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Board stands behind Lyons with donations

By WAVENEY MOORE, DAVID BARSTOW,and MONICA DAVEY

© St. Petersburg Times, published June 25, 1998


INDIANAPOLIS -- Meeting for the first time since their leader was charged with financial crimes, hundreds of members of the National Baptist Convention USA Inc. stood behind the Rev. Henry J. Lyons on Wednesday, offering donations for his legal bills and prayers for his future.

A Ministry Questioned: more coverage from the pages of the St. Petersburg Times.
But even as members rose, held hands and prayed aloud for president Lyons in his battle against state charges of racketeering and grand theft, Lyons was bracing the group for the possibility of more charges.

Federal authorities, Lyons told his members, will not stop until they indict.

He described a relentless investigation. One convention official was summoned to answer questions before a grand jury in Tampa no fewer than three times, Lyons said.

Deacons at his St. Petersburg church had been called upon to testify. Authorities were demanding convention documents the current leaders didn't even possess, Lyons said.

And Lyons said the targets of the federal investigation have spread beyond him -- to a church secretary and a convention staff member.

During the three-hour board meeting Wednesday, not a single person criticized Lyons. They called for solidarity. They lambasted the media. They spoke of an onslaught against African-American leaders.

About 40,000 convention members were meeting this week in an Indianapolis convention center for their 93rd annual Congress of Christian Education.

At one point during Wednesday's meeting, the group prayed for Lyons' deliverance from the criminal investigations that began last summer after his wife set fire to a $700,000 waterfront home Lyons owns with a former convention employee, Bernice Edwards.

But after the prayer, two of Lyons' allies said Lyons needs more than spiritual help. They asked for contributions to his defense fund.

There was a call for pledges of $1,000.

One by one, about half a dozen people rose. Next, pledges of $500 were requested. Then $100.

When it was over, more than a 100 people had offered promises. A hymn was sung.

There were signs the convention itself is struggling for money. Lyons said convention members must raise nearly $400,000 this week to pay the mortgage on their Nashville headquarters.

The meeting agenda calls for a "pay cut" of up to 75 percent in honorariums to convention leaders.

And, according to a new financial report, the number of churches sending monthly tithes to the convention has dropped to 346 from 596 in 1996. Total income to the convention for the first half of 1998 was $685,000, compared with $900,000 for the first half of 1997.

Meanwhile, the Nashville, Tenn., accounting firm that audits the NBC said Wednesday it is considering whether to sever its ties to the convention.

"We may have no choice," said Joe Edmondson Sr. of Marlin & Edmondson, a 30-person firm that specializes in accounting work for religious organizations.

The central problem, he said, is the convention's failure to put in place a professional centralized system of financial oversight and control. The absence of such a system "complicates" efforts to accurately audit the convention's books, Edmondson said.

"You got to have a strong home office to do what needs to be done," he said of the convention. "You need accountants and so forth. So far, they haven't done that."

Last fall, as Lyons faced growing criticism for his handling of convention finances, Lyons and his top aides pledged reforms to improve fiscal oversight.

"I don't think that's happened," Edmondson said. "That's what they owe the constituency of the National Baptist Convention. It's not fair to the members not to have the controls in place."

Grady Irvin, an attorney for Lyons, defended the convention's financial oversight.

"I don't have the authority to invite Mr. Edmondson Sr. to board meetings of the convention. However, I would wager that if Mr. Edmondson were to attend those meetings over the past several years, he would bear witness to a tremendous evolution of accountability when compared to the pre-Lyons years," he said.

"Things don't happen over night. They take time. Just as I'm sure it took time for his accounting firm to evolve into what it is today, he should allow the same deference to an organization which appears to be committed to getting its house in order under the direction of Dr. Lyons."

Edmondson, though, said several disclosures have revealed embarrassing gaps in his firm's reviews of convention finances. He had no idea, for example, about the existence of several convention bank accounts until he read about them in newspaper articles.

The largest of those secret accounts, which handled millions of dollars, is at the heart of state racketeering and grand theft charges against Lyons.

"There were so many accounts we didn't know about," Edmondson said, adding that the firm hasn't finished its 1997 audit because its records have been seized by FBI agents investigating Lyons.

Now there's a new issue: Among 1,900 pages of records released by Pinellas-Pasco prosecutors this week is a memo written on what appears to be Marlin & Edmondson letterhead.

The memo is addressed to Broward County officials who were reviewing an NBC proposal to build a hotel in Fort Lauderdale. Dated Sept. 11, 1996, the memo states that the accounting firm had discovered an additional $50-million in convention assets that were not reflected in its 1996 audit.

"That's a fraudulent document," Edmondson said.

Not only is the type font in the letter not used by his company, but the memo itself misidentified his firm as "Marlin & Edmondson Associates," he said.

The memo is significant because, at the time, Broward government officials were questioning whether the NBC had the financial muscle to develop a hotel. Broward County Commissioner John Rodstrom remembered saying as much during a 1996 meeting with Lyons.

"I looked at their balance statements and there was no equity," said Rodstrom, who also works as an investment banker. "He kept talking about all this equity."

Seeking proof of the convention's financial strength, Rodstrom requested that a major accounting firm inspect the convention's books.

"I said, I think one of the things we need to know is can these people really get these deals done?" Rodstrom recalled. "I think he (Lyons) really took offense to me asking certain questions. He was indignant that I would ask him anything."

Asked about the memo, Irvin replied: "The existence as well as the creation of the memorandum, which I have not seen, comes as a surprise. I'm pretty confident that the creation of that same memorandum, if it does in fact exist, is probably just as much of a surprise to Rev. Lyons."


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