Appendix — Worldwide Church of God, Inc. v. Superior Court of California

® 4s ‘ ‘Vipreme Court, U. & '

FILED

MAY 8 198°

MICHAEL RODAK, JR., CLERM

IN THE -

Supreme Court of the United States = =

October Term, 1979

No. 79-1348

WORLDWIDE CHURCH OF GOD, INC., ef al.,

Petitioners,

vs.

THE STATE OF CALIFORNIA, et al.,

Respondents.

APPENDIX TO BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI.

GEORGE DEUKMEBIJIAN,

Attorney General,

LAWRENCE R. TAPPER,

JAMES M. CorpDIi,

WILLIAM S. ABBEY,

LAUREN R. BRAINARD,

Deputy Attorneys General,

3580 Wilshire Boulevard,

Suite 800,

Los Angeles, Calif. 90010,

(213) 736-2044,

Counsel for Respondent.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

APPENDIX TO BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI

Page

Appendix A. Pages 141-147, 150-171, Direct

Examination of the Witness: Stanley R. Rader . . App. p. 1

Appendix B. Pertinent Text Matter by Court...... 22

Appendix C. Excerpts From Constitution and By-

Laws of the Radio Church of God Preamble ..... 26

Appendix D. Declaration of Hillel Chodos ....... 35

Declaration of Hugh John Gibson .............. 37

Where Are We Now in the Panorama of Prophesied

World Events? by Herbert W. Armstrong...... 42

Declaration of Benjamin Chapman ............. 50

Declaration of David R. Morgan............... 56

Declaration of Alvin E. Timmors .............. 58

Excerpts From Exhibit A to Declaration of Alvin Earl

MES PRR as SMAO RT Oa Db ek Se a tne 64

Declaration of Shirley Timmons ............... 68

Appendix E. Employment and Consulting Agreement 70

Appendix F. From Transcript of March 12, 1979

NINE liao hs Pawibs viekka.d Oka we earns 86

Appendix G. From the September 21, 1979 Hearing,

RE isis. vk wed een bs 4k eR ERS 88

Appendix H. Excerpt From Articles of Incorporation

of Worldwide Church of God, Article II ........ 90

Excerpt From Certificate of Amendment of Articles

of Incorporation of Worldwide Church of God.. 91

Appendix J. Excerpt From Order Dissolving Receiv-

ership; Injunction, Pages 1 and 2 .............. 92

a

il

Page

Appendix J. Declaration of Lauren R. Brainard in

Support of Motion of Plaintiff to Hold Defendant's

Discovery in Abeyance Until the Deposition of Stan-

ley R. Rader Is Completed...........---+-++-- 93

Appendix K. From the January 10-12, 1979 Hearing

Re: Appointment of Receiver: Pages 216-226, Direct

Examination of Virginia N. Kineston .......-..-. 98

Testimony of John M. Kineston, Pages 229-241 .. 105

Direct Examination of John M. Kineston ......-. 106

Direct Examination of Chester Roberson ........ 110

Direct Examination of Paul Tulleners, Pages 262-266 117

Appendix L. Pertinent Testimony From Hearing of

1-11-79, Pages 366-367 ..........-- ee eee eee 121

APPENDIX A.

Excerpts From Reporter’s Transcript, January 10-12,

1979 Hearing, Los Angeles Superior Court.

pgs. 141-147

THE WITNESS: Stanley R. Rader, R-a-d-e-r.

DIRECT EXAMINATION

BY MR. CHODOS:

Q. Mr. Rader, just to begin with, I noted a moment

ago, from what Mr. Browne said and what you said, that

members of the church prefer to affirm and not to swear:

is that correct?

A. That is correct.

Q. Is there some religious tenet of the Church of God

against swearing?

A, ¥es.

MR. BROWNE: Objection. I don’t believe—

THE COURT: The objection is sustained. It is irrelevant.

Q. BY MR. CHODOS: Mr. Rader, are you the man—

May I approach the witness, Your Honor?

THE COURT: All right.

Q. BY MR. CHODOS: Are you the man who took this

affidavit that was prepared for Mr. Armstrong’s signature

to Tucson to have him sign it, the one that was filed in the

court?

A. No.

Q. Did you see it before it was filed with the court?

A. I’m not sure if I saw it before it was filed with the

court, no.

Q. It starts out and says:

‘*Herbert Armstrong being duly sworn upon his oath

deposes and states.”’

And at the end it concludes, ‘‘subscribed and sworn to

before me this Sth day of January, 1979,’’ and has the

signature of a notary public.

to

|

Mr. Rader, in your acquaintance with Mr. Armstrong,

does he swear or does he affirm?

MR. BROWNE: Objection, Your Honor. It’s irrelevant.

THE COURT: Sustained.

Q. BY MR. CHODOS: Mr. Rader, Mr. Browne men-

tioned your employment contract. Do you have a copy with

you?

A. No.

MR. BROWNE: I do.

MR. CHODOS: Perhaps you could give one to the wit-

ness.

MR. BROWNE: Shall I give one to the witness, Your

Honor?

THE COURT: Yes, please.

MR. BROWNE: For the record, I’m handing the witness

the document on the stationery of Worldwide Church of

God, dated August |, 1976, signed by Herbert Armstrong,

followed by employment and consulting agreement, num-

bering 18 pages, followed by employment and consulting

agreement addendum, one page.

MR. CHODOS: Can I have a copy to look at?

MR. BROWNE: I haven’t collated them all. If you will

wait a second.

I have given a copy to counsel, Your Honor.

THE COURT: All right.

Q. BY MR. CHODOS: Mr. Rader, is that the employ-

ment contract that as far as you are concerned is presently

in force between you and the church?

A. Yes.

Q. The contract says—

Your Honor, I would like to-mark that as Exhibit 3, I

believe it is.

pe, Sie

THE CLERK: Plaintiffs’ 3, Your Honor.

THE COURT: It is marked.

MR. CHODOS: | and 2 were introduced at the earlier

hearing, Your Honor.

1 was an authorization by Judge Weisman, and 2 was the

original press release signed by Mr. Armstrong appointing

Mr. Cole—

THE COURT: All right.

Q. BY MR. CHODOS: Do you have a pencil, Mr.

Rader?

A. A pen.

Q. Just put a 3 in the lower right-hand corner of the

first page in a circle.

A. (Marking.)

Q. Thank you, Mr. Rader.

Mr. Rader, this document indicates that it was made and

entered into on the 30th day of July, 1976 between you and

the church; is that correct?

That is what the contract says.

Is that the truth?

I'll stand on the written record.

And—

This is what it says. It’s signed by me and Mr.

Armstrong.

>O>rO>

Q. Mr. Rader, my question was did you sign it on July

30, 1976?

A. Ican’t remember that. I told you I'll stand on what

the paper says.

Q. Mr. Rader, who drew this contract?

A. This contract was drawn probably by a young as-

sociate in the firm of Ervin, Cohen and Jessup after dis-

cussions with me.

ihe Var

I think his name is Greg somebody. | don’t know his last

name.

Q. Gittler?

A. No.

Q. And was Ervin, Cohen and Jessup representing you

in that matter?

A. No.

Q. Who were they representing?

A. I asked them to help to prepare these documents

based upon instructions that had been given to me by Mr.

Armstrong, and contracts with us prepared for Mr. Arm-

strong for his son Garner Ted Armstrong and for me all at

the same time.

Q. In other words, there were three contracts prepared

at the same time.

Were they all prepared by Ervin, Cohen and Jessup?

A. They were, to my knowledge, put into final form

for Mr. Armstrong by the firm of Ervin, Cohen and Jessup,

by a particular man named Greg somebody, whose last name

I can’t recall.

Q. And, Mr. Rader, you were the individual, were you

not, who transmitted to Ervin, Cohen and Jessup’s firm the

information as to what to put in these contracts for the three

people?

A. I told Ervin, Cohen and Jessup’s firm what provi-

sions, in general, Mr. Armstrong wanted, what he was

trying to accomplish by the employment contracts for each

of the people. And I told them to put it into good form, and

they did so.

Q. Now, on page 2, Mr. Rader—sorry—page | of the

agreement, in paragraph A, it recites that since March 1975,

which is a year and three months earlier than the date of

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this agreement, it says ‘‘Rader has served as and is presently

serving as a director, executive vice president, executive

director, vice president for financial affairs, secretary-treas-

urer and general counsel for the church and for its related

entities.”

Do you see that quote?

A. Yes, very clearly.

Q. And you were serving in all those capacities at the

time this agreement was drawn up and signed, weren't you?

A. Yes. But we would have to indicate which entity we

are talking about and make specific which title I had in each

one of the entities.

Q. We will come to that in a minute.

Now, Mr. Rader, you were the general counsel for the

church. Was that you, yourself, or was that your firm of

Rader, Helge and Gerson?

A. The firm of Rader, Helge and Gerson is merely an

association of three lawyers, and Mr. Helge is the person

who deals primarily with the church and its related affairs

as these problems come up.

pgs. 150-171

Q. Mr. Rader, who advised the church about the ad-

visibility or the propriety or desirability of this contract?

A. Mr. Herbert Armstrong is God’s apostle. He is

Christ's representative here on earth at this time. He, by the

powers that have evolved upon him spiritually and which,

as | understand, after constant review with my co-counsel,

Mr. Helge, he has the power to hire and fire, set rates of

compensation, things of that nature, and has done so con-

sistently for 46 years.

Q. Mr. Rader, he is not a lawyer, is he, Mr. Armstrong?

A. No, sir, he is not a lawyer.

cali sa

Q. Did he have any other lawyers advising him besides

you and Mr. Helge about this matter?

A. Mr. Herbert Armstrong calls upon lawyers when and

ift—

THE COURT: Mr. Rader, I think it will help us all if

you will listen to the question. You are a lawyer. Respond

only to the question. All right?

THE WITNESS: All right.

THE COURT: All right.

THE WITNESS: Can you repeat the question, please.

MR. CHODOS: I'll repeat it.

Q. Did he have any other lawyer besides you and Mr.

Helge advising him about entering into this contract from

the church when he did so?

A. Not to my immediate first-hand knowledge.

Q. Mr. Rader, there have been other transactions be-

tween you and the church in the past few years, the purchase

of your home and so on; is that correct?

A. In which years?

Q. Let’s take your home on Loma Vista, Mr. Rader.

The home on Loma Vista was originally purchased by

the church with church money; is that correct?

MR. BROWNE: Objection, Your Honor. Let me tell you

why I’m objecting here.

It’s too remote. I’ll offer to show that the home was

purchased in 1971, and we are prepared to go into that

transaction—it occurred eight years ago—to show how the

home was purchased, how Mr. Rader assumed the obli-

gations, the fact the money of the sale of the previous home

went into it.

The occyrrence in 1971 does not have the immediacy for

this hearing. I think this Court wants to know what has

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happened in the last 90 days, what has happened in the last

60 days.

THE COURT: Mr. Browne, we can’t separate it to that

extent. I think some background is going to be necessary.

And I am going to have to rely on the good judgment of

counsel, both of you, not to enlarge this to the full trial on

the merits. Some background is going to be necessary.

MR. BROWNE: | think eight years ago is—

THE COURT: It is a big asset he is talking about, and

I think he is entitled to go into that, but only cursorily.

MR. CHODOS: If | can have 20 minutes I'll be through

with this part.

THE COURT: Another comment I want to make, gentle-

men, and that is going to help us move this along, and that

is if you are going to make an objection, you make your

objection in legal form and stop. If I require any argument,

I will let you know.

Q. BY MR. CHODOS: Mr. Rader, the question was,

in 1971 the church bought the house at 840 Loma Vista:

is that correct?

A. That is not precisely correct.

Q. Originally the title was put into your name; is that

correct?

A. Title was in my name upon—

Q. You have answered the question.

A. Yes.

MR. BROWNE: Your Honor, objection. Can the witness

give an answer, and if it requires an explanation let him do

it without counsel saying, **You have answered the ques-

tion’’? We are on a fact-finding mission.

THE COURT: All right. Mr. Chodos, give him a chance

to explain if fie so desires.

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Q. BY MR. CHODOS: When the property was origi-

nally acquired, was the title put in your name?

A. When the property was originally acquired the prop-

erty was put in my name. And that was under the specific

direction and authorization of Mr. Herbert W. Armstrong

who actually selected the home.

Q. All right. Now a few months after—

The money for buying the property came from the church

funds, didn’t it?

A. The money for the purchase of the property, as |

recall, was borrowed on a short-term basis from the United

California Bank for the purpose of buying the house for

cash.

Q. It was borrowed by the church and then paid to buy

the house?

A. That’s correct.

Q. Now, Mr. Rader, a few months after the house was

originally bought, you quitclaimed the property to the

church, didn’t you?

A. That’s correct.

Q. Then/about a couple of years later the property was

transferred by the church into your name again; is that right?

A. No. Approximately one year later, when the per-

manent financing was arranged, I quitclaimed the property

to the church so that the financing would be available once

it became impossible for me, as an individual, to acquire

it all by myself.

After the financing had been arranged for, as my affidavit

indicated, the property was then transferred to me, I believe,

January 1972, or approximately thereof, and | then assumed

some mortgages, gave back a second mortgage, and trans-

ferred other property to the church.

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Q. Mr. Rader, at the time that all this was happening,

your firm was peoviding legal counsel to the church, and

your other accounting firm was providing accounting serv-

ices to the church; is that right?

A. In 197—

Q. °71 and ’72.

A. °71 and '72 | was representing the church as a law-

yer.

Q. Did Mr. Armstrong or the church have any inde-

pendent counsel at the time of those transactions?

A. Not to my actual knowledge, but it is quite possible

that they did.

MR. CHODOS: Move to strike the part about it is quite

possible that they did.

THE COURT: Speculation, and it will go out.

Q. BY MR. CHODOS: Now, Mr. Rader, when you—

in 1974, October of 1974, the property was conveyed by

the church to you and Mrs. Rader, was it not, in exchange

for your assuming a $218,000 liability on the existing loan

and giving back a second of $145,000?

A. Ido not believe that 1974 is correct, Mr. Chodos.

I said the property was conveyed on or about January

1972.

Q. Allright. In any event, Mr. Rader, since the property

was occupied by you in the first instance, it is true, is it

not, that the church has paid all the payments for the mort-

gage, the maintenance, the furnishing having to do with that

property?

A. Not true, Mr. Chodos.

Q. The church has paid the charges, haven't they”

A. In some years.

Q. And not in others?

niin.

A. That is correct.

Q. How did it come to pass that they paid in some years

and not in others?

A. To—that will involve a theological explanation,

which I would be happy to go through, Your Honor. It

would take quite some time, and we would have to call Mr.

Helge— ;

Mr. Helge to give the theological explanation?

And the legal aspect of it.

Are you a minister of this church?

No.

You have been baptized into it in 1975?

That is correct.

O>O>N>O

. Mr. Rader, do you know how much money the

church put into this property?

THE COURT: The house?

MR. CHODOS: The house.

MR. BROWNE: Objection. I don’t understand. You

mean at the original time of purchase?

Q. BY MR. CHODOS: No. Up until now, up until you

sold it.

A. It was my understanding, Mr. Chodos, that any pay-

ment made to me or for my benefit will be reflected on the

books and records of the institution.

THE COURT: If you don’t know the answer, state you

don’t know.

THE WITNESS: I—well—I don’t.

Q. BY MR. CHODOS: It is somewhere around $800,000,

isn’t it, Mr. Rader?

A. I wouldn’t think so.

Q. $500,000?

ee

MR. BROWNE: Objection, Your Honor. | think the ques-

tion is asked and answered.

THE COURT: If the witness knows, he can so state.

THE WITNESS: I don’t know.

Q. BY MR. CHODOS: Mr. Rader, in any event, you

and Mrs. Rader sold this property in the summer of last

year; did you not?

