much Western Sequoia Corporation, another firm with close business ties to the archdiocese's cemetery operations, has contributed.

 

Otherwise, Mahony and his subordinates have done their best to ignore the protests of those who say it is a travesty for an archdiocese with so many poor, mostly immigrant Catholics to spend such an enormous sum for a new cathedral. In 1996, members of the Los Angeles Catholic Worker, a lay group that administers to the poor, occupied the former Saint Vibiana Cathedral at Second and Main streets to protest the cardinal's unsuccessful efforts to raze the historic 19th-century Spanish Baroque church when Mahony had wanted to build Our Lady of the Angels there. In 1998, several dozen members of the group disrupted the new cathedral's official ground breaking after scaling a fence and commandeering a piece of earthmoving equipment.

 

But even excluding speculation about the cathedral, the Stewart deal, cobbled together during secret talks in New Orleans and Los Angeles in the spring of 1997, was bound to be controversial.

 

As one of the "big three" funeral chains that in recent years has shriveled competition by gobbling up independent mortuaries with the zeal of a Jurassic Park velociraptor, Stewart is widely viewed as a culprit of spiraling funeral prices. Indeed, Mahony's alliance with the company was no less shocking than if he had announced a deal with Big Oil to build service stations selling high-priced gas in parish parking lots and then tried to strong-arm Catholics to fill up there. "For the archdiocese to go into business with Stewart is sinful," says the Reverend Henry Wasielewski, 71, a Phoenix-area priest who heads the Interfaith Funeral Information Committee, a consumer group. "It's like inviting the wolf into the henhouse."

 

Mahony has scarcely spoken about the Stewart deal publicly. Tod Tamberg, the media relations director for the archdiocese, said that the cardinal would have nothing to say about the matter for this article. Neither did Monsignor Terrence Fleming, who oversees the archdiocese's cemetery department, respond to interview requests. But Randy Stricklin, president of Stewart's western division, confirms that the company's arrangement with the archdiocese, which he credited Mahony as having initiated, was a "triple-net" lease for a term of 40 years, after which the mortuaries that Stewart has thus far spent $22 million to build will belong to the archdiocese. While declining to offer details about the strength of the mortuaries' business so far, Stricklin says, "things are going well. Everything is on target with our projections."

 

He says Stewart pays property taxes on the mortuaries and ground beneath them, despite that the facilities are on archdiocese property. Knowledgeable observers say the fact that the arrangement involves a triple-net lease, as opposed to a basic land lease, suggests that the deal is structured to enable the archdiocese to share profits in accord with some undisclosed formula if Stewart prospers, as expected, from the alliance.

 

And those profits are potentially enormous. A general rule in the funeral industry is that within five years mortuaries built at cemeteries usually end up providing services for half the burials that take place there. With the imprimatur of the church behind it, industry sources say, Stewart could easily exceed the norm. "To me the interesting question is how [the archdiocese] can get away with a deal like that and not jeopardize its tax-exempt status as a religious institution," says Richard Gutierrez, an attorney and L.A. mortuary owner who is also a past chairman of the defunct state Cemetery Board. "I'd love to get the chance to depose them on that issue."

 

Tamberg of the archdiocese portrays the Stewart arrangement as an extension of its pastoral mission, saying that it is a means to provide L.A.'s Roman Catholics with quality funeral services at reasonable prices and with the convenience of having mortuary, chapel and grave at a single location. He offers a similar view of the archdiocese's relationship with Western Sequoia, a commercial cemetery-sales company with headquarters in Inglewood. Since 1987, Western Sequoia has enjoyed an exclusive role in selling graves, crypts and niches at archdiocese cemeteries, a function that was handled in-house by archdiocese employees until after Mahony became archbishop in 1985. (Pope John Paul II elevated him to cardinal in 1991.)

 

"It's part of our ministry. It's an opportunity for us to help people who are grieving see the love and comfort of Jesus Christ," Tamberg says of the church's role with its cemeteries.

 

But when questioned about the Stewart deal, his tone changes.

 

"That's a business thing. We're not going to talk about that stuff. We don't discuss our business and financial relationships in public. But if you're trying to draw a link between Stewart and the cathedral, you're on the wrong track. There's no causal relationship there."

