Texas religious empire under scrutiny over its tangle of kinship
MSNBC NEWS - updated 11:42 p.m. ET July 26, 2008
NEWARK, Texas - Here in the gentle hills of north Texas, televangelist Kenneth Copeland has built a religious empire teaching that God wants his followers to prosper.
Over the years, a circle of Copeland's relatives and friends have done just that, The Associated Press has found. They include the brother-in-law with a lucrative deal to broker Copeland's television time, the son who acquired church-owned land for his ranching business and saw it more than quadruple in value, and board members who together have been paid hundreds of thousands of dollars for speaking at church events.
Church officials say no one improperly benefits through ties to Copeland's vast evangelical ministry, which claims more than 600,000 subscribers in 134 countries to its flagship "Believer's Voice of Victory" magazine. The board of directors signs off on important matters, they say. Yet church bylaws give Copeland veto power over board decisions.
While Copeland insists that his ministry complies with the law, independent tax experts who reviewed information obtained by the AP through interviews, church documents and public records have their doubts. The web of companies and non-profits tied to the televangelist calls the ministry's integrity into question, they say.
"There are far too many relatives here," said Frances Hill, a University of Miami law professor who specializes in nonprofit tax law. "There's too much money sloshing around and too much of it sloshing around with people with overlapping affiliations and allegiances by either blood or friendship or just ties over the years. There are red flags all over these relationships."
Neither Kenneth Copeland nor John Copeland, Kenneth's son and the ministry's executive director, responded to interview requests.
Kenneth Copeland, 71, is a pioneer of the prosperity gospel, which teaches that believers are destined to flourish spiritually, physically and financially and share the wealth with others.
His ministry's 1,500-acre campus outside Fort Worth is testament to his success. It includes a church, private airstrip, a hangar for the ministry's aircraft and a $6 million, church-owned mansion.
Already a well-known figure, Copeland has come under greater scrutiny in recent months. He is one target of a Senate Finance Committee investigation into allegations of questionable spending and lax financial accountability at six large televangelist organizations that preach health-and-wealth theology.
All have denied wrongdoing, but Copeland has fought back the hardest, refusing to answer most questions from the inquiry's architect, Republican Sen. Charles Grassley of Iowa.
The Senate committee didn't set out to determine whether Copeland or the others broke the law, although it could provide information to the Internal Revenue Service if something seems flagrantly wrong, a committee aide said. The main goal, Grassley has said, is to figure out whether existing tax laws governing churches are adequate, which could carry sweeping implications for all religious organizations.
The committee could subpoena Copeland if he remains uncooperative. Neither he nor John Copeland, his son and the ministry's chief executive officer, responded to interview requests.
From a dried-up riverbed
A one-time pop singer, Copeland had a born-again experience and enrolled at Oral Roberts University in Tulsa, Okla. He worked as a pilot and chauffeur for Roberts himself.
He describes hearing his own call to preach standing in a dried-up riverbed.
Now a 500-employee operation with a budget in the tens of millions, Kenneth Copeland Ministries has won supporters worldwide through its conferences, prayer request network, disaster relief work, magazine and television program.
'Ranch of Faith'
John Copeland, a self-described "cowboy at heart," has a side business in ranching. Beginning in 1993, he leased church land to run his business, El Rancho Fe, Spanish for "Ranch of Faith."
Five years later, the church separately sold John Copeland land for his ranch and residence.
Lawrence Swicegood, director of media relations for Kenneth Copeland Ministries, said in a written response to questions that appraisals were done to determine fair market value, and the board approved both transactions. The lease is a good deal for the church, he said. John Copeland must improve the land, and county officials confirmed the church gets a roughly $100,000 annual tax break for putting it to agricultural use.
While the purchase price is not public record, the 33-acre property would have been worth about $93,000 that year, said John Marshall, executive director of the Tarrant Appraisal District.
The land is now valued at $554,160 by the district.
Until recently, the ranch also sold four breeds of horses. The El Rancho Fe Web site advertised the integrity of the Copeland name as a selling point.
Ellen Aprill, a professor at Loyola Law School in Los Angeles and a former U.S. Treasury Department official, said leasing and selling land to the church's top executive raises concerns. Under IRS rules, nonprofits can be penalized or lose their tax-exempt status if an executive, board member or other insider receives an economic benefit above and beyond what the organization gets in return.
"The church and its board must take great care to make sure the payments are fair to the church," Aprill said. "The church says it does. But is not clear how we can know."
Another Copeland relative runs a separate business with close ties to the ministry.
Douglas Neece, Gloria Copeland's brother-in-law, is president of Integrity Media, which plays a little-known but important role in the world of televangelism. It buys television time for the ministry.
Neece said in an interview that Copeland's ministry accounts for just over 50 percent of Integrity Media's business.
The church's board was informed of Neece's relationship to the Copelands, Swicegood said. The television time is bought at market rates and the ministry gets a discount from Integrity Media, he said.
Douglas Neece said his company charges a "deeply discounted" commission below the industry standard of 15 percent. "We earn our money," Neece said. "That's just the way it is ... We have nothing to hide."
The money involved is substantial. In a 1997 filing in Tarrant County, the church said it paid a "related party" $22 million for "telecast and mass media expense" in 1997 and received a discount of about $1.7 million on the transaction.
Kenneth Copeland Ministries
Whatever the venture whether buying TV time or striking land deals with a church executive Kenneth Copeland Ministries points to its board of directors as an important check that helps to maintain the organization's integrity.
Kenneth Copeland serves as board chairman, and his wife is a board member. Records show other members include or have included fellow televangelists Jesse Duplantis, Mac and Lynne Hammond, and Jerry and Carolyn Savelle; Oklahoma architect Loyal Furry; retired Texas pastor Harold Nichols; and Arkansas businessman John Best.
As chairman, Copeland has veto power over any resolution he deems "not in the best financial or operational interests of the Church or not in furtherance of the nonprofit religious purposes of the Church," church bylaws say.
Such veto power is highly unusual, say academics who study nonprofits. The provision was meant to give Copeland emergency powers to prevent the church from doing anything "repugnant to its Christian purposes and mission," Swicegood said.
Swicegood said that although the power has never been exercised, the church board is scheduled to meet in August to vote on removing it and adopting new provisions that "reflect contemporary best practices in nonprofit governance."
Board member Best, in a written response to questions, said he's received "100 percent accessibility to anything I wanted to see and have always seen the highest level of integrity and honesty."
Other board members either declined comment, did not respond to interview requests or could not be located.
Perks and benefits
Some board members, however, receive a perk that experts like Hill, of the University of Miami, said undermines their independence. While board members don't get salaries, some who are ministers get paid for speaking at church events through offerings and honorariums, Swicegood confirmed.
The sums involved are usually kept secret. But in seeking tax exemption for its aircraft in the late 1990s, the church revealed it paid board members a total of $87,000 in "cash contributions" and almost $1 million in honorariums and "benefit purposes" in 1996 and 1997 combined.
Swicegood said the church's independent compensation committee approves all payments to board members.
Marilyn Phelan, a Texas Tech University law professor and author on nonprofit law, said the practice could pose problems. Both the IRS and Texas state law prohibit benefits beyond reasonable compensation for insiders, including board members, she said. If violations are found, nonprofits can lose their tax-exempt status and board members can face penalty taxes.
As the Senate Finance Committee considers its next step, Copeland is not backing down. His ministry is portraying the inquiry as an attack on religious liberty.
At the same time, it is moving forward with a big fund-raising project: soliciting donations for new television equipment so Copeland can be broadcast in high-definition.