Oh God! Section 9505

The State of California staged a coup d’état on the morning of January 3, 1979. The object of the coup was not a foreign power, but the Worldwide Church of God (WCG), headquartered in Pasadena. Based on charges of criminal wrongdoing filed by six dissident WCG-members, the State threw the Church into receivership. A Court-appointed receiver led a surprise blitz on Church headquarters backed by agents of the Attorney General’s office, private attorneys, and armed law enforcement officers. Startled WCG employees resisted and were threatened with physical force, arrest for contempt of court, and dismissal if they did not cooperate with the invading force. A WCG secretary was quickly fired by the receiver. The financial pulse of the Church ceased as the receiver and his staff seized the administration of the Church and ordered its bank to stop payment on all checks, triggering a withdrawal of the WCG’s line of credit, a declaration of default on an outstanding loan (which the bank covered with Church assets on deposit), and destruction of the Worldwide Church of God’s excellent credit rating.

Two years later the State has dropped all lawsuits against the Church and its leaders. Not a single act of wrongdoing by the Church or its leaders has been proven, and the Church has regained absolute control over its affairs. But the fact remains — the State of California took over a church two years ago, rending the wall separating church and state with a fissure fit to rival the San Andreas fault, a fissure that can be either mended or deepened by the outcome of a $1.2 billion lawsuit filed by the Worldwide Church of God against the State of California and co-conspirators, charging denial of due process, unreasonable search and seizure, violation of freedom of association, and infringement of the First Amendment guarantees of freedom to establish and exercise religion. It is a lawsuit which seems destined for the U.S. Supreme Court.

The State’s takeover, ironically enough, had its roots in a schism within the Church. No church has ever avoided schism. The pursuit of God and His truth seems always to provoke disagreement among mere mortals. The WCG’s schism revolved around Herbert W. Armstrong, the Church founder, and his son, Garner Ted Armstrong. While the Worldwide Church is the church that Herbert built, handsome Garner Ted, or GTA as he is often called, also laid a few bricks himself. GTA began by guesting on his father’s broadcast programs and later hosted his own popular series. But GTA’s good looks and charisma had an edge that cut both sacred and profane. If he was dynamite on the tube in the service of the Lord, he was also dynamite with women, and in the early seventies he succumbed to the temptations of adultery. When Herbert W. Armstrong discovered his son’s fall he gave him a leave of absence and told him to put his lust on hold. But a repentant Garner Ted was reinstated a few months later and back riding the airwaves. GTA’s fall and his father’s lightning pardon struck some Church members as hypocritical, and this, along with rumors that Church financial affairs were askew, led to a noticeable but very minor exodus of clergy and laity.

Meanwhile, as GTA’s star alternately rose and sank, Stanley R. Rader’s star steadily advanced. Rader, a topnotch CPA and attorney, had worked for the Church and its allied Ambassador College since the fifties and eventually became Herbert W. Armstrong’s globe-trotting companion and closest advisor—which made him GTA’s natural rival. Rader made serious inroads on GTA’s turf when he was baptized by the elder Armstrong in 1975 in a Hong Kong hotel bathtub. Thereafter, Herbert W. referred to Rader as “my beloved son, in whom I am well pleased.”

Under Rader’s counsel the WCG set up a secular arm, the non-profit Ambassador International Cultural Foundation (AICF), which brought high-culture concerts to the Church’s glittering Ambassador Auditorium on the immaculate Pasadena campus of Ambassador College and also spun off two publishing ventures, Quest magazine and Everest House book publishers, both based in New York City. By 1977 a fragile balance of power existed within an empire which now counted its assets at more than $80 million. GTA ran the day-to-day operations of the Church and College and preached to the video faithful. Rader manned the money and the AICF, and Herbert Armstrong kept a firm hand on Church doctrine.

Then in August 1977 Herbert W. Armstrong suffered a heart attack that set off a power scramble. Church doctrine places Armstrong at the pinnacle of the Church’s hierarchy; as Christ’s chosen Apostle he occupies a position of authority similar to the Pope in the Catholic Church. But the WCG has no College of Cardinals to elect a new leader. “God chooses,” says Armstrong. But when the Apostle, now well into his eighties, lay stricken in Arizona in 1977, some decided to give God a little help choosing a new one.

Garner Ted asserted his power by announcing that Ambassador College’s Texas campus would reopen. But Stanley Rader had the rallying Apostle’s ear and spoke with his authority. Rader made GTA’s announcement inoperative, cancelled his television programs, and had him ousted from his positions as head of the Church and College. Garner Ted, busted to spiritual buck-private and told to stonewall the inquisitive press, instead gave an interview in which he claimed that the Church was in financial trouble because of lavish spending and was “shot through with fear.” That sealed his fate. The Worldwide Church proudly models itself on the rank-by-rank authoritarianism of the military. And Garner Ted’s ensuing fourth and final “disfellowship” (excommunication) was the equivalent of a court-martial. As one former WCG member snickered, “He’s lucky he wasn’t ‘shot through!’”

