Gospel for Asia – Page 12 – Warren Throckmorton

Gospel for Asia Told Staff They Can Track Funds but Tells Federal Court They Can't

In a May 14 2015 staff meeting, a Gospel for Asia staffer asked why GFA regularly asked for funds since so much money was just sitting in banks in India. I understand the point of the question. If GFA has millions sitting in banks unspent, then why bother donors for more money? To answer, GFA officials complained that all funds have to be spent on donor designations which can be tracked here and in India. This question and the answer are relevant because in the current RICO lawsuit, GFA defendants are now saying they are having great difficulty tracking down where the U.S. donations are spent. Questions about how funds have been spent are at the center of the federal fraud case brought by Garland and Phyllis Murphy against GFA.

GFA Told to Produce Documents

In a February court order, federal judge Timothy Brooks scolded GFA for insufficient answers to requests from plaintiffs for answers to questions about where funds have been spent. Specifically, Brooks wrote:

Furthermore, despite consistently telling donors for years that 100 percent of donations went for the purposes designated, now attorneys for GFA want to revise history. In the February 28 order, Judge Brooks summarized the discovery process and pointed out that GFA had originally promised to account for specific donations, but then noted that GFA had backed away from that stance (see footnote below).
If GFA now claims they never promised to use donations for designated purposes, they will need to explain this very clear message to staff on May 14, 2015. In that meeting (a link to the audio is below), K.P. Yohannan and David Carroll said donations made for specific items were held until those items could be purchased. Carroll also added that GFA in Asia had reports to verify these expenditures.

GFA Staff Q&A Meeting

In this meeting, GFA founder, CEO, and Metropolitan Bishop of the Believers’ Church K.P. Yohannan, then COO David Carroll, and other leaders

addressed staff questions about controversies just beginning to swirl around GFA. To listen to the entire exchange, click through to the audio. Because GFA has threatened Patheos with legal action on previous occasions, I am hosting the audio elsewhere and will describe it below.
Initially, David Carroll read this question: “We always pray for more funds because we say the ministry could do so much more if we had it. Why is the ministry sitting on so much in India ($94 million per FC-6 reports)?” Carroll explained that the FC-6 reports are not audited financial statements and are required to show what money comes into India. He said GFA-USA has nothing to do with the preparation of the report.
He then said the funds going into India are restricted and have to sit in an account until the use can be fulfilled. He used the example of donations for bicycles. Funds given for bicycles have to sit in an account until they can spend the money on bicycles according to Indian law. Even if an earthquake happens in Nepal and funds are needed, those bicycle funds can’t be used for earthquake relief.
He said the balance in India was about $7 million, not the $94 million claimed by the questioner.
He said, “We cannot spend the money until we can spend it on the project for which it was designated and that’s important.”
Yohannan declared, “Absolutely every designation is fulfilled. If not, the guys who are responsible for it, the guys in India, they go to jail.”
Carroll finished the question by saying:

As a former auditor, I’m always wondering, so did the money that someone gave for a blanket for a cold person in North India, is that sitting somewhere, does somebody know about that blanket that’s given like that amount? And we’ve asked that question of our Asian office and they’ve said, ‘yes, we actually have a report that mirrors your report here.’ So yes, if a blanket was given here but it hasn’t yet been given because it’s warmer there or whatever the reason, then the money is sitting there and able to be accounted for when it goes out.

Why Is It So Hard Now?

When reassuring staff in 2015 that donations were being used as promised, GFA leaders were quite convincing. When addressing discovery in a 2018 RICO case, a federal judge appears to be frustrated with GFA’s inability to do what they promised. These inconsistencies were exposed months after the May 2015 staff meeting.
Later in 2015, the Evangelical Council for Financial Accountability did an investigation which ended with the expulsion of GFA from membership. In their September 2015 report*, the ECFA found that the GFA’s field partners banked foreign contributions for years while local funds went to meet designation from donors. Because of this procedure it was “extremely difficult for GFA to demonstrate that it has exercised appropriate control of the funds” donated by U.S. donors.
David Carroll told staff that GFA’s field partners had $7 million on account. ECFA’s report found the amount to be $186 million at about the time of the staff meeting. From the ECFA report:

Allegations were made that GFA had upwards of $150 million in partner field accounts, far more than necessary to provide appropriate operating reserves. During our visit on June 3, ECFA was informed that GFA field partner cash reserves were approximately $7 million. After ECFA requested detailed documentation of cash balances held by foreign field offices, on June 29, we discovered that GFA’s field partners had $259,437,098 on hand at March 31, 2014 and approximately $186 million in June 2015.

