Blog Theme: Gospel for Asia – Interview with J.D. Smith

My first post about Gospel for Asia was published April 27, 2015. Here is what I wrote to introduce the organization:

GFA LOGOGospel for Asia is a large missionary organization which supports direct evangelism, child sponsorships, Bible colleges, education, disaster relief and several other ministries. Their assets are substantial but, at their request, I am not going to address how much money they take in.* The 990s are not available on Guidestar and so it is very difficult to find out specific information about the financial situation.

GFA describes itself as a missionary organization and a church. What GFA calls The Believer’s Church is based in Wills Point, TX and apparently consists of the various churches planted around the world. According to the church website, the church has “over 2.4 million members scattered throughout 14 nations.”

Actually, Believers’ Church is based in India and is also headed up by Metropolitan K.P. Yohannan – GFA’s founder and CEO – who also goes by Moran Mor Athanasius Yohan Metropolitan. If we were buddies, I would just call him “Yo.”

My interest in GFA was triggered by a reader, Mr. Jesperson, who was once a donor. Then Bruce Morrison came along who is a Canadian pastor and a key player in confronting the discrepancies in what GFA said on paper in Canada and what they reported in India. Auditor Jason Watkins provided his expertise to help make clear the discrepancies in U.S. financial statements and other records we secured. I have talked to numerous former American and Indian staffers who have helped to paint a picture of GFA. Since 2015, I have written hundreds of posts on GFA’s finances and practices in the U.S. and around the world.

In early October 2015, Gospel for Asia was evicted from membership in the Evangelical Council for Financial Accountability. GFA was a charter member and it was a rare move for the ECFA. To get a description of the reasons for the removal, you can read the ECFA preliminary report given to me by former GFA board member Gayle Erwin.

In 2017, the nation of India revoked GFA and Believers’ Church registration as a charity eligible to receive foreign donations. GFA still solicits money for use in India and still sends funds there to NGOs that have no purpose other than to funnel money to Believers’ Church.

In 2019, GFA settled a class action RICO lawsuit and agreed to pay $37-million to donors. The Canadian branch is currently being sued by a donors in Nova Scotia.

Much of my writing on GFA has related to financial practices. However, there is a human side to the story. This is what got me started and this is what former staffer J.D. Smith focuses on in today’s interview. If you are interested in group dynamics and how leaders hold members with controlling tactics, you will want to hear J.D. speak.

To watch all interviews in this “15 Years of Blogging” series, click here.

To read all posts relating to Gospel for Asia, click here.

To read more about controlling groups and Steven Hassan’s work mentioned by J.D., go to freedomofmind.com.

Here Are the Details of the Canadian Lawsuit Against Gospel for Asia

Today I received the “Notice of Action” brief filed Tuesday against Gospel for Asia by plaintiff Greg Zentner of Nova Scotia, Canada. The class action suit alleges GFA breached their fiduciary duty to donors, defrauded donors, made negligent misstatements to donors, and “civilly conspired to misrepresent the nature of the donations collected from the class and the use to which they would be put.”

The plaintiff, on behalf of GFA donors in Canada, seeks financial damages in the following ways with interest:

return of $20,000,000.00 in funds misdirected to GFA USA;

damages for the defendant’s unlawful actions for the misuse of donor funds in excess of $100,000,000.00, or such other sum as this Honourable Court may find appropriate;

punitive damages of $50,000,000 or such other sum as this Honourable Court may find appropriate;

The overview of the suit claims:

Thousands of well-intentioned Canadians were duped into collectively donating tens of millions of dollars to an international fundraising syndicate operating in Canada known by a variety of names including as Gospel for Asia, Gospel for Asia Canada, GFA, and, later, as GFA World. The donors were convinced by the representations of the Defendants that 100% of donations designated for use in the field would be used in the field, and that their donations would be used for specific charitable purposes to help the poorest of the poor in India. Instead, the funds were converted by the Defendants for their own use, including for the construction of a luxurious compound and personal residence in Texas, USA. In this action, the Canadian donors seek to recover these donations that were collected through fraud or misrepresentation.

