Breaking The Silence: Abuse of Funds?

Article ID: BTS2010-07 | By: Elliot Miller

Breaking The Silence

Chapter Seven:
Abuse of Funds?
 

In his “Statement on CRI” on his Christian Sentinel Web site, Bill Alnor writes, “Despite much good work done by the Christian Research Institute over the years, and the fact that CRI’s Bible Answer Man broadcast and the CRI Journal (and related publications) have helped many people, we are sad to report that this ministry can no longer support or endorse in any way the ministry of Hank Hanegraaff and the Christian Research Institute. We are also advising churches, individuals and Christian organizations NOT to contribute financially to CRI” (emphases in original). Alnor has gone so far as to say, “I really hope that Mr. Hanegraaff steps down from the presidency of that once vital ministry. He has pretty much ruined it by making it a money machine.”[1] Although he has also stressed the charge of plagiarism (see chapter eight), Alnor has probably put greater emphasis on the charge that Hank is abusing CRI donors’ money than on any other charge, and, of course, such a charge cuts right to the heart of a nonprofit organization that is supported by donations.

The allegation that Hank abuses CRI funds first was voiced within a year of his assuming the presidency of CRI. It was based on a completely mistaken understanding of where the profits from the sales of Hank’s Personal Witness Training and Memory Dynamics materials sold through CRI were going. (This is explained in full detail in appendix D.) That allegation was picked up again by Brad Sparks, who embellished it by adding Hank’s book Christianity in Crisis to the list of materials Hank was supposedly unethically and even illegally profiting from. (This too is fully answered in appendix D.) Members of the Group for CRI Accountability were only too happy to add this charge to their list of Hank’s alleged abuses. Both they and Sparks disseminated their anti-Hank materials broadly throughout the countercult community and the body of Christ at large. This smear on Hank’s integrity took on a life of its own so that in the minds of some people his character is forever tarnished as a moneygrubber. Everything about Hank’s personal life, and all of CRI’s decisions, came under close scrutiny, and every detail was interpreted in a most cynical, uncharitable manner.

Once Alnor fully entered the fray, he became the chief spokesperson for this particular perspective. When CRI was temporarily not a part of ECFA, for the reasons explained in chapter four (and also in appendix D), Alnor was sure it was because of CRI’s financial misdeeds and it seemed as far as he was concerned, there was no better way for a Christian ministry to make itself accountable than to join ECFA. However, when the Los Angeles Times reported that ECFA president Paul Nelson “investigated the mail-fraud issue, but was satisfied that the Christian Research Institute did not violate laws or dishonestly solicit money,” Alnor then told the Times that “the Evangelical Council never called him as part of its investigation, and he questions its impartiality.”[2] One thing is for certain: CRI can never do right in Alnor’s estimation, and neither can any organization or person that speaks well of CRI.[3]

ECFA’s 2003 Compliance Review of CRI
 

Alnor’s love-hate attitude toward ECFA (praising it when CRI is not a member or when ECFA is probing CRI; disparaging it when CRI is in good standing with ECFA or ECFA clears CRI of improprieties[4]) is perfectly illustrated by his public response to an ECFA review of CRI that occurred in 2003. The July 2003 issue of The Christian Sentinel E-Update had the headline, “ECFA Investigates CRI; Finds Irregularities.”[5] The article, written by Alnor, begins:

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…is cooperating with the ECFA compliance review and is attempting to comply with breaches with ECFA standards [sic], 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.

Before proceeding, let me point out that this is an incredible thing that illustrates what I stated previously. CRI rejoined ECFA as Alnor exhorted Hank to do in his February 1995 letter. Furthermore, Alnor acknowledges that “CRI is cooperating with the ECFA compliance review and is attempting to comply with…ECFA standards.” (It should also be noted, as will be documented below, that ECFA ultimately concluded that none of CRI’s breaches were intentional, nor did they compromise CRI’s ability to fulfill its ministry commitments.) Nonetheless, despite CRI’s show of good faith and willingness to correct anything in its practice that falls short of ECFA’s standards, Alnor calls on all Christians not to “contribute any money” to CRI, asks them to contact their pastors and all Christian leaders worldwide and ask them not to “give money” to CRI, and calls for the resignation of Hank and other people associated with CRI. This inconsistent and uncharitable public appeal simply makes no sense unless the person making it has an unrelenting agenda to see a ministry destroyed.

As if all this were not bad enough, Alnor neglects to mention (and one would certainly assume the opposite by the way he fulminates so self-righteously against CRI on the topic) that EChO/Christian Sentinel was not then and never has been a member of ECFA, even though they do sell their products online on their “Christian Sentinel Store” page. Furthermore, they make no public commitment to follow ECFA (or any other) financial ethics standards, as CRI did when it was temporarily not a member of ECFA (because of the previously mentioned concern about violations of their own policies that ECFA has since corrected).