A. That's correct.

Q. And the sales price was $1,800,000?

A. That’s correct.

Q. And you have kept that money, that didn’t go to the

church; isn’t that right?

A. That is correct.

Q. Now, at any time, Mr. Rader, was there any inde-

pendent advice to Mr. Armstrong or to the church con-

cerning your ownership or sale of the house on Loma Vista

that you know of?

A. Ican’t answer, because I don’t know.

Q. All right. Now, in addition, Mr. Rader, the house

has—the church has bought you a house in Tucson; is that

correct?

A. lam using a home in Tucson that was purchased by

the church; title is in my name.

Q. How much did that house cost the church, Mr.

Rader?

A. Approximately $150,000.

Q. The church paid for furnishing it, correct?

A. It was bought furnished and a few items were added.

Q. Mr. Rader, in addition to the house in Tucson, you

and Mrs. Rader also own a house in Pasadena?

A. That’s correct.

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Q. That is the house you bought from the church is that

correct?

A. That is correct.

Q. You paid the church about $255,000 for that house

a few months ago, correct?

A. That is correct.

Q. And the way you did that was you paid $75,000

cash, and gave the church back a deed of trust for about

$150,000; is that right?

A. Initially, but 60 days later the one fifty-two was paid

off.

Q. Now, Mr. Rader, does the church—has the church

paid for the cars that you drive?

A. Iam entitled to—

THE COURT: Listen to the question, Mr. Rader. Just

listen to the question. ;

THE WITNESS: Well, I don’t know. I would have to

check my employment contract.

Q. BY MR. CHODOS: Do you have an Aston Martin

and Porshe?

A. Those are mine.

Q. Did the church pay for those?

A. No.

Q. Mr. Rader, I would like to go back to something

that you mentioned a little while ago on the matter of your

different roles that you play.

You have been, as I understand it, Mr. Rader, you and

your lawfirm, Rader, Helge and Gerson, have been counsel

for the church for many years; is that correct?

A. The association of Rader and Cornwall and—excuse

me. Rader and Helge and Gerson have represented the

church and its related entities for a good many years, yes.

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THE COURT: Mr. Rader—

THE WITNESS: It is an association; it is not a partner-

ship. It is very important.

THE COURT: I think you will save us all some time and

expedite this if the question is susceptible to a yes or no,

just answer yes or no. You need not repeat the whole ques-

tion. All right?

THE WITNESS: Yes.

Q. BY MR. CHODOS: Mr. Rader, in addition to that,

you have been a member and founding member of the ac-

counting firm of what is now known as Rader, Cornwall,

Kessler and Palazzo; is that correct?

A. Fee

Q. As I understand it, Mr. Rader, in addition to that,

you organized an advertising agency called Worldwide Ad-

vertising, Inc., which acted as the advertising agency for

all the church’s media purchases, time purchases?

A. ¥es.

Q. And in addition to that, Mr. Rader, you organized

an entity known as Mid-Atlantic Leasing, or something like

that, which purchased airplanes and leased them to the

church; is that correct?

A. Yes.

Q. And let me ask you, Mr. Rader, in connection with

any of these activities or services or supply of assistance

to the church that you provided through these various en-

tities, did the church have any independent counsel besides

yourself or your firm?

MR. BROWNE: Objection, Your Honor. Irrelevant to

the scope of these proceedings.

THE COURT: Overruled. You may answer the question.

a” te

THE WITNESS: My I ask Your Honor something? He

is using the word independent. Does he mean independent

of me or in addition to me? He is not being precise.

THE COURT: I assume he means by independent coun-

sel, counsel other than your firm, which had no connection

with your firm, is that correct?

MR. CHODOS: Yes.

THE WITNESS: Remember I have asked Your Honor

to understand the difference. My firm is not a partnership.

THE COURT: Be that as it may, let’s talk about the three

people who were associated together.

Bearing in mind that is the context of the question, |

think, what is your response?

MR. BROWNE: Objection, Your Honor. Can we have

the time frame about this leasing company?

THE COURT: I don’t think that is necessary, Counsel.

MR. BROWNE: I think it’s 1967, Your Honor.

THE COURT: I don’t think it matters.

MR. BROWNE: Ten or eleven years ago?

THE COURT: I indicated to you, Mr. Browne, I think

some background is going to be necessary. The quicker we

get to it, the quicker we will dispose of the issue now.

MR. BROWNE: May I inquire, Your Honor?

My problem is this. These transactions are brought up.

Was Mr. Armstrong independently represented. Now with-

out regard to that answer, I feel compelled to now dem-

onstrate to Your Honor by way of rebuttal they were all fair

transactions, that they were proper financially, because |

know Mr. Chodos is going to argue just because of the so-

called specter of undue influence that we have a problem.

And I know that if he gets into those underlying transactions,

a)

we are going to be here a long time. And I feel it’s somewhat

of an unfair disadvaritage in that respect.

THE COURT: I want to assure both of you we are not

going to be here for a long time, as I already indicated to

you.

Mr. Chodos, you are going to have to move this along.

I think you are getting into detail that is not going to assist

the Court very much in particular with this ruling.

MR. CHODOS: I asked to have 20 minutes. If I don’t

spend it all on objections, I will be past it.

THE WITNESS: May I help, Your Honor, in one way?

THE COURT: Yes sir.

THE WITNESS: I don’t know whether Mr. Armstrong

has consulted independent counsel. That is because Mr.

Armstrong is inclined to consult independently of everybody

with other people, and I never know with whom he’s speak-

ing at any one time.

THE COURT: Your answer is you don’t know.

THE WITNESS: Yes.

Q. BY MR. CHODOS: Mr. Rader, a few things about

these financial matters.

It’s my understanding somewhere in the—let me ask you

a foundation question.

We have in our moving papers, which you have read—

You have read them, haven’t you?

A. Not completely.

Q. We have attached copies of a document—I think it’s

called the Pastor’s Report, which is sort of a mimeographed

or offset printed publication of the church.

A. Yes.

Q. And in those reports there are messages from you;

correct?

ee

That’s correct.

You are in fact the author of those?

2 2?

That’s correct.

Q. If something appears in the Pastor's Report over

your name, that is your statement?

A. That's correct.

Q. Somewhere in those papers—I’ll find it, if you need

it—you say you severed all your connection with Worldwide

Advertising; is that right?

A. In 1975, that’s correct.

Q. Is that when you became a full-time officer of the

church?

And a member of the church.

You don’t have anything to do with it now?

Nothing.

It’s now all owned by Mr. Gerson?

Worldwide advertising?

¥es.

Is owned by Mr. Cornwall.

Mr. Gerson, what does he have to do with it?

Nothing.

. He’s on the door there as counsel for Worldwide

Advertising. Do you know anything about that?

OFOFOPOPOP

A. Yes. He subleases space from Mr. Cornwall.

Q. Mr. Cornwall is the gentleman of Rader, Cornwall,

Kessler and Palazzo? He’s the Cornwall in that group?

A. By name, yes. |

Q. Now I understand also, Mr. Rader, that sometime

a while ago Worldwide Advertising was no longer—stopped

handling the advertising agency function for the church?

A. That’s correct.

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Q. The church agreed to pay them something like

$375,000 for termination damages; is that right?

A. I don’t know the details. I was not privy to the

transaction. I don’t know.

Q. You don’t know anything about it?

A. Iknow something about it, but I never participated

in the transaction.

Q. Mr. Rader, can you tell me, did you know that the

executive payroll checkbook of the Worldwide Church of

God was out at Worldwide Advertising, Inc.?

Yes.

The executive payroll records?

Yes.

And they were out there a week or so ago?

Yes.

What were they doing there, Mr. Rader?

The executive payroll had been prepared for some

time under the direction of Mr. Cornwall. And Mr. Cornwall

at that time was acting as a certified public accountant.

OP eS Ce?

And Mr. Armstrong’s instructions were that the executive

payroll should be prepared in that manner. When Mr. Corn-

wall, as I understand it, retired from the public accounting

field, he assigned the duties of preparing that—those payroll

checks—which is a clerical function—to someone who had

formerly been working under his direct supervision.

Q. Is Mr. Cornwall now an officer of the church?

A. No. Never was.

Q. Does he have any—is he employed by the church?

A. No.

Q. He has no connection with the church organization

or college or foundation at all?

a

A. As I understand it, there is a contract between Mr.

Cornwall and the church which nad to do with this termi-

nation, and he may have rights under the contract for pay-

ment as some kind of consultant.

Q. Does he prepare the executive payroll now?

A. No.

| just stated the executive payroll has been prepared for

some time by another man who formerly was Mr. Corn-

wall’s employee when he was practicing as a public ac-

countant.

Q. This employee is a—

A. You have to ask that of someone else.

Q. Now, Mr. Rader, on the matter of the leasing com-

pany—then we will be off of this by a quarter of 1 1:00—

some years ago, you and others formed a firm of some kind,

an entity, to buy an airplane and lease it to the church; is

that right?

A. That’s correct.

Q. And since that time, you and others have bought

more than one plane and leased it to the church?

A. That is correct.

Q. And in fact, there is a plane the church is using now

called a Grumman II, that was bought by you and leased

to the church; is that correct?

A. Yes.

Q. All right. The church—the terms of the lease were

such, were they not, Mr. Rader, in every instance, that if

the lease had been fully paid, the lease payments would

cover the full purchase cost and an interest factor or service

charge factor, in addition, for the lessor; is that right?

A. They were leases, and whatever the lease provisions

would provide—

ees a

a ee eS ee

— =

THE COURT: If you don’t know, say you don’t know.

THE WITNESS: I don’t know.

Q. BY MR. CHODOS: They were at least finance,

purchase-type contracts, weren’t they?

In other words, the party paying the lease was, in effect,

bearing the entire cost of the time purchase; isn’t that right?

A. They were leases. They were leases. You would

have to examine the documents if you want to say something

else about them.

Q. Mr. Rader, do you not know whether the terms of

the lease were such that the church’s payments were in-

tended to cover the full purchase price, plus a profit to the

lessor for providing the financing; isn’t that true?

It depends on which plane we are talking about.

Well, let’s talk about the Falcon.

Which Falcon?

How many Falcons were there?

There were two.

Let’s talk about the first one.

Let’s talk about the second one, the most recent Falcon.

Isn’t it true that the purchase payments were intended to

cover the full purchase, the lease payments were sufficient

to cover the full price plus?

A. On the second Falcon there were serious limitations

on the amount that the lease would give in terms of the

difference between the pay out of the lease and the amounts

that the lessee would pay.

In other words, no one knew until the end whether such

a figure would be paid.

THE COURT: You know what the plane cost, don’t you”?

THE WITNESS: Yes.

THE COURT: What did it cost?

O>rO>rao>

axe, Wan

THE WITNESS: Well, the plane upon the trade-in was

about $2.3 million.

THE COURT: What were the lease payments totaled over

the period of the lease?

THE WITNESS: They were to be a certain amount per

month, but the interest rate was variable and could not

exceed a certain amount to the purchaser.

THE COURT: What were the parameters of that?

THE WITNESS: Well—

THE COURT: The lowest and the highest in the form of

the lease payments.

THE WITNESS: Well, I don’t have the contract in front

of me. I can’t—

THE COURT: What is the equivalent, basically the pur-

chase price of the plane?

THE WITNESS: Just about; just about.

Q. BY MR. CHODOS: Now, Mr. Rader, in fact, some-

time in 1977, the chruch decided to terminate the Falcon

lease; is that right?

A. Yes, in 1977.

Q. And under the provisions of the lease, who drew up

that lease, your firm?

A. No.

Q. Ervin, Cohen and Jessup?

A. No.

Q. Who drew it up?

A. The lease was drawn by lawyers in the east, I un-

derstand.

Q. Penalty of $620,000 for early termination was paid

in 1977, for the termination of that Falcon lease, isn’t that

right, to the lessor?

Sate silent ee

a. we

A. I’m not sure that that was the amount. I don’t know

whether it was a penalty, per se.

Q. I will get to that.

A. The lease was terminated, and it is a matter of re-

cord.

Q. I will get that to you in just a minute, Mr. Rader.

But while I am at it, the church then bought the Grumman

II?

No.

They have the Grumman II?

They bought the Grumman II in 1970.

Q. Now the church has made all the lease payments on

the Grumman II, completed making all the lease payments

last year sometime or before; isn’t that right?

A. Yes.

Q. Has the title to the Grumman II ever been transferred

to the church?

A. ¥@6.

Q. When did that happen?

A. I think sometime in 1978.

Q. How long after,the payments were made?

ees

A. Within the period of time necessary for all the clos-

ing documents to be gathered. Mr. Helge, I think, handled

that.

woe. Yael

APPENDIX B.

Excerpt From Reporter’s Transcript, January 12, 1979

Hearing in Los Angeles Superior Court. Pages, 387-

391.

(THE COURT:)

There may be other reasons, but certainly on the basis

of market value, there really has been no showing. Never-

theless, there have some very serious questions raised here

concerning the use and transfer of assets in the form of

money and property to those in control of the church.

Again, the weight of the evidence and the final conclu-

sions in regard thereto will have to be determined by the

trial court. But I have heard enough, | think, during the

course of these hearings, and from my examination of the

documents, to at least give me some cause for concern and

to lead me to the conclusion that pending the trial some

restraints must be imposed on the operations of the church

until the action, as I say, is finally determined.

Now, what have some of these questions amounted to?

Well, firstly, there has been an astonishing amount of money

expended here by Messrs. Armstrong, Rader and others for

many purposes, particularly in connection with so-called

travel expense, the purchase of extensive gifts and so forth.

Now, certainly, some expenditures along that line are

completely proper and permissible, and they are certainly

within the discretion of those persons who are authorized

to determine whether they should be made.

Of course, the persons have to be authorized, it seems

to me—They have to be authorized to indicate and decide

what amounts of money should be expended. And the au-

thority of those persons allegedly authorizing them have to

be persons, as I say, who are in proper authority in. the

church.

kinds.

These are questions which are open to, | think, some

arguments, and will have to be examined very carefully at

the time of trial.

Now, it can generally—with reference to the conduct of

the affairs of the church, the administration of its assets and

the expenditures over the last several years, and up to the

present time—it seems to be conceded that in spite of the

fact that the articles are filed in this corporation under the

nonprofit clause of the State of California, and in spite of

the fact there are specific provisions in the articles and

bylaws which place control in the board of directors, it

seems, nevertheless, to be conceded that for many years

this was essentially a one-man operation, with Mr. Arm-

strong making all the decisions on a completely unilateral

basis; and perhaps even more recently it has been a two-

man operation, in the sense that both he and Mr. Rader are

acting jointly. And of course, as you all know, there is some

suggestion—at least there is an inference, because of Mr.

Armstrong’s possible inability to continue with his activi-

ties, either because of advancing age or infirmity or disa-

bility of one kind or another—that perhaps it is now basically

a one-man operation, again with Mr. Rader conducting the

affairs of the church.

All of these issues will have to be very carefully scruti-

nized by the trial court, and they all represent reasons why

the court is concluding here that some restraints have to be

placed on the conduct of the church business from this point

forward, or at least until trial.

MR. CHODOS: Could you speak a little more in the

microphone, Your Honor?

THE COURT: I wiil do the best I can. 1 am gradually

running out of steam.

There have some serious inferences which have been also

raised concerning various transactions between Mr. Rader

er ee

and the church, from claims of self-interest, possible con-

flicts in interest; again all of those being problems which

are going to have to be resolved in the trial court.

But there has been enough in the way of questions raised

which, again, place the court on notice that there might

conceivably be some problems on the part of Mr. Rader

with reference to the church. Some of these relate to his

possible involvement in, for example, leasing aircraft to the

church and having an interest in the leasing company; var-

ious other business dealings with the church. I am not going

into those now in detail, but they all, again, will have to

be examined by the trial court.

