TRI In The News

Christian Crusaders Cash In

September 06, 2011

9/6/2011

TRI IN THE NEWS: CHRISTIAN CRUSADERS CASH IN

From The Tennessean

Back in the 1980s, Jay Sekulow's career was in shambles. His Atlanta-based law firm had failed, leaving him millions in debt and bankrupt.

Then he got a lifeline from a surprising source — the U.S. Supreme Court.

Sekulow's client, San Franscisco-based Jews for Jesus, was locked in a legal dispute with commissioners at the Los Angeles airport. The group wanted to hand out religious literature there. Airport officials said no. Sekulow argued the commission's actions violated the First Amendment.

The Supreme Court ruled 9-0 in Jews for Jesus' favor, a victory that launched Sekulow's new calling as a crusader for Christians who believed their legal rights were being threatened.

Sekulow's story was chronicled in major newspapers.

For Sekulow, it was like being born again.

"I almost feel like God raised me back from the dead," he told the Atlanta Journal Constitution in 1991. "It was a spiritual rebirth."

Sekulow, a celebrity among conservative Christians, now sits as the principal officer of two closely related multimillion-dollar legal charities: Christian Advocates Serving Evangelism, which he founded in San Francisco, and the better-known American Center for Law and Justice, founded by Christian broadcaster Pat Robertson and based in Virginia Beach.

Jay Sekulow Live — a call-in radio show sometimes produced at the Sekulow Media Group studio in the Factory in Franklin — draws millions of listeners. He's a regular commentator on Fox News and splits his time living between Franklin and the Washington, D.C., area. Attorneys from his two charities are suing to rescind national health-care reform and to block the proposed mosque near ground zero.

Along with its spiritual benefits, Sekulow's new calling has come with significant financial benefits.

Since 1998, the two charities have paid out more than $33 million to members of Sekulow's family and businesses they own or co-own, according to the charities' federal tax returns, known as form 990s.

One of the charities is controlled by the Sekulow family — tax documents show that all four of CASE's board members are Sekulows and another is an officer — an arrangement criticized by a nonprofit watchdog group.

The founder of a different Christian legal organization takes aim at the idea of Sekulow profiting in the name of religion, saying it isn't what Jesus would do.

The American Center for Law and Justice's tax attorney says the payments to the Sekulows and businesses they own or co-own are all made for the charities' benefit and have passed an IRS audit. Sekulow's supporters, including many in Middle Tennessee who have been helped or done business with him, say he is a humble man dedicated to the Christian cause.

Among the payments since 1998:

$15.4 million to the Constitutional Litigation and Advocacy Group, a law firm co-owned by Jay Sekulow. According to the 2009 tax form, he owns 50 percent of CLAG. The firm was known as the Center for Law and Justice when it received some of the payments.

$5.7 million to Gary Sekulow, Jay Sekulow's brother. He is paid for two full-time jobs — as CFO of both the American Center for Law and Justice, or ACLJ, and Christian Advocates Serving Evangelism, or CASE. In 2009, his combined compensation topped $600,000.

$2.74 million in private jet lease payments to Regency Productions, a company owned by Jay Sekulow, and PFMS, a company owned by his sister-in-law, Kim Sekulow.

$1.78 million to Regency Productions for leasing office space and media production.

$1.11 million to PFMS for administrative and media buying services.

$1.6 million to Pam Sekulow, Jay Sekulow's wife, including a $245,000 loan from CASE, which she used to purchase a home from the charity. The balance of the loan was later forgiven over several years and reported on the 990s as income.

$681,911 to Jay Sekulow's sons, Logan and Jordan, for media work and other duties at CASE.

Members of the Sekulow family declined requests for interviews. John Hoover, a Washington, D.C.-based tax attorney with Dow Lohnes who advises ACLJ, responded to written questions from The Tennessean.

"The arrangements between ACLJ, CASE, and companies of which Jay Sekulow has an ownership interest are on terms and conditions more advantageous than the organizations could obtain otherwise," he wrote.

But Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group, said there's a problem when a charity's board is dominated by family members.

Nonprofit board members are supposed to be independent and look out for the best interests of donors. That's nearly impossible with so many family members on a board, he said, after reviewing three years of CASE and ACLJ tax returns.

"Are they going to operate in the best interest of the family or the best interest of the charity or the public?" he said. "They are only human."

John Whitehead, founder of the conservative Rutherford Institute, a Christian civil rights charity founded in 1982, was more blunt about Sekulow, whose work he has followed for years.

When Christian charities become successful, he said, they can lose sight of the ethics of their faith, which include handling money with care. Six-figure salaries and perks like a private jet clash with Christian ideals about charity.

"If you read the New Testament, the founder of Christianity said, 'I have no place to lay my head,'" Whitehead said. "I am aghast at modern evangelism and the money."

The IRS requires nonprofits to disclose the compensation of their leaders.

Whitehead earned $162,452 in fiscal year 2009, according to Rutherford's tax return. Alan Sears, head of the Alliance Defense Fund, a Christian legal group that took in $35 million that year, earned $368,833 in total compensation. Anthony Romero, executive director of the American Civil Liberties Union, made $350,232.

