Senator Grassley Probes Televangelists' Finances

The Guardian reports:

Acting on tips about preachers who ride in Rolls Royces and have purportedly paid $30,000 for a conference table, the top Republican on the Senate Finance Committee said Tuesday he's investigating the finances of six well-known TV ministers.

Sen. Chuck Grassley of Iowa said those under scrutiny include faith healer Benny Hinn, Georgia megachurch pastor Creflo Dollar and one of the nation's best known female preachers, Joyce Meyer.

Grassley sent letters to the half-dozen Christian media ministries earlier this week requesting answers by Dec. 6 about their expenses, executive compensation and amenities, including use of fancy cars and private jets.

In a statement, Grassley said he was acting on complaints from the public and news coverage of the organizations.

``The allegations involve governing boards that aren't independent and allow generous salaries and housing allowances and amenities such as private jets and Rolls Royces,'' Grassley said.

``I don't want to conclude that there's a problem, but I have an obligation to donors and the taxpayers to find out more. People who donated should have their money spent as intended and in adherence with the tax code.''

Those ministries that responded Tuesday either said they were cooperating or committed to financial transparency and following the law.

The investigation promises to shine new light on the kind of TV ministries that were crippled by sex and money scandals in the 1980s. Experts also say it stands out as an unusual case of the government probing the inner workings of religious organizations.

Most of those under investigation preach a variation of the ``prosperity gospel,'' the teaching that God will shower faithful followers with material riches.

Grassley's letters went to:

- Kenneth and Gloria Copeland of Kenneth Copeland Ministries of Newark, Texas, a $20 million organization and prosperity gospel pioneer. Questions were raised about the transfer of church assets to a for-profit company, Security Patrol Inc., a $1 million loan from Gloria Copeland to the group, and a ``personal gift'' of more than $2 million given to Kenneth Copeland to mark the ministry's 40th anniversary.

A Copeland spokeswoman released a statement saying the ministry is working on a response to Grassley's letter, follows all laws and best practices governing churches and religious nonprofit groups, and ``will continue to do so.''

- Creflo and Taffi Dollar of World Changers Church International and Creflo Dollar Ministries of College Park, Ga. Grassley's letter asks for records on private planes, board makeup, compensation and donations and ``love offerings'' to visiting ministers. In a statement, Dollar called his ministry an ``open book'' and said he would cooperate. He also questioned whether the investigation could ``affect the privacy of every community church in America.''

- Benny Hinn of World Healing Center Church Inc. and Benny Hinn Ministries of Grapevine, Texas, is asked about use of a private jet, a home in Dana Point, Calif. and ``layover trips'' while traveling on ministry business. Hinn did not respond to requests for comment.

- Bishop Eddie Long of New Birth Missionary Baptist Church and Bishop Eddie Long Ministries of Lithonia, Ga., was questioned about his salary, a $1.4 million real estate transaction and whether he, and not the board, holds sole authority over the organization. Long plans to fully comply with the Senate's request, and his church has ``several safeguards'' to ensure transactions comply with laws governing churches, according to a statement from Long's spokesman.

- Joyce and David Meyer of Joyce Meyer Ministries of Fenton, Mo., who were quizzed about receiving donations of money and jewelry and the handling of cash from overseas crusades. They also were asked about expenditures at ministry headquarters, including a $30,000 conference table and a $23,000 ``commode with marble top.''

The ministry's lawyer released a statement describing the ministry's work and public release of several years' worth of audits. He also said the IRS found in October that the group continues to qualify for tax-exempt status.

- Randy and Paula White of the multiracial Without Walls International Church and Paula White Ministries of Tampa, Fla. are asked about home purchases in San Antonio, Texas, Malibu, Calif., and New York, credit card charges for clothing and cosmetic surgery and the reported purchase of a Bentley convertible as a gift for Bishop T.D. Jakes, a prominent Texas preacher and televangelist. An e-mail to a spokeswoman for Jakes was not immediately returned.

In a statement, Randy and Paula White declined to comment on specifics, saying they needed time to review the letter with their lawyers. But the Whites called the Grassley letter ``unusual, since the IRS has separate powers to investigate religious organizations if they think it's necessary.''

