When Chuck Grassley was "pwned" by the televangelists

Richard Lindgren reviews Senator Chuck Grassley’s probe of self-dealing by tax-exempt televangelists, which fizzled out with little to show for years of work. -promoted by Laura Belin

In a recent Bleeding Heartland piece, Laura Belin contrasted U.S. Senator Chuck Grassley’s aggressive attack on then-Vice President Al Gore’s use of a government telephone in 1997 to make fundraising calls to his silence after repeated and blatant Trump administration violations of the Hatch Act. This flouting of laws and norms culminated in President Trump pulling out all stops to use the White House grounds and hundreds of federal employees to publicly accept the 2020 Republican nomination for President.

In the internet gaming language of “leetspeak,” the notoriously frugal and “by the book” Grassley has repeatedly been “pwned,” (intentionally misspelled, but pronounced “owned”) which means to be embarrassingly dominated and defeated by another “gamer.”

Grassley has spent his sixty-year legislative career grooming this image of a “tightwad torchbearer” for responsibility in governmental spending, protecting government whistleblowers, and public moral rectitude. Yet in the last three years, he has helped to oversee the worst fiscal deficit blowout in history and too-numerous-to-mention norm-busting sins of this administration. They roll by with nary a peep of protest against members of his own party. A sixty-year reputation proven to be meaningless hypocrisy. What a sad, sad, legacy!

But this wasn’t the first time Senator Grassley stayed silent. We were warned.

The Grassley televangelist probe of 2007 to 2011

While serving as the ranking Republican on the Senate Finance Committee in 2007, Grassley began an investigation that lasted more than three years, trying to uncover the extent of reported multi-million-dollar self-dealing using church funds by prominent “prosperity gospel” televangelists. His investigation was instigated by numerous reports of tax-deductible contributions from poorer, older church members and television watchers getting spent on high salaries, expensive perquisites like private airplanes, and tax-exempt multi-million-dollar “parsonages.”

True to Grassley’s well-groomed persona, this misuse of government tax exemptions intended for the “good works” of churches needed to be investigated, even though he was no longer committee chair.

And by all accounts, significant staff time was allocated to this investigation, targeting six of the most infamous ministries. Indeed, lots of tax-exempt and tax-deductible money was flowing to the personal use of preachers and their families in every shape imaginable.

Two of these televangelists, Joyce Meyer and faith-healer Benny Hinn, cooperated with the investigation and pledged to implement financial reforms (although these pledges were never followed up). Four ministries, including one founded by Donald Trump acolyte Paula White, refused to cooperate at all. Many “religious right” leaders publicly condemned this intrusion into their private money hoards.

Chuck Grassley and I have long held little in common politically. However, with a personal and professional interest in the tax laws surrounding churches and ministers, I had sent a supportive letter to Grassley’s office when this investigation had gone cold, inquiring as to its status. I received a form letter in return. Something was amiss.

The timing of this probe was especially bad for Senator John McCain, who was running for president near its onset. He needed the support of the conservative Christian ministers. Left with little support from his own party, Grassley learned that even the most notorious fiscal tightwad in the Senate was no match for “ministers” who had learned how to profit from millions of dollars in “nonprofit” tax exemptions, and from laws designed to protect the modest parsonage next to the little old church down on the corner.

IRS guidelines require that church earnings may not benefit any private individual, and that pastors’ compensation be “reasonable.” Despite much evidence of self-dealing and gross misuse of the tax-exempt “clergy housing allowance,” Grassley quietly folded up shop in early 2011. He did issue a 61-page report, with trade publication Nonprofit Quarterly writing the most objective, but still disturbing, summary. And there the issue essentially died, with the abuses continuing unabated.

I have reviewed numerous financial statements from churches and affiliated institutions like colleges over my career. To counter the call by some that churches should be taxed, I have written in the past that the large majority of churches and synagogues, if treated as businesses, would be claiming “tax loss carryforwards” for years to come. This includes some entire “mainstream” U.S. Christian denominations and their related institutions, many of whom are facing disastrous financial shortfalls and aging member rolls.

For instance, Iowa has about twenty mostly-small colleges with religious roots, and likely all of their leaders are heavily sweating the fiscal effects of this year’s COVID-19 crisis. In these churches and institutions, the salaries and parsonages are typically modest, and the utility bills are high. “Profits” are largely nonexistent.

On the other hand, it not hard to find “prosperity gospel” preachers who are still pulling tens of millions of dollars annually from the “sacrificial” offerings of Americans, or from the associated “merch” hawked on television. These are often tax-deductible donations and, of course, the churches neither pay income tax nor publicly reveal, as other nonprofit organizations are required to do, their annual cashflow and top salaries in an IRS Form 990.

As the internet “gamers” would say, “Senator Grassley, you have been pwned by the rich megachurch preachers, and especially now by Donald Trump. Eat that humiliation!”

The list of conservative Republicans who have been shamed by Trump, only to return to lick his boots, is long. Senator Ted Cruz had to “eat” insults made about his wife, and even the accusation of his own father’s involvement in the Kennedy assassination. Senator Lindsey Graham had to repudiate his decades-long friendship with the late Senator McCain. “Little Marco” Rubio continues to remind the world how “little” he is through his Trump fealty. RNC Chair Ronna Romney McDaniel had to hide her family name. Is there no shame left among these folks?

Chuck, your silence is deafening, and your sixty-year political legacy has been shot to pieces.

Richard Lindgren is Emeritus Professor of Business at Graceland University in Lamoni, Iowa, now retired in Gulf Coast Florida, but still teaching on Zoom. He blogs at godplaysdice.com.

Top image: Screenshot from CSPAN video of President Donald Trump’s remarks at an evangelical rally in Miami on January 3, 2020. The televangelist Paula White is standing next to Trump, with her hand on his arm. The president appointed White to work as a White House liaison to faith communities in November 2019.

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