Lawyer Takes James MacDonald and Harvest Bible Chapel to the Woodshed (UPDATED)

I don’t know any other way to describe the report written by Sally Wagenmaker about the financial and governance practices of Harvest Bible Chapel during the tenure of former pastor James MacDonald.

MacDonald recently defended himself against the church action of declaring him disqualified as a pastor.  He may have to write another Facebook post or ten with asbestos gloves to handle the fire in this report.

If interested in a blistering report about a megachurch in disarray, you must read it for yourself. Here are some spicy appetizers to help you decide:

Based on our law firm’s review of available information, we determined that a massive corporate governance failure apparently developed over several years at HBC, primarily due to the following factors:
• MacDonald’s powerful and subversive leadership style;
• His development of an inner-circle leadership group through which he could control HBC;
• His marginalization of broader leadership, particularly the former HBC Elders; and
• His other aggressive tactics that thwarted healthy nonprofit governance.
Directly resulting from such problems, MacDonald appears to have extensively misused HBC’s financial resources for improper financial benefit.

MacDonald’s strong and persuasive role as authoritative senior pastor, along with his close inner circle, insulation from proper accountability mechanisms, and key changes to the church’s operational structures, resulted in a highly problematic culture. Policies, formal and informal, were put into place to reinforce this unhealthy power structure.

We were provided with extensive salary information for MacDonald and the HBC Compensation Committee’s year-end meeting minutes, reflecting summary approval for executive compensation, housing, deferred compensation, and the housing allowance for MacDonald. The Committee unanimously approved an overall 2015 compensation amount
of $1,240,000, a 2016 compensation amount of $1,370,000, and a 2017 compensation amount of $1,387,500. For year-end 2017, we provided with a “Memorandum of Understanding and Documentation” dated December 19, 2017, reciting “commitments and pledges given in good faith [that] represent a contractual and covenant commitment” to MacDonald, plus a statement that “Walk in the Word and the respective assets are a bible teaching ministry of Dr. MacDonald.” For year-end 2018, the minutes of the “Elder Executive Committee Compensation Committee,” reflecting a total compensation package of $1,270,000 for 2019.

In a word, this is obscene.

Within this context, a leader who receives a tangible personal benefit as a result of a decision affecting the church’s operations or assets has an inherent conflict of interest that must be fully addressed through disinterested, independent leadership decision-making. Based on our legal evaluation, MacDonald seems to have acted in his own personal interests – reaping significant personal financial benefits, avoiding accountability to any governing board, and with heavy-fisted exclusionary leadership. His close inner circle of HBC leaders helped him to do so and without the important accountability measures needed for effective nonprofit ministry governance.

Although I am not an attorney, I would be worried about my legal liability were I formerly involved in leadership at HBC.

UPDATE: James MacDonald responds: