TBL Staff

ABILENE, Tex. — John C. Goline is living proof of the good work done by the Shriners. Struck by polio as a child, he can walk today only because of his six years in and out of the Shriners hospital in Shreveport, La., where, like all patients, he received free treatment.

Inconsistencies at a Georgia club’s bingo game raised the suspicions of a Shrine leader, but many of his changes were rejected when he left office. The experience inspired a lasting devotion to the Ancient Arabic Order of the Nobles of the Mystic Shrine, the 135-year-old fraternal organization that founded and controls the Shriners Hospitals for Children. “They did wonders for me,” Mr. Goline said.

But his faith was shaken when he joined the leadership of the Suez Shriners in San Angelo, one of 191 temples affiliated with the order. He found that much of the money collected to support the hospitals was commingled with money used for liquor, parties and members’ travel to Shrine events. The Shrine’s national auditor largely confirmed his findings, but not before Mr. Goline was forced out of office.

His experience is not unique. An examination by The New York Times of Shrine records and minutes of Shrine meetings and interviews with current and former Shrine officials painted a picture of lax accounting procedures and oversight under which money earmarked for the hospitals instead financed temple activities.

The examination found these things:

More than 57 percent of the $32 million the Shriners raised in 2005 through circuses, bingo games, raffles and a variety of sales went to costs of the fraternity, including keeping temple liquor cabinets full and offering expenses-paid trips to Shrine meetings and other events.

Only 2 percent of the Shrine hospitals’ operating income comes from money raised by Shrine temples and members’ dues. (The bulk is supplied by the hospitals’ $9 billion endowment.)

A top Shrine official told a meeting of temple treasurers that poor accounting for cash coming into the organization was “an increasingly common problem,” and that more than 30 temples had discovered fraud — like theft of money and inventory, altered bank statements, padded payrolls and fake invoices — amounting to as much as $300,000 and involving members of their “divans,” the five-member boards that govern each temple.

Yet whistle-blowers like Mr. Goline are often greeted with hostility, retaliation and official sanctions.

“I was really amazed and shocked when I got into what had been done,” he said, “especially because everyone kept telling me how everything was done by the rules.”

In Texas alone, at least four of the state’s 13 temples have lost money to theft, embezzlement and faulty accounting over the last five years, according to several Shriners there.

In one of the rare cases where the Shrine prosecuted wrongdoing, the Zem Zem temple in Erie, Pa., accused a former top official last year of misappropriating $1.2 million in bingo revenues. The temple settled for an undisclosed amount.

Critics say the line has been blurred between money raised for the hospitals and for members’ entertainment.

“Money raised for the hospitals is being used to pay for parties and liquor and trips, and they know it,” said Johnny L. Edwards, who was a leader of Oasis Shrine in Charlotte, N.C., until he began campaigning for better control over money. “The way I see it, they’re stealing from crippled children.”