Read the entire lawsuit here

In Murphy v. GFA, GFA said that Canada was the source of funds for the $20-million which capped off the compound building project. GFA leaders lied to their staff, followers, and accountant by first saying that an anonymous donor sent the money. Then they covered that story by saying an Indian entity of Believers’ Church gave the money to them. Then during the court proceedings, a GFA lawyer said the funds came from Canada.  To the ECFA, GFA said the funds were restricted funds that they used to pay for the headquarters’ construction and then paid back. Sorting out this convoluted story will be part of this lawsuit since plaintiff Zentner wants the $20-million returned to Canadian donors.

One of the key facts of the case relates to the absence of Canada as a source of donations to GFA/Believers’ Church in Indian charity reports for an eight year period from 2007-2014. In Canadian charity reports, over $94-million was donated to GFA to go to India during that time period, but during the same period, Indian public documents show no money coming from Canada. GFA spokesman Johnnie Moore evaded that question in a recent CBC interview, but GFA won’t be able to do so in court.

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.

 

 

 

Johnnie Moore’s Gospel for Asia Evasive Maneuvers

Yesterday, I posted a link to a CBC radio documentary about Gospel for Asia’s use of Canadian funds. In this program by Angela MacIvor, PR guru Johnnie Moore was interviewed and made some dubious claims. I take one of them up today. I’ll examine the others in future posts.

During the interview with Moore, MacIvor asked

Can you explain how it’s possible in a period between 2007-2014, GFA reported to the Canadian Revenue Agency that nearly $94-million left Canada and went to India during that time period but GFA reported to the Indian government that zero dollars went to India?

Moore gave a truly extraordinary answer:

I contest that those statistics are factual. The organization has always contested that that is a factual characterization of that and not to mention the organization doesn’t exclusively operate in India. They operate, their partner, they operate in 20 other countries around the world as well.

This issue was one of the earliest matters I researched regarding GFA. In June 2015, I asked former GFA COO David Carroll why funds listed in Canada as going to India didn’t show up as arriving from Canada in Indian documents. He told me:

The Canadian funds were combined with U.S. funds by our auditor in India for various accounting reasons. There is no requirement that they be reported separately.

However, in the Indian reports, funds were listed as originating from other nations, such as Australia, Germany and the UK. According to Indian regulations and contrary to Carroll’s claim, the national source of the funds has to be listed. As noted by MacIvor, for an 8 year period, it appeared Canada had not sent funds when in fact, almost $94-million had been donated specifically for India.

I want to make it clear that Moore’s mention of the other nations where GFA works is irrelevant. The Canadian branch of GFA specifically said in government reports (see this post for images of those reports) the money was being sent to India. This information must be reported accurately. If GFA Canada wanted to send it somewhere else, then some other nation would have been listed. Moore’s statement about other nations was a distraction.

In response to what appeared to be gaslighting from Moore, MacIvor followed up by asked if GFA wants the public to ignore those public reports. Moore’s answer was stunning:

I am not saying you shouldn’t look at those. People ought to have the humility to ask themselves a more important question which is: What is it that I might not know about this? What is the information that I might not have? Or the information that might not be available in the public domain? And I think there are vast gaps between the two pieces of information.

Humility? It is the height of arrogance for Johnnie Moore to accuse donors, former staff of GFA, and members of the public of lacking humility. Since 2015, hundreds of people have been asking GFA for answers to questions about their financial practices only to be met with silence or evasion. When I asked these exact questions (what don’t I know? what can make this make sense?), all I got was silence and name-calling. When a federal judge wanted answers to questions like this, all he got was stone-walling from GFA. I wish the reporter would have asked Johnnie Moore about the sanctions Judge Timothy Brooks imposed on GFA for failure to respond to questions about financial information during the fraud lawsuit brought by  Garland and Phyllis Murphy.

Then Moore dodged the last question posed by MacIvor when she rightfully asked for the information we mere mortals don’t have. Moore’s reply?

