Grassley Withers Under Religious Right Heat

Senator’s Report Seeks No New Laws To Rein In Predatory ‘Prosperity Gospel’ Preachers – And Recommends Repeat Of Church-Electioneering Ban

Texas-based TV preacher Kenneth Copeland takes in millions in tax-deductible donations each year. He and his wife Gloria live in a $6.2 million “parsonage” on 25 acres of land by a lake. He has a private cattle ranch, a power plant and oil and gas wells and drives several Harley-Davidson motorcycles, a Mercedes Benz, a Cadillac and a Corvette convertible. His tax-exempt Kenneth Copeland Ministries (KCM) has a fleet of airplanes and its own private airport.

Copeland has told associates that he is personally a billionaire, and his Pentecostal colleagues gave him and Gloria a $2.1 million cash “gift” to celebrate his 70th birthday and their 40th anniversary in ministry.

Operating as a church and almost entirely outside the purview of federal tax authorities, Copeland answers only to a KCM board stacked with family members and friends.

And, soon, if U.S. Sen. Charles Grassley (R-Iowa) and his Religious Right allies have their way, Copeland will be able to use his mega-ministry to intervene in partisan political campaigns.

In a move that shocked many observers, Grassley and Senate Finance Committee staffers concluded their three-year investigation into the financial irregularities of tax-exempt television ministries with a report that makes no recommendation for additional governmental oversight. And, to compound the controversy, the staff report recommends repeal of the federal tax law ban on church electioneering.

The report, posted on the Finance Committee website, details staff interaction with six multi-million-dollar “prosperity gospel” ministries. Two of them – Joyce Meyer Ministries and Benny Hinn’s World Healing Center Church – cooperated with the investigation. But four offered limited cooperation or none at all – Randy and Paula White’s Without Walls International Church, Eddie Long Ministries, Kenneth Copeland Ministries and Creflo Dollar Ministries.

Turning to other sources, committee staff documented a pattern of lavish lifestyles and dubious use of donated funds by several leaders of these outfits. Top officials live in palatial homes, often owning more than one. (The Whites, now divorced, had a $2.7 million house in Tampa and a $3.5 million condo in the Trump Tower in New York City.)

Ministry officials take tax-free “housing allowances” for themselves and often classify staffers, friends and relatives as “ministers” so they too can protect income from taxation by the Internal Revenue Service. Top pastors sometimes pocket “love offerings” – huge sums of cash collected from supporters – and no one knows whether the money is reported as income.

This Finance Committee information was obtained despite stonewalling from some mega-ministry leaders. According to the report, employees of the ministries were threatened with retribution – divine and otherwise – if they cooperated with the investigation.

Even former staffers told the committee that they were afraid to provide statements for fear of being sued.

Said one ex-employee, “The Copelands employ guerrilla tactics to keep their employees silent. We are flat out told and threatened that if we talk, God will blight our finances, strike our families down, and pretty much afflict us with everything evil and unholy.”

Despite these findings, Grassley and his staff recommended no immediate changes in federal law to rein in the apparent ministry abuses. Instead, they called for creation of an independent commission led by an evangelical Christian agency to study a variety of tax issues. Among them: a proposal to repeal the ban on campaign intervention by churches and other religious groups.

Said the Grassley report, “The electioneering prohibition…should be repealed or circumscribed with respect to churches and other Section 501(c)(3) organizations (other than private foundations) because ‘the game is not worth the candle.’” 

Tax law experts and civil liberties activists were aghast.

“I have to wonder what these Senate staffers could possibly be thinking with this breathtakingly wrong-headed suggestion,” said Barry W. Lynn, executive director of Americans United for Separation of Church and State. “It’s a sign that this investigation has gone seriously off course.”

Lynn noted that the probe got under way because of widespread allegations that several high-profile TV preachers were abusing their church status by living lavishly while raking in millions of dollars tax-free every year. Issues of church-based politicking had not been raised during the investigation.

