Update to the Gospel for Asia Fraud Lawsuit – Why Are Board Directors Not Named as Defendants?

Wills Point GFA Chapel
GFA’s Chapel at Wills Point, TX

After I read the lawsuit against Gospel for Asia, I asked the lawyers bringing the suit why Board directors were not included as defendants.
In response, Martin Woodward of Stanley Law Group told me:

Defendants may be added or removed throughout the litigation of a case based on the available information.

Understandably, those bringing the suit do not want to signal their moves. My guess is that the process of discovery will reveal information which could lead to additional defendants. On that point, I am wondering if board members who knew K.P. Y0hannan altered Gayle Erwin’s report on the GFA diaspora might find themselves added to the suit.
Board members have a fiduciary responsibility to see that the organization operates ethically and in keeping with laws. Even so, Erwin pulled back the curtain and let the public know that much of what was happening was not known by the board of directors. Given what Erwin revealed, it is certainly possible that the author of the recent board statement did not actually come from the board.
 

Statement from Gospel for Asia’s Board of Directors on ECFA, Fraud Lawsuit, and a Blogger

Just today, the Gospel for Asia Board of Directors placed the following statement on the GFA website.

STATEMENT FROM GOSPEL FOR ASIA BOARD ON RECENT DEVELOPMENTS

Wills Point, Texas – February 12, 2016: In the fall of 2015, the Evangelical Council for Financial Accountability (ECFA) revoked Gospel for Asia USA’s membership, after a 36-year relationship. ECFA is an organization that provides accreditation to Christian nonprofits in the U.S. based on their “standards for financial accountability, transparency, fundraising and board governance.” ECFA accreditation entitles a ministry to use the ECFA seal, but the loss of accreditation does not mean that the organization is guilty of illegal or unethical behavior. It simply means the organization no longer meets the standards chosen by ECFA to entitle an organization to the ECFA endorsement. Gospel for Asia was a founding member of ECFA, so an endorsement by ECFA is and remains a great honor to us. However, many very reputable organizations are not members of ECFA because they do not meet their rules for membership or they have chosen not to meet them, but Gospel for Asia has always valued our endorsement by ECFA and therefore made efforts to remain in good standing for 36 years.

Our change in status with ECFA caused concern by some and raised questions about financial accountability of Gospel for Asia. ECFA’s decision was made after conducting a special review of Gospel for Asia, and we respect ECFA’s evaluation. Our response was to begin a focused review and to implement the ECFA’s recommended improvements.

For more than 30 years, Gospel for Asia has served in some of the most complex environments in the world. Some of the questions raised relate to measures Gospel for Asia felt forced to take to continue our work in hostile environments where very real threats exist to Christians of all kinds, new believers and international humanitarian organizations. Gospel for Asia has always had “enemies” who didn’t want our mission to continue, but sometimes our biggest challenges have related to managing the complex economic and political environments within which God has called us to serve.

Most of ECFA’s issues resulted from us growing more quickly than our processes and procedures were able to accommodate while we were simultaneously navigating unbelievably complicated circumstances in sometimes dangerous and confusing environments. Over the course of these challenges, we made some good decisions and some bad ones and sometimes we didn’t have the right counsel or any counsel at all.

We willingly accepted—and appreciated—ECFA’s concern because our processes and procedures needed improvement, and in some cases, we were still operating like a small organization as opposed to an organization of our size and influence. We have always welcomed ECFA’s efforts to help us improve.

We learned of the lawsuit when reporters began to call us. It’s worth noting, the first to post anything related to the lawsuit was a blogger who has leveled a relentless attack on Gospel for Asia for months.

We appreciate the role and responsibility—and often good intentions—of journalists in the “new media” and in traditional media, but we have been grieved to discover that too many of them have chosen to consider us “guilty until proven innocent” as opposed to “innocent until proven guilty.”

We must take the time to fully understand the nature of the accusations being leveled against us, and then we will respond accordingly. The issues surrounding our change in status with ECFA have been misunderstood, but regardless of viewpoint, we have taken and will continue to take a focused approach to implement suggested changes to our operations.

We will fully cooperate with the law and are in the process of securing specialized legal counsel to help us and our other legal advisors navigate this new challenge.

We consider it a blessing to finally have the opportunity to bring this matter to full resolution through an impartial arbiter, and you can rest assured that in the meantime we will continue operating on behalf of some of the world’s most desperate people in some of its most complex environments. We hope you will pray for us, for these ongoing challenges are certainly also challenges and distractions to our mission.

The staff leadership of Gospel for Asia are working diligently to handle all of this responsibly and with integrity. We will come out of this stronger.

We thank our committed staff, our donors, prayer partners and friends, for walking with us all these years, especially during this challenging season.

As the Board of Directors, we take our responsibility seriously and we have full confidence in the ministry of Gospel for Asia.

—Board of Directors of Gospel for Asia

This statement mentions “a blogger.” Note to GFA board: I have a name. Furthermore, I have an email address. GFA’s David Carroll has it. He stopped answering my emails in May 2015. Is that what you wanted him to do? I just sent an email to Taun Cortado asking for comment on the allegations in the lawsuit. Instead, you respond to me via other sources.
I have sent many emails to board member Francis Chan with questions about the unaccounted for funds. Chan has not replied. Why not? Is it easier for you to accuse bloggers of misrepresenting facts or having bad motives? This is a losing strategy. Most people can see through it when you answer a charge with an ad hominem attack. Instead of attacking me, you should try talking.

If there is information you believe I am missing, please do what a responsible organization would do — contact me and let’s talk. It is unseemly for you to continue to blame the messenger. If there are answers to the many unanswered questions, then you are to blame for failing to communicate them.

