Johnston’s former ministry faulted: Misuse of group’s finances is alleged
Johnston’s former ministry faulted: Misuse of group’s finances is alleged
By JUDY L. THOMAS - Kansas City Star - Sat, Jul. 21, 2007
Employees and board members of the former Jerry Johnston Ministries said that Johnston often misused ministry money, even as his evangelistic association was in turmoil over financial accountability issues in the mid-1990s.
An assistant office manager, an accountant, another former employee, and board members with firsthand knowledge of the ministry’s finances said the Rev. Jerry Johnston and his wife, Christie, sometimes used the organization back then as their personal piggy bank.
“They didn’t know the difference between ministry money and their money,” said Kim Barr, who worked for the ministry as assistant office manager in 1994, handling mail solicitations, preparing deposits and entering donations into a computer database. “They thought whatever was coming into that place was for them to use at their discretion.”
Johnston and his wife said through their attorney and First Family Church board Chairman Robert Ulrich that such allegations were untrue. They said financial audits and a recent review by a certified public accountant found nothing wrong.
“Jerry and Christie Johnston categorically and emphatically deny each and every allegation asserted in your inquiry,” the attorney said in a letter sent to The Kansas City Star.
Johnston started the ministry in 1979, but it was dissolved after he founded First Family Church in Overland Park in 1996, which became one of the fastest-growing megachurches in America.
In March, The Star reported that hundreds of members had left First Family Church in the past few years because of concerns about financial accountability.
Complaints filed after those stories were published led the Kansas attorney general’s office to open an investigation into whether Johnston had used church funds for personal gain. The attorney general’s office would not say whether it also was investigating the former Jerry Johnston Ministries. An attorney for the Johnstons and the church would not say whether any subpoenas have been issued.
But Zoe Raymonde, a former accountant for Jerry Johnston Ministries, said investigators from the attorney general’s office contacted her last month. She said she could not disclose the details of what they talked about.
Raymonde, an accountant for the ministry in the early 1990s, said she left because she refused to sign checks over to the Johnstons for their personal use. She also said that there was a lack of documentation for how the ministry funds were spent.
Raymonde’s job included writing checks, reconciling the books, and other accounting duties that required her to review receipts and financial documents.
Key elements of her story have been independently corroborated by two other former employees and two former ministry board members. Those board members said they resigned over what they viewed as mishandling of money.
Among the actions in question involving the former ministry:
•An Overland Park home purchased by the ministry as a parsonage for the Johnstons was later sold, and the Johnstons built a new house in Hallbrook Farms, an upscale Leawood neighborhood. Property records, however, show that the new house was put in the Johnstons’ names — not the ministry’s. The Johnstons’ attorney insisted that the money from the sale of the house stayed with the ministry. But board members interviewed said they didn’t even know the old Overland Park house had been owned by the ministry, or what happened to the money from its sale.
•Johnston’s ministry regularly sent out mailings for the ministry, soliciting donations for specific purposes. But former employees and board members said that when the money came in for buying a new van for the ministry or establishing a national suicide-prevention hot line, it wasn’t always used for the purposes intended. A former board member and a former employee said the hot line never opened.
•A large corporation sent a $50,000 donation designated to go toward launching television and radio programs for the former ministry and then accidentally sent another check for the same amount. Raymonde said the Johnstons put most of the excess money into their personal account after a corporate executive said the ministry could keep the extra $50,000 check. Raymonde and some former board members said the ministry’s TV and radio programs never materialized at that time.
In his letter, Eddie James, the Johnstons’ attorney, said that “they deny the allegations of missing monies and records that you claim Ms. Raymonde asserted to you while she was an employee of JJM (Jerry Johnston Ministries).”
“JJM received a certified exculpatory audit report regarding the receipt and expenditure of funds each year of its existence from independent auditors, and in particular the years in which Ms. Raymonde was employed,” James wrote.
James also sent The Star an affidavit from Jeffrey Humbard, a certified public accountant, that said that Humbard had reviewed audits of the ministry.
“I can confirm the contributions made to Jerry Johnston Ministries were used for the Jerry Johnston Ministries and not for the personal gain or use of Jerry Johnston or Christie Johnston,” Humbard said in the affidavit.
Calls to Humbard for comment were not returned. The Johnstons’ attorney declined to release the audits Humbard said he reviewed.
James said in his letter that the allegations by Raymonde and others were part of a “scheme to harm the Johnstons and First Family Church.”
Raymonde, however, said she stood by her story. She said she only agreed to talk to The Star because she started hearing stories of people being hurt financially and emotionally by Johnston’s actions, and because of her Christian beliefs.