Lynn said if these ministries were abusing their non-profit charitable status, then more accountability and oversight might be in order. Yet Grassley’s staffers have recommended doing away with the “no electioneering” rule, which would only turn these same ministries loose in the world of partisan politics to do what they will with little or no oversight.

“If these multi-million-dollar ministries are already misusing their donations for personal gain, imagine how much more dangerous they would be operating in the world of partisan politics,” said Lynn. “I don’t want to see Pat Robertson and other TV preachers using their tax-exempt empires to give backing to favored candidates, and I don’t think most other Americans want that either.”

Americans United has led the fight to maintain the federal tax law ban on partisan politicking by houses of worship and other religious organizations. A phalanx of Religious Right leaders has aggressively fought to repeal it or undermine its effectiveness so that fundamentalist churches can be forged into a disciplined voting bloc.

AU’s Lynn testified in Congress in 2002 when U.S. Rep. Walter Jones (R-N.C.) and his allies attempted to get Congress to scrap the restriction. The move drew support from TV preachers and a few ultra-conservative religious groups, but most religious denominations did not support it. After several forays in the House, Jones finally gave up the battle and so far has not introduced the bill in the current Congress.

With Grassley’s new move and the change in power in the House, however, a renewed push in Congress is almost certain. U.S. Rep. Michele Bachmann (R-Minn.), a Tea Party favorite and Religious Right stalwart, has assailed the tax law ban.

In addition, sectarian lobbies and right-wing political forces have waged a relentless crusade to undermine the law.

The Alliance Defense Fund (ADF), a Scottsdale, Ariz.-based legal group founded by TV preachers, sponsors an annual “Pulpit Freedom Sunday” that encourages pastors to break the law by endorsing or opposing candidates from the pulpit. Each year, a handful of clergy have done so.

ADF lawyers organized a May 2008 meeting with Grassley’s staff to demand that the electioneering restriction be lifted and to insist that religious organizations be kept free of any significant new governmental oversight. Among the attendees were representatives of the Family Research Council, Focus on the Family, the National Religious Broadcasters and others.

Observers believe Grassley and his staff wilted under the Religious Right pressure.

Grassley is a conservative Republican with historically close ties to the Religious Right. He has a 100 percent “true blue” rating from the Family Research Council’s lobbying arm for his votes in the 111th Congress.

But Grassley’s TV preacher inquiry, launched in November 2007, soured his friends’ view of him. Things got so bad that Grassley, a five-term senator, was denied a seat in the Iowa delegation to the 2008 Republican National Convention. The GOP party apparatus in the state is dominated by the Iowa Christian Alliance and its cronies.

Seeing the handwriting on the wall, Grassley eviscerated his drive to clean up the prosperity gospel outrages. Instead of new legislation insisting on more openness and accountability, the issue will be turned over to the Evangelical Council for Financial Accountability (ECFA), a Winchester, Va.-based agency.

Top ECFA officials have been asked by Grassley to lead an independent national effort to review accountability and tax policy issues affecting churches and other religious organizations.

ECFA board member Michael Batts, an accountant, will chair a special Commission on Accountability and Policy for Religious Organizations. ECFA President Dan Busby will also be a member, and ECFA board president Mark Holbrook will serve in an ex-officio capacity. Other members have not yet been named, and no timeline for action has been announced.

Among the issues the commission plans to address are: whether churches should file the same highly detailed annual information return that other nonprofits must file (Form 990); whether legislation is needed to curb abuses of the clergy housing allowance exclusion; whether the current prohibition against political campaign intervention by churches and other nonprofits should be repealed or modified; and whether legislation is needed to clarify tax rules covering “love offerings” received by some clergy.

ECFA was formed in 1979 in part as a response to proposed federal legislation intended to curb fund-raising abuses by religious charities. Religious leaders insisted that voluntary efforts by the nonprofit sector were preferable to new laws.

But ministries are not required to join the agency, and many major players do not. Its existence did not prevent the Jim and Tammy Faye Bakker scandal in 1987 or others like it.

Critics fear Grassley’s request for the ECFA study will lead nowhere.

