Nothing scares the American religious establishment more than the threat of real oversight and real disclosure. Perhaps a history lesson is in order before providing potential solutions.
In 1977, Texas Congressman Charlie Wilson authored a bill, which never passed, that would have required religious organizations soliciting funds to provide documentation for where the money was going.
The events that prompted the bill have long been forgotten but scandals involving the Catholic Pallottine order shocked donors in the 1970s. The Washington Post reported that priests purchased expensive Florida property and provided $54,000 to finance Maryland Governor Marvin Mandel’s divorce.
After Wilson’s bill was introduced, the Billy Graham Evangelistic Association faced its own scandal. The Charlotte Observer discovered that Graham’s ministry had given $23 million to the World Evangelism and Christian Education Fund without disclosing it.
The Evangelical Council for Financial Accountability (ECFA) was created in 1979 in response to growing political pressure for financial disclosure.
As ECFA’s history relates, “Senator Mark Hatfield addressed a group of key Christian leaders and challenged them to police their own mission agencies as a “Christian Better Business Bureau” or face the potential of government intervention. Consequently, ECFA was formed, standards were established, and a chartering process was initiated for applicant ministries.”
Yet ECFA has done a poor job of policing its own members or slowing down the immense growth of religious financial fraud in the Church.
Former ECFA members Harvest Bible Chapel and Gospel for Asia were accused of misusing donations.
Reports in the International Bulletin of Missionary Research estimate more than $60 billion is embezzled annually by so-called Christian leaders. This amount exceeds what is spent on world missions.
In 2005, Trinity Foundation contacted Dean Zerbe, aide to Senator Charles Grassley, and requested the Senate investigate financial fraud committed by televangelists. In response, Grassley and the Senate Finance Committee requested additional documentation. Trinity Foundation provided investigative reports on over two dozen ministries.
The Senate inquiry went public in 2007, when Grassley’s staff requested financial records from six prominent TV ministries. However, televangelists wanted the IRS to investigate rather than Congress because the IRS is subject to the 1974 Privacy Act and would be required to keep more information confidential. Only a few complied and then even marginally.
In 2011 Grassley’s staff released reports on four of the TV ministries revealing conflicts of interest, self-dealing, and examples of extravagant spending. Trinity Foundation had provided the Senate with 36 investigative reports.
Grassley requested ECFA set up a commission to study areas of abuse identified by his staff and to offer solutions.
Lobbyists and Christian leaders met with Grassley in attempts to thwart the Senate inquiry and arguably succeeded. No subpoenas were ever issued.
ECFA set up a commission but failed to offer solutions to the growing financial fraud. The commission obtained “expert testimony” from televangelists’ attorneys without including the testimony of the televangelists’ critics. A one-sided consensus emerged for no new oversight or legislative remedies to close tax loopholes exploited by televangelists.
The government-sanctioned commission was captured by the very people it should have been holding accountable. Economists and political scientists describe this failure of oversight as regulatory capture.
With the news that ECFA’s current president Dan Busby will be retiring in 2020, it is an appropriate time for the organization to consider not only bold leadership appointments but bold policy decisions as well.
Trinity Foundation would like to suggest four bold actions.
Take a stand against the prosperity gospel
Imagine Martin Luther attempting to reform the Catholic Church without addressing the evil of indulgences. Such a scenario seems ridiculous, yet that is how ECFA treats the prosperity gospel. ECFA is quietly neutral where it should be most outspoken. ECFA’s Doctrinal Standards never mention the prosperity gospel or related abuses.
At a minimum, ECFA should advise its members to avoid falsely promising that God will enrich people that give to their ministries. Not only is this an abuse of scripture, it is advance-fee fraud. According to the FBI, “An advance fee scheme occurs when the victim pays money to someone in anticipation of receiving something of greater value—such as a loan, contract, investment, or gift—and then receives little or nothing in return.”
Allow Wall Watchers to join ECFA
When Wall Watchers, the parent organization of Ministry Watch, attempted to join ECFA, its membership application was declined. Ministry Watch rates ministries, issues donor alerts, and warns Christians not to donate to organizations that spend donor funds recklessly or without transparency.
After its rejection, Wall Watchers reported on its website, “The denial of Wall Watchers application for ECFA membership was based on a difference in philosophy concerning the rating of ministries, not because Wall Watchers could not meet ECFA’s Standards. The ECFA Board concluded that Wall Watchers’ pursuit of its objectives as a member of the ECFA could create divisiveness within the membership of the ECFA.”
If ECFA intends to get serious about religious financial fraud and excess, it must be welcoming to victims, whistleblowers and Christians that investigate such fraud.
Select a president and board members willing to fight religious fraud
In 2017, ECFA’s board of directors included 15 people. ECFA’s website currently lists 11 board members and officers. Who will replace the board members that have recently left? ECFA should seek out people that are advocates for the victims of religious financial fraud. It is time to give them a real voice, rather than being a voice of the religious establishment.
Why not ask someone like Rusty Leonard to join the board? New perspectives should be welcomed.
Require member organizations to disclose how much key employees are paid
On March 12, 2009, Joyce Meyer Ministries joined ECFA. Joyce Meyer’s compensation should have been disclosed to ECFA during the application process. However, Meyer has never disclosed this amount to her donors. She hides behind a claim of church status to avoid filing a Form 990 which discloses salaries of highest paid non-profit employees.
Was Meyer compensated $2 million per year from her ministry? Possibly. At least one of the televangelists Grassley examined was paid this much.
Senate Finance Committee staffers prepared a memo for Grassley outlining tax loopholes being exploited by religious organizations. The memo also examined excessive compensation. Could the following quote written by Grassley aides be about Joyce Meyer?
“Staff reviewed a compensation study prepared for one of the six churches by a leading compensation consulting firm that also does studies for for-profit organizations. … Taking into consideration the compensation of for-profit CEOs and media personalities like Oprah Winfrey, Britney Spears, Madonna, Rosie O‘Donnell, and David Letterman, and mindful that the minister also receives income from book royalties and consulting fees, the consulting company recommended that the minister‘s total compensation be set at $2 million.”
Is Meyer enriching herself at donor expense? Her donors deserve answers.
Following the Jim Bakker scandal, televangelist D. James Kennedy testified in a Congressional hearing and said, “I would think that if a person is going to give money to something, that they have … a responsibility to learn where it is going.”
How can donors avoid funding lavish lifestyles if they lack salary data and more facts about where the money goes, such as the IRS form 990?