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by Jim Holman.
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Catholic Cemetery Superstores

ARCHDIOCESE MAKES LUCRATIVE DEAL WITH MORTUARY CHAIN

By Monica Seeley

Callers to Calvary Cemetery, the oldest Catholic cemetery in the Los Angeles Archdiocese, will soon be informed that they can now do "one-stop shopping" for death-care. To make things easier in their time of need, they will be able to utilize the services of a large mortuary to be built at Calvary. The complex, complete with flower shop, will eliminate the hassle of separate trips to mortuary, parish church, and cemetery. If interested, the caller will then be referred to a counselor at Catholic Mortuary Services, to discuss pricing, "pre-need" plans and other details.

The caller may not be aware that the "Catholic Mortuary Services," is actually a division of Stewart Enterprises, a Louisiana-based mortuary chain that has contracted with the Los Angeles Archdiocese to operate for-profit mortuary complexes on the grounds of six of the eleven archdiocesan cemeteries--All Souls Mortuary, Holy Cross Mortuary, Calvary Mortuary, Resurrection Mortuary, San Fernanco Mission Mortuary, and Queen of Heaven Mortuary. Stewart and Catholic cemeteries will work with well-known mortuary architects J. Stuart Todd, Inc. on designs reflecting "California mission-style architecture," according to a press release bearing the names and phone numbers of archdiocesan media relations director Fr. Gregory Coiro and Stewart vice chairman and CEO Joseph P. Henican III. Four of the six mortuaries will house chapels, all will have full-service flower shops, visitation and arrangement rooms, and most will include after-service reception areas, visitor lounges and family meditation rooms. Construction of the facilities will represent a multi- million dollar investment by Stewart shareholders, said the news release. The complexes are to be completed in late 1998 or early 1999.

Stewart Enterprises was founded in 1910 as a family business. In 1991, when the firm went public, it owned 43 funeral homes and 29 cemeteries in six states. By November, 1997, Stewart owned and operated 401 funeral homes and 130 cemeteries throughout the U.S., Puerto Rico, Mexico, Australia, New Zealand, Canada, Spain and Portugal. Most of these properties continue to operate under their original names.

Stewart is one of three chains that have come to dominate the funeral industry in recent years. "The Big Three"--Stewart, Service Corporation International (SCI), and the Loewen Group own 15% of the country's 23,000 funeral homes and handle one in every five funerals. The Big Three have taken over the funeral business virtually unnoticed, because when they buy a funeral home they typically keep the former name, and even hire the previous owner, so it appears that the home is still locally owned. They favor a "combination" approach, providing mortuary and cemetery facilities at one location.

Although it created little stir when it was signed in June 1997, the Los Angeles Archdiocese deal with Stewart Enterprises has generated considerable publicity lately, as other dioceses begin to sign contracts with international funeral chains.

Much of the media coverage is due to the efforts of Father Henry Wasielewski, a retired Tempe, Arizona priest, whom I interviewed for this article. Father Wasielewski has been fighting corruption in the funeral industry for 20 years. His organization, the Interfaith Funeral Information Committee, operates a web-site entitled "Funerals and Ripoffs" (www.xroads.com/~funerals) that exposes the high prices and dirty dealing he claims are rampant in the industry, and presents low-cost funeral options. Incensed by the impending marriage of Catholic dioceses with secular death care chains, which he calls "sinful," he took his case to the media late last year, buying print ads in the National Catholic Reporter.

Father Wasielewski's concerns about the Los Angeles Archdiocese deal with Stewart are many.

First, Stewart and other mortuary chains are often high priced, and engage in what Wasielewski feels are less-than-honest business practices. According to the Funeral and Memorial Societies of America (FAMSA), the prices at funeral homes and cemeteries run by Stewart Enterprises are almost always considerably higher than other local prices. The prices at homes and cemeteries owned by Service Corporation International and Loewen are also higher. Chains often raise prices soon after acquiring an established independent home, sometimes upping fees more than 100 percent, according to U.S. News & World Report. Caskets, which typically make up half a funeral's cost, can be marked up more than five times. At Stewart's South Park Cemetery in Pearland, Texas, for instance, a casket that wholesales for $675 is sold to customers for $3,495.

