FORT MILL, S.C. -- Last year, television evangelist Jim Bakker began a new crusade: to raise money for a home for handicapped children on the grounds of Heritage USA, his Christian family resort here. To make his appeal to viewers, Bakker introduced them to Kevin: a 17-year-old boy, victim of a rare bone disease, who has grown to a height of only 22 inches.
The home was dubbed "Kevin's House."
By all accounts, it was a highly effective fund-raising tactic for the founder of the PTL ministry. Money poured in for the home, and last July 4 it was ready at a cost of more than $1 million -- a blue, gingerbread-style house with wheelchair ramps intended to house eight disabled children.
But like so many of Bakker's projects, reality did not live up to the promise. Today, more than 10 months after it opened, the house has only five occupants: Kevin, his two sisters and his adoptive parents -- who PTL executives recently discovered were Bakker's cousins.
Bakker's aides say they combed the files of local social service agencies and reviewed scores of applicants, but couldn't find any children that met their standards: handicapped and poor, but "ambulatory" and mentally alert.
Kevin's House is an example of what some of Bakker's former associates say were troubling flaws in his fund-raising methods. A star of televangelism until he resigned this March after confessing adultery with a church secretary and payment of hush money, Bakker collected tens of millions of dollars from viewers after promising to use the money for ambitious "good works" projects -- homes for unwed mothers and homeless men, counseling centers, foreign missions, a prison ministry and a nationwide network of "People That Love" centers that offered free food and clothing to the poor.
But, say former PTL executives, Bakker often overextended himself. Buffeted by repeated financial crises, he shifted and rearranged priorities, dropping projects he had once touted and leaving many of those who expected PTL funding out in the cold.
Last year, only 2.9 percent of PTL's $129 million in revenues went to charitable programs, according to figures provided this week by PTL officials.
During 1986, when Bakker and his wife were collecting $1.6 million in salaries and bonuses, PTL ceased funding most of its overseas missions in order to pay the bills at Heritage USA. Bakker also cut off support for the People That Love centers -- which three years ago President Reagan, during a speech at the National Religious Broadcasters convention, praised as being on the cutting edge of "volunteerism," the administration's alternatives to its social welfare cutbacks. "Bakker lost interest in it," explains one ministry official.
"Bakker got very much missions-minded during a telethon because he knew . . . people would give more if you showed a hungry kid on the air," Bob Manzano, a former PTL vice president, once told federal investigators. "I believe in many cases he was sincere in wanting to help, but he committed to too many things at one time . . . without being too concerned about how he was going to get the money to do it."
"You have to ask, what is our philosophy? What is our stated purpose?" says the Rev. Sam Johnson, the pastor of Heritage Village Church and the former head of PTL's home missions. "Is it to . . . put a blanket on the back of every homeless person in America? Mr. Bakker made a decision to put his greatest emphasis here on Heritage USA . . . a 21st-century Christian retreat center for the family."
But Johnson, who has known both the Bakkers since college and believes they "have done an awful lot of good," acknowledges he has qualms about Bakker's use of charitable programs to raise money for his ministry.
"What they started out to do 10 years ago and what they did 10 years later are really two different things," he says.
Bakker Versus the FCC Charges that Bakker engaged in deceptive fund raising date back to the early days of his ministry. In the fall of 1979, it became the focus of an investigation by the Federal Communications Commission.
The FCC probe was a turning point in PTL history, a protracted, bitter conflict that tested Bakker's fortitude, his marriage and the faith of his flock under what he labeled "satanic attacks from the federal government." He would emerge from the probe stronger and richer than ever.
"If I wasn't a Christian and didn't love the Lord, I would be almost out of my mind right now," said an emotional Tammy Faye Bakker on the "Jim and Tammy Show" during the height of what her husband labeled an FCC "witch hunt."
For more than three years, the FCC pursued charges that Bakker misled viewers by raising hundreds of thousands of dollars in contributions that never went for their purpose. In the end, the FCC staff concluded there was sufficient evidence to support charges of fraudulent fund raising: A 1982 staff report detailed $350,000 that Bakker had raised for foreign missions -- telling viewers he needed the money to spread the gospel in Korea, Cyprus and Brazil -- most of which was then spent back home.
