A Shadow on the Altar : Rev. McBirnie’s Once-Majestic Religious Empire Faces Financial Ruination

When the Rev. William Steuart McBirnie arrived at the United Community Church in 1961, the La Crescenta church hardly seemed destined for the big time--or the controversy that would follow.

Twenty-four years ago, the church had a congregation of 100 and was holding its services in a community recreation center.

But under the guidance of the enterprising McBirnie, the church quickly began to prosper. Within five years, he increased the congregation ten-fold. Soon United Community Church had a home of its own, in downtown Glendale.

At the same time, McBirnie also was building a personal following well beyond the Los Angeles Basin, thanks to a nationally syndicated 15-minute radio program called “Voice of Americanism” that featured his “Christian and conservative perspectives” on news of the day.

By 1977, the church and several affiliated groups set up by McBirnie held 22 pieces of property in downtown Glendale, valued in the millions of dollars. On Easter Sunday of that year, a record crowd of 1,500 showed up at the church’s brand new, Spanish-style amphitheater.

“Everything was so beautiful then,” recalled a former McBirnie follower. “We don’t know why everything went wrong.”

McBirnie’s explanation is fairly straightforward.

He contends that the church and his affiliated organizations were pushed to the precipice of bankruptcy because of rising interest rates and poor financial advice that he received while he was building his now-tottering, multimillion-dollar empire. Those holdings were financed largely by loans and contributions from church members as well as McBirnie’s radio listeners from throughout the country who shared his strong anti-Communist views.

But McBirnie’s version is disputed by many critics, including a Glendale court commissioner who levied $1 million in punitive damages against the church, McBirnie and his affiliated organizations, saying they “at no time intended to fulfill the promises made at the time the money was borrowed.”

The controversy is far from settled. The church is appealing the $1-million fine. In addition, more than a dozen lawsuits--seeking millions of dollars against McBirnie’s ministry--are still pending, mostly in California courts.

In the meantime, attendance at the United Community Church is down dramatically. Three of McBirnie’s nonprofit organizations have filed for bankruptcy protection and one of them is proposing to sell a 150-unit apartment complex for the elderly in Pasadena. The organizations are the Community Churches of America, the California Graduate School of Theology and the Concord Senior Housing Foundation.

Among those who have claims pending against McBirnie’s ministry are Arthur and Doris Chester, former Pasadena residents. Over a 10-year period, the Chesters, now retired and living in Massachusetts, loaned $59,000 of their life’s savings to McBirnie’s ministry.

For more than 12 years, they faithfully attended his Sunday service at the nondenominational church in Glendale. The rest of the week, they listened to the charismatic preacher’s 15-minute radio broadcasts, which can still be heard five mornings a week on KIEV-AM.

Like many other listeners, the Chesters received a brochure with an appealing pitch: “Your savings can work for God and country and at the same time be very profitable for you!”

The brochures promised up to 10% interest, payable semiannually, on such 12-year “investment loans.” Lenders were also promised “a letter of legal commitment from a large California bank to withdrawals up to $35,000 on demand.”

“We figured if you can’t trust a church, who can you trust?” said Arthur Chester, 73.

The brochures generated millions of dollars, with individual loans ranging from $500 to $65,000. Much of that money was used to finance the purchase of property and the construction of buildings for McBirnie’s expanding ministry.

In 1980, the Chesters’ interest payments stopped. It took the couple two years to recover $30,000 of their “investment.” Since then, they have heard or received nothing more.

“The sad part is that it soured us so on church,” Chester said. “We haven’t been to any church in a long time.”

Among the hundreds of other creditors of Community Churches of America, a nonprofit corporation founded by McBirnie in 1963, are other churches, according to bankruptcy court documents.

McBirnie, breaking a long public silence, maintained in a recent interview that he is innocent of any wrongdoing.

He blamed his financial problems on bad investments and on rising interest rates. When those rates rose well above 10%, many of McBirnie’s lenders sought to invest their money elsewhere for a higher yield, and that created severe cash-flow problems, he contended.

Community Churches of America’s finances also suffered, McBirnie said, when it, in turn, could not collect money that it had loaned, mostly to other churches that later “either folded or in some instances just refused to pay.”

McBirnie said he does not know how much money was lost as a result. Tax records in 1980 showed that nearly $1 million in such loans had been made. And court records in Los Angeles County Superior Court show that in the late 1970s Community Churches of America had sued seven businesses and individuals to recover more than $284,000 in outstanding loans.

