Part III
Excerpts from Stan Raders book-
“Against the gates of hell: The threat to religious freedom in America”
“What is it about the gates of Hell that compels people to wander into it?”
Yet he came to our Church with full legal authority to do the Following: To take possession and control of the Church, including all its assets, real and personal, tangible and intangible, of every kind and description…
To supervise and monitor all of the business and financial operations and activities of the Church… if he does so determine, he shall have the right to take over management and control of the Church to whatever extent that he, in the sound exercise of his sole discretion, deems necessary.
To hire, employ and retain lawyers, accountants, appraisers, business consultants, computer experts, security guards, secretarial and clerical help, and employees of all sorts to assist him in the discharge of his duties pursuant to this Order; and he is authorized to pay reasonable compensation to all his assistants out of the funds and assets of the Church, subject to the supervision of this Court as hereafter provided.
To take immediate possession of all books and records of the Church, no matter where or in whose possession said records may be found. These records are to include without limitation journals, ledgers, bank statements, vouchers, invoices, logs, memoranda, computer-readable data, and membership lists. These books and records shall be made available for the use of the employees of the Church in the carrying out of all their duties. They shall also be made available to the representatives of the plaintiffs in this action, for use in preparing for the trial in this action.
To supervise and control all the business and financial operations of the Church, including both ordinary day-to-day operations, and extraordinary operations. Except as is otherwise provided herein with respect to Messrs. Herbert W. Armstrong and Stanley Rader, the Receiver is hereby authorized to suspend or terminate, as he in the sound exercise of his sole discretion determines is necessary, any employee, officer, or agent of the Church (subject to any contractual employment rights the suspended or terminated party may have), and to direct that said employee, officer or agent not be permitted access to any of the grounds or facilities of the Church from and after the date of such termination or suspension.
Messrs. Armstrong and Rader will be permitted to continue their prior functions as representatives and authorities of the Church unless and until they are, either of them, removed by proper action of the Church pursuant to its By-laws and Articles; or unless they are removed by further order of this Court pursuant to an application on the part of the Receiver. If the Receiver deems it necessary at any time hereafter pending the trial to move the Court to remove either Mr. Armstrong or Mr. Rader or both, the Receiver may file a petition with the Court on notice to the defendants, and the Court will hear the matter and make a determination on that issue…
To employ, to the extent necessary, accountants, auditors, and attorneys to conduct a thorough audit of the financial and business dealings of the Church; and to compensate said professional assistants out of the Church treasury…
To supervise the deposits and disbursements of the funds by the Church in accordance with the terms of this Order… [he] shall have the right, in the sound exercise of his sole discretion and at any time, to take possession and control of the funds of the Church forthwith by notification to the Court and to the defendants, and to deposit them in a special Receiver’s account, if he deems it necessary.
It is little wonder that legal scholars, studying the events of that day, were incredulous. Many wrote to us or expressed themselves in print. I quote from just one, written by Jerry Wiley, associate dean of the University of Southern California School of Law in Los Angeles. Writing in Liberty,* Professor Wiley said: What Deputy Attorney General Tapper asked — and got — from the court is mind-boggling to the student of constitutional law: that the judge meet with him, the accusers, and their attorneys before he was required to file any action against the church or even notify the church that an action was filed, and that immediately upon filing the suit, the judge would order a receiver placed in control of all the church’s local assets, and, moreover, forbid anyone in the church from managing and disposing of a church asset. The court also retained the power to decide whether what the church proposed to do was religious.
* Liberty, vol. 74, no. 3, May-June 1979. Liberty is published by the Religious Liberty Association of America and the Seventh-Day Adventist Church. The association declares itself “dedicated to the preservation of religious freedom” and advocates “no political or economic theories.”
The deputy attorney general well knew that he was asking the court to commit itself to giving the state what it wanted against the church without the church’s even having had opportunity to know that action was pending. Indeed, he was asking an advisory opinion from the court concerning the outcome of a case not yet filed, when the law in his jurisdiction did not provide for advisory opinions. He was asking the court to appoint someone to run the church on the unsubstantiated accusations of six dissident members — some say, “excommunicated” members. He was asking the state’s judicial branch to take over the church before a case was filed, and upon the uncorroborated accusations of the dissidents — all this in spite of state and federal constitutional provisions for strict separation of church and state!