“It’s a tragedy that Jerry is so gifted in biblical knowledge and is such a great orator but that he’s damaged his ministry in the pursuit of money,” she said. “I have nothing against how much a minister is paid, but everything has to be up front and in the open.
“If you want God to bless your ministry, you have to be accountable.”
The Hallbrook house
Johnson County property records show that in 1984, Jerry Johnston Ministries bought a house in Nottingham Forest in Overland Park. Records also show that the house was sold in 1993, and that the Johnstons built a new house in Hallbrook Farms.
But while the ministry owned the Nottingham house, property records show that the Hallbrook house was owned by Johnston and his wife. Raymonde said the monies from the sale of the Nottingham house should have gone into the ministry because the ministry owned it, but saw no evidence that happened.
The Johnstons insist the money stayed with the ministry, according to their attorney and CPA.
“Based upon my research and review related to the 1993 audit of Jerry Johnston Ministries, I can confirm that the proceeds from the sale of the Nottingham parsonage owned by JJM stayed with JJM and were used for JJM purposes and not for the individual use of Jerry Johnston or Christie Johnston,” Humbard said.
Two men who served on the board during that period said that to their knowledge the money did not go into the ministry and that board members did not even know that the ministry owned the Nottingham house.
“The board was never notified on that sale,” said a Johnson County man who served on the board in the late 1980s and early 1990s. “We thought that was their private home, and we had nothing to do with that. I had no idea it was in the ministry’s name. If we did, that money, when they sold that house, would have gone to vendors (businesses owed money). With the pressure we were getting to fight off those vendors, we would have had that money go directly to them.”
The former board member, who asked not to be identified for fear of repercussion with his business, said he was positive the money from the sale of the house did not go back to the ministry.
“We would have known if an influx of money had come in off the sale of the home, and it never happened,” he said.
Solicitation concerns
Employees and board members at the time also had concerns about the ministry’s mail solicitations.
They said Johnston regularly sent out mailings that solicited donations for specific purposes. In one case, they said, Johnston decided to establish a national suicide-prevention hot line.
Johnston worked with a company to set up the hot line and advertised the toll-free phone number in his mailings. The solicitation brought in large amounts of money, former employees said. But a former board member said the hot line never took a single call, and a local counseling team that was to operate it never got off the ground.
In another case, Raymonde and a board member said, Johnston decided the ministry needed a new vehicle and prepared a mail solicitation. However, a donor bought the ministry a new van.
But Johnston went ahead and sent the mailing out, they said, and money came in. When two board members found out about it, they resigned, the board members said.
Through their attorney, the Johnstons denied that any board members quit over financial-accountability concerns.
“The Johnstons admit that JJM, founded in 1979, did not have the same board throughout its fifteen-plus year existence, but deny that any alleged wrongdoing prompted any board resignations,” James wrote.
Use of contributions
The final straw for Raymonde was in 1994, when the Coca-Cola Bottling Co. in Charlotte, N.C., sent a check for $50,000. Raymonde said the check was designated to go toward putting the ministry on radio and TV.
Within days of the arrival of the first $50,000 check, Raymonde said, the corporation accidentally sent another check for $50,000. Raymonde said she called the comptroller of the corporation and left a message saying she was going to return the duplicate check.
In the meantime, she said, Johnston found out about the second check and learned that she had notified Coca-Cola.
“He was very upset at me,” Raymonde said. “I wasn’t going to cash that. I never thought in my wildest dreams that we were going to keep that.”
She said Johnston later called back and said that he had contacted Frank Harrison III — the chief executive officer of the Coca-Cola distributor and also a board member of Jerry Johnston Ministries — and was told that the ministry could keep the extra money. Raymonde said she then called Harrison and he confirmed that the ministry could keep the money for launching its radio and TV programs. She said both checks were deposited into the ministry account.
Lauren Steele, a spokesman for Coca-Cola Consolidated, confirmed recently that two checks for $50,000 each were sent to the ministry.
“It was a $100,000 pledge over two years, and they accidentally ended up getting it at one time,” Steele said.
But Raymonde said when she arrived at work the next morning, co-worker Barr told her that Christie Johnston had called and said they were to cut her a check for $50,000.
Raymonde said she called Christie Johnston back and told her she wouldn’t do that. Shortly after that, she said, Jerry Johnston called and demanded that she write a check to Christie Johnston.
“I said, ‘You are nuts. Do you think someone’s not going to notice $50,000 coming in, $50,000 going out?’ ” Raymonde said. “I was told I was listening to the devil, to get down on my knees and start confessing. I was told that I was going to sign that check or basically I was going to hell.