 

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Beyond the secrecy surrounding the deal's specifics, the misleading way in which the archdiocese and Stewart have teamed up to promote their partnership has drawn a barrage of criticism from rival mortuaries and consumer advocates. For instance, to market its funeral homes at the Catholic cemeteries, Stewart -- with the archdiocese's blessing -- created a subsidiary called Catholic Mortuary Services.

 

Critics say it is an explicit attempt to disguise the commercial nature of the mortuaries while making them sound more "Catholic." In fact, Catholic Mortuary Services uses the official seal of the archdiocese as its logo, and in promotional literature published by the archdiocese's cemetery department -- and personally endorsed by Mahony -- the fine print must be scrutinized to discover that Catholic Mortuary Services is, indeed, a Stewart company.

 

Nowhere is the displeasure with the Stewart alliance more pronounced than among L.A.'s independent mortuary owners, some of them Catholics, who view the pact as a slap in the face. After providing funeral services to Catholic families in some cases for generations, the independents have accused the cardinal of trying to drive them out of business, now that the archdiocese and Stewart share a financial interest.

 

Not only has the archdiocese helped Stewart poach their customers by unethically making available parish donor lists, but it also exerts pressure on priests to steer parishioners to Stewart's mortuaries at the Catholic cemeteries, despite costs that are often substantially more than those of the independents. Stricklin, the Stewart regional president, defends his mortuaries' prices as "reasonable," adding that they are "neither the most expensive nor the least expensive." But a New Times comparison of price lists from Stewart's Catholic Mortuary Services with those of several randomly selected independent funeral homes reveals that Stewart charges considerably more.

 

Although each Stewart mortuary offers an array of products with different prices, even its discounted "complete" funeral packages compare unfavorably in price with those of independent funeral homes. For instance, Calvary Mortuary, the Stewart facility at the archdiocese's Calvary Cemetery, offers one such package for $2,585. That compares to a price of $1,795 -- or about 30 percent less -- for an almost identical package at the independently owned Hollywood Forever Mortuary. (Such prices for a mortuary's services do not reflect the cost of caskets and other products that may be bought separately and can drive up the price of a typical funeral and burial by several thousand dollars.)

 

In fact, an internal memo prepared for its sales staff encourages Stewart's Catholic Mortuary Services' personnel to avoid, whenever possible, making available the company's lowest-cost funeral offering, known as its "special option," except in "areas where pricing by other funeral homes or casket stores is a concern." The memo further exhorts managers and counselors, "DO NOT abuse the use of this special option. It is only to be used to assist you when prices are a significant issue." Says Gutierrez, the mortuary owner, "When you stop and think about it, that's essentially the church by proxy saying "squeeze every buck you can from these people.'"

 

Since linking up with the archdiocese, the company's sales tactics have also drawn the ire of rivals as well as consumer groups.

 

A case in point is Stewart's controversial use of a subsidiary, Simplicity Plan of California Inc., to sell caskets and other merchandise outside the purview of the state's funeral and cemetery regulators. Stewart discontinued the practice last year, although company officials say the decision was unrelated to complaints about Simplicity, or the fact that its Simplicity operation in Florida ran afoul of regulators there. Enoch Hancock, who owns Abbot & Hast Mortuary in Silver Lake and who is a competitor and vociferous critic of Stewart, lays the blame at the archdiocese's door. "I would say that the archdiocese has screwed a lot of Catholic families," he says. "It has been extremely heavy-handed, disingenuous and disloyal."

 

Others are outraged that Mahony has used his lofty position to shill for Stewart and Western Sequoia.

 

They point to his having exempted the Stewart mortuary chapels from a long-held rule prohibiting priests from celebrating funeral mass at commercial chapels. (Archdiocese officials offer the rationale that since the Stewart chapels are on consecrated ground within the cemeteries, it is appropriate for priests to conduct masses there.) "That means he's saying 'If you want the mass outside of church, the only place you can get it is at Stewart,'" says Carlos Guerra, who, with Gutierrez, owns three Guerra-Gutierrez Funeral Homes on L.A.'s east side.

 

Other mortuary owners say that to accommodate the wishes of poor Catholic families who cannot afford Stewart's prices but who want the funeral mass, some sympathetic priests agree to conduct the mass at commercial chapels other than Stewart's without the cardinal's knowledge. "We have a short list [of priests] on call, more or less, who will come over if they're needed," says an official with a Hollywood mortuary, who asked not to be identified.

