Gospel for Asia Continues to Raise Money for Flood Relief Without Saying How the Funds Will Get to the Needy

A month ago, I asked Gospel for Asia how they planned to distribute donor funds to flood victims in Kerala, India. In 2017, Gospel for Asia’s comparable organization in India (now called Ayana Charitable Trust) and their ecclesiastical arm (Believer’s Church) lost registration with the Indian government to accept foreign contributions. Thus, these groups can’t accept any of the funds now being raised by K.P. Yohannan from foreign donors. GFA very deliberately is raising these funds on the organization website and on social media. If GFA is giving these funds to another nonprofit in India, why can’t GFA simply inform the donor public about this?

When I asked GFA’s public relations firm, I was told:

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

However, InChrist Communications did not respond when I asked how those headquarters could accept funds when the registration to accept foreign funds had been revoked.

The later a friend of the blog was told that funds were being sent to Believers’ Church in India. Furthermore, the GFA representative said it could not be guaranteed that the donated funds would actually get to flood victims since GFA has no control over Believers’ Church. Actually, this explanation doesn’t make sense because Believers’ Church cannot legally accept foreign contributions.

Saying One Thing and Doing Another

When Compassion International lost their registration with the Indian government, they left the country. GFA has never addressed their loss of registration, nor why they continue to raise funds to send to India when the organizations they claim to support can’t take them. This is an issue for more than flood support. GFA has continued to raise support for sponsored children, missionaries, and all sorts of activities. GFA is telling the public they are doing something that the Indian government says can’t be done. If GFA is getting donor funds to the intended targets, GFA should disclose how they are doing that.

It is a mystery to me why investigative reporters have not taken up this issue. If there is an easy way around this issue, then why didn’t Compassion International use it? While there may an explanation, given GFA’s size and current legal difficulties, it seems like they should have to be more accountable.

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Image Fair use, GFA Facebook page

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

Nationwide and Arkansas Class Certified in Gospel for Asia RICO Case

In a major development in the RICO lawsuit filed against Gospel for Asia in the Western District of Arkansas, Judge Timothy Brooks certified a nationwide class of people eligible to pursue a RICO claim against Gospel for Asia. He also certified a subclass of Arkansas donors. The specifics are below:

The judge gave GFA until October 10, 2018 to come up with a suitable plan for alerting donors about this action. This will give donors a chance to opt out of the class if they wish. I will report that process when announced here as well. For now, GFA donors can anticipate being contacted.

This is a significant milestone in this case and opens this action up to all donors (with the exceptions as noted in the judge’s order) since 2009. An exception not noted here are former employees of GFA who signed an arbitration agreement with GFA while employees. In another case involving former employees, a federal appeals court ruled that former employees pressing a RICO claim must submit to arbitration if that was a part of their contract. However, for all other donors, the class certification is a major development.

Read Judge Brooks’ Order

In a related development, Judge Brooks appointed a Special Master to oversee the discovery process. This had been anticipated since Judge Brooks had sanctioned GFA over their lack of response to discovery requests from the plaintiffs.

The Special Master is attorney David R. Cohen of Cleveland, OH. He will have freedom to inspect GFA’s documents wherever he believes is necessary to determine compliance.

I expected that GFA would have made an effort to settle before a Special Master was appointed. I suspect this is causing significant stress in Wills Point, TX and somewhere in Kerala, India.

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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

K.P. Yohannan’s Believers’ Church to Halt New Admissions to Caarmel Engineering College Amid Financial Crisis

According to the Indian newspaper The Hindu, Believers’ Church Caarmel Engineering College is closing amid a financial crisis. The news provoked a demonstration at the college on Monday. According to video posted on YouTube earlier this week (and embedded below), the college maintains the school is halting new admissions due to a financial crisis but that current students will be able to finish their programs. There were no promises made going forward. Thus, the future of the school is uncertain.

The Hindu report said students and parents were in a panic because the “college management said that they were unable to run the institution further due to financial crisis.”

Although I am not sure of the significance of this, the protest was triggered by the institution being excluded from the yearly allotment list published earlier this week.