In the ECFA report, GFA acknowledged that solicitations are more specific than expenditures. I wonder if GFA’s attorneys have read this report.

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.

*This report was not made public by the ECFA or GFA, but was released to me by Gayle Erwin, former GFA board member who resigned from the GFA board over GFA’s misconduct.

Gospel for Asia’s Believers’ Church Medical Center Dumps Poor Patient

Gospel for Asia’s field partner in India is Believers’ Church. K.P. Yohannan is founder and CEO of Gospel for Asia and he is Metropolitan Bishop of Believers’ Church. GFA has sent hundreds of millions of U.S. dollars to India to support Believers’ Church and Believers’ Church has built an impressive array of schools and medical centers in India. GFA tells donors in the U.S. that the donations go to spread the gospel and ease the suffering of the poor and needy in India and throughout Asia.

In fact, most of the schools and medical centers often charge market rates and don’t cater to the needy. Case in point is this report from the Deccan Chronicle about a man who had to leave Believers’ Church Medical Center in Kerala because his family couldn’t afford the high fees. From the Deccan Chronicle:

Pillai, who had breathing difficulty due to a neurological deficit, was undergoing treatment at the Believers Church hospital at Thiruvalla. However, he was shifted to the Kottayam medical college hospital on Wednesday as the family could not afford the huge expenses. Salini said that the doctor who administered treatment to her father at the Thiruvalla hospital told her that the MCH will have a full- time ventilator facility.

According to the report, the doctor in charge at K.P. Yohannan’s hospital didn’t bother to call the receiving facility to find out if a ventilator was available. Since there was no ventilator, the poor fellow had to wait in the ambulance for over four hours until a ventilator was available.

The excuse given by Believers Church is telling. The spokeswoman said the receiving hospital had made excuses in the past about not having a ventilator. Apparently, Pillai wasn’t the first patient dumped by Believers’ Church Medical Center on the local public facility. How Jesus-like of Believers’ Church.

For those who have forgotten, recall that GFA promised to regain their membership in the Evangelical Council for Financial Accountability. That promise was made in October 2015 after being kicked out for multiple financial violations. GFA has not regained membership.

GFA’s RICO suit continues on with trial set for 2019.

Gospel for Asia Defendants Must Produce Evidence in RICO Case or Admit They Can't

Admirer kissing the hand of K.P. Yohannan. From his 2017 birthday video.

On November 21, Gospel for Asia CEO K.P. Yohannan and his fellow GFA defendants were dealt a legal setback in federal court when Judge Timothy Brooks ordered them to respond to plaintiffs discovery requests for information. GFA initially argued that plaintiffs had made too many requests. Furthermore, GFA said they couldn’t get answers because GFA doesn’t control the relevant entities in India. Later, GFA argued that those entities (e.g., Believers’ Church) had decided to turn over documentation of how funds were used and hoped to offset the order on that basis. However, Judge Brooks ruled in favor of the plaintiffs.
The background is further explained in the order:

The matter currently before the Court, however, concerns a discovery dispute that has arisen between the parties [the plaintiffs Garland and Phyllis Murphy v. GFA] regarding information central to this case: namely, information regarding where donated monies were sent and for what purposes they were used. As is obvious given the nature of this case, Plaintiffs’ theory of fraud is premised on demonstrating that Defendants and their international partners did not spend the donated money in accordance with their donors’ wishes and, in doing so, violated promises allegedly made to these donors to do exactly that.
In order to demonstrate that these donations were not spent in conformity with these alleged promises, Plaintiffs served two prior sets of discovery on Defendants. Both of these sets, which included interrogatories and, by the Court’s count, at least 75 requests for production, sought to obtain information and documents that would either establish or refute Plaintiffs’ theory about where the donated money went. Given the information provided under seal to the Court and discussed during the September telephone conference, it is clear that Plaintiffs’ prior attempts to discover this crucial information were only partially successful. In short, these interrogatories and requests for production provided a wealth of information that illustrated how much money was collected by Defendants. But, this discovery information did nothing to clear up the confusion as to how this accumulated money was subsequently spent.
As such, Plaintiffs now once again seek answers to the same questions that they have been asking for months: was this donated money diverted to other causes and do Defendants have information or documents that would prove how the money was spent? In an effort to come at the problem from a different angle, however, Plaintiffs now seek to serve on the Defendants what amounts to over 1000 RFAs. While startling upon first read, this sizable number of RFAs consists entirely of the same six RFAs repeated for each of 179 different codes representing different categories of donations (e.g. a code for pigs and a separate code for bicycles).2 Each of these sets of RFAs is accompanied by a Request for Production asking for any documents in the Defendants’ possession that would reflect how this earmarked money was spent.

