Spending God's Money

The secrecy of Southern Baptist officials about their financial scandal at the International Mission Board wasn’t anything unusual. It’s the sort of thing we’ve seen over and over again.

Southern Baptists need to begin seeing the pattern rather than merely viewing these things as isolated cases.

It’s a very common pattern: Without accountability, power corrupts.

Religious organizations are no exception.

The corruption manifests itself, not only in the cover-up of financial wrongdoing but also in the cover-up of clergy sex abuse. For both types of corruption, the root of the problem is a systemic lack of accountability.

That’s the root that Southern Baptists desperately need to remedy.

This blog has posted scores of examples showing the lack of accountability in connection with clergy sex abuse, but let me give you a few more illustrations showing the lack of accountability in the financial context.

North American Mission Board

The president of the North American Mission Board, Bob Reccord, resigned after a state-convention newspaper published an extensive investigative piece about financial mismanagement.

At the time, Mary Kinney Branson was a marketing director for the North American Mission Board, and she’s written a book that provides an insider’s account of the extravagance and financial mismanagement there. Spending God’s Money shows how a powerful religious organization goes wrong when it is unaccountable to the people who fund it and when its leaders lose touch with the higher purpose they purport to serve.

Branson provides details that implicate high Southern Baptist officials and those details are not flattering. For example, Bob Reccord “had a $1 million fund he could use at his discretion, no questions asked and no receipts required.” (Branson at p. 61)

Can you imagine any other organization that would allow an official to spend such sums with so little oversight? According to Branson, that $1 million fund was replenished each year, and in Reccord’s last two years, the fund was reduced to $350,000. In other words, the money didn’t just sit there. He spent it. “No receipts required.”

When Reccord resigned, 41 Southern Baptist leaders signed a letter, praising Reccord and essentially whitewashing his “undisputed misuse of funds.” (Branson at p. 18) One of those signers was Johnny Hunt, who is now the president of the Southern Baptist Convention. Another was evangelist Jay Strack.

According to Branson, after Bob Reccord left the North American Mission Board, “auditors discovered that payments were being made to evangelist Jay Strack ($300,000) and Bob’s mega-pastor Johnny Hunt at Woodstock Baptist Church ($92,000). Final payments were sent after Bob resigned but before he left the building…. There were no written contracts. So nearly half a million dollars was paid to Strack and Hunt through verbal agreements with Bob.” (Branson at p. 113)

A copy of the letter signed by those 41 Southern Baptist men is included in the appendix to Branson’s book. Some of the other prominent Southern Baptist leaders who signed off on it were Jerry Vines, Ronnie Floyd, Jack Graham, David Clippard, Anthony Jordan, Michael Lewis, Jerry Sutton, and Edwin Young.

As Branson explains, Southern Baptist officials effectively concealed this sort of financial mismanagement and wrongdoing by silencing employees. With financial incentives, they induced most departing employees to sign a secrecy pact.

A copy of the standard agreement is included in the book’s appendix; here is the secrecy clause that they persuaded people to sign: “I further agree to make no public or private statements or disclosures concerning my employment or treatment by NAMB or any of its officers, directors, or employees, and not to portray them in a negative or poor light to anyone.” The contract further specifies that, if they break the secrecy pact, then all the “enhanced separation benefits” they received (i.e., the “hush money”) will “become immediately due and payable to the NAMB.”

Baptist Foundation of Arizona

The Baptist Foundation of Arizona was established with the pretense of serving Southern Baptist causes. During its history, it did indeed return about $1.3 million to Baptist causes. But it also “loaned” nearly $140 million to companies owned by three of the Foundation’s directors. In doing so, the Baptist Foundation of Arizona cost thousands of investors their life-savings to the tune of $570 million dollars. It was called “the largest affinity fraud in history.”

Also called “affinity scams,” such frauds target investors who have a similar interest -- in this case, advancing "the Lord's work" through Southern Baptist churches.

Consider just one example: A Baptist Foundation of Arizona subsidiary called Arizona Southern Baptist New Church Ventures "had a stated purpose of financing new Southern Baptist churches in Arizona. Yet it raised most of its money by selling investment products to individuals and invested most of those funds in… an allegedly phony company owned by one-time BFA director Jalma Hunsinger.”

Many of the investors were elderly, and they learned of the investment “opportunity” through their church. They were promised high returns and that some of their money would be used to advance the Gospel. Brochures, distributed in Arizona churches, assured investors that their money “would be as safe as if kept in a bank.”

“We were deceived,” said a woman who invested $35,000 from her son’s Navy death benefit with the Foundation. She described the Foundation’s presentation in her church as being like “the moneychangers in the Temple,” and she complained that Baptist officials were reluctant to discuss the scandal for fear that it “gives God a bad name.”

Sound familiar?

Baptist General Convention of Texas

The “Valleygate” scandal showed the ugly side of the largest state-wide Baptist convention in the country. It involved $1.3 million in lost and mismanaged church-starting funds. “The investigative team faulted the BGCT Executive Board staff for poor oversight, uneven management, failure to abide by internal guidelines and misplaced trust.”

Because the investigators’ report indicated that some BGCT staff had “allowed the misuse to occur,” it was determined that recovery of the funds would be difficult.

This was a scandal that probably would have never seen the light of day if not for a courageous Southern Baptist pastor named David Montoya, who blogged about it relentlessly as “Spiritual Samurai.” It was a name that suited him because he had the heart of a warrior. But like many whistle-blowers, he was made to pay a heavy price.

Two Rivers Baptist Church in Nashville

Remember when church members at Two Rivers tried to get access to church financial records? They were accused of “causing division” within the church body.

Sound familiar?

Executive pastor Scott Hutchings gave this Borgian justification for the harshness in how church leaders treated the “renegades”: “There has to be submission and authority.”

Meanwhile, thousands of pages of church financial records were found in a dumpster behind the church. It certainly appeared as though church officials didn’t want people to see those records.

Two Rivers is the home-church for many of the Southern Baptist officials and bureaucrats who do the day-to-day decision-making of the Southern Baptist Convention. Is it any wonder that there are so many Southern Baptist cover-ups when this is the example that is set by the leaders of the leaders’ own church?

These are the sorts of disasters you get when an organization gives its leaders power without also insisting on accountability.

Without accountability, power corrupts.
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Updates:
6/11/09: Appeals court upholds convictions of Arizona Baptist Foundation officials
11/11/10: Libel suit by South Texas church starter dismissed