Foreign Donations Helped Fund the Engineering School

Caarmel has been the recipient of Gospel for Asia -U.S. donations in the past. According to a filing in an Indian tax court, Gospel for Asia – India and Believers’ Church acknowledged that they used foreign donations for expenses at Believers’ Church Medical Center and Carmel Educational Trust (the trust which manages the engineering school). The quote below comes that court filing. Shri Venkitachalam represented GFA/BC:

On the contrary, Shri Venkitachalam, the ld.representative for the assessee submitted that both the assessees advanced funds to other registered trusts which have similar objects. According to the ld.representative, the assessee advanced funds to BCMET 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.

GFA/BC hoped to avoid paying taxes on the deflected income. The tax court had this to say about the income redirected to Caarmel and the medical college:

We have considered the rival submissions on either side and also perused the material available on record.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. (emphasis added)

This case in itself should help address issues in Murphy v. GFA. In that case, the Murphys assert that GFA didn’t use donations as donors intended. GFA acknowledged as much in their defense against the tax assessor. However, in all of the literature I have read about GFA, I have never read an appeal for donations to the Believers’ Church Medical College or the Caarmel Engineering College. These facilities charge medical fees and tuition. I suspect most GFA donors would be surprised to learn they exist.

In any case, it appears that Caarmel Engineering College is in some jeopardy. This video shows a vigorous protest and upset crowd over the situation.

UPDATE: If I am understanding the English of the speakers in this video, the closure may only be for one class year. The financial crisis may cause the school to fail to begin a class while they may be able to complete the work of classes underway. The situation does seem to be uncertain which has triggered a lack of trust in management.

At one point near the end of the video, a student asks why a financial crisis in Believers’ Church should effect the school since the school generates revenue through tuition.

With a little more digging, I found this video. At 53:53, a man who appears to represent Believers’ Church stands to read a statement which says essentially that Caarmel will not take new students during the 2018-2019 school year due to a “financial crisis” but the current students will be able to continue their studies.

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K.P. Yohannan at Global Anglican Future Conference as a Delegate

Always the colorfully dressed Metropolitan, leader of Believers’ Eastern Church and CEO of Gospel for Asia K.P. Yohannan served as a delegate at the recent GAFCON 2018.

IMG_9465

GAFCON stands for Global Anglican Future Conference and was initiated after the U.S. Episcopal Church consecrated gay man Gene Robinson as a bishop in 2003.

K.P. was featured in an article about the fashion on display at GAFCON.

The extravagantly-coiffured are not limited to the ladies – a couple of Anglican males would give the sisters a run for their shekels. It has been whispered that there will be a competition for the most outstanding beard – a tip that came three months late for me. Seemingly set for any time, any day, any place, the Indian Metropolitan, the Most Rev. K.P. Yohannan, from Believers Eastern Church in Kerala, on the Indian eastern seaboard, would be hard to beat, being imperial in both attire and beard. Yohannan’s bright red cassock, white mane, and genteel character make him an instant attraction for those seeking trip-defining photos to take home.

Apparently, Believers’ Eastern Church is considered to be an Anglican church. GFA has always portrayed their work as evangelical and Believers’ Church as evangelical.

GFA recently had a petition for writ of mandamus denied by the 8th District Court of Appeals in their fraud case Murphy v. GFA. The practical impact of the Court of Appeal’s action is that a special master will be appointed to open GFA’s records and oversee discovery in the case. GFA had been sanctioned by the federal judge in the case for abusing the discovery process and failing to provide documentation of how donations had been spent in keeping with donor intent.

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Images: GAFCON logo – GAFCON.com; K.P. Yohannan – Embedded via Flickr

8th District Court of Appeals Denies Gospel for Asia’s Petition for Writ of Mandamus

Today, the 8th District Court of Appeals denied the petition from Gospel for Asia a writ of mandamus which would have vacated Judge Timothy Brooks order for sanctions and the appointment of a special master to oversee discovery in the fraud case against GFA.

The denial in full is as follows:

UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
___________________
No: 18-2322
___________________
In re: Gospel for ASIA, Inc.; Gospel for Asia-International; K.P. Yohannan; Gisela Punnose; Daniel Punnose; David Carroll; Pat Emerick
Petitioners
___________________________________________
Appeal from U.S. District Court for the Western District of Arkansas – Fayetteville
(5:17-cv-05035-TLB)
___________________________________________
JUDGMENT
Before BENTON, KELLY and GRASZ, Circuit Judges.
Petition for writ of mandamus has been considered by the court and is denied. The petitioners’ motion to seal appendix is denied. Mandate shall issue forthwith.

