K.P. Yohannan – Page 41 – Warren Throckmorton

Reputation Management Consultants Requests Images Removed from Post on Gospel for Asia

Doing some reputation managing of their own, Reputation Management Consults and/or Gospel for Asia requested that my post on their partnership be removed by Patheos due to a claim that I violated their copyright by using images from reports given to GFA. The request came in such a manner that it is not clear exactly who issued the take down notice, but I believe it was RMC. I have posted many GFA images without problem so I suspect RMC was behind it.
Patheos took the post down while I reviewed the complaint, along with Patheos management. We agreed that the images were fair use but have decided not to press the matter at this time. Instead, readers can review the post reposted below. It is important to note that the facts were not contested. Apparently, the images provided more information than these groups wanted out.
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(original 8/31/15 post)
In June 2014, a group of former Gospel for Asia staff members sent a letter to GFA’s board alleging a pattern of unbiblical practices involving top leaders, including founder and CEO K.P. Yohannan. Over time, more staff left GFA and joined the GFA Diaspora group (over 100 now).
As the Diaspora group grew, GFA leaders developed several responses. One strategy was an attempt to disseminate positive information about GFA throughout social media. Another was to hire a company to manipulate Google search results by creating many redundant websites with positive information about GFA. To do this, GFA hired Reputation Management Consultants to create the websites. According to an internal document (see below) the fee set aside for this effort was $70,000 (go to the last line item).

According to former staff, the “Reputation mgmt” line item of $70k was required to pay Reputation Management Consultants for seven months. RMC describes itself as follows:

RMC has innovated new strategies and techniques that repair existing damages, clear your reputation, and safeguards against new attacks, all while doubling as an effective online PR campaign.

Links to the February and March reports to GFA from RMC are here and at the end of the article. It appears that RMC created a bunch of websites with positive stories about GFA to influence the results of Google searches.
RMC March GFA
The goal of the campaign was to “push down” negative information so that it appears “after position 30 in major search engines.”

In addition to an “aggressive linking campaign,” RMC created 18 new websites to promote GFA.

Most of these links go to websites with very little activity beginning in November or December of 2014 and ending in April of this year.
It is possible that the campaign ended early with less than $70 being spent. According to the reports below, RMC planned to take the campaign into April.
As an aside, if anyone reading this wants to give me $70k to create websites and buy domains, I am ready to go. I suspect anyone who has opened accounts or run a blog is amazed that so much money was paid for free social media accounts and sparsely populating a few blogs.
Given the austerity encouraged by GFA’s CEO K.P. Yohannan, it is surprising to see him use donor money to push down negative articles about himself. Perhaps I shouldn’t be surprised; GFA and Believers’ Church in India are suing Google and Facebook in India over what they claim is false information disseminated on those sites.
If pushing down negatives is what GFA is about, then they need to rehire RMC. This article about K.P. Yohannan’s ring is in the top ten on Google.
In his book Touching Godliness, K.P. Yohannan wrote:

Those in authority should never fight for themselves. We need to simply leave it to the Lord to defend us. He will do a much better job in His time and His way than we ever could. In fact, when a leader fights to establish his authority, he actually loses his ability to lead. (p. 189).

The Lord and RMC.
Reputation Management Consultants February report to GFA
Reputation Management Consultants March report to GFA
After this post was published, a reader reminded me of this passage from page 77 of K.P. Yohannan’s book Road to Reality.

Just think of the $70,ooo savings if GFA and Rev. Yohannan would address the Diaspora’s concerns rather than try to push down these issues. In fact, a re-read of Road to Reality in light of the fact that “the field” had to take a $19.8 million loan so that GFA could afford Wills Point might be in order for GFA’s decision makers.

Details of Gospel for Asia's 2014 Loan K.P. Yohannan Said Wouldn't Happen

Recently, I posted audio of Gospel for Asia founder and CEO K.P. Yohannan promising staff that GFA would not take out a loan in order to build the new Wills Point, TX headquarters and living compound. Eventually, Believers’ Church in India (K.P. Yohannan was managing trustee at the time and he is also the Metropolitan Bishop and spiritual leader of the church) gave GFA in the U.S. $19.8 million toward the project. The church had to borrow money to make this donation. Furthermore, I asserted that an $11.5 million loan was taken in 2014 with the money used for the project.
Today, I post evidence for the 2014 loan. Below are images from the 46 page Deed of Trust.

GFA borrowed $11.5 million.

