"Praise the Lord and pass the money brother!"
Family Battle Offers Look Inside Lavish TV Ministry
The Holy Land Experience theme park in Orlando, Florida is part of the Trinity Broadcasting Network's operations. (Brian Bianco of New York Times)
By Erik Eckholm
Friday, May 4, 2012
Brian Blanco for The New York Times
A SIDE BUSINESS The theme park is run by Janice Crouch, a TBN founder. More Photos »The prosperity gospel preached by Paul and Janice Crouch, who built a single station into the world’s largest Christian television network, has worked out well for them.
Mr. and Mrs. Crouch have his-and-her mansions one street apart in a gated community here, provided by the network using viewer donations and tax-free earnings. But Mrs. Crouch, 74, rarely sleeps in the $5.6 million house with tennis court and pool. She mostly lives in a large company house near Orlando, Florida where she runs a side business, the Holy Land Experience theme park. Mr. Crouch, 78, has an adjacent home there too, but rarely visits. Its occupant is often a security guard who doubles as Mrs. Crouch’s chauffeur.
The twin sets of luxury homes only hint at the high living enjoyed by the Crouches, inspirational television personalities whose multitudes of stations and satellite signals reach millions of worshipers across the globe.
Almost since they started in the 1970s, the couple have been criticized for secrecy about their use of donations, which totaled $93 million in 2010.
Now, after an upheaval with Shakespearean echoes, one son in this first family of televangelism has ousted the other to become the heir apparent. A granddaughter, who was in charge of TBN’s finances, has gone public with the most detailed allegations of financial improprieties yet, which TBN has denied, saying its practices were audited and legal.
The granddaughter, Brittany Koper, and her husband have been fired by the network, which accused them of stealing $1.3 million to buy real estate and cars and make family loans. “They’re just trying to divert attention from their own crimes,” said Colby May, a lawyer representing TBN. Janice and Paul Crouch declined requests for interviews.
In two pending lawsuits and in her first public interview, Ms. Koper described company-paid luxuries that she said appeared to violate the Internal Revenue Service’s ban on “excess compensation” by nonprofit organizations as well as possibly state and federal laws on false bookkeeping and self-dealing.
The lavish perquisites, corroborated by two other former TBN employees, include additional, often-vacant homes in Texas and on the former Conway Twitty estate in Tennessee, corporate jets valued at $8 million and $49 million each and thousand-dollar dinners with fine wines, paid with tax-exempt money.
In the lawsuits and interviews, Ms. Koper, 26, also charges that TBN has spent millions of dollars in sweetheart deals with a commercial film company owned until recently by a son of the Crouches, Matthew, including poorly monitored investments made after he joined the TBN board in 2007.
“My job as finance director was to find ways to label extravagant personal spending as ministry expenses,” Ms. Koper said. This is one way, she said, the company avoids probing questions from the IRS. She said that the absence of outsiders on TBN’s governing Board — currently consisting of Paul, Janice and Matthew Crouch — had led to a serious lack of accountability for spending.
Ms Koper and the two other former TBN employees also said that dozens of staff members, including Ms Koper, chauffeurs, sound engineers and others had been ordained as ministers by TBN. This allowed the network to avoid paying Social Security taxes on their salaries and made it easier to justify providing family members with rent-free houses, sometimes called “parsonages,” she said.
The company did not always succeed. Last year, officials in Orange County, Florida turned down TBN’s application to register the adjacent lakefront houses in Windermere as parsonages, saying they served no religious purpose, The Orlando Sentinel reported. The designation would have resulted in religious exemptions and saved TBN roughly $50,000 in taxes a year.
Ms Koper said that the company run by Matthew Crouch, 50, who is her uncle, had received an estimated $50 million in TBN money over the years, with little oversight, to finance religious film projects and television shows. TBN recouped only a small fraction of its loans and investments, sometimes forgiving large sums in return for broadcast rights of limited value, she said.