Hinn, Kenneth Copeland and Creflo Dollar all sit on the board of regents for Oral Roberts University, which is mired in a financial scandal of its own.

The Senate Finance Committee has chided secular nonprofits for governance and compensation problems in the past, but this level of scrutiny for what are basically ``non-pulpit churches'' is unprecedented, said Ken Behr, president of the Evangelical Council for Financial Accountability.

Because the groups have tax status as churches, they are not required to file tax forms open to public inspection.

Senator Questioning Ministries on Spending

The New York Times reports:

Senator Charles E. Grassley, the ranking Republican on the Senate Finance Committee, is investigating six prominent evangelistic ministries to determine whether they have illegally used donations to finance opulent lifestyles.

Mr. Grassley said yesterday that he sent letters to the six Christian ministries on Monday requesting documents to answer a long list of questions about their compensation, housing allowances, checking and savings accounts, cars, airplanes and overseas trips. They have until Dec. 6 to respond.

The inquiry focuses on some of the flashiest preachers now popular on television and the Internet, many of them proponents of the prosperity gospel — that God will reward believers who open their hearts and wallets.

Mr. Grassley, of Iowa, said in a telephone interview: “Jesus comes into the city on a simple mule, and you got people today expanding his gospel in corporate jets. Somebody ought to raise questions about is it right or wrong.”

These ministries are being investigated:

• Rev. Creflo A. Dollar Jr. and his wife, Taffi, of World Changers Church International, based in College Park, Ga., popular prosperity preachers with churches and homes in New York City and Georgia.
• Paula and Randy White, a dynamic young couple who started Without Walls International Church and Paula White Ministries in Tampa, Fla., but who are now divorcing. Mr. Grassley wants them to document clothing expenses and any cosmetic surgery from 2004 to the present.
• Benny Hinn of World Healing Center Church, a showy faith healer based in Grapevine, Tex., who holds large crusades around the world. Mr. Hinn is being asked how he handles cash collected on his overseas crusades and how much he spent on hotels and food for himself and his staff members during layovers on his trips from 2001 to the present.
• Joyce Meyer, who with her husband, David, runs Joyce Meyer Ministries from Fenton, Mo., and who is popular especially with women for her no-nonsense brand of self-help. Mr. Grassley wants her to explain the “tax-exempt purpose” of purchases including a “commode with marble top” bought for $23,000 for her headquarters.
• Bishop Eddie L. Long of New Birth Missionary Baptist Church in Lithonia, Ga., a megachurch in the Atlanta suburbs with an active media ministry.
• Kenneth and Gloria Copeland of Kenneth Copeland Ministries of Newark, Tex.

The ministries, although far larger and more diversified than the average church, are classified by the Internal Revenue Service as churches and do not have to file the I.R.S. 990 forms required for other nonprofit organizations.

Mr. Grassley’s letter says that since these ministries are tax exempt, contributions to them must be used for the “tax-exempt purposes of the organizations.”

If donations were diverted for personal use, that could violate the tax code.

Asked for a comment, four released statements yesterday saying that they planned to respond to the requests for information.

Mr. Hinn’s ministry said that his legal counsel and board were trying to determine the “best course of action,” and would not respond until they got more information.

There was no reply to a message left for Paula and Randy White, or a spokesman.

Mr. Dollar said that he would comply, but that he planned to consult legal professors and scholars first. “The questions at hand are much bigger than World Changers,” he said, “as it could affect the privacy of every community church in America.”

Mr. Grassley said that he and Finance Committee staff members focused on these ministries because they were “intrigued” by investigative reports about many of them in local newspapers and on television. They also received tips from watchdog groups like the Trinity Foundation in Dallas and ministrywatch.com.

“It centered on these six ministries,” Mr. Grassley said, “but I wouldn’t want to say there’s something magic about these six. It could be seven or eight. Who knows, after we get these answers back, we might decide we have to look at others.”

Corn Farms Prosper, But Subsidies Still Flow

The Washington Post reports:

Corn farmer Jim Handsaker has found a slew of ways to ride the heartland boom in biofuels that is reshaping the economy of rural Iowa.

