From the Hamilton Spectator March 19 2016
A Canadian missionary organization based in Stoney Creek is facing allegations that nearly $94 million in charitable donations purportedly sent to India in the past eight years can't be properly accounted for by either the Indian or Canadian governments.
Gospel for Asia Canada's filings with the Canada Revenue Agency (CRA) show $93.5 million was transferred to India between 2007 and 2014, but Indian government documents show that no money from Canada was received by the charity's Indian affiliates during the same period.
Pat Emerick, the head of Gospel for Asia Canada, is now named as one of the defendants in a U.S. class- action lawsuit launched last month in Arkansas alleging the multinational Gospel for Asia charity, which is based in Texas, has engaged in racketeering and fraud.
Gospel for Asia was created and is controlled by K.P. Yohannan, who was born in the southern Indian state of Kerala and is now based in Wills Point, Texas, about 30 kilometres east of Dallas. Yohannan is also listed as the founder and president of the board of Gospel for Asia Canada.
Emerick also suggested that Morrison's accusations are “based upon conspiracy theories and do not reflect reality.”Believers Church, based in Kerala, boasts 2.6 million members in 10 countries. Yohannan is both the church's founder and spiritual leader.In that year alone, according to the lawsuit, nearly $38 million US was spent on administration and another $43 million US “went missing.”
Much of Gospel for Asia's international work is focused on Kerala and a significant part of the charity's stated mission is to help the Dalits, members of India's lowest caste.
In written responses to a lengthy list of questions submitted by The Spectator, Emerick strongly denied Gospel for Asia Canada is involved in any financial impropriety.
"This is entirely false, even absurd," Emerick stated. "For more than 30 years, this ministry — with its partners overseas — has provided humanitarian assistance and spiritual hope to millions upon millions of people."
Bruce Morrison, a Nova Scotia pastor whose church has raised money for Gospel for Asia for more than 20 years, has filed formal complaints about the charity with the CRA and the RCMP.
Morrison conducted a meticulous review of Indian financial documents filed by Gospel for Asia conducted with the help of an American auditor. He alleges that for some of the charitable categories cited by the organization, less than one per cent of money donated from developed countries was used for the stated intentions.
In a detailed 21-page financial analysis of Gospel for Asia prepared in November, Morrison alleges as much as $128 million US in worldwide donations over an eight-year period went "missing" in India.
Morrison also alleges Gospel for Asia's Indian branch and three related charitable affiliates in India showed $56 million US sitting in one Indian account as of March 2014, and another $152 million US reported as cash-at-hand in other Indian bank accounts.
"K.P. Yohannan has taken hundreds of millions of dollars from western donors and put a majority of those funds in expensive profit-generating properties in Kerala," Morrison claims in one of his reports, "and also let tens of millions of dollars accumulate in Indian banks, while continuing to beg for more on pretences that are simply not true."
Garry Cluley, a recently-ousted board member of Gospel for Asia Canada, has also filed a complaint with the CRA. Cluley alleges he was dumped from Gospel for Asia's board in December when he asked to see copies of documents that would show how the charity's donations were being governed and spent.
Morrison and Cluley, along with the U.S. lawsuit, allege Gospel for Asia, either directly or through Indian affiliates, has used its charitable donations to build an extensive for-profit corporate empire in India that includes a private hospital, private schools, a college, a rubber plantation that cost $19 million US to purchase, and even a professional soccer team based in Myanmar.
In addition, the lawsuit alleges Gospel for Asia spent $45 million US to build its new state-of-the-art headquarters in Texas, with nearly half of the money coming from donations that had originally gone to India and were then sent back to the U.S.
In its literature and on its website, Gospel for Asia pledges a guarantee to donors that "100% of what you give toward sponsorship goes to the field."
"I'm hopeful there will be a CRA investigation or a police investigation into Gospel for Asia," Morrison said in an interview with The Spectator. "I've given full disclosure to the police."
The RCMP declined to comment on Gospel for Asia Canada, which has its headquarters at 245 King St. E. in Stoney Creek, near Green Road.
"Generally, only in the event that an investigation results in the laying of criminal charges would the RCMP confirm its investigation, the nature of any charges laid and the identity of the individuals involved," said RCMP spokesperson Annie Delisle.
The Canada Revenue Agency also declined to comment on Gospel for Asia, citing confidentiality provisions in the Income Tax Act.