Now, again, I am not going to dwell on it. There has

been the problem raised about these homes which have been

transferred to Mr. Rader, one of which he subsequently and

concededly sold at a profit of perhaps one million dollars

or thereabouts, which he has retained as his own property.

There are also questions with reference to the legal effect

of his employment contract under which he receives a salary

of some $200,000 a year, plus substantial expenses, with

no apparent approval of anyone except perhaps Mr. Arm-

strong. That is certainly an issue which is open to serious

examination.

Mr. Rader is an attorney, of course. I question—I don’t

know right now the answer—but I certainly question the

legality of his present employment argeement, the enforce-

ability of that present employment agreement with the

church under these circumstances.

The defendants have taken the position, I think, coinci-

dentally so, that Herbert Armstrong is and is entitled to be

in sole control of the church, since it is what the defendants

have referred to as a hierarchy; as I say, in spirit of the law,

the articles, the bylaws, the fact this is a nonprofit corpo-

ration and the fact that the articles and bylaws—certainly

the bylaws provide that the control is vested in the board

of directors and not in Mr. Armstrong.

Mr. Armstrong apparently has taken the position that he

may do what he pleases with reference to the affairs of this

church, and without consulting with anyone else, including

the board of directors.

When you combine this with the inference that Mr. Rader

{may] now in reality have replaced him or is in the process

of replacing him it becomes obvious, it seems to me, that

the trial court will have to make a full inquiry into this

situation.

ai..

APPENDIX C.

Excerpts From Constitution and By-Laws of the Radio

Church of God.

CONSTITUTION

ARTICLE |

NAME

This association, a corporation, shall be known as RADIO

CHURCH OF GOD.

ARTICLE II

OBJECT

The object and purpose of this Association shall be to carry

out the active ministry, according to the call and commission

of Jesus Christ, of the tue CHURCH OF GOD and its

various local Churches of God with which it is associated

and from which it has come into being, which scriptural

call and commission is:

|) to preach and to publish the true Gospel of Jesus Christ,

which is the New Testament MESSAGE which God sent

by and was preached by Jesus Christ our Lord—the Gospel

of the Kingdom of God, in all the world as a witness unto

all nations in fulfillment of the prophecy for this time of

Matthew 24:14;

2) to effectively warn the people of the United States, the

British Common-wealth of Nations, and the Democracies

of Northwestern Europe whom we understand to be the

descendants of the House of Israel, of the divine judgments

from Almight God prophesied soon to fall on our peoples

in punishment unless we repent of and turn from our in-

P POE Oe eat FOE HOR Ee Fe

‘ CTS rr re —er

ae

creasing sins and violations of God’s laws, and return to

national and individual total reliance upon the God of our

fathers;

3) to be used of God in the conversion of souls;

4) to minister to those whom God adds to His Church,

feeding the flock with the pure Word of God by personal

contact and by literature;

5) to establish, raise up, and maintain according to the

New Testament pattern, local churches composed of those

whom God gives us;

6) to establish and conduct one or more educational in-

stitutions or other instruments to educate and train students

for active duty in this ministry of worldwide evangelism,

organization and conduct of local churches;

7) to minister to the material need of God’s people, by

healing of the sick through prayer and faith in God’s prom-

ises of healing, and whatever other physical or material

ministry we may be equipped to give.

ARTICLE III

MEMBERSHIP

Section 1. Those who are recognized members of all local

churches affiliated with this Association, together with those

active co-workers in this ministry, whether by tithes and

- offerings and prayers only, or by this and personal active

full or part-time service, who have been baptized into Jesus

Christ and show evidence by the fruits of their lives of

having received and being now led by the Holy Spirit of

God and who keep the Commandments of God and the faith

of Jesus Christ, and who acknowledge this as their sole and

only church affiliation shall be considered as members of

the RADIO CHURCH OF GOD.

Section 2. Reception of Members: No person can *‘join’’

the Radio Church of God or any of its affiliated local

Churches of God, in the usual sense of the word. We con-

ceive, as revealed in Holy Scripture, that God adds to the

Church such as are being saved, and it is by His Spirit being

received on Conversion that one is baptized or inducted into

the true Body of Christ. Any person qualifying according

to Section | first above, in whom we perceive the grace of

God as manifested by the ‘‘fruits’’ borne in his or her life,

shall, if located near or visiting one of the local churches,

be given the right hand of fellowship in public meeting by

the local membership; or, where not accessable to a local

congregation in our fellowship, such members, consideered

as already having been added to the Body of Christ, the true

Church of God, by the Holy Spirit, shall be if when possible

extended the right hand of fellowship by any authorized

minister or representative of this Body. Isolated members,

however, may be considered and recognized as members

of the RADIO CHURCH OF GOD without, or pending

being extended the right hand of fellowship in this personal

manner.

“Article III, Section 3. Dismissal of Members: We

are warned in the New Testament that even of our own

selves shall men arise, speaking perverse things to

cause division and draw away disciples after them: and

that ‘wolves’ in ‘sheep’s clothing,’ making an ap-

pearance and pretense of being true disciples or min-

isters, will enter in among God’s true Christians for

greedy purpose. We are commanded, and the authority

therefore vested in the Church, if the same be deemed

expedient for the protection or other benefit of the

Church, to mark them that cause divisions and offenses

contrary to the teaching of the Bible, to make a full

Statement of the reasons to the congregation for doing

so, and/or disfellowship such persons and avoid them.

The determination as to which remedial procedure is

ee, a

to be invoked, and whether or not the same is ‘deemed

expedient,’ shall be within the sole and subjective dis-

cretion of the ministers duly authorized by the Church

to make such a determination.’”’

ARTICLE IV

DIRECTORS, OFFICERS,

AND DUTIES THEREOF

Section 1. Board of Directors: The corporation shall be

controlled by a Board of Directors, which shall consist of

thirteen in number, who shall also be Trustees. All Direc-

tors, except Herbert W. Armstrong, shall be appointed for

a term of one year or until such time as a successor is

appointed.

Herbert W. Armstrong shall hold office perpetually by

virtue of having been called by divine authority of Jesus

Christ as evidenced by the founding, development and

growth of this work, the salvation of souls, the raising up

of local churches of those converted by and through this

ministry, the effective proclaiming of the true Gospel to the

entire nation by word of mouth, by radio, and by printed

word, which achievements could only be accomplished by

the divine direction and the power of God working effec-

tually in and through the one specially called for this mis-

sion.

Section 2. Executive Officers and and Duties:

A) The President of the corporation, who shall be a mem-

ber of the Board of Directors, who also is Pastor of this

Church. He shall be the Chairman of the Board of Directors.

He shall, by virtue of his office by devine calling and di-

rection, have power and authority to appoint all other Di-

rectors and administrative officers, after counsel with the

other directors and prayer.

B) A Vice President, whose duties shall be to act as

president in the absence of the president.

— =

C) Secretary-Treasurer, who shall keep all minutes of

Board meetings and Church meetings, and records of the

organization, and shall account for and be responsible for

all monies received.

Section 3. Duties of the Pastor: \t shall be the duties of the

Pastor to preach over the radio, and, when feasable, by

television; to write booklets and literature; to edit the PLAIN

TRUTH magazine; to preach before public audiences; to

preach when possible before our local congregations; to pray

for the sick; to ordain elders and deacons; to teach or su-

pervise the teaching of the Bible and courses of Religion

at the College training prospective ministers and workers

for the mission to which we have been called: to have general

Oversight and supervision of the Church and its work.

Section 4. Administrative Officers: The President of the

corporation shall be the Executive Director over the active

administration of the work of evangelism; and in the conduct

of the business affairs of this active evangelistic ministry,

there shall be employed, responsible to him, such admin-

istrative, executive, secretarial and other help as the conduct

of the purposes of this Association may require, including,

as at present organized:

(1) A Business Manager, whose duties are to manage and

supervise all routine and ordinary business administration,

including employment and direction of secretaries, file

clerks and other office employees; the purchase of supplies;

the payment of accounts, supervision Over auditing and

keeping of books and records and reports, and other ad-

ministrative departments. The Business Manager shall be

directly responsible to, and under direction of and in close

cooperation with the President, with whose knowledge and

consent all important or out-of-the-ordinary decisions or

policies shall be made.

=e

(2) An Office Manager, under direction of the Business

Manager, who shall supervise the routine of the general

office, maintaining and checking the mailing list and ad-

dressing machine system, mimeographing, mailing of re-

quested literature, booklets, the PLAIN TRUTH magazine,

etc. ;

(3) An Auditor, in supervision of auditing and book-

keeping department, who shall audit all financial records

of The RADIO CHURCH OF GOD and its auxiliary or-

ganizations or institutions at least once each year, and report

to the President, the Secretary-Treasurer, and the Board of

of Directors, their true financial condition. He shall have

access to all records of monies received and of expenditures

and amounts, payable at all times. He shall act also as

adviser and counsellor in the financial affairs of the Church.

(4) An Executive Secretary, serving as personal secretary

to the President.

(5) A Financial Secretary, who shall be manager of the

mail opening department, and, in supervision over trusted,

trained and qualified secretaries, shall be responsible for the

opening of mail, receiving of all monies, and turning of

these monies promptly over to the executive secretary or

auditor or whomsoever the Business Manager shall direct

for entering in records and banking. It shall be the further

duty of the Financial Secretary’s office to carefully read all

incoming mail, channelling each piece into the proper de-

partment or office for attention and reply; marking carefully

what special literature is requested or, in judgment of sec-

retary, would be helpful.

(6) Manager of Printing Department, in supervision over

printing of booklets, bulletins; letters, letterheads, envelopes

and other literature.

(7) Manager Recording Department, who shall be in

charge of radio studio control room and whose duties are

to make all recordings of radio programs by electrical tran-

scription for broadcast, packaging and alr-expressing same

to various radio stations; keeping careful records of all tran-

scribed programs sent to each station; and maintenance con-

tinually in best condition of all radio and recording equip-

ment.

(8) Superintendent of Buildings and Grounds, who shall

be directly responsible Business Manager who in turn is

responsible to the President of the College for maintenance

and repair of buildings, new construction supervision, su-

pervision over all janitor work; also for supervision and

maintenance of all grounds, lawns, trees, shrubs, hedge,

etc., and any new installation thereof or landscaping. No

new building construction or landscape installation may be

contracted for, however, or undertaken, unless ordered by

Business Manager with consent of the President of the Col-

lege and approval of the Board of Directors.

ARTICLE XII

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Every person who serves as a director, officer, or em-

ployee of the corporation, and every person who serves at

the written request of the corporation (or at its oral request

subsequently confirmed in writing) as a director, officer,

or employee of another business, whether or not incorpo-

rated, in which the corporation owns a proprietary interest,

may, in the discretion of the Board of Directors, be indem-

nified and held harmless by the corporation from and against

any loss, cost, liability, or expense that may be imposed

on or incurred by him in connection with or resulting from

any claim, action, suit, or proceeding, civil or criminal, in

which he may become a party or otherwise involved because

of his being or having been a director, officer, or employee

of the corporation, or of the other business in which the

corporation may own.a proprietary interest, whether or not

he has this relationship when the loss, cost, liability, or

expense was imposed or incurred. The phrase ‘‘loss, cost,

liability, or expense’’ shall include all expenses incurred in

defense of the claim, action, suit, or proceeding and the

amounts of judgments, fines, or penalties levied or rendered

against the indemnified person, provided that no person

shall be entitled to indemnity under this section unless the

Board of Directors determines that he was acting in good

faith and within what he reasonably believed to be the scope

of his employment or authority and for a purpose that he

reasonably believed to be in the corporation’s best interest.

The determination of the Board of Directors shall be within

its sole and subjective discretion and its decision shall be

final. Payments authorized under this section shall include

amounts paid and expenses incurred in settling the claim,

action, suit, or proceeding, whether actually begun or only

threatened. Expenses incurred with respect to a claim, ac-

tion, suit, or proceeding indemnified against under this sec-

tion may be advanced by the corporation before final dis-

position of the matter. This right of indemnification shall

not affect any other rights to which any person may oth-

erwise be entitled by law or contract.

ea 6 & 2

This CONSTITUTION has been recommended by the Pas-

tor, and approved by the majority of the members present

at this annual meeting, this 24th day of October, 1948.

(Signed) HERBERT W. ARMSTRONG

Pastor and President of corporation

(Signed) LOMA D. ARMSTRONG

Vice-president

pes.” ae

(Signed) ESTHER OLSON

Secretary-treasurer

(Signed) BASIL WOLVERTON

Elder and Director

(Signed) D.T. HENION

Deacon and Director

(Signed) JAMES A. GOTT

Deacon and Director

35...

APPENDIX D.

Excerpts From Declarations and Exhibits in Support of

Ex Parte Application for Temporary Receiver, Filed

January 2, 1979 in Los Angeles Superior Court.

DECLARATION OF HILLEL CHODOS

I, HILLEL CHODOS, hereby declare as follows:

1. Iam one of the attorneys for the relators in the within

action. I make this declaration in support of the ex parte

application for appointment of a temporary receiver, tem-

porary restraining order, and order to show cause.

I have personally discussed this matter with the Hon.

Steven S. Weisman, a retired judge of this court, in order

to ascertain whether he would be willing and able to act as

receiver if appointed by this Court. Judge Weisman has told

me that he is willing and able to do so.

2. I have practiced law for approximately seventeen

years. I specialize in business and corporate litigation and

in trial in appellate courts. Much of my practice relates to

cases of business and commercial fraud involving large

amounts of money and large corporate enterprises.

3. I have personally interviewed all of the declarants

whose declarations are filed in support of the within appli-

cation. I have also reviewed the materials they have fur-

nished to me. These materials strongly suggest that the

Church may have substantial claims against the individual

defendants and other persons for improper diversion and

misappropriation of church funds. They also suggest strongly

that the Church has ample legal grounds for avoiding the

consummation of a proposed sale of its major asset in Big

Sandy, Texas. However, based on my experience in liti-

gation, it is my opinion that the ascertainment and pursuit

of those claims will be greatly facilitated if the records of

the Church are fully preserved and available to the counsel

pa WS

charged with doing so; and that their ascertainment and

prosecution will be rendered much more difficult if any

substantial segment of the records has been destroyed. It

is therefore of the utmost importance to the ultimate en-

forcement and protection of the charitable trust that whatever

records remain in existence be preserved from removal or

destruction.

4. Itnow appears that a proposed sale of the Big Sandy

facility will close on January 4, unless orders are made

which will prevent the closing. Based on my experience in

business litigation, including many real estate matters, it is

my opinion that the legal difficulty and expense involved

in setting asid2 a consummated sale would be much greater

than that involved in avoiding the consummation of the

transaction before it is complete.

I declare under penalty of perjury that the foregoing is

true and correct.

Executed this 28th day of December in Beverly Hills,

California.

/s/ Hillel Chodos

HILLEL CHODOS

eS:

DECLARATION OF HUGH JOHN GIBSON

I, HUGH JOHN GIBSON, declare as follows:

1. JI am one of the attorneys for plaintiff and relators

in the within action. I make this declaration in support of

the plaintiffs’ application for appointment of a receiver and

a temporary restraining order, and for a receiver and an

injunction pendente lite.

2. During approximately the last two weeks, I have

been furnished by certain of the relators with various written

material and information pertaining to the Worldwide

Church of God, Inc. and its associated corporations. I have

reviewed and analysed those materials, and have pursued

certain additional inquiries and investigations. The follow-

ing facts appear (among numerous other facts) in said ma-

terials and are pertinent to this proceeding; and may be

briefly summarized for the Court’s convenience as follows.

3. Attached hereto, marked Exhibit A, is a copy of the

‘*Pastor’s Report’’ published by the Worldwide Church of

God on August 14, 1978. At pages 4-7, the report contains

a personal message from Stanley Rader. In it he explains

he is employed by the Church under an arrangement made

between him and Herbert W. Armstrong that “*whatever it

took to meet my financial requirements would be provided.”’

