Background
Following the 9/11 terrorist attacks, the American Red Cross created the Liberty Fund collecting more than half a billion dollars for the families of the victims. When donors give money for a specific purpose, these funds are classified as restricted donations, and it can be illegal to spend them for a different purpose.
After news reports revealed the American Red Cross diverted some of the funds to a general account, state attorney generals and Congress launched investigations. When the Senate investigation of the Liberty Fund received news coverage, victims of other non-profits contacted Senator Grassley to request investigations, resulting in investigations of additional non-profit organizations.
In April 2005, by dumpster diving, Trinity Foundation investigator Pete Evans discovered the IRS was auditing Benny Hinn Ministries. Evans submitted a report to the IRS challenging church status for Hinn’s ministry.
In June 2005, Trinity Foundation president Ole Anthony emailed the Benny Hinn Ministries report to Dean Zerbe, then counsel for the Senate Finance Committee and aide to Senator Chuck Grassley. The letter revealed Ole’s intentions. “I only hope the upcoming hearings will include looking into abuses in the religious non-profit universe.”
It was Ole’s belief that Congress should investigate televangelists in the same manner it investigated the mafia. During the Kefauver hearings and hearings of the 1950s and 1960s, mafia leaders were subpoenaed to testify before Congress.
In 2007, Senator Chuck Grassley, then ranking minority member of the Senate Finance Committee, publicly launched an inquiry into alleged abuses of the tax code by six large media ministries. Grassley’s staff sent faxes to the ministries requesting financial information.
In January 2011, the Senate Finance Committee published reports on four of the televangelist ministries and a memo listing loopholes in the tax code being exploited by churches and religious non-profits. Grassley requested the Evangelical Council for Financial Accountability (ECFA) create a commission to study the loopholes and recommend solutions for ending or reducing financial abuses.
The Religious Policy Commission failed to suggest any serious financial reforms for religious organizations. The Commission deliberately featured expert testimony from attorneys and accountants representing some of America’s best known televangelists and megachurches. Advocates for financial transparency such as MinistryWatch and Trinity Foundation were not included in the commission.
The Religious Policy Commission was a classic example of regulatory capture because the regulatory reform process was controlled by the organizations to be regulated.
Documents in this Collection
June 9, 2005, Ole Anthony Email to Dean Zerbe
Memo to Grassley – Theresa Pattara & Sean Barnett authored this 61-page report identifying financial loopholes in the tax code exploited by religious organizations.
Kenneth Copeland Report – According to the report, Copeland’s church “used intimidation in an attempt to keep informants from speaking to the [Senate Finance] Committee.”
Kenneth Copeland Ministries Response to Grassley – Copeland’s Church “asked Senator Grassley to request the Church’s audited financial statements from the IRS after the IRS obtained them from the Church through an official IRS church tax inquiry. Information obtained in this matter would be subject to appropriate confidentiality protections under the Internal Revenue Code. ” In other words, Copeland’s church didn’t want the public or their donors to obtain access to financial information which would show how donations are spent.
Paula and Randy White Report – During the inquiry Trinity Foundation discovered that Paula White’s company Paula White Enterprises operated from the church and informed the Senate that companies were operating from churches.
Benny Hinn Letters – During a TV broadcast Hinn told his viewers that he spent $5 million fighting the Grassley inquiry, much of that money was spent on legal representation. One of the letters reveals that during the Senate inquiry, Benny Hinn was represented by attorneys Larry Gibbs and Fred Goldberg who both previously served as IRS Commissioners. Goldberg is know for granting the Church of Scientology its tax exemption in 1993.