Yeah, first of all, that’s a question for the Believers Eastern Church in India and around the world. That’s a question that needs to be asked of them.

How convenient. K.P. Yohannan isn’t available, so they bring in Moore from D.C. to speak for Yohannan on GFA matters, but when Moore turns the attention to Believers’ Church, all of sudden he can’t speak for Yohannan.

Moore got away without answering the questions. So Moore chides the public for failure to understand something he refuses to disclose. The appeal to Believers Church is a disgusting dodge. Not only is Yohannan the head of the church, but GFA in Canada and the U.S. is responsible for how donor funds are spent. GFA needs to know why the funds they sent to India didn’t show up in records there. It is obvious GFA knows or else they would just as concerned about it (where is our money?).

There are two other issues I want to take up from this interview. First, what does it mean that all the funds given to “the field” went to the field? Second, what about those hospitals in India? Moore was asked about that and misrepresented the situation. More to come in future posts…

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 5

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 “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 one of the concerns each day. 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 fifth compliance issue:

5. Lack of discretion and control over funds granted to foreign entities. During our review on June 3, ECFA staff raised questions regarding GFA’s oversight and control of funds sent to foreign field partners. GFA’s staff indicated that the foreign field partners are completely independent organizations and therefore GFA did not exercise any direct control over field partners. GFA staff also indicated that they did not have a foreign grant process in place to oversee the use of funds.

Given legal requirements on tax-exempt entities to have appropriate discretion and control over the use of funds sent to foreign entities, ECFA staff indicated that GFA’s lack of a grant process appears to violate ECFA Standard 4’s requirement to follow applicable laws.

Subsequent to these conversations, on August 21, GFA staff indicated a new foreign grant process was developed with the assistance of its new audit firm and will be in effect as of September 1, 2015.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of GFA’s minimal oversight of funds provided to field partners.

For reasons I cannot explain, GFA has publicly claimed no control over what happens with donations in Asia. K.P. Yohannon has repeatedly claimed that he is not on any boards in Asia. As recently as last month, he told Francis Chan, he has no more control over Believers’ Church than the other Bishops.

This claim was thrown into doubt during the fraud lawsuit due to discovery of an email from Chief Operating Officer David Carroll to K.P. Yohannan. In it, Carroll said to Yohannan:

We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up.

The Believers’ Church constitution makes it clear that Yohannan is the final and supreme authority in temporal and spiritual matters. Perhaps GFA didn’t want to own up to the level of control Yohannan possesses.

In any case, the claim that Believers Church and GFA-India (now known as Ayana Charitable Trust) had no input from Yohannan seems implausible. At this time, both charities in India are barred from accepting foreign funds since their registration as charities was revoked in 2017.  GFA-USA is sending funds to NGOs which act as shell organizations for the purpose of funneling money to Believers’ Church.

Donors should know that funds given to GFA don’t go directly to GFA in India.  Some funds go to other nations in Asia but most goes to entities in India that have no operational presence in the country. They exist to receive funds and give them to Believers’ Church or some other BC controlled entity. I have asked various authorities if this is allowed but have not received an answer as yet.

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

 

Compare Gospel for Asia’s Image with Reality

In 2019, Gospel for Asia is celebrating 40 years in business. This comes the same year GFA settled a fraud lawsuit (Murphy v. GFA) for $37-million. The settlement was just finalized with about 26,000 claimants seeking just over $109-million. Not everybody will get what they donated but this shows that donors weren’t happy.

On their Patheos blog, an unnamed staff member wrote a glowing vanity piece about GFA founder K.P. Yohannan. I would like readers to compare that piece with an email from David Carroll to Yohannan from 2015. This email came to light during discovery in Murphy v. GFA. At issue in the case was the use of donor funds. Plaintiffs Garland and Phyllis Murphy contended that GFA didn’t use all donor funds as donors intended. As a part of fund raising, GFA made representations that the funds were all going to mission work and were urgently needed. The discovery process pulled back the curtain on GFA’s claims and found that the reality wasn’t always what they claimed.

