By Marc Fisher and Jeff Leen
A Church in Flux Is Flush With Cash
Washington Post Staff Writers
Sunday, November 23, 1997; Page A01
First of two articles
ven as the Rev. Sun Myung Moon's Unification Church falters as a religion in the United States, it remains a robust, diverse business -- especially in the Washington area, where the movement controls more than $300 million in commercial, political and cultural enterprises.
From rundown city storefronts to gleaming suburban office buildings, from ornately refurbished mansions to mundane tract housing, organizations owned or sponsored by Moon and his inner circle of Korean and American followers hold properties stretching from Prince George's to Fairfax counties, according to corporate, property and court records.
This vast and bewildering multinational could be called Moon Inc. It is a sprawling collection of churches, nonprofit foundations and for-profit holding companies whose global operations include computers and religious icons in Japan, seafood in Alaska, weapons and ginseng in Korea, huge tracts of land in South America, a university in Bridgeport, Conn., a recording studio and travel agency in Manhattan, a horse farm in Texas and a golf course in California.
In the Washington area, the Unification Church's investment is an important cog in a global machine that Moon uses to boost his credibility, spread his spiritual doctrine and win political influence, according to current and former church members.
As the Unification movement evolved from selling roses on street corners to acquiring control of a nationwide cable channel, the nation's capital became the epicenter of Moon's U.S. holdings. Those include the Washington Times newspaper, a video production firm and a stately old church, once the pride of the Mormons, along 16th Street NW. Washington-area property owned by the church, its affiliated companies or senior church officials is worth more than $200 million, according to property and corporate records.
Washington will be the focus of the worldwide Unification movement this week, as Moon-sponsored organizations hold a series of academic conferences and the World Sports and Culture Festival, culminating Saturday with a mass wedding at RFK Stadium. Here and at locations around the world, the church says it will marry or reaffirm wedding vows of 3.6 million couples.
At 77, Moon presides over a church in flux, an embattled religion that has found only a small following in this country despite nearly four decades of proselytizing. The South Korean self-declared Messiah has grown increasingly vehement in his denunciations of American society; earlier this year, he declared his intent to give up on his U.S. church. As the religion fades, even some loyal followers now fear that Moon's most enduring legacy will be his multibillion-dollar business empire.
Within the Unification movement, Moon's spiritual and business ventures are viewed as part of a unified whole. "Ideas without the money to back them up are just dreams," said Richard Rubenstein, president of the movement-controlled University of Bridgeport. In church parlance, a position at a church-related business is not a job, but a mission.
"The corporate section is understood to be the engine that funds the mission of the church," said Virginia Commonwealth University sociologist David Bromley, who has studied the church for more than 15 years. "The wealth base is fairly substantial. But if you were to compare it to the Mormon Church or the Catholic Church or other churches that have massive landholdings, this doesn't look on a global scale like a massive operation."
Since the 1970s, Moon has gained his highest profile in this country not with his church, but with the Times, the 100,000-circulation daily that competes with The Washington Post.
Moon said earlier this year that he has spent more than $1 billion in subsidies for the paper over 15 years. Church members say the publication has never come close to turning a profit, but the paper has become an established voice of conservative America, winning readers in the White House and praise for its professionalism and scoops on national and local stories.
Beyond the Times, Moon-affiliated entities are linked by a complex web of interlocking directorships and nurtured by a seemingly endless flow of cash from the Far East. That has enabled them to buy new businesses such as the Nostalgia Network cable channel and even help bail out the Rev. Jerry Falwell's foundering Liberty University.
Executives of Unification-related entities have acknowledged that money from Japan and Korea fuel U.S. operations, but the magnitude and mechanism of those payments, as well as their exact sources, have eluded investigators on three continents over the past three decades.
The rise of Moon's U.S. businesses and decline of his U.S. church -- leaders say membership is stagnant, former members contend it is declining -- may prove merely that it is easier to sell seafood or jewelry than a religion based on a unique merger of Western Christian theology and Eastern Confucian temperament. Bromley compares Unificationism to 19th century American communal religions such as the Oneidas, Shakers and Amanas, new faiths that began with a burst of energy, but settled into entropy dominated by their business interests.
"Membership plummeted, and what remained was the corporate structure," Bromley said.
Moon's businesses exist for several purposes, church leaders and critics agree: to employ members, to gain influence in industries Moon considers crucial to worldwide recognition of himself as Messiah, and to support Moon's spiritual and political agenda.
Sometimes, that support is direct, as when Moon's nonprofit organizations contribute to conservative political and social causes with financial donations, staff and publicity. And sometimes it is indirect, as when Moon-sponsored groups stage academic, religious and cultural conferences, inviting professors, clergy, media executives and other opinion-shapers to meetings, expenses paid.
