Category: Believers Church

Class Action Suit Filed in Canada Against Gospel for Asia

This morning Nova Scotia pastor Bruce Morrison wrote to say that an elder in his church has filed a class action fraud lawsuit against Gospel for Asia. The CBC has a news item about it in print and on radio.

The plaintiff is Greg Zentner and he alleges that $100-million in donations didn’t end up where the donors wanted it to go. Marc Stanley is one of lawyers involved. He was the lead council in the case that was settled for $37-million in the U.S.

GFA is on the defensive against an earlier CBC broadcast documentary which featured an interview with GFA spokesman Johnnie Moore. Moore dodged questions posed by the CBC and failed to account for discrepancies in documents filed in Canada and India.

I Don’t Believe Most of What Johnnie Moore Said in His CBC Interview About Gospel for Asia

In his interview with CBC reporter Angela MacIvor, Gospel for Asia spokesman Johnnie Moore justified the diversion of funds to Believers’ Church Medical College Hospital by saying there are no other hospitals in the area for “many miles.” This and nearly everything else Moore said in his interview requires scrutiny. I started that activity last week and this week, I turn my attention to the rest of the interview.

In this interview, MacIvor asked Moore why some of the funds donors gave for poor people went to build a state of the art hospital in Kerala (first reported here). In response, Moore said:

It was all happening. It was all happening. They were building hospitals, the hospital that you are referencing, I’ve been to it. I’ve walked around it. I’ve sat down with people being cared for in the hospital. I’ve sat with the director of the hospital. I’ve seen the gigantic statue of Jesus in the center of the hospital, and by the way, that hospital is the only hospital of its kind within a very long distance. I mean people come from all over that part of India to get great health care for themselves. Not only that, by the way, you know they’re training doctors and nurses to serve other people all across the country. You know, this is an organization that has always talked about providing healthcare and educating people and so they’re doing it, they’re doing it. And while they’re doing it, they’ve also provided goats and wells and medicine and literacy training.

There are problems here.

Moore said: “that hospital is the only hospital of its kind within a very long distance.”

Not true. There are at several other comparable hospitals within 30 miles of Believers’ Church Medical College Hospital. One, the Tiruvalla Medical Mission Hospital is a modern state of the art facility with a location only 3.4 km away (about a 9 minute drive) (see the image below).

St. Ritas Hospital is 10 minutes away. St. Thomas Hospital is about 22 minutes away. Each has a nursing school and other medical training. There are numerous specialty clinics in the vicinity as well (heart, dental, etc.). Since Moore says he has been there, it seems like he should know that.

Moore added: “Not only that, by the way, you know they’re training doctors and nurses to serve other people all across the country.”

I am sure that the school does train doctors and nurses but Moore makes it seem as though there is a shortage of medical training in India. That is not true. According to this list, there are three other medical colleges in the same district (Pathanamthitta) of the state of Kerala as Yohannan’s. About 1.2-million people live in the district which covers just over 9 square miles. In the state of Kerala (the size of New Hampshire and Connecticut combined), there are 36 medical colleges with 2 more planned.

Moore: “I mean people come from all over that part of India to get great health care for themselves.”

While that may be true, they have to pay for it. Moore said there isn’t another hospital of its kind in the area, but the Believers’ Church hospital found one about 30 minutes away to send a poor patient to according to the Deccan Chronicle report.

A patient  suffering from breathing difficulty,  who was shifted from a private hospital at Thiruvalla to the MCH [Government Medical College Hospital] here on Wednesday,  had to wait in the ambulance  for over four hours due to the lack of a spare ventilator in the MCH.  The doctors at the private hospital had told the relatives of the patient that medical colleges will have ventilator facility all the time. The plight suffered  by the   patient,  N.K. Saaidharan Pillai, 58, of Pandalam,  was explained to DC  by his daughter Salini on Friday.

Pillai, who had breathing difficulty due to a neurological deficit, was undergoing treatment at the Believers Church hospital at Thiruvalla. However, he was shifted to the Kottayam medical college hospital  on Wednesday as the family could not afford the huge expenses. Salini  said that the doctor who administered treatment to her father at the Thiruvalla hospital told her  that the MCH will have a full- time ventilator facility.   “He told us that there was no need to ring up the MCH about arranging a ventilator,”  she said.

This man couldn’t afford the care at Believers’ Church. Despite the millions given by donors to help poor people in India, this man could not get medical care at a facility that those foreign donations helped build. Does this look like the picture Johnnie Moore was painting?

The Deccan Chronicle report gives a hint that this patient wasn’t the only one dumped on the government hospital. The article concludes:

Meanwhile Winnie Elizabeth Johnson, PRO of the Believers Church hospital told DC that while the hospital authorities used to call them previously, since the MCH authorities used to come up with excuses against assurance regarding the ventilator facility citing increase in patient arrivals, they had stopped calling them anymore.

