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Ministerial oversight?

National | Ned Graham loses board members, the privilege of the term "Reverend," his wife of almost 20 years-and quits a financial watchdog association

Issue: "Taking on the thugs," Nov. 6, 1999

in Puyallup, Wash. - Thelma Moxley, 79, of Sunriver, Ore., is a faithful donor who says she gives to ministries "as to the Lord." The retired secretary, widow of a carpenter, says she carefully budgets to give all she can from her limited income to the Billy Graham Evangelistic Association (BGEA), the American Bible Society, other groups, and her church. "I believe in Billy Graham's ministry, and the others," Mrs. Moxley said. "I trust they'll add the little I can give to what others give, so that together we can do more than any of us could do alone." Trust is the operative word. It's up to a ministry's board of directors to make sure the trust is deserved. To help such boards and ministry leaders keep faith with the Mrs. Moxleys of the Christian world-and to head off a threatened government crackdown-the Evangelical Council for Financial Accountability (ECFA) was formed 20 years ago. Member organizations voluntarily subscribe to seven "standards of responsible stewardship," including a 12-part fundraising standard. "By law, [a ministry's] board of directors is responsible to oversee management," said Brewster Kopp, president and chairman of Stewardship Group, an organization that aids Christian nonprofits. "There are many not-for-profit organizations where the board is not doing what it should." Does East Gates Ministries International fit that category? Within the last year it saw a string of board members and staff leave. The departures began soon after the wife of East Gates President Nelson E. "Ned" Graham, youngest son of Billy and Ruth Graham, sued her husband for divorce a year ago. Early this year, East Gates quietly resigned from the ECFA. "These are red flags," Mr. Kopp said. East Gates is located about an hour's drive southeast of Seattle, below the snow-covered glacial fields of Mount Rainier. Its post-office box address is Sumner; its street address is Puyallup. The organization underwrites the production and distribution of Bibles in China (2 million so far, according to Mr. Graham) in cooperation with the China Christian Council and Amity Printing Company. It has built structures for 20 Chinese churches, according to Ned Graham, or about five according to a former East Gates executive. It has helped Chinese pastors to receive training in Singapore, provided high-tech equipment to seminaries in China, and sent money to flood-damaged churches. East Gates was established in 1989 by Ruth Graham, journalist David Aikman, Bible smuggler Doug Sutphen, and others. Ned Graham, then 33 years old, became president in 1991. Under his leadership, the organization has become financially viable. In 1997, the last year for which complete figures are available, East Gates took in $2.3 million. Nearly $1 million of that came from the Billy Graham Evangelistic Association, and thus indirectly from Mrs. Moxley and other BGEA donors. (BGEA has since decreased its funding; a BGEA source told WORLD that the organization gave $60,000 in 1998 and budgeted the same amount in 1999.) East Gates over the years has received most of its income from other organizations-some of which give generously because of the Graham name. The American Bible Society, another recipient of Mrs. Moxley's contributions, has given East Gates $825,000. The Richard and Helen DeVos Foundation gave $1 million in 1996. Both cite the Billy Graham connection as one reason for the sizeable grants. Mr. Graham's salary in 1998 was about $76,000, and he received a tax-free housing allowance of more than $36,000. No one has alleged financial impropriety, but many associates of Mr. Graham have expressed concern about his personal difficulties and their impact on East Gates. Carol Graham, in a Nov. 10, 1998, affidavit filed in court, accused her husband of infidelity, domestic violence, and drug and alcohol abuse. Ned and Carol Graham were then members of Grace Community Church in Auburn, Wash., where Mr. Graham had been an elder and associate pastor. Church elders met with him for two hours in mid-December 1998. They discussed not only the accusations in the divorce complaint but also Mr. Graham's rare church attendance during the preceding three years, according to Bruce Ker, chairman of the church's elder board. The elders prescribed a course of counsel and discipline aimed at reconciliation and accountability. Mr. Graham balked, claiming his wife had lied and the pastors had unfairly sided with her. Accusing the elders of using improper procedures, he left the church. The church subsequently stopped supporting East Gates (at $500 a month), revoked Mr. Graham's ministerial license, and told him to stop using the title "Rev." since he had never been ordained. (The divorce suit was settled in mediation; both sides agreed to have the case record sealed.) Mr. Graham chose to be interviewed by WORLD only through written questions and answers. Questioned regarding reports that he had undergone treatment for an alcohol-related condition, Mr. Graham wrote, "I took Board-approved time away in June of 1998." In response to a question about alleged involvement with a woman who was not his wife, Mr. Graham wrote, "During our marriage and before the divorce I had never been alone in a woman's home or apartment and had never been alone in my home with any woman other than my wife. To directly answer your implied question-I was faithful to my wife for 18 years without exception." At the time of the divorce filing, Ned and Carol Graham had been married for 19 years