Plaintiffs File Response in Dicksons v. Gospel for Asia

Attorneys for Matthew and Jennifer Dickson filed responses (see below) to Gospel for Asia’s motions to dismiss and compel arbitration in the RICO lawsuit against leaders of GFA. According to the filing, the Dickson’s provided ample detail and a clear and compelling case against GFA. The response concluded:

Under a straightforward application of the pleading standards, the Court should find the Dicksons allege facts sufficient to support each of their claims. Their Complaint leaves no doubt as to the nature of their allegations, and it is nearly impossible to imagine that Defendants need even a shred of additional detail to prepare their defenses. Accepting the allegations as true, and drawing all reasonable inferences in the Dicksons’ favor, there is no question that all Defendants are liable for the misconduct the Dicksons allege under each of their four claims. The Court should therefore deny the motions to dismiss, and this case should proceed to discovery forthwith.

In response to GFA’s demand that the Dicksons enter arbitration, the plaintiffs said GFA’s demand was based on an invalid and unenforceable employment agreement. The plaintiffs concluded:

Defendants have entirely failed to carry their burden of proving the existence of a valid arbitration agreement. The arbitration language in the Statement lacks consideration and is helplessly vague. Moreover, the Statement is palpably irrelevant to the dispute the Dicksons have brought before the Court for redress: the deliberate misleading of tens of thousands of similiarly situated donors resulting in Defendants’ enrichment. Rather than allowing Defendants to evade responsibility for their conduct based on the happenstance of the Dicksons’ former and terminated status as “members” of GFA, the Court—following well-settled precedent—should deny Defendants’ motion in its entirety.

 
Documents:
Plaintiffs’ Opposition to Defendants’ Motions to Dismiss Plaintiffs’ Claims
Plaintiffs’ Opposition to Defendants’ Motion to Compel Arbitration

Gospel for Asia Denies RICO Allegations, Moves to Dismiss Suit, and Asks Court to Compel Arbitration

In court filings Monday, Gospel for Asia denied all allegations of wrong doing, asked the court to compel the plaintiffs Matthew and Jennifer Dickson to enter into arbitration to settle their dispute and/or to dismiss the suit.
In February, Matthew and Jennifer Dickson brought sued GFA alleging fraud and mismanagement on behalf of themselves and the class of GFA donors. On Monday, GFA’s lawyers responded with denials, a motion to dismiss the suit and a demand that the Dicksons enter arbitration. The GFA legal response included signed agreements by the Dicksons while they were GFA employees which included a clause stating they wouldn’t sue over disputes but rather enter arbitration.
GFA’s response concludes:

Defendants [GFA leaders] pray that arbitration be ordered, or, alternatively, that judgment be entered that Plaintiffs take nothing by this suit against any of the Defendants, that class certification be denied, that all relief prayed for by Plaintiffs in this action be denied, and that Defendants be granted such other and further relief, at law and in equity, to which they may be justly entitled. DATED: April 15, 2016.

GFA’s motion to compel arbitration
GFA’s motion to dismiss the suit
GFA’s brief supporting motion to dismiss
GFA’s response to the complaint
The original complaint Dicksons v. Gospel for Asia
 

Gospel for Asia Claims Allegations Are False But Then Claims Changes Are Coming; Still Keeping the Audit Secret

If Gospel for Asia wants to show change, then the board of directors should release the most recent audit…
In early March, Gospel for Asia’s board of directors (we still don’t know who they are) posted a statement to donors about how they are responding to GFA’s loss of ECFA accreditation and the resulting questions about their financial integrity.
In it, I find some good signs, if indeed the statements are accurate. GFA claims to have instituted new procedures to insure money is spent where it should be spent. However, on the down side, GFA claims that the allegations which led to the need for these changes are false. Shorter GFA: We never did anything wrong and we won’t do it again.
You can read the statement in full at the GFA website. Below, I intersperse my reactions throughout the statement.

Strengthening Our Commitment to You

Wills Point, Texas – March 10, 2016: A positive effect of a malicious internet attack—and a subsequent series of false accusations—against Gospel for Asia has been the overall review and fine tuning of our administrative and financial processes in order to insure we are above reproach.

My carefully documented posts since April 2015 have been vigorous but not malicious. I have all along the way asked for comment and information from Gospel for Asia. GFA stopped responding to me in May of last year. At one point, a rumor was spread that I was offered a chance by GFA leaders to go to Texas and see the operation. That was false but I indicated that I would be willing to do that. There has been no effort to set the record straight with me or any other Christian media source. Christianity Today, World, Christian Today, etc. have all tried but gotten no answers of substance.
GFA board of directors, I ask you, what allegations are false? You keep saying that publicly and privately but you don’t provide evidence. The ECFA report documents numerous problems, many of which came from this blog. If you are going to make an allegation like that, you should be prepared to back it up. I have provided documentation via publicly available documents, internal budgets, staff meeting disclosures, etc. On the other hand, you have answered with denials without evidence.
The fact that you continue to spin what is obvious to everyone is not a good sign that you are actually following through with all of the “fine tuning” you claim. If you can spin this, then there is no assurance that you are doing what you say you are doing. For years, GFA promised to be following ECFA guidelines. You were not doing that. For years, GFA promised to follow the guidelines of the Office of Personnel Management. You did not comply which resulted in the OPM evicting you from the Combined Federal Campaign. Did you forget about that? Donors are not going to forget. If you really want to fine tune, then stop blaming the messenger for false allegations when it is obvious that many of the allegations have already had consequences in the real world.