GFA was initially able to verify how much money they collected but the response to the requests for information did not address where the funds had been spent. Therefore, the Murphys came back with additional requests for information which GFA was hoping to avoid. GFA’s reasons were outlined in the order:

In their Response in Opposition, Defendants object to this proposed set of discovery on several grounds, including the sheer number of requests, the improper nature of these requests given the purpose of Rule 36 of the Federal Rules of Civil Procedure, and the lack of need for these requests now that Defendants’ field partners have recently committed to providing information relevant to Plaintiffs’ inquiries.

Judge Brooks did not agree with these reasons and the rest of the order lays out his justification for the ruling against GFA. Regarding the number of requests, Brooks said the complexity of the case and GFA’s prior inability to get the information justified the plaintiffs requests. He declared their requests to be proper. Furthermore, in light of prior statements by GFA that they had no control over field partners, the discovery order was needed to make sure the facts could be determined.

Can Gospel for Asia Prove Money Was Spent as Promised?

On that question, GFA appears to be claiming two contradictory messages. First, the adamantly claim they are spending all funds as promised. But second, they are telling the judge and plaintiffs that they haven’t got control of the entities spending the money and so they can’t provide proof about how the money is being spent. Judge Brooks appears to be on to this contradiction. On that point, this section of the order by Judge Brooks is key:

Finally, Defendants object to these RFAs because they argue that they have been rendered unnecessary by recent commitments by some of Defendants’ international field partners to provide information related to Plaintiffs’ questions and because they personally do not have control over what their international field partners do. These objections are also unpersuasive to the Court.
As an initial matter, the Court applauds the Defendants for acknowledging and committing to carry out their duty under Rule 26(e) to supplement their prior answers to the interrogatories that were served on them in Plaintiffs’ First and Second Discovery Sets. However, these discovery devices are not mutually exclusive. See, e.g., 88 Charles Alan Wright & Arthur R. Miller, Fed. Practice & Procedure Civ. § 2253 (3d ed. 2017) (“a party need not elect between Rule 36 and the other rules and it may use the various devices at the same time.”). Therefore, the fact that Defendants might now have the ability to provide a supplemented answer to the previously served interrogatories does not alter the Court’s view that these RFAs are proper given the information that has been submitted to it by the parties.
Moreover, Defendants contend that the requested information is largely in the hands of third parties over whom Defendants exercise no control. As the Court advised Defendants during the telephone conference, if, after reasonable inquiry, Defendants do not have within their possession information by which they could honestly admit or deny these RFAs, then that is the answer that should be provided. See, e.g., Wright & Miller,
Fed. Practice and Procedure § 2261 (stating that where a party does not know whether the matter it is asked to admit is true or not, it may reply that “it cannot truthfully admit or deny the matter”). If, in fact , it turns out that Defendants are correct that they do not have the means by which to document how their international field partners spent the money, then the replies to Plaintiffs’ RFAs will be very similar and simple-further supporting the Court’s view that this request is not unduly burdensome in light of the nature of this case.

Let that sink in. If GFA cannot “truthfully admit or deny the matter,” then how can GFA make the claim that donated funds are being spent as promised? If GFA’s defendants really can’t document how the field partners spent the money, then their claims to use donated funds in accord with donor intent are unverifiable. To donors and staff, GFA leaders have said they know where it all goes. To Judge Brooks, they have been saying we don’t have the means to document it.
Seems to me that a lot more donors should be asking a lot more questions.

Gospel for Asia's Religious Property Tax Exemption Questioned

WFAA ABC News Dallas tonight dropped a major story about Gospel for Asia. The tax exempt status of the homes on their Wills Point, TX is

being challenged because the homes are not occupied by ministers. According to TX law, the homes of ministers may be exempt and GFA claimed the homes of staff members were housing ministers. However, staff members working on all aspects of their nonprofit live there. It is simply misleading and dishonest to say they are ministers.
Former staffer Tom Sluberski is quoted and some good investigative journalism is reported in this piece. The RICO lawsuits are cited as well. It well worth the time to read it carefully.
Stay tuned for more GFA news coming up.

Category: Gospel for Asia