The narcissism in this article is obvious. The blog is GFA’s and the person writing it is an anonymous GFA staffer and yet readers are expected to take the following statements at face value:

They, and others like them, can look back and stand in awe of how an Almighty God has blessed their ministries abundantly and beyond imagination.

I know a man exactly like that. His name is Dr. K.P. Yohannan. He is one of the humblest and most dedicated men I have ever known. Forty years ago, he responded to God’s call to minister to the millions of people in Asia. Little did he know that in 2019 he would be able to look back at the remarkable things the Lord did over the past 40 years.

By any objective assessment, GFA has not had such a good record since 2014. The organization has been embroiled in scandal, membership in the Evangelical Council for Financial Accountability was removed, they lost other symbols of financial integrity, they lost their registration as a charity in India, at least one of their schools in India closed due to financial problems, and they have to pay a $37-million settlement to donors. Yes, K.P. is a remarkable CEO.

Leaving aside the fact that GFA hasn’t had a great record of late, the picture presented is that GFA is taking all of that money using it to help the poor and needy. Since all of this is done for the Lord, surely there wouldn’t be any deception or double talk.

Now let’s pull back the curtain a bit.

In the fraud lawsuit, an email from Chief Operating Officer David Carroll to CEO K.P. Yohannan surfaced which presents a different picture. Here is the email. 

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.”

“It doesn’t matter that we have now moved the money out of the corpus fund because according to the public FC-6 reports, we have been building them up for years. Moving the money only serves to confirm the feelings of guilt to outsiders.”

“I think the only way for us to handle the inquiries raised by Bruce and others is to refer them to our Indian office. Mr. Throckmorton (unless a miracle happens) will get this information and may even begin an investigation of us. We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the
spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up. Can the field find a way out of this situation? I too am very nervous. I have always believed in total accountability of the field, yet the FC-6 reports provide numbers that, as a former auditor, I cannot just explain away with a simple explanation. I, and the world, will need numerical proof now, and I do not have the ability to get it from the USA end. Only the field can explain it, and I am in the hot seat in this crisis and I feel a lot of pressure.

If I say, well, it is not my problem, it’s a field problem, it’s as good as saying we are guilty of misappropriation, If I say “The FC-6 reports are filed inaccurately on purpose, due to the hostile environments we work in, it gets the field in trouble and turns the attention to them. I get the feeling that, although we are not financially dishonest, we are financially reckless — the stockpiling of money in the RBC [Royal Bank of India] account
and then the hurried transferring of it to the field, the Hong Kong account, et cetera. Sir, may I please have my name taken off of the RBC account as soon as possible?”

There is much in this email which is inside baseball. One would need to follow this story closely to understand all of what Carroll is worried about. But note this: He is worried. He is worried because GFA was caught in misrepresentations and feared that Bruce Morrison from Canada and/or I would investigate the matter further to expose it all. And we did.

For the purpose of this post, I want to highlight one misrepresentation. K.P. Yohannan told people that he had nothing to do with finances in India, that he didn’t control anything financially there. However, here is what David Carroll said about that.

We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up.

Yohannan told the the Evangelical Council for Financial Accountability and his staff the story that he had no power over finances in India. However, in this email, David Carroll acknowledged that Yohannan’s story would “not hold up.” Click this link to hear the audio of the staff meeting in 2014 when he and Carroll told the staff about a $20-million gift from India which was used to complete the GFA headquarters in Wills Point, TX. The transcript can be read here.

Carroll could see there was a problem with donor funds going into a corpus fund (a kind of rainy day fund) and being spent on a medical center and other projects instead of on what donors intended. Yet, GFA was officially denying all of this. Eventually, the ECFA removed GFA from membership when these discrepancies could not be cleared up.

GFA still hasn’t admitted publicly that anything was ever wrong. They haven’t been readmitted to ECFA membership. They were sanctioned by a federal judge for delaying discovery during their fraud trial. There isn’t an indication that anything has changed. For all we know, reality is still much different from what they are presenting.

