Giving the Ministerial Exception a Bad Name

Over at PrawfsBlawg, our friend Paul Horwitz notes an interesting piece in the New York Times yesterday on doings at the Trinity Broadcast Network, an extremely successful Christian cable channel. Well, “doings” is perhaps too polite. TBN, which advocates the so-called “Prosperity Gospel,” has received many millions of dollars over the years in donations from the faithful — $93 million in 2010 alone. An insider now claims that much of the money has gone to fuel the lavish lifestyle of TBN executives, particularly the network’s founders, the husband-and-wife team of Paul and Janice Crouch. I won’t go into the details, except to say that the portrait is one of high-spending, low-rent excess, and that the allegations come from one of the Crouch’s own granddaughters, who other family members say was the real sponger.

IRS regulations prohibit “excess compensation” for executives of non-profit organizations. According to the Times, though, TBN has been able to avoid scrutiny by relying on the ministerial exception. TBN has allegedly ordained “dozens of staff members . . . including chauffeurs, sound engineers, and others,” as ministers, thus allowing TBN to give them rent-free luxury “parsonages” and to avoid paying Social Security taxes on their salaries. TBN’s lawyer defended the network’s actions, arguing that the hundreds of ordained employees, including performers at a TBN-affiliated religious theme park, had experienced a true religious vocation.

Who knows how these allegations will sort out? One issue that seems sure to arise, though, is fraud. Some of the Court’s church autonomy cases suggest that fraud is a limitation on the ministerial exception, though the cases don’t really develop the idea. If the IRS were to go after TBN, it could argue that the ordinations for company workers without any theological or pastoral training were phony. Questioning such ordinations would obviously raise free exercise concerns, though, and at least one legal expert the Times quotes thinks it won’t happen: “absent clear fraud, the government is not going to touch that.”

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