Pastor Mariano Caneso and his wife, Mary, face a legal battle over the church he founded in 1947. The couple, who have been married for almost 60 years, are pictured inside the sanctuary of Way of Salvation in Kalihi.

Kalihi church dispute
in court

A battle over funds raises some
questions of constitutional law

More than half a century ago, the Rev. Mariano Caneso and his wife, Mary, started a small, penniless church in a dilapidated Waipahu restaurant, catering primarily to Filipino immigrants in the surrounding neighborhoods.

From that humble beginning in 1947, the Way of Salvation Church has grown into an international organization that boasts more than 100 branches in several countries, owns more than $1 million worth of Hawaii properties and collects thousands of dollars in member contributions a month.

The far-flung enterprise is overseen by the 94-year-old Caneso, a mild-mannered, soft-spoken pastor who preaches about compassion and selflessness.

Yet Caneso is at the center of an internal church battle that is anything but compassionate and selfless. A group of dissident members has sued the church, claiming it is being mismanaged by the pastor and his family for the family's personal benefit -- a charge the Canesos dispute. The dissident group has since been excommunicated. As the court case proceeds, control of Way of Salvation, now based in Kalihi, hangs in the balance.

The fight has generated harsh allegations, all of them squarely at odds with the moral and spiritual underpinnings of a Christian house of worship. Among the accusations from one or both sides: that church funds have been plundered, that untold sums of cash are unaccounted for, that members have been intimidated and threatened for raising questions, that disinformation is being used to discredit the opposition and to cover up illicit activities.

The charges were serious enough that the state attorney general's office took the unprecedented step last year of opening an investigation into the church's operations. It was believed to be the first probe of its kind in Hawaii.

The AG's office eventually demanded that the church hold a special election for a new board of directors, noting that the institution violated its own bylaws by having a board appointed by Caneso, rather than an elected one. The appointed board consisted mostly of Caneso family members.

The pastor and his supporters claim the dissident group, led by Herminia Baldonado, the pastor's niece, has stirred up trouble by spreading lies, half-truths and distortions about church leadership, with the goal of seizing control of the institution.

Church leaders say they don't understand why anyone would try to undermine a ministry that has touched so many lives for so many years in the name of God. What is even more puzzling, they say, is the mean-spirited and false nature of the attacks.

"I see all these things happening; I call it the spirit of selfishness," Caneso said. "Everything is unfounded. When we started this ministry from nothing to what it is today, it's by the grace of God."

But Baldonado and her supporters claim the church is being run as if it were the family's personal business empire, with the Canesos reaping plentiful rewards and providing little or no accountability on how church funds are spent.

"Hundreds of thousands of dollars have privately inured to the Canesos' private benefit," Baldonado and 22 other plaintiffs claimed in a May 26 Circuit Court filing. "Members' charitable contributions have been illegally squandered by the Caneso family."

The state, after conducting an investigation that church leaders described as biased, unprofessional and shameful, corroborated some of the main claims of the Baldonado group. In April the AG's office filed a "friend of the court" brief in the case, depicting an institution dominated and controlled by a family abusing church authority.

Even though the AG's office is not a party to the lawsuit, the office said it supports the plaintiffs' call for the court to appoint a receiver to oversee the church.

"A court-ordered accounting or the appointment of a receiver (is) appropriate because the church has repeatedly failed to account for charitable funds, and because the assets of the church are in possible danger of conversion and loss," Deputy Attorney General Hugh Jones wrote in the April 14 filing.

Among other things, Jones noted that eight members of the Caneso family were employed by the church during a 37-month period through February 2003 and collectively earned $480,304 -- without the approval of a disinterested or elected board of directors. He also mentioned that the church leased a 2002 Audi A6 sedan for the pastor's exclusive use, with the payments topping $40,000.

In 1996 and 2000, according to Jones' filing, the family-controlled board secretly amended the bylaws without getting the required approval of church members. One amendment took voting power away from the members and gave it to the board. The church, acknowledging that the amendments were not adopted correctly, has since reverted to its original bylaws.

Although the special election was held last year as the state demanded, Jones, in an interview, said he supports appointment of a receiver because the new board still is operating in the old way, allowing bylaws to be violated and the Caneso family to exercise excessive control.

"These are people who are very afraid of facts being known," Jones said. "They have a habit of attacking anyone who even questions what they're doing."

But church leaders say Jones has been bent on helping the dissident group and has taken facts out of context, not even questioning the leaders to get a complete picture. "He is destroying the structure of the church," said 2002 Honolulu Police Officer of the Year Leland Cadoy, a board member since January.

Jones said he did not contact the leaders because legal rules dictated that he deal with their lawyer, from whom he got needed information.

The Canesos said they have been paid modestly to run the church and that the compensation was not out of line given their duties and pay scales at other religious organizations. Only three family members -- the pastor, his wife and a daughter -- currently are on the church payroll.

The notion that the family has gained lucrative financial benefits from the church is ridiculous, family members said.

"Where is the massive wealth?" asked Clement Caneso, the pastor's son, who works for the church but does not draw a salary. "If he had massive wealth, (my parents) would have another house."

The elder Caneso couple -- Mary Caneso is 78 -- still live in the modest, slightly rundown Kalihi home that church members built in the 1950s.

Caneso supporters also note that Baldonado, the pastor's niece, did not start causing a stir until Way of Salvation leaders asked her to account for more than $20,000 raised by a church group she headed. That money still is unaccounted for, and church leaders believe she created the current controversy partly to deflect attention from that problem, they said. Baldonado denies that.

Much of the continuing controversy stems from the fact that Caneso, as the church's spiritual leader, runs the organization in much the same fashion as when he founded it, even as the institution grew by leaps and bounds. Until recently, Caneso would appoint board members and church pastors, even though bylaws adopted in the 1950s do not give him such powers.

But Caneso is given so much deference as spiritual leader that church leaders did not realize the bylaws, which were simply copied from another religious organization, conflicted with practices that predated adoption of those rules, church officials say.

The Way of Salvation case is being watched by other churches because it raises for the first time in a Hawaii court several key issues regarding separation of church and state.

Chief among them: Can the government intervene in an internal church dispute or force a church to comply with its bylaws?

Ronald Amemiya, the Way of Salvation attorney, answers no. He cites judicial decisions from other jurisdictions in which the state and courts were told they could not intervene in disciplinary disputes, even if the church did not follow its established procedures.

But Barry Lynn, of the Washington, D.C.-based Americans United for Separation of Church and State, said other court rulings have determined that a state can intervene if the dispute deals with neutral principles of law rather than religious doctrine.

A court hearing on Amemiya's motion to dismiss the lawsuit is scheduled for July 7.


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