When Mammon Serves God

By Richard N. Ostling

The Worldwide Church and financial accountability

Jesus said: You cannot serve both God and mammon. But these days it takes a heap of mammon to serve God. Religious establishments in the U.S. raise $20 billion or more a year. Most of the money is efficiently passed on to an assortment of spiritual and charitable works, with respectably small administrative costs.

However church money is handled, fiscal accountability is far looser than for other nonprofit organizations, which are required by law to keep records open to the public and follow standard bookkeeping practices. Churches have to meet no such formal standards and have been treated as exempt from government scrutiny under the constitutional guarantee of religious freedom. But more and more, church money raisers these days confront a growing public skepticism about how ecclesiastical cash is handled.

With some reason. Between 1970 and 1975 the Roman Catholic Pallottine Fathers of Baltimore were accused by Maryland's attorney general of frittering away some $45 million in mission funds. The United Methodist Church is financially aboveboard, but there are ideological disputes. Last year a layman who works for the AFL-CIO complained that his church had wrongly given $442,000 in aid to "totalitarians" who support revolutionary regimes in Cuba and elsewhere. Church officials contended that helping groups with Marxist ideas was a "risk" modern Christians must take to help the "oppressed."

Many evangelical groups are free from scrutiny. In the monthly Eternity, Columnist Joseph Bayly complains that while worthy causes pinch pennies, cash flows freely to high-living evangelists subject only to boards led by relatives and retainers. To allay doubts, nondenominational ministries in 1979 created the Evangelical Council for Financial Accountability (E.C.F.A.) to fix fund-raising standards. Many evangelists, including Billy Graham and Jerry Falwell, have won its seal of approval; others, including Jim Bakker, Rex Humbard, Oral Roberts and Pat Robertson, have not. Bayly advises contributors to demand a financial statement even if a group has the E.C.F.A. seal: "If questions are dodged, assume it is a careless operation at best, fraudulent at worst."

Assuming the worst, the state of California in 1979 seized financial control of an entire denomination, the 68,000-member Worldwide Church of God, charging that vast amounts of money and other assets had been misused. By any standard, the Worldwide Church is unusual. It is ruled by Herbert W. Armstrong, 88, self-styled "Chosen Apostle" of God, who is preparing the one true church for the imminent collapse of world order and Christ's return. Among other things, Armstrong denies the Trinity and insists that Christians should not celebrate Christmas or Easter (considered "pagan" holidays). He inspires fanatical loyalty among followers and fierce enmity among defectors, and deftly uses his radio-TV show, The World Tomorrow, and his monthly Plain Truth magazine to lure converts. Members contribute a tenth or more of their income, and with proceeds of $66 million a year the church has no trouble financing Armstrong's frequent tours to meet assorted world leaders.

California Attorney General George Deukmejian and a few dissident church members tried to sue church leaders. The state charged the church with not having accounted for an extra tithe fund for the poor, estimated in the millions. It also claimed that the church purchased services from profitmaking companies privately controlled by its own officials. In one year alone, documents showed an outlay of more than $1.7 million on travel and entertainment. Eyebrow-raising details: a $1,520 bill from a Tokyo nightclub and $26 for golf balls to Belgium's former King Leopold. However, the state did not cite an expense that helped trigger the dispute. Armstrong had his church pump more than $10 million into Quest magazine and related projects, partly to foster his image as a philanthropist and world statesman. For infuriated dissidents the glossy secular magazine seemed a big waste of church money. Two months ago, Quest's top editors quit when Armstrong insisted on writing a story about a pet project of Egypt's Anwar Sadat, whom Armstrong met last fall.

In joining the suit, Deukmejian took a radical step, applying the laws that govern other charities to a church. With a court-approved "receivership," he temporarily froze the church's assets. Arm strong, acting on advice from Lawyer Stanley R. Rader, his chief aide, legally dissolved his church, temporarily dismissed all employees and reorganized as a one-man corporation that is virtually exempt from such suits in the future.

In the legal confrontation between California and Armstrong, most major U.S. denominations filed briefs defending the Worldwide Church's position that such an inquiry by the state into the practices of even one unorthodox religion was an unthink able violation of religious liberty. Last fall, as the long-awaited case was about to reach trial, Governor Jerry Brown signed a bill that denied the state attorney general power to investigate malfeasance in religious organizations except in clear-cut criminal cases. The suit was dropped, and Armstrong's church is suing for millions of dollars from some of those who brought legal action against it.

Whether the events were a triumph for fiscal irresponsibility or for religious freedom, they were clearly a victory for Rader, 50. The aging apostle's longtime traveling companion, Rader was not baptized until 1975 (in a Hong Kong hotel bathtub) and was ordained a minister only in 1979. But he runs the denomination for Armstrong and, despite his disclaimers, will probably assume com plete control when Armstrong dies. To anyone who wants to pry into the lavish fiscal ways and means of the Worldwide Church, Rader has a simple reply: We live this way because that's what our members want. Besides, he asks, who ever questions the Pope's expense account?

With reporting by Diane Coutu

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