 

The archdiocese has even allowed Stewart to appropriate the mass itself as a marketing tool. Mahony's exemption sanctioning mass at the Stewart mortuaries clearly has given the company a competitive advantage it doesn't hesitate to exploit. In a Stewart sales brochure outlining in menu format what the customer gets when buying its various funeral options, each begins with a basic: "Mass and rosary/prayer service followed by burial or entombment in the Catholic cemetery of your choice."

 

In hindsight, Mahony's deal with Stewart seems all the more curious considering the cardinal's rationale for it in the first place.

 

Careful to proclaim that they were not entering the funeral business, archdiocese officials suggested early on that their Stewart initiative grew out of a directive from the church-affiliated National Catholic Cemetery Conference.

In 1997, the group issued a document seeking to address some key death-care issues that many within the church saw as troublesome. With the big three funeral giants (Stewart, Service Corporation International of Houston and Canada's Loewen Group) on an acquisition binge, Catholic-owned cemeteries across the country were being squeezed by the trend of the big chains to consolidate their mortuary and burial services at single cemetery locations. As a result, Catholic cemeteries were losing out to secular competition in the burying of their dead.

 

In Los Angeles, where the cemetery department has long been the biggest money-maker within the archdiocese, Catholic cemeteries had already suffered bruising losses, having gone from handling 85 percent of Catholic burials in 1965 to just 35 percent two decades later.The challenge was both financial and spiritual. Not only was the trend costing the church money, but as more and more Catholics resorted to secular funerals in commercial mortuaries without the benefit of the mass, the church was losing one of the few ceremonial opportunities available to it to reinforce spiritual bonds to generations of increasingly nominal Catholics.

 

"There are only so many occasions where you have the potential for a Catholic audience in the church and one of them is a funeral," says Matt Lamb, who heads Stewart rival SCI's Christian Funeral Services division. As a remedy, the conference suggested that Catholic cemeteries might want to consider operating their own funeral homes, and, in essence, imitate the model of the big three by enabling parishioners to access the services of a priest, a mortuary and a cemetery all at one location. In a document titled "The Catholic Cemetery: A Vision for the Millennium," the group endorsed the idea of "providing access to competitively priced funeral services without the pressure to select items and services inappropriate or beyond the means of the family."

 

But the document didn't say anything about alliances such as the one Mahony struck with Stewart.

 

In fact, some L.A. parish priests tell New Times privately that they cringed upon learning that Mahony had decided to cast his lot with the kind of conglomerate they were under the impression he had wanted to protect parishioners against. These priests cite fear of banishment by Mahony for their reluctance to speak out publicly. "As for the archdiocese's claim that it isn't in the funeral business, I'm not buying it," says Wasielewski, the Arizona cleric and industry watchdog, who, unlike some of his L.A. colleagues, hasn't held back from criticizing Mahony. "Can a cardinal lease space to a [commercial] business, allow masses there, share the profit and truthfully say, "I'm not responsible'?"

 

The deal has elicited similar reaction in industry quarters.

 

"The whole idea had been to protect Catholics from the wolf at the door. Instead, [Mahony] decided to invite the wolf in," says Ron Hast, publisher of Mortuary Management Magazine, an industry trade journal. Not surprisingly, the deal has taken its share of hits within Hast's publication. "The powers that be among the church seem to be forgetting the historic lesson that God and mammon truly do not mix," proclaims one editorial.

Founded in 1910 as a family business, Stewart had only 43 funeral homes and 29 cemeteries in six states when it became a publicly traded company in 1991. The company's namesake family has long been prominent in Catholic circles. Founder Frank Stewart Sr. oversaw the construction of numerous mausoleums at Catholic cemeteries across the country for many years. His son, Frank Stewart Jr., serves as company chairman.

 

By November 1997, shortly after the deal with Mahony had been cinched, the firm had already gobbled up more than 400 funeral homes and 130 cemeteries in a frenzied acquisition race with SCI and Loewen that saw the stock prices of each company go stratospheric. Then, in the late '90s, as suddenly as a coffin lid's closing, the boom went bust.