The story of CRI’s compliance review by ECFA in 2003, which was also covered by Christianity Today (by a writer who credited Alnor’s Web site for much of the information he used in his story), was not the scandal Alnor tried to portray it as. There were a few people on staff who apparently had been influenced by Alnor and/or other people working in concert with him. One of them entered the CRI finance office on a Saturday without permission and pulled several invoices and receipts out of files that were off limits to her, looking for evidence of financial improprieties. Believing she found some, she stole the receipts from CRI and passed them on to ECFA. ECFA then launched a complete audit of CRI, which CRI willingly complied with at great loss of man-hours from key personnel.

ECFA prematurely and inappropriately made a public statement about what they thought they were finding, and this became fodder for Alnor and the press. ECFA stated that CRI had a conflict of interest in having a Board member who was also the employee of one of its vendors. Only later did ECFA discover that the vendor employee did not join the CRI Board until after he had terminated his employment with the vendor.

The audit CRI submitted to was far more comprehensive and demanding than anyone could expect to receive from the IRS. Nonetheless, CRI strongly believes in accountability and fully cooperated with ECFA, willingly incorporating all of their suggestions. In the end, ECFA issued a public statement that should be reassuring to CRI’s donors. The June 17, 2003 statement, “ECFA Confirms CRI’s Current Compliance with ECFA Standards,” states that ECFA had closely monitored CRI’s response to their requirements and they were satisfied CRI was now in full compliance. They also clarified that “the deficiencies in compliance with ECFA Standards found at CRI were not willful on the part of the ministry, nor was the ministry’s accomplishment of mission objectives, consistent with donor expectations, negatively impacted.” The deficiencies largely consisted of what ECFA called “naive bookkeeping”—a failure to match up receipts for every expenditure—but CRI eventually did locate and provide ECFA with the missing receipts and now makes a practice of documenting all ministry expenses.

Alnor vs. ECFA:
Who Is More Qualified to Identify Financial Abuse?
 

There are two major reasons why many Christian organizations decide not to apply for membership in ECFA. First, ECFA sets limits to the salaries that can be paid to members of an organization so that they are reasonably proportionate to the income generated by that organization. This prevents the executives of an organization with a relatively small income from receiving a disproportionately large salary. It also allows executives that are responsible for generating a relatively large income for an organization to be reasonably compensated while at the same time ensuring that they are not so excessively compensated that the organization’s ability to fulfill its mission is compromised.

Second, ECFA prohibits principals of its member organizations from receiving royalties from books or other materials that are sold by the organization for promotional purposes (i.e., as fundraising devices). This prevents authors from using their organization both to promote and sell any of their own products unless the organization, and not the author, is the full beneficiary of such sales.

There really is a problem in the Christian church today with people using their tax-exempt nonprofit organizations merely as fronts for their own personal profit. Still others may be doing a legitimate work but are dipping too deeply in the till. ECFA was established to address abuses in these areas, and supporters of a ministry can be reasonably assured that if that ministry is a member in good standing with ECFA its salaries and fund-raising practices are consistent with its nonprofit purposes. ECFA personnel are knowledgeable of what is practiced in the nonprofit world across the spectrum and are well qualified to judge whether an organization’s salaries and practices are consistent with its nonprofit status. People who do not have this background may hear that an executive receives a six-figure salary and think that is scandalous, but in many cases it is perfectly acceptable.

Hank is not excessively compensated. His salary is well-within ECFA standards and well within the range of what CEOs of nonprofit organizations that have comparable budgets make. Hank also carries the burden that such an executive carries (and frankly, much more than most executives because of his consuming passion for, and commitment to, the ministry), and he carries it well.

Hank more than earns his salary. His normal work week is about sixty hours and when he’s pushing to get something done it too often keeps him busy almost around the clock. Just last month, as he was personally shouldering the burden of looking into every nook and cranny of ministry expenses in order to pull us out of a financial crisis, I heard Hank rejoicing that he got five hours sleep the night before after several nights of no sleep. I can’t even imagine that—if I get less than six hours sleep it takes me days to recover!

Many people do not realize that Hank and Kathy Hanegraaff have a total of eleven living children. Eight of these children are currently living at home, seven are attending Christian school, one is away at a Christian college, and two others have graduated from a Christian college, all at Hank and Kathy’s expense. Can you imagine what all that costs? Hank recently commented to me that with all the expenses of providing for so many children, he and Kathy do not have any funds set aside for retirement.