He sold some of his 2006 crop this year for more than $4 a bushel, the highest price in a decade. His stake in two nearby ethanol plants brought in several thousand dollars more in dividends. Meanwhile, soaring farmland prices have pushed the value of the 400 acres he owns to around $2 million.

Even so, come October he will get a subsidy check from the government, part of a $1.6 billion installment that the U.S. Department of Agriculture will send to corn farmers.

Those annual automatic payments to Handsaker and thousands of other prospering corn growers have long been controversial. But coming at a time when taxpayers are already subsidizing the ethanol industry to the tune of $3 billion a year, the double-barreled support system for those who grow corn and those who turn it into fuel has begun to draw fire in Congress.

"Federal farm subsidies are already narrowly focused on certain crops and are excessive," said Sen. Richard G. Lugar (R-Ind.), a farmer and former chairman of the Senate agriculture committee. "They become ridiculous given the exploding possibilities to grow crops for biofuels production."

So far, Congress has shown little inclination to adjust the subsidies to account for the new energy-driven rural economy.

A House-passed farm bill would give corn growers $10.5 billion over the next five years, even if prices stay high. These "direct payments," a kind of annual allowance, are set by formula and go out automatically, regardless of prices, profits, yields or weather.

At the same time, a Senate-approved energy bill would double the federal requirement for the use of ethanol from corn -- a move that should further buttress corn prices.

Handsaker, a Republican who keeps a framed picture of President and Mrs. Bush in his office, argues that such farm subsidies help keep agricultural land in the hands of family farmers and away from corporate monopolies.

Handsaker is not banking on the ethanol boom lasting. "We've all been down the road of price plateaus," he said.

But he acknowledges that justifying the payments is not easy in the midst of an energy renaissance in the heartland. Country roads are dotted with signs advertising "ethanol corn" -- genetically engineered seeds with the high starch content ideal for making 200-proof, high-octane ethanol.

Just weeks before the October harvest, Hardin County, Handsaker's home in central Iowa, was a sea of corn rolling southwest from Iowa Falls. Handsaker once grew a mix of corn and soybeans on the farmland he and his brothers own or rent. "Now we're 100 percent corn," he said.

On a once quiet highway west of Iowa Falls, a constant stream of tractor-trailers pound the road, hauling corn to the Hawkeye Renewables ethanol refinery and soybeans to Cargill Inc.'s biodiesel plant.

To celebrate a banner year, Hawkeye founder and chief executive Bruce Rastetter pulled out the stops for his annual midsummer bash. Several hundred politicians, businessmen and farmers mingled at his richly landscaped hilltop estate, and Sen. Charles E. Grassley (R-Iowa) made his entrance in a wagon pulled by Rastetter's team of Percheron draft horses.

"It's a great country," said Rastetter, a Hardin County native who started with a few acres of farmland and a small feed business 20 years ago. He recently pledged $1.75 million to Iowa State University. In addition to his Iowa Falls plant, he operates a second one in a nearby county and has two more under construction.

The boom has helped push shares in Iowa ethanol plants to double or triple the initial price. Bill Couser, a corn grower and cattleman who was a driving force behind a new ethanol plant in neighboring Story County, says a grateful local school bus driver who bought shares "waves and honks every time she drives by."

"That's the secret of this ethanol industry," Couser said. "It's keeping the dollars at home."

In July, Pine Lake Corn Processors, the second Hardin County plant after Hawkeye's, announced profits for the previous eight months of $3,800 a share, more than the $3,250 cost of the initial investment. "It's worked out better than my wildest dreams," said Pine Lake President Larry Meints, a corn grower who pushed for the new plant after becoming fed up with hauling grain to distant elevators.

The new market means corn-rich Hardin County has to import the crop even though it grows 35 million bushels a year. The county can't supply its two ethanol refineries and its thriving pork, beef and poultry industries.

"Things are good here," said Howard B. Wenger, president of Iowa Falls State Bank, who reviews the balance sheets of hundreds of farmers.