Cleaning House
On the morning of January 3, 1979, the day after the hearing, Judge Steven Weisman, the temporary receiver, and his task force stormed into the Hall of Administration to fulfill their State-approved functions. As I described in the opening chapter, rose petals were not strewn in their path. Virginia Kineston and her small group of brave determined, and baffled young women barricaded themselves inside the executive offices.
The offices were protected by an alarm system; moreover, only a few persons had a key. We had taken the precaution of giving an extra one to the security office but it was locked in a safe. Virginia had telephoned and told an official: “Under no circumstances should that safe be opened and the key taken out.”
The hours passed slowly. A silence, chill and forbidding, pervaded the building. Some fifteen miles away I was in a nonstop meeting with a corps of lawyers. From time to time, I would call Virginia, ask what was happening and pass along instructions. At 1:00 P.m., the girls went into the small kitchen adjoining the office and made sandwiches and coffee, then re turned to their watchful waiting.
At 3:30, Virginia was on the telephone when she heard a key grating in the lock. She looked up and saw what she later described as a “swarm of people.” A security guard had panicked and given the intruders the emergency key.
“Those people,” Virginia said afterward, “literally charged into the office. There was that very fat man in the rumpled suit, Hillel Chodos, and his brother, followed by at least a dozen others. The place became an instant madhouse. They began opening doors to offices, peering into the shelves, looking into desk drawers.”
Over the bedlam, Virginia called out instructions to the girls: “Keep an eye on each and every one of them! Don’t let them rummage through the files. Make sure they don’t put anything in their pockets or briefcases. If they want to take something, make them sign for it and take a description of what it is.” The men tore through the offices, followed by the girls.
Striding to the phone, Virginia called the photo department. “Get a man here at once to get pictures of what’s happening.” She called the television studio to send up people to take a visual and sound record too. Then she telephoned me. Breathlessly she said: “They’ve broken in. They’re taking over the whole office.”
Total chaos followed. The men — the Chodos brothers, and others who identified themselves as government agents — ransacked the place. Despite the brave attempt of the secretarial staff, records and files, confidential or no, were rifled, gathered up, and carried off. Many of them are still missing months later, and the state has consistently refused to give any accounting of what was taken despite repeated requests from the Church.
In the basement garage, some agents pounced on a large box in the back seat of an automobile I use on Church business. They opened it, saw it was filled with files, and gleefully impounded it, satisfied they had captured vital confidential records that I would later try to smuggle out of the building.
The “confidential” papers were records of a legal case tried several years before by Ralph Helge’s office; they had nothing whatever to do with the financial operations of the Church. I had asked for the files to check some facts and then sent them downstairs to be returned to Helge’s office.
Judge Weisman wasted no time in demonstrating power. He told Hillel Chodos to send Virginia to the personnel office where he had installed himself; he was beginning to’ clean house and apparently decided to start with my executive secretary.
Virginia went down and saw him for the first time. Weisman, a short, crippled man of medium build, leaned back in his chair. “I guess you probably don’t like what I’m doing here,” he said. “Of course I don’t like it,” Virginia replied.
“Regardless, I have the authority of the state,” Weisman said, and with that declared that he was “terminating” her employment.
Virginia was aghast. She demanded an explanation and insisted that she would not leave without one. None was forthcoming; Weisman insisted she was “terminated,” that she leave at once, and that other firings would follow.
“What about Mr. Armstrong?” Virginia asked, hardly expecting the incredible reply: “He’s out too.”
Virginia gasped. “You mean he’s fired?”
“Yes, that’s right,” Weisman answered.
“I see. And what about Mr. Rader?” Weisman was unflappable.
“He’s out too,” he said.
