A Silver Anniversary and a Search for Gold

Empire That Falwell Built Marks Silver Jubilee, Now Goes for Gold

LYNCHBURG, Va. -- The empire was founded a quarter-century ago today, when 35 people gathered in the former warehouse of a soft-drink bottling company, the floor sticky with the residue of Donald Duck Cola, to listen to a 22-year-old Baptist preacher named Jerry Falwell. That day the Thomas Road Baptist Church collected $125.

This week the church, now the nation's second largest, will collect more than $1 million, but not by passing the collection plate among its 18,000-member congregation. The pastor will raise the money through the electronic church, from people who watch the Sunday service on their television sets and mail in their offerings.

Tonight thousands will jam the massive, red brick church to celebrate its silver anniversary and pay tribute to the pastor who presides over a religious empire with a budget larger than that of this city of 70,000. At first glance the church seems the picture of financial health. But even as the congregation is enjoying the congratulatory telegram from President Reagan and the presentation of "This Is Your Life, Jerry Falwell," complete with mystery guests, there are signs of serious financial trouble.

In recent impassioned letters to supporters of his weekly "The Old-Time Gospel Hour" carried on 392 television stations, Falwell blamed "inflation, recession [and] vicious media attacks" for a $3 million deficit, and threatened to pull the show off the air. A similar and simultaneous fund-raising plea was mailed to supporters of Moral Majority, the conservative national political lobby Falwell founded two years ago.

Only Falwell and his closest associates know the real extent of his financial problems. Several times in the past few years Falwell has, in biblical terms, "put out the fleece," saying he would pull the show unless emergency contributions were forthcoming. Each time, Falwell says, his followers have always come through with millions of dollars.

What emerges from audit reports of the Thomas Road ministries and interviews with the 47-year-old evangelist and his current and former associates is a portrait of an empire that is heavily mortgaged and deeply in debt. The empire, which along with the "Gospel Hour" includes a college, seminary, private school, summer camp and home for alcoholics, has provided millions of dollars in lucrative employment to Falwell's relatives and friends and has enabled him to live like a millionaire. And all of it depends entirely on the presence and popularity of Falwell, who has a $15 million insurance policy on his life.

"Some might call it overextension," said Falwell. "We call it stepping out by faith."

The faith may be wearing dangerously thin. For example:

Revenues for Falwell's combined ministries, mostly raised through the "Gospel Hour," rose from $22 million in 1977 to $51 million in 1980. But the church-commissioned audit report for the year ending June 1980 showed the ministries were $19 million in debt, some of it through mortgages bearing interest rates several points above the prime. Two months after the audit, Falwell borrowed a total of $6.5 million through a bond issue.

Between 1979 and 1980, expenses rose nearly 19 percent from $39.6 million to $47 million while the amount of revenues left after expenses dropped by 57 percent, from $6.6 million to $3.8 million.

In the past year while Falwell periodically threatened to pull the "Gospel Hour" off the air because of mounting deficits and the increased cost of air time, his organization bought time on 50 more TV stations.

Two firms have filed mechanics liens -- usually a sign that an organization is having trouble paying its bills -- totalling more than $240,000 against Falwell's ministries. They were removed after Falwell paid his bills.