Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 7

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the seventh compliance issue:

7. GFA’s financial statements do not appropriately report transactions with foreign partners.

During our review on June 3, GFA staff indicated that funds transferred to GFA India were actually transferred to a number of related entities instead of the single entity reflected in the 2013 audited financial statements. Additionally, on August 24 we learned that GFA received a $19,778,613 donation from GFA India, which was classified as a related party elsewhere on the 2013 audited financial statements (also see #8 below).

On August 27, GFA staff confirmed that this donation was neither disclosed in the footnotes of the 2013 financial statements as a related-party transaction nor to the GFA board of directors. This inconsistency within the financial statements and lack of disclosure to the GFA board of directors about a significant related-party transaction appears to violate ECFA Standards 2, 3, and 6. On July 20, ECFA was informed that GFA engaged a new audit firm and they are in the process of reviewing related-party transactions.

This is one of several problems related to the nearly $20-million in donations which was sent to “the field” but then sent back to Wills Point, TX to complete the GFA headquarters complex. Apparently, GFA leadership tried to obscure this transfer of funds from their board and auditors. It has never been made clear to the public whether or not the auditors (Bland Garvey) knew the full circumstances of this transaction.

In the first paragraph, ECFA refers to the fact that GFA sends funds to multiple shell organizations in India. These organizations are incorporated as charities there with Yohannan and his family in control. However, they have no other purpose but to funnel funds to Believers’ Church.

This point is a reminder that GFA has not released audited financial statements to the public since 2013. Actually, they did not release that statement willingly. I requested it and published it in stages to demonstrate the problems with this “related party transaction.”

 

Next: Use of funds restricted for the field for other purposes.

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 6

After about a month break, I am resuming this series.

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the sixth compliance issue:

6. GFA solicits funds for narrower purposes than the eventual expenditure of the funds.

During ECFA’s review on August 12, GFA staff provided a document to demonstrate the flow of funds from GFA to field partners. ECFA learned that donor-restricted donations are appropriately tracked by particular revenue classifications. However, we also discovered, and it was confirmed by GFA staff, that the disbursement of the gifts are tracked in much broader categories. For example, donations were received and tracked for 38 different specific items including kerosene lanterns, bio sand filters, chickens, manual sewing machines, blankets, bicycle rickshaws, and others, but related expenses were only tracked as “community development.” In other words, donations were raised for 38 specific items, with the donations pooled for expenditure purposes instead of expending them specifically for the purposes raised.

ECFA did not find any evidence that donors to the 38 different giving categories had awareness that their gifts were grouped and used in a broader category than the specific categories in which the gifts were raised. ECFA’s staff raised concerns regarding GFA’s compliance with ECFA Standard 4, 7.1, and 7.2 in raising funds for a particular purpose but then failing to document the actual use of those funds by the particular donor-restricted purpose.

Subsequent to this conversation, on August 16, GFA staff indicated that GFA field partners will begin tracking expenditures by specific item accounts to provide adequate transparency as to the use of designated funds.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, that gifts solicited for very specific purposes were not being expended with the same specificity as the gifts were raised.

GFA led donors to believe their funds had been spent for specific items but there was no way to know if such intent had been followed since there was no documentation of that use. This policy had not been approved by the board. However, after this the board would have been alerted via the letter.

Francis Chan was on the GFA board by this time and had reassured people that he had sent in personal auditors to make sure funds were being spent as intended. Here is a May 15, 2015 email from his organization Crazy Love to me:

He has even gone to the lengths of sending two different auditors/accountants to research their financial practices. Both have come back with glowing reports.

His auditors/accountants missed a whole bunch of violations of ECFA standards. Chan continues to use this story. However, we know that GFA was kicked out of ECFA in October for numerous violations. GFA promised that they would reapply for ECFA membership which they have not done. GFA has not released audited financial statements. They have not disclosed to donors that their charity registration in India has been revoked.

Next: GFA’s financial statements do not appropriately report transactions with foreign partners.

James MacDonald Responds to Disqualification Decision

Last Sunday, the elders of Harvest Bible Chapel announced that they had found former pastor and church founder James MacDonald to be biblically disqualified for pastoral ministry.  Today, MacDonald posted what appears to be a response to that announcement on his Facebook page.

