Pastor Mac Hammond of the Living Word Christian Center (LWCC) "will address many of the recent articles and allegations circulated in the media during the services this weekend."
Normally, his church offers a live streaming webcast — made famous as the source of video of Michele Bachmann's appearance there. I was unable to access a feed from Saturday evening's service. It may be they decided not to broadcast it, although I saw a comment from someone who claimed to have seen it. Here's a comment from a believer who attended live.
I'm considering showing up for Sunday morning services.
Meanwhile, I've been perusing the 166-page offering memorandum to participate in a $25 million financing package for the church. I am not posting the PDF here, but will make reference to some of the information it contains. [For more, see the foot of this post.]
In this post, I'm calling out a few items about LWCC's management that have not been part of the other reports I've read. In addition to MinnMon's original stories, here's a great deal more over at DumpBachmann,with links to still other reports — and because this story continues to develop, I'm just linking to their main page. The Star Tribune has a lengthy profile in Sunday's edition.
I'm not certain I was the first blogger to write about Hammond, but I've known about him for years. I know how he acquired and sold his former house, and the set of transactions confirms that the questionable complexity of Hammond's current financial dealings are nothing new.
Breaking faith isn't the same as breaking laws. I'm sure Hammond believes he's done neither.
Unless otherwise credited, the information below is based on the document obtained by MinnMon and released by Citizens for Responsibility in Washington (CREW).
Oversight of the LWCC "temporal affairs."
Seven Trustees, all ministers, oversee this roughly $35 million organization, including Hammond and his wife Lynne, and another pastoral couple who run Living Word North in Brainerd and minister through reality TV. The other three — located in Arlington and Crowley, Texas, and New Orleans — also operate prosperity gospel ministries.
This Board was appointed by Hammond and approved by the Congregation. The memorandum says they have "significant educational and business experience," but unlike most boards, which strive for diverse backgrounds, this group specializes in the same business, conducted in a very similar fashion. To an outsider, this board — which would approve loans, compensation and other operations that benefit Hammond — appears under Hammond's control. They also all operate closely held family businesses where husband, wife and other relatives appear to harvest the tithes draw compensation.
None of the ministries I examined in connection with this study offer any basic governance information on their web sites, aside from bios of their pastors. Nor have I found information on the other organizations that would indicate whether Board membership is overlapping among them.
The Sunday Strib updates the Board information, but apparently doesn't include a complete list:
Hammond selected an early board of directors. They nominate new members. Board members include Mac and Lynne Hammond, Kenneth Copeland's son, pastors of Living Word's Duluth satellite and Texas minister Dennis Burke. They set salaries for the Hammonds (Lynne and sons James and John and daughter Lucyhrt work for the church) by comparing compensation of pastors in all denominations, as well as founders of similarly sized nonprofits and for-profits.
Copeland's ministry, like Hammond's, seems fond of jets. Copeland was once Oral Roberts' pilot. Dennis Burke's home page features a more modest plane. 
Sources of Funds. Most members of the church make tithes and offerings on a regular basis. The prospectus reports that in 2004, the average weekly amount, per adult and child attendee, was $57.63. In 2003, the average weekly gift per person was $61.86.
Tithes and offerings are the largest source of income, but the church also derives income from sales of products such as books, tapes and internet services and tuition from its schools. In 2005, contributions were projected at about $18 million, with "other income" at $10 million. Also during this period, the church conducted a $30 million capital campaign, which entailed multi-year pledges. In 2005, it projected to be able to spend about $6 million from these restricted capital funds.(The $25 million mortgage is additional.)
Selected expenditures. MinnMon and others have already reported on the sweetheart arrangement that allows the flying pastor to own aircraft he purchased with the church's help, which he leases back to the church for nearly $900,000 a year, far in excess of his loan payments. The church pays all operating and storage costs for the two planes.
According to the Strib, Hammond has a Lexus and Porsche registered in his name. The church paid auto leasing fees of $28 thousand in 2004, a level sufficient to pay for cars of that type and then some. However, we don't know how many cars are under lease or who uses them.