Apparently, Believers’ Church had been shipping so many patients to the MCH that MCH was coming up with reasons not to take them. Now Believers’ Church Hospital just dumps them. For some reason, she thought that was okay to admit.

Moore concluded: “this is an organization that has always talked about providing healthcare and educating people and so they’re doing it…”

This is a big part of the dispute between donors and GFA. In fact, GFA did not talk about building a hospital and that is the problem. Donors never heard about a hospital and when I first started covering GFA, it was scandalous that such a huge amount of money in fiscal year 2014 (over $14-million) of foreign donations went to the construction and maintenance of the hospital. There were no appeals for funds to build a hospital. It just appeared.

So no, GFA didn’t talk about building a hospital and ask for funds to do it. If Johnnie Moore can find an appeal and document a U.S. campaign in 2012-2014 to build the Believers’ Church Medical College Hospital, I would like to see it.

Apparently, former GFA COO David Carroll didn’t know about it either because he sent a nervous email to K.P. Yohannan after Bruce Morrison and I started asking questions about the Indian public documents (FC-6 Reports). Moore said in the interview that GFA contested the accuracy of those documents. However, David Carroll, GFA’s COO at the time, did not contest them. Here is what he said to K.P. Yohannan in early 2015 in an email reveal during the RICO court case:

Sir, I need to share with you where I am over this situation. I will try to summarize for brevity sake. We have a saying in our country: The numbers don’t lie. The published FC-6 reports show westerners that we have either sent money to the field raised for National Ministries and Bridge of Hope to fund the hospital and the corpus fund, or our FC-6 filings are filed wrong.

Either way, this is a huge problem. It appears to those reading these that we might have been dishonest to the donors (fraud), or been dishonest to the Indian government, (a PR nightmare at least). Sister Siny’s report below will, in my opinion, do little to satisfy those who are printing out and analyzing our FC-6 reports. I am sorry for not expressing more confidence than this. I think we may have used money raised for National Ministries and Bridge of Hope for the hospital.

I think that India feels that we raise money and send it. I think that India feels that we raised money and sent it to them and they can legally use it any way they deem fit. I hope that I am wrong, but I am doubtful. I also don’t think that it is an intentional wrong, but if I am correct, it is a huge wrong. We’ve spoken at hundreds of churches with tears asking for the National Ministries and Bridge of Hope support, and the FC-6 that is public says that we sent much of that money for the hospital and the reserve corpus funds.”

Yes, the money went “to the field” but David Carroll here in the privacy of this email is lamenting that Believers’ Church — which is run by K.P. Yohannan — spent funds meant for ministry to poor people on the hospital and to stock a reserve fund.

An Indian tax court document confirmed the transfer of funds in December 2014. According to the court filing:

…the assessee [Believers’ Church] advanced funds to BCMET [a trust to build the hospital] for construction of hospital building. BCMET is also a registered trust u/s 12AA of the Act. The ld.representative further submitted that Carmel Education Trust also a registered charitable trust u/s 12A of the Act was given funds by the assessee to carry out their charitable activities.

That same court opined that Believers’ Church and GFA used funds inappropriately:

 It is not in dispute that substantial income of the assessee trust was not used by both the assessees for the purposes for which they were formed.

I don’t know if Angela MacIvor will get another chance to interview Mr. Moore. I hope so. I also hope U.S. media will follow up on the CBC documentary and bring more light to GFA.

 

 

 

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 8

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the eighth compliance issue:

8. Use of funds restricted for the field for other purposes.

On June 3, ECFA discussed GFA’s claim that 100 percent of field funds are sent and used in the field. GFA staff confirmed that this was accurate. On August 24, ECFA was informed that GFA India made a gift to GFA of $19,778,613 in 2013 to complete GFA’s new office. On August 27, GFA’s staff confirmed that the funds relating to this donation were originally received by GFA as gifts restricted for the field and GFA transferred to field partners to fulfill donor restrictions.

Two important issues are raised:
A. Reallocating gifts donated for field purposes and using them to pay for headquarters construction appears to be a violation of ECFA’s Standards 7.2. GFA staff stated in a recorded GFA staff meeting that you approached the field partner and explained that GFA could borrow the funds in the U.S., at less than desirable terms, for the headquarters construction. However, a gift from the field partner, in lieu of GFA borrowing the funds, would allow GFA to complete the new headquarters and thereby save interest. Therefore, GFA would be able to send more money to the field in future years.

ECFA believes that the potential savings resulting from the GFA India gift is an inadequate basis to reallocate gifts donated for field purposes.

B. Reallocating gifts donated for field purposes contradicts GFA’s claim that 100 percent of funds are sent to the field. In fact, a significant amount of donations restricted for the field made a circuitous trip back to GFA and were used for the headquarters construction, as though they had never gone to the field. This appears to be a violation of Standard 7.1.