"Of course, the whole thing is to buy respectability," said Marvin Borderlon, a Roman Catholic ex-priest who is president of the American Conference on Religious Movements, a Rockville-based group that fights discrimination against new religions. The group is funded by the Church of Scientology, the Hare Krishna organization, and most of all, by Unificationists, who give him $3,000 a month, Borderlon said.
"They'll have a conference on the essence of religious founders, like Buddha, Jesus and guess who," Borderlon said. "He gets a room full of academics to sit there while he pronounces himself the Messiah. He gets his picture taken with them. He gets credibility, they get to have their conference. It's all very messy."
Borderlon, like many people who have received some of Moon's generous bounty, has never been able to figure out the blizzard of organizations that make up Moon Inc. "My money is never from the church itself," he said. "It's always the International Something or Other."
On two floors of an office building in Falls Church -- purchased by a church-owned property development company from conservative activist Richard Viguerie -- the startling range of Moon's interests and activities is played out along hallways bare of art or decoration.
On one corridor, the International Coalition for Religious Freedom -- the group that Borderlon said signs his checks these days -- shares a suite with the Martial Arts Federation for World Peace and a company called Washington Times Aviation. The only person in the suite on a recent visit was a Korean man who spoke little English, saying only, "I am Martial Arts Federation. I work for Father," the term by which devotees of Unificationism refer to Moon.
Church officials have for years denied any direct control of the myriad businesses, saying its members run the companies and contribute to the church. But some members and internal publications indicate Moon is deeply involved in directing corporate activities.
A column in a Unification Church of Washington newsletter in 1990 informs members of "Father's Instructions": work on "economic, political, cultural whole system activity," recruit precisely 84 new members, and proceed with "national organization of the fish . . . video and electronic media . . . and jewelry businesses."
"Rev. Moon says many things," said Farley Jones, president of the Family Federation for World Peace and Unification, the most important nonprofit in Moon's network. "Sometimes you have to sort through it and select which activities to focus on."
Jones and a few other church leaders and members spoke to Post reporters, but most officials at church-connected organizations and businesses did not return repeated calls for comment over the past six weeks.
Moon's Washington enterprises range from a ballet academy to an architectural molding company on 14th Street NW to magazines such as Insight and the World & I.
"The idea was that we'd be like Disney, controlling all kinds of media, working on behalf of God," said Ron Paquette, who was president of Manhattan Center Studio, the church's New York recording facility, until he left the faith in 1994.
Paquette, whose job gave him access to financial information about several church-related businesses, said he believes virtually none of Unification's U.S. operations is profitable. "A lot of the stuff they do is for prestige, so they can show President Bush our dance academy and our newspaper," Paquette said. "The idea is to bring Bush in, use his name and picture, buy Moon credibility."
A 1978 congressional investigation into "the Moon organization" concluded that "the Unification Church and numerous other religious and secular organizations headed by Sun Myung Moon constitute essentially one international organization" that moved money freely among its entities.
In 1994, the Unification movement opened an unusual window onto that flow of money, as well as its willingness to suffer sustained losses, when its Concept Communications subsidiary paid $11.5 million for a controlling stake in the Nostalgia Network. It was the movement's first foray into a U.S. public company, forcing it to disclose detailed information to the Securities and Exchange Commission.
The cable TV channel -- featuring reruns such as "The Rockford Files," "Tony Orlando and Dawn" and "The Captain and Tennille" -- has suffered sharp losses and dwindling access to cable households. The number of households that get Nostalgia has dropped from 12 million to 7 million in the three years since church-connected companies acquired control. Moon-related companies have spent more than $60 million to gain control of the network and keep it afloat, SEC filings show.
When the Moon subsidiaries -- Concept, Crown Communications and Crown Capital -- took over Nostalgia, they paid at least $2.30 a share, according to the companies' statements. Last week, Nostalgia was trading at 7 cents.
With numbers like that, said Bruce Leichtman, a cable TV analyst for the Yankee Group, "you have to fold. Unless, of course, you have an endless source of cash."
SEC filings show that the cash for Nostalgia comes through a chain of companies leading to the Unification Church International. It's a vertically integrated operation common in Moon's empire:
Nostalgia leases offices from the Unification-owned Washington Television Center, part of the $90 million office building at 650 Massachusetts Ave. NW, which is owned by U.S. Property Development Corp., which in turn is one of many Moon-connected companies under One Up Enterprises Inc., the main holding company for the movement's U.S. businesses.
Nostalgia's production facilities are in the Alexandria headquarters of Atlantic Video, a Moon-connected company that was one of the area's top video production firms in the late 1980s. Its billings have suffered recently, according to video industry figures.