GFA May Have Kept Some Information Back
The agreement was based on the use of Generally Accepted Accounting Principles (GAAP) and pledges that all material statements are correct. This pledge may be in conflict with the audited financial statement for 2013 which failed to disclose that GFA made related party transactions to Believers’ Church, Love India Ministry and Last Hour Ministry.
Furthermore, the bank (City Bank) was not informed that $19.8 million toward the building project came from a loan taken in India by a related party (Believers’ Church). Speaking as a non-accountant, this seems to be a significant and material omission. City Bank did not know that an entity related to GFA had taken a loan in order to provide GFA with funds. If City Bank took the audit at face value, they would have considered that $19.8 million to be a gift with no relationship to GFA anywhere in the world. City Bank might have reconsidered if they knew that an affiliate of GFA (and recipient of millions in U.S. donations) had to take a loan in order to keep the construction project going.
The Bland Garvey 12/31/13 audit was completed in June 2014 and the Deed of Trust signed in July 2014. It is difficult, if not impossible, to imagine City Bank, an FDIC-regulated institution, making a $11.5 million loan in July 2014 without relying on the Bland Garvey audit report on the 12/31/13 GFA financial statements. That audit report included the misinformation on the source and nature of the $19.8 million previously raised and spent on the project.

U. S. Customs and Border Protection Reports Aggressive Enforcement of Cash Smuggling and Smurfing Laws

In May and June, I wrote posts about cash smuggling on the part of staff and students affiliated with Gospel for Asia (link, link, link, link, link). GFA leaders gave individual travelers envelopes of cash containing $4500 which was to be carried in personal belongings and then given to Believers’ Church headquarters in India. Since the travelers traveled in groups, the total amount of unreported cash was often over the $10,000 allowed by law. Travelers may take any amount of cash out of the country but any amount over $10k must be reported to Customs and Border Protection. Breaking up the total amount into smaller portions carried by individual travelers in a group to avoid detection (sometimes called “smurfing“) is illegal and can result in seizure of the cash and sometimes criminal charges.
After my reports on the practice, GFA leaders said they stopped sending cash to India via student groups, telling staff they were told by their auditor (Bland Garvey) that the practice was legal. Bland Garvey referred me to their attorney who refused to confirm or deny GFA’s claim. Inexplicably, GFA has remained publicly silent about the reasons for cash smuggling or how the donations were used.
In the mean time, U.S. Custom and Border Protection has aggressively enforced laws on cash smuggling. On the U.S. CBP website, numerous press releases detail enforcement actions related to cash smuggling. For instance just yesterday, USCBP reported the following activity:

LAREDO, Texas – U.S. Customs and Border Protection (CBP) officers and agents at the Laredo Port of Entry seized $266,000 in unreported currency in an outbound enforcement action this weekend at the Gateway to the Americas Bridge.

“Our outbound team maintained their vigilance, utilized their keen inspection skills and seized a significant load of unreported currency,” said Port Director Joseph Misenhelter, Laredo Port of Entry. “Seizures of unreported currency like this one remove the profit potential from possible illicit activity and help advance our border security mission.”

From the U.S. Customs and Border Protection website

The interception occurred on Saturday, Sept. 12 while CBP officers and Border Patrol agents conducting outbound (southbound) inspections at the international bridge referred a 2007 Chevy Equinox driven by a 22-year-old U.S. citizen from Dallas, Texas for a secondary inspection. CBP officers conducted an intensive secondary examination of the vehicle and discovered packages within the vehicle that contained $266,000 in unreported currency.

CBP officers seized the currency and the Chevy Equinox. The driver was turned over by CBP officers to Homeland Security Investigations (HSI) special agents for further investigation.

Individuals are permitted to carry any amount of currency or monetary instruments into or out of the U.S., however, if the quantity is more than $10,000, they will need to report it to CBP. “Money” means monetary instruments and includes U.S. or foreign coins currently in circulation, currency, travelers’ checks in any form, money orders, and negotiable instruments or investment securities in bearer form. Failure to declare may result in seizure of the currency and/or arrest.

According to their website, CBP seises just over $650,000 each day in illegal cash:

CBP seized $50,510 in unreported U.S. dollars and Chinese yuan from a family that arrived Saturday from China after the family reported possessing $3,000.
CBP seizes $650,117 in undeclared or illicit currency every day. There is no limit to how much currency travelers may bring to, or take from the U.S. However, federal law requires travelers to complete financial reporting forms for any amount that exceeds $10,000 in U.S. dollars or equivalent foreign currency.

Since I last reported on cash smuggling, CBP has reported several other actions relating to smuggling (list, list, list, list, list, list, list, list, list, list, list, list, list, list, and smurfing (list, list, list, list). In GFA’s situation, some groups carried over $100k in cash without reporting the cash to U.S. Customs or Indian Customs.

Gospel for Asia Reneged on Pledge Not to Take Loans or Money from Mission Field to Build New Headquarters

