FCC Reviewing Trinity’s Minority Subsidiary : Television: Offshoot of evangelist Paul Crouch’s network is called ‘a sham entity’ by challengers.

The Federal Communications Commission has begun an inquiry into Trinity Broadcasting Network to determine whether a subsidiary of the worldwide Christian programming service is a bona fide minority organization or one controlled by Trinity founder and president Paul F. Crouch, officials said.

Trinity has the right to hold 14 full-power TV stations--two more than networks such as CBS and NBC are allowed--if there is bona fide minority ownership and control of the subsidiary, National Minority TV Inc.

In Tustin, where Trinity is based, network officials referred all comment to their Washington attorney, Colby M. May. In a telephone interview last week, May said that Trinity intends to provide “open and candid” answers to the commission and that “if they don’t like us, they can tell us.”

A letter from the FCC dated Sept. 13 asked 27 detailed questions about the structure of National Minority and its relations with Trinity and Crouch.

Barbara A. Kreisman, chief of the video services division of the FCC’s Mass Media Bureau, asked Trinity to supply answers, supported by sworn affidavits, within 20 days.

Kreisman’s assistant, Stephen F. Sewell, confirmed the inquiry earlier this week, calling it “a normal part of the commission’s processes.”

He said it does not represent any shift in commission policy or philosophy.

But Andrew Schwartzman, head of the Media Access Project, a Washington-based watchdog group, called the FCC’s action anything but normal.

It is “most unusual that they initiated an investigation,” he said.

Trinity’s attorney confirmed that he could find no record of any formal inquiries regarding similar minority ownership issues in FCC files. May noted that many of the same issues were raised four years ago in a Los Angeles Times series on Trinity and that no FCC action was taken afterward.

The FCC’s Sewell would not comment on the specifics of the Trinity inquiry but did say it has been general policy in the past that if the panel determines that an erroneous presentation or “abuse of process” has taken place, the commission “fashions remedies appropriate to the violations, if any”--including the loss of existing licenses.

The FCC’s letter was prompted by a challenge to National Minority’s purchase of TV station WTGI in Wilmington, Del., a bankrupt commercial UHF outlet that serves the Philadelphia market.

The challenging group, called the Ethnic Programming Legal Defense Fund, represents programmers from the Italian, Greek, Polish, Ukrainian, Indian and Asian communities, as well as Latino and black groups.

In its petition to the FCC, the challengers--who were previously given free air time on the station--characterize National Minority TV as “a sham entity” and “a transparent minority front.”

In its response to the challenge, National Minority TV’s attorney argued in a brief that the sham allegation is not only false but “ironic,” because the company “employs three minorities on a staff of 7 in a television market in the Pacific Northwest without large numbers of minorities.”

The fight over control of the station has already been the subject of an article in the magazine Christianity Today, which described Trinity as “the world’s largest Christian television network.”

According to a recent Arbitron survey, Trinity is the most-watched religious TV service in the United States, reaching an average of 714,600 households per week in the nation’s 50 largest viewing markets. Many of Trinity’s stations and affiliates are in smaller U.S. cities.

Trinity has a book value of $150 million, according to figures submitted to the Internal Revenue Service, and a market value estimated by Trinity at $500 million.

Through Crouch family members, programming and financial arrangements and various companies--including at least one other minority company--Trinity controls more than 200 TV stations around the world, including Europe, Africa, South America, Central America and the Caribbean.

However, most of the stations, including the flagship KTBN-Channel 40 in Tustin, are in the United States.

Trinity, with National Minority TV, controls 14 commercial stations in this country, the maximum permitted by law, as well as three educational stations, which are not limited.

In the challenge, attorneys David Honig and Eduardo Pena allege that National Minority TV is “cynically and brazenly used by (Trinity) to acquire and control more than 12 full-power television stations.”

Honig is communications counsel for the National Assn. for the Advancement of Colored People; Pena is chief communications counsel for the League of United Latin American Citizens.

While it has the same mailing address and telephone number as Trinity, National Minority’s brief says the company “hires and fires its own employees, has its own employee policies, and has its own insurance. It files its own tax returns. It pays its own bills.”

In addition to expanded ownership limits, any broadcast properties sold to minority owners also receive favorable federal tax breaks.

The stated aim of Congress in enacting both provisions was to provide the public with a “diversity of viewpoints” on the dial.

Programming on the two stations owned by National Minority in Texas and Oregon is supplied by Trinity, a 24-hour-a-day Christian service. African-American and Latino evangelists appear on a small percentage of Trinity’s schedule.

In its brief, National Minority TV says the FCC does not require a “minority-owned company or organization to provide any specific kind of programming” to quality for the expanded ownership limits.

The FCC has asked for confirmation that National Minority is set up as a nonprofit corporation, with no stock. Money for the WTGI purchases, as for the two earlier stations, comes in the form of loans from Trinity.

The three listed National Minority directors--who receive no compensation--are Crouch, its president, who is white; P. Jane Duff, Crouch’s salaried assistant, who is African-American, and Anaheim evangelist Phil Aguilar, who is Latino. Aguilar is a frequent guest on Crouch’s “Praise the Lord” talk show, and his Set Free Ministries is supported by Trinity.

In its brief, National Minority argues that the FCC requires nothing more than that minority board members have enough votes to control the organization.

In the letter, the FCC also asked for confirmation of a published comment by Aguilar that he is merely “a figurehead” on the National Minority board, and for an explanation of Duff’s duties at Trinity and National Minority TV.

Jan Crouch, Paul Crouch’s wife and co-host and a Trinity board member, has announced plans for Aguilar to establish one of his Set Free Ministry ranches on WTGI property in Delaware.

Duff’s son is Trinity’s chief of security, and her husband has been on several Trinity boards.

The FCC letter also requests details regarding the fact that four of National Minority’s five officers are Trinity employees.

In 1987, FCC staff attorney Alan Glasser said that Duff’s employee status with Trinity was “a minor thing” and that National Minority TV’s structure was “consistent with the policy” of providing a diversity of viewpoints.