The FedEx envelopes landed at dawn on the doorsteps of some of Orange County’s most influential Catholic philanthropists — real estate developers, attorneys, CEOs and other church stalwarts who had raised tens of millions of dollars over the years for the local diocese.

Inside were letters from Bishop Kevin Vann that boiled down to two words: You’re fired.

Those June missives ignited a revolt inside the Orange County church that has burned all the way to the Vatican while remaining largely hidden from the diocese’s 1.3 million rank-and-file Catholics.

At its heart is a falling-out between a circle of well-connected laypeople who helped the church rebound financially from the clergy abuse scandal two decades ago, and a prelate staring down fresh money problems brought on by the pandemic and a new round of molestation lawsuits.

The benefactors have accused Vann of violating state law by removing them from the board of an independent charity after they rebuffed what they contend was an illegal plan to “invade” endowment funds and flout donor wishes.

They complained formally last month to the papal nuncio, the Vatican representative in Washington, D.C., and have alerted Los Angeles Archbishop Jose Gomez, the head of the American bishops’ conference, along with a cardinal in Rome who oversees clergy issues and charitable foundations for Pope Francis.

A spokeswoman said the bishop was on vacation for the month and unavailable for an interview. His representatives denied he or the church acted improperly, but declined to answer many questions about the situation, with the spokeswoman, Tracey Kincaid, saying the diocese “does not comment on internal processes.”

“Not one of my brethren among the board of Directors of The Orange Catholic Foundation has ever found herself or himself in the position of having to question the actions of our Ordinary in a manner such as this,” Hunsberger, the former board secretary, wrote to the nuncio July 2, using the ecclesiastical term for bishop. “Each of us has suffered under the weight of having to make this decision.”

California was in its first day of the COVID shutdown when the chief financial officer of the diocese approached the Orange Catholic Foundation and said the bishop needed a lot of money and quickly. CFO Elizabeth Jensen said the school system was short $8 million and parishes $4 million, according to correspondence reviewed by The Times and interviews with people familiar with the conversation.

In a follow-up email March 23 to foundation Chairman Stephen Muzzy, a Trabuco Canyon real estate and private equity investor, the CFO wrote that nine parishes lacked “enough cash to meet near-term basic expenses.” Parents in poor areas and “even some in South County” were unable to make tuition payments, she said.

“I believe the situation is getting to the point of being grave, which motivated me, on behalf of Bishop Vann, to ask for the resources from OCF for which I truly consider to be real needs,” Jensen wrote.

Money the foundation provided might be repaid down the road, she said, but “there is no guarantee. We are all in uncharted waters.”

The emergency funding request, which the board ultimately declined, was unprecedented in the foundation’s history. The nonprofit had been set up 20 years before in the midst of another crisis: Revelations that priests had sexually abused children and their superiors had covered it up. As the abuse crisis swept the country in the late 1990s and early 2000s, big donors cut back on their giving. Many said they did not trust church leaders who had covered up molestation and did not want their money going to pay legal bills or million-dollar settlements with abuse victims.

Story continues at The LA Times.