He estimates that most farmers earned between $100 and $400 an acre on their 2006 crop after expenses, depending on whether they owned or rented their land. That translates into profits of $100,000 to $400,000 on a 1,000-acre farm. The USDA predicts that net farm income will be $87.1 billion this year, up nearly 50 percent over 2006.

Iowa farmland values are up 18 percent in the past 12 months, according to Federal Reserve Board surveys, making millionaires on paper out of any farmers owning 200 acres free and clear.

The rural prosperity is due in large measure to billions of dollars in federal subsidies and incentives for corn-based energy. These include a 51-cent tax credit that gasoline manufacturers get on every gallon of ethanol they mix with their blends, and more than $500 million in federal cash to ethanol refiners between 2001 and 2006.

In 2005, Congress required the use of at least 7.5 billion gallons of ethanol a year by 2012. Then in 2006 came new demand for ethanol as a pollution-curbing additive, along with a jump in gasoline prices that made the corn-based fuel competitive.

"We're harvesting the sun out here," said Handsaker, a genial man who typifies the new breed of businessman-farmer. "We're creating something with sun and chemicals and water and making a renewable product instead of unloading an oil tanker."

When he started in 1971, he recalled, farmers sold their crops to the local livestock industry or sent them "down the river" to volatile export markets.

Prices soared when the Soviet harvest failed or Argentina's corn crop fell short. In between, government payments bridged the gap between solvency and bankruptcy. From 2001 through 2005, Handsaker and his two brothers collected more than $500,000, according to USDA records.

Now four ethanol plants have sprouted within easy trucking distance of their farms and will get about half the 450,000 bushels they produce.

Still, the three brothers stand to collect about $45,000 in direct payments this year, based solely on their previous crop acreage and yields, according to USDA records. Congress created the payments in 1996 as part of a plan to temporarily buttress farm incomes while other traditional subsidies were eliminated. They were supposed to be phased out. Instead, the 2002 farm bill continued them.

"It's a bonus program, not a safety net," said Sen. Richard J. Durbin (D-Ill.). "Farmers I talk to know it's not politically sustainable to ask taxpayers to make payments to them in highly profitable years."

Durbin plans to offer a farm bill amendment that would gradually replace the automatic payments with a program to compensate growers when statewide farm revenues fall below the norm. The National Corn Growers Association embraces a similar plan. This week, the Senate agriculture committee's chairman, Tom Harkin (D-Iowa), circulated a proposal to cut direct payments by $4.5 billion over five years.

The American Farm Bureau Federation, the country's largest farm organization, opposes any changes, but the National Farmers Union, the nation's second-largest, supports an overhaul of direct payments. "It's the most costly and inefficient method for providing a safety net," said the union's president, Tom Buis.

Lugar, the senator from Indiana, favors scrapping the current farm program and using crop insurance and tax-exempt savings accounts to tide farmers over in bad years.

"A farmer's best friend in Iowa is the energy bill," said Bruce Babcock, a professor of economics at Iowa State. "What do you need the direct payments for? It's money for nothing."

Rastetter, along with most others in the ethanol industry, argues that increasing requirements for ethanol use would do more for corn growers than farm programs would. If the government expands its support for ethanol, he said, "then the market price of corn will support farmers and provide the safety net."

But relying on energy policy instead of the traditional farm program worries many in rural Iowa who remember previous bubbles.

The bank still holds a mortgage on his land, Handsaker notes.

Ethanol prices have been tumbling recently as supply catches up with demand. Some ethanol companies, including Rastetter's, have put plans for new refineries on hold pending action by Congress to expand required use.

But such action faces stiff opposition from the livestock industry, which contends that the added demand for corn could mean higher feed and food costs. Environmental groups say it could jeopardize water supplies and sensitive lands in exchange for only minimal savings in the use of fossil fuels, given the amounts of gasoline and chemical fertilizer needed to raise corn.

Meanwhile, the prices of fertilizer, seed and land have been rising rapidly as landlords and corporations move to capture their share of higher grain prices. "As far as the bioeconomy, I don't think any of us thinks it's the golden egg," said April Hemmes, who owns 1,000 acres of prime farmland near Iowa City.