June 26, 2018

This will allow the sanctions from Judge Brooks to go forward and is a victory for the Murphys. If Judge Brooks follows through, then a special master will be appointed with full access to the records of GFA thus allowing discovery to proceed.

Gospel for Asia will have to absorb the cost of the special master and should alert donors to this reality. A federal district judge and now a Court of Appeals (along with the Evangelical Council for Financial Accountability) have taken the position that GFA is not being forthcoming with information.

We may be getting closer to learning if there is any evidence to validate GFA’s claims that they have spent money as donors intend. The plaintiffs contend GFA’s leaders conspired to divert donations from intended causes such mission work or helping the poor to for profit enterprises or other purposes which donors didn’t intend. Now that the Court of Appeals has cleared the way for discovery to proceed, the plaintiffs and eventually the donor public may get to see exactly what GFA has done with millions in donations.

 

ECFA Report: Gospel for Asia Made Inaccurate Statements and Withheld Information

In a 2015 Evangelical Council for Financial Accountability report to Gospel for Asia founder and CEO K.P. Yohannan, ECFA Vice President John C. Van Drunen delineated a devastating list of findings from a lengthy and in depth investigation of Gospel for Asia’s financial practices. The end result of the investigation was the eviction of GFA from the  ECFA. Due to the relevance of the investigation conducted by the ECFA to the current RICO and fraud lawsuit against GFA (Murphy v. GFA), I am highlighting pertinent parts of the report in a series of blog posts. Yesterday, I pointed out that GFA admitted that field partners didn’t track expenditures as precisely as they took donations. Today, I show that ECFA accused GFA of making false statements and withholding information.

Toward the end of the report, Van Drunen made an observation about the process of collecting information.

Certain information provided to ECFA by GFA that was crucial to our review was, at least initially, inaccurate.

Our review process has covered nearly four months. Certain pertinent information about the compliance issues was not revealed to ECFA by GFA until late in the review process.

We have learned significant information from sources unrelated to GFA that we should have learned directly from GFA.

Although I have been critical of the ECFA in the past, I must credit them in this case. Mr. Van Drunen and his staff deserve credit for persisting through initial deflection and distraction. Also, I am aware that information published here (“unrelated to GFA”) made it possible for the investigation to ask certain questions which might have come up otherwise.

I want to point out that GFA didn’t fully answer all of the questions nor was the ECFA able to verify all claims. Take this issue for instance:

16. Claims of inappropriate use of funds under an Indian tax assessment. ECFA received concerns that an Indian Tax Court case indicates that GFA India misused funds for purposes other than what they were intended. ECFA reviewed this matter for compliance with ECFA Standard 4. On July 27, GFA’s staff indicated that this matter was a false charge that was later remanded and that GFA India was absolved of any wrongdoing in this matter. GFA’s staff was not able to provide any documentation other than reports from field partners on this matter.

This concern was brought to light by my blog post from July 17, 2015. It appears from the court record that GFA was to pay a tax which they probably did. However, that doesn’t change the finding that GFA inappropriately used funds. GFA has never produced a court record absolving them of wrongdoing. They had a chance to do that to ECFA but did not do so.

GFA and Accountability: A Pattern

As Van Drunen’s reaction demonstrates, Judge Brooks is not the first observer to express frustration with GFA’s answers to questions about accountability. In one Court order, Brooks expressed his frustration with GFA’s response to discovery requests, writing at the time:

I feel like when I read the defendants’ answers and when I read their response that it is as if this Court had not already addressed and ruled on some of these same issues at least twice, if not more and, yet, here we are again.

Eventually, GFA’s delays led Brooks to sanction GFA and signal his intention to appoint an attorney (special master) to oversee discovery.  Given the history, going back before Murphy v. GFA, oversight seems like a good idea.

 

ECFA Report: Gospel for Asia Solicited Funds for Narrower Purposes Than the Eventual Expenditure of Funds

Since 2015, I have investigated the mission giant Gospel for Asia. First privately and then publicly, former employees of GFA sounded alarms about financial and personnel management. A former donor alerted me to the situation and eventually numerous insiders in India and the U.S. came forward with information about the second largest mission organization in the U.S.

At present, former and current leaders of GFA are defendants in two lawsuits which allege that they conspired to defraud donors by using donations in ways contrary what donors intended. One case is stalled in federal court but the other — Murphy v. GFA — is moving forward.

