FOR IMMEDIATE RELEASE

MARCH 13, 2013

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Trinity Foundation, Inc.

Pete Evans, pete@trinityfi.org

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Televangelist watchdog group questions ECFA response to Sen. Grassley investigation

 

Dallas, TX—Trinity Foundation, an investigative organization that monitors religious media abuses, is questioning the effectiveness of the self-policing recommendations to the Senate Finance Committee for ministries issued by the Evangelical Council for Financial Accountability (ECFA) in December 2012.

“The ECFA has failed to address the real problem,” said Ole Anthony, president of the Dallas-based watchdog organization, and he called on religious leaders to join the foundation in working to find new solutions.

Specifically, the foundation questions the makeup of the commission that produced the report, saying its findings were compromised by including on the panel representatives with ties to ministries that are among the most egregious offenders investigated previously by the Senate Finance Committee.

Trinity Foundation was directly involved in that Senate investigation. Beginning in 2005, after being asked to help by the Senate Finance Committee’s general counsel, over the next six years Trinity submitted 38 separate reports on abuses by religious not-for-profit organizations, which were incorporated into the committee’s final report.

After the investigation ended in 2011, ranking member Sen. Charles Grassley received a number of tough recommendations from his staff about how to address clergy housing allowance, “self-dealing”, questionable executive compensation practices, and tax-avoidance techniques such as love offerings which are excluded from taxation but can total in the millions.

To improve accountability and good governance, they suggested new legislation and government policies restricting which organizations are given nonprofit status by the IRS, expanding penalties on “self-dealing” and establishing new regulations to make sure that nonprofits, particularly religious organizations, do not reward their leaders excessively.

Instead of acting on those suggestions, Sen. Grassley asked the EFCA to seek solutions that considered these recommendations but relied on self-regulation by the religious ministries themselves.  Sen. Grassley asked ECFA to study these recommendations and provide feedback with government intervention such as legislative changes only as a means of last resort. The ECFA, in turn, formed a commission that produced a report in December 2012. The commission report rejected every suggestion from the Senate Finance Committee memo and said little change was needed in the regulatory framework. Instead it called for effective administration of existing law together with education about the law.

Investigators at Trinity Foundation were troubled by the outcome.

“Considering ECFA has a vested interest in maintaining the status quo in order to perpetuate its own existence, it’s like having wolves guard the henhouse,” Anthony said.

In fact, Congress has been kicking this can down the road for decades, he added.

In 1977, in a reaction to public pressure caused by several media reports about scandals related to misuse of funds in charities, Texas Congressman Charles “Charlie” Wilson drafted a bill that would have required ministries to disclose financial information “at the point of solicitation.” At a meeting with 30 evangelical groups, then-Senator Mark Hatfield called on religious organizations to be more transparent. His chief legislative assistant explained that a voluntary disclosure program would preclude the necessity of federal intervention into the philanthropic and religious sector. Two years later, in 1979, the ECFA was founded.

Yet since then, abuses by televangelists and other ministries have expanded rather than decreased, Anthony said. The formation of the ECFA did nothing to prevent the Jim Bakker and Jimmy Swaggart scandals in the 1980s, not to mention more egregious televangelist outrages of later decades and up to the present day.

That’s not likely to change, Anthony said, considering the ECFA’s close connections with prosperity gospel ministries.

Some examples:

–Michael Little, president of the Christian Broadcasting Network, is on the ECFA board and thus holds some influence over the commission.  Little works for and has been a close associate of televangelist Pat Robertson for almost four decades and has close ties to many other televangelists.

–Mark Holbrook is the Chairman of ECFA.  He is also the president and CEO of the Evangelical Christian Credit Union, which held the mortgage on Without Walls International Church — directly connecting him to televangelists Randy and Paula White.

–Tom Winters is on the panel of legal experts which advised ECFA’s Commission on Accountability and Policy. A Tulsa attorney, Winters has worked with many nonprofit clients facing inquiries by governmental entities including the IRS and the Senate Finance Committee.  He is one of Matt Crouch’s attorneys, and his law office is handling one of the cases suing Brittany Koper on behalf of Trinity Broadcasting Network, Paul Crouch Sr. and Jan Crouch.  He authored a policy paper on opposing a requirement for churches to file Form 990, which he says is unconstitutional.   Churches are not required by law to make any of their financial information public; whereas all other non-profit organizations provide this information in the form 990.

–Matthew Staver is on ECFA’s Commission on Accountability and Policy.  He is the dean of Liberty University School of Law, founded by the late televangelist Jerry Falwell.

–Frank Sommerville is on the panel of legal experts advising the ECFA Commission on Accountability and Policy. He has been active in defending excessive housing allowance deductions by various ministries, most recently music evangelist Phil Driscoll, who Forbes magazine has called “the poster boy of parsonage exclusion abuse.” Driscoll is appealing to the Supreme Court to overturn his tax-evasion conviction on money owed to the IRS for excluding $400,000 on his lakefront second home. Sommerville’s wife’s CPA firm worked for years handling televangelist Kenneth Copeland’s bookkeeping. Copeland’s defiance during the Senate investigation made headlines.

Regarding the outlandish salaries and lavish lifestyles displayed by the worst of these ministries, the ECFA makes its position clear on Page 19 of the commission report: “Finally, we recommend against requiring organizations to include in their governing documents a prohibition of excess benefit transactions as a condition of tax-exempt status.”

This attitude by the major religious financial accountability organization, combined with an overstretched IRS virtually giving up on auditing these ministries, assures that abuses will continue to increase, the foundation maintains.

“This is a shameful situation that must be corrected,” Anthony said. “The leaders of legitimate Christian organizations must have the courage to speak out forcefully against the Elmer Gantry-like hucksters who are bringing the name of God into disrepute.”

He called on concerned religious leaders and laypeople to work with the foundation to help formulate new substantive solutions that could bring some integrity to religious non-profit organizations.

“After all,” Anthony said, “Shouldn’t religious groups be leading the way regarding integrity?”

 

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