In the Los Angeles area, the least expensive casket offered by Stewart's Catholic Mortuary Services costs $1275--$300 to $700 more expensive than the lowest priced caskets offered by most of L.A.'s Catholic mortuaries. There are two exceptions: Pierce Brothers, at $1475, and McCormick Mortuary, at $1395. Interestingly, Pierce Brothers admits that they are owned by Service Corporation International. While McCormick insists that it is family-owned, it is listed in the June 1996 Service Corporation Directory of Affiliates. A manager at McCormick acknowledged only that Service Corporation International provides some services, such as bookkeeping, for the funeral home, and stated that "being part of a publicly held corporation, we answer to local management, not to Houston."

While the archdiocese contends that Stewart will "honor the cardinal's request to keep prices reasonable," this is only relatively true. The Big Three now own 40% of Los Angeles mortuaries. If they increase their grip on the industry, it will undoubtedly influence the status quo, causing tomorrow's relatively "reasonable" price to be much higher than today's. Counselors at Catholic Mortuary Services urge consumers to buy "pre-need" plans that cost over twice as much as today's prices, because "funeral costs will more than double in the next ten years."

In addition to high pricing, chain mortuaries specialize in aggressive sales and marketing techniques. For instance, they often require an "identification viewing" that critics charge is superfluous, merely giving the mortuary a chance to interest the family in a more expensive casket or cremation container.

Some objections to corporate tactics have centered on pre-need sales, which have become a huge money-maker for the funeral industry. The counselor at Catholic Mortuary Services repeatedly urged me to purchase a pre-need package, payable over two, five, or ten years. A confusing formula including interest and "risk factor" was quickly trotted out, while "funeral costs will double in the next ten years" was repeatedly intoned to justify the final cost of around $7000 over ten years. When I called back to double-check the figures, I was encouraged to purchase additional "travel insurance" that would cover the cost of flying the body home should death occur while traveling.

Secondly, according to Wasielewski, both Stewart and the Archdiocese of Los Angeles stand to profit unethically from the deal. The archdiocese will receive an undisclosed percentage of the proceeds from each funeral. And sales should be brisk, aided by collaborative marketing and the name recognition that the archdiocese will provide. The Stewart mortuaries will probably bear the names of the cemeteries where they are located, archdiocesan personnel told National Catholic Reporter, causing potential customers to make the association with the archdiocese. Additionally, the archdiocese will waive its rule barring priests from saying funeral Masses at commercial mortuary chapels. "Because these chapels within these mortuaries are at Catholic sites," the archdiocese's Fr. Gregory Coiro told NCR, "that rule will not apply to these mortuaries. This will serve a need."

Coiro would not disclose details of the financial arrangements or expected income from leasing cemetery land or from percentages of sales. The financial arrangements are "basically an internal matter," he said.

Stewart's goal is to perform funerals for at least half those buried in archdiocesan cemeteries, according to U.S. News & World Report. The archdiocese will advertise and provide the company's salesmen with parish lists. Not only will it receive new income from its share of mortuary proceeds, but Stewart will steer Catholic customers from its other area mortuaries to the church's cemeteries. "To handle the volume, we're building mausolea," James Tixier, a director of archdiocesan cemeteries, told U.S. News, "which can stack 16 caskets in the space of one grave."

Wasielewski is also concerned that the Los Angeles deal sets an unfortunate precedent for other dioceses. Tucson signed a similar contract (with the Loewen Group, Inc.) early this year, and it is rumored that Dallas and Sacramento will soon follow. In Canada, Service Corporation International, the biggest of the "big three" chains, has almost completed a 66,000-square-foot funeral home, Centre Funeraire Cote-des-Neiges on the grounds of Montreal's Notre-Dame-des-Neiges Cemetery, the oldest Catholic cemetery in North America. John Morrow, executive vice-president of Service Corporation International, was quoted in the National Catholic Reporter as saying the Los Angeles deal "woke us up." Service Corporation International had been talking, but not seriously, to a number of dioceses and parishes, he said, but he indicated that the company would now seriously pursue such contracts. Service Corporation International has established a subsidiary corporation, Christian Funeral Services, Inc., like Stewart's Catholic Mortuary Services, to serve the Christian market. Industry analysts, says Father Wasielewski, call the diocesan contracts "the atomic blast of the industry" and predict that "the Catholic Church will reap big money from its lease arrangement with Stewart."

Father Wasielewski is not the only one who is angry at the alliance between Stewart Enterprises and the Archdiocese of Los Angeles. Local Catholic mortuaries, most of whom have served Catholics in the archdiocese for years, feel snubbed. They stand to lose business to the new mortuary complexes. Manuel Baughes, of Baughes and Son Mortuary, which has offered lower-priced funeral services to Catholic families in East L.A. since 1928, says he feels the deal is deceptive: "They're sending information to these churches and saying that it's a Catholic mortuary. They're sending it to the parishioners and telling them, 'We're opening a Catholic mortuary.' They're not saying that they're leasing the property to an independent company, to represent the Catholic archdiocese. That is wrong.'

