SHE WAS RESPLENDENT in her peach sweater, cream-colored skirt and pink lipstick, a defrocked preacher's wife with a mission as she trudged up the hill outside her posh lakefront parsonage last week in Tega Cay, S.C.
Tammy Faye Bakker had come to unload both barrels at a Christian brother, the Rev. Jerry Falwell. Not only had he stolen the couple's multi-million-dollar ministry through deceit, Falwell and his ruthless lieutenants had also starved the Bakkers' beloved dogs and then exiled them to the pound. Perhaps most insulting to this country gospel singer, Falwell's agents had bulldozed cartons of her record albums into a red clay grave, Tammy Bakker charged.
It was a remarkable performance, one more example of how the irrepressible Bakkers have shrewdly used television to generate sympathy while dodging hard questions, fudging the facts and refocusing public attention on the most trivial aspects of the PTL affair -- and away from serious charges inside their ministry.
Indeed, for all its soap opera elements -- diamonds, minks, Mercedes, sex, sin, and betrayal -- the saga of the Bakkers is no mere comic romp involving a fallen preacher's sexual conduct or his flashy wife's penchant for heavy makeup and K Mart shopping sprees. And it has far more serious implications than most cases of hypocrisy in the pulpit.
The meteoric rise and sudden collapse of PTL may turn out to be one of the biggest frauds in the history of American religion -- a case in which tens of millions of dollars in tax-exempt, charitable contributions were raised from television viewers for some purposes and then diverted on a massive scale for things that had little to do with religion. At least $12 million cannot be accounted for, PTL's new auditors say. All this took place while the Internal Revenue Service and the Justice Department, armed with ample evidence of the Bakkers' free-wheeling use of ministry funds, looked the other way.
Federal law forbids charities, including television ministries, from raising money through "false or fraudulent pretenses." In building its 2,300-acre, Christian-style Disneyland -- Heritage USA -- PTL routinely commingled its funds, according to PTL officials. Over the last few years, PTL raised nearly $120 million by selling time-share "partnerships" in two luxury hotel projects, touting the deals on the ministry TV show as a good "investment." A $1,000 "partnership," for example, entitled contributors to three free nights and four free days in the hotels every year for life -- and would be worth "almost $20,000" in 40 years, according to PTL literature.
Yet it has now become clear to Falwell's auditors that only a portion of the money raised through this device was ever spent on such projects. To build the Heritage Grand Hotel, Bakker and his deputies raised more than $65 million from his partners -- $22 million more than it cost. Out of another $49 million specifically raised for a second uncompleted high-rise called the Heritage Towers, only $11 million went into the ground.
What happened to the rest of the money? Auditors aren't sure, but much of it, they now believe, was improperly diverted to pay daily operating expenses at PTL.
"Buildings have been constructed to pay for prior buildings and negative cash flow," said Harry Hargrave, PTL's new chief operating officer, explaining why the ministry was forced to file for bankruptcy protection this month. "The game has ended and we can't build any more buildings to pay for past fiscal sins."
Such unanswered questions hover over PTL finances, especially now that the Bakkers are publicly vowing to return to the airwaves in a matter of weeks. Over the last two years, according to PTL officials, Bakker and his aide-de-camp, David Taggart, withdrew more than $600,000 in cash advances from ministry credit cards without producing any records or receipts to document how the money was spent. What was all this cash spent on? For ministry business? Or personal excess? Bakker has yet to explain.
Since 1984, according to PTL officials, the Bakkers received about $4.9 million in salaries and bonuses. In the first three months of 1987 alone, just before he resigned after confessing his 1980 sexual encounter with a former church secretary and the payment of hush money, Bakker and his wife pocketed $640,000, according to PTL.
In the past, PTL said Bakker was worth the large sums he received because he was "the guiding light" of the ministry. The Bakkers have also said they donated royalties worth millions on their books and records to PTL.
If the Bakkers had been simply television stars their salaries and lifestyle might seem typical of the entertainment business. But the Bakkers also professed a religious mission and their ministry had a tax-exempt status. Bakker last month acknowledged that the large salaries and bonuses were a "mistake," although he said that the PTL board of directors authorized every penny. However, no records indicate the board discussed salaries or bonuses for the Bakkers this year, according to PTL officials.
Indeed, apparently the only written back-up for the Bakkers' exorbitant salaries are to be found in addendums to board minutes typed on Bakker's personal stationery by his $160,000-a-year private secretary, Shirley Fulbright. These addendums state that, over the years, the board granted repeated bonuses ranging as high as $500,000 for Bakker and his wife. Three former board members who were interviewed don't recall ever approving such sums. Who instructed Fulbright to type these records? How were the bonuses paid?
These are just a few of the questions that have piqued the interest of federal investigators and which the Bakkers have yet to address in their repeated appeals for tears and sympathy on TV.
But beyond the questions of financial misconduct, the PTL story also raises serious questions about the lack of scrutiny of religious organizations in general and TV preachers in particular -- many of whom have long sought refuge from financial accountability under the cover of the First Amendment. In the case of PTL, as far back as 1982, a Federal Communications Commission staff report charged that the ministry had violated federal wire fraud laws against misleading fundraising over the air. The case was dropped. The FCC report was dispatched to the Justice Department but nothing was done.