At the heart of Murphy v. GFA is the allegation that GFA didn’t use donations as donors intended. The judge in the case, Timothy Brooks, ordered GFA to produce documentation which could address this basic allegation. Because GFA has not produced documentation responsive to Brooks’ requests, he signaled his intention to appoint a Special Master to oversee the discovery process.

Although the federal suit is potentially more serious, GFA has been investigated on these allegations before. In 2015, the Evangelical Council for Financial Accountability investigated GFA’s financial dealings and eventually evicted GFA from membership due to multiple violations of ECFA standards.

The ECFA Investigated GFA’s Financial Accountability

Prior to removing GFA, the ECFA prepared a report of their investigation which was provided to GFA board members. The report was written in the form of a letter dated September 2, 2015 to GFA founder and president K.P. Yohannan. Former board member Gayle Erwin provided it to me after his resignation from GFA’s board.

Periodically over the next few weeks, I am going to highlight aspects of the ECFA report which are relevant to issues raised in Murphy v. GFA. This is especially relevant to the decision of GFA attorneys to ask the 8th District Court of Appeals to force Judge Brooks to withdraw his sanctions and not appoint an attorney to oversee the discovery process.

Since the key issue in the case is about how GFA spent donor funds, I will start with what the ECFA found on this question. On page 4 of the letter, ECFA’s representative wrote:

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.

The Murphys donated $34, 911 to GFA between 2009 and 2014. According to the information provided by GFA to the ECFA, expenditures were not tracked by specific item accounts until at least after August 2015. GFA led donors to believe their donations would go for one of 38 items, but GFA did not track the way those funds were spent to know if the funds were spent as intended. “Community Development” is a label which could obscure many activities and allow GFA’s field partners to spend money on things not contemplated by donors. This admission by GFA staff, some of whom are defendants in Murphy v. GFA, seems particularly relevant to the discovery process but has not been disclosed to the Court by GFA’s attorneys.

Thus, I am left wondering which account is true – the one in the ECFA report or the one offered by GFA attorneys in various Court pleadings. To the ECFA, GFA staff claimed field partners in India didn’t track expenditures by specific items accounts. In their filings, GFA attorneys have indicated that documents in exist in India.  In the recent writ of mandamus to the 8th District Court of Appeals, GFA attorneys wrote:

There are millions of such documents spread over 12,000 locations in almost every part of India. SASA00718-SA00720. Plaintiffs have made no effort to inspect those documents. Petitioners also secured and produced over 60,000 pages of bank statements, ledgers, and summaries from the field. (p. 16)

Presumably, when this case gets to trial, the ECFA report will be entered into evidence. It might be that ECFA staff who were involved will be deposed. Eventually, the admissions made by GFA staff regarding the same questions at issue in this trial will come out.

 

Gospel for Asia Asks 8th District Court of Appeals to Withdraw Sanctions

Gospel for Asia’s Writ of Mandamus Contradicts Investigation Filed by Evangelical Council for Financial Accountability

On June 18, Gospel for Asia’s legal team took the extraordinary step of petitioning the 8th Circuit Court of Appeals for writ of mandamus which, if granted, would vacate Judge Timothy Brooks’ sanction of GFA and his order for a Special Master to oversee discovery in the fraud case against GFA brought by Garland and Phyliss Murphy.  Earlier this month, Brooks found that GFA had willfully delayed discovery and failed to comply with court orders. In response, he sanctioned GFA and signaled his intention to give an attorney access to GFA’s records as a means to speed up GFA compliance with court ordered discovery of information in the case.

Despite being a nonprofit organization, GFA has faced repeated questions and frustration from Judge Brooks over the inability to produce sufficient responses to discovery requests. Now, with the prospect of additional transparency, GFA is seeking to have the action reversed through the Court of Appeals.

GFA’s Case

In their June 18 filing, GFA defendants claim that Judge Brooks should not have sanctioned them because they have done their best to produce documents showing how they spent donor funds. Judge Brooks recently ruled that GFA had not done enough and abused the discovery process. As a result, he sanctioned the mission group.

GFA now counters by claiming that Judge Brooks erred by assuming GFA leaders in the U.S., namely K.P. Yohannan, have more control over operations in India than they actually do. GFA attorneys claim Brooks presented no evidence that Yohannan has the power to compel the production of necessary documents.

GFA also claims that Judge Brooks did not adequately take into consideration the burden of discovery as compared to the claims raised by the case. Specifically, the Murphys donated nearly $35,000 but the discovery requests involved over $360-million in donations.