On February 12, the board of Gospel for Asia issued a statement regarding our relationship with ECFA. Over Gospel for Asia’s thirty-six-year history with ECFA, our ministry underwent a number of reviews, all of which we passed, but our most recent review (which ECFA initiated as a direct result of false accusations originating on the internet) cited several recommended areas of improvement. Gospel for Asia contested ECFA’s conclusions, but simultaneously values our relationship with ECFA, especially as a founding member of the organization.

Seems pretty clear in this statement that it is fine with you to accuse media of making false allegations but then to ingratiate yourself with ECFA. When I make a claim, you call it a “false allegation.” When ECFA includes the same information in their review and validates my work, you change your tune.
Have you forgotten about your former board member colleague, Gayle Erwin? Erwin was a part of the GFA board for 30 years. He pulled back the curtain and validated media reports. In fact, he provided even more detail about how the board was misled. Are his allegations false? If so, please explain.

Compliance with ECFA standards are a benefit—but not a requirement—for a charity to operate ethically and legally. Even so, Gospel for Asia is working to comply with recommendations made by ECFA.
Today, Gospel for Asia, is pleased to announce we as a ministry have implemented—or are well on our way to implementing—each of these recommendations for improvement.
Some of the changes being implemented include the following:

  1. While Gospel for Asia has always undergone an annual and independent financial audit from a reputable firm, the ministry has now contracted a new auditing firm that ECFA specifically recommended. This firm is well equipped to assist Gospel for Asia in navigating the increasingly complex demands presented by the varying international environments within which we operate.
  2. The aforementioned audit—which is underway—has identified additional safeguards that can be applied to GFA’s accounting and reporting processes. Till now, Gospel for Asia has fully implemented approximately forty percent of these recommendations, and is in the process of implementing all of the recommendations.
  3. In order to assess our overall operations and management, we have engaged a national non-profit expert to conduct an additional management review and in turn recommend changes to policies, procedures and practices throughout the entire organization.
  4. With the help of the auditors and experts referenced above, we have created—and are in the process of implementing—an improved agreement with our field partners. This will allow GFA to more efficiently deploy resources and better communicate regarding the use of all resources.
  5. We are in the process of adding more staff to key administrative and financial divisions in order to strengthen our overall operations.

We believe these changes will strengthen our work and insure that all of it is accomplished according to standards that are above reproach.
Gospel for Asia remains undaunted in its mission to bring the love of Christ to those who have yet to hear his name. We believe the best is yet to come and that now, more than ever before, is the time to share the love and message of Christ among the world’s least reached. These changes will allow us to be even more effective.

Statement from Gospel for Asia’s Board of Directors on Recent Developments

If you really are doing these things, then show some good faith to the public by releasing the now completed audit. If you want to demonstrate that you have turned over a new leaf, then release the audit. I know you have been asked for it and have denied the request. It is business as usual at GFA. You have it but you won’t release it.

GFA board members, you need to realize that donors don’t have to support GFA. There are other organizations which are more transparent and more focused. You must earn the trust of donors again. This spin job isn’t a good start. Just saying you are going to do things doesn’t cut it anymore. You must do something to demonstrate you have learned something.

For starters, release the most recent audit.

Gospel for Asia Defendants Request Extension to Prepare Response to RICO Suit

Gospel for Asia defendants K.P. Yohannan, Gisela Yohannan, Daniel Punnose, David Carroll, and Pat Emerick have requested until May 9, 2016 to respond to the RICO lawsuit filed on behalf of former GFA donors Matthew and Jennifer Dickson.
In February, the Dicksons filed a racketeering suit against the leadership of Gospel for Asia alleging misuse of funds and fraud (click link for the suit and more information).
 
GFAExtCourt
The entire document is here.
UPDATE: Although the defense requested 60 days to prepare a response, the judge shortened the period to end April 15. In exchange for the extension, the defense agreed to accept service on the suit on behalf of K.P. Yohannan who apparently is still out of the country. GFA’s defendants are being represented by Locke Lord, a prominent law firm in Dallas.
The Order on Motion for Extension of Time to Answer is below:
40 day ext Dickson v GFA
 

In Hamilton Spectator Gospel for Asia Story, Canadian Director Contradicts GFA-US Executive

Steve Buist reporter for the Hamilton Spectator has written a major expose’ of Gospel for Asia. Published today, a shorter version will also appear in the Toronto paper tomorrow. The headquarters for GFA-Canada is in Hamilton so the story is a local and national one there.
In the story, GFA-Canada Director Pat Emerick denies one of the first claims told to me by GFA-US COO David Carroll. Emerick denied that Canadian donations had been lumped together with American donations:

“There has been no mingling of funds and field partners can absolutely account for the originating source of all deposits,” Emerick stated.

“All funds sent to the field have been accounted for separately in annual reports to the respective international boards as well as according to national accounting standards in the receiving countries,” Emerick stated.

He is not exactly answering the question. The fact is that Canadian funds were not reported to the Indian Home Ministry as coming from Canada. In May 2015, Carroll told me that Canadian funds were lumped in with American funds. He said there was no requirement for them to be reported separately.

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.

Buist’s assessment is that the funds were combined without proper reporting.

Meanwhile, Gospel for Asia officials in the U.S. told an American evangelical financial accountability group last summer the charity didn’t exert any control over its Indian affiliates and how they spend the money.

Taken together, it means Canadian donations were lumped in with the American donations sent to India but the American charity didn’t exercise any control over the Indian affiliates receiving the money.

This would appear to be in violation of the CRA’s rules that state the Canadian charity must maintain control and direction of its donations and be able to account for how they have been spent, even when done through an intermediary.

Buist covers the waterfront and cites Bruce Morrison and me on a variety of financial matters. The entire class action suit is embedded online.
Readers of this blog will recognize much of the facts but Buist does a very fine job of weaving it all together in one place.