In a confidential November 1985 report, Internal Revenue Service auditors recommended stripping PTL of its tax-exempt status after concluding that, between 1980 and 1983, some $1.3 million in ministry funds were spent for the purely personal benefit of the Bakkers. Agency regulations bar "unreasonable" compensation for the officials of non-profit organizations. No action was taken. The IRS did not refer the evidence to its criminal division until this month. Instead, it simply continued a low-key, ongoing civil audit.
Any viewers moved to send money to the Bakkers after Tammy Faye's recent plea of poverty -- only $37,000 in the bank, she claimed -- might recall how the Bakkers responded to the November 1985 IRS letter to PTL. The agency noted that in 1983, Jim Bakker drew $638,112 in salary and bonuses -- more than five times what the IRS viewed as "reasonable" for the head of a non-profit ministry.
After receiving the report, PTL hired the law firm of Baker & McKenzie to protest the IRS findings -- while Bakker's salaries and bonuses soared heavenward. The PTL chairman earned $1.1 million last year, he recently said. Counting Tammy's paycheck, the couple collected an estimated $1.9 million in 1986, according to PTL officials -- compensation never disclosed to their followers.
How could such questionable activities have been ignored for so long by the federal agencies responsible for policing them? Why has the Justice Department refrained from using the same vigor to investigate Jim Bakker that it used to send another religious leader, the Rev. Sun Myung Moon, to jail for criminal tax evasion and obstruction of justice -- a case that hinged on less than $10,000 in unpaid back taxes?
In part, the Reagan administration appears to have been less than eager to take a hard look at a popular television ministry whose evangelical Christian followers formed a key part of the president's electoral constituency. While Bakker was viewed by many conservatives as politically naive -- and was hardly as active in the right-wing religious trenches as Falwell, Pat Robertson or Jimmy Swaggart -- there were still numerous ties between Reagan officials and his ministry. PTL was praised by no less than the president himself at one National Religious Broadcasters convention.
Meanwhile, Vice President George Bush actively lobbied Bakker as part of his campaign strategy, inviting Jim and Tammy to a campaign party at his home here last summer where Tammy Faye, who touts shopping as "therapy," was astounded to learn that Barbara Bush relaxed with needlepoint rather than credit-card outings to the mall.
After leaving Bush's staff, former vice presidential press secretary, Pete Teeley, went on the PTL payroll and received $120,000 over an 18-month period to serve as the ministry's Washington consultant. Doug Weed, Bush's campaign liaison with evangelical Christians and a frequent guest on the PTL show, drew $75,000 from the ministry last year to write a book about Bakker and his problems with the federal government. It was never published.
In recent months, as the dimensions of the scandal unfolded, the response from Washington has been tepid at best. Although multi-pronged federal inquiries are now under way to determine whether there was mail fraud, wire fraud, tax fraud or extortion at the ministry, there is still no indication that administration officials are willing to press the case hard enough to dig out the truth. Some Justice Department officials were struck dumb last month when, during a high level meeting convened by Deputy Attorney General Arnold Burns, some voiced the idea of dropping the whole matter on the grounds that a case against PTL would interfere with the ministry's First Amendment rights. "This case could be a very emotional thing with some segments of the public," one department official explained later.
Today, despite a three-month-old request by IRS auditors, no grand jury has yet been empaneled, nor subpoenas issued. In the meantime, PTL officials say that numerous documents and records are missing.
Perhaps another reason officials may have shied away from a no-holds-barred investigation -- and a coterie of supporters continue to rally behind the flamboyant Bakkers -- is that people really do believe the Bakkers' version. They are, after all, persuasive on television. What is often overlooked, however, is how they often divert attention from the relevant questions.
Some of the Bakkers' statements are merely amusing, such as Tammy Faye's account of the couple's travails last week. She charged Falwell's men had essentially destroyed perfectly playable and saleable record albums under her name.
According to Falwell spokesman Mark DeMoss, the records were "defective merchandise," tossed out only after PTL employes discovered that they were badly warped from the summer heat and worthless. Then there are Bakker's dogs, alleged by Tammy Bakker to have been shipped away by cruel Falwell henchman. DeMoss says it was the Bakkers' own yardman who shipped out the dogs after he got fed up with them messing up his yard.
"There may have been something she said during that press conference that was truthful," said DeMoss, who hastened to add that he was unable to think of what it might be. "To say that Tammy Bakker was misinformed would be the kindest thing I could say."
The Bakker's assertion that once-loyal PTL staffers want them back is perhaps the most preposterous of their claims. For these hard-working employes, the past three months have been especially painful. In recent interviews, many recalled bitterly how they sacrificed at Bakker's request over the years, swallowing pay freezes, lay-offs and cutbacks in health benefits because they were told the ministry was hard up for cash.
"How could we have been so naive with all this stuff going on?" wondered one TV producer, a longtime loyalist who now wishes the Bakkers would fade away. "But it was all so very well covered up. Only the inner circle knew." It was only towards the end, he added, "that we began to joke, 'When are they going to break out the Kool-Aid?'"
"There are only a few fervent Bakker followers left," said another producer and long-time associate. "The rest of us feel betrayed."
Michael Isikoff and Art Harris have been covering the PTL story for The Washington Post.