One aspect of the fraud case settlement which might serve to bring GFA into the light is the addition of two new board members to GFA’s board. Plaintiff Garland Murphy and an unnamed person will be added. Provided GFA honors the intent of the settlement, there may be some light at the end of this tunnel. For now, the public would do well to discern reality from image.

 

 

Website for Gospel for Asia Class Action Lawsuit Now Active

Donors who contributed to Gospel for Asia between January 1, 2009 and September 10, 2018 are considered members of a class in a pending lawsuit against GFA. Now there is a website which provides background and instructions for member of the class. From the site: GFACLASSACTION.US

There is a pending legal matter in a class action lawsuit against Gospel for Asia, Inc., Gospel for Asia-International, K.P. Yohannan, Gisela Punnose, Daniel Punnose, David Carroll, and Pat Emerick (“GFA”), who are the Defendants. The class action lawsuit involves whether GFA misdirected funds designated for specific charitable projects the donors selected.

The lawsuit is still pending. A judge has not made a ruling in this matter. There are no benefits currently available to Class members and there is no guarantee there will be benefits available to Class Members.  This notice is to inform you of your rights.

You are included in the Class if you live in the United States and donated money to GFA between January 1, 2009 and September 10, 2018.

Those who want to be excluded from the suit must write to the class administrator directly. Otherwise, donors in the class will be represented in the suit by the Stanley Law Group, Basset Law Firm, and Tom Mills. No charge will be assigned for their representation. Exclusion from the suit allows a donor to sue separately from this suit but there will be no benefit to an excluded party if the suit is successful.

Current donors should consider the information contained on this website.

Gospel for Asia Suing Insurance Company over Attorney Fees in RICO Case

Gospel for Asia has retained Locke Lord to defend them against the allegations of fraud by Garland and Phyllis Murphy. One of their attorneys is Harriet Miers, former White House counsel to President George W. Bush. Furthermore, GFA has to pay the costs of a Special Master since they were sanctioned by federal judge Timothy Brooks. No doubt the costs are high for all of that.

According to a suit filed by GFA in March, GFA’s leaders (K.P. Yohannan, David Carroll, Pat Emerick, etc.)  hoped to recover those legal fees via an insurance claim with Philadelphia Indemnity Insurance Company. Although details are sealed, it appears the insurance company declined to fully pay GFA’s claim. Here is a brief statement of the dispute from a recent court document.

1.1 GFA Parties bring this action for Philadelphia’s breaches of its common law duty of good faith and fair dealing and the Texas Insurance Code for unfair settlement practices and for failing to promptly pay covered claims as a result of its wrongful denials and/or wrongful delays in providing defenses in lawsuits against them.

1.2. Philadelphia denies that any reasonable defense fees or expenses remain unpaid and contends that, accordingly, this case should be dismissed. Additionally, Philadelphia denies that it breached its common law duty of good faith and fair dealing or the Texas Insurance Code. Philadelphia contends that it had a reasonable basis for the coverage positions that it has taken and liability was not reasonably clear.

For more detail, see GFA’s original petition.

One crucial court document is sealed and Philadelphia Insurance declined to speak to me. In plain language, it appears that the insurance company has found a reason why they believe they are not liable to pay the claim GFA made. It may be that Locke Lord’s fees are beyond reasonable or that Philadelphia believes GFA is at fault in some way. In any case, the trial is to be by jury in late 2019, probably after the RICO trial.

GFA and Lawsuits

For a Christian ministry, GFA here and abroad, is involved in many legal battles. Aside from the RICO suit, and now the action against their insurance company, GFA has sued the Church of South India for defamation. Back in 2015, GFA threatened Patheos with legal action when I published audio of a staff meeting. I wonder how many donor designate their funds for the legal defense fund.

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Image Fair use, GFA Facebook page

Dear Gospel for Asia: How Will Funds Raised for Kerala Flood Victims Get to Them?

Over the past week, the news out of the state of Kerala in India has been devastating. Due to severe flooding, over 400 are dead and 800,000 have been displaced. Sadly, those numbers are expected to climb. Of course, the natural impulse is to help.

