NCC's Burned Churches Fund fails to account for $2.6 million By Parker T. Williamson The Layman Online Monday, November 15, 1999 CLEVELAND – The National Council of Churches says it raised $9.1 million in cash for its Burned Churches Fund, distributed grants totaling $6,403,483 and had assets of $12,335 as of Sept. 30, 1999 – but offered no explanation about where more than $2.6 million went. Futhermore, a report to the council said "a special audit was not required for the Burned Churches program." One diversion of Burned Chuches Fund money did show up in records distributed at the council's 50th anniversary celebration. Desperate to find a way out of its $3.9-million deficit, the council has moved $330,000 from its donor-designated Burned Churches Fund into NCC operating accounts. A council official told The Presbyterian Layman that the financial transfer was made to cover "consultant costs" that were incurred in tracking a huge flow of money in a short span of time. The great hoax? The Burned Churches Fund was established in June, 1996, to rebuild churches that were allegedly destroyed by arson. Campaign rhetoric by the NCC officials suggested that the burned churches were primarily African American houses of worship and that the burnings were racially motivated "hate crimes." That assumption has been challenged. In 1998, the National Church Arson Task Force, which had been appointed by President Clinton to investigate charges perpetrated by the NCC, reported that of the 670 investigated incidents, fewer than half (225) involved African American churches, and of that number, only 163 were in the NCC's target area, the Southern United States. The task force found that reported church fires resulted from many causes, including inadequate wiring and poor maintenance, and that there was scant evidence of arson in many of the churches that had burned. Subsequent studies have shown that among those church burnings that were verified as arson-related, one-third of those who were arrested were African-Americans. In September, 1996, the Institute on Religion and Democracy issued a devastating report, citing studies conducted not only by its staff but also by USA Today, The Associated Press, The New Yorker, The New Republic, and The Wall Street Journal, all of which "punched significant holes in the NCC's theory about surging white racism assailing black churches on a major scale." In a Wall Street Journal article titled "A Church Arson Epidemic? It's Smoke and Mirrors" (July 8, 1996) Michael Fumento wrote, "This supposed 'epidemic of hatred' is a myth, probably a deliberate hoax. There is not good evidence of any increase in black church burnings. There is, however, compelling evidence that a single activist group has taken the media and the nation on a wild ride." NCC Campaign Hits the Jackpot Mac Charles Jones In spite of the warnings, Mac Charles Jones, racial justice officer for the NCC, declared at a Washington news conference that black church burnings constituted evidence of a racial war in rural areas. He said the nation was experiencing a "tinderbox" climate that put black churches in imminent danger. Jones' rhetoric paid off and millions of dollars poured into the NCC's coffers. By September, 1996, the fund had received a reported $2 million from churches, $4 million from individuals and $3.1 million from foundations, a total of $9.1 million in cash gifts. Additionally, the council says it received $3.4 million in contributions of construction materials and other goods. In-kind contributions raised the value of all gifts to the Burned Churches Fund to $12.5 million. In an oral report to the NCC General Assembly on Nov. 11, General Secretary Joan Campbell said the fund had received more than $10 million. Other estimates from within her organization peg the number in excess of $12 million, the figure that comes closer to the 1996 totals reported from churches, individuals, foundations and in-kind contributions. But according to a 1996 Wall Street Journal estimate, if every burned black church had been rebuilt, no more than $4.5 million of the NCC's fund would have been needed. Where did the money go? During the NCC's Nov. 9-12 meeting in Cleveland a "Burned Churches Project" report (A&F-3a) was distributed to some of the council members. The document contains no income statement and no details on how the money was spent. The report says that grants made from the fund totaled $6,403,483. But a schedule from the NCC's General Secretariat Financial Operations Office for the fiscal period ending Sept. 30, 1999 shows net assets in the Burned Churches Fund of only $12,335. Assuming the accuracy of the $9.1-million cash income estimate, that report leaves the NCC with an unexplained disappearance of more than $2.5 million from contributions made to its Burned Churches Fund. Margaret J. Thomas, treasurer of the NCC Special audit 'not required' A report was submitted to the NCC Executive Board (A&F-1) on Nov. 10 bearing the name of Margaret J. Thomas, a Presbyterian Church (USA) synod executive who serves as treasurer of the NCC. The report reminded the board that the Administration and Finance Committee had decided earlier, and recorded in its minutes, that "a special audit was not required for the Burned Churches program." The report continued, "The Committee indicated that it was now unable to reconcile the present reports with earlier reports from the Pappas Group [independent financial consultants], and that steps need to be taken to correct this problem. The Committee wishes to state for clarification that it made a decision based on assumptions which now seem inappropriate." Thomas told The Presbyterian Layman on Nov. 11 that this portion of her report (quoted in the paragraph above) had been "added by an unauthorized staff person without my knowledge." She said that she asked the executive board to strike the section from her report because it was erroneous, and that it did so at a meeting on the evening of Nov. 10. Thomas told The Layman that the alleged differences between the independent consultants and the NCC staff were "relatively minor," amounting to "only $28,000 in a $12 million fund," and that these discrepancies have since been, for the most part, resolved. She said that a special audit of the Burned Churches Fund had never been recommended by her Administrative and Finance Committee and the she continues to believe that an audit of this fund is unnecessary. Expanding Project Goals It is clear that the NCC did not spend $12.5 million rebuilding burned churches. Although she does not reveal specifics, Joan Brown Campbell admits that this is the case. She says that she made that clear in a letter that she wrote to NCC board members in August, 1999. That letter states, "The NCCUSA Burned Churches Project is being reshaped as we look to the future. As of August 15, 1999, the program will become the 'Community Reconciliation and Church Rebuilding Project,' and will be lodged in the NCCCUSA National Ministries Unit. Focus will be given to community reconciliation activities, with rebuilding grants to churches being allocated as such funds may become available." Elenora Ivory, director of the Presbyterian Church (USA)'s Washington Lobby The Campbell letter appears to have established August 15 as a benchmark beyond which the NCC's National Ministries Unit (chaired by Elenora Ivory, director of the Presbyterian Church (USA)'s Washington Lobby) could spend Burned Churches money on activities other than rebuilding burned churches. Thomas told The Layman, however, that "this has always been the case." Thomas said that from the very beginning the Burned Churches Campaign envisioned broader goals than "simply rebuilding burned churches." If this is, in fact, the case, then the NCC created an opportunity, when it established the campaign, to transfer into Ivory's National Ministries Unit a substantial contribution from the Burned Churches Fund, a virtual life-saver to the NCC's red-ink budget. None of the financial reports distributed to the council specifically identify that such transfers occurred, and the Burned Churches report that was distributed at the council's November meeting identifies only "church rebuilding projects." So for the moment, questions regarding the whereabouts of approximately $2.6 million that was given to the Burned Churches Fund remain unanswered, and the NCC's Administration and Finance Committee continues to insist that an audit of that fund is "not required."

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