Falwell: Ministries Must Police Selves : Evangelist, IRS Chief Tell Congress About Problems of Control

The Internal Revenue Service said Tuesday that it lacks authority to police the tax-exempt status of churches, and the Rev. Jerry Falwell said the PTL sex scandal has aroused such public concern that television ministers will have to police themselves.

“The arrogance we have all been guilty of in the past is over,” Falwell told a congressional hearing called in the aftermath of the sex-and-payoff scandal in the PTL ministry. “We are all naked before the public now, and those (ministers) who deserve to survive, will.”

The Lynchburg, Va., evangelist, who presides over a $100-million-a-year ministry built around the “Old Time Gospel Hour” and has been serving temporarily as head of PTL, said a new code of ethics being developed by National Religious Broadcasters will help to assure contributors that their money is not being squandered.

Vote With Checkbooks

“People vote with their checkbooks,” he said, suggesting that contributors would be influenced by assurances that the minister soliciting their donations had agreed to make full financial disclosure.

The Rev. Ben Armstrong, executive director of National Religious Broadcasters, a 1,300-member group, said the association’s proposed “Ethical and Financial Integrity Commission” will require members to disclose all salaries and other finances, to forgo hiring relatives, to make their fund-raising appeals realistic and to guarantee that donations will be used for the intended purposes.

Rep. J. J. Pickle (D-Tex.) called the hearing before his House Ways and Means oversight subcommittee to find out if there is widespread abuse of the tax-exempt status of churches and religious organizations, especially those heavily involved in television.

The session was prompted by disclosures that Jim Bakker, the defrocked head of PTL, received millions of dollars in salaries from the ministry, that PTL had never paid taxes on nonreligious enterprises such as its amusement park and that some religious organizations may be using contributions for political purposes.

Lawrence B. Gibbs, the IRS commissioner, said the agency has no evidence of widespread abuse by religious organizations. About 25 of the nation’s estimated 400,000 churches are being audited, he said.

Tax Audits Restricted

Gibbs added, however, that the law leans so far to avoid excessive government interference in religion that the IRS has no way of knowing if some ministries are cheating.

The Rev. Robert Schuller, head of the Crystal Cathedral in Garden Grove and host of the weekly “Hour of Power” television broadcast, said Tuesday in Orange County that he decided not to appear at the hearings after initially agreeing to testify.

In a 15-page letter to Pickle, Schuller wrote that the congregation, which is affiliated with the Reformed Church in America, “has reservations about the climate in which these hearings have been scheduled” and that “the church is simply not comfortable with the notion of my appearing on its behalf . . . because most of the witnesses that you have invited are not members of a mainline denomination.”