Religious Broadcasters Seek to Wash Financial Image : Scandals, Congressional Hearing Push TV Ministries to Improve Income Accountability

Spurred by the scandals involving television evangelists and an upcoming congressional hearing, religious broadcasters say they are taking steps to make their ministries financially accountable.

“We’ve never had a watchdog operation, but these events have caused us to bite the bullet,” said Ben Armstrong, executive director of the National Religious Broadcasters. The professional organization, based in Morristown, N.J., includes 1,300 conservative Christian radio and television ministries and stations.

Armstrong said the impetus came from the Jim Bakker-PTL sex-and-money scandals, Oral Roberts’ deadline plea for $8 million on ground that God would claim his life and plans by Rep. J. J. Pickle (D-Tex.) to examine laws that exempt religious organizations from federal income taxes.

It is still uncertain, however, whether an ethics and accountability code recently drafted by the National Religious Broadcasters will satisfy all concerned.

Might Be Reluctant

For example, the Religious Broadcasters board has asked the 9-year-old Evangelical Council for Financial Accountability to administer their monitoring program, but Council President Arthur C. Borden suggested in an interview this week that the council board might be reluctant to manage a code that he said is less stringent than the council’s own auditing requirements.

“I can’t speak for the board, but I don’t see how we could have two sets of standards,” Borden said.

The council sets financial reporting standards for 400 evangelical ministries, including more than 50 that belong to the broadcasting organization, and monitors their compliance. The council is headquartered in Washington.

The broadcasters’ new code requires an independent audit and an audit review in alternate years for ministries that receive at least $500,000 a year in contributions from broadcast solicitation. Ministries with annual donations of less than half a million dollars would have to provide only an unaudited annual financial statement. In both cases, all the salaries and benefits received by the top ministry officials are to be listed and the statements “made available for public inspection,” Armstrong said.

Audits Every Year

Borden said the Evangelical Council requires audits every year of members who bring in $500,000 yearly in total income--not just in donations. Ministries under $500,000 in income may submit audits every other year, with the less comprehensive audit reviews in alternate years.

While the council “is willing to work with the National Religious Broadcasters in any way possible,” Borden said the council “wants to avoid confusion in the minds of the public” between the two groups. The council’s board will consider the proposal Oct. 16-18 at Arrowhead Springs in the San Bernardino Mountains.

The Religious Broadcasters general membership will have to approve the proposed change in the organization’s bylaws that stipulate that any nonprofit member (about 700 ministries out of total membership of 1,300) must submit to the new reporting rules in order to be a member. That vote will come on Feb. 3, the last day of the 45th annual convention in Washington.

The change has received support at the board level. In a mail vote that concluded Sept. 1, directors favored the new rules 50 to 15. Board members meeting in Chicago on Sept. 11 also approved the final draft on a 30-9 vote.

Next weekend, the organization hopes to announce the members of its Ethics and Financial Integrity Commission, the body that would make the decisions on whether to accept or reject members.

Armstrong indicated that some members may balk at the new rules.

“An independent audit is a concept that is foreign to some of our people. Most of them came from seminaries and Bible schools with no courses on finances. When they started out, they were mom-and-pop operations,” Armstrong said.

Meanwhile, Pickle, chairman of the oversight subcommittee of the House Ways and Means Committee, has scheduled a hearing Oct. 6 to review tax exempt provisions in the federal tax code, especially as it applies to television ministries. Tentatively scheduled to testify are representatives of the Treasury Department, the Internal Revenue Service and 11 television ministries, among others, said Dave Mason, an aide to Pickle.

“Basically, it’s an examination of how the law is applied and how the ministries interpret the tax codes,” Mason said. Scheduling problems are expected to limit the hearing to one day, he said.

‘No Expectation’

“At this point, there is no expectation of any legislation resulting from the hearing,” Mason said.

“I haven’t heard anyone who said they wouldn’t meet with Pickle’s committee. We want a chance to tell our story--that 99% of the ministries are honest,” Armstrong said.

“A year ago, that wouldn’t have been the case. People would have been accusing Congress of persecuting religion,” he said.

Nevertheless, the public demand for accountability should continue to benefit both their organizations, Armstrong and Borden agreed.