The Plain Truth About
The 1979 Receivership
By John O.
Sent: Tuesday, January 04, 2000 10:46 AM
Subject: RE: Interview with C. Wayne Cole??
Mr. O. I would appreciate your response to this inquiry as I know you and many of the earlier ministers were closer to Mr. Armstrong than most and that is the reason that I am want to ask some pertinent questions and d/t the fact that I am currently studying the recent history of Worldwide Church of God, (and her daughters).
Also-a short while back I sat and listened to C. Wayne Cole's version of the '79 fiasco, (where the state attorney general's office sought to do an audit on church financial records). I also read John Tuit's book about this, (i.e., "The Truth Shall Make You Free"). If the books were in order-why did Mr. Armstrong object to being audited? (surely all knew that the audit was to reassure the people as to where and how their tithe-moneys were being spent)-and why did he go to Arizona at such a crucial time?-and leave the church in the hands of Mr. Cole, (or RCM either)?
Mr. Cole was very defensive as if something was being swept under the rug at the time. Is there something that the ordinary lay-people do not know about this incident?
Also, I am currently looking for the Lochner tapes as I feel they may let me know how much Herbert W. Armstrong was aware of his own deceptions.
And thank you for the inquiry. Although I was in Hawaii at the time, I was back and forth a couple of times in those days, constantly privy to information, and was kept up to date daily on the phone with men on the Pasadena site that I could trust. What happened at that time in Pasadena could have turned into another Jonestown.
While the following may sound ridiculous, Mary, it's NO exaggeration, and if I were not actually involved, I don't think I might have believed it all.
You're absolutely correct that much was swept under the rug. The expenses that were being blown away by the upper echelon were not only unwarranted and excessive, they were also illegal. Although I don't have the expense details anymore, Ambassador Report does. The list includes spending sprees that took place over a number of years, and all over the world. Cruises, vacations with "friends," and trips to health (sex) spas in Romania, bonuses, and more bonuses.
Within the data processing department at Pasadena, people were talking. All these expenses were being funneled through them. A couple of concerned folks made copies of all that was happening. They passed all this onto some concerned brethren on the outside. Wayne Cole was the administrator of the Church Administration Department at the time.
Although, as I understood, Wayne did his best to keep the lid on all this mess, he was powerless to stop anything when those outside brethren filed a class action suit against the College and Herbert W. Armstrong for illegal misappropriation of church funds. This was early January 1979.
When the legally appointed receiver and investigator came onto the campus and demanded to see the books and records, he and his party were prevented by church staff from doing their job. And the shredding of those implicating documents started. I was told that Rader and his minions did their best to destroy any evidence of wrongdoing. Many documents were shredded, but some were taken by the receiver after a big hassle. The object of seeing these documents was simply to determine if Worldwide Church of God was violating IRS tax-exempt laws with regards to churches and legitimate expenses. They were.
A few "evangelists" immediately flew in the G-II to see Herbert W. Armstrong who was enjoying Tucson life with Ramona, his new wife. Among these were Hoeh, Antion, and Cole. They explained what was going on to HWA, and Herbert (these guys later reported) had said: "So what? Let them see the books. We've got nothing to hide." He didn't seem to care, or as witnessed, was too drunk to care. So the "evangelists" returned to Pasadena thinking that this problem would now be easily solved.
Meanwhile, I was told, Ramona got on the Tucson phone to Rader in Pasadena and told him what Herbert W. Armstrong said. Rader erupted, and apparently yelled that there was PLENTY to hide, and the real shredding began in earnest. Huge bonuses were quickly handed out to special "friends" before the bank accounts were finally seized, and the word was prepared to be spread to the brethren, that God's College and the Work were now in the hands of "darkness." The receiver, it seems, was "anti-Christ."
Later, Mike Wallace of "60 Minutes," was given a copy of only some of these wild expenses. In the, now famous, interview with Rader, Mike figuratively brought Rader to his knees by exposing all the figures of misappropriation of funds. He showed Rader out to be (as Mike later called him) "a crook," and Rader was made to look foolish in front of the whole TV world.