The staff's confidential report, parts of which were released under the Freedom of Information Act last year, also charged that Bakker had testified falsely about his overseas fund raising. The report also stated that "evidence indicates over a period of years Mr. and Mrs. Bakker, or their agents, repeatedly used viewer contributions for personal expenses without properly accounting for them."
One ex-executive, Jim Moss, told the FCC staff that he witnessed the Bakkers using PTL petty cash funds for personal shopping sprees. There was testimony that Bakker used ministry money to make a $6,000 down payment on a 43-foot Drifter houseboat, to buy a $2,500 mink coat for Tammy and to buy a Corvette. Bakker denied any wrongdoing.
After hearing it all, FCC commissioners, in what has been described as a shouting, table-pounding debate behind closed doors, voted 4 to 3 to drop the case. Some commissioners described the decision as "unprecedented" in the agency's history. The FCC agreed to let Bakker transfer his lone TV station in Canton, Ohio, to another ministry, and thereby escape FCC oversight. Two commissioners, Joseph R. Fogarty and Henry M. Rivera, wrote a stinging dissent, branding the decision "malodorous" and a "rude and cynical insult."
"It was a close question; I struggled over it," says then-FCC chairman Mark Fowler, a Reagan appointee and avid deregulator, who had argued for dropping the case against Bakker. "It may be, from the advantage of hindsight, that the commission might have done something different."
To fight the agency, Bakker hired a battery of lawyers, including a former chief counsel of the FCC. He took his case to the airwaves to provide viewers daily updates on his "persecution" in Washington.
During the closed FCC hearings, he did what had always worked magic with his viewers: He cried.
"It got to the point where you couldn't let the guy cry because once he would start, you couldn't stop him," recalls Larry Bernstein, who directed the FCC staff investigation. "We'd be questioning him and we'd watch his face start to contort and the tears would begin and we'd have to adjourn."
Bernstein recalls a morning in the fall of 1979 when, as chief inquisitor, he began to press Bakker about a South Korean minister to whom Bakker had promised funds for a TV ministry but never delivered. Bakker broke down.
"At that point, the judge left and we were stuck there," says Bernstein. "Bakker was in a corner wracked with tears, surrounded by his retainers . . . He was being held up, literally, by his people."
Later that day, Bakker wept as he taped a segment for the upcoming "Jim and Tammy Show." Daily bulletins continued: "PTL is going to be stronger . . . than it's ever been," said Bakker on one show. "I will fight to the day I die for the right to broadcast the gospel of Jesus Christ over the airwaves."
Then came the inevitable appeal for money: "Let's give the Devil a black eye."
It was after Bakker's victory at the FCC that his Christian ministry became the money machine of his dreams. Revenues skyrocketed: from $28 million in 1978 to $129 million last year. So too did his penchant for luxury: He bought condos, he bought cars, he bought furs for Tammy Faye. The ministry began spending millions in PTL contributions that auditors now believe were diverted for the Bakkers' personal use.
"PTL saw the FCC investigation as its salvation," says Bernstein. "It was like a gift from God . . . In a terribly ironic way, we made Jim Bakker what he is today."
The Counting Room The lifeblood of Jim Bakker's dream came from a small counting room inside the pyramid-shaped executive compound on the Heritage grounds. During the mid-1980s, the daily mail would sometimes bring in more than $200,000. Five employes cut open the envelopes and counted the take, and at 3 p.m. sharp, an armored car arrived to haul the cash away.
Bakker timed mail pleas to arrive the same day Social Security checks hit the streets, says an ex-staffer.
For those who gave, Bakker offered "a shower of blessings" and published a paperback devoted to letters from people who claimed to reap earthly dividends after dispatching cash to PTL. Some boasted winning lottery tickets. Others told of winning raises, new jobs, tax refunds, new cars, according to the book offered for sale here at a shop on the mall.
Troubled souls felt a kinship with the Bakkers, a seemingly ordinary couple whose real-life problems, marital spats and all, were aired live on TV as parables for modern living.
Often, older women Bakker affectionately called "Grandma Grunts" showed up at the studio, gifts in hand.