He acknowledges that he arranged for the lease-financing

of a Falcon aircraft for use by Church executives; that ‘‘after

careful consideration and much discussion with all parties,

it was agreed that the financial arrangements were equitable

for all parties and that my participation would not be in

conflict with the Church or any professional responsibilities

that I might have had as a result of my relationship to the

Work as a lawyer and as an advisor to Mr. Armstrong;”’

and that the arrangement provides for the Church to indem-

nify him from any tax loss he might suffer in connection

aaa

with it, which indemnification was in the process of being

calculated as of the date of the report. Mr. Rader also admits

that for many years he was the owner of an advertising

agency which handled all of the Church’s radio and tele-

vision time buying activities on a commission basis [Mr.

Rader claims in the report that he divested himself of any

and all interest in the advertising agency in 1975; but as

appears more fully below that claim is highly questionable].

Mr. Rader also admits that the Church purchased and main-

tained a home for him in Beverly Hills [recently sold by

him personally for $1,800,000, as explained more fully

below]. Mr. Rader claims that all of this remuneration was

approved by Herbert W. Armstrong, who allegedly felt and

feels that he has been ‘‘a servant worthy of his hire.’’

4. The current edition of Martindale-Hubbell lists Mr.

Rader and his law firm, Rader, Helge and Gerson. In ad-

dition to the official listing, the directory contains a paid

listing for the law firm, setting forth biographical infor-

mation concerning its members and other information. A

copy of this paid listing is attached hereto marked Exhibit

B. It lists Mr. Rader as a lawyer and also indicates that he

is a certified public accountant. Among the representative

clients of the law firm are included Ambassador College,

Worldwide Church of God, Ambassador International Cul-

tural Foundation, and Worldwide Advertising, Inc. World-

wide Advertising is the advertising firm Mr. Rader formed

to handle the Church’s time buying programs, and in which

he allegedly divested himself of any interest in 1975.

5. Areview of current telephone directories reveals that

Mr. Rader maintains law offices at 10100 Santa Monica

Boulevard, telephone number (213) 552-1717. Worldwide

Advertising, Inc. is listed in the telephone directory at the

same address and phone number. Also listed at the same

address and phone number are Henry F. Cornwall, C.P.A.

eS, Ue

and Gateway Publishing, Inc. The accounting firm of Rader,

Cornwall and Kessler, and W. Jack Kessler, C.P.A., are

listed with offices at 10100 Santa Monica Boulevard and

a telephone number of 553-6958.

6. Attached hereto marked Exhibit C, is a Dun & Brad-

street report on the Worldwide Church of God, Inc., dated

July 18, 1978. This report lists Herbert W. Armstrong as

president; Stanley R. Rader as treasurer; and Ralph Helge

(Rader’s law partner) as secretary; and states that the three

officers are the directors. It also states that Armstrong, Rader

and Helge hold identical offices in Ambassador College,

Inc.

7. Attached hereto, marked Exhibit D, is a Dun & Brad-

street report dated September 28, 1978 on Ambassador In-

ternational Cultural Foundation, Inc. Messrs. Armstrong,

Rader and Helge are listed as the president, executive vice

president and secretary; and Henry Cornwall (Rader’s other

accounting partner) is treasurer.

8. I have examined the ‘‘Pastor General Department,

Report of Expenditures’’ for July 1, 1975 through June 30,

1976, which is attached to the Declaration of Mr. Chapman

as Exhibit B. This report lists a total of $2,031,643 ex-

penditures by the Church during this period, consisting prin-

cipally of items characterised as ‘‘travel and lodging’’

[$889,485] and ‘‘public relations’’ [$819,346]. The item-

ized breakdown shows repeated expenditure for luxury items

such as meals at Perino’s or La Scala, limousine service,

and the like. Typical of these items are bills incurred by

Rader at Perino’s on February 28, 1976 ($272.34) and at

La Scala on March 12, March 18 and March 19 ($125.00;

$202.71 and $102.18 respectively). Other items which ap-

pear repeatedly throughout the itemized list are charges at

Hermes in Paris (a luxury store with a branch on Rodeo

Drive), Gucci (a similar establishment), Christian Dior,

eae” en

Cartier, and so on. Another category of items which fre-

quently appears relates to charges to the Church, as exec-

utive expenditures by Osamu Gotoh for cameras and ac-

cessories: by way of example only, between June and

September of 1975, he is listed as having purchased over

a dozen cameras and related equipment from various pho-

tography stores for over $10,000.

9. In addition to ongoing and enormous expenditures

of this character, the report also lists travel expenditures of

bizarre and exorbitant amounts. Typical items are:

8/8/75 American Express-Gotoh

Hotel Plaza Athenee, Paris (no backup) $12,416.93

8/31/75 American Express-Gotoh

Imperial Hotel, Tokyo (no backup) $13,735.74

9/12/75 American Express-Gotoh

Munich, Germany $12,504.59

9/11/75 Diners Club-Rader

Hotel Plaza Athenee, Paris $12,049.39

Between October 23 and November 1, 1975, Gotoh made

four charges to the Church’s American Express card at the

Plaza Athenee totaling over $44,000; and a week later, he

billed another $8,580.29 to the Church for a Stay at the

Imperial Hotel in Tokyo. On February 25, 1976, Rader

made nine separate charges to the Church’s Diners Club

card at the Jerusalem Hilton, amounting to more than

$10,000.

I have also examined the monthly executive expense anal-

ysis of March 3, 1978, attached to the Declaration of Mr.

Timmons as Exhibit C. This report reveals that the type of

expenditure shown in the 1975-1976 report is continuing

to more recent times. The analysis includes a bill by Rader

at the Plaza Athenee in Paris for $22,571.19: a bill for

Henry Cornwall at the Imperial Hotel in Tokyo for $22,-

ee en

925.56; and charges at La Scala ($694.78), Harrod’s

($281.98) and the like. 3

The report for March 3, 1978 also reveals additional major

expenditures of significance. During the period reflected by

that report, the Church incurred $13,166.90 for Rader’s

home in Beverly Hills, including utilities, property tax,

landscaping, expense allowance and mortgage payment.

During the same month, the Church incurred an additional

$10,591.17 to furnish and maintain Rader’s home in

Tucson.

10. Despite the fact that the Church paid for the Beverly

Hills home, including taxes and maintenance, Rader and

his wife held personal title to the property until they sold

it in July of 1978 to Erwin and Margo Winkler. A certified

copy of the Raders’ grant deed to the Winklers is attached

hereto marked Exhibit E. The documentary transfer tax is

listed as $1,980, computed on the full value of the property

conveyed, signifying (at $.55 per $500) a sale price of

$1,800,000.

11. Shortly after selling the Beverly Hills home and pock-

eting the money, Rader and his wife purchased a home in

Pasadena from Ambassador College for an apparent pur-

chase price (based on transfer tax) of $225,000. The Church

took back a note and trust deed for $152,500 of the purchase

price. Certified copies of the grant deed and the deed of

trust given back are attached hereto, collectively marked

Exhibit F. |

I declare under penalty of perjury that the foregoing is

true and correct.

Executed this 27th day of December, 1978, at Beverly

Hills, California.

/s/ Hugh John Gibson

HUGH JOHN GIBSON

am

Excerpts From Exhibit A to Declaration of Hugh John

Gibson: Pastor’s Report.

Where Are We Now In the Panorama of

Prophesied World Events?

by Herbert W. Armstrong

The DEATH of Pope Paul VI may trigger a drastic change

in world events. This change could plunge the world into

the most terrifying crisis ever experienced by man.

But I hasten to add that if this catastrophic World War

III does explode, that will be the definite ASSURANCE

that WORLD PEACE in the utopian WORLD TOMOR-

ROW— is imminently to follow.

I would rather picture to our readers a future of WORLD

HOPE, than of horrifying world disaster. But we live in a

troubled world with unprecedented evils piled mountain-

high. And the trend is foreboding—not reassuring. It will

get darker before the DAWN. The important thing is that

the DAWN is absolutely assured by the living Creator GOD!

Some twenty years ago, before Pope John XXIII was

elected, I had wondered if the Pope then being selected by

the College of Cardinals would be the one who would pro-

pose his good offices to the nations of Europe to achieve

political, monetary, and military union. European nations

have longed for some sort of UNITY. They want not only

economic union, as they have achieved by the ‘“Common

Market,”’ they fear the communist hordes—and especially

if the U.S.S.R. and the Peoples Republic of CHINA ever

get together.

United now—since World War II—the Europeans have

had to rely on the United States military power to protect

them from further encroachments or nuclear attack from the

Soviet Union.

Back during the final days of World War II, I was giving

a commentary on the war news daily on the World To-

or oe

morrow radio program. We came to a point where the final

coup de grace was expected hourly to be rendered on Ger-

many by the Allies. But the Western Allies could not inflict

that final death-blow until the Russians ended their part of

the war in the eastern sector.

Day after day, hour after hour, we waited. But the Rus-

sians were in no hurry to END the war. They continued on,

until they had taken over Latvia, Estonia and Lithuania—

and until the Russian boot had been firmly planted on all

Eastern Europe—including Eastern Germany. All these be-

came the ‘‘satellite countries.’’ They are spoken of as behind

the ‘‘Iron Curtain.’’

All who know communist beliefs, aims and tactics, know

that they are committed to waging this war, by propaganda,

by infiltration and fifth-column tactics, by sabotage and

guerilla warfare—and, when necessary, finally by open all-

out nuclear war. The Soviet Union maintains a very huge

standing army. The Soviet Union competes on a virtual

parity with the J.S.A., as the world’s two superpowers in

military strength.

And the Europeans are right on their border. They know

how communism did prove the ‘‘domino theory’’ correct

in Viet Nam. They not only continued on from North Viet

Nam to conquer South Viet Nam—even with full U.S.A.

participation with its military force—but then quickly Cam-

bodia and Laos fell. And, next in the ‘‘domino falldown’’

is to come Thailand, Burma, Malasia. Singapore a few years

ago successfully stopped a threatened communist take-

over—but now they are in the “‘domino’’ orbit.

The Europeans are far more disturbed about their safety

in relying on United States military power to protect them

than Americans realize! The United States is not loved in

Europe. European confidence in U.S. protection against

their next-door communist neighbor has been lessening and

lessening.

ee ae

EUROPEANS WANT THEIR OWN UNITED MILI-

TARY POWER! They know that a political union of Europe

would produce a THIRD MAJOR WORLD POWER, as

strong as either the U.S. or the U.S.S.R.—possibly stronger!

They have made a real effort toward union, in the Com-

mon Market. It has made them economically strong. United

they could become stronger economically than the United

States. The dollar continues dropping in European and Jap-

anese markets—and especially the German MARK has

soared stronger and stronger!

But they well know there is but ONE POSSIBILITY of

union of Europe—and that is through the Vatican.

Two leaders in Europe produced, a few years ago, two

different plans for union. The former Archduke Otto von

Hapsburg of Austria, and the ‘‘strong man of Europe,’’ Dr.

Franz-Josef Strauss of Munich. I know the latter well. He

has been a dinner guest in my home.

Five years ago I felt, personally, that the more likely plan

that might come to fruition was that of the former Archduke

of Hapsburg, but the most likely man to HEAD such a union

was Franz-Josef Strauss. However, we all become a year

older every year, and there has been so much delay that a

younger man may now head up such a European union.

As I said before, when Pope John XXIII was in process

of election, I felt that the Pope elected might be the one

who would make available his good offices to help political

leaders of Europe bring about their hoped for union. But |

at once it became eviden: that Pope John had other ideas.

He started the Ecumenical Movement, to bring about a

different kind of union—a Church union between Protes-

tants, Eastern Orthodox Catholics, and the Roman Catho-

lics.

Then fifteen years ago, I thought Pope Paul might be the

one to lead in this European political union. But the res-

ay

urrection of the old ‘‘Holy Roman Empire’’ was again de-

layed. Pope Paul continued with Pope John’s ecumenical

union project. But that was not to be accomplished.

* * * * *

PERSONAL FROM STANLEY R. RADER

There has been a systematic effort to destroy the reputations

of Mr. Herbert W. Armstrong and those closet to him. This

effort was spear-headed by Garner Ted Armstrong, but aided

and abetted by those seeking favor with him. Mr. Armstrong

has written and spoken about this during the past few

months, and I am certain that you will recall similar efforts

on his part to correct the problem during the past several

years.

Although my record of performance is well known and well

documented, there has nonetheless been a conspiracy to

place a cloud over it, and to impune my character, my

reputation and my professional integrity. My financial ar-

rangements with the Church, matters which are of record

and known to all parties with the right to know them, have

been falsely distorted and made to appear wrongful. Ac-

cordingly, I am taking this opportunity to share the record

with you in order to put to rest once and for all the spec-

ulations and misapprehensions in this area.

When I first met Mr. Armstrong the Work was very small—

the total gross revenues from all sources was less than

$800,000 annually. Mr. Armstrong soon learned that he

could rely on me to get problems solved—problems that

were not being solved by others for whatever reasons. He

asked me to represent the Work on a retainer basis. We

agreed that the Work would prosper, and in time I would

be compensated in accordance with the scriptural principle

that ‘‘a servant is worthy of his hire.’’ | had great faith in

the Work and in Mr. Armstrong and I threw myself into

=

my responsibilities with the zeal and energy necessary to

get the job done—with little regard to my compensation.

By 1969, I had helped Mr. Armstrong in many ways and

we had come to love one another very much. We had a very

special relationship which I shall always cherish as will my

wife and my children. I was still very successful on two

other fronts—in my law practice and in my public account-

ing practice. At that time, however, Mr. Armstrong and

Mr. Portune asked me to come into the Work ‘‘a little

more’’ by giving up all other professional activities that

required my Own commitment of time and energy. We

agreed and, from that time forward, I devoted all my time,

talent and energy to Mr. Armstrong and the Work. We

agreed that whatever it took to meet my financial require-

ments would be provided.

Prior to 1969 the only financial dealings that I had with the

Work were for the payment of my professional services,

with one exception. At Mr. Armstrong’s specific request

in 1967, I managed to arrange for the financing of the first

Falcon aircraft after all other attempts to do so by Mr.

Portune and his colleagues in the business office had been

unsuccessful. The only way that I was able to provide the

financing for the completion of the purchase of the falcon

from Pan American Airways was to arrange a tripartite

agreement between Mid-Atlantic Leasing, Pan American

Airways and the Church. Mid-Atlantic Leasing was a part-

nership which was formed for the transaction. The part-

nership was willing to act as the lessor if it would be guar-

anteed certain tax shelter benefits. Furthermore, since it was

impossible for a partnership to be assured of the Church’s

credit- worthiness, the partnership required that 1) I take part

in the transaction and that 2) I indemnify each of the other

partners in the event of the Church’s default in any material

respect.

ae. ee

After careful consideration and much discussion with all

parties, it was agreed that the financial arrangements were

equitable for all parties and that mv participation would not

be in conflict with the Church or any professional respon-

sibilities that I might have had as a result of my relationship

to the Work as a lawyer and as an advisor to Mr. Armstrong.

At that time, it was also clearly foreseeable that at the

termination of the lease the provisions of the tax law would

result in a definite tax loss for me. The Church agreed to

indemnify me from such loss if, in fact, it were to occur.

In July 1977, the lease was terminated, but well in advance

of the termination date provided for in the lease agreement.

Accordingly, I am now in the process of calculating the

actual economic loss that I have suffered as a result of the

transaction that began in 1967.

In the fall of 1969, Mr. Armstrong decided to terminate the

services of his advertising agency, M. B. Scott, Inc., and

he determined that it would be in the best interest of the

Work that the time-buying function be transferred to an

agency that would be more under the control of the Work.