The costly sacrifices Hank makes for the ministry of CRI cause me to sit back in awe. The fierce and unrelenting personal attacks under the spotlight of the media that he has sustained for almost two decades would be enough to drive almost anyone else to seek a more rewarding, less punishing profession. He is an extremely talented guy. He could no doubt be very successful in many other fields, Christian or secular, that would not be nearly so populated by the likes of Bill Alnor as the Christian countercult/discernment field seems to be. Nothing earth could give Hank could truly compensate him for what he has had to suffer, but his eyes are fixed on a different kind of reward.

As mentioned previously, CRI authors not only fulfill the ECFA requirement of turning over to the ministry all the royalties from their materials that are used by the ministry for promotional purposes, but we turn over to the ministry all of our royalties for products sold by the ministry whether or not the ministry uses them for promotional purposes. This extra step beyond what ECFA requires was initiated by Hank and he follows it to the letter. When he goes out on the road to speak, he always offers his materials for sale. This is a key way for many authors to increase their personal income, but Hank turns all of these proceeds over to CRI at great benefit to the ministry. Hank is clearly devoted to furthering the ministry of CRI. He is not using it as a “money machine,” as Alnor harshly alleges.

I do not have any problem supporting CRI or working for it, because I know what the ministry is doing to further God’s kingdom with the donations it receives. But certainly, every Christian has a responsibility before God to research a Christian work he or she is supporting to make sure it is the best investment of his or her money, and CRI makes its 990s available to the public on request out of respect for this fact. If someone feels he or she cannot support CRI, that is between that person and God. We are called to make such judgments, but we should also be careful how we judge (John 7:24). I am appalled by Alnor’s self-righteousness, presumptuousness, and intrusiveness. Any Christian who finds himself or herself being caught up in the same harsh judgmentalism should back away in horror at the realization of it. Does he or she really want to be judged by that same standard (Matt. 7:1–5)?

One would think Alnor must be the standard-bearer of financial integrity in light of the way he so self-righteously goes after other Christians. That is certainly implied and he sometimes even speaks of his personal integrity. I have sat on some information that bears on such a notion for thirteen years because I don’t have an interest in sifting through anyone’s muck, including Alnor’s, even though the ministry I have been pouring my life into for thirty-two years has been the biggest target of his muckraking “ministry.” But with Alnor showing no signs of letting up after thirteen years, it’s time for me to point a few things out.

Alnor accepted the allegations against Hank of certain former CRI staff people as evidence of Hank’s guilt without first seriously attempting to understand the other side of the story. So, if mere hearsay offered by former staff people is to be given credence in that way, then Alnor is in no position to point the finger at anyone. In early 1996 EMNR and CRI were contacted by former staff people of Alnor’s EChO, alleging that they had witnessed Alnor abuse EChO funds and lie to staff, supporters, and leaders of his church (at that time Calvary Chapel of Philadelphia) on several occasions. I interviewed a couple of these people and reported on the conversations to fellow EMNR board member Wayne House in the following memo. Only the telephone numbers of the two people interviewed have been deleted from the text.

MEMORANDUM

To: H. Wayne House
From: Elliot Miller
Date: March 21, 1996
Re: Bill Alnor
_________________________________________________________
Conversation with Paul Architetto, formerly of EChO

  • Claims he and several other former members have caught Bill Alnor in several boldfaced lies. For example: he claims to be an elder at Calvary; he boldly revises history with regard to how these people left [EChO].
  • Many have left EChO for conscience’ sake. He claims Bill intimidates and lies about these people in order to preserve his image with the Calvary pastors. (Virtually all of his staff were or are members of the church and the church supports and facilitates his ministry.)
  • Last January through April Bill devoted all of his EMNR and EChO time to hunting down CRI. The phone bill and fax bill were in the hundreds. A stack of letters from people seeking spiritual help was ignored.
  • In the view of EChO staff he was draining EChO’s funds and manpower for EMNR. Paul saw money coming in for EChO being used to pay EMNR bills. Then Bill would claim no money was coming in for EChO. Last August Paul roughly added up how much money was coming in. A lot of money was coming in for EChO and yet they were constantly broke. Unwillingness to be involved in funneling EChO money over to EMNR is what caused him, Ruth Rosenberg, and Mary Delahanty (all involved with the finances) to leave. In their view, EChO was a ministry for the people while EMNR was a personal vehicle for Bill.
  • They suspect Bill has “cooked” the books because he’s brought people in from time to time and they think it was to make the books look right.
  • Bill is telling EChO staff and Calvary pastors that resigning from EMNR was his idea so that he could get back to the duties of EChO. [Note: according to Architetto, when Alnor was fired from EMNR he told people it was he who resigned in order to concentrate on EChO; this is exactly what he told people when he was fired from the Christian Research Journal.]
  • Comingling of funds: he says Bill’s scatter-brained quality is at its worst with money. He would borrow from one ministry to pay the other. If he had a personal need he would use ministry funds if they were all that was available. No record of these expenditures was kept.

