Clergyman’s Trial Is Rocked by 2 Late Developments : Courts: The judge will let the defense argue that priest accused of theft could have been framed. And an audit by the archdiocese is revealed.

Father David Dean Piroli’s month-old church embezzlement trial was rocked Thursday by a reversal and a revelation--two late developments that could sharply alter its course.

First, Piroli’s attorney and the prosecutor learned that the Roman Catholic Archdiocese of Los Angeles had audited bookkeeping records at St. Peter Claver Church immediately after Piroli’s arrest on embezzlement charges in May, 1992.

The lawyers immediately demanded and received a copy of the audit of the Simi Valley parish and began studying it for evidence that could bolster either the prosecution or defense case.

Then, in an unrelated development, Ventura County Superior Court Judge Allan L. Steele ruled that Piroli’s attorney can argue to the jury that another priest could have planted the $50,000 in cash and parishioners’ checks and the collection envelopes that were found in Piroli’s office and bedroom.

That reversed an earlier ruling in which the judge forbade the use of such a defense.

Piroli, 37, faces two charges of grand theft for allegedly stealing a total of $60,000 in collection money from St. Peter Claver and his previous posting, Sacred Heart Church in Saticoy. Parish employees discovered the cash in his rooms after Hollywood police found Piroli in his church car with $10,000 in cash, church collection envelopes and traces of cocaine.

Thursday’s developments came relatively late in the trial, as defense attorney Richard Beada was preparing to question the last few defense witnesses on Piroli’s behalf.

Earlier in the trial, Steele had forbidden Beada to argue that Piroli was framed by Father James McKeon, his superior at St. Peter Claver. Beada had said he hoped to persuade jurors that McKeon planted the money in Piroli’s rooms because he feared his own embezzlement of church funds was about to be exposed by the associate pastor.

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Steele had said there was not enough evidence to support such a defense.

But on Thursday, Steele changed his mind after Beada cited testimony that had come out since the judge’s initial ruling.

Beada recalled testimony that, within a day of Piroli’s arrest on May 29, 1992, McKeon and church secretary Eileen Slavin had handled special holy day collection envelopes like those found with bundles of cash in Piroli’s bedroom.

Deputy Dist. Atty. Mary Peace argued that many church officials had access to the envelopes, and that there is no evidence linking McKeon or Slavin to the envelopes in Piroli’s dresser drawer.

But Steele ruled that Beada could cite the envelopes in a bid to persuade jurors that there was enough reasonable doubt of Piroli’s guilt to prevent them reaching a guilty verdict.

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Steele expressed dismay that Beada was only now tying together enough evidence to bolster his argument, some 18 months after the case was filed.

He also said he was displeased to learn for the first time Thursday that the archdiocese had audited the books at St. Peter Claver immediately after Piroli’s arrest.

Diocesan officials had said publicly after Piroli’s arrest that they were auditing the books at St. Peter Claver. But both sides apparently neglected to uncover the audit disclosed Thursday.

The audit was not made public and has not yet been introduced as evidence. But after reading the audit Thursday, the attorneys hinted at its contents in discussions with Steele.

Beada noted that the audit criticizes one church official--whose name has not surfaced in the trial--of falsifying financial records. And Peace said she was not aware until she read the audit that Piroli had access to the St. Peter Claver bingo fund--a fact that has not been focused on in testimony.

“Obviously, we are all appalled to obtain this kind of information this late in the game,” Steele said. “But it seems to me we have to make some choices with respect to where we are.”

The judge said he would let Beada alter his witness list slightly so that jurors can hear testimony about the audit. But he warned: “I’m not going to turn this case into another three weeks” of testimony.

Beada then continued with his witnesses.

Stacia Michaels, a former bookkeeper at St. Peter Claver, testified that the church was in bad shape financially when she arrived in 1989--before Piroli’s arrival the following year.

“I honestly didn’t know where the funds were always going,” she testified. “And nothing was being done to keep the church in its proper mode or maintenance.”

Michaels testified she once walked into McKeon’s office and saw him sitting with piles of cash on his desk, opening collection envelopes. She also said McKeon sometimes kept church cash in envelope boxes like those found in Piroli’s bedroom closet.

Piroli testified last week that he never kept such boxes in his closet.

However, it was not unusual for McKeon to count collection money on his desk and he made no attempt to hide it from parish employees, testified Pamela Prendeville, a former secretary at St. Peter Claver.

In any case, Michaels and Prendeville testified that they stopped giving money to the church building fund because they never saw it being spent properly.

“The church was falling into disrepair” in 1990, Prendeville said. “We did not see the funds being used for the maintenance of the church.”

After a week’s break, testimony is scheduled to continue Feb. 28.