When the three "evangelists" returned to the campus, they came back ready to tell everyone that all was Ok and it was fine to audit the books because there was nothing to hide. On arrival, they were immediately informed that they were all disfellowshipped for "disloyalty," and trying to mislead God's Apostle. And now, Meredith - who had been previously removed from top dog at CAD - made his move. Wayne Cole was out, and Meredith was again running the ministry department with the same Hitlerian mentality that he had during the sixties. No soap opera could match this one.
Meredith gave a speech in the auditorium during those initial days, explaining everything about the demonized receiver trying to - as he said - destroy God's work. This was not the case, but it was presented as if the legal receiver were the devil himself, and it was time for God's people to rise up. Ministers and brethren attended that meeting. While Meredith ranted at the podium, Wayne Cole came quickly onto the stage, tried to grab the microphone, and attempted to explain to everyone what was REALLY going on. He didn't have a chance to say much before he was grabbed by ministers and security and forcibly taken from the stage. It seems the "plain truth" was NOT to be told.
In the days that followed, brethren came from all over to fill the College building entrances to such a capacity that the legally appointed receiver and his team could NOT enter the premises. Homemakers seemingly came from everywhere and blocked the doorways, elevators, and corridors so the receiver could not do his job. And the shredding continued.
Wayne Cole, and others who thought the same, were evicted from the campus. I talked with Wayne on the phone from Hawaii in those days, and he was totally confused. He couldn't believe anything was all THAT wrong. Poor Wayne. Little could he imagine! Herman Hoeh then became a turncoat, confessed that he was an un-willing pawn in the Herbert W. Armstrong visit, and thus continued to receive his paycheck. Antion and Cole were "marked," their vehicles re-possessed, and all their paychecks stopped.
There was such a cult fever in those days, it was incredible. This was not too long after the Jonestown suicides, and Herbert W. Armstrong was already inferring that the recently departed GTA was another Jim Jones. Meanwhile, I heard a couple of Worldwide Church of God brethren saying that they felt the end was near, and IF (like the Jones cult) they were asked to take poison by Herbert W. Armstrong, they'd do it willingly. Waves of people packed onto the campus in those days, again making it impossible for any receiver to do his job. The Sheriff's department was finally called in.
While Dean Blackwell - on one day - was giving an hours long sermon (deliberately) in the Administration Building, the Sheriff's department were trying to gain forcible entry to get at the books. Inside, mothers rushed to hold up their babies, pressing them against the glass doors, and against the Sheriff's attempted and legally required entry. This was done so any break-in by the law would be disastrous for the babies, and the Sheriff's people could see this. Since the Sheriff's department were not willing to hurt children, they backed down, and inside the Administration Building, a victory was claimed for "God and His Work."
What Wayne Cole had possibly seen coming, in the form of crazed cult mentality, was now fully in place. Cult madness had taken over the campus completely, and there were those who kept the frenzy very much alive. We even heard rumors of arms being distributed from the Motor Pool near Imperial School. Many church fanatics were happy at the chance for a shoot out with the law. After all, they were defending God's College and His work. Thank God there were no vats of poison available. Meanwhile, Herbert W. Armstrong - like the coward he was - sat in Tucson and barked orders from there, as the receiver's charges were only for the California church activity and not for Arizona. For the time being, HWA, with his plane standing by for Mexico departure just in case, were safe. Eventually, as we understand it, for the State of California, twenty seven felony counts were finally leveled against HWA and nineteen against Rader. And that's why HWA stayed in Tucson.
The big problem here, is that the receiver and the law KNEW that Worldwide Church of God was nothing more than a corrupt business and was ripping off the tithe payers and the American taxpayer. But they couldn't touch them because of the stigma of the "Church and State" clause in the Constitution. They had a legal right to move in on the corruption, but they didn't want to because of appearances, and because of the backlash of "Big Brother" intimidating some poor little "Church of God." It seems that if any organization can add the name of "God" to its title, it could do anything at all.
The receiver carefully explained to all the ministers in a letter to each that he was NOT trying to stop any church work. He stated that it was his legal duty to check the books for improprieties, and that's ALL. But he never got as far as the books. The chanting of "The receiver is trying to destroy the work of God," echoed all over and drowned out any semblance of sanity in thousands of brethren, and many brethren were ready for war.