Asked whether Moon-connected ventures operate in service of the church, Jonathan Park, a church member who until 1991 ran Atlantic and several other Moon-related businesses, said, "That's an interesting question. It's a worldwide organization. Specifically how they're all connected, I don't think is very clear."
What is clear is that the most important building for many local Unification ventures is the Falls Church office complex at 7777 Leesburg Pike, purchased for $10 million in 1987. This is headquarters of One Up, a primary conduit for overseas cash coming into Unificationism's U.S. operations, according to Paquette and other former church executives. One Up president Michael Runyon did not return calls from The Post. (One Up, like many Moon-related ventures, draws its name from Moon's spiritual teachings. His chinchilla farm is called One Mind Farms; the movie production company that made his epic flop about the Korean War, "Inchon," was called One Way Productions.)
One Up last year had estimated sales of $232.3 million and 2,000 employees in its subsidiaries, according to Dun & Bradstreet.
One Up and its parent, Unification Church International, not only share hallways with many church-supported nonprofit groups, but help many such groups get started, current and former members said.
"The idea was to connect all these businesses to the church," said Bromley, the sociologist. "UCI was then to control all the profit-making companies and . . . the profits from that are channeled into the not-for-profit foundations."
Those groups range from an inner-city runners' club called D.C. Striders Track Club to a 210-student private school in Landover Hills called New Hope Academy. The academy's principal, Joy Morrow, said Moon personally contributed $250,000 for the down-payment on the school building. She said the school was founded by Unificationists who were "really unhappy with the public schools," but she said New Hope is not affiliated with the church. Morrow described the school as "God-centered," adding that about 40 percent of the students come from Unificationist families, with the rest from about 20 other faiths.
Moon launched what is now the Kirov Academy of Ballet in Northeast, according to church publications. Housed in a splendid mansion, Kirov is widely respected for the quality of its dancers and faculty, led by artistic director Oleg Vinogradov, who was recruited from the Kirov Ballet in Russia.
Moon created the school in part for Julia Moon, whom Moon considers his daughter-in-law since she married the spirit of his deceased son in a unique church ceremony.
"The idea behind all these arts, science and media projects is that they will assemble talented and influential people and someday they will realize Moon is the whole truth," Paquette said. "His objective is not to find great dancers, but great credibility."
The road to that credibility, critics say, is paved with cash.
"Rev. Moon sent bags of cash, big fat bags, stacks and stacks of hundreds, from Korea and Japan to Manhattan Center," the church's recording studio in New York City, Paquette said. "Whenever we asked where the money was coming from, the answer was it just came `from Father.' "
Borderlon, too, said Moon's various groups seem awash in cash. "I've made numerous trips to Japan for them," he said, "and they take me to see these great fancy businesses they have there. There's always huge amounts of cash involved in doing anything with them. In dealing with them, you have to accept cash. I came back from Japan once with $10,000 in my pocket -- cash."
Some members believe the cash comes from the church's traditional core business -- street sales of flowers, laser prints and wooden engravings. No one has hard evidence of the ultimate sources, not even a former high-ranking church member who said he once sneaked into Unification archives in an unsuccessful search for answers to the money puzzle.
The wealth of Unificationism's worldwide economic empire remains a closely guarded secret. Lawrence Zilliox, a private investigator who has studied the church for more than a decade, has concluded from church documents that Unification Church International, the main holding company for Moon's U.S. businesses, exceeded $500 million in the mid-1980s.
But the church's wealth has always been centered in Asia. A detailed analysis by the Far Eastern Economic Review in 1990 valued the church's landholdings in South Korea alone at more than $1 billion. A single property on Seoul's Yoida Island was said to be worth $250 million. The collection of Unification-related companies in Korea -- known as the Tong Il group -- was ranked as the country's 28th largest `chaebrol' or business conglomerate, with ventures ranging from titanium mining to weapons manufacturing.
In recent years, several of the Korean companies have lost money, causing business experts there to wonder -- like their counterparts in America -- where the money comes from.
The long-standing explanation: It is Japan, not Korea, that provides the bulk of the church's wealth -- as much as 70 percent, church observers estimate. A former high-ranking Japanese church member told The Post in 1984 that $800 million had come from Japan into the United States in the previous nine years.
Japanese church members have long turned profits selling ginseng products and religious items such as miniature stone pagodas -- products imported from Moon companies in Korea. But tough sales tactics -- as well as disputed claims of spiritual power -- have led to class-action suits in Japan, and hundreds of claimants have won judgments and settlements in the last five years.
Yet despite years of such legal and financial troubles, the Unification movement continues to pump hundreds of millions of dollars into existing businesses and new ventures around the world, according to business analysts and academics who study the church.
