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  • Lawyer says rules don't limit Lyons' spending

    By DAVID BARSTOW, Times Staff Writer
    ©St. Petersburg Times, published July 30, 1997

    Lawyers for the Rev. Henry J. Lyons are studying ways to prevent prosecutors from examining banking records of the National Baptist Convention USA Inc., saying Lyons has "virtually unbridled authority" to spend convention funds as he pleases.

    "As it stands right now, I don't see any proper purpose for the release of the convention's banking records to any investigative agency," said Grady Irvin, an attorney for Lyons, the embattled Baptist leader.

    "As best I can tell, the president of the Baptist convention has no written limitations in the constitution or bylaws of that organization which limit his spending authority."

    Last Friday, the Times reported that Lyons maintains a local bank account -- called the National Baptist Convention USA Inc. Baptist Builder Fund -- which does not appear in the convention's most recent annual report or financial audit.

    The same day, Pinellas-Pasco State Attorney Bernie McCabe issued subpoenas ordering the United Bank and Trust Co. in St. Petersburg to turn over its records of the Baptist Builder Fund.

    "They're requesting a significant number of records," Irvin said. "It is without question overly broad. In addition, the subpoenas do not state why they want the records. There's been no explanation. What are they going to say? "Because of a story in the St. Petersburg Times' -- which I'm confident is probably the reason."

    Said McCabe: "I've never heard of having to put on a subpoena why I'm investigating something. That seems kind of ridiculous."

    McCabe said the subpoenas were issued partly because of information reported by the Times and partly because of information investigators have gathered about Lyons' purchase last year of a $700,000 waterfront home on Tierra Verde.

    Lyons' wife of 25 years is accused of ransacking and burning the home after discovering that Lyons owns it with Bernice V. Edwards, a convicted embezzler whom Lyons hired as the convention's director of public relations.

    Since the July 6 fire, questions have been raised about the money behind Lyons' affluent lifestyle, which includes the purchase of a $135,000 Mercedes-Benz, a six-figure joint checking account with Edwards and plans to purchase a $925,000 estate in Charlotte, N.C.

    Lyons has denied wrongdoing.

    Tuesday, in an hourlong interview, Irvin provided additional details about Lyons' use of the Baptist Builder Fund.

    The fund, he said, was used for a variety of purposes, including paying off convention debts, paying for travel expenses, paying "minor salaries" and paying contractors hired for special projects.

    "Any monies that were used from that (Baptist Builder) fund were consistent with the discretionary spending purposes of the convention's president," he said.

    He declined to give a more specific spending breakdown.

    Asked why key officials in the convention -- including the convention's finance and budget chairman -- were unaware of the Baptist Builder Fund, Irvin replied: "Officials in the convention are aware of the programs which are supported by the convention's funding methods. However, they may not have been specifically aware that those programs were being funded through this particular account."

    The reason they were unaware, Irvin said, is because the convention's board of directors exercises very little oversight over Lyons' use of convention money. There was no attempt by Lyons to keep the fund a secret, he said.

    "The National Baptist Convention, for reasons which are only known to the convention and its members, have vested virtually unbridled authority in its president to act in a completely discretionary manner. This authority is consistent with the authority exercised by previous presidential administrations of the convention," Irvin said.

    "I don't think he's done anything wrong under their constitution and bylaws. I don't think a wrong has taken place. Now it may be cause for the convention to amend its bylaws if it desires to have greater oversight."

    The Rev. Fred Crouther, the third vice president of the convention and its finance and budget chairman, agreed that Lyons has broad spending authority. But that authority, he said, is not unlimited.

    "I don't think that any president of our convention or any organization would just take the funds of the organization and just spend it as their own money."

    Crouther said he hoped Lyons would provide a full accounting of the Baptist Builder Fund at the convention's annual meeting in September. He said he hoped that the fund was nothing more than a "discretionary fund" typical of many large organizations.

    "I'm sure everything will be cleared up later," he said.

    Irvin said Lyons does not owe the public any full accounting of how he spends the millions of dollars in donations collected by the convention each year from its 8.5-million members.

    "If the board of directors of the convention decides that they want to limit that spending authority, there are voting procedures in place which would allow them to amend the current constitution and bylaws."

    Meanwhile, he said, Lyons "should have standing" as president of the convention "to protect" the confidentiality of the organization's banking relationship with United Bank.

    Irvin said he and Lyons' new attorney, Anthony Battaglia, "are looking into whether or not the subpoenas served on the United Bank seek information that is otherwise privileged or protected."

    He accused local prosecutors of "over-reaching" and engaging in an investigative fishing expedition. "I think that's what it is -- trying to see if they can find something," he said.

    One possibility: Filing a motion in Pinellas Circuit Court to quash the subpoenas.

    "That decision has not been made," Irvin said, adding that he would not discuss Lyons' legal strategy in the newspaper.

    McCabe, however, noted that the subpoenas are directed at United Bank. Thus, it is up to bank officials -- not Lyons -- to produce records, he said.

    Susan Blackburn, senior vice president of United Bank, said the bank will not resist the subpoenas.

    "We are working quickly to comply with the request by furnishing those documents," she said. "When we receive a subpoena from Bernie McCabe . . . we certainly follow our responsibility to comply with the law."

    Blackburn said the bank already has "provided some information" to McCabe's office.

    There were many questions Irvin could not answer about the Baptist Builder Fund.

    He said he was uncertain what convention money is designated for deposit into the Baptist Builder Fund, when the fund was established, how large the fund is now, or whether any other convention officials other than Lyons have written checks off the account.

    Several convention checking accounts require at least two signatures on each check. Only Lyons' signature appears on a Baptist Builder Fund check obtained by the Times.

    "I don't know whose signature is required (on checks from Baptist Builder Fund)," he said.

    He could not say whether the fund ever has been fully audited, as is required by convention rules.

    Why wasn't the Baptist Builder Fund mentioned in the 1996 audit?

    Irvin said there "was not a significant amount of money" in that account at the time of the 1996 audit -- perhaps $1,000 or $2,000. He said it was possible that some of the fund's money was audited as part of a larger convention bank account. He could not provide specifics.

    Irvin, though, emphasized that the Baptist Builder Fund will be subject to the current year's audit, now under way.

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