God's word, plus static, on Calvary Satellite Network

Amid accusations over sex, money and control, Pastor Chuck Smith is about to surrender much of the evangelical radio empire to a man he calls morally unfit for ministry

Los Angeles Times/February 28, 2007
By Christopher Goffard

When Chuck Smith, founder of the worldwide Calvary Chapel movement, decided to invest big in radio, the Orange County evangelist joined forces with a pastor he trusted.

Mike Kestler was one of his proteges, a folksy preacher with a ponytail who had ridden the Calvary phenomenon to a pulpit in Twin Falls, Idaho.

Smith had presided at Kestler's wedding. He'd helped Kestler keep his job after a churchgoer complained that Kestler had begged her to run away with him.

Now, the pastors would be business partners. Kestler knew how to run a radio station. Smith had money and a famous name. They shared a vision of FM radio as a megaphone for God's word.

Bolstered by $13 million from Smith's Costa Mesa church, Calvary Satellite Network grew into a spectacular recruiting tool for the evangelical movement. In listening areas across the nation, Calvary Chapels proliferated.

But relations between the two pastors deteriorated. In 2003, Smith cut off funding for the radio network, precipitating a crisis that continues to roil Calvary's leadership. It sparked a war for control of the network on terrain Smith had preached against for years: the earthly courts.

The two sides have hurled accusations of lust and greed, betrayal and embezzlement. As part of the battle, Smith funded a lawsuit against Kestler by a former Dallas Cowboys cheerleader who said he had fired her from her radio job for rebuffing his sexual advances.

Now, after a year of hugely expensive legal sparring, the 79-year-old Smith is so eager to settle the case that he is willing to do so at a staggering loss.

He is about to surrender much of the radio empire to Kestler, a man he calls morally unfit for ministry. Smith says that by walking away, he is making a Christian gesture.

Lori Pollitt, the former cheerleader, said Smith told her he had hoped his legal maneuvers would bring Kestler to repentance. "But it appears it won't, so I think they just want to wash their hands of the whole thing," Pollitt said. "He said basically it was just time to turn Kestler over to Satan."

Smith opened the first Calvary Chapel on a Costa Mesa lot in 1965 with a handful of congregants. Combining literalist Bible teaching with casual dress, contemporary music and an aversion to ritual, the church quickly became famous as a sanctuary for disillusioned hippies and a hub of the Jesus People. The doctrinal cornerstones included the depravity of the world, hell for unbelievers and the promise of a Second Coming.

The church became the symbolic center of one of the nation's largest religious movements. Smith, a deep-voiced man fond of Hawaiian shirts, remains its undisputed father figure.

Kestler was drawn to Smith's church in the early 1970s, when it still occupied a tent. He joined the movement and with Smith's blessing opened his own church in Twin Falls in 1979. Before long, he had built a small Christian radio station there.

In 1994, Kestler's fortunes appeared to teeter on the brink. A parishioner had accused the married pastor of showing up at her home and office uninvited and pleading with her to run away with him. Kestler stood to lose both his pulpit and his radio station.

Smith took a plane to Twin Falls, defended Kestler before his church board and fended off his ouster. In a recent interview, Smith said he believed Kestler's claim that the woman's accusation stemmed from a misunderstanding.

In salvaging Kestler's career, Smith also rescued plans the two were hatching for a radio ministry.

Smith's son, Jeff, had been paying Christian radio stations to broadcast his father's sermons for years. Kestler and the younger Smith had become close friends. They approached the Calvary Chapel founder with an idea: Instead of handing money to other stations to carry the Calvary message, why not invest in their own radio network?

Kestler would handle technical matters out of Twin Falls, the younger Smith would handle the finances out of Santa Ana, and Chuck Smith would bankroll the project. Calvary Satellite Network was born.

Broadcasting a mixture of sermons and worship music, the network started with two stations: Kestler's in Twin Falls and another in Yucca Valley, Calif. From 1996 to 2003, Chuck Smith poured an estimated $13 million — much of it from the collection bowls of Calvary Chapel Costa Mesa — into expanding the network.

Kestler and the younger Smith snapped up broadcast licenses, built towers and invested heavily in satellite technology that beams low-power signals to remote pockets of listeners. As host of a daily call-in show, Kestler became one of the network's best-known voices.

The radio system did not carry advertising, relying instead on listener donations, money from preachers whose sermons it broadcast, and monthly subsidies from Chuck Smith's church.

Calvary Satellite Network now has about 400 low-power stations and 49 full-power stations in 45 states. Its coverage area has 22.5 million potential listeners. It estimates its worth at $250 million, derived mostly from the value of its broadcasting licenses.

As the network grew, so did tensions between Smith and his son. Stations were opened at a ferocious clip, but it typically took years for them to break even.

The elder Smith said his son and Kestler took to siding against him, refusing to listen to his pleas for a more conservative business plan.

"I thought of myself as not having a voice," the elder Smith said. "When I see a ship sinking and I'm voting to put plugs in the hole and they're saying 'No, no, no, make more holes,' I don't want to go down with a sinking ship."

In January 2003, he resigned from the network's board and cut off the monthly subsidies. Apart from misgivings about the network's direction, Smith said, he had developed moral qualms about Kestler.

A Calvary parishioner, a California woman, had come forward saying Kestler had made passes at her. Smith said he called Kestler about the accusation.

