CRI President
Hanegraaff
Make-up of CRI board
criticized... Existing CRI board
unable to spot problems...
Expenditures not properly
documented... Potential conflicts of
interest cited... CRI made `serious
reimbursement' for monies spent that may not
have had a `ministry-related purpose.'
The
Evangelical Council for Financial
Accountability (ECFA) is continuing a
review of the scandal-ridden Christian
Research Institute (CRI) that found all
the above and more, according to two public
statements issued by the watchdog group in
recent months.
CRI,
which is headed by radio talk show host and
author Hank Hanegraaff, is cooperating with
the ECFA compliance review and is attempting
to comply with breaches with ECFA standards,
according to a June 17 statement. But
the investigation is ongoing and it will
include "another on-site visit to CRI
headquarters."
In light of the
clear breaches of ECFA Standards, as
outlined in the group's March 20 public
statement, The
Christian Sentinel is continuing to call
for Christians NOT to contribute any money
to CRI, and we are continuing a call for
Hanegraaff to resign, along with his wife,
Kathy, and others associated with that
ministry, including Paul Young, Elliot
Miller and Bob and Gretchen Passantino.
Further, we believe
readers should contact their pastors and all
Christian leaders worldwide to ask them not
to give money to CRI. Further, if anyone would like an E-mail copy of ECFA's two
public statements outlining problems at CRI,
click here, and we will provide you with
copies.
These ECFA
revelations are coming during the same time
frame as The
Christian Sentinel's June
E-update in which we exposed some of the
ongoing problems at CRI, including the fact
that Hanegraaff's salary has zoomed to more
than $250,000 a year (not counting book
royalties and other funds he receives partly
due to his position at CRI), while his
wife's salary is near the six figure level.
Paul Young, the CRI vice president who
abandoned his wife in Canada, has a salary
of $130,000 a year.
In
last month's story we also questioned
the make-up of the CRI board, as Young was
added to the board following a stormy time
period in the late 1990s, along with fellow
golfing enthusiast with Hanegraaff, pastor
and friend, Louis Neely of Sacramento, and a
third man, Chuck
Merritt.
Merritt, it turns
out, is a fundraiser employed by KMA Direct
Communications, and his firm had already
been in an interlocking relationship with
CRI, bringing in almost $1.1 million from
CRI's coffers since 1999!
According to CRI's 990 forms on file with
the IRS and available
on the Internet, Merritt's firm made
$223,870 from CRI in fiscal 1999, $174,655
in 2000, $307,213 in 2001 and $386,943 in
2002! This clearly represents a
potential conflict of interest to have a
board member whose company is making money
off its client.
On a side note, The
Christian Sentinel has received multiple
complaints from Christian leaders, many of
them pastors in the Calvary Chapel movement,
strongly objecting to CRI's aggressive
telephone solicitations. See
details in the last E-update.
In a bizarre twist
to the story, The Christian Sentinel
has learned that in fiscal 2000, Julissa
Neely, daughter of Louis Neely, was added to
the board. However, after the report
was completed and typed, Julissa's name was
crossed out by pencil or pen, and Merritt's
name was inserted. Below is a
photograph of CRI's 990 form indicating the
change. CRI's 990s for at least the past
four years also indicate all board members
as having their addresses at the post office
box CRI maintains, which is not true.
It was unknown at press time if the Neelys
were aware of their listings in this manner.
It was also unknown at press time whether
Julissa Neely was ever aware she was penned
in as a CRI board member, or whether she
actually attended any CRI board
meetings. The Christian Sentinel was
unable to reach her, but we are working on
this angle for a future article.
According to the Servant
Quarters newsletter, produced by popular
author and conference speaker Gayle Erwin, Julissa Neely is a
talented singer and has recently produced a CD
titled "Fly" that contains a mix
of her new songs, "coupled with her
warm, loving rendition of old hymns."
The point here is
that the March 20 ECFA statement on CRI
states that there were potential problems
with CRI's board which was a factor leading
to an on-site review. It stated that
in "January 2003, ECFA received
allegations concerning CRI" that
sparked their probe. In conducting the
on-site review they wanted to place
"particular emphasis on determining
responsible board governance, appropriate
financial controls and policies, and the use of resources consistent with exempt
purposes of the organization."
It continued:
"The ECFA Standard Committee has ...
determined that CRI has breached compliance
with ECFA Standards 2, 4, and 6. In
general, the ministry was found not to have
adequate systems in place to ensure that
expenditures are properly documented in a
manner consistent with sound internal
control or to substantiate the ministry
purpose of disbursements made.
"The Standards
Committee found that the ministry had not
addressed potential conflict of interest
transactions involving related
parties. Also, there were not
sufficient Board policies or oversight
existing to identify these deficiencies." [Emphasis added.] As we reported in
the June E-update, when The Christian
Sentinel filed a report several years
ago critical of CRI, Neely asked to be
removed from our E-mail list. We have
discovered that other close friends of Hanegraaff's reacted much in the same way
upon hearing provable, factual reports on
irregularities inside CRI -- though true,
they don't even want to hear it. Some
have even attacked The Christian Sentinel
and journalist Bill Alnor
specifically. (More in a future
article.)
The ECFA reports go
on to say that CRI has cooperated with the
investigation, and the June 17 statement
notes that "CRI is actively seeking to
increase the size of its Board, as well as
the diversity of professional disciplines
represented on the Board."
Independent
investigators were also brought in, and they
"went back three years to assess
expenditures and determine their
purposes." It states: "The
investigation resulted in significant
reimbursement for certain disbursements that
could not be clearly substantiated as having
a ministry-related purpose."
Both
statements claim CRI's violations were
"not willful," but at press time The
Christian Sentinel had some evidence to
the contrary.
As we pointed out
in a previous statement, CRI, which has had
an on again, off again relationship with ECFA,
was last rebuked by ECFA for a fundraising
appeal claiming they were going to put the CRI
library on-line (which never
happened).
During this review
and continuing investigation CRI remains a
full member of ECFA.
