DALLAS (ABP) — The Baptist General Convention of Texas will not file lawsuits to recover church-starting money mismanaged in the Rio Grande Valley.
Civil litigation would be costly and complex, and the statute of limitations could prevent recovery of a significant portion of the misappropriated money, attorney Steven Wakefield wrote in a letter to the BGCT Executive Board. BGCT Executive Director Charles Wade reported the recommendation to the board at its May 21-22 meeting in Dallas.
Last year, a five-month independent investigation uncovered evidence that 98 percent of the 258 new churches reported by three church planters in the Rio Grande Valley between 1999 and 2005 no longer exist, and some never existed. Those churches received more than $1.3 million from the BGCT. The investigative team faulted the BGCT Executive Board staff for poor oversight, uneven management, failure to abide by internal guidelines and misplaced trust.
Two weeks after it received the investigators' report, the BGCT board met to take action to clean up the scandal and prevent future problems. One of the motions approved directed the board's executive director, in consultation with legal counsel and with convention and board officers, to consider “the full range of methods for recovery of funds misused or misappropriated” by individuals named in the investigators' report, and to initiate action to recover the money.
Wakefield and Wade forwarded the investigative report and all its supporting documents to the United States Attorney in Brownsville, Texas, in December.
“I have coordinated, on a regular basis, follow-up with the U.S. Attorney's office to attempt to determine that office's interest in pursuing any criminal cases that are attributable to possible misappropriation of funds provided for church-starting efforts,” Wakefield wrote in his letter to the board.
He also looked at options to recover misspent funds, including civil litigation, he reported.
“After consideration of all relevant facts, we believe that civil litigation by the convention to recover funds is neither practical nor would it represent good stewardship of churches' resources,” he concluded.
Since three church planters — Otto Arango, Aaron de la Torre and Armando Vera — were named in the investigators' report and their circumstances vary, any attempt at restitution would require three lawsuits held in the Rio Grande Valley, Wakefield noted.
“As clearly evidenced in the Valley investigation report, tracing of the funds from the BGCT to the recipients and then to the possible inappropriate use would be extremely difficult and costly,” he said.
Indications in the investigators' report that some former BGCT church-starting staff relaxed guidelines and allowed the misuse to occur also makes a successful suit more difficult, Wakefield explained.
“If the BGCT's own employee or employees facilitated any misapplication, whether intentionally or unintentionally, recovery becomes legally much more difficult,” he wrote.
Legal action in the Valley would require the BGCT to employ local legal counsel, along with an investigator and forensic accountant. And the statute of limitations further complicates the issue, Wakefield noted.
“The maximum period of time that we have to bring civil actions for fraud, debt, breach of contract or other potential causes of action to recover misappropriated funds is four years from the date of misappropriation, or the date we should have known of the misappropriation,” he explained.
Most of the funds advanced for church-starting purposes were advanced during the period from 2000 to 2003. Under federal criminal law, the U.S. Attorney has up to seven years to pursue the matter, he added.
The Federal Bureau of Investigation also is investigating, board members learned. BGCT second vice president Robert Rodriguez reported the FBI had called him to ask questions.
Wakefield reminded board members that FBI officials “work on their own schedule,” and it's hard to know when investigators will decide whether to pursue charges.
“It's certainly our intention to assist them in any way possible,” Wakefield said. Wade also reported to the board progress on issues related to the church-starting fund scandal:
— A new system is now in place that includes a date-recording process for an “accurate and timely documentation of church starting and ending dates,” Wade said.
— Staff completed on April 12 an integrated system that assigns each church a single identification number and cross-references it to a vendor identification number.
— Revised documentation has been completed in all areas regarding church starting, including a process for check issuance.
— A certified accountant firm completed an internal risk assessment. “The audit committee will give direction to the areas identified in the risk assessment to be audited during 2007 and years following,” Wade said.
An outside firm is developing an online service to allow staff to register any concerns anonymously, and staff will be trained in its use within the next couple of months. The online reporting mechanism will function in addition to the existing “whistle-blower” policy, Wade noted.
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