She also questioned the justification for providing rent-free houses for Matthew, now a TBN Vice President, and his wife, Laurie, and separate houses for their young-adult sons in Costa Mesa, California including one that Ms Koper said was remodeled at company expense with wall-mounted Transformer robot figures costing several thousand dollars, a putting green and an indoor basketball court.
Ms Koper and her husband, Michael Koper, 28, who formerly managed sales of TBN airtime, said they were fired last September after writing memorandums to the elder Mr. Crouch about questionable spending.
They showed a reporter for The New York Times what they said were copies of the memos.
“People have been conned by my grandparents,” Ms Koper said.
Page 2 of 3
But TBN said the pair made their charges only after the company confronted them with evidence of embezzlement. TBN later filed and then dropped a civil lawsuit accusing the Kopers of fraud, and this week filed a new suit in a California court, repeating only a few of the original allegations. No criminal charges against the Kopers have been filed.
Mr May, the lawyer, offered a broad defense of TBN and the Crouches. He said that TBN had indeed ordained hundreds of people who felt a true “ministerial call” and that performers at Holy Land Experience, for example, were “ministers playing roles.”
He said that all contracts with the film company that Matthew Crouch led until mid-2010, Gener8Xion Entertainment, had been at “arm’s length” and provided good value to TBN.
Mr May added that TBN owned so many homes because traveling employees and guests used them. He said that the remodeled house, in the Lifestyles complex in Costa Mesa, was not occupied, but used as a set for youth television programs, with the Transformers serving as props. Matthew Crouch, through the company spokesman, declined an interview request. But Gilbert J. Luft, president of the Lifestyles Homeowners Association in Costa Mesa, said that the sons were familiar residents and that the association does not permit filming there.
Extolling TBN’s prominence and programs, Mr May said the spending that some call opulent “is necessary to convey the ministry’s position of accomplishment.”
The Gospel of Prosperity
On the air, the Crouches combine uplifting talk with encouragement to give to the Lord, and so be repaid.
This “prosperity gospel” is shared by several televangelists who appear on TBN. But many conventional Christian leaders regard it as a sham.
“Prosperity theology is a false theology,” said R. Albert Mohler Jr., president of the Southern Baptist Theological Seminary in Louisville, Kentucky. Between its message and its reputation for high spending, Mr. Mohler said, “TBN has been a huge embarrassment to evangelical Christianity for decades.”
While TBN said it provided tens of millions of dollars’ worth of free advertising time to conventional charities like the Salvation Army and a few million dollars in some years for aid to disaster victims, it is forthright about its overriding purpose: “to spread the Gospel to the world” through its cable systems, satellite transmitters and, now, via computers and smartphones.
Janice Crouch, called “Mama” on the air, is known for her pink-tinged wigs, which look like huge swirls of cotton candy, and for talking emotionally about the Lord’s blessings. Mr Crouch, or “Papa,” is relentlessly upbeat as he quotes flurries of Bible verses on signature programs like “Praise the Lord.”
Clearly, many viewers have heartfelt responses. In 2010, TBN received $93 million in tax-exempt donations, according to its tax report. The company also had $64 million in additional income from sales of airtime and $17 million in investment income that year.
It spent $194 million operating its far-flung network and investing in new programs. The company was in the red for the year, but could draw on its cushion of $325 million in cash and investments.
Rusty Leonard, an independent tax expert and the leader of Wall Watchers, a charity watchdog group that has long criticized TBN for financial secrecy, said televangelists often escape penalties for extravagant spending because the definition of taxable “excess benefits” is subjective, and authorities are reluctant to challenge religious groups.
Marcus S. Owens, a tax lawyer with Caplin & Drysdale in Washington, said that lavish spending by nonprofit organizations could raise red flags for tax officials. “The law says that any compensation must be reasonable, and the value of a house is part of that,” he said. “Dinner on the company every night could be an issue too.”
At the same time, Mr. Owens said, churches have considerable latitude under the First Amendment.
