FORT MILL, S.C., JULY 21 -- A new internal PTL report prepared for the embattled television ministry has uncovered hundreds of thousands of dollars in previously undisclosed payments to former chairman Jim Bakker and his top aides in the final months of their regime.
In 1987, during the 2 1/2 months before Bakker resigned on March 19 after confessing adultery, the evangelist and his wife Tammy Faye drew $792,000 in total compensation from the ministry, including a $150,000 "loan" that was never approved by the ministry's board of directors and has not been repaid, the report shows. A copy of the report, prepared by PTL auditors, was obtained by The Washington Post.
The report provides the most complete accounting yet of the financial excesses of the Bakkers and their top aides -- at a time PTL was in the midst of a grave financial crisis. It offers a wealth of new detail about their freewheeling use of ministry credit cards, cash advances that ranged as high as $30,000 in one day and huge unexplained hotel bills for Bakker and his entourage.
The report was circulated among top PTL officials here earlier this week, just a few days after an interagency federal task force investigating alleged wrongdoing during the Bakker years at PTL delivered a subpoena demanding hundreds of documents, letters, notes and memos from Bakker-era files.
The auditors' report also shows that in February 1987, PTL paid a $225,000 bonus to Bakker aide-de-camp David Taggart, in part to reimburse him for a personal tax penalty. Taggart had been fined by the IRS for failing to fully document business-related expenses, the report says. Records in the report indicate the bonus was never authorized by the board.
During one two-month period, November-Dec. 26, 1986 -- before he is believed to have left for a European vacation with his family -- Taggart drew $89,000 in cash on ministry Visa and MasterCards, the report shows.
It also indicates that ministry credit cards were used to pay such unexplained charges as $14,672 at the J.W. Marriott Hotel in Washington, on July 30, 1986; $4,015 at Lippe Ware, a crystal boutique in Laguna Beach, Calif., on Sept. 15, 1986; $2,833 at the Louis Vuitton leather shop in Beverly Hills on Sept. 20, 1986; and $17,083 at the cliffside Ritz-Carlton Hotel in Laguna Beach, Calif., on Oct. 9, 1986.
Bakker frequently stayed in $1,000-a-night "presidential suites" at assorted hotels and traveled with a retinue of aides who ran up large room-service bills, according to Don Hardister, his former chief of security and traveling companion who now works in the public relations office of PTL. The initials stand for Praise the Lord or People That Love.
As Bakker's top aide, Taggart handled all of Bakker's personal affairs and finances, often carrying upwards of $10,000 in cash in a briefcase to pay for traveling expenses of the Bakkers and their staff on trips out of town, Hardister said in an interview today.
Since he was fired in April by the new PTL officers appointed by the Rev. Jerry Falwell, Taggart has repeatedly declined to comment about any aspect of his work at PTL.
Calls to Taggart's apartment at the Trump Towers in New York, where he lives with his brother James, PTL's former $130,000-a-year interior decorator, went unanswered today.
Former associates say Taggart has said he has receipts to document his expenses but has refused to turn them over to PTL's new officers because he fears they will be altered.
The report is a preliminary summary of expenses paid out by PTL in 1986 and 1987 under an exclusive executive payroll account maintained by its former auditing firm, Laventhol & Horwath, as well as credit card charges and other executive accounts. Since taking over the ministry after Bakker stepped down, Falwell's executives have replaced the Laventhol firm with Arthur Andersen & Co.
Some of the information in the report will be submitted by PTL officials at a federal bankruptcy hearing scheduled for Wednesday in Columbia, S.C. PTL filed for reorganization under bankruptcy laws last month, saying it was unable to pay more than $70 million in debts. Falwell for weeks has urged PTL viewers to increase their donations to keep the cash-strapped ministry on the air.
As investigators intensify their probe here, a special federal grand jury has been empaneled to begin hearing evidence in the case Aug. 17 in Charlotte, N.C.
Michael C. Durney, acting U.S. assistant attorney general in charge of the tax division, recently informed a PTL lawyer the investigation could last from six months to a year. It will focus on charges that the Bakkers and others engaged in fraudulent fund-raising tactics and diverted millions of dollars in charitable donations for personal use and other improper purposes, according to government and other sources. The PTL ministry itself is not a target of the probe, ministry officials have been told.