But a donor to ACLJ wouldn't know how much Sekulow is earning from his work with the organization, even though he is described as CEO, chief counsel and board member on its tax forms. ACLJ reports that Sekulow has taken no salary since 2002.

However, ACLJ's 2009 tax form shows it paid $2,382,770 to the law firm 50 percent owned by Sekulow — Constitutional Litigation and Advocacy Group. The fact that the law firm is half-owned by Sekulow is not found in ACLJ's tax filings. Hoover confirmed that the law firm pays Sekulow, but the firm does not disclose how much Sekulow is paid. The firm's office address is in a building owned by CASE.

In addition, Sekulow was paid $85,747 by CASE in fiscal year 2009.

'Very small' income

In a phone call, Ronn Torossian, a public relations executive serving as ACLJ's spokesman, portrayed Sekulow as a great lawyer getting by on modest pay.

"You are asking about one of the most successful lawyers in the country whose income is very small and owns a very small home," he said.

Property records show Jay and Pam Sekulow own three homes, including one they bought in 2008 in Franklin for $655,000 and another in Norfolk, Va., bought in 2005 for $690,000. Their third home, which once belonged to CASE, is in Waynesville, N.C., and is assessed at $262,800, according to Haywood County, N.C., tax records.

Sekulow's supporters say they believe he acts with integrity in his business and personal dealings. They describe him as a humble and generous man who is dedicated to serving God. Darren Tyler, pastor of Conduit Church in Thompson's Station, said he was aware Sekulow runs two nonprofits.

Tyler's church meets at Independence High School, a right it indirectly owes to Sekulow. In 1993, Sekulow won a case — one of nine he's won at the Supreme Court level — called Lamb's Chapel v. Center Moriches School District. The ruling allowed churches more access to rent space at schools.

Along with the church, Tyler also leads a small nonprofit that works in Haiti. He said that Sekulow interviewed him on air several times after the Haitian earthquake in 2010, raising thousands of dollars to rebuild homes in that impoverished country. Sekulow also donated to the rebuilding, Tyler said.

"That's the Jay Sekulow I know," he said.

Sekulows helped ill boy

Kim LaRocca of Spring Hill met the Sekulows at Conduit Church in July 2010, after she and her family moved back to Tennessee from Florida. Their young son Matthew was ill with a brain tumor that would eventually kill him at age 12.

On their first Sunday at church, they got an envelope with gifts cards totaling about $150 from an anonymous donor.

In December of 2010, LaRocca got an email from Pam Sekulow. She offered to pass Matthew's information to Ben Carson, the director of pediatric neurosurgery at Johns Hopkins University in Baltimore.

LaRocca agreed and, within a few days, Carson had called them. He helped arrange for Matthew to be treated at Johns Hopkins. The Sekulows paid the airfare and expenses for their first visit. Jay Sekulow also interviewed the LaRoccas on his radio show, and fans of the show donated enough funds to pay the family's expenses while Matthew was treated at Johns Hopkins.

"Our son loved them," she said. "Those are the people we know."

Joe Davis of Franklin also supports the Sekulows and their charities.

Davis is a retired veteran of the Christian radio business and senior adviser to Salem Communications, a major Christian radio broadcast company with 95 radio stations nationwide, many of which carry Sekulow's program. He often did business with CASE and the Sekulows.

"I've met most of the family members who are employees, and I would hire them, too," he said. "They're good."

2 charities, 1 name

Sekulow was running CASE before he became involved in ACLJ in the 1990s. Today both charities operate under the name American Center for Law and Justice. When supporters send donations to ACLJ, the funds actually go to CASE, which handles the fundraising for both groups, tax records show.

In 2009, the last year a tax return is available, CASE collected $43,783,317 in revenue. Of that, about 25 percent, or $11,060,000, was then transferred to ACLJ to fund its legal work. About 21 percent funded media work such as Sekulow's radio show, and 27 percent went to educational programs and sending out nearly 10 million pieces of mail to ACLJ members.

Borochoff worries that donors will search for details about ACLJ's finances and find only the tax returns for that group, not CASE, so they won't get full details of how their donations are spent. Many of the transactions that benefit members of the Sekulow family are disclosed on the CASE returns, but not the ACLJ's.

"People should know where their money is going," he said.

The ACLJ website does include a notice at the bottom of the page saying that CASE does business as the ACLJ. Torossian, the spokesman, said all donors get a receipt that makes clear that the funds went to CASE.

Hoover, the tax attorney, explained why the charities use the same name:

"ACLJ and CASE operate in furtherance of the same educational, charitable, and religious purposes, and to avoid confusion, CASE operates by doing business as ACLJ under a registered d/b/a name," Hoover wrote.

Borochoff said it's obvious that the Sekulows are talented and very effective attorneys. He'd like to see them change the way that CASE and ACLJ operate, so that questions about their business practices don't interfere with their mission.

In his eyes, that involves merging CASE and ACLJ and adding more non-family members to the organization's board of directors.

"They need to operate more seriously as an organization," he said.