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Tape details Lyons' fund demands

He is heard insisting that a funeral company finance an expensive ""image recovery'' campaign.

By WILLIAM R. LEVESQUE and DAVID BARSTOW

© St. Petersburg Times, published January 8, 1999


ST. PETERSBURG -- Prosecutors have obtained a secret tape recording that captures the voices of Baptist leader Henry J. Lyons and his former aide Bernice Edwards as they try to squeeze hundreds of thousands of dollars from what investigators call their largest corporate victim.

The recording offers a vivid, first-hand glimpse of how Lyons and Edwards boldly improvised and beguiled their way into the world's second-largest funeral company, The Loewen Group of Canada.

The tape surfaced only days before Lyons and Edwards are scheduled to be tried on state racketeering charges. Jury selection starts Monday.

The recording was made in mid-1997 by a public relations consultant to Loewen, which signed a deal with Lyons, president of the National Baptist Convention USA, to market Loewen's funeral plots to Baptists.

Lyons, fending off fierce criticism from black funeral directors that he was selling out to a white corporation, demanded that Loewen finance an expensive campaign to repair his public image. Lyons sent Loewen a bill for Phase I of his "image recovery" -- a mailing to the convention's 33,000 churches and 8.5-million members.

"My appeal has to be to my constituents, which are the people. And that's why I need the mass mailing, the big mailing, the 8-million mailing to get my message across," Lyons says on the tape during a telephone conference with Loewen public relations man Tom Franco and Edwards.

Postage alone cost $996,710. Print and labor was another $262,759.

"Of course, I know it's a big figure," Lyons says apologetically. "I really know it's a big figure, and I'm being sensitive to that."

Still, he and Edwards insist they've already incurred expenses, and they expect to be reimbursed.

"We've mailed to them, the money's spent," Lyons explains, adding, "Please Mr. Franco, my philosophy is kill the mosquito with an ax, and that's really my approach here. Because this mosquito keeps getting bigger and keeps stinging me. And I know I have an ax approach, but I've never killed them any other way."

In fact, the convention's 8.5-million members and 33,000 churches were a mirage. The convention's own records show it has fewer than 5,000 churches and 1-million members.

Yet on the tape, Edwards suggests they've already mailed letters to 4.7-million members of the convention, at 11 cents a letter.

"Now, the number in the budget is a hard number for the mailing to the members?" Franco asks.

"Eleven cents, that's as low as they could go to with this," Edwards replies.

Pinellas-Pasco prosecutors released the tape on Thursday pursuant to a public records request by the Times.

It was unclear where the recording was made. Franco could not be reached. In Florida and some other states, it usually is against the law to record a conversation without all parties' consent. Also unclear is whether the recording will be admissible at trial.

Lyons' lead attorney, Grady Irvin Jr., did not return a call for comment late Thursday.

In the end, Loewen balked at paying for Lyons' image-recovery plan, which called for Loewen to spend $3-million. Lyons and Edwards are not charged in connection with the public relations plan.

Prosecutors say the two defrauded the company of more than $3-million, much of it by submitting bogus expense reports about the costs of marketing Loewen's funeral plots to Baptists.

Few plots were ever sold. Instead, Lyons and Edwards fed their appetite for luxury with expensive cars, homes, jewelry and gourmet meals, banking records show.

The recording appears to begin mid-conversation with Lyons explaining why it was crucial to mail letters to each and every member of his convention. He complains that black funeral directors resent his deal with Loewen, and they are fueling negative stories about Lyons in black newspapers.

"Now the people think I've turned on them," he said.

This, Lyons tells Franco, poses a serious threat to his grip on the convention.

"Right now, my election is at stake in 1999," he says. "... the black funeral directors are not going to let it go away. They smell my blood. They think they got me on the ropes, and actually they do have. And so we've got to do something, and, of course, I'm going to do it. And I've already assumed a great cost in money as well as reputation and image."

On the tape, Franco reminds Lyons that Ray Loewen, the company president, just fended off a takeover attempt. "Ray now is under tremendous pressure himself from his shareholders and every dime and nickel counts," Franco says.

Lyons says he sympathizes with Loewen, but he insists that his "reputation management" plan must reach beyond the NBC pastors to the membership.

"When I got elected in '94, the pastors didn't elect me," he says. "They didn't even like me. My appeal was to the people. That's why I'm called the people's president."

As a concession to Loewen's financial struggles, Lyons offers to eliminate from the bill the costs of sending letters to the pastors and four officers in each NBC church.

"If I had to opt to do anything, I gotta go with the people. That's where my strength is. That's widely known. Everybody knows that. Even pastors know it," he says.

The concession barely dents the $1.2-million price for Phase I.

Near the end of the tape, Lyons hangs up and leaves Edwards to finish the discussion with Franco. Edwards tells Franco she's under enormous pressure from Lyons to repair his image in the black community.

"I'm just pushed to bring an end to it," she says. "Every city he goes in I get a phone call (from Lyons), "Do you know what they did to me? Do you know what happened?' And I'm just pushed to bring an end to it ... to eradicate the situation."

In the end, Franco promises to consult with the Loewen Group on their demands.

"I look forward to hearing from you," Edwards says.

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