The former finance director of the Episcopal Diocese of Oregon has filed a whistleblower lawsuit against the diocese and Michael Hanley, the bishop of the Diocese of Oregon.

The lawsuit, filed by Mary Macy in Multnomah County Circuit Court Oct. 24, alleges that Hanley fired Macy after she raised concerns about a number of issues.

One of the allegations involves more than $10 million that the diocese oversees for the Episcopal Bishop Foundation of Oregon.

Macy's lawsuit says most of that money was given by Portland Mayor Ted Wheeler's grandmother, Cornelia Wheeler, for the benefit of Good Samaritan Hospital, which the diocese used to own. The lawsuit says most of the foundation money is restricted—that is, it can be used only for specific purposes designated by the donor.

But Macy says Hanley sought to improperly divert restricted funds for use in general expenditures.

“In 2015 and 2016, [Macy] reported that Bishop Hanley was misappropriating these funds for general use by the Church,” the lawsuit says. “Plaintiff also reported Bishop Hanley’s physical assault of an Episcopal reverend, sex discrimination, age discrimination and other activities of Bishop Hanley that violated IRS regulations.”

The allegation of assault refers to an alleged 2014 incident involving Hanley and a female reverend at an Episcopal church in Salem.

“In 2014, Bishop Hanley assaulted a vicar, Margaret McMurren, at a church during his visit to her congregation,” the lawsuit says. “Plaintiff reported this to Defendants in 2014 and again in 2015. Plaintiff was involved in Defendant’s investigation into the allegations and was generally supportive of Margaret McMurren’s position in that investigation.”

Macy worked for the diocese from 2008 through October 2016, when she says Hanley fired her for raising concerns about his actions.

She is seeking $845,000 in damages.

Heidi Pitts, a spokeswoman for the diocese, said in statement that the diocese would not comment on personnel matters but said the lawsuit is without merit.

“There have been multiple independent investigations by the Diocese into the allegations made by Ms. Macy,” Pitts said. “Ms. Macy’s claims for whistle-blowing and employment discrimination were, as her complaint acknowledges, investigated by the Oregon Bureau of Labor and dismissed. Ms. Macy’s further allegations were investigated by The Protestant Episcopal Church in the United States and the Standing Committee of the Diocese of Oregon and were dismissed.
The Diocese believes that Ms. Macy’s allegations are unfounded and will defend the lawsuit vigorously.”