Melvin Belli, the Bakkers' San Francisco attorney, was in court yesterday and could not be reached. But Belli has denied all wrongdoing on the Bakkers' behalf, saying all financial matters were handled by aides.
Over the last few weeks, key employes here have been summoned to a stark-white office, its glass windows darkened by brown paper, to sit for interrogations by federal agents on the third floor of the pyramid-shaped executive office building on the grounds of Heritage USA, the Christian theme park built by the Bakkers. "From their questions, it was clear these are serious people," said one former Bakker associate who was interviewed here recently.
Charles J. Alexander, special litigation counsel for the Justice Department's tax division, has arrived from Washington to direct the task force and declined to comment today. The team, which includes agents from the Internal Revenue Service and the U.S. Postal Service, is expected to begin using the new report later this week as a road map to help trace a flurry of large withdrawals from ministry accounts in the Bakkers' final months, sources said.
A copy of the subpoena, obtained by The Washington Post, indicates that one focus of the probe is cash bonuses and other payments to the Bakkers and other officials and whether they were authorized by the board of directors.
The subpoena orders PTL officials to deliver all notes and recordings made of board meetings by Shirley Fulbright, Bakker's $160,000-a-year private secretary. Fulbright could not be reached at her home in Charlotte.
The internal report raises new questions about Jim Bakker's claim that the board authorized "every penny" paid him and others. It shows frequent discrepancies among bonuses mentioned in board minutes, the amounts recorded in addendums to those minutes and what was actually paid out.
For example, minutes from the July 3, 1986, board meeting show directors approved a fiscal-year-end bonus for Bakker without specifying the amount. Later that day, David Taggart typed a memo to the minutes showing Bakker's bonus to be "$150,000 plus taxes." The new report shows that Bakker actually drew a $350,000 bonus that month. The report says that the board of directors, which was supposed to authorize all bonuses, never met after Dec. 16, 1986. But in the subsequent months, PTL paid bonuses -- in addition to salaries -- to its six top officials totaling nearly $1 million. The Bakkers received $471,000; Taggart, $225,000; Bakker's second in command, Richard Dortch, $203,000; finance director Peter Bailey, $55,000; Fulbright, $15,000.
On top of these payments, the ministry paid $87,000 for an elaborate security system to ward off tourists and other threats at the Bakkers' private retreat in Gatlinburg, Tenn., the report shows.
Bakker also received in February a $150,000 payment listed on the check as a loan. But the loan was "charged to payroll expense on PTL's books," according to the report. A top PTL official says there is no record of any loan documents or schedule of repayments.
These payments were made at the height of what former aides describe as a serious financial crisis at the $129 million-a-year ministry. As far back as last fall, Bakker feared he might have to bankrupt PTL, according to Hardister.
"There was talk that we might have to go belly up," he recalled in an interview today. "We all knew it was serious, that we could fold any second."
In January, Bakker's wife contracted pneumonia after a long addiction to prescription drugs and the ministry chartered a jet to fly her to California for treatment at a cost of $60,000, the report shows. In April, Bakker was defrocked by the Assemblies of God church for adultery and "alleged bisexual activities," and he has since claimed that Falwell tricked him into surrendering his multimillion-dollar pulpit -- a charge Falwell has ridiculed.
Of the $792,000 received this year by the Bakkers, according to the report, Jim Bakker got $590,980: $88,000 in salary, $300,000 in bonuses, $44,000 in retirement pay, $8,480 for expense allowances and the $150,000 loan. Tammy Bakker this year received $201,989, including $171,000 in bonuses and $30,000 in salary.
In 1986, according to the report, Bakker received a total of $1.2 million: $812,000 in bonuses, $264,000 in salary, $132,000 for a retirement account and $25,000 in expense allowances. Tammy Bakker received $368,000 in compensation: $277,000 in bonuses and $90,000 in salary.
The report also shows payments totaling $128,000 to Panache, the interior decorating company owned by James Taggart. It further details thousands of dollars spent by the Taggart brothers and another PTL employe for frequent trips to New York, and what the report calls "a large number of flower purchases" -- all from ministry accounts.
"He has good taste," said Todd Sharp, a salesman at Lippe Ware, who remembered David Taggart buying crystal. "He bought some old Rene Lalique from the '20s, very collectible, some antique crystal and new pieces. I don't know if it was for gifts or what."