“In the first place I didn’t cause the problems,” McBirnie said. “In the second place, I never took any of the money that was borrowed for myself; never, ever, ever. I was trying to do all the good I could.”

Court Disagrees

Among those who have taken a sharp exception to that characterization was Superior Court Commissioner Florence-Marie Cooper, who presided over a non-jury, civil trial filed by 24 former members of the United Community Church who sued the church, McBirnie and his affiliated organizations for $200,000 in outstanding loans, plus $5 million in punitive damages.

In April, Cooper levied a $1-million fine in punitive damages and awarded the 24 plaintiffs the $200,000 they had sought. Cooper said the $1-million penalty was necessary because “general damages, standing alone, would do nothing to prevent this kind of wrongful conduct in the future.”

McBirnie called the fine “incredible,” and said it is being appealed.

To date, seven other lawsuits in California and elsewhere have resulted in judgments against McBirnie’s ministry, amounting to more than $260,000 plus interest.

At least 17 more lawsuits are pending in courts throughout California. But those lawsuits have been postponed indefinitely as a result of the Chapter 11 bankruptcies filed by Community Churches of America, the Concord Senior Housing Foundation and the California Graduate School of Theology.

In court documents, Community Churches of America claimed to be $2.3 million in debt, and it proposes to settle by selling the Concord, a 150-unit senior citizens apartment complex in Pasadena, which is run by the Concord Senior Housing Foundation under a subsidized rent program of the U.S. Department of Housing and Urban Development. The Concord is estimated to be worth $5.5 million.

Confident of Sale

“The Concord will be sold sooner or later, and the money will go to pay off those debts,” McBirnie insisted. “There isn’t any question in my mind that it will be sold.”

The housing foundation has until Dec. 13 to submit a formal proposal to the bankruptcy court. It has indicated in court hearings that there is a buyer for the building.

But the proposed sale also could become mired in controversy. The foundation’s 1982 attempt to sell the Concord, at a potential $3-million profit, failed after the building’s tenants filed a class-action lawsuit. And this time HUD has said it intends to oppose the sale.

Equally uncertain is the fate of the church complex itself.

If Cooper’s fine is allowed to stand, the $1.5-million amphitheater-style United Community Church may be put up at a public auction.

The amphitheater anchors a complex of buildings along Kenwood Avenue and Louise Street in Glendale. The octagonal, Spanish-style building is an impressive forum for church gatherings with its tiered rows of cushioned, plum-colored pews, thick wall-to-wall carpeting, an oaken pulpit and a huge illuminated cross that hangs from the wood-beamed ceiling.

Seven other pieces of valuable church property also may be threatened, including the posh two-story apartment that is the parsonage. McBirnie said his only cash income is his monthly $500 salary. The residence of the minister and his wife, June, has an assessed value of $285,485.

The controversy clearly has taken a toll on the United Community Church. At three recent Sunday services, attendance was down to about 250 to 300 people.

Yet, for all his problems, McBirnie is still a commanding figure when he stands at the pulpit, addressing his congregation in a voice that resonates with assurance.

“I have suffered grievously at the hands of the press and people behind the press feeding the press stories, calling the press every time they want to print something against me,” McBirnie said during a two-hour “accounting.”

“This is an attack, folks, by people who want to destroy the church,” he said. “They not only want their money back, they want to punish you. They know I don’t have $1 million. But who does? I’ll tell you who: This church.”

McBirnie, who has a trace of gray in his reddish-brown hair, expects to celebrate his silver anniversary at United Community Church in January.

He was born in Toronto and is the son of a preacher. McBirnie holds a master’s degree and Ph.D. in religious education from Southwestern Baptist Theological Seminary in Fort Worth, Tex.

Texas Experience

Before he came to California, McBirnie spent about 10 years in Texas, where he was considered something of a rising star in the Southern Baptist ministry--until allegations surfaced that he had become romantically involved with a married parishioner.

Over the years, McBirnie also has worked to help resettle Southeast Asian refugees and to provide food and clothing for victims of disasters in East Africa and Latin America through another of his organizations, the World Emergency Relief Foundation.

The depth of the anger and bitterness that McBirnie has engendered was evident at a September meeting of creditors of the California Graduate School of Theology.

The 30 or so senior citizens seemed particularly upset that McBirnie was not there. The two representatives of the school who attended said they had no knowledge of the school’s former financial situation.

Among those at the meeting were Arthur and Doris Chester, who had flown here from Massachusetts. They left thinking that they had wasted their time and money once more.

“It’s just a circus,” said Doris Chester, 76. “They either didn’t answer the questions or they didn’t know.”