The church has loaned Hammond money to buy homes in Minnesota and Florida. (According to the Sunday Strib article, Hammond owns two Destin, Fla., condos worth more than $3 million and a "comfortable but hardly ostentatious Plymouth home, which has lovely landscaping and a pool.") The church also owns a home and more than 500 acres of real estate in the Brainerd area.
The church's primary expenses are for payroll and "program expenses." At the time of the offering, LWCC employed 239 full-time and 99 part-time employees and had budgeted $14.6 million for salaries and benefits and about the same amount for program expenses.
One rationale for the aircraft, besides the pastor's personal travel, is that the church uses them to fly between satellite churches and ferry guest ministers. The Strib says:
Flight plans gathered by Fboweb.com show that Hammond, who flies his plane himself, makes many trips to cities where other prominent Word-Faith ministries are located. But he also uses the jet to travel to his condos.
In my examination of the financials, I didn't focus on the flight expenses. I did note the church spends roughly $1.6 million a year in gifts and honoraria in the years data were available (the Strib says $2.6 million in the most recent year) and nearly $1 million for travel, meals and lodging. Presumably much of this is related to Hammond and his ministerial cohorts visiting each other's churches.
My conclusions. Hammond — or church officials — have issued a public statement that's about the best they can do under the circumstances. It's neither baseless nor persuasive; parts are debatable, as I note below.
One one hand, someone leaked a confidential financial document, and the church has a right to be upset. All the unfavorable allegations related to Hammond's lifestyle and "related party transactions" are based on documents the church prepared and disclosed to its lenders. Some public company boards have let their CEOs get away with more than Hammond has done.
On the other, the documents reveal practices that CREW claims may violate IRS rules governing non-profits. They indicate to me a level of fiduciary oversight and tolerance for self-dealing that would not have been tolerated by any non-profit I have ever served as a board member. That these practices by a religious leader supposedly under the review by other religious leaders makes them more distasteful to some, if not any worse legally.
What LWCC said. Here's the statement [with my comments]:
Living Word Christian Center has a long history of making every effort to conduct the financial affairs of the church with integrity and candor [I'll await the church's more detailed response. Right now, "integrity and candor" could qualify as overstatements.]
It is standard procedure for all appropriate contracts and financial transactions to be reviewed by our law firm (Faegre and Benson), audited by an independent accounting firm (Ernestvedt [sic] and Christensen), and approved by our board. [Though I have no reason to doubt the statement, I don't know what the term "appropriate financial transactions" includes. The accountant's statements in the loan documents expressly state they have "reviewed" the accompanying financial statements, which falls far short of an audit. I've worked with local accounting firms and done dozens of competitive reviews for clients. The Enestvedt and Christensen firm never appeared on our radar. As I've noted above, the board hardly qualifies as independent and shows no sign of particular legal or financial expertise that a non-profit board would normally include.]
Every effort is made, and will continue to be made, to completely comply with and diligently follow all applicable legal standards established by the IRS and the State of Minnesota for the conduct of non-profit organizations. [This is boilerplate language. I'm not impressed that they say they try to follow the law.]
Living Word and those outside professionals involved in the conduct of our financial affairs remain confident any fair review of our dealings will reveal the validity of our effort to consistently be an accountable and honest ministry before God, our congregation, and our community. [It would be interesting to know how much disclosure prior to this was available to the congregation and community, neither of which is represented on the Board. The terms "accountable and honest" don't rule out substantial self-enrichment.]
We can be offended by Hammond, his lifestyle and his brand of tax-exempt, "Jesus wants me to have what I want" Christianity. As taxpayers, we can hope the IRS will verify whether he's following the rules. But the church's members in particular deserve
answers. They are the ones who have to decide whether Hammond's
conduct is unacceptable or fits right in with the prosperity gospel they've all signed up for.
For most, I'm betting it's the latter.
NOTE: This document was obtained unsolicited by Minnesota Monitor, and I got it from a link to Citizens for Responsibility in Washington (CREW) in this MinnMon report. The Marshall Group, who prepared the loan offering, has asked that it be removed from the Web, so I am not reposting the PDF. There's likely a legal difference of opinion whether anyone who was not a recipient of the offering or "its employees, agents or representatives" is obligated to observe the confidentiality of a document that has already been released publicly.