Blackstone Shares Surge In Opening Trade

The Financial Times reports:

Blackstone Group shares on Friday jumped 14.8 per cent on the US private equity group's first day of trading in a strong performance that could encourage its arch-rival Kohlberg Kravis Roberts to follow suit within weeks.

After pricing the landmark offering at $31 a unit on Thursday night, Blackstone saw its share price soar to $35.58 and its market value increase to about $38bn by noon.

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Blackstone's sparkling debut on the New York Stock Exchange shows how investor demand for the most high-profile Wall Street listing in years remained strong in spite of doubts about the company's valuation and a political backlash against the industry.

KKR was closely watching the market reaction on Friday. Having considered a stock market debut for months and held advanced discussions with investment banks that would underwrite a possible listing, KKR could move within weeks towards a filing with US regulators, these people said. However, no decision had been made and Blackstone's market performance would have to be judged over a longer period, they warned.

Other US private equity groups, including Apollo Management, Carlyle and TPG Capital, have also been considering listings.

Steve Schwarzman, Blackstone's 60-year-old chief executive, owns a 23 per cent stake in the company, worth about $10bn after the share price jump.

Mr Schwarzman extracted $677m from the listing while Pete Peterson, the 81-year-old senior chairman, received a pay-out of about $1.88bn.

Blackstone benefited from high demand for its units in spite of significant doubts about the company's valuation.

In addition to concerns that the global private equity boom could be ending amid rising interest rates, a serious political challenge to the listing emerged last week when Max Baucus and Chuck Grassley, the most powerful members of the Senate finance committee, introduced legislation that would significantly raise Blackstone's tax bill in 2012.

Other US politicians kept up the pressure this week, with Jim Webb, the Democratic senator from Virginia, questioning the national security implications of Blackstone's sale of a $3bn stake to the Chinese government.

House Democrats on Friday introduced legislation to increase the tax on profits from private equity deals.

Senator Grassley Letter to FBI Director Mueller re: Spike Bowman

February 25, 2003

The Honorable Robert S. Mueller
Director
Federal Bureau of Investigation
935 Pennsylvania Avenue, NW
Washington, DC 20535

Dear Director Mueller:

I am writing to you about your "Presidential Rank Award" to Marion "Spike"Bowman and the FBI's response to my January 9 letter about the matter.

Today, Sen. Leahy, Sen. Specter and I released a report of our investigation into the FBI's problems implementing the Foreign Intelligence Surveillance Act (FISA). In addition to the cultural and systemic problems plaguing the FBI and the processing of FISA warrants, the report highlighted problems with the National Security Law Unit.

The report shows that Mr. Bowman (named as "Attorney #1" in the report) and three other attorneys who work with him could not provide the legal definition of "probable cause," which is one element needed to obtain a FISA warrant. (Pages 43-44).

The two supervisors at headquarters who handled the Zacarias Moussaoui case also did not understand the basic elements of FISA, even though they were questioned in July of 2002, long enough after the attacks of September 11, 2001 for them to re-examine the facts of the case and to refresh their understanding of the relevant legal concepts. Mr. Bowman bears a great deal of responsibility for their obvious lack of training.

This is one reason why I was so concerned about the award you granted him, and the message it sends to agents in the field.

In my original letter, I asked that you read the transcript of this session so you could see the evident problems first hand. I understand that another FBI official read the transcript instead. This person stated in the FBI response letter that you are "already generally familiar with the issues raised at that hearing." Yet the letter omits any mention of the deficiencies Bowman and the other attorneys demonstrated. The transcript of the sessions makes the problems plain and explicit.

Our report on the FBI's FISA problems is hardly the only record of this issue. The Joint Inquiry of the Intelligence Committees, in particular, highlighted FISA problems at the FBI, particularly in the Moussaoui case. All of these problems are not Mr. Bowman's fault, but many of them have occurred during Mr. Bowman's tenure. This is another reason I was concerned by the award. Yet it seems the FBI is reluctant to admit mistakes, a problem I had hoped you would fix. I appreciate the biographical information about Mr. Bowman and an explanation of his duties and accomplishments. I do not doubt his work ethic, integrity or patriotism. I do question his judgment in a particular case. This case, in a substantive sense, was an important indicator of the attacks of September 11, 2001. In a symbolic sense, the case and all of its problems were indicative of what needs to be fixed at the FBI, particularly with regards to FISA and headquarters personnel.

