"It's causing scandal to the church," said Msgr. Jamie Gigantiello, pastor of Our Lady of Mount Carmel-Annunciation Parish in Brooklyn.
The diocese said the priest transferred nearly $2 million in parish funds to a businessman who was the former chief of staff to embattled New York City Mayor Eric Adams.
In a 30-minute interview with National Catholic Reporter on Nov. 19, Gigantiello challenged the diocese's characterizations of his financial dealings.
The diocese said Gigantiello did not inform diocesan officials nor seek required approval for the transfers, which Gigantiello arranged between January 2019 and November 2021, the diocese said.
In addition, the diocese said its review identified other instances where the priest used and transferred parish funds in violation of diocesan policies and protocols. He is also alleged to have used a church credit card for "substantial" personal expenses. Those transactions are under investigation.
In a prepared statement Nov. 18, Brooklyn Bishop Robert Brennan said he had relieved Gigantiello of any pastoral oversight or governance role at Our Lady of Mount Carmel-Annunciation Parish because Gigantiello had "mishandled substantial church funds and interfered with the administration of the Parish after being directed not to do so."
"There's no written handbook we have that really clarifies all the diocesan policies," said Gigantiello, who said he received approval from members of his finance council to invest parish funds in businesses affiliated with his longtime friend, Frank Carone.
"I know many pastors have made investments with investment groups and stock brokers, without the approval of the diocese," said Gigantiello, who added that he was unaware of any policy that required him to notify diocesan officials of parish financial expenditures apart from any amount over $30,000 for repairs and renovations.
"I was unaware it was also for investments," Gigantiello said.
Regarding the parish credit card, Gigantiello said he used it for personal expenses but explained that the money he spent was from $30,000 that the Catholic Foundation for Brooklyn and Queens wired to the parish every year in extra compensation for the various diocesan duties he handled in addition to being a parish priest.
"Beginning five years ago, once a year $30,000 was wired to the parish and I used the credit card for my own personal expenses from that $30,000," he said. "For five years, the parish received $150,000 and I only used $120,000 for myself. The parish made $30,000."
The news of Gigantiello's relief of duties comes several months after federal investigators issued a subpoena at Our Lady of Mount Carmel in Brooklyn's Williamsburg neighborhood.
The subpoena inquired into Gigantiello's business dealings with Carone, a local attorney, businessman and Adams' former chief of staff. The subpoena was delivered amid a sprawling federal investigation that has already resulted in Adams being indicted on charges that his campaign conspired with the Turkish government to receive illegal foreign donations.
The U.S. attorney's office for the Eastern District of New York, told NCR it had no comment on the case.
Gigantiello told NCR that the U.S. Department of Justice called on him in June to testify as a witness about the money he had transferred to Carone's law firm in January 2019 as well as two separate transfers in 2021 to businesses affiliated with Carone. Gigantiello said investigators asked him about those transactions when he appeared before a grand jury in the fall.
"I went in. I was there with my lawyer. I was there for about two hours. I explained everything that happened and they said thank you very much for cooperating with us, and that was it," said Gigantiello, who added that he has known Carone, a mover and shaker in New York City politics, for more than 20 years.
"He's a very reputable man," Gigantiello said, adding that he had made other private investments with Carone that yielded good returns.
"He was credible, so I invested the money with him," Gigantiello said.
The turmoil at Our Lady of Mount Carmel-Annunciation Parish extends beyond alleged financial mismanagement.
On Nov. 18, Brennan announced that he had also relieved the parish's temporary administrator, Deacon Dean Dobbins, after Dobbins was secretly recorded by Gigantiello using racist and "other offensive language" during private conversations in the parish office.
"It was wrong to secretly record Deacon Dobbins, but the use of such language by any church employee is unacceptable and will not be tolerated," Brennan said.
"I am being discredited," Gigantiello said. "I have to speak out in justice and let people know what the truth is."