The Rader-GTA rivalry continued. Rader tried several times to buy Garner Ted’s silence about confidential WCG matters. But GTA rejected the offers, went back to Texas, and established his own media church, the Church of God, International. Then the power-playing seemed over: GTA was out, Rader was in, and Herbert W. Armstrong wasn’t going to die—at least for the time being. Peace returned to the “Government of God.”

But the peace was short-lived. In late 1978 six dissident WCG-members, some of them followers of GTA, approached attorney Hillel Chodos with “information and belief” alleging that Rader, Herbert W. Armstrong, and other leaders were liquidating Church property on a massive and rapid scale and stuffing their pockets with the loot. Chodos took the charges to California Deputy Attorney General Lawrence Tapper who then filed a complaint on the State’s behalf requesting that a receiver be appointed over the entire WCG operation.

Tapper and Co. committed several procedural violations in their haste to take over the Church. The selection of judges was not random, the Church was not notified of the hearing, and Superior Court Judge Jerry Pacht heard the complaint before it had been filed and paid for, all contrary to court rules. If all that sounds shady, the next revelation is decidedly dark: Attorney Chodos brought his friend, ex-judge Steven Weisman, to the hearing as his handpicked candidate for receiver. Judge Pacht imposed the receivership and appointed Weisman receiver. The State was now in control of a church.

A momentary digression on receiverships: They are usually imposed only as a drastic last resort to prevent internal hit-and-run looting and to protect corporate records from destruction during litigation. A receiver generally has almost dictatorial powers within the corporation. He can hire and fire at will, conduct audits and investigations, dispose of corporate assets, and direct the use of corporate records. The salary of the receiver and his aides comes from the treasury of the corporation under fire. Answerable only to the court, a receiver is supposed to be an impartial third-party, and is supposed to be neutral to the interests of the two parties in litigation.

Steven Weisman was not an impartial third-party. As an ex-judge, Weisman was a former employee of the very State tied up in litigation with the Church. How could he be neutral? Weisman was also a personal friend of the attorney for the original complainants, Hillel Chodos, who helped him get the job of receiver. Surely, Weisman could be expected to be partial to Chodos and his interests. In fact, Weisman displayed his partiality toward Chodos immediately, by appointing Chodos deputy receiver, thereby creating a receivership managed by the counsel for the original complainants and his friend.

And even aside from this tangle of stealth and conflict of interest, the choice of Weisman as receiver was a terrible one. He had no previous experience running a multi-million dollar corporation, nor did he have any understanding of the doctrines of the church he now commanded. Appointing Weisman receiver of the WCG to protect it was like bombing the Church to save it.

The wedge the Attorney General used to crack the First Amendment wall between Church and State and take over the WCG was a wild new interpretation of California’s Corporation Code Section 9505. At the time of the coup the WCG was registered with the State as a non-profit, property-holding corporation, as most churches are. The Attorney General asserted that the Worldwide Church was not only a church but also a charitable trust and invoked Section 9505, which gives the Attorney General the power to make certain that assets and records of such trusts are being used properly. By definition, the assets and records of a charitable trust are public assets and public records; the Attorney General is the guardian of the trust for the public. Through this legal sleight-of-hand the State was able to argue that because there were no private interests there were no private rights to consider and therefore no constitutional rights to uphold like due process, freedom of association,

Herbert W. Armstrong, the 88-year-old self-proclaimed Apostle of the Worldwide Church of God, whose heart attack set off a power struggle in August 1977.

About the Worldwide Church of God

Herbert W. Armstrong discovered God after suffering several business setbacks just prior to the Great Depression. In 1933, at the age of 41, he ended his search for the “true” church by founding his own. Armstrong quickly took his ministry to the airwaves and prospered.

The WCG is a Christian church based on Herbert Armstrong’s interpretation of the New and Old Testaments. As Christ’s chosen Apostle, Herbert Armstrong teaches that the Anglo-Saxons are descended from the ten lost tribes of Israel, who will inherit the promises of land and riches God made to Abraham’s progeny. After the apocalypse the Messiah will return and WCG members will figure highly in His rule over a Kingdom of God here on earth.

The Church observes the Jewish Holy Days and celebrates the Sabbath on Saturday. Members are forbidden to eat pork and shellfish.

The WCG’s mission is to spread the news of the coming Kingdom through visits by WCG leaders to world dignitaries and dissemination of its version of the Gospel through over 400 broadcast outlets and in such publications as the slick monthly, The Plain Truth. Spreading the news of the coming Kingdom is called “the Work.”

The Church has somewhere between 30,000 and 100,000 adult members.

protection against unreasonable search and seizure, and freedom of speech.

The WCG fought back. Thousands of its members demonstrated and blocked the entry of the receiver into Church headquarters. The receiver responded by further violating Herbert W. Armstrong’s freedom of speech. Weisman halted 60,000 copies of a letter from the Apostle which directed the faithful to circumvent the receiver’s control of Church finances by sending their offerings directly to Armstrong in Arizona. But Armstrong spread the word by phone. And soon, nearly all contribution income was flowing into his control. Church lawyers, meanwhile, filed a suit for damages against the State and fought to have the receivership lifted. Finally, Church members posted a $3,749,689 bond to protect the Church’s financial records during a stay of the receivership, which was then granted. And after nearly three months in the religion business, the State of California was kicked out. But Garner Ted, who some say precipitated the whole mess so he could return as boss, was never called in from the wings.

