Investigating Televangelist Finances For Violating Non-Profit Tax Laws?

Kent Garber
Rolls-Royces, Dresden vases, vacation homes, jewelry, private jets, a $11,219 clock—the inventory is either admirable or suspicious, depending on your point of view. To adherents of the so-called Prosperity Gospel, the trappings of their ministers are evidence of God's blessings for a life well lived. But to Sen. Chuck Grassley of Iowa, they may be signs of excess—the kind of unreasonable compensation that he says could violate federal tax law.

Grassley, the ranking Republican on the Senate Finance Committee, has investigated many scandals, including excessive spending by officials at the Smithsonian Institution. Now, he is taking on the matter of church-state boundaries with his probe of six well-known televangelists who preach that God wants his followers to be rich both spiritually and materially. The philosophy applies not only to the worshipers but to the preachers as well.

So what happens when the preacher earns rock-star status and a paycheck to match? Federal tax law prohibits religious leaders, as the heads of tax-exempt nonprofit institutions, from earning "unreasonable compensation." It also prohibits tax-exempt organizations from providing "substantial benefit" to individuals.

Airplanes. With these provisions in mind, Grassley sent requests to six televangelists last fall seeking information about such things as credit card spending, offshore accounts, and airplane and car purchases. To date, only one ministry has responded to Grassley's satisfaction. So he is redoubling his efforts. Last week, the senator was planning to send a second request for information, along with further justification for his probe. "It is the same thing I have been trying to accomplish with all of my investigations," said Grassley, "and that is to make sure that tax laws are complied with." He said he wanted to make sure that churchgoers were not being "played for suckers."

Grassley's interest in the televangelists stems from several published reports of loose spending by church leaders. In 2003, for instance, the St. Louis Post-Dispatch exposed the opulent lifestyle of Joyce Meyer, a St. Louis-based televangelist whose church, Joyce Meyer Ministries, made an estimated $95 million that year. In his letter to Meyer and her husband, David, he noted reports of the couple accepting "personal monetary gifts and jewelry" from donors. To the Revs. Creflo and Taffi Dollar of World Changers Church International in College Park, Ga., Grassley cited reports that they had received two Rolls-Royces from the church. In both cases, he asked the ministers to show whether they had declared the gifts to the IRS.

The Meyers, who have said they are committed to "transparency," did provide much of the information that was requested, according to one of Grassley's aides. But Creflo Dollar, along with Georgia preacher Eddie Long, has declined to provide Grassley with documents. The other ministries—Kenneth Copeland Ministries of Newark, Texas; Without Walls International Church of Tampa; and Benny Hinn Ministries of Grapevine, Texas—have provided answers Grassley found insufficient. A Copeland spokesperson said the ministry supplied Grassley with 291 pages of exhibits but cited privacy concerns about releasing more documents. The Dollars and Joyce Meyer declined to comment; representatives of the other ministries did not return phone calls.

Discrimination? The objection from the churches is twofold: that the IRS, not Congress, is the proper body to investigate tax matters related to religious groups, and that the focus on members of the Prosperity movement is discriminatory and threatens their First Amendment rights. In a recent editorial, Creflo Dollar's attorney, Marcus Owens, said Grassley had singled out the churches because of his "often-expressed distaste for, or disagreement with, these churches' theology."

Grassley dismisses both arguments, "This has nothing to do with church doctrine," he said in a statement. "This has everything to do with [whether] the tax exemption of an organization is being used according to the law; and is the money that's donated...being used for legitimate, nonprofit purposes?" Grassley also noted that only Congress can change laws.

Still, the idea of the government investigating churches is a sensitive one. The last substantial federal probe of church finances dates to the 1980s, when an IRS investigation led to the indictment of Jim Bakker, the former host of the PTL Club, on fraud charges. The House later considered reforming the tax laws but made no changes and did not investigate the churches themselves. "The IRS has really not gotten involved too much in this, much less Congress," says Gary Snyder, managing director of Nonprofit Imperative. Government oversight of church finances is lax, and penalties for tax violations are rarely dispensed.

One change Grassley could seek, says Pablo Eisenberg, a nonprofit expert at the Georgetown Public Policy Institute, would be to impose limits on how much leaders of nonprofit organizations can earn. Congress could also try to demand stricter boundaries between preachers and boards of trustees.

Owens has challenged Grassley to subpoena the desired information. So far Grassley has resisted taking that route, but he says he has no plans to back down. "I think there is some gamble for people who are stonewalling," he said. "Every organization I have requested information from, I have gotten voluntarily."

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