An effort by the 100,000-member Worldwide Church of God and its leadership to lift a state receivership -- obtained by California to stem alleged massive frauds -- has failed in the Supreme Court.
The justices rejected a plea by the fundamentalist sect to review the 4-to-3 refusal by the California Supreme Court to dissolve the receivership, which was imposed last Jan. 2 but later stayed pending appeal.
The church, founded in 1933 by Herbert W. Armstrong, its pastor general, accuses the state of devastating its finances and inflicting "massive, immediate and irreparable destruction" on the religious freedom guaranteed by the First Amendment.
The constitutional argument generally is supported in friend-of-the-court briefs offered by five unrelated organizations, including Americans United for Separation of Church and State and the American Civil Liberties Union of Southern California.
But California Attorney General George Deukmejian says the judge supervising the receiverships "assiduously sought to avoid interference in matters of religious doctrine and practice."
Armstrong, his personal adviser, Stanley R. Rader, and other individual defendants are accused by Deukmejian of siphoning off and diverting to their own use assets of the church and its affiliated Ambassador College and Ambassador International Cultural Foundation.
All are nonprofit corporations subject, Deukmejian says, to the state's charitable-trust law, which makes the people of California -- not the church or its members -- the beneficial owners of all of its property. He also says the case isn't "ripe" for review.
In a Superior Court hearing in Los Angeles, Rader admitted that his homes in Tucson and Beverly Hills were purchased with church funds, which derive mainly from tithing, and that he pocketed the proceeds -- $1.8 million -- from the sale of the Beverly Hills home last year.
Rader also admitted that the church gave its business to an advertising agency and accounting, aircraft-leasing, and law firms he had established.
From time to time, Armstrong, who has homes in Pasadena and Tucson, sent urgent appeals to church members to supplement their tithes with emergency cash for "God's Work." What Deukmejian termed "the true nature" of an alleged emergency in 1970 was shown, he said, by purchases Armstrong made at about the same time for his Pasadena home: crystal candelabra costing $6,090 and French porcelain vases costing $2,079.
The receivership was approved in Los Angeles by Superior Court Judge Julius M. Title. His order enabled the state to seize books and records, take over and "protect" all church assets, and control all functions except those deemed by the court to be ecclesiastical. The court reserved for itself power to remove Armstrong and Rader.
The church, which had a 1978 budget of about $57 million, said that the receivership caused immediate cancellation of a $4 million line-of-credit, transformed it into a cash-in-advance buyer "in a manner more appropriate" in a bankruptcy and already has caused losses exceeding $5 million.
The losses eliminated a youth program, led to the dismissal of 90 employes, including ministers, and eliminated subsidies for 300 to 500 families and widows to attend a church convocation, the church says.