Kerala is the home of K.P. Yohannan, Gospel for Asia (now called Ayana Charitable Trust in India), and Believers’ Church. While it is understandable that K.P. has been informing his followers about what is happening there, he is also doing something that raises a question: K.P. is raising foreign donations to send to flood victims. The question is how will those funds get to flood victims?

In 2017, the government of India canceled the registration of Gospel for Asia (Ayana Charitable Trust), Believers’ Church India, and two other affiliated organizations to receive foreign donations. Yohannan is raising money but it isn’t clear how those funds will get to flood victims when the Indian organizations he fronts can’t receive them?

Different Answers from Different Sources

Yesterday via email in response to a GFA press release asking for donations for flood victims, I asked public relations contact Gregg Wooding of InChrist Communications if he could explain how donations will get to flood victims. He replied:

GFA has headquarters in Kerala, India. Volunteers are actively rescuing, feeding those affected by flooding and providing other supplies.

I wrote back to ask how GFA in Kerala could receive those funds since the Indian government had canceled the organization’s FCRA registration. He did not answer.

Earlier in the day a source called GFA in Wills Point, TX on behalf of my blog and asked how American donations could be accepted in India since the FCRA registrations had been canceled. The caller was told that GFA still is able to operate in India, but the license to receive money is with Believers Eastern Church. The GFA representative said that the funds given to GFA are sent to Believers Church. He added that GFA and Believers’ Church are technically and legally different entities. GFA cannot guarantee money given for India disaster relief will be used for that purpose through Believers’ Church because GFA has no legal or ultimate authority over Believers’ Church. Money given to GFA is preferenced by donors for a certain purpose and Believers’ Church in practice uses the money for what it is preferenced for.

Leaving aside the uncertainty that the Believers’ Church might not use the funds as intended, GFA’s answer doesn’t match what the Indian government says. As I will demonstrate below, the registrations for GFA (Ayana Charitable Trust), Believers’ Church, and two other GFA affiliated organizations were canceled in 2017.  The question remains – how will American funds get to flood victims since GFA and Believers’ Church are unable to receive foreign contributions? Maybe there is an answer to this question, but GFA hasn’t provided one that fits with information available to the public.

FCRA – Foreign Contribution Regulation Act

In India, a charity must be registered with the government to receive foreign donations. There are rigorous reporting requirements as specified by the Foreign Contribution Regulation Act (FCRA) and the records are available to the world via the Home Ministry’s website. In fact, those records prompted the early questions about Gospel for Asia’s finances that eventually led to GFA being removed from membership in the Evangelical Council for Financial Accountability.

The FCRA rules are clear that only registered organizations can receive foreign donations (click here for a larger image).

Among other conditions, the rules (Q.2b) state that an organization “must obtain the FCRA registration/prior permission from the Central Government.” In contrast, Q.3i specifies that “individuals or associations who have been prohibited from receiving foreign contributions” cannot receive them.

To determine organizations which have been canceled, one can go to the India’s Home Ministry website and scroll down to the FCRA link.  On that site, there is a link near the bottom left which reads: List of Associations whose registration has been cancelled. If you click through, you will need to select the state of Kerala. Once you do that, you will see Ayana Charitable Trust at the top of the list. Scrolling down you will soon encounter Believers’ Church India and Love India Ministries and Last Hour Ministries.  Here are screen caps of Ayana Charitable Trust (formerly GFA-India), Believers’ Church, Love India Ministries, and Last Hour Ministries on the canceled list).

Since the very organizations which GFA and GFA’s PR representative said will take the money can’t do so, it is a fair and significant question to ask how donations intended for flood victims will get to them.  So far, GFA has not provided a satisfactory answer or provided evidence that the Indian government is wrong. Donors should demand more.

For more on the impact of the revocation of registration to receive foreign funds in India, see this article on Compassion International. When the Indian government canceled their registration to receive foreign donations, they left India. 

 

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Image: with permission Indian Navy (GODL-India) [GODL-India (https://data.gov.in/sites/default/files/Gazette_Notification_OGDL.pdf)], via Wikimedia Commons