While Baughes predicts "It's going to hurt my business a little bit," Baughes and Sons is well-established and he is not worried about taking a big financial hit from the new mortuary complexes. However, he is opposed on principle. "The archdiocese is not concerned about the parishioners, they're concerned about what profit they're going to make on the leasing and probably a percentage of the sales," he said. "They're going to spend millions of dollars to build these facilities. To get that money back, they're going to have to have their services higher than what the independent mortuaries charge, to get that revenue. That's actually going against their own parishioners."

Baughes feels the Church is "not supposed to be in that kind of a profit business" and is aggrieved that local mortuaries were not approached first. "They didn't give us a chance to make a bid," he says. "Why didn't they say, do you want to build a mortuary here? We didn't know about it until Stewart had all the cemeteries."

Likewise, John Cabot of Cabot and Sons Mortuary, which has served the Pasadena area for 77 years, feels Catholic funeral homes were treated with ingratitude by the archdiocese. "We considered it a slap in the face," he said. "All the years that we've worked with the Church and the archdiocese, and all the good to the priests and the nuns and the indigent over the years, and then for the cardinal just to go to New Orleans and do a deal without even consulting [us]. I don't think it was a very kind thing to do; not a very Christian thing to do... Why are they doing this? It's a five letter word: M-O-N-E-Y."

Cabot says that priests with whom he has spoken "are all pretty supportive of us." Likewise, Baughes notes, "the ones who are opposing it are the priests."

Archdiocesan personnel say the plan responds to directives outlined in the National Catholic Cemetery Conference's document "The Catholic Cemetery: A Vision for the Millennium," issued in August. The document addresses the problem of large conglomerates buying up locally operated funeral homes, and encourages Catholic cemeteries to consider operating their own funeral homes, where families would have "an opportunity to access the services of a priest, the funeral home, and the cemetery at one location." It emphasizes the need to provide "competitively priced funeral services without the pressure to select items and services inappropriate or beyond the means of the family." The document also encourages the use of a "parish-based funeral network" that would allow for the use of church space for wake and vigil services and the funeral Mass. It notes that "the Catholic cemetery is a sacred place" and "the burial of the dead has always been recognized by the Church as a religious rite and a corporal work of mercy."

While Father Wasielewski is incensed at the lucrative mergers that are leaving a few large chains in control of the funeral industry, he dispenses criticism even-handedly. His website details unfair business practices that, he says, go on at both chain-owned and independent mortuaries. He is outspoken in his criticism of common practices like giving out mortuary calendars at church, and what he calls "bribes" to pastors by mortuaries--donations of raffle tickets, pagers, or large sums of money. He made himself very unpopular with his bishop, who effectively suspended Wasielewski for years, refusing to give him a parish or let him live in a rectory. Finally, two years before retirement he was given a small rural parish, where he promptly angered a local mortuary by banning their "body deliverymen" from entering the church, "disrupting the congregation with their attempts to imitate Catholic genuflections, and passing out mortuary advertising and pre-pay plan leaflets." When the bishop demanded that Wasielewski write a letter of apology, he wrote, urging the mortuary to refund money to families he believed the mortuary had overcharged.

Father Wasielewski seeks to remind those shopping for funeral arrangements that morticians are merely businessmen, and do not need to be approached with the mixture of awe and fear that they sometimes cultivate. He urges families to exercise their legal right to shop around for a less expensive casket and have it delivered to the mortuary, rather than buying the mortuary's higher priced model. And he advises them to be on the lookout for deceptive or unfair business practices. Father Wasielewski reminds consumers that if the mortuary they have chosen is not trustworthy, they have the right to choose another mortuary to complete the arrangements. The Interfaith Funeral Information Committee website contains information on companies that sell inexpensive caskets direct to the consumer, as well as links to other useful sites, like that of the Funeral and Memorial Societies of America (http://vbiweb.champlain.edu/famsa), where one can find lists of local chain-owned mortuaries.

Meanwhile, as of mid-1997, Stewart indicated a 49.8% profit on funeral home operations and 33.3% on cemeteries.

An information packet is available free from the Interfaith Funeral Information Committee. Send a self-addressed envelope with 55 cents postage to: IFIC/Web, P.O.Box 939, Tempe, AZ 85280.

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