W. Eugene Scott, a Pentecostal television preacher with a penchant for the dramatic, successfully rescued the tiny Faith Broadcasting Network (FBN) from financial oblivion. But now the California-based pastor is locked in a battle of his own—with state legal officials over matters of financial disclosure. According to Scott, the outcome of legal proceedings against him could affect the First Amendment freedoms of every church in California. The white-haired preacher sees himself as “fighting everybody’s battle” within the religious community.
Members of Faith Center, a charismatic church in Glendale, called Scott to rescue them financially in Scott late 1975. Their church, with its FBN network of three stations, was over $3.5 million in debt, with assets of only $2 million. In desperation, they turned to Scott, a financial and management consultant in Pentecostal circles. Scott had a record of getting religious organizations out of financial difficulties, and he advised Oral Roberts during the founding of Oral Roberts University.
Scott’s first step was to establish several interlocking corporations—including a travel agency and a publishing company—under the aegis of Wescott Christian Center, a sister church to Faith Center located in Oroville, California. But in the process of getting FBN out of debt, he disputed with legal authorities in California and Connecticut who, he said, were disallowing the normal church tax exemptions for Faith Center. Scott’s problems were complicated by differing state laws, allegedly overzealous government investigators, and reported mismanagement by his predecessors at FBN.
When government officials charged him with the nonpayment of back taxes, Scott took his case to the airwaves. He challenged public officials by name night after night on “The Festival of Faith.” (His controversial live television program runs several days a week, lasting all evening or all night, depending on Scott’s mood or endurance.) He charged some government agencies with illegalities, and he even invited certain officials by name to appear with him on camera.
When his transmitter man at the FBN station in Hartford, Connecticut (WHCT-TV), was arrested for trespassing on station property that the state claimed had fallen to it for nonpayment of back taxes, Scott asked his viewers to telephone their protests to the governor and public officials of Hartford. Later, the mayor apologized on WHCT-TV, saying that perhaps the sheriff’s office had exceeded its authority.
Meanwhile, Faith Center paid $80,000 in back taxes under protest in May, 1977, after the Hartford station was temporarily taken off the air when it refused to pay taxes, claiming tax exempt status. The church filed a $7.7 million lawsuit against the city of Hartford soon after.
When the cameramen and production staff of his Hartford station wanted to unionize, Scott positioned the cameras and then fired the entire staff in front of a startled television audience. The National Labor Relations Board has conducted hearings regarding the incident.
Since then Scott has become entangled with the Federal Communications Commission (FCC) and the California attorney general’s office. Two former employees (fired by Scott) complained that Scott used monies solicited for one purpose for another. The FCC then demanded the names of all FBN contributors.
Scott’s current battle is with the California attorney general. When Scott received a subpoena on May 1, 1978, demanding that he produce over ten years of church records—including minutes of all meetings and membership lists—he balked.
Scott, the pastor and president of FBN, declared that his church records were “inviolable” on the basis of the First Amendment. He challenged the attorney general to take the case before a grand jury, but reportedly was refused since his is a civil action and not subject to the same procedures of a criminal act.
Curiously, Scott has not withheld financial records from outsiders or his television audience. He has disclosed his records to a private accountant and to certain evangelicals, including Clyde Narramore. Scott often holds network and church documents before a close-up camera on his “Festival of Faith” program. “He has nothing to hide,” says one Scott-watcher. “It’s just that he doesn’t want the government demanding to see church records.”
Last November 3, Scott appeared in Los Angeles Superior Court in an unsuccessful attempt to squash the subpoenas against him. He broke a self-imposed fast of three days with a 4 a.m. bacon and eggs breakfast, the Los Angeles Times reported, when he had received commitments from 3,000 followers to appear at the hearing with him. His supporters upheld their pledges, judging by the crowds at the courthouse when Judge Charles H. Phillips upheld the subpoenas requiring that Scott answer questions about church finances. Phillips also granted a petition from the attorney general that would compel the church to produce financial records.
Phillips based his decision on the California Corporations Code, saying that it applies to churches. Phillips said any church must use its funds for purposes stated in its articles of incorporation.
Judge Phillips said the code allows the attorney general to inspect and supervise records of churches whether or not any wrongdoing is suspected. He said that a “charitable trust” is created, such that expenditure of donated funds (even as little as “ten cents,” he said) is subject to the attorney general’s supervision.
Phillips, however, limited his probe of church records to the past five years, instead of ten as requested by the attorney general’s office. He also did not issue a subpoena for income tax records.
In a subsequent ruling, Phillips also allowed Faith Center to withhold information that is purely religious. Scott’s attorneys, say the latest ruling by Phillips provides a convenient “escape clause,” since all records of the church may be defined as “religious.”
Scott is appealing the decision anyway. He still refuses to produce any records of the church as requested by Phillips. He says the earlier ruling would violate the freedoms of every church in California, and that only Faith Center is in a position to appeal.
Scott will be charged with contempt if he does not produce church records by February 20. In the interim, he is following past custom by raising a band of vocal followers, mostly from fundamentalist and Pentecostal groups. He mailed transcripts of Phillips’s November decision to 4,000 pastors in California, and speaks of holding freedom rallies. And then, of course, there is his television program.