 

Heavily in debt and unable to sustain an empire that it had expanded too rapidly, Stewart -- like its rivals -- saw its stock price plummet. Each of the big three had undergone restructuring. As of September, Stewart had only 320 funeral homes. But in filings with the Securities and Exchange Commission, the company has continued to express optimism about its deal with the archdiocese, highlighting the pact as an important part of its long-term strategy to increase revenues.

 

Such news leaves archdiocese critics shaking their heads.

 

"I walk a fine line between being loyal to my church and being honest in terms of how I feel about the church being involved in private enterprise," says John Horan, a prominent Catholic who owns several commercial mortuaries in Denver, where the local diocese operates its own mortuary at a Catholic cemetery. "Cardinal Mahony is being motivated by all the wrong things. I understand the financial benefit [to the archdiocese], but I think the Los Angeles [Catholic] community is made poorer in other ways when you mistreat loyal Catholic mortuary owners the way they've been mistreated out there."

 

Lisa Carlson, who heads the Funeral Consumers Alliance, based in Vermont, and who has written extensively about the funeral industry, makes a similar point. "It may seem obscene, but what the archdiocese has done [in letting Stewart onto its properties] is exploit a simple maxim of real estate," she says. "Location, location, location."

 

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As archdiocese and Stewart officials moved ahead last year to get the new mortuaries up and running, they couldn't have anticipated what would happen in Montebello. Overwhelmingly Latino and Catholic, the neatly kept community of 60,000 residents next to L.A.'s eastern boundary is home to the sprawling Resurrection Cemetery, owned by the archdiocese. Founded in 1952, the cemetery is the final resting place of more than 100,000 Roman Catholics.

 

By the summer of 2000, Stewart had opened mortuaries at Calvary Cemetery in East Los Angeles, All Souls Cemetery in Long Beach and had nearly finished others at Queen of Heaven Cemetery in Rowland Heights and Holy Cross Cemetery in Culver City. And it was well along in planning a fifth mortuary at San Fernando Mission Cemetery in Mission Hills, which opened two months ago. After two years of planning, including meetings with the cemetery's neighbors, the time had come to get Montebello's approval for a mortuary at Resurrection.

 

Long before its deal with Stewart, the archdiocese had stumbled while trying to build 14 mausoleums at the hilly, 98-acre burial ground just off the 60 Freeway near where Montebello abuts Monterey Park and South San Gabriel. But when neighbors complained that the project was too large and would generate too much traffic, the archdiocese had to settle for just one mausoleum.

 

Now doing Stewart's bidding, the archdiocese was back before Montebello officials seeking approval to build a 31,000-square-foot mortuary with parking for 175 cars, and again nearby residents objected. But few could have imagined that the opponents would include eight of the cardinal's own clerics, including Monsignor Juan Matas, pastor of Montebello's Our Lady of the Miraculous Medal parish. The priests submitted letters in July 2000 urging the city's planning commission to reject Stewart's plans. Each complained that a mortuary would use up space needed for graves and that, since the cemetery was nearly full, it would hasten the day when area Catholics would have to go to cemeteries farther away to bury their dead.

 

But the priests were also opposed for a more compelling reason.

 

"The property at Resurrection Cemetery was dedicated as cemetery ground, not for use as a business," wrote Matas, the monsignor, in expressing a view shared by each of his colleagues. The Reverend Robert J. Juarez, pastor of Our Lady of Guadalupe Church in East Los Angeles, expressed concern that Stewart's entry at Resurrection threatened the existence of independent Catholic-owned mortuaries that had served the community well for generations. He warned of "unnecessary corporate versus private entrepreneurial competition" if the project were approved.

 

At least a few of the priests believed -- however naively -- that the letters would not become public and thereby attract Mahony's wrath. Even so, their views were not particularly unusual among priests, church sources say. From the time details of the Stewart deal became known, many priests at the parish level reacted with shock and dismay that consecrated ground at the cemeteries would be used as part of a commercial enterprise. And some were especially miffed upon learning that the archdiocese expected them to enlist in the sales army by steering parishioners to the new Stewart mortuaries. "Just awful, preposterous," says one L.A. parish priest, describing his initial reaction to the Stewart deal. "I don't know of any [fellow priests] who were excited about it."