Regarding the ordination of untrained workers, he said, “absent clear fraud, the government is not going to touch that.”
A TBN spokesman said executive salaries were recommended by independent consultants. In 2010, Mr. Crouch received $400,000 as President, Mrs. Crouch $365,000 as First Vice President.
Page 3 of 3
On the air, Mr and Mrs Crouch tell viewers that they have almost no personal assets. But that only underscores the problem, said Tymothy S. MacLeod, a lawyer for the Kopers. “It’s the tax-exempt company that is giving them this opulent lifestyle.”
Accounts of Extravagance
Relatives and former employees agreed that Paul and Janice Crouch seem to have deep spiritual feelings and believe they are doing the Lord’s work — a belief, according to a former employee, Troy Clements, that seemed to justify almost any extravagance.
Mr Clements, a former Executive at Holy Land Experience, said that when employees questioned decisions like remodeling the cafe three times in six weeks, Mrs. Crouch said, “No one has told me ‘no’ for 30 years, and you’re not going to start now.”
Mr Clements, who was Sales and then Personnel Director at Holy Land, said that he resigned in frustration in 2008 and that working for Mrs. Crouch had often been “surreal.”
In 2008 and 2009, as Mrs Crouch began remodeling Holy Land Experience, she rented adjacent rooms in the deluxe Loews Portofino Bay Hotel in Orlando — one for herself and one for her two beloved Maltese dogs and clothes, according to Mr Clements and Ms Koper. Mrs Crouch rented the rooms for close to two years, they said.
Ms Crouch was seldom without her little white dogs, pushing them in a pink stroller and keeping a costly motor home, originally purchased to serve as an office, for two years as an air-conditioned sanctuary for her pets, the two former employees said.
In Newport Beach, according to Ms Koper, the elder Mr Crouch sometimes traveled in a chauffeured Bentley, which TBN says is used to ferry television guests in proper style.
First-class “working dinners” are a way of life. In pending lawsuits, the Kopers say that Mr Crouch, Mrs Crouch and their son Matthew each ran up meal expenses of at least $300,000 per year. Mr. May, the TBN lawyer, said this was not accurate but did not offer other figures.
A Contentious Exit
When Brittany Koper and her husband decided to join TBN in 2007 after college, they were tempted by the generous perquisites, they admit. But they said that as Mr Koper completed law school on the side, and Ms Koper her MBA, they began to feel uneasy and moved out of their company house.
Nonetheless, they did borrow company money for their down payment on a private home and the purchase of a condominium, and gave Mr Koper’s uncle a company loan of $65,000, among other acts that Mr May called thefts. The Kopers said the loans were authorized in writing by the elder Mr Crouch, with clear repayment terms.
TBN says Mr Crouch’s signature was forged. Mr May showed a reporter letters from the fall in which Ms Koper apologized for lying and lending herself company money.
Ms. Koper said that she had never admitted to breaking the law. She said she was pressured by TBN lawyers to show "Christian contrition" and to hand over company property and repay their loans.
In October the Kopers moved to New York. "We just wanted a fresh start," Mrs Koper recalled.
Her father, Paul Crouch Jr., Matthew's older brother, was also forced off the staff and quit the Board. He declined to be interviewed, but he wrote an e-mail, "Getting caught in the middle of disputes involving my daughter, brother and parents is probably one of the hardest things I've ever had to endure.
As lawsuits and countersuits swirl, the Kopers are living in the basement of his father's modest house in Elmont, on Long Island.
Mr Crouch and an assistant, Matthew and his family, and two pilots are nearing the end of a six-week world tour in the larger company jet, visiting affiliates, taping programs and scouting new territory for evangelism in Rome, Dubai, Israel, Hong Kong and Hawaii.
“Others may do things differently, and may criticize
TBN for how it operates, its look, its doctrine and belief,” Mr. May said. “But
what is absolutely clear is that TBN, with God’s grace, has succeeded where most
others have failed.”
posted by Clare L. Pieuk at 6:18 AM
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