MacDonald begins with a vague reference his “former church”:

I trust this timing finds you well in the Lord and growing in your awareness of how good He truly is. Our efforts to work through existing channels in our former church have reached an unsuccessful end, leading to this release of words we have long sought to express.

MacDonald addresses various concerns raised by Harvest’s weekend statement. Specifically, he confesses “sinful patterns of fleshly anger and self pity that wounded co-workers and others.” He adds that his decisions involving the lawsuit against Julie Roys, two former elders and their wives, his media ministry and Harvest Bible Fellowship were “regrettable.”

In the end, however, he continues to contest the statements from Harvest and remains in arbitration.

Decisions by the current Elder/staff, along with inaccurate announcements and recent public condemnation, signaled clearly the timing to communicate our message directly. With sadness we accept that no face-to-face confession or truth-advancing interaction will be forthcoming.

The above matters are now in Christian arbitration where impartial believers will hear and give a written, objective ruling. As we cannot give specifics, we are trusting the Lord for truth to be revealed in His time, and we covet your prayers.

Despite the words of confession and findings of HBC, it appears MacDonald is gearing up for a return to ministry of some kind.

After waiting many months in hope of a pathway toward restoration, we have been welcomed into the congregation of New Life Covenant Church in Humboldt Park, Chicago. A multi-ethnic church under Pastor Wilfredo DeJesus, New Life has embraced us in love, offering us a place to serve and the beginnings of healing community.

In a recent Naples Daily News article, I was quoted as saying that James MacDonald would be back in the ministry saddle.  That interview was conducted in May. It is not that I think disqualified pastors should go back into the pulpit. I don’t; but this is the pattern that has become well traveled.

Gospel for Asia Update: First Lawsuit Settlements Checks Go Out; Foot Washing for the Metropolitan; Still No Audited Financial Statement

Gospel for Asia news:

Refund Checks

During the week of October 28, former donors to Gospel for Asia received the first of two checks as a part of the massive $37 million fraud lawsuit settlement. The second check should go out sometime in the first half of next year.

Shortly after receiving their checks, those same donors promptly received a mailing asking for them to re-gift those funds to GFA. One such donor posted a partial photo of his letter.

I heard from nearly a dozen donors who were upset with this tactic. On the other hand, because GFA continues to do it, I suspect that it is working for them.

Foot Washing Up

According to a witness to this scene, it is customary for people of a lower caste to wash the feet of visitors of a higher caste. Apparently, the Metropolitan, aka Moran Mor Athanasius Yohan I, aka K.P. Yohannan is of a higher caste.

I asked the witness to this if Yohannan returned the gesture but according to this informant, he did not.

Audited Financial Statement and Charity Registration

Gospel for Asia continues to solicit funds from former, current, and new donors. However, they have not released an audited financial statement since 2013. They have not disclosed to donors that their field partners (Believers Easter Church and Ayana Charitable Trust — formerly Gospel for Asia India) had their charity registrations revoked in 2017. This means those two field partners cannot receive charitable donations from outside of India.  Gospel for Asia has never disclosed how American donations are getting to needy people in India. Given GFA’s history, donors should demand an answer to this question.

I am aware that there are other charitable shell organizations in India which GFA-USA can send money to. However, they have no web presence or track record, there is no way to examine their practices. There is no way for a donor to know if they are reliable or are spending funds according to good practices or donor intent. GFA refuses to release audited financial statements. They are not required to file IRS 990 forms since they are classified (inaccurately in my opinion) as a fraternal/religious organization.

Since GFA was removed from the Evangelical Council for Financial Accountability for violating financial management standards, the limited oversight involved in that membership is now absent. There is no transparency for donors. Donors should ask themselves why an organization that claims to have nothing to hide hides everything.

Gordon Allport on the Program of the Demagogue

In 1949, Leo Lowenthal and Norbert Guterman wrote a book titled Prophets of Deceit. In his 1954 book The Nature of Prejudice, personality psychologist Gordon Allport summarized Lowenthal’s and Guterman’s findings into a section he called “The Program of the Demagogue.”

If you have ever been able to get through a Donald Trump rally, you will recognize the points Allport summarized. It is as if Trump is reading from a script. Here is the excerpt from 1958 version of The Nature of Prejudice (p. 389-390).*

The Program of the Demagogue

In their volume Prophets of Deceit, Lowenthal and Guterman have analyzed a large number of similar speeches and tracts. There is a sameness of protest and hatred in all of them. What the demagogue is saying seems to boil down to the following points. 2

You’ve been cheated. Your social position is insecure because of the machinations of Jews, New Dealers, communists, and other agents of change. Sincere and plain folk like us are always dupes. We must do something.

