LJ-SEC: (ORIGINALLY POSTED BY nebris)

http://www.minnesotamonitor.com/showDiary.do?diaryId=1251

Feb 08, 2007 -- 9:11 AM CST
Andy Birkey

A Washington, D.C., watchdog group is filing a complaint with the Internal Revenue Service against television evangelist Mac Hammond's Brooklyn Park mega-church based on documents obtained by Minnesota Monitor that purport the pastor arranged several lucrative deals with the church.

These documents describe financial agreements in which Hammond bought a plane from the Living Word Christian Center and then leased it and another plane back to the church for almost $900,000 a year and obtained loans –- some of them unsecured –- for $1.9 million.

Church officials did not respond to repeated requests for comment, and Minnesota Monitor could not confirm the authenticity of the documents.

But when shown the documents as part of the reporting for this story, Citizens for Responsibility in Washington (CREW) said it would file a complaint against the church with the IRS.

According to the documents, which involved a loan application in 2003 and contained over 100 pages of pictures and detailed descriptions of the church's land amounts, financial transactions and administrative history, Hammond owns two airplanes, one bought from Living Word for $1.06 million on credit supplied by Living Word. He leases the planes back to the church at a total annual rate of more than $893,000. The church asserts that "the aircraft are important to the efficient management of its ministry at the present time..." Living Word also rents a hangar to store the planes, and it pays for the expenses of the planes as well.

In addition, the church made several loans to Hammond since 2000 totaling at least $1.9 million: two were for the planes, three were unsecured, and one enabled Hammond to purchase a house in Florida.

CREW's complaint alleges that Living Word, since it is a tax-exempt organization, has engaged in improper financial transactions with Hammond. According to the complaint, Hammond is one of seven members of the church's board of directors, making him an "insider" under federal law. CREW asserts that tax law prohibits "insiders" from benefiting from the church.

The complaint further alleges that the leasing arrangement violates federal laws barring favorable financial deals to people in Hammond's position and prohibits using charitable resources to compensate "insiders" for activity not related to the church's tax-exempt purpose.

"Pastor Hammond and the LWCC have shown a disturbing pattern of violating federal tax law, and the IRS has done nothing," said Melanie Sloan, executive director of CREW. "The IRS has not hesitated to target liberal organizations. When will enough be enough and the IRS finally step in and investigate a conservative church that has repeatedly demonstrated its contempt for federal law?"

This will be the second complaint CREW has filed against the church. In October, CREW alleged that the church violated tax laws when Rep. Michele Bachmann, R-Minn., made a campaign speech at a Sunday service and web broadcast. During Hammond's introduction of the candidate, he told the church that he would be voting for Bachmann.

There were two problems with Hammond's endorsement: Hammond did not live in Bachmann's district, and endorsing a candidate from the pulpit violates of IRS rules concerning churches.

The story posted on Minnesota Monitor generated considerable interest in the media, both for the potential tax violations and Bachmann's statements in her speech (saying she's a "fool for Christ"). CREW alleged that Living Word was improperly using its tax-exempt status to influence the outcome of an election. The story was picked up by the local media, the Associated Press, The New York Times and hundreds of blogs.

The IRS has yet to issue a decision on the complaint.

Tim Mooney, senior counsel at CREW, said this second complaint could spell trouble for the church. "It's conceivable that the IRS could revoke Living Word's 501(c)3 status," he said.

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