An Oregon Department of Justice investigation has concluded there is insufficient evidence to justify any criminal action against the former priest at St. Mary, Star of the Sea parish in Astoria.

The Rev. Ted Prentice came under scrutiny for his handling of finances in the parish and eventually resigned from his Astoria position and was reassigned.

Staff working for Oregon Attorney General John Kroger announced the outcome of the probe in a letter to Clatsop County District Attorney Josh Marquis.

With the entire parish in uproar last year, Marquis had initially asked the Astoria Police Department to investigate alleged financial improprieties. Later, the state became involved.

The letter indicates that on March 15, Special Agent Steve Armbruster and Senior Assistant Attorney General Andrew Campbell met with two representatives of the Archdiocese of Portland, Paulette Furness and Leonard Vuylsteke. "The conclusion of that meeting is the The Rev. Prentice made a series of poor decisions about the finances of the parish, but that he had the legal authority to make those decisions."

The letter revealing the outcome of the probe, from Chief Counsel Sean Riddell, said the state did not plan to have any additional grand jury proceedings. However, it noted that its agents were unable to interview some of the key players because Prentice has retained legal counsel, and one of the women, Nereyda Valdes, who apparently benefited from his spending practices, lives in Mexico.

It highlighted how the investigation broke down into five areas:

? payments to a charitable organization, Nuestro Futuro, Inc., and three women, Valdes, Carmen Valezquez and Caridad Valdes, intended to pay them for giving religious instruction; Nuestro Futuro, was formed in 2003 with Prentice as its registered agent and Valdes as its president; Valdes is Prentice's former fiancee, and had been using the name Sister Antonia, although it was not believed she was a nun.;

? payroll advances - agents learned Prentice took payroll advances that exceeded his salary by just less than $2,000, although details were not clear because of poor bookkeeping "which is clearly present throughout parish finances";

? travel reimbursement - agents followed a paper trail to check on flights between Mexico City and various U.S., Jamaican and Canadian cities in the names of himself, Valdes and Velezquez between May 2007 and July 2008, and found no evidence of fraud. However there was evidence that Prentice "shelled out hundreds of dollars associated with travel for himself and Nereyda Valdes";

? filing false IRS forms - agents noted that Prentice signed an IRS form listing Kathy Kendall-Johnston as a director, which was false but there was no proof that Prentice knew this;

? misapplication of entrusted funds. In the latter case, the investigators noted:?"DOJ?has carefully reviewed the documents, correspondence, and financial papers connected to this case and we are unable to determine that Prentice solicited funds for one purpose and used them for another with a criminal intent.

"Clearly, Father Prentice used parish funds in a manner that was contrary to the preferences of the parishioners."

The report added that an April 2009 audit from the Archdiocese of Portland concluded, "based on the review of all the expenditures, taken as a whole, it appears that the funds mishandled or questionably disbursed were not for Prentice's personal use, and could be viewed as used consistently with the overall mission of the church."

Prentice took over as priest of Star of the Sea and its satellite parish in Hammond five years ago. It was his first assignment. A former mechanical engineer, he entered a Portland seminary in 1999 and was ordained in 2004.

The Rev. Msgr. Dennis O'Donovan, from the Archdiocese, wrote to parish members in spring 2009 noting the amount of money involved in the irregularities was about $83,000. Prentice had agreed to pay back 60 percent.

In February last year, parishioner Cindy Howe and Walt Postlewait, whose children attended Star of the Sea School, e-mailed Star parents urging them to insist that the archdiocese remove Prentice. On hearing the results of the DOJ investigation today, Howe said she's disappointed but not surprised.

"I'm still a Catholic, but I'm a Catholic with my eyes open now," Howe said. "I support the church, I support the school, but I do not support the archdiocese regime."

Howe said she's heard the archdiocese usually operates by filing delays and requests for information until a case is watered down so much that it becomes inconsequential. And in this case, she said, when archdiocese officials finally stepped in, all they did was move Prentice to another place.

"What he (Prentice) did was wrong. It set the school back," Howe said. She said she has forgiven Prentice, but "he will be held accountable. Father Ted will have to answer to God."

Postlewait said things are better now.

"The parish and the school are stronger today with the current leadership," he said. "There's been a huge positive effect from going through these challenges. Sometimes you must go through challenges to grow and prosper. The leadership we have now is fantastic."

Bud Bunce, director of communications for the Archdiocese of Portland, said that the Archdiocese has considered the matter closed since it concluded its own investigation last year.

"This was a Department of Justice investigation done at the request of the Clatsop County district attorney's office," he said. The new report came to similar conclusions as the church's internal one, Bunce said, finding that "the expenses were within the purview of the pastor at the parish."

After Prentice resigned, he was reassigned to a parish in Tigard and repaid some of the funds that were called into question. There were no further consequences for Prentice, Bunce said.

"No, I'm not sure what else could have been done," he said.

The archdiocese did, however, send support to the parish to complete a full audit and work with the church's financial oversight committees. So far the new priest, the Rev. Ken Sampson, appears to have helped the Star of the Sea community begin to heal, Bunce said.

"He has been a good person for the parish to draw around and rejuvenate itself. It's really going quite well," he said.

Sampson is on vacation this week and is not reachable by phone, the church office staff reported today.

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