The Pastor General of the Worldwide Church of God and his chief aide and adviser had been summarily “fired” by a court appointed receiver. Absurdities were piling on absurdities so rapidly the logical mind could not absorb them. As for her staff and the others in the organization, Weisman said, he would talk to them and “see where their loyalties lay.” Virginia, almost literally unable to talk because of her bottled — in fury, left.
Upstairs she called me and, finding her voice, told me what had occurred. (Later, on a witness stand, Weisman blandly stated that he had not “fired” Armstrong.) All Virginia was allowed to take from the building were her personal belongings. I told her to collect them and come down to Allan Browne’s office with her husband, John, my executive assistant.
They drove to my home to pick up my wife, who had packed a suitcase, knowing I would be in for a long siege.
They arrived at Allan’s office shortly after 6:30 and the long, hard task of planning the counterattack was begun. We had to reestablish order from the chaos, prove that the integrity of the Church leaders was unquestioned, and recover the Church from the control of people who had no legal, much less spiritual, right to be guiding its destiny.
We worked until nearly daybreak marshaling our evidence. We ate when we could: Allan’s offices were littered with trays, coffee cups, and empty paper bags. I managed to get about two hours’ sleep at a nearby hotel where Niki had booked rooms, then returned for another hard session just after sunup.
Earlier, a number of Church members came in to help Virginia and John Kineston search the files, organize and copy them. Immediately after Virginia informed me of the invasion, I had called Herbert Armstrong in Tucson; thereafter, I telephoned him almost hourly, keeping him abreast of developments.
Problems have never upset Mr. Armstrong and he reacted even to this serious threat with serenity, courage, and confidence. Over the years of my close association with this remarkable man, I have noted abundant evidence that he is the embodiment of his own message of hope and trust that the living God will provide man with the wisdom to prevail over obstacles. “No matter how intelligent, alert or resourceful you may be,” he has written, “you need God’s wisdom and help in solving the constant problems and meeting the recurring obstacles that beset life’s path, whether it is in business, a profession, private life or what.
The man who has contact with God, who can take these matters — these emergencies — these problems — in the quietness of his private prayer room to the Throne of Grace and seek God’s counsel and advice is going to have divine guidance… Wisdom comes from God. ” I am certain that Mr. Armstrong took this grave emergency into the “quietness of his private prayer room to the Throne of Grace,” sought God’s counsel, and knew that justice and truth would ultimately prevail. (Editors note: I seriously doubt that Herbie took to prayer. More than likely, he took his problems to the bottle for consolation)
The damage that appointment of a receiver can do to any organization, and most especially a church, cannot be over estimated. It is as though a perfectly respectable individual were falsely arrested on a charge of sexual misconduct. Until the accused can prove his innocence through the laborious machinery of the law, a reputation built up layer by layer over the years has been blackened and virtually destroyed.
Sensational news travels fast and merits black headlines and prime spots on the evening news. If an accusation is made, the vast majority of readers and viewers tend to accept it. In the case of a receivership, moreover, the presumption of guilt created by the court’s order is powerful. Few people ask: What is the other side’s case? Rather, they infer that if the court has been forced to act, something very serious must be afoot.
In just two days we were to reap the first bitter fruits. Headlines throughout the country trumpeted the news that a church was being rocked by a financial scandal so massive, so shocking that the state of California had been forced to step in. And if people missed the headlines, they heard and saw it on television. Camera crews and newsmen descended on the Church in droves.
The name of the Worldwide Church was being blackened before it had been given a chance to say a word in its defense.
The Charges Shredded
There was, of course, a great deal to say. The charges leveled against the Church, Herbert Armstrong, and me by the state of California were specious-cleverly worded and loudly trumpeted to sound meritorious but actually steeped in falsity, inaccuracy, and blatant untruthfulness. It would be useful to consider each of them in detail.
1. The Church has, in the past, refused to make regular and proper accounting of its funds, and continues to do so.
The attorney general’s own complaint belies this, for he in — detailed accounts of Church expenses, gleaned from reports prepared by the Church for the years 1975 and 1976. Actually, outside audits of the financial affairs of the Church and Ambassador College have been made annually since 1956 and, since 1975 the International Cultural Foundation has been audited as well. Arthur Andersen & Co., one of the “big eight” national accounting firms, was retained to conduct the 1978 audit of all three organizations and to verify the earlier audits. There has been no evidence introduced to show or suggest that all audits have not been properly and professionally conducted.