Conversation with Ruth Rosenberg, formerly of EChO (3-15-96)

My computer spontaneously restarted in the middle of my conversation with Ruth and so I lost the file and only have my own memory to draw on. The only information she added to what Paul A. said is perhaps the most important information of all. She says that she saw thousands of dollars of EMNR money go into EChO. She also saw EMNR money go into Bill’s own pocket. She is willing to talk with Jim Bjornstad about this but wants to talk with him in person. I told her he had moved to Ohio but she still seemed interested in possibly traveling there. However, she did agree to Jim’s calling her and perhaps it could all be handled over the phone. She says she did not keep any copies to prove Bill’s improprieties, but once Jim received the books she could tell him where to look.

After the above information was communicated to EMNR, its president Jim Bjornstad did communicate with Ruth Rosenberg and he told me in a personal conversation at the 1996 EMNR conference in Atlanta that he did see confirmation of Alnor’s improprieties. Nonetheless, I cannot vouch for all of Paul Architetto’s allegations against Alnor because I never sought Alnor’s side of the story. I would never have made these allegations public except to drive home a point: this is exactly what Alnor has been doing to Hank and CRI for thirteen years. By his own standard of evaluation, Alnor would be disqualified from any ministry—how much more a ministry whose purpose is to investigate and expose this very same kind of financial impropriety?

Alnor vs. Hank:
Who Is Really Unaccountable?
 

Alnor constantly carps publicly about Hank’s salary and lack of accountability, yet Hank is accountable to a very independent board (he does not have control over it—he could be fired if the board judged his performance or ethics wanting). Hank further submits his salary and all CRI financial information to the scrutiny of ECFA. In fact, CRI pays for, and submits itself to, a comprehensive annual audit by an independent organization, and these statements are examined by ECFA. If there is anything questionable about CRI’s financial records or activity, ECFA will deal with CRI about it.

Alnor, on the other hand, is a member of no financial accountability entity; rather, he wants to be that entity for everyone else while doing as he pleases with his own ministry finances. As noted before, Alnor sells plenty of materials on his Web site. It even came to our attention that he was selling CRI material without permission that we were offering to the public for free![6] Again, he has given no indication whatsoever that he operates by ECFA standards, such as putting the profits of his materials sold through his organization back into the organization rather than pocketing them himself. Furthermore, he seems to be accountable to no one for his decisions to pursue and bring down Christian leaders and ministries, despite the great risk of damaging a valid work of God inherent in such crusades.

The clear conclusion is that what Alnor is calling his “ministry” is an unholy business. It reeks of self-righteousness, judgmentalism, and hypocrisy. It is outright evil, and it should be rejected by the body of Christ as such.


[1] Quoted in “Assistant Professor of Journalism William Alnor Uncovers Financial Controversy Surrounding Evangelist,” Campus News and Events, January 26, 2005, http://www.tamuk.edu/news/2005/january/alnor/.
[2] Kimi Yoshino, “Evangelist Sues Critic over Charge,” Los Angeles Times, April 2, 2005, http://articles.latimes.com/2005/apr/02/local/me-bibleman2.
[3] This has been a pattern all along. He has devoted much energy and time to debunking, and at times personally going after, such Christian apologists as Bob and Gretchen Passantino, Dr. Norman Geisler, and Richard Abanes for the transparent reason that all of them had spoken publicly in defense of CRI. However, when Geisler was publicly critical of Hank’s positions on eschatology and the Local Church movement, then suddenly his opinions were important enough for Alnor to quote them, distribute them, and post links to them on AR-Talk (October 10, 2006 and February 7, 2007).
[4] For example, see his editorial, “Does Adherence to ECFA’s Standards ‘Clear’ a Ministry of Wrongdoing? NO!” The Christian Sentinel, August 2003, http://www.cultlink.com/news/HankEditorialAug.htm.
[5] http://www.cultlink.com/news/july_2003_sentinel_eupdate.htm.
[6] Former CRI researcher Steve Parks wrote in a May 7, 1996 e-mail, “I just wanted to notify you that about a year ago I wrote in to ECHO (Eastern Christian Outreach—Alnor’s ministry) to purchase their ‘Jehovah’s Witnesses’ packet, and it included materials copied from other ministries magazines and newsletters, including the ‘Whither the Watchtower’ article from the Summer 1993 issue of the JOURNAL.…I just thought you all might want to know that photocopies of the JOURNAL are being SOLD by another ministry.”
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