Prominent tax lawyer Marcus Owens told The New York Times he is disappointed with Grassley’s move.

“He could have said we should change the law here and here,” said Owens, who is the former head of the IRS tax-exempt division. “But passing this task on to another group that isn’t really equipped to do it is probably going to result in a report that is going nowhere. So in a sense, it’s like Grassley didn’t want it to go anywhere.”

Leaders at the Trinity Foundation, a Texas-based evangelical Christian group that monitors and exposes TV preachers’ misconduct, took the same view.

Trinity President Ole Anthony told Religion Dispatches’ Sarah Posner that ECFA has no “teeth” to force televangelists to change their profligate ways. TV preachers, he said, will continue to tell their followers that donations to their ministries are necessary so that God will bless the donors with a supernatural return.

“The most desperate and weakest in our society are being raped by these guys,” Anthony said.

Anthony, whose foundation worked with the Senate committee staff to document some of the abuses, said two issues should have been addressed: “conversion” and “inurement.” Conversion is the improper use of non-profit ministry resources and personnel to bolster the TV preachers’ for-profit endeavors. Inurement is excessive compensation and other use of ministry assets for personal benefit.

Ministry misconduct would likely be compounded if Congress repeals the ban on church electioneering. TV preachers and other mega-ministry leaders could then curry favor with favored candidates, and receive even more preferential treatment in return.

The issue is particularly important for Religious Right leaders as the 2012 election approaches. They hope to defeat incumbent president Barack Obama and elect a Congress that is even more favorable to their agenda.

In 2008, Religious Right leaders were split among several Republican candidates. This year, they are hoping to align behind one White House hopeful to maximize their influence.

“We’ll get behind a candidate earlier…and there will be less fracture,” said Mat Staver, dean of Liberty University’s School of Law.

Staver has formed an organization called the Freedom Federation that he says will bring together leading Religious Right organizations. The effort, he asserts, “will really help to bring evangelical leaders and policy leaders together to talk and vet [candidates] as opposed to being isolated and making conflicting decisions.”

If the non-profit electioneering ban were repealed, it would make it much easier for Religious Right groups and ultra-conservative religious organizations to marshal their formidable resources on the political scene.

Ironically, all of this focus on religious involvement in partisan politics comes at a time when Americans are more convinced than ever that clergy shouldn’t endorse candidates. A new poll shows that Americans’ opposition to pulpit-based electioneering has reached an all-time high.

Rasmussen Reports, a New Jersey-based polling firm, announced in December that “only 12% feel it’s appropriate for their local religious leader, such as a parish priest, minister, rabbi or imam, to suggest who they should vote for. Seventy-nine percent (79%) do not find such suggestions appropriate.”

The question was straight-forward; it read, “Is it appropriate for your local religious leader, like your Parish Priest, minister, Rabbi or Imam, to ‘suggest’ who you should vote for?”

But polls and public sentiment don’t matter much to mega-ministry leaders. Only the possibility of official scrutiny does, and the Grassley retreat means that the threat has gone away, at least for now.

In a Jan. 7 letter to donors, Copeland’s ministry celebrated the end of the Grassley investigation as a victory of biblical proportions.

“Sen Grassley’s office stated that there were no findings of wrong doing within Kenneth Copeland Ministries and therefore no penalties were levied against KCM,” the missive exulted. “It was God’s faithfulness and your prayers and support that truly made the difference. Thank you for standing with us for freedom and justice for all people of faith.

“The Scripture from II Kings, Chapter 6 comes to mind at this moment,” the letter continued. “You’ll remember Elisha and his aide were surrounded by forces aligned against them. When his assistant was full of panic, Elisha prayed ‘Lord open his eyes.’ Then he looked up and saw all of the hosts and angels in full battle regalia. And Elisha said, ‘There are more with us than there are with them.’ This is a great truth for you to remember in your daily walk of faith.

“Join us in thanksgiving to God and in continued prayer for those who represent us in the United States Congress,” the Copeland missive concluded. “Jesus Is Lord.”