Mr. Armstrong and Mr. Portune were both aware of my

vast background and experience in the advertising field as

a result of my contact over the years with Mr. Scott and

other advertising agencies, as well as my broad overview

of the entire communications field as a result of my law

practice. Hence I was asked to form an Advertising Agency

and to limit its activities to representation of the work.

From the late fall of 1969 until March 1975 when I was

baptized, I was the president of Worldwide Advertising

Inc., although several years prior to that time I had delegated

away most of the day-by-day operation. During the years

1969 through 1975, copies of the Worldwide Advertising

income tax returns were made available to Mr. Portune and

my remunneration to Worldwide Advertising was, of

a

course, included as an important item on those tax returns.

In 1975, upon my baptism, and of course after becoming

a diretor and an officer of the church and the college, it was

necessary for me to divest myself of any and all interest in

Worldwide Advertising.

Prior to 1971, I never lived in a faculty or college home.

Although Mr. Armstrong, and others thought it would be

better for me to live in the Pasadena area, my wife was

unwilling to make the move from Beverly Hills and hence

we did not. In 1971, however, it became clear to Mr. Arm-

strong, to Mr. Portune and to me that there would be benefits

of a substantial nature io the Work if I were to be able to

undertake the responsibility of seeing to the needs of the

very important overseas visitors that were coming to Cali-

fornia at Mr. Armstrong’s invitation, and also to maintain

a residence that would lend itself to the type of formal and

large scale receptions also necessary to fulfill the various

responsibilities of the Work as a result of its ever-increasing

activities throughout the World.

Accordingly, a more appropriate home was found in Beverly

that was, in Mr. Armstrong’s opinion, the perfect residence

for such activities. We did not feel, however, that it would

be possible for me to live in such a residence on a tax-free

basis as did our ministers and faculty members. Hence, we

agreed that I would purchase the home. Financing would

be arranged with the help of the Church and my remuner-

ation would be adequate to cover the increased costs.

For many, many years Mr. Armstrong has stated on more

than one occasion that I am the highest-paid individual in

the Church. This fact is well known to responsible persons

at Headquarters. Whether I should be the most highly-paid

person in the Work, of course, is something for Mr. Arm-

strong, as Christ’s apostle, to decide. I do not feel, however,

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that | should be embarrassed that Mr. Armstrong has felt

that | have been a servant worthy of his hire.”’

| have had no other financiai dealings with the Work and

| have never been involved as a recipient directly or indi-

rectly of any favor, financial or otherwise, from any person

or institution that has had dealings with the Work. My

reputation in the community is without blemish and | intend

to keep it that way.

With Christian love,

Stan Rader

$0...

- DECLARATION OF BENJAMIN CHAPMAN

1. My name is Benjamin Chapman, and my business

address is Department of Theology, Ambassador College,

300 West Green Street, Pasadena, California. | am above

the age of eighteen years and, if called as a witness, I could

testify to the following out of my own knowledge.

2. 1am making this Declaration with the understanding

that it will not be used in any way for the personal financial

gain of myself, or of any other individual, but for the col-

lective good of all the members of the Worldwide Church

of God, and with the hope that greater fiscal responsibility

will be achieved in the Worldwide Church of God.

3. I hold a Bachelor of Science degree from UCLA in

Engineering, which I earned in 1957: I also hold a Bachelor

of Arts degree from Ambassador College, and a Master’s

degree in Theology from that same institution. I am pres-

ently employed full time as an Instructor in Theology at

Ambassador College and as a Pastor in the Worldwide

Church of God.

4. Richard David Armstrong, the eldest son of Herbert

W. Armstrong, died in the 1950s. I married his former wife

in 1961 and we have been married ever since. Because of

this, I have been almost a member of Mr. Armstrong’s

family for many years.

5. Iam presently, and I have been since 1963, a Pastor

of the Worldwide Church of God. In 1963, the Church sent

me and my family to Texas, where I pastored congregations

in Dallas and Fort Worth. In 1964, I also became a faculty

member, administrator and minister at the Big Sandy cam-

pus of Ambassador College, in Texas, and I occupied that

position until 1973, when I was called to Pasadena to be-

come the Manager of the Data-Processing Department and,

later, Director of Circulation for the Church.

inal actie

6. To my recollection, it was in the early part of 1974

that Mr. Herbert W. Armstrong appointed me to sit on the

Board of Directors of the Worldwide Church of God, Inc.,

and I occupied a position on that Board for a number of

months. At that time, a Ms. David John Hill was a teacher

at Ambassador College and was also a member of the Board

of Directors of Ambassador College, Inc. It was brought

to the attention of Mr. Armstrong that a conflict of interest

might exist because of Mr. Hill's dual role as an employee

and director of the College, so I was asked by Mr. Arm-

strong to swap Board positions with Mr. Hill, and in that

way I became a member of the College Board. | served in

that capacity until the Spring of 1975, when I was asked

by Mr. Armstrong to resign my position on the College

Board.

7. To my knowledge, all members of the boards of

directors of the Worldwide Church of God, Inc., Ambas-

sador College, Inc., and Ambassador International Cultural

Foundation, Inc., are and always have been appointed by

or under the direction of Mr. Herbert W. Armstrong. Mr.

Armstrong also personally approves ordination of all Church

Pastors. In recent years, he has accepted recommendations

from others regarding ordination.

8. During 1974 and 1975, I was employed full time as

Director of Circulation for the Worldwide Church of God,

Inc. My duties in that position included supervision of all

the data-processing functions of the Church, and so I became

familiar with a number of the reporting procedures in use

in the Church at that time, especially those concerning media

and literature requests and responses.

9. Ihave been employed full time by either the World-

wide Church of God, Inc., or Ambassador .College, Inc.,

for over eighteen years. Because of my long and continuous

association with the Church, I am familiar with Church

aS, a

doctrine and practices, and with the evolution of those

doctrines and practices over the last fifteen years.

10. The Church maintains a computerized data-base of

all persons who either receive its literature, participate in

its ecclesiastical functions, or contribute money to it. This

data base supports a subscriber development system, which

is one of the means by which the Work of the Church is

accomplished.

11. To my knowledge, no member of the Church, re-

gardless of the amount of frequency of his financial con-

tributions to the Church, has ever, at any time, been asked

to vote, or ever has actually voted, upon any matter con-

cerning the governance of the Church: even upon matters

which are not ecclesiastical, such as the selection of directors

or the expenditure of Church funds. And despite the fact

that I served on the Board of Directors of both the Church

itself and the College, I myself never had an opportunity

to express my personal opinion on any Church matter by

means of a vote. Instead, I and the other board members

were simply asked to approve decisions made by Herbert

W. Armstrong or in his name. I am acquainted with mem-

bers of the boards of various corporations affiliated with the

Church and, to my knowledge, the role I played as a Board

member of the Church and then of the College is typical

of the role played by the other members of the boards

involved.

12. To my knowledge, all Church funds are received

from charitable contributions made to the Church. Very

little of these funds is earned from income from Church

investments. This has always been true and, as far as I

know, continues to be true to the present day.

13. All these charitable contributions are made to the

Worldwide Church of God for the purpose of furthering its

religious mission, which is referred to in the Church as

‘‘the Work’’. Contributions from all over the United States

are received by and deposited to the bank accounts of World-

wide Church of God, Inc., Ambassador College, Inc., and

Ambassador International Cultural Foundation, Inc., all in

Pasadena, and all disbursements of those funds are made

by those same corporations.

14. Financial reports of Church receipts and disburse-

ments are disseminated to members of the Church from time

to time, but these reports are never detailed more than a

simple balance sheet and income statement, and the mem-

bers of the Church do not generally have access to the

records which would substantiate them. Part of the financial

reporting has been done orally: Mr. Armstrong and Mr.

Stanley Rader read portions of the reports to the congre-

gations assembled to observe the Feast of Tabernacles.

Some of the reporting is done in written form: a copy of

one such recent report, which appeared in two separate

issues of The Good News, is attached here as Exhibit *‘A’’.

15. recognize the Pastor General Expense Report at-

tached here as Exhibit ‘‘B’’ to be in the form customarily

given to such documents in the Church. Judging from its

form and content, and based on my personal knowledge of

the character and magnitude of the expenditures in these

categories at that time, I believe it to be what it purports

_ to be: a copy of a report actually made within the Church;

and I believe it reflects with substantial accuracy the actual

expenditures borne by the Church during the time period

it purports to cover. Although I am no longer a member of

the Board of the Church, nor Director of Circulation, |

believe that the expenditures reflected in the attached Exhibit

‘*B’’ are continuing today.

16. Other reports, which were computer-generated,

were regularly made and delivered to select individuals in

ee Ae tana

ee ee ee

se Mills:

the Church at all times while I was Director of Circulation

for the Church. I believe that those same reports, or other

reports substantially similar to them, are still generated and

circulated within the Church today.

17. Ihave known Mr. Stanley R. Rader for nearly eight-

een years. | met him when we were both involved in the

Work in Bricket Wood, England, in 1960.

18. Mr. Rader is presently a lawyer, and a C.P.A., and

has advised and counseled Mr. Herbert W. Armstrong on

Church affairs for many years. Mr. Rader became a lawyer

since the time I originally met him, and ever since he became

an attorney he has been, as far as I know, a member of the

Bar of the State of California. Mr. Rader has effective

control over and responsibility for the legal affairs of the

Church, and has had this control and responsibility for sev-

eral years. Recently, in his capacity as Treasurer of the

Worldwide Church of God, Inc.—a post to which he was

appointed some months ago—he has taken financial re-

sponsibility and control as well.

19. Mr. Herbert W. Armstrong is now eighty-six years

old, and while he is still in possession of most of his fac-

ulties, he is beginning to suffer from certain of the disa-

bilities.of advanced age. Over the years, Mr. Rader has

gained the confidence and trust of Mr. Armstrong to such

an extent that recently, as far as I can perceive, Mr. Arm-

strong no longer makes important legal or financial decisions

himself, and is advised or influenced by few persons other

than Mr. Rader. In consequence, it appears to me that as

of this date, Mr. Herbert W. Armstrong is effectively guided

by Mr. Rader in all Church matters and affairs.

I declare under penalty of perjury that all the foregoing

is true and correct.

TABLE OF CONTENTS

Summary of Pastor General Expenditures

Summary of Pastor General Expenditures by Account

Summary of Pastor General Expenditures by Month

Graph of Credit Card Usage for Pastor General Travel § Lodging

and Public Relations

Pastor General Credit Card Usage in Detail

Pastor General Travel and Lodging Expenditures by Month

Pastor General Public Relations Expenditures Summary

Pastor General Public Relations Expenditures in Detail

Page

8 - 27

PASTOR GENERAL ~ SUMMARY OF EXPENDITURES

July 1, 1975 Through June 30, 1976

ie Description Actual Budget Variance

2-510 Pastor General $1, 723, 930 $1,260, 000 $463,930 Over Budget

2-0511 P, G, Campaigns 136, 374 500, 000 363,626 Under Budget

2-1420 AICF tokyo 87,528 g 87,528 Over Budget

Chancellor's Projects 83,811 d 83,811 Over Budget

$2,031,643 $1, 760, 000 ' $271,643 Over Budget

te? (wr

* \~

c7e ks

ce Ast Ue

PASTOR GENERAL - EXPENDITURES

July 1, 1975 Through June 30, 1976

Pastor : Thailand | Jerusalem] Jerusalem

Pastor General AICF ICCY Mt. Tribe] Excav. S Excav. Chancellor's

Account Totals General |Campaigns}| Tokvo Israel Program Wall Upper City | Scholarships

Salaries $ 62,948 $ 62,948

Professional Fees (10, 460) 4,540|($ 15, 000) ;

vrint Insertions 52 52

Telephone & Telex 12, 383 12, 383

Freight 5,997 1,184 4,813

Travei & Lodginy &89, 485 804, 927 83,185 |$ 1,373

Contracted Services 24,203 14,119 10,084

Maintenance & Repair 2,011 2,011

Outside Food Service 1,043 1,013

Ortice Supplies 919 919

Misc. Supplies 1, 669 1, 669

’roduction Supplies 3,518 3, 344 174

Petroleum Products 461 461

Books & Periodica!s 12 12

Allocation to Branches 25,061 25,061

Property & Bldg. Rent 780 780

Insurance Premiums &, 500 2,530

Public Relations 819, 346 766, 422 52,924

All Other 9,882 10, 387 ( 638 ) 133

Employee Grants -in-Aids 120 $120

Grants-in-Aid 179, 713 10, 000 86, 022 $12, 500 $43, 391 $26,200 $1, 600 Het oe

Totals $2,031, 643 $1,723, 930 $136, 374 |$87, 528 $12, 500 $43, 391 $26, 200 $1, 600 3120

|

PASTOR GENERAL - MONTHLY EXPENDITURES

July 1, 1975 Through June 30, 1976

Pastor Pastor General AICF Chancellor's

Cost Center: General Campaigns Tokyo Projects Actual Budget Variance

July 1975 $ 179,335 $ 47, 685 $ 9 $ 4,567 $ 231,587 $ 147,821 $ 83,766 Over Budget

August 1975 195, 706 11, 704 g 5,366 212, 776 146, 431 66,345 Over Budget

Sept. 1975 55,583 ) ) 30, 487 86,070 146, 431 60,351 Under Budget

Oct. 1975 358, 653 ) 25,019 ) 383, 672 146, 431 237,241 Over Budget

Nov. 1975 121, 828 ( 15,000) 10, 022 ") 116, 850 146, 433 29,583 Under Budget

Dec. 1975 188, 169 13, 467 10,021 3,391 215,048 147, 823 67,225 Over Budget

Jan. 1976 80, 691 9, 636 11,395 40, 000 141, 722 146, 433 4,711 Under Budget

Feb. 1976 197, 058 13, 399 10, 022 g 220, 479 146, 433 74,046 Over Budget

March 1976 36, 13a 10, 852 10,021 g 59,006 146, 441 87,435 Under Budget

April 1976 81, 768 40,207 11,022 Y) 132,997 146, 441 13,444 Under Budget

May 1976 89,078 1,272 5,016 ") 95,296 146, 441 51,145 Under Budget

June 1976 137, 928 3,152 (5,010) y 136, 069 146, 000 9,931 Under Budget

Total $1,723, 930 $136, 374 $87, 528 $83, 811

Thousands

of Dollars

200

L1$0

30

:

bor, 5

te

—

Mr.

Mr.

Mr.

H. Cornwall

H. Armstrong, Captatn Black, etc.

S. Rader

0. Gotoh

———

Sep Oct Nov Dec Jan Feb . Mar Apr May Jin

75 75 75 75 76 76 76 76 76 76

CREDIT CARD USAGE FOR PASTOR GENERAL TRAVEL & LODGING AND PUBLIC RELATIONS

Source: Expenditure Distribution Report - Monthly Payments to Credit Card Companies

CREDIT CARD USAGE FOR PASTOR GENERAL TRAVEL & LODGING

& PUBLIC RELATIONS

oi

i 8/75 9/75 10/75 -. 41/75 12/75 1/76 2/76 3/76 4/76 5/76 6/76

-E, 166.69 =$102,328.57 $1,381.88 $ 85,451.36 $26,553.71 $23,047. 46 $22,809.24 $ 40,721.63 $ 9,358.02 $31,401.63 $25,245.13 $64, 660. 35

ay. 82, O4 5,953. 40 9 120, 367. 72 23,299.05 75,157.63 19,597.00 $0, 752.32 °135,932. 97 1, 109. 34 16, 861. 96 18, 483.13

a; +. 10 1 765..53 g p g g 452.10 10,650.15 9,972. 76 526.13 g g

Me ae at Y g Yy gabe g Yy 9, 180. 33 g g 39, 591. 46 d a.