2. Extravagant sums of money have been spent by Armstrong, Rader and other Church officials for foreign travel, lavish gifts, and entertainment.
All these monies were expended in furtherance of what Church leaders and members believe to be its chief mission — establishing religious and charitable programs and spreading the message of the Gospel throughout the world. In company with other representatives of the Church, Herbert Armstrong and I travel many thousands of miles each year to confer with heads of state and other foreign dignitaries as goodwill ambassadors of the Worldwide Church of God.
The members are apprised of these trips, and of other expenses such as gifts, dinners, and receptions that are held for these leaders. Far from “high living,” these are legitimate costs incurred while on Church business and are fully reported in bulletins and memoranda to members.
As a letter written to the editor of the Pasadena Star — News of January 22, 1979 states: “Does Judge Title seriously think that the thousands of people who support this Church had no idea that Mr. Armstrong went on these trips, or were ignorant of the system of Church government?”
The letter concludes: “If the State attorney of California gets away with this infamy, I would advise descendants of the Pilgrim fathers to once again board the Mayflower and sail for the religious freedom of the Old World.” (Editors note: skipping down to point three)
3. Church funds are being diverted by Mr. Armstrong and Rader for their own use.
This charge was aimed solely at me, for no “evidence” was offered linking it to Mr. Armstrong. The attorney general charges that (a) in 1978, I kept the proceeds from the sale of a home in Beverly Hills purchased by the Church in 1971; (b) I then bought another from the Church at a price lower than market value; and (c) a firm in which I was a partner purchased an airplane and subsequently leased it to the Church. It was also charged that my salary was too high. The answers, point by point:
(a) In 1971, I was asked to buy a house in Beverly Hills that would be suitable to entertain foreign guests visiting California at Herbert Armstrong’s invitation. Although the initial financing was arranged by the Church, I bought the house, giving the security in my Holmby Hills home as a down payment, giving the Church a second trust deed for $145,000, and assuming a first mortgage of $225,000. Until I became a Church member in 1975, I made all payments on the house. Beginning in 1976, the Church took over these payments, and paid for other expenses as well, since my residence was used to further the goals of the Church. Both the mortgage payments and maintenance payments were reported by me as income and — I paid taxes and tithes on them. Before this house was sold in 1978, I played host, in furtherance of the work of the Church, to such world-renowned figures as Gideon Hausner, the attorney general of the State of Israel who prosecuted Adolf Eichmann; Dr. Nagendra Singh, a member of the International Court of Justice; Teddy Kollek, the mayor of Jerusalem, and the ambassadors from Jordan to the United States and from Israel to Japan.
(b) The sale of the house, precipitated by Mr. Armstrong’s request that we move to Tucson, brought a profit which my wife and I received as owners. This was never kept a secret from anyone. When the Tucson move was deemed unnecessary, I purchased a house in Pasadena, owned by the college, appraised at $208,000. The purchase price was $225,000, paid in cash. (Editors note: $225,000.00 in 1978 had the same buying power as $856,974.64 in 2016. Annual inflation over this period was about 3.58%)
(c) The story of the airplane goes back to 1967, when my sole connection with the Church was professional. I was neither an officer, a director, nor member of the Church when Armstrong asked me to facilitate the leasing of a plane, as the Church had been unable to overcome a reluctance on the part of the owners to lease to it. The only way I was able to accomplish this was to form a partnership, which then leased the plane to the Church. I agreed to personally indemnify the other partners should the Church default.
As to my salary ($200,000 per year), far from being excessive, it is simply a reflection of my earning power plus my value to the Church. Prior to my employment by Herbert Armstrong, I had a successful practice as an attorney and certified public accountant with many important clients.