"He didn't have time for them," says Jean Albuquerque, an ex-PTL greeter with a penchant for floppy hats. "I remember two spinsters in gingham dresses, hicks. No one would see them, so they asked me, 'Will you come out to our car? We want to give something to the ministry.' So I walked out, they lifted the trunk and there were 11 bars of silver! People gave us Hummels, furs, diamonds . . ."
"I hear people say, 'Jim is a genius,' " says Bob Gass, an Atlanta-based televangelist and Bakker friend. "He is at one thing -- fund raising. Bakker was a pioneer. But if there is anything wrong with the way any Christian evangelists raise money on TV, Jim Bakker is greatly responsible."
Austin Miles, a former minister and frequent PTL guest, says he once feared the ministry was about to collapse after watching Bakker plead for money. Miles remembers asking a PTL official, " 'How did you get over that financial crisis?' Without changing expressions, he said, 'Oh, there wasn't really a crisis at all. We had money all along; it was just in another account . . . It just gave people something to rally around.' "
The Bakkers' combined salary was $72,800 in 1979, the last year it was officially disclosed. But Bakker had no trouble winning raises and bonuses that far exceeded this figure from the PTL board, some of whose members say they were not allowed to take documents from the meetings.
The money flowed through a confidential "executive account" controlled by Bakker and his top aide, David Taggart, and kept secret from PTL's financial officers, according to Peter Bailey, the chief PTL financial officer.
By 1984, PTL's attorney of 10 years, Edward Knox, then mayor of nearby Charlotte, N.C., learned of the secret executive payments. He says he protested -- and resigned when they weren't stopped. Last month, The Charlotte Observer disclosed the Bakkers' real compensation: $4.6 million from 1984 through the first three months of this year.
The disclosures shocked many viewers and staffers who remember how the Bakkers defended themselves in the past against charges of high living. Weeks after the Bakkers bought their $449,000 Palm Springs, Calif., home, Bakker told viewers that he and Tammy had given nearly everything to a ministry facing yet another financial crunch. Said Tammy Bakker, "I have offered to sell everything I own because things really don't mean that much when it comes to getting the gospel of Jesus Christ out."
Meanwhile, pilgrims kept rolling through the gates of the 2,300-acre Heritage USA resort. Some came for spectacle, others with relatives in wheelchairs, or sick children in tow, on crutches. They would drop by the Upper Room, a replica of Jerusalem open 24 hours a day for prayer and healing.
Also showing up on Heritage's doorsteps were the homeless and the jobless. Every week, say PTL officials, small groups of such down-on-their-luck visitors would arrive at the Charlotte bus depot, expecting to find shelter or work at Bakker's Shangri-La.
"They'd have people coming out there who needed to be in the mental hospital," says Knox, the former Charlotte mayor, who acknowledges that the city's social service agencies would sometimes have to end up caring for such people.
"What we would do is send them down to the Salvation Army," says Sam Johnson. "We'd give them some food money or we'd buy them a bus ticket back home."
The problem was that Heritage's highly touted social facilities -- Fort Hope, a 125-bed drug and alcohol rehabilitation center for men, and Heritage House, a 24-bed home for unwed mothers -- were not equipped to handle such visitors.
The strain became more acute early in January, when amid yet another financial crisis, Bakker ordered further cutbacks in these and other home missions. Unpaid bills piled up; the search for additional occupants for Kevin's House was abandoned altogether.
Little more than a year earlier, in December 1985, Johnson had come to PTL as "world missions director," only to discover shortly thereafter that Bakker was eliminating virtually all of the ministry's $1.8 million foreign missions program. "It was devastating," says Johnson.
Johnson, however, also says that many of PTL's foreign missions were not as effective as they could have been. Usually they consisted of little more than buying television time in foreign countries and then broadcasting PTL-type shows in the native language.
There was "no follow-up," says Johnson, nor any relationship with local churches. "We never asked, 'Hey, would you like to have a gospel program on television?' " says Johnson.
One of Bakker's foreign "missions" had been in Monte Carlo, Monaco, the site of a powerful transmitter that broadcast a French-language PTL show into southern France, home of the Riviera.
Why Monte Carlo? Johnson was asked.
"Some of the greatest heathen areas of the world are in Europe," he said. "Some of the affluent people in the world are some of the most ungodly."