and 2H months. They have two sons, ages 11 and 13. WORLD gave Mr. Graham an opportunity to amend his answer. An aide replied by email: "Please very carefully note that Mr. Graham's answers were factually correct." In response to a question about his current church affiliation, Mr. Graham responded, "I am attending another fellowship," without naming it. The bylaws of East Gates require church membership. When asked about his use of the title "Rev.," which is by tradition reserved for those who have been ordained, Mr. Graham wrote in September, "I never personally used the title Reverend and East Gates no longer uses the title Reverend in reference to me." But a 1997 letter he wrote to members of Congress is signed "Rev. Ned Graham." The East Gates website at least until mid-October included a photograph of Mr. Graham holding a Bible, with the photo captioned, "Rev. Ned Graham." (The site has since been changed; "President" replaced "Rev.") East Gates public-relations materials emphasize the organization's distribution of Bibles for people in China without ready access to them. Documents filed with the IRS show that in 1996 East Gates spent $494,515 on Bible purchases and distribution, and $504,497 on other ministries (in China and on donated food to North Korea valued at $300,000), not including all associated costs, out of a total income of $2,076,533. Other expenses included an item for "building relationships with governmental agencies and individuals" (see sidebar). In 1997, East Gates reported that it spent $268,890 on Bible purchases and distribution and $276,365 on other ministries in China not including all overhead costs relating to those expenditures, out of a total income of $2,308,362. In 1998, with incomplete figures available, East Gates took in $1.1 million; it spent $178,000 on Bibles and $120,000 on other ministry needs in China, excluding related costs. At least six of the 10-member East Gates staff resigned in the first six months of this year. Three of the five members of the East Gates board of directors resigned at a Dec. 1, 1998, telephone-conference-call board meeting. Three new board members came on at that meeting: Mr. Graham's sister Ruth Graham McIntyre, his brother-in-law Stefan Tchividjian, and motivational speaker Peter Lowe. Mr. Graham informed the Evangelical Council for Financial Accountability in a Jan. 8, 1999, letter that East Gates was voluntarily withdrawing its membership since it had fallen out of compliance with ECFA's standard that family members should not constitute a majority of a board. WORLD interviewed the board members who resigned. Roger Flessing, director of communications for the Billy Graham Evangelistic Association, said he resigned to clear his crowded schedule. Board chairman John Akers, a top aide to Billy Graham, said he would not comment on the reasons he resigned. But a Dec. 3, 1998, letter to East Gates from the third resigner, Richard "Dick" Gordon, a long-time friend and near neighbor of Mr. Graham, displays concern. Mr. Gordon, who is also associate pastor at Grace Community Church, stated, "Due to factors and issues concerning the President of East Gates Ministries, I hereby submit my resignation as a Board Director of the ministry, effective immediately." Mr. Gordon told WORLD that he had frequently and over a period of years expressed his concerns to Mr. Graham about the ministry leader's lack of church attendance and his unwillingness to be accountable to the East Gates board; a January 1998 memo put those concerns in writing. They became a subject for board discussion at the Dec. 1, 1998, meeting, according to minutes signed by chairman John Akers but not approved by the new board majority. "Richard Gordon made the motion that due to lack of job performance, violation of numerous East Gates bylaw items, and general lack of accountability, that Ned Graham be put on administrative leave as president of East Gates Ministries, for such time as the board deemed appropriate. Having no second, the motion died." East Gates bylaws require all board members and employees to be "in a pattern of ... personal and corporate accountability." They are "required to be members of and accountable to a local church of their choosing." They are expected "to put into their family life the time needed for the well being of the family unit." Mr. Gordon cited "fraternization" with a woman employee as another of Mr. Graham's bylaw violations. Asked about why he chose not to second the motion, Mr. Akers said he had no comment, but added, "Keep in mind the good of the organization and the opportunities it has had. I know not everyone agrees with the philosophy of East Gates, but it has opened the door to several million Bibles being distributed." Mr. Flessing said he was bothered by the "one-two punch" of Mr. Graham losing first his wife and then his ministry. Current East Gates chairman David Dove, a friend of Mr. Graham since their student days and a long-time East Gates board member, said, "The allegations were broad and did not make any sense." He added, "Ned felt capable to continue, and East Gates needed his efforts." Jeffrey W. Reinen, a Connecticut attorney who has served on and advised many nonprofit boards, said that boards sometimes deal with leaders who are having problems by sidelining the leader, placing him on administrative leave, or asking him to resign for the good of the organization. All such decisions are difficult, Mr. Reinen said, but a board of directors should emphasize "protection of the organization." Those are the kinds of tough calls that Mrs. Moxley, like other donors, is happy to leave to a board of directors. But she expects a board to make them.

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