I now travel more than 200 days a year on Church business and have, I believe, made a significant contribution to its growth and success. The salary, I cannot deny, is extremely good, but it is certainly not excessive in light of the above. What is somewhat ironic is that it is less than half of the amount demanded by the receiver and his associates as compensation by the Church.
4. Church property, including the 1,600-acre former campus of Ambassador College in Big Sandy in northeastern Texas and 50 parcels in Southern California, was being sold at prices far below market value to raise quick cash for the “personal use and benefit of the individual defendants.”
The Church owned the vast acreage at Big Sandy, having originally purchased the property for development as a sister institution. In 1977, Mr. Armstrong decided that the Big Sandy campus was no longer serving the purposes for which it had been established. He ordered the academic operations terminated at the close of the spring semester. The campus was costing the Church $1.8 million annually in maintenance costs, so it was decided, in 1978, to sell the property.
A buyer was found and negotiations were in the final stages of completion to sell it for $10.6 million. This figure was almost $4 million above the value placed upon the property by a na-tional appraisal firm. The complaint, however, charged that Big Sandy was worth between $30 million and $50 million. Judge Title held in Superior Court that no evidence was produced to substantiate this valuation and, also in court, the attorney general conceded his failure to prove that the property was being sold below its market value. The sale — for $10.6 million, as originally intended — was later approved by the receiver and the court, but a determined group of Church members from Wisconsin successfully enjoined the sale when they learned that the receiver had requested a federal court in Texas to place the sale proceeds in his own account.
Judge Title also held that no evidence was produced to support charges that any of the other properties to be sold were priced below market value. These sales were made following a decision to reduce the number of college-owned-and-maintained properties for faculty members, a decision that rendered a large number of properties surplus. These were sold at prices exceeding their fair market value, all sales proceeds being deposited into the Church treasury.
5. Representatives of the Church have denied access to its books and records and have indicated they will be destroyed through shredding and other means.”
The attorney general was never denied access to our records. He never requested them when he stormed our premises without warning. There is no question that, if he had made such a request, in the same manner as the IRS, it would have been granted. The Church has nothing to hide. All our records, which are our best answer to these charges, are on a computer in a building about a quarter of a mile from administration head, quarters. Herbert Armstrong has not been in this building for many years. I have never set foot in this building; and nobody is hiding anything. The alleged shredding of documents was discussed earlier. Even Judge Title held that the state had presented no credible evidence that any papers had been destroyed, shredded or removed.
6. The properties, revenues and assets of the Church are being “siphoned off” by Herbert Armstrong and myself on a “massive scale,” amounting to several million dollars.
The fact is that the internal accounting system of the Church has scrupulously accounted for every penny received and expended. No “pilfering” or “siphoning” could have taken place without being reflected in the accounting records. Arthur Andersen & Co. was requested specifically, in its audit, to verify the integrity of the internal and external controls in our accounting system and has rendered an unqualified and certified opinion.
7. Mr. Armstrong is a feeble and senile old man.
Outside of the fact, which cannot be denied, that he is eighty-seven years old, this is pure rot. Herbert Armstrong’s vigor and steady stream of activity in behalf of the Worldwide Church of God amply refute this charge.
Since July of 1978, he has traveled extensively, both in this country and abroad. He has visited the People’s Republic of China, Japan, Morocco, Tunisia, and Israel, as well as making many personal appearances in the United States. He has written five books, two of which, The Incredible Human Potential and Tomorrow… What It Will Be Like, have already been published, with all royalties going to the Church.
He contributes regularly to Church publications and has made more than sixty-half-hour television programs. He personally oversees all copy in Church publications and conducts many meetings with ministers and officials of the Church. These facts were established by actual court rulings or clear evidence, uncontradicted by the attorney general, which was presented by lawyers for the Church. But the assault did not stop. (Editors note: Yep, you guessed it. Stan had to use not 3 or 4 points, but 7. The number “7” means something to church members based on the idea that God completed his creation on the 7th day. With this in mind, one would have to conclude that this propaganda is for church member consumption.)
We’ll stop here for now. In Part IV we will have the 60 Minutes interview where Stan gets his ass kicked by Mike Wallace. The other side of the story….