GFA’s 100% Claim

As a part of GFA’s prayer to the appeals court, they make some claims that are at odds with other information in the public record. GFA’s attorney’s state:

As explained in opposition to Plaintiffs’ certification motion, GFA encouraged donors to participate in the good works GFA was sponsoring in Asia, but it’s the representations it made to donors varied. ECF73. For example, GFA told many donors that “100% of what you give toward sponsorship goes to the field,” ECF1, ¶17, but donations must be made “without restrictions” with GFA retaining discretion to use donations to best fulfill its mission. ECF71 at 4. There was no guarantee that each of the $376 million donated would be used for its exact designated purpose.

There is little dispute that GFA frequently touted their claim to spend 100% of donations on the field. This became a point of contention after concerns about their spending practices in India became public. After that, GFA made some changes which allowed them more flexibility.

In 2015, when interviewed by the Evangelical Council for Financial Accountability, GFA representatives acknowledged the claim that they sent 100% to the field. On page 5 of the ECFA report to GFA, this admission is clear:

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.

It appears to me that the attorneys for all sides might want to interview the people who conducted and participated in this report. Here we have an admission that nearly $20-million was donated for field work but then was sent back to the U.S. for completion of the Texas headquarters. The ECFA report continues:

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.

GFA claimed that the field partner (presumably Believers’ Church) took out a loan to pay back the $20-million and then used field generated money to pay back the loan. If that is the case, then it should be a simple matter to produce the documents.

In May 2015, defendant David Carroll told me via email:

Our field office is also audited by an independent accounting firm, to ensure compliance with regulations governing the recognition and spending according to donor designations of monies received.

While I don’t know if these audits have been offered as a part of the discovery process, I have to wonder if they actually exist.

GFA’s Claim About Control over the Field

GFA’s attorneys claim Judge Brooks used the wrong definition of control in reference to the GFA defendants. Furthermore, they claim no evidence was presented to support any theory of control. From the writ:

Plaintiffs did not introduce evidence to prove that Petitioners had control over the documents in India. Instead, the court’s decision relied on what it termed “the power of the pursestrings.” A00262, A00360. Because GFA made large donations to third parties in India, the court assumed that Petitioners could compel the third parties to produce the documents Plaintiffs wanted. The court’s assumptions are no evidence of control, regardless of which standard is applied.

The district court also assumed that control existed because Petitioner K.P. Yohannan held a prominent position in BEC, and his family members were allegedly involved in related entities. A00011. Of course, there is a significant difference between being an ecumenical leader in a church and having the legal right to compel production from over 12,700 churches all over India on demand. And involvement in transferring funds does not equate to the legal ability to compel production of documents (and bank records have already been produced). Plaintiffs offered no evidence to connect Yohannan’s family members with particular entities from whom documents were requested, nor do Plaintiffs show that Yohannan could compel these unnamed family members to use their alleged positions to obtain documents from any, much less, all of the 12,000 locations in India where documents are located. The district court’s reasoning is all based on assumptions of control, not evidence.7

Note here that GFA does not offer any evidence that Yohannan is without authority in India. Instead of asserting something, the attorneys simply cast doubt.

Why has GFA not produced documents describing Yohannan’s role in India?  The only Constitution which can be found designates him as the supreme authority over all matters temporal and spiritual. He doesn’t just hold a “prominent position;” Yohannan is the supreme leader.

Yohannan’s son-in-law Daniel Johnson is on the board of Believer’s Church as is Yohannan’s niece Siny Punnose. Yohannan sits on multiple boards of the hospitals, schools, Bridge of Hope, and other entities in India and around the world. Yohannan’s name is on all of the deeds of property owned by the church.

This notion of no control in India was doubted in 2015 by the ECFA as well due to the church Constitution of 2003 which is the copy given to ECFA by GFA. In that Constitution, Yohannan is referred to in this way:

By virtue of the ecclesiastical position, the Metropolitan Bishop is the legal authority on everything that belongs to the Church.

Based on their review of documents and GFA’s statements about Yohannan, ECFA came to the following conclusion:

Based on this level of oversight and control as well observed during our review, ECFA staff questions whether GFA has a sound basis to disclaim any control over the activities of field partners.

In some respects, the ECFA investigation was a preview of the Murphy case. If the RICO case turns out like the ECFA investigation, GFA might want to consider a new legal strategy.