Gigantiello also told NCR that Dobbins was recorded making those remarks on the parish video surveillance system that was installed seven years ago.
News of Gigantiello's dismissal from his pastoral duties at Our Lady of Mount Carmel-Annunciation Parish saddened parishioners such as George Leicht, the grand knight of the parish's Knights of Columbus chapter.
"I feel terrible that this is happening to him," said Leicht, who has worked with Gigantiello on the annual Our Lady of Mount Carmel Feast, an Italian-American street fair in New York City, dating to 1887.
Leicht praised Gigantiello for overseeing the restoration of Mount Carmel's sister church in Williamsburg, Annunciation, and he credited Gigantiello with bringing new, community-building events to the parish, including an annual Christmas tree lighting where children are served hot chocolate and visit Santa.
Leicht described Gigantiello as "well-liked in the community," and said, "He's brought nothing but good to that parish."
Leicht added that in all the time he has known Gigantiello he's never seen him engage in any improper or questionable behavior.
"He’s my priest," Leicht said, adding that when he has missed Mass, Gigantiello will say to him, "I didn't see you last Sunday."
The Diocese of Brooklyn, however, presented a picture of Gigantiello as a pastor who ignored important diocesan financial safeguards.
According to the diocese, Gigantiello transferred $1.9 million in parish funds to bank accounts affiliated with Carone's law firm, as well as two companies affiliated with Carone. While Gigantiello described the transfers as investments, the diocese said they were loans.
The first transfer, $1 million, was made in January 2019 to Carone's law firm, Abrams Fensterman LLP, according to the diocese. In August 2021 and November 2021, Gigantiello made two additional transfers, totaling $900,000, in parish funds to two companies associated with Carone; Cesco, LLC and Lex Ave 660 Partners LLC.
For those transfers — which were made via promissory notes providing one-year repayment terms at agreed interest rates — the diocese said Gigantiello violated diocesan investment policies and protocols by not informing diocesan officials or seeking the required approvals.
The diocese said Gigantiello also "did not obtain necessary details" from Carone about his companies or the use of those funds. In February 2022, the diocese said Gigantiello requested early repayment of those parish funds without requiring Carone to pay the "substantial interest" provided for under the notes.
The Brooklyn Diocese commissioned New York-based law firm Sullivan & Cromwell and consulting firm Alvarez & Marsal to conduct the investigation.
Gigantiello told NCR that he earned $120,000 in interest from the $1 million he gave to Carone's law firm.
"I made $120,000 for the parish, and then I reinvested it," said Gigantiello, who added that he requested early repayment on the $900,000 he gave to the Carone-affiliated businesses after seeing Carone's law firm in news reports pertaining to the federal investigation.
"I called them up immediately and said I could not have parish money invested with you if you're being investigated," said Gigantiello, who has been a source of controversy over the past year.
In November 2023, Brennan removed Gigantiello from all administrative and financial oversight at Our Lady of Mount Carmel-Annunciation Parish after learning that Gigantiello had permitted the filming of a Sabrina Carpenter pop music video in the church. Brennan also stripped him of his role as the diocese's vicar for development and appointed Dobbins the parish's temporary administrator.
Gigantiello, a New York Fire Department chaplain who sells his own signature line of pasta sauce, said the music video controversy prompted the diocese to investigate the parish's finances, which he said he had improved since becoming pastor of Our Lady of Mount Carmel-Annunciation Parish in January 2013.
"When I got to the parish there was less than $2 million in reserves," he said. "As of this day, there are $5 million in reserves, and I've done $5 million in renovations and repairs to our two churches and every single building and the grounds."
Gigantiello also said he feels that his reputation has been unfairly blemished by the diocese.
"My question is why did the bishop have to publicly announce this to the press?" he said. "Why not do it internally? Once again the bishop is causing public scandal to the church."
He also said he will fight the accusations saying: "The devil has been at work over the past year, and I'm not going to let the devil win. I will fight as much as I can and the Lord will be with me and guide me as he has been throughout my life."