BT, t4+.83 $119,985.48 $1,381.88 $205,819.08 $49,852.76 $98,205.09 $52,038.67 $132,123.90 $33,263.75 $72,628.56 $42,107.09 $83, 143.98

ta. -r:dit Card Activity for Account Code #'s 6510-350, 6510-370, 6511-350, and 6511-370, respectively | $1, 027, 989. 07

ee OF oe Si4;:73:. 5 Y) $ 2,149.73 $ 1,627.00 $ 3,487.11 $ 1,705.02 $ 1,655.47 $ 2,669.54 $ 1,576.91 $ 3,648.91 $ 3,399.79

2,807.05

211,67 §$ 514.73 ¢g $ 2,149.73 $ 1,627.00 $ 3,487.11 $$ 1,705.02 $ 1,655.47 $ 2,669.54 $ 1,576.91 $ 3,648.91 $ 6,206. 84

tl sr:dit Card Activity for Account Code #'s 6510-350 and 6510-370 - Mr. H. Cornwall $25, 452.9

ee ee ee ae ae ~ eM RE AD ta a

o—& - aoe i“ nw ited iinet nie ee i a . ee LRA ARN, WO, mee ee em See rte er ne ee

o¥,°°11.69 3 90,769.27 $ 114.24 $ 68,512.16 $15,839.19 $11,507.58 $ 7,246.20 $ 23,528.27 $ 2,256.28 $20,365.95 $ 9,098.74 $30,886.57

5,953. 40 107, 687. 02 19, 003. 72 75,157.63 19,597.00 78,892.65 13,932.78 682.23 6, 730. 85 8,507. 57

me: 741.40 it, 703.51 452.10 10,650, 15 9,972. 76 526.13

ia , 9, 180. 33 . 39, 591. 46

15, 45.79 $108,426.18 $ 114,24 $176,199.18 $34,842.91 $86, 665.21 $36,475.63 $113,071.07 $26,161.82 $61,165.77 $15,829.59 $39, 394. 14

val credit Card Activity for Account Code #'s 6510-350, 6510-370, 6511-350, and 6511-370, respectively for Mr. O. Gotoh $313, 931. 53

ae a S.. Mie SS eee ee ae —

©,'55.25 $ 9,285.21 $ 257.37 $ 11,978.87 -$ 3,810.36 $ 5,356.06 $ 9,539.35 $ “2,334.69 $ 3,338.65 $ 4,627.41 $ 185.53 $ 2,749.53

13-4. 54 12, 680. 70 1,859. 47 427.11 10, 131.11 7,168.51

16, 0) 79 $ 9,285.21 $ 257.37 $ 24,659.57 $ 3,810.36 $ 5,356.06 $ 9,539.35 $ 4,194.16 $ 3,338.65 $ 5,054.52 $10,316.64 $ 9,918.04

tel + dit Curd Activity for Agcount Code #'s_ SR ee ee

“ BR $1,759.46 $1,010.27 $ 2,810.60 $ 9,572.49" 3 ee: 3, eo 5 4,83) 36 $12 311 98

aon £ rs

PASTOR GENERAL - MONTHLY EXPENDITURES

ACCOUNT 350 - TRAVEL & LODGING

July 1, 1975 Through June 30, 1976

Pastor General

Month Pastor General Campaigns Amount Budget Variance :

July $130, 380. 54 $47, 674. 10 $178, 054. 64 100, 416. 40 $ 77,638.24 Over Budget

August 119,218. 80 11, 703.51 130, 922. 31 100, 416. 40 30,505.91 Over Budget

Septernber 9,268.11 ) 9,268.11 100, 416. 40 91,148.29 Under Budget

October 119, 682.00 ¢g 119, 682.00 100, 416. 40 19,265.60 Over Budget

Novemiber 51,223.90 ; g 51,223.90 100, 416. 40 49,192.50 Under Budget

December 50, 361.94 1, 814.20 52,176.14 100, 416. 40 48,240.26 Under Budget

January 50,594.08 452.10 51,046.18 100, 416. 40 49,370.22 Under Budget

February $5,971. 13 10, 650. 15 66,621.28 100, 416. 40 33,795.12 Under Budget

March 23,909. 62 10, 365. 16 34,274. 78 100, 416. 40 66,141.62 Under Budget

April $8,812.94 526.13 59, 339.07 100, 416. 40 41,077.33 Under Budget

May 62,274. 00 ) 62,274. 00 100, 416. 40 38,142.40 Under Budget

June 73,230. 74 g 73,230.74 100, 416. 40 . 37,185.66 Under Budget

$804,927. 80 $83, 185. 35 $888, 113.15

—————

EXPENSE ANALYSIS SUMMARY

PASTOR GENERAL EXPENSES - ACCOUNT 570 - PUBLIC RELATIONS *

July 1, 1975 - June 30, 1976

(A) VIP Travel, Lodging & Entertainment (C) Film & Film Processing (E) Testimonial Dinners & Overseas Campaigns

—=

July $ 6,861.16 July $2,272. 64 July $ 4,600.00

Aug. 42,495.17 Aug. 536.02 Aug. 5,000.00

Sept. 7,385.93 Sept. 1, 419. 43 Sept. 4,420, 00

Oct. 91, 344.55 Oct. 153. 70 Oct. 107, 174. 10

Nov. (2,040. 42 ) Nov. Y) Nov. 23,177.60

Dec. 13,263. 18 Dec. 2, 178.10 Dec. 64, 840. 18

Jan. 7,056.24 Jan. d Jan. 28,261.27

Feb. 17,257.94 Feb. ") Feb. 106, 912. 37

Mar. 3,651.87 Mar. ¢ Mar. 15, 378.97

Apr. 8, 731.58 Apr. ) Apr. 39,591. 46

May 18, 927. 79 May ) May .- B

June 11,314. 62 $226,249. 61 June i 6,559.89 June 3, 152.00 402,507.95

(B) Gifts (D) Contracted Services (F) Miscellaneous

July $ 22,538.74 July $ 3,100.00 July $ g

Aug. 6,961. 37 Aug. 24, 750.00 Aug. 65, 440. 00

Sept. 5,592.99 Sept. 7,000, 00 Sept. 13, 840. 00

Oct. 24,923.10 Oct. 104. 97 Oct. Y)

Nov. 10, 845. 63 Nov. 2, 820. 02 Nov. 18,248.00 "<i

Dec. 12, 583.37 Dec. V) Dec. 46,235.79

Jan. 3, 37%. 43 Jan. ¢ Jan. ¢

Feb. 6,451.09 ~ Feb. _ @ Feb. 1, 654. 50

Mar. 4,543. 36 Mar. ") .. Maer. ")

Apr. 940.27 Apr. ¢ - Apr. Y)

May v May a May _ ’)

June 16, 524. 00 115,080. 95 June 19,300.00 57,074.99 June 119, 32 145,537.61

GRAND TOTAL $953,011.00

“Por Cost Centers 6510, 6511, 1400 (July - Dec. 1975)

(A) VIP Travel & Lodging:

July:

Sub total for amount paid in July

‘ 7

-SUuNSst.

Invoice

Date

6/20/75

0/23/75

3/24/75

5/27/75

5/23/75

0/3/75

5/27/75

5/22/75

5/22/75

7/21/75

7/07/75

6/19/75

7/22/75

7/24/75

0/19/75

0/06/75

0/13/75

6/19/75

6/13/75

6/19/75

6/13/75

8/13/75

7/10/75

8/3/75

7/18/75

4/22/75

6/6/75

8/24/75.

3/01/75

7/19/75

Beverly Wilshire Hotel

Recipient

Perino's

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

Dr. Ohno - Cash

White Tie Limo. Sv.

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

Captain Black

TWA - Gotoh

TWA - Gotoh

Monty's - Pasadena

TWA - Gotoh

TWA - Gotoh

Okno, Sato, Matsufuji

WWA - Gotoh

Perino's

Sub Total for arnount paid in August

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Purpose of Payment

Mr. & Mrs. Nadaya (6/24, 25, 26)

Mr. Gotoh (6/25, 6/28) .

M. Baca

Mugo - Addis Ababa - Nairobi - Addis Ababa

Dr. Angeles

Zulin Mehta

Dr. Singh - Nirobi, Zurich, Geneva, Amsterdam

Rahiansgy - Amsterdam, Paris, Amsterdam

Dr. Singh - Amsterdam, Paris

Expense Money

Mr. Nadaya

Dr. Singh - Amsterdam, Geneva, Amsterdam

Matsufuji - Paris, Tel Aviv

Dr. Ohno - Tokyo, Los Angeles, Tokyo

Mr. Mugo - Paris, Geneva, Paris

Mr. Mugo - Nirobi, Paris, Geneva

Matsufuji - Tokyo, Bombay, Tel Aviv

Dr. Singh - Geneva, London, Amsterdam

Mr. Mugo - Paris, Geneva, London * :

Mr. Mugo - Nirobi, Addis Ababa, Paris, Geneva

Dr. Singh - Amsterdam, Tokyo, Amsterdam

Expense money for Mr. Ravid

Amano

Murata

One Dinner

Fujita - Tokyo, Hong Kong, Karochi, Tokyo

Gecage - Nairobi, Paris, Geneva

Cash - Entertainment Expense

Travei & Transportation for Japanese Group

Various Meals

ee ee

September:

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Invoice

Date

7/05/75

9/03/75

7/23/75

3/05/75

9/05/75

3/26/75

9/03/75

Recipient

Beverly Wilshire Hotel

Beverly Wilshire Hotel

AC Big Sandy

Carlton Tower

Disneyland Hotel

Beverly Wilshire Hotel

Worldwide Adv. Gotoh

Sub jiotal for amount Paid in September

October:

9/09/75

7/20/75

3/25/75

9/29/75

3/11/75

9/03/75

9/02/75

9/13/75

7/30/75

7/26/75

9/16/75

9/02/75

10/6/75

3/30/75

9/02/75

3/03/75

10,21/75

>/09/75

7/26/75

7/26/75

9/01/75

L. A. Hilton

TWA - Gotoh

TWA - Gotoh

White Tie Limo.Serv.

Diners Club - Rader

Royal V.S. P. Services

Am. Express - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

Beverly Wilshire

Mrs. Mugo

Kahala Hilton

Am. Express - Gotoh

Del Webbs Kuilima

TWA - Gotoh

Regency Hotel

Hertz - L.A.

TWA - Gotoh

TWA - Gotoh

Regency Hotel

Purpose of Payment

Senator Bunsei Sato

Japanese Senators

Flight Charges to San Antonio - Dr. & Mrs. Angeles

Dr. Singh (7/31 - 8/05)

Matsufuji and family and Dr. Ohno (8/28 - 8/30)

Hajime Ishii (Japanese Diet) (8/25, 8/26)

Misc. Expense - Japanese Delegates to Jerusalem

Dr. Ohno (8-24 to 9-09)

Yamaguchi

Matsufuji

Japanese Senators

La Scala, Beverly Hills

Honolulu

Hyatt Regency - Manila

Dr. Ohno

Yamashita

Mori

B. Mugo (9/10 - 9/16)

Bank Draft to Carlton Tower for Mrs. Mugo

Ambassador Mugo & Family

Imperial Hotel - Tokyo

Hotel charges - Senator Matsufuji & Party - Hawaii

Yomashita

Mrs. Dottie Moore (10/20 - 10/21) s

John Kineston for VIP '

Lloyd - NCE - Paris

Yamaguchi

Ambassador Mugo (9/2 - 9/10)

‘

Amount

$ 904.

1, 997.

270.

1,774.

423.

180.

1, 835.

$ 7,385.

$ 1, 428.

2,054.

6, 734.

2,588.

195.

293.

3,926.

1, 041.

1, 355.

2,054.

2, 462.

4,972.

2,408.

5, 739.

476.

10, 660.

429.

422.

1, 695.

3,401.

5, 393.

60

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

VIP’ Travel & Lodging (Continued):

Invoice

Date Recipient

October (Cont. ): 3/20/75 TWA - Gotoh

10/06/75 White Tie Limo. Serv.

3/26/75 Amer. Express - Gotoh

9/17/75 Foreign Draft

3/20/75 TWA - Gotoh .

3/26/75 Amer. Express - Gotoh

9/25/75 Regency Hotel

Sub Total for Amount paid in October

Moveinber: 10/13/75 Perino's

9/18/75 Lowes Drake

11/15/75 Bev. Wilshire Hotel

10/01/75 Diners Club - Gotoh

11/19/75 Bev. Wilshire Hotel

9/03/75 TWA - Gotoh

Sub Total for Amount paid in November

Decernber:> 10/25/75 American Express

11/18/75 TWA - Gotoh

11/24/75 White Tie Limo. Ser.

12/20/75 White Tie Limo. Ser.

12/09/75 Royal USP Serv.

12/10/75 Royal USP Serv.

12/10/75 TWA - Gotoh

10/14/75 TWA - Gotoh

11/25/75 Regency Hotel, N.Y.

Sub Total for Amount paid in December

Purpose of Payment

N,. M. Mugo ;

Mugo & Family, Cornwall & Rader

Korikawa Restaurant, L.A.

Bank Draft to Carlton Tower, London

Fukunaga

Korikawa Restaurant, L.A.

Dr. Singh (9/15 - 9/25)

Various Meals

Ms. C, Drake - Guest of H.W.A. - New York

Sander, Gorlinsky

Club Kon (Night club) - Japan

Jascha Bistritzky (11/4 - 11/19)

Senator Yamashita

Osamu Gotoh - Hotel Bill - Switzerland

Y. Olino - TYO - LAX - NYC - LAX - TYO

Mr. George Whyte - Limousine Service

Mr. Gotoh, Rader, Panov, Whyte

Limousine Service in Hawaii

Limousine Service in Hawaii

Kabayashi - Paris to Tokyo

J. Bistrytsky TLV - VIE, LON, NYC, - TLV

Sara Kde Mekler - along with Bistrytsky

de

Amount

$19,272.

921.

2,056.

3, 983.

1, 683.

67.

. 98

4,020

73

65

84

64

50

91

$91, 344.

55

$ 298.

59.

1,175.

1,519.

1, 149.

(6,243.

73

32

74

75

24

20)

$( 2, 040.

42)

> 6, 325.

1, 334.

adi,

631.

423.

202.

2, 189.

1,465.

539.

+0

77

80

25

20

60

29

24

63

$13,263.

18

10

(\) VIP Travel §

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

lodging ¢ Entertainment:

January 1976:

February 1976:

Invoice

‘Date

12/30/75

12/31/75

12/30/75

12/29/75

12/02/75

12/19/75

01/07/76

12/18/75

12/14/75

12/18/75

12/16/75

10/25/75

12/05/75

01/26/76

01/28/76

01/25/76

01/31/76

12/24/75

12/16/75

01/14/76

12/24/75

01/14/76

12/23/75

Recipient

Perino's

Perino's

Perino's

White Tie Limo Serv.

White Tie Limo Serv.

White Tie Limo Serv.

White Tie Limo Serv.

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

Diners-Gotoh

Diners-Gotoh

Perino's

Perino's

White Tie Limo Serv.

White Tie Limo Serv.

Amex - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

TWA - Gotoh

Purpose of Payment

Meals

Meals

Meals

Mr. Cornwall §& Mr. Fujita - 5 trips

Mr. & Mrs. Arthur Rubenstein

Mr. Rader

Mr. Rader - 3 trips

F, Lloyd - Hong Kong-Zurich-Paris

M. Lloyd - Tokyo - Hong Kong

Akanoma - Hong Kong _

Akanoma - Tokyo-Hong Kong-Beirut-Cairo-Paris-London-New York

Sub-total tor January

S.A.Hermes - Paris (Credit)

Japan (establishment unknown)

Meals

Meals

Mr. Rader 4 party

Mr. Gotoh

S.A.Hermes - Paris

Siniscar - Tokyo-Honk kong-Singapore-L.A.-Tokyo

J. Romm - Tokyo-Paris

Stanronides - London-L.A.-London

S. Hagiwara - Tokyo-Paris-Tokyo ‘«.

Y. Akgndiya - Cairo-Paris

Sub-total for February

Amount

; : ae

y. sr;

344

461,

96,

28

149,

1,612.