A spokesperson for the federal government's Canadian Anti-Fraud Centre, based in North Bay, would only confirm it received a complaint from Morrison about Gospel for Asia. The centre — jointly managed by the RCMP, the Competition Bureau and the OPP — is the national repository for data and intelligence related to fraud.
Emerick stated he is not aware of any investigations by police or the CRA into Gospel for Asia Canada.
Emerick stated "all proper reporting has been done according to Indian law." He also stated "the ministry has complied with all Canadian law for charities, and funds sent to the field have been accounted for."
Emerick also suggested Morrison's accusations are "based upon conspiracy theories and do not — by any means — reflect reality."
Bequests, church offerings, cheques from individuals, donations in lieu of flowers following a death, appeals through its website — the money flows to Gospel for Asia in any number of ways.
In some cases, volunteers who have been touched by Gospel for Asia will visit church groups across the country and spread the word about the charity, asking the faithful to support the mission and its goal of helping India's poorest people.
On its website, for example, Gospel for Asia's "2015 Christmas Gift Catalog" lists a variety of items that can be purchased for a needy family with a donation — $460 for a water buffalo, $345 for a camel, $115 for a sewing machine and $1,400 for a so-called "Jesus Well."
In the fall of 2014, Bruce Morrison started having concerns about Gospel for Asia, based on some troubling stories he'd read from former staff members who have banded together and call themselves the Gospel for Asia Diaspora.
Morrison is the pastor of Christian Fellowship Church in New Glasgow, N.S., and for 20 years, he and his church had been raising money for Gospel for Asia.
He began investigating, then started sending a series of letters last year outlining his concerns to K.P. Yohannan and Gospel for Asia's boards in Canada and the U.S.
Yohannan indicated that Gospel for Asia Canada operates under a joint ministry agreement with the U.S. and German offices of the charity "to meet the requirements of the Canadian government."
In its most recent filing with the federal government, Gospel for Asia Canada reported $18 million in revenue for 2014 and that $16.2 million was sent to the charity's Indian branch. No money was sent to any other country.
According to the CRA's rules, there are two options if a charity wants to use donated money in another country.
One option is for the charity to conduct the charitable activities with its own staff, volunteers and resources.
The other option is to use an intermediary, such as a contractor, or through what's known as a joint ministry agreement with another organization.
In all of those cases, however, the Canadian charity is the one responsible for properly reporting how its money is used.
According to the CRA: "If a charity reports to the CRA that it has spent its resources on a certain program or activity outside of Canada, regardless of whether it is using its own staff (including volunteers, directors, or employees), or working through an intermediary (including agents or contractors), the charity must be able to validate that expenditure or allocation of resources.
"When using an intermediary, a charity must be able to provide evidence to distinguish its own resources and activities from the intermediary's, and that the charity is maintaining direction and control over them," CRA notes.
Indian law, meanwhile, requires charities to detail precisely where foreign contributions come from and precisely how the money is being used, in part because the Indian government is worried foreign charitable contributions could be used as a cover to fund political activities. Even the interest earned on foreign contributions sitting in Indian bank accounts has to be used for charitable purposes.
Gospel for Asia's other Indian affiliates include the Believers Church, Last Hour Ministries and Love India Ministry.
Believers Church, based in Kerala, boasts 2.6 million members in 10 countries. Yohannan is the church's founder and spiritual leader.
For the eight years between 2007 and 2014, documents filed with the Indian government and available online for Gospel for Asia India and its three affiliates show no money received from Canada.
That information didn't sit well with Warren Throckmorton, a college psychology professor based in Grove City, Pa., who has written extensively about Christian issues and large American megachurches.
For the past year or so, like Morrison, Throckmorton has also conducted his own investigation of Gospel for Asia and its affiliates.
Both Morrison and Throckmorton were told by Gospel for Asia officials that the charity's Canadian donation amounts had been lumped in with the U.S. donations sent to India, which is why they don't show up in the Indian government filings.
"That seemed way off," said Throckmorton. "By that time, I'd read enough of your law to know that didn't sound right."
Meanwhile, Gospel for Asia officials in the U.S. told an American evangelical financial accountability group last summer the charity didn't exert any control over its Indian affiliates and how they spend the money.
Taken together, it means Canadian donations were lumped in with the American donations sent to India but the American charity didn't exercise any control over the Indian affiliates receiving the money.
This would appear to be in violation of the CRA's rules that state the Canadian charity must maintain control and direction of its donations and be able to account for how they have been spent, even when done through an intermediary.