The siege continued in the courts until mid-October 1980, when SB 1493 became law and Attorney General George Deukmejian dropped the case. It is important to note that while SB 1493 denied the State the power ever again to define churches as charitable trusts, it did not apply to pending cases like the State v. The Worldwide Church of God. The State had simply lost its taste for battle.

Why did the State of California rip up the Constitution and topple the WCG in the first place? While the people of the United States have a fair record of religious tolerance, the governments of the United States have a brutal history of persecution of minority religions, be they Mormon, Catholic, or Moonie. Displays of intense loyalty and belief by people of minority religions seems to promote in outsiders what theologian Harvey Cox calls the “myth of the ‘evil eye'“—the belief that any such odd loyalty constitutes insanity, and that we, the sane, must marshall the State to save these deluded souls from themselves. In a way, the State’s attack on the WCG was only business as usual.

It might be argued that it was not the oddness of the WCG, but the Church’s public announcement of a $5 million deficit in 1978 which alerted the State to the possibility of Church wrongdoing. It might be argued that Stanley Rader’s high salary ($225,000 plus perks), and the expenses incurred in jetting Armstrong and Rader, arms filled with gifts of Steuben glass, around the world to meet with presidents, kings, and generals and throw parties for them would strike anyone as wasteful. And Herbert W. Armstrong’s age at the time of the coup, 86 years, might imply to some that the WCG was headed by a senile incompetent. But a $5 million deficit in an $80 million corporation is not a crime. High salaries, perks, and lavish spending are not in themselves criminal. And age does not equal senility and incompetence. The Church’s financial affairs were open to the State—no receivership was needed when the Internal Revenue Service requested a look at the WCG’s books or to get the WCG to file its annual returns with the State Franchise Tax Board.

And even if Armstrong, Rader, and others had been pilfering Church assets (and there is no evidence whatsoever that they were), the State already had broad powers to bring the guilty to justice without imposing receivership. The State can investigate, call grand juries, subpoena witnesses and records, all under accepted rules of procedure. The WCG recognizes that the free exercise of religion clause of the First Amendment does not shield it from criminal prosecution. But the WCG was not resisting criminal prosecution. It was resisting a takeover.

Think of the odds the Church faced as it struggled to keep the wall between Church and State intact. The Church had nothing to hide but much to protect. After surviving the potential knockout-punch of receivership, the Church had to establish its innocence in order to throw off the yoke of the receiver. This is contrary to our legal principles which oblige the State to prove guilt. Accused of theft, but denied due process, the Church refused to surrender its constitutional rights. And to defy the State implies guilt to impressionable minds.

But the State acted on suspicion, not evidence. The reputation of the Church and its leaders was blackened, its credit was destroyed, its members suffered psychological battering, and its growth was retarded. Greedy receivers helped themselves to the Church treasury, billing in excess of $150 an hour for their “services.” If computed on an annual basis, the salaries of the receivers exceeded those of Armstrong and Rader, the very executives accused of abusing their power and plundering the Church. The State seized records that had nothing to do with finance, such as privileged lawyer-client and priest-penitent documents, as well as membership and tithing lists.

Rader’s most ominous accusation is that the goal of the Attorney General was to establish the State’s right to regulate religion just as the Public Utilities Commission regulates utilities. As overseer of the “charitable trust” religions, the Attorney General could reserve the right to decide what was proper use of church money. The State wished, according to Rader, to divide the ecclesiastical affairs of churches from the financial affairs of churches and decide exactly where the dividing line would be drawn, pretending all the while that no religious liberties were being violated. Yet, as Sharon L. Worthing writes in The Uneasy Boundary: Church and State (The Annals of the AAPSS, 1979),

“...since most religious worship is corporate, not purely private, the right of free exercise means very little if it does not include the right to form appropriate institutions or organizations to conduct religious activities.”

There can be no denying that political rights dissolve into nothing in the absence of economic rights. Without the rights to property and the fruits of one’s own labor, the political rights of freedom of press, speech, and assembly vanish—for individuals as well as corporate organizations. And so the corollary: economic rights precede the political right of freedom of religion. The pursuit of the sacred takes many forms. The Catholics build cathedrals in which to worship. The members of the Worldwide Church rent school-gymnasiums or meeting halls in which to worship, reserving their capital for other expressions of what they consider to be God’s will. One religion might emphasize the importance of proper education, another, dietary laws or pilgrimage. When the State intervenes in the financial affairs of these voluntary associations it becomes the arbiter of what path the pursuit of the sacred will take. And then state religion is just around the corner.

The author is a Los Angeles-based Jack-of-all-trades and free-lance writer. With this issue, he joins the LR masthead as a contributing editor.