The Money Trail
Moon has repeatedly told his followers that money flowing into church coffers is meant for higher purposes. Some money goes to cultural, educational and religious enterprises. But according to former church members, the Unification movement also dedicates resources to winning political influence in America.
"Tom McDevitt always told me that Father has directed us to get members elected to Congress so we can take over America," said Craig Maxim, a church member who quit in 1995 after spending several years as a regional leader and a singer at Moon's various mansions.
McDevitt ran an unsuccessful Republican campaign for a Virginia House of Delegates seat in 1993. Campaign records show many of McDevitt's contributions came from church members and businesses. Now press spokesman for several Moon-affiliated groups, he did not return repeated calls.
Moon's most ambitious foray into the political process in recent years was the American Freedom Coalition (AFC), a conservative group that built popular support for Col. Oliver L. North during the Iran-contra probe. In addition to about $5 million, Unificationists provided the personnel that gave the coalition its grass-roots strength, former church members said.
AFC appears to be dormant; its phone was not answered and its Falls Church office was unmanned on a recent visit.
Unification support for nonprofit groups such as AFC ebbs and flows. Contributions to the International Cultural Foundation, long the leading Moon entity devoted to spreading his values among professors, book readers and the Washington policy elite, dipped from $7.9 million in 1988 to $1.1 million in 1994, according to tax records filed with the IRS. The foundation funds other Unification affiliates, including the Professors World Peace Academy, the Washington Institute for Values in Public Policy, and Paragon House, the movement's book publishing arm, the records show.
When the tap tightened at the Cultural Foundation, groups such as the Institute for Values withered and went out of business.
Other groups get quick infusions of cash for special projects. Gifts and contributions to the Women's Federation for World Peace, for example, soared to $10.7 million in 1995. The federation sponsored a series of speeches by George and Barbara Bush in Asia and the United States, with total fees estimated at about $1 million.
Bush spokesman Jim McGrath said the ex-president "strongly believes in the mission" of Moon's federations, but "has no relationship with Moon." McGrath said all of Bush's appearances have been arranged through Wesley Pruden, editor in chief of the Washington Times.
Pruden denied arranging Bush's speeches, saying that the former president had merely asked the editor to introduce him at the events. "I have no more connection with the Unification Church than I have with the Vatican," Pruden added. "I don't book the pope and I don't book for the church."
Also in 1995, the Women's Federation made another donation that illustrates how Moon supports fellow conservatives. It gave a $3.5 million grant to the Christian Heritage Foundation, which later bought a large portion of Liberty University's debt, rescuing the Rev. Jerry Falwell's Lynchburg, Va., religious school from the brink of bankruptcy.
Journalist Robert Parry, who first reported the bailout in I.F. Magazine, quoted an official with the Women's Federation confirming that the $3.5 million was meant for "Mr. Falwell's people."
The Post has learned of more recent and direct financial support from Moon to Falwell. Last year, News World Communications, parent of the money-losing Times, lent $400,000 to Liberty at 6 percent interest, according to the promissory note.
Liberty University spokesman Mark DeMoss said the school was not aware of News World's connection to Moon when it obtained the loan through a broker. "I'm not going to be pious and tell you we would have turned it down," DeMoss said. "Because it was a business transaction, we probably would have moved forward even if Dr. Falwell or somebody in the organization knew who News World Communications was."
Unification-related groups court clergymen, local officeholders and news reporters, inviting them to conferences and ballgames. Their pictures then appear in church publications.
Frederick Sontag, a religion professor at Pomona College, quit organizing academic conferences for church-related groups because his initial independence was curtailed. "They wanted to bring much more Unification doctrine into it and more of their own people," he said. "I couldn't do that."
"What they're doing is buying people," said conservative columnist Armstrong Williams, who was invited to watch a Redskins-Cowboys football game from a Moon organization's luxury box at Jack Kent Cooke Stadium this fall. "They just kept wooing me, calling me."
Williams said Lavonia Perryman, who is handling press relations for this week's festival, told him her client had asked her "to put together the top, most influential journalists in Washington and put them in the box," Williams recalled. "Not once did she ever tell me it was the Moonies."
"They'll pay anything to get influence," said Sontag. "That's just fulfilling their doctrine, that they will work spiritually through these famous people. They really aren't very practical. They get these little interests, in business or academia, wherever, and hype them up, and then move on. It hasn't really gotten them anywhere."
Next: In the twilight of its founder's life, the Unification Church plans a dramatic change in direction.
Staff writer Charles R. Babcock, staff database specialist Jo Craven and staff researcher Alice Crites contributed to this report.
© Copyright 1997 The Washington Post Company
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