Audit's Lesson Was 'Painful' for Evangelist

Los Angeles Times/August 17, 2003
By William Lobdell

Hank Hanegraaff and auditors won't say how much was repaid to the Christian Research Institute or by whom. Critics allege whitewash.

After complaints from former employees, a Southern California evangelist who calls himself a theological watchdog for Christians worldwide has been chastised for his ministry's financial practices.

Officials with the national Evangelical Council for Financial Accountability conducted an audit that has resulted in what they called a "significant reimbursement" in June to the Christian Research Institute, a ministry run by Christian author and radio personality Hank Hanegraaff.

Neither the council nor Hanegraaff, known on the radio as the "Bible Answer Man," would say how much money was paid back to the institute or by whom. Council officials said the ministry cooperated fully with the audit.

But a group of former employees called the audit a whitewash and made its complaints public by taking the story to the magazine Christianity Today.

The council serves as a financial watchdog for about 1,100 religious organizations that subscribe to its principles and pay for its operation. Officials defended their investigation as thorough and tough and insist that other reforms are underway at the Rancho Santa Margarita-based institute, including an expanded and more diverse board of directors and better documentation of ministry-related expenses.

"Our first concern was restoring the [confidence of] donors" by recovering money that they had given to the institute, said Dan Busby, vice president of the accountability council. "We did that to the best of our ability."

Hanegraaff, who says he is guilty of nothing more than careless bookkeeping, acknowledges that his image has been tarnished.

"It's been a painful but very important lesson," he said. "We take integrity and accountability seriously. As a result, we've implemented the changes recommended by the [council] and our organization is stronger for it."

The dispute is another in a string of controversies surrounding Hanegraaff, who is best known as a Christian purist who holds pastors, churches and denominations accountable for teaching Bible-based Christianity.

Nine years ago, another group of former employees who banded together as the "Group for CRI Accountability" accused Hanegraaff of abusive leadership, misuse of donor money and other transgressions. In 2000, the widow of institute founder Walter Martin called for Hanegraaff's resignation, citing similar concerns.

Hanegraaff and other supporters said those allegations came from institute veterans who resented the way he brought professionalism and structure to a ministry that was "drowning in red ink."

During the latest tempest, at least six employees have been fired or have resigned from a staff of about 50, former workers say. Those employees said the ministry routinely used donations to pay for Hanegraaff's personal expenses and luxury items, including a board-approved 2003 Lexus sports car and smaller items.

They also said he paid his wife a large salary although she spent little time in the office and her role was unknown to most employees.

According to Evangelical Council for Financial Accountability guidelines, a ministry must take reasonable efforts to ensure that "all resources are used to accomplish the exempt purposes for which they are intended Any part of an organization's resources [used for] the benefit of private individuals is absolutely prohibited."

Hanegraaff, the author of "Christianity in Crisis" and "Counterfeit Revival," said claims of intentional misuse of ministry money are false and part of a campaign by disgruntled ex-employees to discredit the institute.

He also angrily defended his wife's role as the ministry's director of planning.

"That's an insult" to say she didn't work, he said, adding that she worked out of their Coto de Caza home and the office.

Even so, he said, the changes insisted upon by the Evangelical Council for Financial Accountability will help his ministry improve its image. "Perception matters," said Hanegraaff, who said he has given up his Lexus to avoid the appearance of wrongdoing.

The Christian Research Institute received $9.3 million in donations and other income in 2001, according to the most recent tax records available. Hanegraaff, 53, made $251,886 and his wife made $87,600. In comparison, Billy Graham took a $174,000 salary from the Billy Graham Evangelistic Assn., which had about $87 million more in revenues.

Hanegraaff said his board-approved salary is much less than what he'd make from his book royalties, which go to the ministry.

The latest controversy began last fall, when six institute employees began secretly meeting to discuss ways to bring greater accountability to the ministry.

Thaddeus Williams, a leader among the concerned employees, said he met with Hanegraaff's deputy in December to outline their worries about Hanegraaff - who workers say wouldn't meet with them - and the ministry. "He told me we needed proof," Williams said.

To get the evidence, Jen Hubbard, another employee who worked with donors, copied samples of invoices in the evening whenever she was alone.

Williams brought the copies to Hanegraaff's assistant in January. A week later Hubbard was fired for copying internal documents, but kept working with the Evangelical Council for Financial Accountability, which she contacted in December.

Williams, who said he talked with Hanegraaff once in four years of employment, said ministry executives agreed to begin an employee accountability group that would investigate concerns and suggest changes.

But before the group could meet, Williams was fired for "excessive tardiness."

The firing of Hubbard and Williams was followed by the resignations at least four other employees.

In March, the Evangelical Council for Financial Accountability determined that CRI had "breached compliance" with a number of its standards, requiring that the board of directors be strengthened and money be paid back to the ministry.