"I don't know why the Canadian government hasn't moved on this," Throckmorton said. "That's probably the biggest scandalous aspect of this that I can think of.
In a written response, Emerick stated that all donations have been properly accounted for by all the various international components of Gospel for Asia.
He also denied that Canadian donations have been lumped in with American donations.
"There has been no mingling of funds and field partners can absolutely account for the originating source of all deposits," Emerick stated.
"All funds sent to the field have been accounted for separately in annual reports to the respective international boards as well as according to national accounting standards in the receiving countries," Emerick stated.
Morrison estimates there are about 10,000 Canadian donors to Gospel for Asia.
"Some of them are on very fixed incomes and they believe they're doing a great thing by contributing to Gospel for Asia," he said.
"They're responding to the appeals that come, assuming the gifts they give will be spent on those appeals.
"They just don't know the difference," Morrison said. "And if there's an ever an institution that you should be able to trust, it should be the Christian church."
Garry Cluley certainly recognizes the irony of the situation.
For two years, he was one of the board members for Gospel for Asia Canada, a volunteer position with no remuneration.
He's also a retired RCMP officer who worked in security and intelligence.
Last summer, Cluley attended a Gospel for Asia meeting where there was a discussion about the allegations of financial improprieties that had begun to circulate in online Christian forums.
"It blew me out of the water," said Cluley, who lives in Durham, south of Owen Sound.
Cluley was told Gospel for Asia Canada's donations were covered by a joint ministry agreement, as mandated by the CRA, and that some audits had been done as well.
"Great, let's establish that fact," Cluley remembers saying at the time. "And if there were problems, let's resolve them."
So he asked Pat Emerick for a copy of the joint ministry agreement and the audits.
"I clearly expressed that while I was interested in the information, I wasn't trying — to put it in the vernacular — to screw Gospel for Asia in any way," Cluley said.
There was no response from Emerick, Cluley said.
On Dec. 8, Cluley again asked for the agreement and the audits.
"Pat's response to me was that there was no problem getting them," Cluley said.
The next morning, Cluley said, he received a memorandum terminating his position on the board.
"When I got this letter, my thought was how stupid are you to send this kind of a letter to me and terminate me one day after I was asking to see the correspondence?" Cluley said.
"It's the dumbest thing they could have done, especially since I was very, very clear that I was not out to hang the organization out to dry."
Emerick said in a written response that Cluley was not dismissed.
"Mr. Cluley's term on the board expired," Emerick stated.
Cluley said he was flabbergasted to hear allegations that Gospel for Asia had $56 million US in one Indian account and more than $150 million US in other Indian accounts.
"And yet there were these soliciting emails 'It's urgent, we need your support' blah blah blah, when this amount of money was sitting there," said Cluley. "It's just crazy.
"I'm totally disillusioned."
On Feb. 8, Matthew and Jennifer Dickson of Rogers, Arkansas, were named as the lead plaintiffs in a U.S. class-action lawsuit launched against Gospel for Asia.
They were donors to the charity who now allege they've been duped.
Also named as defendants are K.P. Yohannan, his spouse, his son, the charity's CFO and Emerick, the Canadian head.
"Soliciting charitable donations to benefit the poorest of the poor while covertly diverting the money to a multi-million-dollar personal empire is reprehensible," the opening statement in the lawsuit reads.
"Using a Christian organization as a front to attract and exploit the goodwill and generosity of devout Christians is a particularly vile scheme," it continues.
"But that is exactly what K.P. Yohannan and the organization he controls — Gospel for Asia Inc. — have been getting away with for years."
None of the lawsuit's allegations have been proven in court.
Gospel for Asia and the other defendants have been given an extension to April 15 to file their responses to the lawsuit.
"Gospel for Asia intends to vigorously and fully defend itself against these false accusations," Emerick stated in a written response. "The defendants are not guilty of the accusations being levelled against them.
"You can rest assured that in the meantime the organization will continue serving some of the world's most desperate people in some of its most complex environments," Emerick stated. "We hope our friends will pray for us, for these challenges are certainly also challenges and distractions to our mission."
The lawsuit alleges Gospel for Asia raised $450 million US between 2007 and 2013 in the U.S. alone.
"However, despite repeated, explicit guarantees from GFA to donors, only a fraction of the donated money supports the people and causes for which it was donated," the lawsuit alleges.
