Category: Francis Chan

Johnnie Moore’s Gospel for Asia Evasive Maneuvers

Yesterday, I posted a link to a CBC radio documentary about Gospel for Asia’s use of Canadian funds. In this program by Angela MacIvor, PR guru Johnnie Moore was interviewed and made some dubious claims. I take one of them up today. I’ll examine the others in future posts.

During the interview with Moore, MacIvor asked

Can you explain how it’s possible in a period between 2007-2014, GFA reported to the Canadian Revenue Agency that nearly $94-million left Canada and went to India during that time period but GFA reported to the Indian government that zero dollars went to India?

Moore gave a truly extraordinary answer:

I contest that those statistics are factual. The organization has always contested that that is a factual characterization of that and not to mention the organization doesn’t exclusively operate in India. They operate, their partner, they operate in 20 other countries around the world as well.

This issue was one of the earliest matters I researched regarding GFA. In June 2015, I asked former GFA COO David Carroll why funds listed in Canada as going to India didn’t show up as arriving from Canada in Indian documents. He told me:

The Canadian funds were combined with U.S. funds by our auditor in India for various accounting reasons. There is no requirement that they be reported separately.

However, in the Indian reports, funds were listed as originating from other nations, such as Australia, Germany and the UK. According to Indian regulations and contrary to Carroll’s claim, the national source of the funds has to be listed. As noted by MacIvor, for an 8 year period, it appeared Canada had not sent funds when in fact, almost $94-million had been donated specifically for India.

I want to make it clear that Moore’s mention of the other nations where GFA works is irrelevant. The Canadian branch of GFA specifically said in government reports (see this post for images of those reports) the money was being sent to India. This information must be reported accurately. If GFA Canada wanted to send it somewhere else, then some other nation would have been listed. Moore’s statement about other nations was a distraction.

In response to what appeared to be gaslighting from Moore, MacIvor followed up by asked if GFA wants the public to ignore those public reports. Moore’s answer was stunning:

I am not saying you shouldn’t look at those. People ought to have the humility to ask themselves a more important question which is: What is it that I might not know about this? What is the information that I might not have? Or the information that might not be available in the public domain? And I think there are vast gaps between the two pieces of information.

Humility? It is the height of arrogance for Johnnie Moore to accuse donors, former staff of GFA, and members of the public of lacking humility. Since 2015, hundreds of people have been asking GFA for answers to questions about their financial practices only to be met with silence or evasion. When I asked these exact questions (what don’t I know? what can make this make sense?), all I got was silence and name-calling. When a federal judge wanted answers to questions like this, all he got was stone-walling from GFA. I wish the reporter would have asked Johnnie Moore about the sanctions Judge Timothy Brooks imposed on GFA for failure to respond to questions about financial information during the fraud lawsuit brought by  Garland and Phyllis Murphy.

Then Moore dodged the last question posed by MacIvor when she rightfully asked for the information we mere mortals don’t have. Moore’s reply?

Yeah, first of all, that’s a question for the Believers Eastern Church in India and around the world. That’s a question that needs to be asked of them.

How convenient. K.P. Yohannan isn’t available, so they bring in Moore from D.C. to speak for Yohannan on GFA matters, but when Moore turns the attention to Believers’ Church, all of sudden he can’t speak for Yohannan.

Moore got away without answering the questions. So Moore chides the public for failure to understand something he refuses to disclose. The appeal to Believers Church is a disgusting dodge. Not only is Yohannan the head of the church, but GFA in Canada and the U.S. is responsible for how donor funds are spent. GFA needs to know why the funds they sent to India didn’t show up in records there. It is obvious GFA knows or else they would just as concerned about it (where is our money?).

There are two other issues I want to take up from this interview. First, what does it mean that all the funds given to “the field” went to the field? Second, what about those hospitals in India? Moore was asked about that and misrepresented the situation. More to come in future posts…

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 8

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 eighth compliance issue:

8. Use of funds restricted for the field for other purposes.

On June 3, ECFA discussed GFA’s claim that 100 percent of field funds are sent and used in the field. GFA staff confirmed that this was accurate. On August 24, ECFA was informed that GFA India made a gift to GFA of $19,778,613 in 2013 to complete GFA’s new office. On August 27, GFA’s staff confirmed that the funds relating to this donation were originally received by GFA as gifts restricted for the field and GFA transferred to field partners to fulfill donor restrictions.

Two important issues are raised:
A. Reallocating gifts donated for field purposes and using them to pay for headquarters construction appears to be a violation of ECFA’s Standards 7.2. GFA staff stated in a recorded GFA staff meeting that you approached the field partner and explained that GFA could borrow the funds in the U.S., at less than desirable terms, for the headquarters construction. However, a gift from the field partner, in lieu of GFA borrowing the funds, would allow GFA to complete the new headquarters and thereby save interest. Therefore, GFA would be able to send more money to the field in future years.

ECFA believes that the potential savings resulting from the GFA India gift is an inadequate basis to reallocate gifts donated for field purposes.

B. Reallocating gifts donated for field purposes contradicts GFA’s claim that 100 percent of funds are sent to the field. In fact, a significant amount of donations restricted for the field made a circuitous trip back to GFA and were used for the headquarters construction, as though they had never gone to the field. This appears to be a violation of Standard 7.1.

In a GFA staff meeting, GFA indicated the field partner took out a loan to cover the use of the $19,778,613 gift and GFA staff confirmed on August 27 that India-generated income was used to repay the loan. Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of the $19,778,613 reallocation of donor-restricted gifts.

The lawsuit settlement between Garland and Phyliss Murphy and GFA included this agreement:

The Parties also mutually stipulate that all donations designated for use in the field were ultimately sent to the field.

Some, including GFA in their promotional material, have portrayed this as an admission that they did no wrong with donated funds. However, this is not the case. GFA did use donor funds in an elaborate scheme to help fund their corporate headquarters in Wills Point, TX. The donations were solicited to help needy people in India and were originally sent to “the field” but then sent back from “the field” to GFA in Texas. The ECFA letter outlines the circuitous route of those funds.

Originally, GFA leaders told staff that an anonymous donors gave the $20-million to complete the construction of the Wills Point headquarters. Then, in a staff meeting (that I first revealed on this blog), Yohannan and David Carroll disclosed to the staff that a field partner under the authority of Believers’ Church gave the money to GFA in the U.S. In that staff meeting, the staff were not told that the funds were originally given by donors.

GFA was so worried about the truth coming out about this point in the ECFA letter that they threatened to sue my former blog host, Patheos, to remove the staff meeting audio.  GFA is a nonprofit organization which requires a certain transparency. They claim to maintain financial integrity but threatened to sue to attempt to cover up aspects of their financing concerning their headquarters.

Thus, one of the key reasons GFA lost their membership in ECFA was reallocating field funds back to headquarters. So the funds were sent to the fields, but they didn’t stay there. If the Murphy suit had gone to trial, there is no doubt in my mind that the Wills Point headquarters transaction would have been a central component of the plaintiffs case.

Next: GFA’s financial statements presentation of restricted funds.

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.

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.