Suit Against McBirnie : Minister Loses Appeal of $1.2-Million Award

A U. S. District Court of Appeal has upheld a $1.2-million award against a Glendale minister and four church organizations charged with defrauding former parishioners through bad loans.

The order was levied Jan. 5 against the Rev. William Steuart McBirnie and the McBirnie-founded groups United Community Church, California Graduate School of Theology, Concord Senior Housing Foundation and Voice of Americanism.

All four groups have filed for protection from creditors under the bankruptcy code. McBirnie has said he no longer controls the organizations and is not responsible for their finances. He resigned as senior minister of United Community Church last May.

Twenty-six former church members, most of them elderly Glendale residents, filed suit in April, 1984, to recover loans made to McBirnie in the late 1970s and early 1980s. McBirnie said he was unable to repay them because of bad investments, rising interest rates and poor financial advice.

In 1985, a Glendale court commissioner awarded the plaintiffs $200,000 in actual damages and $1 million in punitive damages, finding that the various church enterprises were under McBirnie’s control and were treated “as if they were one.”

McBirnie founded United Community Church in 1961 with a congregation of 100. By the late 1970s, he presided over a multimillion-dollar empire, partly because of his charismatic presence and a nationally syndicated radio show on which he preached anti-communist sermons.

His empire began to crumble when parishioners sued him for not repaying loans. As of last year, about 17 suits were pending.

An attorney for the California Graduate School of Theology said the case may be appealed to the Supreme Court.