"Mike confessed and [said] sorry and so forth and so on," Smith said. "At that point, I felt, 'There's something wrong with this guy.' I really don't want to maintain much of a relationship with him, so I resigned."

Kestler's lawyer declined to comment on the allegation.

Kestler himself did not respond to requests for an interview.

A month after Chuck Smith resigned, Kestler and the younger Smith, looking to raise cash, approached the Costa Mesa church's board of directors with a surprising offer: For $21 million, they could buy the radio network and assume control of operations.

The board considered the offer "foolishness" and "turned it down flat," said Hal Fischer, a former Placentia police chief and a Calvary board member at the time.

"We all almost laughed at it, because it was so ridiculous," Fischer said. "We weren't going to purchase something back that we had financed originally."

Still, the offer underscored a fact that some members of the church had been slow to grasp: Despite the money they had poured into the network over the years, they had no control over it. The church and the network were separate entities.

As matters worsened, so did the church board's distrust of Jeff Smith. After rejecting the sale offer, the Calvary board pushed for an audit of the Word for Today, a church-affiliated book and tape ministry that Jeff Smith used to raise money for the radio network.

The review found shoddy accounting and oversight, 10 bank accounts, $184,000 in computer purchases for obscure reasons, undocumented loans to employees or friends, plus $568,000 in loans to the radio network in 2002 and $350,000 in 2003.

Jeff Smith, who was removed as top administrator of the Word for Today, said he had not seen the auditors' report but that the loans were legitimate and nothing improper happened under his watch. He said he was targeted by a church board dominated by "good-old boys" whose aim was to divide him from his father and take control of Calvary Chapel.

Ultimately, the friction between father and son abated. The elder Smith said his son was "blinded by the promises" Kestler was making about how quickly the network could expand, but that "his heart is pure and his motives are pure." For his part, Jeff Smith, 53, said he wished he'd heeded his father's advice about moving more slowly.

By late 2004, the younger Smith and Kestler were the radio network's sole remaining board members. Deadlock ensued.

Word reached the Smiths that another woman was complaining about Kestler. Sarah Meyer, an Idaho parishioner, said he had offered her a radio job, only to try "using Jesus to seduce me."

"He'd prayed, and felt God was saying I was the one he was supposed to be with," Meyer, now 28, said in an interview. She said she turned down his advances and the job. Now, when she hears Kestler's voice on the car radio, "it makes my flesh crawl," she said.

Kestler's lawyer declined to comment on her allegations.

In late 2005 and early 2006 came the volley of lawsuits. Chuck Smith filed suit against Kestler in state court in Twin Falls for $1.3 million, demanding repayment of a loan to build Kestler's church.

Smith had long been troubled that he defended Kestler in 1994 against accusations from a female churchgoer, only to see other women voice similar complaints. Now, he bankrolled a federal lawsuit by Pollitt, 46, the former Dallas Cowboys cheerleader.

Pollitt said Kestler lured her from Dallas to Twin Falls with the promise of a job at Calvary Satellite Network, only to fire her after she rejected his come-ons. In court papers, Kestler has denied retaliating against Pollitt and has said she made sexual overtures to him.

Returning the Smiths' fire, Kestler filed suit in Orange County Superior Court, seeking control of Calvary Satellite Network and accusing the younger Smith of seizing donations intended for the network.

In a countersuit, the younger Smith charged Kestler with misappropriating millions of dollars in listener contributions. The suit also accused Kestler of "sinful sexual and flirtatious misconduct with numerous women over the years" and of spending network funds on vacations and purchases at Victoria's Secret.

To fundamentalist Christians, taking a quarrel to the secular courts is considered a drastic option. Believers point to 1 Corinthians, Chapter 6: "If any of you have a dispute with another Christian, how dare you go before heathen judges instead of letting God's people settle the matter?"

Jeff Smith's lawyer, Janet Carter, a born-again Christian, said the rule doesn't apply when dealing with people such as Kestler. "You don't get to be protected by 1st Corinthians 6 if you're acting like a heathen," she said.

In vain, Chuck Smith has asked Kestler to stop using the Calvary name. It still adorns his Twin Falls church. "They're free to use the secular courts to try to stop him," said Lloyd Walker, Kestler's attorney and brother-in-law. "Until then, we're not going to."

Today, management of the network is split between Jeff Smith in Santa Ana, who controls a host of full-power stations, and Kestler in Twin Falls, who controls the much more valuable translator network.

The younger Smith said the network could have weathered his father's withdrawal of financial support were it not for Kestler's alleged financial mismanagement. Jeff Smith said the network had to sell $9 million in assets to stay solvent.

Michael Newnham, an independent pastor in Medford, Ore., and a longtime critic of Calvary leadership, maintains a website (www.phoenixpreacher.com) that chronicles the conflict. He blames Chuck Smith for entangling the church's fortunes with Kestler's.

"Why would you go into business with someone you know is of less-than-sterling moral character, when we're talking about millions and millions of dollars?" Newnham said.

The sides are close to a settlement of their legal dispute. Chuck Smith has offered to drop his suit against Kestler, withdraw funding for Pollitt's suit and give Kestler the network's low-power stations, worth an estimated $200 million. Calvary Chapel would keep most of its full-power stations, valued at about $50 million.

"My thinking is, just leave him to God," Smith said. "God is the ultimate judge."

Pollitt said Smith's change of heart left her feeling like Uriah, the loyal soldier from the Old Testament whom King David dispatched to be slaughtered in battle. "Sent to the front lines," she said, "and abandoned."