In May 2010, Gospel for Asia’s CEO and founder, K.P. Yohannan, told GFA staff that GFA might move from Carrollton, TX to Wills Point, TX. A month later, GFA acquired 350 acres which would eventually become the site of the current compound. As reported previously, GFA began building the project without sufficient funds in hand to complete it. In April 2013, GFA leaders realized they were very low on cash and approached City Bank in Lubbock for a loan. According to GFA COO, David Carroll, the City Bank was willing to loan the money but before that happened, a board under the control of Believers’ Church in India took a loan there and then sent almost $19.8 million as a gift to help GFA complete the office buildings (link).
I have since learned that GFA borrowed $11.5 million from City Bank in Lubbock in July 2014.
In May and June of 2010, GFA staff were informed that GFA had initiated a process of acquiring land for a new headquarters and compound. During these meetings, staff were told that the move would save millions and be cheaper for staff living expenses (neither of these claims appear to be true which will be addressed in future posts). In addition, staff were told that GFA would not divert money from the field nor take loans to help construct the headquarters. However, as we have seen, GFA did both. In October 2013, nearly $19.8 million was wired to GFA from a source in Asia (later disclosed to be Believers’ Church, headed by K.P. Yohannan). In India, GFA is an arm of Believers’ Church. According to GFA’s David Carroll, Believers’ Church took a loan which allowed them to give the $19.8 million to GFA in the U.S. to complete the headquarters. In one act, it appears that GFA reneged on the earlier promises to staff. Then another loan was taken by GFA in the U.S. in 2014.
Below listen to Yohannan’s statements to staff in 2010.

One of the main complaints from former staff is a feeling of betrayal over the policies portrayed by GFA leaders and that which actually happened. The story that is emerging about the move to Wills Point is quite different than what was described at the time.
What might be more serious even than misleading statements to staff are the the misleading statements in the 2013 audit conducted by Bland Garvey. The $19.8 million payment from Believers’ Church in India to GFA was clearly a related party transaction with financial repercussion both in India and the U.S. However, the “anonymous” gift was reported in a different section of the audit:

This description does not alert potential donors or potential lenders (e.g., City Bank in Lubbock, TX who loaned $11.5 million to GFA) that the cash to help build the buildings actually came from a related party (Despite his claims to the contrary, Yohannan is listed in legal documents in India as the managing trustee of Believers’ Church). Some donors might wonder why funds are so urgently needed on the field if a beneficiary of GFA’s work can turn around and give such a large gift with assurances that it can be repaid very quickly. A bank might view the credit worthiness of GFA differently if it is known that an anonymous donor is really a related party.
The ECFA review of Gospel for Asia is supposed to be completed by October when GFA is supposed to answer all outstanding questions. Looking forward to that.

Is Gospel for Asia's Board Independent as Defined by ECFA?

The Evangelical Council for Financial Accountability provides guidelines for governance which member organizations must follow. One important feature is independence which is defined as follows:

Board independence. The organization should take care to maintain the reality, not just the appearance of independent board governance. Requiring the predominance of independent board members helps ensure the board will take official action without partiality, undue influence, or conflict of interest.

To assess the reality of board independence, ECFA looks beyond the majority of independent board members on the board roster. ECFA is just as concerned about the reality of board independence as with the mathematical determination of a majority of independent board members.

ECFA defines independent board members as:

Persons who are not employees or staff members of the organization.
Persons who may not individually dictate the operations of the organization similar to an employee or staff member. A person who is an uncompensated CEO, for instance, is not independent.
Persons who are not related by blood or marriage to staff members or other board members. Blood or marriage relationships are defined for the purposes of the standard as being his or her spouse, ancestors, brothers and sisters (whether whole- or half-blood), children (whether natural or adopted), grandchildren, great-grandchildren, and spouses of brothers, sisters, children, grandchildren, and great-grandchildren.
Persons who do not report to, or are not subordinate to, employees or staff members of the organization.
Persons who do not report to, or are not subordinate to, other board members.
Persons who do not receive a significant amount for consulting or speaking, or any other remuneration from the organization.
Persons who do not have relationships with firms that have significant financial dealings with the organization, officers, directors or key employees.
Persons who are not the paid legal counsel, related by blood or marriage to the paid legal counsel (see definition of blood or marriage in #3 above), or are employed by the firm that is the paid legal counsel of the organization.
Persons who are not the auditors, related by blood or marriage to the auditors (see definition of blood or marriage in #3 above), or are employed by the auditing firm of the organization.

Gospel for Asia provided Guidestar with the names of 2015 board members as of April*:

Looking at this board, it is reasonable to question the independence of a majority of members. K.P. Yohannan is President, his son is Vice President (Daniel Punnose), and his wife is a volunteer (Gisela Punnose). Chuck Zink is a major donor to GFA and his son and daughter-in-law are employees of GFA. Yohannan is also employed by GFA (#1), Daniel Punnose is employed by GFA (#1) and is a family member as is Yohannan’s wife (#3). As mentioned, Chuck Zink’s son and daughter-in-law are employed by GFA (#3). That is four out of seven.
A case could be made that Gayle Erwin’s independence has been compromised by his reliance of K.P. Yohannan and Gospel for Asia for promotion of his book, Jesus Style, and speaking engagements. According to Yohannan, GFA has translated the book into multiple languages.
In any case, it seems misleading to have “No Affiliation” by Zink’s and Erwin’s names. It is also misleading for Yohannan’s wife and son to use their Indian last name while Yohannan reverses the order for his name.
The ECFA claims that the guideline is not met by simple appearance of independence. According to Christian Today, the ECFA is reviewing GFA. I wonder if board independence is one of the items under review.

*There was a rumor that Francis Chan joined the board but as usual GFA won’t confirm this.