There is widespread conspiracy against us. It is being engineered by devils — by Wall Street, Jewish bankers, internationalists, the State Department. We must do something.

The conspirators are sexually corrupt too. They “roll in wealth, bathe in liquor, surround themselves with the seduced daughters of America.” “Oriental erotics debauch youth for the purpose of wrecking gentile morale.” Aliens enjoy all the forbidden fruit.

Our present government is corrupt. The two-party system is a sham Democracy is a “trick word.” “Liberalism is anarchy.” Civil liberties are “silly liberties.” We cannot be universalistic in our ethics. We must look out for ourselves

We can’t trust the foreigners. Internationalism is a threat. But we can’t trust our own government either. Alien termites bore within. Washington is a “Bolshevik rat’s nest.”

Our enemies are low animals: reptiles, insects, germs, sub-human. Extermination is called for; we must do something.

There is no middle ground. The world is divided. Those who are not for us are against us. It is a war between haves and have-nots; between true Americans and “foreigners.” “The Talmudic philosophy of Europe- Asia-Africa and Nudeal is directly opposite that of Christian.”

There must be no polluting of blood. We must keep racially pure and elite. Vile contamination comes from dealing at all with the moral lepers of liberalism.

But with disaster around the corner what can you do? Poor, simple, sincere people need a leader. Behold I am he. It isn’t the American nation that is wrong, it is the corrupt men in office. Change the personnel. I am available. I’ll change the whole smelly mess. You’ll have a happier and safe life.

The situation is too urgent to permit the luxury of thought. Just give me your money, and I’ll tell you later what to do. Everybody is against me . I am your martyr. The press, the Jews, the stinking bureaucrats are trying to shut me up. Enemies plot against my life, but God will protect me. I’ll lead you. And I’ll ignite the public mind everywhere. And I’ll liquidate millions of bureaucrats and Jews.

Maybe we’ll march on Washington . . . 

This is the playbook of the Trump GOP. He and Fox News have convinced his base that they have been cheated and threatened by immigrants and the Democrats. Immigrants are devalued and debased. They are the problem. He will stop the invasion. The country was a disaster before he came along and we needed him to make America great again. He alone can save us. He alone can drain the swamp. We must stick together against the attacks of a liberal press, the enemy of the people. They are godless but God is on my side.

Allport said in the 1950s that the aim of this kind of demagogue is “a totalitarian revolution following the pattern of fascism.” With hopefulness, he added:

American democracy has a remarkable resiliency, for it has with stood such demagogy for decades, in fact, since before the founding of the nation. But today, the aggravating of strains, the cultural lag (i.e., the failure of social skills to keep pace with technological) have made the appeal greater than ever before. It is not a movement that is born overnight. Its seeds are always present, and its growth may be gradual and imperceptible up to a point, and then sudden and alarming. It waxes and wanes with the rise and fall of particular demagogues. But sometimes its roots gain a firm hold in congressional committees, in local and state political groups, in certain newspapers, and among certain radio commentators.

On the whole, the democratic tradition seems still in the ascendancy. Each fascistic movement generates a strong counter-current. Yet the mounting of social strain and the acceleration of social change in our day create a precarious condition. The question is whether realistic diagnoses and policies can be evolved to ameliorate domestic and international ills and to improve men’s outlook before panic and fear drive them in larger numbers to embrace demagogic nostrums.

Allport’s question haunts me. I think he has the situation diagnosed but I don’t believe our psychology or our policies have kept up with the pace of social and technological change today. Panic and fear drove a sufficient number of presidential voters to elect a spectacularly ill-equipped reality television actor and businessman of questionable success. Panic and fear appear to be driving a defense of Trump’s abuse of power based on something other than reality. Evangelical placation of everything Trump does is almost certainly driven by panic and fear. Surely they are not walking by faith.

I hope our democratic institutions will survive the panic and fear whipped up by Trump. The social strain is here, accelerated social change is here and I believe we are in a precarious condition.  Here’s hoping that our democratic tradition remains the ascendant attitude with enough of us to thwart The Program of the Demagogue.