You fail to mention the testimony of your former colleague Gayle Erwin. Remember him? He was on the GFA board and pulled back the curtain.
Former donors are speaking out. Former Canadian board members are speaking out after being improperly dismissed.  The Office of Personnel Management found you guilty after an investigation.

The ball is in your court.

Gospel for Asia Accuses Certain Bloggers of Misrepresenting Facts

GFA HQ inside
Inside Gospel for Asia’s HQ. HH Architects website

I wonder who they mean.
Gospel for Asia apparently will only talk to Christianity Today. About the recent RICO class action suit against GFA, an unnamed spokesperson for GFA told CT (go read the entire article):

“While we are more than willing to answer any questions asked of us, it would be irresponsible for us to do so at this time since we have not yet been served any lawsuit,” GFA told CT. “All we know is what has been posted on the internet by certain bloggers who have previously misrepresented facts related to Gospel for Asia in a relentless attempt to discredit our ministry.

The first statement is a blatant lie. For months, GFA has not answered questions from donors and media (e.g., 20 year donor Bruce Morrison). GFA stopped answering my questions on May 7, 2015. At the end of this post, I have provided statements from survey respondents regarding the unwillingness of GFA to answer questions.
UPDATE: (Since I first posted this, I read an article posted by the Christian Post with the same statement. CP identifies the source of the statement as Daniel Punnose, K.P. Yohannan’s son. So, Rev. Punnose, please point out any facts you believe I have misrepresented.)
GFA also told CT:

“Once we know the nature of the accusations, we will respond accordingly and transparently,” GFA stated. “We remain—as we have been for over 30 years—committed to operating with integrity on behalf of so many of the world’s most desperate people. That is our commitment and we will remain focused on our Christian mission. We are so grateful for all of those who support our work.”

This statement insults the intelligence of everyone who has done any kind of investigation into GFA. Let’s review GFA’s recent record.

  • On October 2, 2015, the board of the Evangelical Council for Financial Accountability disclosed that GFA’s membership had been terminated due to multiple violations of ECFA guidelines. The letter from ECFA outlining the violations of financial integrity standards can be viewed in this previous article.
  • In their response to the ECFA, GFA admitted smuggling cash to India. While GFA says it didn’t know such smuggling was illegal, questions remain about their conflicting stories.
  • The Independent Charities of America did not offer membership to GFA due to GFA’s failure to provide a clean audit for 2014.
  • The Office of Personnel Management banned GFA as an approved charity due to violations of eligibility requirements. The OPM imposed the most severe response allowed by law. GFA will not be allowed to solicit donations from federal workers for at least the next campaign year.

It is clear that GFA has learned nothing from their recent problems. Despite the removal of ECFA and ICA memberships and the disciplinary action of the OPM, GFA continues to blame bloggers for their problems.
I challenge GFA to back up the statements to CT. Where have I or any other blogger misrepresented facts relating to GFA? I have asked repeatedly for clarification and information which might clear up these matters. However, GFA has consistently refused to answer any questions from me and has made no effort to address the many loose ends surrounding their management of donor funds.
Because GFA has attacked my integrity, I challenge the organization to provide me, CT or any media source with evidence that I have misrepresented facts about GFA. I will gladly provide their explanation and any evidence GFA offers to my readers.
 
In October 2015, I created a survey designed for anyone leading and attending a Calvary Chapel. I have 77 responses so far. For participants who had contacted GFA, I asked if they were satisfied with answers given by GFA.  Most did not answer (59), but of the 18 that did, four were satisfied and 13 were not satisfied. Some of the negative replies are below. The four positives simply indicated that they were satisfied or very satisfied with GFA’s responses.

  • Saddened, not satisfied. Sin is blinding and deceptive. The answers the leaders and staff members gave me have broken my heart, and I pray for them daily that they will turn and be restored.
  • I got no answers or responses to my concerns and comments.
  • Not at all satisfied. They tried to turn the tables on the dialogue basically saying: “Prove the accusations to be true.” No offer of explanation or dialogue. This has been the recurrent theme with others in our congregation who attempted to address the issue with them.
  • Standard response was to blame the blogs as propaganda for former staffers.

 
 

Media Reports on the Gospel for Asia Fraud Lawsuit

Although the Gospel for Asia fraud lawsuit hasn’t become a megastory yet, some reports are being filed in various places. This post links to the ones I have seen.
Gospel for Asia donors misled, couple’s suit says – Arkansas Online (Arkansas Democrat-Gazette)
Gospel for Asia Sued for Fraud – WORLD
Gospel for Asia, Second Largest Mission Organization in U.S., Sued for ‘Fraud and Misuse of Charitable Donations’ – Gospel Herald

Gospel for Asia faces lawsuit for ‘fraud and misuse of charitable donations’ – Christian Today

Lawsuit Alleges Gospel for Asia Fraudulently Solicited Hundreds of Millions in Donations, Enriched Leader – Christian Post 
Gospel for Asia Withheld Hundreds of Millions Meant for ‘Urgent’ Needs, Says ECFA – Christian Post
Prominent mission agency facing federal lawsuit – Onenewsnow
The Christian Post article has been translated into Malayalam in this Indian paper.

KP Yohannan’s Gospel for Asia in the dock over fraud and misuse of donations – Narada News

The Narada News posting appears to be a reprint of a Tehelka article (Indian paper) which has since been pulled. Even though the title is still on the front page (see #6 below), it can’t be found on the site.
GFA is not commenting despite being asked.
GFATehelkaSuit
After covering this story nearly everyday since April 2015, it is good to see others looking into it.
 
If you see other reports on the story, please post the links in the comment section.