In a GFA staff meeting, GFA indicated the field partner took out a loan to cover the use of the $19,778,613 gift and GFA staff confirmed on August 27 that India-generated income was used to repay the loan. Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of the $19,778,613 reallocation of donor-restricted gifts.

The lawsuit settlement between Garland and Phyliss Murphy and GFA included this agreement:

The Parties also mutually stipulate that all donations designated for use in the field were ultimately sent to the field.

Some, including GFA in their promotional material, have portrayed this as an admission that they did no wrong with donated funds. However, this is not the case. GFA did use donor funds in an elaborate scheme to help fund their corporate headquarters in Wills Point, TX. The donations were solicited to help needy people in India and were originally sent to “the field” but then sent back from “the field” to GFA in Texas. The ECFA letter outlines the circuitous route of those funds.

Originally, GFA leaders told staff that an anonymous donors gave the $20-million to complete the construction of the Wills Point headquarters. Then, in a staff meeting (that I first revealed on this blog), Yohannan and David Carroll disclosed to the staff that a field partner under the authority of Believers’ Church gave the money to GFA in the U.S. In that staff meeting, the staff were not told that the funds were originally given by donors.

GFA was so worried about the truth coming out about this point in the ECFA letter that they threatened to sue my former blog host, Patheos, to remove the staff meeting audio.  GFA is a nonprofit organization which requires a certain transparency. They claim to maintain financial integrity but threatened to sue to attempt to cover up aspects of their financing concerning their headquarters.

Thus, one of the key reasons GFA lost their membership in ECFA was reallocating field funds back to headquarters. So the funds were sent to the fields, but they didn’t stay there. If the Murphy suit had gone to trial, there is no doubt in my mind that the Wills Point headquarters transaction would have been a central component of the plaintiffs case.

Next: GFA’s financial statements presentation of restricted funds.

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 6

After about a month break, I am resuming this series.

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the sixth compliance issue:

6. GFA solicits funds for narrower purposes than the eventual expenditure of the funds.

During ECFA’s review on August 12, GFA staff provided a document to demonstrate the flow of funds from GFA to field partners. ECFA learned that donor-restricted donations are appropriately tracked by particular revenue classifications. However, we also discovered, and it was confirmed by GFA staff, that the disbursement of the gifts are tracked in much broader categories. For example, donations were received and tracked for 38 different specific items including kerosene lanterns, bio sand filters, chickens, manual sewing machines, blankets, bicycle rickshaws, and others, but related expenses were only tracked as “community development.” In other words, donations were raised for 38 specific items, with the donations pooled for expenditure purposes instead of expending them specifically for the purposes raised.

ECFA did not find any evidence that donors to the 38 different giving categories had awareness that their gifts were grouped and used in a broader category than the specific categories in which the gifts were raised. ECFA’s staff raised concerns regarding GFA’s compliance with ECFA Standard 4, 7.1, and 7.2 in raising funds for a particular purpose but then failing to document the actual use of those funds by the particular donor-restricted purpose.

Subsequent to this conversation, on August 16, GFA staff indicated that GFA field partners will begin tracking expenditures by specific item accounts to provide adequate transparency as to the use of designated funds.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, that gifts solicited for very specific purposes were not being expended with the same specificity as the gifts were raised.

GFA led donors to believe their funds had been spent for specific items but there was no way to know if such intent had been followed since there was no documentation of that use. This policy had not been approved by the board. However, after this the board would have been alerted via the letter.

Francis Chan was on the GFA board by this time and had reassured people that he had sent in personal auditors to make sure funds were being spent as intended. Here is a May 15, 2015 email from his organization Crazy Love to me:

He has even gone to the lengths of sending two different auditors/accountants to research their financial practices. Both have come back with glowing reports.

His auditors/accountants missed a whole bunch of violations of ECFA standards. Chan continues to use this story. However, we know that GFA was kicked out of ECFA in October for numerous violations. GFA promised that they would reapply for ECFA membership which they have not done. GFA has not released audited financial statements. They have not disclosed to donors that their charity registration in India has been revoked.

Next: GFA’s financial statements do not appropriately report transactions with foreign partners.

Gospel for Asia: Does This Look Evangelical?

In his recent video defense of Believers’ Church in India, Gospel for Asia CEO and Believers’ Church Metropolitan K.P. Yohannan told Francis Chan that his church was “hard core evangelical.” Below watch Yohannan lead what looks like a kind of mass.

A relative of Yohannan’s sent this video to me and said it was a mass of the BC. I can’t understand what is happening so I can’t say for sure what this is. I will say that it doesn’t look like any evangelical church service I have ever attended.

As I have said several times when commenting about BC, I don’t care what they do. The reason I point this out is because it seems to be a matter of great importance to GFA to portray the organization — here and in Asia — as evangelical. Donors who care about this designation and about what this means should know that it may mean something very different there than here. I also think that GFA should simply represent their field partner accurately.