“I said, ‘Jerry, if this is so important that you guys think you need this money, Christie’s a signer on that account, have her sign it. I will not sign it.’ ”
Before long, Raymonde said, Christie Johnston came into the office and cut two checks to herself — one for $30,000 and one for $20,000. Raymonde said Christie Johnston slammed the $30,000 check onto the desk.
“And she said, ‘That better be in the bank before 2 today.’ ”
Raymonde said she called some board members and told them she could no longer work there because of the financial-accountability concerns.
Raymonde and Barr said they were asked to resign shortly after the incident. Both said it was the first and only time they had ever been let go from a job.
Humbard, First Family Church’s current CPA, said in a letter provided to The Star by Johnston’s attorney that there was no disclosure in a former ministry audit of any contribution being used for unauthorized or other than ministry purposes.
But Janet Pyland, who also worked in the ministry’s office and handled the mail and solicitations, said she quit when the other office employees left because she couldn’t tolerate the mishandling of money.
“I just couldn’t stomach it anymore,” Pyland said. “I had been raised in a very religious family, never missed church. And for somebody to do that absolutely disgusts me, because it taints everyone’s perspective about Christianity.”
Raymonde said that months after she left the ministry, an FBI agent showed up at her door because someone had reported the financial concerns. But she said she would not cooperate because she wanted to put those experiences behind her.
In a letter inserted in a First Family Church bulletin last Sunday, Ulrich, the chairman of the church’s board, confirmed that there had been a complaint to the FBI alleging misconduct by Jerry Johnston Ministries, but said the agency concluded that “the complaint held no credibility.”
Ulrich added that “the IRS Agent who was assisting the investigation stated that there were no indications of any criminal violations of the Internal Revenue laws.”
According to the Johnstons’ attorney, the ministry hired the law firm of Wyrsch Atwell Mirakian Lee & Hobbs in 1995 to “ascertain the reasons for the FBI investigation” and conduct a “parallel, independent investigation.”
Attorney Jim Wyrsch said in an interview Friday that his firm’s investigation found no criminal wrongdoing.
His firm’s report to the ministry — which was heavily redacted before being given to The Star — said that a “tip concerning forged checks was not accurate” and that the FBI was terminating the investigation.
However, FBI spokesman Jeff Lanza said Friday that there never was any formal investigation by his agency.
“At no time did the Kansas City FBI open an official investigation into the ministry,” Lanza said.
About that time, board members and major donors started leaving.
“It was on the brink of collapse administratively and financially, both,” said the former board member from Johnson County. “The board members just lost faith in the financial accountability of what was going on.”
A year after Johnston founded First Family Church, Jerry Johnston Ministries stopped filing annual reports with the secretary of state’s office and ceased to exist. In 1998, the Johnstons sold their Hallbrook house and built a new house on 2 ½ acres in southern Johnson County.
‘We are accountable’
First Family Church, which was an outgrowth of the old ministry, defends its current financial accountability.
Since The Star stories in March, several contractors who had liens pending against the church for nonpayment of debts have been paid.
And on March 31 and April 1, Johnston spoke to his congregation about financial management at First Family Church, his first public response to the accountability questions.
He said church finances were audited and that salaries were determined by comparison with how staffs were paid at similar-sized churches.
“We are accountable, we are responsible,” Johnston told the congregation on April 1.
Church members were given a pamphlet titled First Family Church Good Stewardship Report as they left a service. The pamphlet gave no actual numbers except for total donations of $6.6 million in 2004 and $7.9 million in 2005.
Two pie charts showed percentages of how the money was spent. For example, in 2005, a chart indicated, 38 percent of the budget went to “church ministry activity,” 24 percent went to salaries and 19 percent was “excess revenues over expenditures.”
Johnston said he knew that when he spoke in favor of a marriage amendment in Kansas and spoke out against abortion and stem-cell research that he would be attacked by enemies. Despite that, Johnston said he would continue to preach the gospel.
The congregation gave him a standing ovation.
But afterward, not all members were satisfied. Some contacted The Star, saying that they had talked to Johnston and asked to see more detailed financial information, but were denied.
“He said he will not give out a printed copy of the budget,” said a woman, who added that she remained a member but had stopped giving money to the church.
Other members, however, remain devoted to Johnston and First Family Church.
“Contrary to your belief, we members are not checking our brains at the door,” wrote someone using the name “Tabitha” on www.kctalk.com, a local Internet forum that began a thread in response to The Star articles and has had more than 2,100 posts. “We are loyal to FFC because the word of God is being preached faithfully.
“Until we see evidence to the contrary, we will continue to believe it is God’s will for us to attend and support FFC … The congregation has been furnished with financial information. We are satisfied …”
@ Go to KansasCity.com to read audit documents and a statement by First Family Church board Chairman Robert Ulrich, and to read past stories by The Star.