Senator digs for church finances

Tampa's Without Walls is studying how it will respond to the request for records.

By WES ALLISON and SHERRI DAY, Times Staff Writers
Published November 7, 2007

Sen. Charles Grassley, R-Iowa, warns that churches could face congressional and IRS scrutiny.
	[AP photo]

WASHINGTON -- As the top Republican on the Senate Finance Committee, Charles Grassley has taken on some sacred cows: the Nature Conservancy, the Red Cross, even the United Way.

Now, as he investigates whether glitzy mega-ministries are abusing their tax-exempt status, he's urging Tampa's Without Walls International Church and others to comply with his request for detailed information about how they spend their donations.

The leaders of Without Walls say they're considering it. But Grassley, R-Iowa, on Tuesday warned Without Walls and five other ministries across the nation that they may face congressional hearings or IRS scrutiny if they don't.

"I think it'd be wise for them to do it," Grassley said at the Capitol. "I doubt if they're legally bound. ... But you're sure going to have to respond to the IRS. And wouldn't you rather respond to Chuck Grassley than the IRS?"

So far, the organizations are split on how they will respond. Some have promised to fully comply. Others were hesitant, including Without Walls.

"We take our financial responsibilities to our partners very seriously, and to the best of our knowledge, we comply with all tax laws," the Revs. Randy and Paula White, who run Without Walls and Paula White Ministries, said in a statement late Tuesday. "Our audited financial statements appear on our Web site. However, we are concerned about the possible precedent and ramifications of this request.

"We will be reviewing the request and its implications in detail over the coming weeks as we prepare our response."

Grassley sent Without Walls a letter Monday seeking a range of records from the Whites, including their salaries, payments made for private jets and luxury cars, and the makeup of the ministry's corporate boards.

Grassley also inquired about the income generated from the sales of books and DVDs and the money the Whites used to pay for residences on Bayshore Boulevard in Tampa, and in New York City and San Antonio, Texas. He also asked about the Bentley convertible that Paula White gave her mentor, Bishop T.D. Jakes, for his birthday last summer.

The federal tax code prohibits using income and assets from tax-exempt organizations for personal gain. Unlike many other nonprofits, churches and ministries are not required to file Internal Revenue Service forms outlining their spending.

Grassley has asked for information from ministries led by the Rev. Kenneth Copeland of Newark, Texas; the Rev. Creflo Dollar, pastor of World Changers Ministry in College Park, Ga., and New York City; Benny Hinn, a televangelist based in Irving, Texas; Bishop Eddie Long of New Birth Missionary Baptist Church in Lithonia, Ga.; and Joyce Meyer, a popular evangelist and author based in Fenton, Mo.

Finance Committee investigators chose them because of news reports and tips about alleged financial shenanigans. The committee received complaints about Without Walls from "interested third parties, you might call them whistle-blowers, people who had inside information, and they brought us information over a period of several months," Grassley said.

Senate aides said the committee plans to review the ministries' documents and forward any potential violations to the IRS, which can strip organizations of their tax-exempt status and force them to pay back taxes and penalties. Criminal charges can result as well.

"Right now, I have no reason to believe something is wrong. But there are accusations, allegations," Grassley said. "If there is something wrong, then that's an IRS issue. If we don't get the information we want, that might be cause for a hearing."

Each of the ministries in question boasts thriving TV and publishing operations. Four of the ministers lead megachurches or congregations with several thousand members. And with the exception of New Birth, each ministry is nondenominational and does not answer to a larger ecclesiastical governing body. In many cases, the ministries' boards of directors consist of family members and people hand-picked by church leaders.

The lack of accountability to an independent body can become a breeding ground for unchecked spending and possible abuse of power, scholars said.

"As much as I don't think they want to necessarily break down the wall between church and state, at the same time, a lot of these ministries have been accused of doing some pretty outlandish money handling and those types of things," said Scott Thumma, professor of religion and sociology who studies megachurches at the Hartford Institute for Religion Research in Connecticut. "I could see the government wanting to take a look at it and see whether there's any validity to those claims."

Grassley, who was chairman of the Finance Committee until the Democrats took control of Congress this year, is one of the Senate's most dogged investigators. He enjoys a reputation for choosing targets regardless of political affiliation, and he works closely with the committee's chairman, Sen. Max Baucus, D-Mont.

The letters Grassley sent to Without Walls and the other ministries are part of his ongoing investigation into the abuse of tax-exempt status by nonprofit and charitable organizations. Since 2002, the Finance Committee has taken aim at the practices of the American Red Cross, the Nature Conservancy and the United Way, and each has changed its practices as a result.

But Congress has been reluctant to police churches, and Grassley said his letters to the ministries are the first he has sent to religious groups.

Reaction to his request varied among the ministers Tuesday. Copeland, who runs an international ministry near Fort Worth, denied any wrongdoing and called the Senate committee's request an "iniquity." He issued a statement urging his followers to pray for "wisdom, favor, and quick resolutions."

Meyer released a statement on her Web site with an October letter from the IRS affirming her ministry's tax-exempt status after a recent investigation.

Confident of his ministry's compliance with tax laws, Long, the pastor of New Birth, said he intended to fully comply with the investigation.

Dollar said the request could affect the privacy of every church in America. Still, he pledged to honor "valid" requests from the Senate. "My life and my ministry have always been an open book," he said in a statement.

Whether anything comes of the Senate investigation, churches large and small can learn a lesson from the inquiry, observers say.

"They have to pay attention to the rules," Thumma said. "They can't just operate as they see fit and disregard the laws and rules that are set in place."

Times researcher Carolyn Edds contributed to this report. Sherri Day can be reached at sday@sptimes.com or (813) 226-3405. Wes Allison can be reached at allison@sptimes.com or (202) 463-0577.

[Last modified November 7, 2007, 00:15:26]