At this time, George "Duke" Dukemajin was Attorney General for the county of Los Angeles. He was investigating many other cultic churches at the time. George had his eye on the gubernatorial mansion in a couple of years. If this suit against Worldwide Church of God and other churches were to continue, he would undoubtedly lose the "Christian" vote. He decided to drop all charges for "lack of evidence," and - as we understand it - accept some big campaign contributions from the Rader camp. George went on to serve two terms as California governor.
Anyhow, Mary, that's a brief rundown of what happened.
Wayne, I understand, joined Garner Ted Armstrong for a while, and I've heard nothing about him since.That's all I have. Best for now. John.
A couple of facts in follow up about the 1979 sit-in that some may be unaware of. These are the facts that I've either seen, or as they were given to me from people I trust.
It didn't take thousands of brethren to barricade themselves inside the Administration Building to stop the receiver. It only took hundreds, so the ENTIRE campus wasn't flooded with bodies. They were all packed into the one building at West Green Street. These were people mainly from the local areas. There were men, women, children, and babies in there, and they'd barricaded the doors against the receiver.
The whole church was NOT doing the shredding, only the accounting department loyalists and some of the Rader group. But it happened.
Stan Rader was NOT promoted, if I remember correctly, to "Evangelist" until after the fiasco. In any case, the gargantuan salaries plus bonuses were way overboard. No executive of that sized corporation is entitled to such a stipend. Even Clinton only gets $250,000 salary. Of course, there's the extras . . . but Worldwide Church of God had "extras" too.
Any supposed "church" organization is for serving and ministering, and NOT making a profit, and THAT'S exactly where the problem comes in. If you make a profit, you're technically NO longer a non-profit corporation by the federal law and IRS rules. Like most churches, it was therefore a "profit" corporation.
But, had the class action suit never been started (and Garner Ted Armstrong knew all about it in advance), this whole mess of excess spending, aberrant behavior, and wild parties, etc., would never have completely surfaced. When Ambassador Report was released in 1978, it told of the problems, but the 1979 fiasco PROVED the point. The "Ambassador Report" was true.
I was not aware that Joe Tkach was at the head of the sit-in during that 1979 time. He may have been there, but it was not publicized to the ministry or anyone. Like Napoleon Pig in "Animal Farm," maybe he later took credit for it?
Another interesting point here I was told by one of the top brass that in those days, that Wayne Cole (before he flew to Tucson with the others) checked into a local Pasadena motel, and once in his room, he called Herbert W. Armstrong's private number in Tucson. He wanted to cover his own tail, and didn't want this call routed through the college switchboard. He wanted to discuss the receivership (it had just started then), and so he RECORDED the conversation.
In it, you may remember, Herbert W. Armstrong expressed some dissatisfaction with Rader and the fact that so many people were trying to grab the church (or Herbert's) money. He mentioned there was a big motive for many to do that. As Herbert said, it was the incentive was for:
" . . . fifty, sixty, or seventy million dollars a year."
Later on, Don Hewitt and Mike Wallace of "60 Minutes" were given that tape. They edited out Wayne's voice and left only Herbert's.
This was the exact tape that Mike played to Rader on the interview when Rader finally exploded and tried to kick the 60 Minutes crew out. Rader obviously didn't feel it made him look too good, and kept yelling that the tape was illegal, etc.
I think Mark is correct in a couple of things he mentioned. Rader is still supposedly getting salary until 2002 AD. Also, the Worldwide Church of God had horrendous legal bills in those days. Since Rader and his buddies were lawyers, I'm sure some $$$$ filtered in that direction. Many brethren I know borrowed money to help the "work," and I was told that some even sold their homes, and gave up the profits. When things restabilized, they never got their property or money back. Maybe some can confirm this.
Fortunately, the receiver was on the ball and stopped one letter going to all the brethren at the time, asking for everyone to "sell everything" as the work needed the money and NOW was "the time." He stopped most of the letters, but a couple got to Hawaii. I got two calls from the outer islands from friends who thought Herbert W. Armstrong had finally "flipped." They quoted me from the co-worker letter they'd received, and said they'd ripped up their letters in disgust. I understand that Brian Knowles could possibly confirm this, wherever Brian is now.
That's all for now.
(Also see Dana 's recollections of the Receivership.)
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