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Tax Lawsuits Reveal Ministry’s Finances

June 21, 1987 GMT

DALLAS (AP) _ A court battle over the tax-exempt status of a radio station is forcing Jimmy Swaggart Ministries to release details of its finances and has led to the charge that the evangelist has kept contributions for his personal use.

The Rev. Jimmy Swaggart and his ministry, based in Baton Rouge, La., also have been accused of ignoring court orders to produce information, the Texas Lawyer newspaper reported in its June 22 edition.

The ministry’s lawyer denied withholding any relevant material and denounced the allegation that Swaggart had skimmed profits from his ministry.

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The Conroe Independent School District, the city of Shenandoah and Montgomery County claim that Swaggart-owned radio station KJOJ owes $157,000 in taxes on three pieces of property. KJOJ is one of the ministry’s six Christian radio stations in Texas.

Swaggart contends the facilities are tax-exempt.

A hearing is scheduled for July 17 on a motion for sanctions against the church for its alleged reluctance to obey discovery orders.

So far, the Lawyer reported, financial records provided by the ministry have provided these details:

- The ministry collected $455.8 million in contributions and sales of religious materials from 1978-85. Financial statements show contributions have increased about 25 percent annually since 1979.

- The church’s net worth increased $65.8 million in that six-year period, while assets tripled between 1982 and 1984 to $112.8 million.

- The ministry contends it does not make a profit, but a 1982 financial statement showed $11.9 million in ″excess revenues″ after expenses. Between 1979-83, the ministry collected more than $37 million in excess revenues.

- While the ministry seeks a protective order to prevent disclosure of individual salaries, a lawyer for the ministry revealed in a May 26 letter the salaries of its highest-paid employees, including $216,000 for Swaggart family members in an unspecified year. The list, including salaries of 57 people paid more than $30,000, totaled nearly $2.3 million.

Swaggart’s income - drawn from about $5.5 million in annual royalties from recordings and books - was $17,600 in salary and $34,000 in other compensation for an unspecified year, according to an interview and a letter from Swaggart’s lawyers.

Russell R. Graham, an attorney for tax officials, said in a letter to State District Judge John C. Martin that his clients believe Swaggart retained funds from contributors for his personal use.

William D. Treeby, chief lawyer for Swaggart Ministries, denied the allegation.

″If any of that money went into Rev. Swaggart’s pocket...that would be the death penalty,″ said William D. Treeby, chief lawyer for Swaggart Ministries. ″We’re not going to do that.″

Other salaries disclosed in court documents include $52,000 for Swaggart’s wife, Frances, who handles the ministry’s finances; $51,000 for her brother, Robert Anderson; and $62,100 for the Swaggart’s son, Donnie, the ministry’s executive vice president.

Treeby said the ministry stopped releasing its financial data a few years ago because the media misinterpreted it.

After allegations of wasteful spending at Jim and Tammy Bakker’s PTL Ministry, Swaggart Ministries changed its policy to grant reporters access to audited financial statements on the understanding that the reporters review the statements with ministry accountants.

The Baton Rouge Morning Advocate reported in May that the ministry’s net worth was $111.9 million, with revenue of $128.5 million. The report was based on an audited financial statement provided by the ministry.

The ministries’ net worth in 1985 included $22.8 million in land, almost $80 million in buildings and more than $33.1 million in equipment and furnishings, including a TV and recording studio, the Advocate reported.

Homes owned by Swaggart and his son, and a third owned by the ministry and occupied by Swaggart’s brother, were assessed at $2.5 million, the Advocate had reported.

In 1986, the Advocate said, Jimmy Swaggart Ministries had estimated receipts of $142 million, according to Jim Guinn, the Dallas-based auditor who has kept the Swaggart Ministries’ books since 1978.

The IRS has not audited the organization since 1976, and has reaffirmed the ministries’ tax-exempt status several times as it has grown, the Advocate said.

Recently, Swaggart has reported a sharp drop in contributions, which he blamed on public reaction to the PTL scandal.