WASHINGTON, Feb. 8 /PRNewswire-USNewswire/ -- Today, Citizens for
Responsibility and Ethics in Washington (CREW) filed a complaint with the
Internal Revenue Service against the Living Word Christian Center (LWCC),
in Brooklyn Park, Minn. This is the second complaint CREW has filed against
the LWCC.
CREW's complaint alleges that the LWCC, organized under section
501(c)(3) of the Internal Revenue Code (IRC), has engaged in illegal
financial transactions with LWCC's senior pastor and founder, James "Mac"
Hammond, in which Hammond has profited from the church's activities.
Hammond and his wife are two of the seven members of the LWCC's board of
trustees, making them "insiders" under federal tax law. Tax law prohibits
insiders from benefitting from a 501(c)(3) organization.
Loan documents given to CREW by the blog Minnesota Monitor show that
LWCC showered Hammond with favorable financial deals, including a scheme
under which Hammond purchased a plane, partially on credit, from the church
and then leased it back. The church then paid Hammond twice the amount per
month to rent the plane that Hammond paid the church to buy it.
In addition, the plane remained in Hammond's possession while the
church paid all of the related expenses, including rent to store the plane
in Hammond's own hangar.
The leaseback deal may violate tax law "inurement" rules barring
financially favorable deals to insiders like Hammond as well as
prohibitions against using charitable resources to compensate insiders for
activity not related to the organization's tax exempt purpose.
In addition, between 1999 and 2004, the LWCC made Hammond eight loans
totalling $1.9 million at very favorable rates and terms. Two of the loans
were related to the purchase of the plane Hammond then leased to the
church, three were unsecured in any way and another was for Hammond to buy
a private house in Florida.
CREW's earlier complaint, filed in October 2006, charged Hammond with
violating the prohibition on churches engaging in electioneering activity.
Melanie Sloan, CREW's executive director, said, "Pastor Hammond and the
LWCC have shown a disturbing pattern of violating federal tax law and the
IRS has done nothing." Sloan continued, "The IRS has not hesitated to
target liberal organizations. When will enough be enough and the IRS
finally step in and investigate a conservative church that has repeatedly
demonstrated its contempt for federal law?"
The complaint and supporting documents are available at CREW's Web
site.
Citizens for Responsibility and Ethics in Washington (CREW) is a non-
profit legal watchdog group dedicated to holding public officials
accountable for their actions.
For more information, please visit http://www.citizensforethics.org or
contact Naomi Seligman Steiner at 202.408.5565 or
nseligman@citizensforethics.org.
SOURCE Citizens for Responsibility and Ethics in Washington
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Related links:
http://www.citizensforethics.org
CONTACT:
Naomi Seligman Steiner of Citizens for
Responsibility and Ethics in Washington, +1-202-408-5565
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