 

As early as November 1999 there were enough priests expressing concerns about the propriety of the deal that Jim Tixier, the director of the archdiocese's cemetery department, sent a memo to Mahony seeking direction about what to tell them. In the memo, a copy of which was obtained by New Times, Tixier recounted a conversation with Monsignor Douglas Saunders of Long Beach in which Saunders asked him, "What is Catholic about Catholic Mortuary Services?" -- to which Tixier had replied, "Nothing. Catholic Mortuary Services is a wholly owned subsidiary of Stewart Enterprises, as is All Souls Mortuary in Long Beach." In seeking Mahony's input, Tixier offered to circulate a memo to priests or make himself and Randy Stricklin, the Stewart executive, available to meet with them. It isn't known how, or even if, the cardinal responded. Tixier, like Mahony, declined to be interviewed for this article.

 

Upon learning of the clerics' defection from the Resurrection campaign, Mahony wasted no time reining them in.

 

The offenders were summoned to meetings with Tixier and other archdiocese officials and persuaded to recant. A few weeks before Montebello's planning commission held its hearing, each priest issued a letter of retraction, saying he had been misinformed but now supported the project. Matas and Juarez declined to be interviewed for this article. (One priest, the Reverend Richard Siebanand, died last August.) Only the Reverend Helios Del Cerro, who serves a Spanish-speaking parish in East L.A., consented to speak publicly about the episode. "You don't know me if you think somebody could persuade me to do something like that," he says, referring to his retraction letter. He says he changed his mind "after being assured that there would be graves for the poor at Resurrection."

 

But a well-placed church source says Mahony, through emissaries, let the priests know "in no uncertain terms" that they were to reverse their opposition to Resurrection Mortuary or face disciplinary consequences. The source said that in several cases, someone from the archdiocese drafted the retraction letters using the letterheads of the offending priests and that the priests were ordered to sign them. Del Cerro, who is pastor of Our Lady of Talpa parish, says that he wrote his own letter. He says he "may have borrowed some language" from a letter sent to him by another cleric (whose identity he says he no longer recalls) encouraging him to reconsider. Each of the eight retraction letters was dated within a few days of the others in October 2000, nearly three months after the original letters were submitted. They are remarkably similar in content, including entire sentences that are identical.

 

In the end, the planning commission rejected the mortuary, and when the archdiocese appealed to the city council, sitting as Montebello's redevelopment agency, the matter assumed the trappings of political theater.

 

A hearing last April was jam-packed with archdiocese cemetery employees -- some of whom whispered to friends on the other side of the issue that they had been paid to attend -- and more than a few priests who seemed uncomfortable being there. Lawyers for Stewart and the archdiocese made their pitches as if they were personal emissaries of the cardinal, while scarcely mentioning Stewart.

 

"I think they thought that by playing the archdiocese card, the political pressure would be too great when push came to shove," says Robert Risher, a long-time Montebello mortuary owner. But the archdiocese and Stewart fared no better before the city council. The vote rejecting the mortuary was 5 to 0.

 

"I hate to say it," recalls Montebello Mayor Ed Vasquez, "but I think the archdiocese just wanted to make a lot of money."

 

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If using the name Catholic Mortuary Services makes Stewart's role at the archdiocese cemeteries sound less commercial, another of the funeral giant's subsidiaries -- Simplicity -- was tailor-made to exploit a loophole in state laws governing the death-care industry.

 

By law, the state requires that mortuaries and cemeteries that sell so-called pre-need funeral plans (offered in advance of a person's death) place the proceeds in a trust fund that cannot be spent until the person dies. The law was enacted to protect consumers against fraud and from being left in the lurch by funeral establishments that go bankrupt. As with a similar law requiring cemeteries to place part of the cost of graves, crypts and niches into an untouchable endowment to provide perpetual care, cemeteries owned by religious organizations, such as those of the archdiocese, are exempt. As a huge commercial seller of pre-need funeral services, Stewart enjoys no such exemption, not even for its mortuaries on church-owned property.

 

But in creating Simplicity as a separate entity, Stewart found a way to sidestep the trust-fund requirement and escape the oversight -- such as it is -- of California's enfeebled Cemetery and Funeral Bureau.