We obviously disagree on this matter, but I had hoped you or your representative would have taken the transcript of our interview of Mr. Bowman and others more seriously. Perhaps the report released today can explain my concerns more fully.

In the future, I hope more care is taken in granting the "Presidential Rank Awards."

Sincerely,

Charles E. Grassley
Member

Senator Wants FBI To Explain Bonus For Official in 9/11 Case

The Washington Times reports:

FBI Director Robert S. Mueller III has been asked by a senior member of the Senate Judiciary Committee to justify an award he gave to an FBI official who refused requests by Minneapolis agents for a warrant to search the computer of terror suspect Zacarias Moussaoui.

Sen. Charles E. Grassley, Iowa Republican, described as "shocking" Mr. Mueller's decision to give the Presidential Rank of Meritorious Service award to Marion "Spike" Bowman, head of the FBI's national security law unit.

"By granting this award and a monetary bonus, you are sending the wrong signal to those agents who fought sometimes against senior FBI bureaucrats at headquarters to prevent the [September 11] attacks," Mr. Grassley said in a letter Thursday to Mr. Mueller.

FBI agents in Minneapolis, advised that Moussaoui, 33, a French Moroccan, was seeking flight lessons, had sought a secret Foreign Intelligence Surveillance Act (FISA) warrant to search his computer, but FBI officials in Washington refused, saying there was insufficient probable cause.

The agents had gathered information, including intelligence from officials overseas, that Moussaoui was tied to terrorism suspects. He was detained a month before the September 11 attacks after officials at a Minneapolis flight school called authorities when he offered to pay cash to learn how to fly a Boeing jetliner.

A senior FBI agent in Minneapolis later complained in a letter to Mr. Mueller that bureau executives in Washington had blocked the Moussaoui investigation because they did not understand the significance of his arrest.

Agent Coleen Rowley, chief principal legal assistant, said the agents faced a "roadblock" when they sought the Moussaoui search warrant, and they became so frustrated at the lack of response that they sought to bypass the chain of command and notify the CIA directly but were reprimanded.

Mr. Mueller has told reporters that lawyers at FBI headquarters found insufficient probable cause and denied the request. He has since referred the matter to the Justice Department's Office of Inspector General for review.

Moussaoui was indicted in December by a federal grand jury in Alexandria on six counts of conspiracy. Four of the counts could result in the death penalty.

The award was given to Mr. Bowman during a ceremony on Dec. 4 in Des Moines, Iowa, which recognized "exceptional performance" by nine senior managers. In a statement, Mr. Mueller said those honored "are strongly linked to our counterterrorism efforts," citing investigations into the bombings of two U.S. embassies in Africa and the USS Cole, as well as the September 11 attacks.

The awards included cash bonuses of between 20 percent or 35 percent of each recipient's base salary.

The Judiciary Committee has been investigating FISA problems at the FBI, including holding closed hearings where Mr. Bowman and others were questioned about the Moussaoui case.

Mr. Grassley said a 26-page electronic communication from the Minneapolis agents contained information that "a reasonable person would have concluded" was sufficient to obtain a FISA warrant.

He said the application should have gone forward to the Justice Department and the FISA court.

Instead, he said, FBI Supervisory Special Agent Michael Maltbie concluded there was not enough information and that Mr. Bowman agreed, although he was aware Mr. Maltbie had "removed certain information before making a presentation of questionable accuracy and length to the national security law unit."

Mr. Grassley said if the application had gone forward and a warrant issued, the agents would have found information in Moussaoui's belongings linking him both to a major financier of the hijacking plot and to an al Qaeda boss who met with at least two other hijackers while under surveillance by intelligence officials.

"You have given an award and extra money to a bureaucrat at headquarters who is seen by many as having stymied the work of field agents," he said.

In the letter, Mr. Grassley asked for information on how and why Mr. Bowman was selected for the award and how much money he received because of it. Mr. Grassley gave the director until Jan. 27 to respond.