8S.

334.

1,983.

60

16

64

70

60

.30

00

10

83

16

65

$ 7,056.

24

$ (750.

1,147.

226.

868.

212.

147.

2,257.

3,989.

1,646.

795.

6,584.

152.

38)

30

07

68

60

60

12

68

23

44

92

68

$17,257.

94

11

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

(A) VIP Travel §& Lodging §& Entertainment:

“arch 1970:

April 1970:

Invoice

Date

02/20/76

02/25/76

02/28/76

Adjustment

01/29/76

01/31/76

02/19/76

03/05/76

03/12/76

03/18/76

03/19/76

03/21/76

93/23/76

03/27/76

03/29/76

03/30/76

03/31/76

04/01/76

04/17/76

Recipient

White Tie Limousine

Perino's

Perino's

TWA

TA = Gotoh

TWA - Gotoh

White Tie Limo.Serv.

White Tie Limo.Serv.

Diners Club S.R.R.

Diners Club S.R.R.

Diners Club S.R.R.

Royal VSP Serv.

Diners Club S.R.R.

Perino's

Perino's

La Scala

White Tie Limo Serv.

Ambassador Nasar

Disneyland Tour

Purpose for Payment

Limousine Service - Gotoh

Food Service - H.W.A.

Food Service - S.R.R.

Miyagawa

Sub-total for March

Miyagawa

Kawada

Horowitz

Rader §& Cornwall

La Scala

La Scala

La Scala

Limousine Service in Hawaii

Beverly Wilshire

Food Service

Food Service

Restaurant - S.R.R.

Ambassador §& Mrs. Nasar

Expense money

Ambassador Nasar

Sub-total for April

(A) VI Travel & Lodging & Entertainment:

vilne

Pe

d Love:

19703

Invoice

Date

02/10/76

02/25/76

02/25/76

02/25/76

02/25/76

02/25/76

02/25/76

02/25/76

02/25/76

02/25/76

03/13/76

04/02/76

04/07/76

05/06/76

05/13/76

04/06/76

05/16/76

05/16/76

Recipient

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Diners Club

Perino's

Perino's

Beverly Wilshire Hotel

La Scala

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Gotoh

Rader

Rader

Rader

Rader

Rader

Rader

Rader

Rader

Rader

Gotoh

Diners Club - Gotoh

Amer. Express

Amer. Express

Purpose of Payment

Imperial Hotel - Tokyo

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hilton Hotel - Jerusalem

Hawn Regent Hotel - Honolulu

Meals

Meals

Ambassador Nasr & Family Hotel Bill

Meals - Rader

Sub-total for May

Hotel Plaza - Paris

Canyon Hotel - Palm Springs, Mr. Cornwall

Canyon Hotel - Palm Springs, Mr. Cornwall

Sub-total for June

Amount

$ 2,473.38

1,084. 00

1, 323. 61

1, 084. 00

1,219.50

1,084. 00

1,084. 00

1,084. 00

1,084. 00

1, 084. 00

4,257.20

779. 36

36.17

1, 180. 88

69. 69

$18,927.79

$ 8,507.57

500. 04

2,307.01

$11, 314. 62

as

13

(:3) Gifts:

July:

Invoice

Date

6/11/75

6/11/75

6/10/75

6/12/75

0/25/75

7/09/75

7/09/75

ee ee ee ee er ee eee ee ee

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Recipient

Amer. Express -.S. Rader

Amer. Express - E. Black

Lee Mac Camera

Lee Mac Camera

Steuben Glass °

Worldwide Adv. -Gotoh

Worldwide Adv. -Gotoh

Sub Total for Amount paid in July

August:

3/22/75

7/28/75

$/12/75

7/29/75

7/19/75

7/02/75

8/06/75

Central Stores W/C

Amer. Exp.- Gotoh

Barnhart

Lee Mac Camera

Amer. Exp. -Gotoh

Lee Mac Camera

WWA - Gotoh

Sub Total for Amount paid in August

September:

9/09/75

§/29/75

8/19/75

WWA - Gotoh

Lee Mac Camera

Lee Mac Camera

Su!) Total for Amount paid in September

October:

8/31/75

7/09/75

8/23/75

8/27/75

8/27/75

2/27/75

10/2/75

10/9/75

9/12/75

Amer. Exp. - Rader

Amer. Exp. - Gotoh

Amer. Exp. - Gotoh

Diners Club - Gotoh

Amer. Exp. - Gotoh

Amer. Exp. - Gotoh

Steuben Glass Co.

WWA - Gotoh

Lee Mac Camera

Purpose of Payment

Sato Photo Co.

King Fook Gold & Jewelry - Hong Kong

Mr. Gotoh - 3 Cameras & Accessories

Mr. Gotoh - 3 Cameras & Cases

1 Moses, 1 Pyramidon; 1 Excalibur, 3 Pillar of the Criffin

Gifts for Tokyo, Geneva, Paris trip (6/16 - 6/25)

Tokyo, Paris Monte Carlo trip

Cross, Schaeffer, Parker Pen and Desk Sets

Sato Photo Co. - Tokyo

Golf Balls for King Leopold

4 Cameras, Accessories & Film

Sato Photo Co.

6 Cameras & Accessories

Egypt, Israel & Orient (8/1 - 8/20)

Trip - Tokyo, Bangkok, Austria (8/21/75 - 9/21/75)

Camera & Accessories

2 Cameras and Accessories

Sato Photo Co., Tokyo

Gucci Shop, Paris

Sato Photo Co., Tokyo

Gucci Shop, Beverly Hills *

Gucci Shop; Beverly Hills

Gucci Shop, Beverly Hills “°

4 Crystal Griffins

Gifts for Geneva, Paris, Dusseldorf

Cameras, Cases, etc.

ee i eines . UR? or rey ee + eee te

14

Gitts (Continued):

Octuber (Cont. )

Invoice

_Da te

03/21/75

10/31/75

10/31/75

10/31/75

Recipient

Diners Club

Gene Michel .

Central Stores, WC

Central Stores, WC

Sub Total for amount paid in October

Noveniper:

10/20/75

09/30/75

11/12/75

09/25/75

Steuben Glass Co.

Amer. Express--Gotoh

Osamu Gotoh

Amer. Express - Gotoh

Sub Total for amount paid in November

Deceniner:

00/03/75

19/98/75

10/15/75

10/27/75

10/27/75

10/27/75

10/27/75

10/30/75

11/14/75

12/26/75

12/23/75

12/01/75

12/03/75

ACUK Backcharge

Amer. Express

Carte Blanche

Carte Blanche

‘Carte Blanche

Carte Blanche

Carte Blanche

Diners Club

American Express

Osamu Gotoh

Central Stores WC

Osamu Gotoh

Osamu Gotoh

Sub Toral for amount paid in December

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Purpose of Payment

Expenses incurred in Japan

‘Golf Clubs

Cross, Schaeffer, Parker Pen and desk sets (6/15 - 7/15)

Cross, Schaeffer, Parker pen and desk sets (8/15 - 10/15)

Four Pieces of Crystal

Sato Photo Co.

Gifts for Japan, Jamaica, Thailand, Incia, etc.

King Fook Gold & Jewellry - Hong Kong

/

Mr. Rader - Perfume purchased at Harrods

Osamu Gotoh - K. Mikinoto & Co. Tokyo

Osamu Gotoh - 62 Pc. Flatware

Osamu Gotoh - Mens Jacket

Osamu Gotoh - Glassware

Osamu Gotoh - Ladies Jacket

Osamu Gotoh - Mens Jacket

Osamu Gotoh - Christian Dior, Faris

Osamu Gotoh - Duty Free Shop

Cash paid out for gifts

Pen and Desk Sets for Mr. Gotoh

Gifts - Japan, Philippines, Thailand, Iran, Switzerland

Gifts - Bahamas, Japan, Korea, Israel, Egypt, etc.

ee

Amount

921.94

111.40

1, 636. 78

1. 735.20

$24, 923. 10

$ 3, 406.00

1,502.50

5, 300. 00

637.15

$10, 845. 63

$ 81.27

1,666.95

55.88

22.76

36. 54

22.76

22.76

115.06

306. 85

209.88

442.66

4,600.00

5,000.00

$12, 583. 37

——————ww

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT S70

— —— --

lé

(g) Gifts

Invoice

* Date Recipient Purpose of Payment Amount

January 197%: 12/01/75 Lee-Mac 2 cameras § cases $ 356.02

12/17/75 Amex - Gotoh Sato Photo Co. - Tokyo 516.06

12/23/75 Polaroid 11 cameras with cases 4 film 2,324.95

Sub-total for January $ 3,177.03

February 197o: 12/23/75 Diners - Gotoh Christian Dior - Paris $ 635.46

12/18/75 Diners - Gotoh Siberian Fur Store - Kowloon 2,124.24

01/15/76 Amfac 12 cases of flashbars 245.38

01/10/76 Amex - Gotoh K.K. Cosmo Tenchido - Tokyo 209.73

01/03/76 Amex - Gotoh Bernard's China - Nassau 309.05

01/09/76 Amex - Gotoh Sato Photo Co. - Tokyo 1,223.32

01/08/76 Amex - Gotoh Sato Photo Co. - Tokyo 245.13

12/23/75 Amex - Gotoh Cartier - Paris 1,560.78

Sub-total for February $ 6,451.09

Murch 1976: 01/23/76 Amex - Gotoh Nassau Shop - Bahamas $ 360.00

01/25/76 Amex - Gotoh Island Newsstand 156.00

01/30/76 Amex - Gotoh Sato Photo Co., Ltd. 1,138.00

02/03/76 Lee Mac Poloroid Cameras 2,646.00

02/03/76 ‘Lee Mac Leather Carrying Cases 245.36

Sub-total for march $ 4,545.36

April 1976: 09/15/75 Diners - Gotoh Christian Dior ; $ 258.04

02/04/76 Diners - Gotoh Gucci - Paris \ 682.23

. Sub-total for April $ 930.27

— ——-

(33)

Qifts

Invoice

Date

06/14/76

05/08/76

Recipient

Patek Philippe

Steuben Glass

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Purpose of Payment

Gifts - H.W.A. Purchase

Six Crystal Pillar/Griffins

Amount

$ 4,504. 00

12, 020. 00

$16, 524. 06

17

ri.) Film &

ily:

Film Processing:

Invoice

Date

6/93/75 °

6/12/75

Recipient

Lee-Mac Camera

Lee-Mac Camera

“ib Total for Amount paid in July

\

oe

‘

a?

igust:

‘ptember:

SSZAF 7S

8/29/75

8/05/75

8/07/75

7/30/75

8/04/75

8/25/75

7/22/75

8/07/75

7/22/75

Eastman Kodak

Eastman Kodak

Eastman Kodak

Consolidated Film Ind.

Consolidated Film Ind.

Consolidated Film Ind.

Consolidated Film Ind.

Consolidated Film Ind.

Consolidated Film Ind.

Consolidated Film Ind.

sab iotal for Amount Paid in September

(i

D

>

vo» Total

“tober:

cembdber:

9/03/75

Lee-Mac Camera

Consolidated Film Ind.

Consolidated Film Ind.

American Express

American Express

for Amount Paid in December

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Purpose of Payment

Mr. Gotoh - 420 Rolls of Film § Bulbs

Mr. Gotoh - 130 Rolls of Film §& Bulbs

Mr. Gotoh -

Film

Film

Film

Film

Film

Film

Film

Film

Film

Development

Development

Development

Development

Development

Development

Development

Color Processing

Asian

Asian

Asian

Asian

Asian

Asian

Asian

Film Expenses for AICF

Film Expenses for AICF

Osamu Gotoh - Photo Hall, Paris

Osamu Gotoh - Sato Photo Co. Tokyo

36 Rolls of Film

Students

Students

Students

Students

Students

Students .

Students

Amount

$1,583.64

689.00

106.48

$1,419.45

153.70

$ 193.65

16.92

56.02

La Rada ok

$2,178.10

18

>. ptember:

NoeVenber!

Contracted Services:

Invoice

ate

D

7708775

8/20/75

9/03/75

10/26/75

11/30/75

11/20/75

11/06/75

11/20/75

11/20/75

11/96/75

Recipient

Hans Quast

Gateway

Hans Quast

Sam Duncan

San Duncan

WC Adjustment

WC Adjustment

WC Adjustment

WC Adjustment

WC Adjustment

Subd Total for Amount Paid in November

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Purpose of Payment

Brecht Translation Rights §& Art Design - Polydor

Amount

$ 3,100.00

Advance to Guarantee Payment - Book on Hirohito

$24,750.00

Unicef - U.N. Record

$ 7,000.00

Photography for Japanese Documentary

104.97

Photography for HWA Banquet

TV - Audio Clip for Slide Presentation

Tony Vanderleeden - Film Editing

TV - Recording of AICF Performance

TV - Use of Beethoven Recording at Recital

2-min. Talk Show - KNXT; KFAC l-min.

614.04

24.50

20.00

54.30

19.18

2,088.00

$2,820.02

(D) Contracted Services

June 1976:

Invoice

Date

Oo/21/76

05/21/76

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Recipient

Gateway Publishers

Gateway Publishers

Purpose of Payment

World Activities of United Nations & Introduction to Egypt

World Activities of United Nations & Introduction to Egypt

20

Amount

$ 2,300.00

17, 000. 00

$19, 300.00

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

(EE; Eanquets:

[Invoice

Date Recipient

July: 7/09/75 Worldwide Adv. - Gotoh

7/99/75 Worldwide Adv. - Gotoh

Sub Total tor Amount Paid in July

Auwiust: 7/28/75 Worldwide Adv. - Gotoh

8/06/75 Worldwide Adv. - Gotoh

$/7 3/73 Peter Schanz

Sub foral for Amount Paid in August

Sepytciber: 9/05/75 AC Food Service

9/09/75 Worldwide Adv. - Gotoh

9/03/75 Worldwide Adv. - Gotoh

Sud Total for Amount Paid in September

October: 7/17/75 Am. Express - Gotoh

3/03/75 Am. Express - Gotoh

38/31/75 Am. Express - Gotoh

9/12/75 Am. Express - Gotoh

9/11/75 Diners Club - Rader

7713879 Am. Express - Gotoh

7/17/75 Am. Express - Gotoh

10/09/75 Worldwide Adv. - Gotoh

8/02/75 Am. Express - Gotoh

Sub Tural for Amount Paid in October

Novenber: 8/25/75 Am. Express - Gotoh

11/01/75 Osamu Gotoh

9/07/75 Diners Club - Balck

10/09/75 Squires, Pasadena,

Sub Total for Amount Paid in September

Purpose of Payment

Tokyo, Geneva, Paris Trip (6/16 - 6/25)

Tokyo, Paris, Monte Carlo Trip (6/26 - 7/31)

Jerusalem Banquet Set-Up Expense

Egypt, Israel §& Orient (8/1 - 8/20)

Champagne for HWA Social Center

Hors d'ourves for AICF Reception (8/27)

Trip: Tokyo, Bangkok, Austria (8/21 - 9/21)

Jerusalem Party

Jerusalem Hilton (No Backup)

Hotel Plaza Athenee Paris (No Backup)

Imperial Hotel, Tokyo (No Backup)

Munich, Germany

Hotel Plaza Athenee, Paris

Hotel Plaza Athenee, Paris

Hilton - Jerusalem (Split Charge)

Geneva, Paris, Dusseldorf trip - Banquets

Hotel de Paris - Monte Carlo

Imperial Hotel, Tokyo

Banquets: Japan, Jamaica, Thailand, India, etc.

