S.D. Evangelist Offers $52 Million to Buy Scandalized PTL Ministry : Religion: Morris Cerullo has put down $7 million in ‘phase one’ of purchase of Bakker-founded empire.

Morris Cerullo, a faith healer who is head of the San Diego-based Worldwide Evangelism ministry, has offered to buy the assets of the scandal-plagued PTL ministry for $52 million.

PTL, founded by defrocked TV evangelist Jim Bakker, has been in the control of U. S. Bankruptcy Court since June, 1987, two months after Bakker resigned from the ministry following the emergence of a sex-and-money scandal involving former church secretary Jessica Hahn.

Bakker is serving a 45-year federal prison term in Minnesota after his conviction last October on fraud and conspiracy counts.

Cerullo, 58, and his church are best known locally for having owned the El Cortez Hotel in San Diego, where he ran a short-lived evangelism school before selling the property in 1981. Cerullo also proposed a grandiose 200-acre retirement center and religious education center on land the church owned in the Mira Mesa area, but ended up selling the property to home builder Pardee Construction.

PTL Trustee Dennis W. Shedd, an attorney in Columbia, S. C., confirmed Cerullo’s offer, saying the preacher had put $7 million cash in an escrow account in Columbia to cover purchase of the PTL cable TV network and a broadcast production studio, which Shedd referred to as “phase one” of the sale.

Shedd said Cerullo is in the process of securing financing to buy “phase two” of PTL: the 2,200-acre Heritage USA theme park in Ft. Mill, S. C., 15 miles south of Charlotte, N. C. The theme park, which includes a completed 500-room Heritage Grand hotel and another 500-room hotel still under construction, as well as a water slide, shopping mall and miniature railroad, has been closed since September.

Cerullo, who was unavailable for comment Wednesday, intends to resume operation and development of Heritage USA as a religious theme park, Shedd said. Of the park’s 2,200 acres, about 500 are developed. The Heritage USA phase of the sale to Cerullo is expected to close later this year, he said.

Shedd said he will file a motion today with the U.S. Bankruptcy Court in Columbia seeking approval of the offer by Cerullo. A hearing was scheduled at the court this morning to consider a $6.3-million offer for PTL’s cable TV network from evangelist Oral Roberts.

Shedd said the Cerullo offer is “a good deal (for the PTL estate) because it is the only package offer (for all PTL assets) that we have received, and the part of the package allocated to the network is more money than anyone has offered.”

Last year, a Canadian developer offered to buy the Heritage USA theme park, but the deal fell through after it became apparent that he could not obtain clear title to the property. Ownership of the land is disputed by an Indian tribe that has claimed in a lawsuit that the property was illegally taken from them by the U. S. government in the 1800s.

The PTL satellite cable network consists of a leasehold interest in a cable TV satellite controlled by HBO and an “uplink,” or earth-to-satellite transmission facility. The PTL network still operates, carrying other evangelists’ programming, including Cerullo’s, but no longer produces programming of its own, Shedd said.

The PTL network is accessed by 800 cable TV systems across the United States, which in turn can reach 6.5 million households, Shedd said. In court documents, however, HBO has argued that Shedd has no power as trustee to transfer the leasehold interest in the satellite to a new buyer. It was unclear Wednesday whether HBO would dispute the sale of the network to Cerullo.

Cerullo was once a friend to Jim Bakker and appeared on the “Jim and Tammy Show,” the once-popular program hosted by Bakker and his wife. Cerullo was ordained in the Assembly of God Church, the same denomination that defrocked Bakker in 1987 after the Jessica Hahn scandal but is not now affiliated with any particular denomination.

Bakker allegedly had sex with Hahn and then made payments to her to hush up the incident. With the scandal broiling around him and his ministry drowning in financial problems, Bakker turned PTL operations over to preacher Jerry Falwell in April, 1987. Two months later, Falwell placed the ministry in bankruptcy and turned over its financial records to the U. S. Department of Justice.

Cerullo, who grew up in a New Jersey orphanage, directs a ministry that produces videotapes and television programming and which conducts operations in Europe, Canada, Israel and Zimbabwe as well as in the United States. Worldwide Evangelism solicits funds from viewers and church members via direct-mail, telephone and televised appeals.

The evangelist came under fire in the early 1980s when it came to light that trust funds from donors, some of whom were told they would receive lifetime income on their donations, were being invested in second and third trust deeds, a risky kind of mortgage loan.

Cerullo’s Worldwide Evangelism bought the 250-room El Cortez Hotel in 1978 for $6.5 million, but was unsuccessful in making it a religious education and training center. During the two years the training center was open, Cerullo became involved in several disputes with contractors, students, real estate brokers and labor unions.

Cerullo sold the hotel in 1981 to Denver developer Terry Considine, who unsuccessfully proposed it as the site of the San Diego Convention Center, which was ultimately built on Harbor Drive. Considine subsequently sold the landmark to the Grosvenor family, who last year formed a joint venture with Japanese investors to build a $250-million hotel complex.

Times wire services were used in the writing of this story.