 

The product that the Simplicity sales force commenced selling to L.A.-area Catholics, with the archdiocese's cooperation, wasn't pre-need at all, although those who bought it could be forgiven if they thought so. In reality, Simplicity was merely selling merchandise, including caskets and flowers, not unlike an unregulated casket store in a shopping center. Critics contend that Simplicity presented its merchandise contracts in ways that mimicked traditional pre-need funeral plans.

 

Indeed, Simplicity's contracts provided space at the bottom where sales representatives filled in the location of the preferred Stewart/Catholic mortuary where the buyers of its caskets expected their services to be held. "It was extremely deceptive and misleading, especially in the Eastside Latino communities they targeted," says Gutierrez, the mortuary owner.

 

The operative word is was, because Stewart stopped using such contracts last year, according to Stricklin, Stewart's regional president. Stewart earlier had run afoul of Florida regulators with its Simplicity subsidiary there and was forced to pay a $50,000 fine. Stricklin says the decision to discontinue the merchandise agreements in California was the result of an accounting rule change by the Federal Trade Commission that affects how corporations report revenue, and had nothing to do with the Florida matter.

 

Carlson of the Funeral Consumers Alliance says that in-home salespeople have frequently abused such products, misleading people into believing that they were buying complete funeral packages and not merely merchandise. Typically, pre-need funeral packages include an array of mortuary services beyond merely the cost of a casket, flowers and similar items. "Consumers can have a hard time cutting through the confusion," she says. "With Simplicity, if you're Catholic and someone comes into your home who has the implied backing of the archdiocese, you're less likely to question it."

 

In one such contract, entered into with a Rosemead woman in 1999 (and a copy of which New Times acquired), Simplicity charged $1,750 for a casket and $350 for flowers and other items. The woman financed the purchase, and Simplicity tacked on interest at a rate of 10 percent, bringing the total cost over five years to more than $2,700. Since "delivery" of the merchandise doesn't occur until the buyer's death, the company was, in essence, charging interest on products that might not leave its inventory for many years.

 

To get around that issue, Simplicity used a concept known as "constructive delivery," in which it purported to merely be holding the casket and other items for customers who, in theory, could insist that they be delivered at any time. "It's not like somebody's going to call them and say, "Could you please bring over my casket today?'" Gutierrez says. "It's absurd. Stewart used Simplicity shamelessly to sell something that wasn't even a funeral and, worst of all, the archdiocese was an accomplice."

 

Simplicity also figures prominently in another aspect of the Stewart/archdiocese alliance that demonstrates how hit-and-miss the state's oversight of the death-care industry remains, six years after lawmakers dissolved the Cemetery Board and created the cemetery and funeral bureau as part of the Department of Consumer Affairs.

 

In parts of East L.A. and suburban communities served by Resurrection Cemetery, Simplicity sold its product to area Catholics with the clear implication that their funeral service would take place at Resurrection Mortuary. The only problem is... there is no Resurrection Mortuary.

 

Just don't tell that to cemetery and funeral bureau officials.

 

Amazingly, the bureau issued a license in the name of the nonexistent mortuary in 1999, nearly two years before the Montebello City Council rejected Stewart and the archdiocese's application to build a mortuary at Resurrection Cemetery. Even now, the archdiocese cemetery department's own literature prominently lists Resurrection Mortuary as part of its network. As if to enhance the "mortuary's" credibility, a department price list even identifies the mortuary's license number: 1701.

 

When New Times initially contacted the bureau, providing the address of the cemetery's administrative office, spokesman Kevin Flannigan confirmed the license and suggested that the mortuary, which the bureau's records show is at the same address, was inside the building. Under state law, he explained, what the archdiocese touts as a mortuary technically holds a "funeral-establishment" license. The bureau's chief, G.V. Ayers, and one of its chief inspectors, Jeff Brown, later explained that since the law allows for a mortuary to maintain offices separate from the location of its embalming facilities, viewing areas and chapel, it was legal for the cemetery office to double as the "mortuary." That is, as long as some space there is devoted to mortuary business. That would be true, Brown said, if the space was only a small room with a desk and a file cabinet.

 

But when a reporter visited the cemetery office and asked for directions to the mortuary, an employee quickly explained that no mortuary exists.

 

"We had wanted to build one, but it got turned down," the employee said.