Gospel for Asia's various appeals usually include a "100% Guarantee," accompanied with a red stamp of approval, meant to signify that 100 per cent of donations "go to the field," according to the lawsuit's claims.
Gospel for Asia's website states: "Since the ministry began, we have sent 100 per cent of what you give toward sponsoring a missionary or a child to the field."
Instead, the lawsuit claims, less than 13 per cent of the $115 million US in donations collected worldwide by Gospel for Asia in 2013 for its Indian mission was spent on the intended causes.
In that year alone, according to the lawsuit, nearly $38 million US was spent on administration and another $43 million US "went missing."
In one example, the lawsuit alleges that between 2010 and 2013, Gospel for Asia collected $4.2 million US to support widows and abandoned children.
During that time, the lawsuit alleges, documents filed with the Indian government show Gospel for Asia spent $31,265 for the welfare of widows and $0 for the welfare of orphans, less than one per cent of the intended donations.
In a written response, Emerick stated Gospel for Asia "has indeed sent 100 per cent of field designated funds for the purposes intended."
The lawsuit lists a number of for-profit enterprises that have allegedly been either purchased or built by Gospel for Asia and its three Indian affiliates, including:
Caarmel Engineering College in Kerala.
The 500-bed, for-profit Believers Church Medical College Hospital in Kerala.
Six for-profit primary schools in Kerala.
A 900-hectare rubber plantation in Kerala.
A professional soccer team in the Myanmar National League.
In a written response, Emerick called the allegations "ludicrous, absurd and totally false."
"Any ministries operated by Gospel for Asia's local partners — such as hospitals or schools — that have net revenue use that revenue for charitable work exclusively," Emerick stated. "There has been zero diversion of funds in order to personally enrich anyone."
The lawsuit also alleges, somewhat ironically, that a $20-million anonymous donation reported by the American Gospel for Asia to help build the new Texas headquarters was actually a transfer of money from Gospel for Asia India back to the U.S.
"They've been telling the donors they're going to save the Dalits, the lower caste members," said Throckmorton.
"Then you find out it's been spent on a hospital that's like the Mayo Clinic that people pay to use."
"They tell American donors and worldwide donors 100 per cent goes to the field, 100 per cent is spent on saving souls and poor people," said Throckmorton. "About 14 per cent does.
"When you tell people 'I'm going to take your dollar and do this with it' and then you take it and spend 14 cents on the dollar to do something like that, most people would say 'Well, all right, I suppose schools are a good thing and health care's good.'
"But they're missing the point," said Throckmorton. "They've been lied to."
In a written response, Emerick called the accusations "just ludicrous, entirely false."
Virginia Wilkins was once a believer. Not any more though.
About nine years ago, K.P. Yohannan came to her Hamilton church to talk about Gospel for Asia.
"I was impressed because of the 100 per cent guarantee, that all of the money went to the field," said Wilkins. "It's the only ministry that claims that and I believed them.
"They even said they spent nothing on salaries for their people," Wilkins added. Employees, she said, were required to raise their own support to cover salaries and benefits.
She was hooked.
Wilkins was such a believer that she became a volunteer for the charity, spending three days a week in the Stoney Creek headquarters, trying to convince bookstores across the country to give away copies of books written by Yohannan.
Then she, too, began reading the concerns raised by the Gospel for Asia Diaspora and they struck a nerve with her.
She raised her own concerns and got no answers. Then she discovered that some of the employees at the Stoney Creek office "had never raised a penny of support."
Emerick said in a written response that Gospel for Asia's missionaries and staff try to raise their own support to minimize expenses to the charity.
"When staff or missionaries are not able to raise their support, their support is sometimes subsidized through other fundraising," Emerick stated. "Legally, it is also reported as compensation in certain circumstances."
Gospel for Asia Canada's CRA filings for 2014 show $650,000 was spent on employment income.
Wilkins took a leave of absence from the charity in October 2014. Then came the last straw for her – the serious allegations that started trickling out from Morrison and Throckmorton last year.
"Betrayal is the word," said Wilkins. "And vindicated in one sense. Now we had an explanation.
"In a way it was a relief to know the truth, because the Bible says you shall know the truth and the truth shall set you free.
"It hasn't shaken my faith in God one bit," said Wilkins. "He is still in control.
"Why He's allowed this to go on for so long, some day we'll see the answer," she concluded. "I'm just glad the truth is out there."
http://www.thespec.com/news-story/6397796-hamilton-based-charity-allegedly-can-t-account-for-over-90m-in-donations/ |
