Sunday, February 11, 2007

Can’t see the forest for the planes

Charlie has a great, informative post about Mac Hammond up at Across the Great Divide. Spot suspects that most of Spot's readers read Across the Great Divide anyway, but if there are any strays out there, go have a look. It is Spotty™-worthy, but Spot is going to make Charlie really work for the hat trick. The gravamen of Charlie's post is the cozy management of The Living Word Christian Center:

Seven Trustees, all ministers, oversee this roughly $35 million organization, including Hammond and his wife Lynne, and another pastoral couple who run Living Word North in Brainerd and minister through reality TV. The other three — located in Arlington and Crowley, Texas, and New Orleans — also operate prosperity gospel ministries.

This Board was appointed by Hammond and approved by the Congregation. The memorandum says they have "significant educational and business experience," but unlike most boards, which strive for diverse backgrounds, this group specializes in the same business, conducted in a very similar fashion. To an outsider, this board — which would approve loans, compensation and other operations that benefit Hammond — appears under Hammond's control. They also all operate closely held family businesses where husband, wife and other relatives appear to harvest the tithes draw compensation.

There is certainly not much transparency in the operation. You can probably get more information about your average Disney-operated amusement park than Mac's nonprofit, tax-exempt, organization. As Charlie points out there are many stake-holders here: the congregation, of course, but the rest of us taxpayers, too.

It is also interesting to Spot how the recent revelations about LWCC came about. As Charlie recounts, the report that has been disclosed—or maybe leaked is a better word—was part of an offering memorandum to prospective participants in the syndication of a $25 million mortgage-backed loan to the church.

Why would all this stuff about loans to pastor Mac and airplane leases show up in an offering memorandum, Spotty?

Because of the securities laws, grasshopper. When you offer to sell a participation in a loan like this, it is a security, and all the things that are material to the repayment of the loan must be disclosed to the potential lenders. Are the closed management and the self-dealing material to the ability of the church to repay a $25 million loan? Somebody thought so.

Spot has already commented on the merits of trying to get CREW to take down the report from its website. The mortgage syndicator, The Marshall Group, or LWCC itself, may have a legitimate complaint against somebody who was contractually bound to keep the information confidential and did not. But as long as CREW did not steal or somehow intercept the information unlawfully, it is free to publish it. If the Washington Post can publish the Pentagon Papers, CREW can certainly publish this.

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