 

There were no signs, either outside or inside the building, to indicate the existence of a mortuary. Informed that the cemetery and funeral bureau had issued a license for a mortuary at the address, the cemetery's helpful manager, Margaret Hunter, chuckled and appeared surprised. "There's no mortuary here," she said. "This is a cemetery office. We don't have anything to do with the mortuary business and never have."

 

Told of the exchange, the bureau's Brown, whose inspection of the premises in 1999 resulted in issuance of the license, defended his action, saying Stewart had applied for the license based on its "intent" to build a mortuary there, "and we went ahead and issued it to them."

 

Ayers, his boss, acknowledged that if the facility wasn't being used for its intended purpose, the license could be revoked. "I'll look into it and get back with you," he told a reporter. He never did.

 

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Meanwhile, the archdiocese's aggressive pursuit of Catholic death-care dollars goes beyond merely funerals.

 

For years, Gutierrez, the mortuary owner, says he has heard horror stories from clients who've reported going to one or another of L.A.'s Catholic cemeteries to bury loved ones only to learn that a stranger occupied the graves the clients had purchased years earlier. "In my experience, it's mostly been poor people who are affected. They buy a grave. The value of the grave appreciates. The cemetery sells it a second time to someone else. And when the original buyers show up to claim it, they say, "Oops, we made a mistake. Let us give you another grave.' And then they cart the person off to a less desirable, less expensive spot in the cemetery. It's happened too often to be coincidence."

 

He isn't alone in his opinion.

 

In October, Beverly Hills attorney Attilio Regolo Jr. sued the archdiocese and Western Sequoia on behalf of Remberto Llamas, who, with his wife, Cristina, bought plots at Calvary Cemetery 12 years ago. However, when the wife died last January and Llamas went to make arrangements for her burial, he was told that her plot had "mistakenly" been sold to someone else who was already laid to rest there. The lawsuit contends that what happened to Llamas was "part of a pattern of fraudulent conduct" involving Western Sequoia, Calvary and the archdiocese. Michael Peffer, the lawyer representing the archdiocese in the matter, declined to comment.

 

Gutierrez and others say Western Sequoia's sales representatives have been known to mislead prospective grave buyers into thinking they are representatives of the archdiocese without making it clear that Western Sequoia is a for-profit corporation that handles plot sales for the church. And as even state cemetery regulators acknowledge, because Western Sequoia's sales are on church property, the firm -- like the archdiocese -- is not subject to the state's scrutiny.

 

"It's a joke, the stories you hear," says Gutierrez. "They have these guys dress up like priests, with these big crucifixes dangling from their necks and," he claims, "if the client isn't sophisticated enough, they will tell them just about anything to turn a sale."

 

Juan Alas says it's true.

 

And he says he should know, having worked at Western Sequoia for more than a dozen years until leaving in 1996. He now works for a rival cemetery sales firm. "When I was there it was routine practice for sales people to make it seem as though they were from the church," he says. Alas says it was common for graves to be sold more than once as part of a "bait-and-switch" tactic. "As long as people didn't complain -- and most wouldn't -- you could sell the same crypt or plot several times and nobody would be the wiser," he says.

 

Archdiocese officials routinely provided Western Sequoia with lists of church contributors that the company used as sales leads, he says, and the company's sales reps on occasion even swapped the supposedly confidential records with vacuum-cleaner salesmen and other solicitors. (David Warmby, who heads Western Sequoia, declined to talk about the matter, referring questions to Jim Tixier of the archdiocese cemetery department. Tixier did not return phone calls.)

 

But Alas says the "ultimate sales rep" is the cardinal himself.

 

He provided New Times with a videotaped message from Mahony, intended for prospective clients, which he says Western Sequoia staffers refer to, in sales parlance, as: "the closer."

 

Whenever a client balks, Alas says, "the drill is to whip out the tape, have them stick it in the VCR and give them a dose of the cardinal's voice." Titled "A personal and confidential message for all Catholic families from Cardinal Roger Mahony," it features His Eminence speaking from in front of an altar extolling the cemeteries as part of a Catholic tradition as old as "the burial grounds of the catacombs."

 

But then he cuts to the chase.

 

Although subtle, the sales pitch carries an ominous implication. "These cemeteries," intones the cardinal, "are the only places in the archdiocese where the complete ritual of Catholic burial is approved as suitable."