Tel Aviv Hilton, Israel

Wine for AICF Reception

ae

Amount

$ 1,200.00

3,400.00

4,600.00

$ 2,500.00

2,200.00

300.00

> 5,000.00

$ 100.00

3,200.00

1,120.00

$4,420.00

$ 9,897.97

12,416.93

13,735.74

12,504.59

12,049.39

10,309.99

9,897.97

4,100.00

22,261.52

$107,174.10

> £35, 366.32

3,200.00

4,295.33

337.95

¥ 23,177.60

21

Banquets (Continued):

December

10/23/75

10/29/75

10/29/75

11/01/75

11/05/75

11/02/75

12/01/75

12/31/75

American

American

American

American

American

American

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Express

Express

Express

Express

Express

Express

Osamu Gotoh

Osamu Gotoh

Sub Total for Amount Paid in December

Osamu

Osamu

Osamu

Osamu

Osamu

Osamu

Banquet Expenses - Japan, Philippines, Thailand

Banquet Expenses - Bahamas, Japan, Korea,

Gotoh

Gotoh

Gotoh

Gotoh

Gotoh

Gotoh

Hotel Plaza Athenee,

Hotel Plaza Athenee,

Hotel Plaza Athenee,

Hotel Plaza Athenee,

Imperial Hotel, Tokyo

Paris

Paris

Paris

Paris

Hotel in Bangkok, Thailand

Iran, Switzerland

Egypt, etc.

Israel,

$16,556.12

11,615.00

11,615.00

6,098.91

8'°580.29

3,774.86

2,300.00

3,800.00

$64,840.18

22

ee i

23

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570.

(f) Testimonial Dinners & Overseas Campaigns

Invoice ‘

Date Recipient Purpose of Payment Amount

January 1970: 12/17/75 Amex - Gotoh Imperial Hotel - Tokyo $17,261.74

11/30/75 Amex - Gotoh Plaza Athenee - Paris 1,319.20

11/05/75 Amex - Gotoh Sheraton - Jamaica 1,133.39

11/07/75 Amex - Black Rose Hall - Jamaica 5,859.60

11/17/75 Amex - Gotoh Sheraton - Jamaica 900.00

11/15/75 Amex - Gotoh Sheraton - Jamaica : 1,287.34

Sub-total for January $28,261.27

February 1976: 01/20/76 Diners - Gotoh Plaza Athenee - Paris $ 1,859.47

01/21/76 Amex - Gotoh Plaza Athenee - Paris 14,063.22

01/22/76 Amex - Gotoh * Plaza Athenee - Paris (adj. from January billing) 16,307.64

12/27/75 Amex - Gotoh Plaza Athenee - Paris 12,096. 29

12/18/75 Amex - Gotoh Hotel in Hong Kong - name unknown 11,477.34

12/18/75 Amex - Gotoh Hotel in Hong Kong - name unknown 2,253.99

01/24/76 Amex - Gotoh Plaza Athenee - Paris 9,795.09

01/16/76 Amex - Gotoh Hotel in Switzerland --name unknown : 4,059.33

02/16/76 Barclays Bank, Int. Cable tor campaign expenses - Nassau 25,000.00

02/27/76 + A.C. Agency — Cable for campaign expenses - Philippines 10,000.00

Sub-total for February $106,912.37

March 1976: 02/01/76 Amex. - Gotoh Imperial Hotel $ 16,278.97

04/02/76 Cable - Adair Manila Campaign 3,100.00

Sub-total for March $15,378.97

‘\

April 1976: 02/13/76 . Diners Club . Nassau $ 12,876.34

02/14/76 Diners Club Nassau’ so 18,412.12

02/17/76 Diners Club Nassau 8,302.50

Sub-total for April $ 39,591.46

(1)

June

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Testimonial Dinners & Overseas Campaigns

Invoige

Date Recipient

l'70: 95/13/76 Bank of America

Purpose of Payment

Cairo Banquet expenses held in April

Amount

$ 3,152.00

24

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 579

1: ) Itscellaneous:

Invoice

Date Recipient Purpose of Payment Amount

8727775 AICF 40 House Seats per Concert $65,440.00

September 9/24 TS AICF 4 House Tickets for 16 Series 3,840.00

9/16/75 Osamu Gotoh Cash Cable to London - Purpose Unknown 10,000.00

$13,840.00

Soveuber 10/24/75 Les Ambassadeurs S.A. Check Written by HWA $ 368.00

10/24/75 Les Ambassadeurs S.A. Check Written by HWA 380.00

11/19/75 Jascha Bistritzky Cash to Mr. Bistritzky - AICF Board of Directors 2,500.00

11/30/75 Osamu Gotoh Cash Cable to Jamaica 15,000.00

Sab Total for Amount Paid in November 18,248.00

Dewenber 10/15/75 Carte Blanche Osamu Gotoh - Food Tote (?) $ 24.32

10/17/75 American Express Osamu Gotoh - Santory, Paris (7) 78.02

10/25/75 American Express Osamu Gotoh - Hermes, Paris (7?) a. Uhecee

10/25/75 Diners Club Osamu Gotoh - Hermes, Paris (7?) 3,460.33

La/ 22575 Perinos AICF Reception Pe | Pee

12/03/75 Air Wings Int. Ship 12 Magazines to Mr. Rader in Hong Kong 26.50

12/03/75 Air Wings Int. Home Vidio Game Gift Sent to Mr. Gotoh - Tokyo 26.50

12/16/75 Osamu Gotoh Manila Campaign 12,000.00

12/13775 Gateway Publishing Additional Expenses on Book About Japanese |

Emperor 12,300.00

10/25/75 Jurgensens Groceries AICF Reception per H.C. 399.38

11717775 Bert Roberts Bartender - AICF Reception 576.83

11/14/75 Squires AICF Reception - Liquor 88.80

L1/37/775 Gino Galileo Bartender - AICF Reception 38.50

11/10/75 Squires AICF Reception - Liquor 850.67

Lt/te/75 Paone Catering Catering Service for AICF Reception 1,028.20

11/17/75 Ed Aryoin Bartender - AICF Reception 38.56

11/17/75 Richard Melone Bartender - AICF Reception 38.50

11/7/i5/77$ Sven's Danish Pastries for AICF Reception 111.42

11/10/75 Squires AICF Reception - Liquor 1,000.00

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Miscellaneous (Continued):

11/21/75 Krupnicks Mrs. Rader - Banquet Equipment § Supplies Rental > 1,372.76

11/26/75 Lincoln Foods Plastic nei for AICF 14.79

12/01/75 Carl Mannino Caterer - AICF Reception 45.50

12/01/75 Don Allevato Caterer - AICF Reception 32.50

12/01/75 Marc Ziegler Caterer - AICF Reception 32.50

12/01/75 Mario Armato Caterer - AICF Reception a¢ua8

12/01/75 Sam Ippolito Caterer - AICF Reception 32.50

12/01/75 Rose Roberts Caterer - AICF Reception 45.50

12/01/75 Iren Myernik Caterer - AICF Reception 32.50

12/12/75 Robert Kuhn Reimbursement for Two AICF Receptions 1,457.85

12/16/75 Paradise Island Deposit for Campaign Facilities in Bahamas 1,000.00

Sub Total for Amount Paid in December $46,235.79

(F ) otis cellancous

February 1976:

Jue ] Bee

Invoice

_Date_

02/13/76

02/27/76

0 1/20/76

04/20/76

EXPENSE ANALYSIS

PASTOR GENERAL EXPENSES - ACCOUNT 570

Recipient

W.C, Adjustment

W.C, Adjustment

Ambassador College BS

Ambassador College BS

27

Purpose of Payment Amount

Photograph Rader's Anniv. party at H.W. Armstrong's Home $ 382.50

Backcharge from Central Stores 1,272. 00

Sub-total for February $ 1,654. 50

Doilies for Big Sandy Student dinners $ £2.32

Flowers for Big Sandy Student Dinners 97. 00

$ $k ART

oe ee ren

ay | ie

Executed this 23d day of December, 1978, at Altadena,

California.

/s/ Benjamin R. Chapman

Benjamin Chapman

pox ae

DECLARATION OF DAVID R. MORGAN

I, DAVID R. MORGAN, hereby declare as follows:

1. I have been a member of the Church since 1962,

having been baptized in that year.

2. Iam a licensed electrician. For seven and one-half

years, from 1964 to 1972, I worked as an electrician for

the Church on its projects full time, for one-half of the pay

that an electrician would receive if he worked in private

industry.

3. From 1962 to 1975, I also tithed, i.e., gave 10% of

my annual income to the Church. since that date, I have

given 5% of my annual income to the church.

4. Many members of the Church put themselves through

considerable hardships in order to finance its work. Many

members of my acquaintance pay substantially more than

10% of their total income to the work of the Church. One

example of self-denial on the part of the membership is that

some ladies I am acquainted with, and for whom I used to

mow the lawn on weekends as an act of charity, regularly

fast once a week and give the money they save on food to

the Church.

5. Despite the austere lifestyle that the members undergo

to finance the work, I have observed numerous instances

of waste and mismanagement of Church finances.

6. For example, while I was working for the Church

as an electrician, I became aware that certain materials being

used on an electrical installation that I was working on were

far more expensive than were necessary for that job. I

brought that fact to the attention of my foreman. He refused

to do anything about it, so I brought the problem to the

attention of his superior. That superior did not address him-

self to the issue that I raised, but rather gave me a dressing-

down to the effect that, since my foreman had authority

0 «sm ahaa

ee, We

over me, I was to give him unquestioning obedience, be-

cause all members of the Church are to obey without ques-

tions all commands from persons in authority over them.

7. Onanother occasion, I was instructed to install chan-

deliers in the personal residence of Herbert W. Armstrong,

the Pastor General. Price tags were attached to the chan-

deliers when they were given to me for installation. While

I can no longer remember the exact price, I recall that they

cost substantially more than $5,000 each.

8. On another occasion, 2 work crew of electricians all

of whom were Church employees spent more than a week

working on a private house in Beverly Hills owned by Mr.

Stanley Rader.

9. Based on my observations, the doctrine of unques-

tioning obedience has been imposed throughout the Church

hierarchy.

10. None of the wasteful expenditure that I had an op-

portunity to observe as a full-time electrician was ever re-

ported or disclosed by Church authorities to me or other

members of the Church in our capacity as members. The

financial information divulged to the membership has never

contained sufficient detail to bring these matters to the at-

tention of the members.

11. In all the years I have been associated with the

Church as a member, I have never been given an opportunity

to vote, nor have I ever voted, on any matter pertaining to

the governance of the Church or any of its affairs, whether

financial or ecclesiastical.

I declare under penalty of perjury that the foregoing is

true and correct.

Executed this 26th day of December, 1978, at Beverly

Hills, California.

/s/ David R. Morgan

DAVID R. MORGAN

eo. ee

DECLARATION OF ALVIN E. TIMMONS

I, ALVIN E. TIMMONS, hereby declare as follows:

1. 1am one of the relators named in the within action.

I make this declaration in support of the application of

plaintiff in support of a temporary receiver and a temporary

restraining order, and for a receiver and injunction pendente

lite.

2. Since 1966, since I was baptized into the Church,

I have been a member in good standing of the Worldwide

Church of God.

‘3 I began attending services of the Church in approx-

imately 1965. However, I began to tithe in 1959 (contrib-

uting one-tenth part of my annual net income), and I have

made substantial monetary contributions to the Church in

addition to the tithing.

4. For many years, I was engaged in business as a

plumbing and heating contractor, and I have done a tre-

mendous amount of work for the Church, all without cost

or charge for my services: | installed the seats for the Church

in a theater in Sacramento; I installed a commissary for the

Church on Fair Oaks Avenue in Pasadena, investing ap-

proximately $20,000 to $30,000 worth of my time without

charge, billing the Church only for the cost to me of nec-

essary materials.

5. All of the money I have contributed was solicited by

the Church and given by me, on the understanding that it

would be used solely and exclusively to further religious

work of the Church. This concept is constantly expressed

in the Church publications which are distributed to the mem-

bers. A typical example is the ‘‘Pastor’s Report’’ for De-

cember 19, 1978, a copy of which is attached hereto, marked

Exhibit A. In this report, in a section written and signed by

Stanley Rader and Ralph Helge, reference is made to * the

financial aspects of God’s Work;’’ ‘*..God’s money;”’

‘*God’s tithe money;’’ and so on.

6. The passage to which I have referred in Exhibit A

consists of an accusation by Rader and Helge against a

former financial officer of the Church, Ray Wright, that he

was permitted to accomplish ‘‘a misuse of God’s tithe

money.’’ However, my own inquiries and investigations in

recent weeks have led me to conclude that Rader and Helge,

and other people in the Church, have been and are guilty

of a continuous misuse of God’s tithe money.

7. Although I have been a member of the Church for

thirteei years, I have never been asked to vote or given an

opportunity to vote on any matter pertaining to Church gov-

ernarice, or to its financial and business affairs. To the best

of my knowledge, no member has ever been given an op-

portunity to vote on any such matter.

8. Likewise, the Church has distributed little or no fi-

nancial information about its receipts and expenditures, or

about its assets and liabilities, during the years I have been

associated with the Church. It is true that, from time to

time, oral financial reports were given by Mr. Armstrong

and Mr. Rader to members assembled at conclaves held by

the Church in connection with the Feast of Tabernacles.

However, only a tiny fraction of the members were present

at these meetings, and the results were not published or

disseminated in any of the numerous publications issued by

the Church. More recently, written reports have been dis-

seminated over the signature of Stanley Rader. However,

these reports are made in such form, and at such times, as

to be virtually useless. For example, the Church publishes

a newspaper entitled ‘‘The Good News.’’ In the issue for

Monday, September 25, 1978, a ‘‘Treasurer’s Report’’ was

included, over the signature of Stanley R. Rader, purporting

—60—

to show the income and expenditures for the year ended

December 31, 1977. Six weeks later, on November 6, the

paper published what purports to be a balance sheet for the

Church and Ambassador College (combined) at December

31, 1977. Copies of these reports are attached hereto, col-

lectively marked Exhibit B. However, neither of these re-

ports provides any meanirgful information. Rader describes

them as having been audited and certified each year “‘by

an independent firm of certified public accountants;’’ but

the accountants are not identified, and their signature does

not appear. The operating statement apparently relates only

to the Worldwide Church of God, while the balance sheet

relates to the Church and Ambassador College combined.

The categories of expenditures are so broad as to be mean-

ingless: ‘International Expenses, $15,867,700;”’ ‘‘Personal

Worldwide Evangelism—Campaigns and Overseas Visits,

$2,738,500.”’

9. Except for these partial and scanty reports in recent

months, the Church does not distribute or disseminate any

financial information to the members, and does not make

it available on request.

10. I have, however, been able to obtain certain ma-

terials from personnel currently or formerly in the employ

of the Church, which contain information about the Church’s

finances. One of these documents is entitled ‘‘Pastor Gen-

eral Department, Report of Expenditures, July 1, 1975,

through June 30, 1976,’’ which is attached as Exhibit B to,

and authenticated by, the delcaration of Benjamin Chapman,

a former board member of the’ College. I have also obtained

a copy of an internal accounting document of the Church,

entitled **Executive Expense Analysis” for March 3. 1978,

a copy of which is attached hereto, marked Exhibit C. These

items show immense expenditures for Mr. Rader, Mr. Arm-

te e

at.

strong, Mr. Gotoh, Mr. Cornwall, and other Church officers

and executives, for luxury items of vast expense.

11. Ihave also obtained a copy of a letter, dated July

24, 1978, from Stanley R. Rader to Garner Ted Armstrong

(a former officer of the Church and son of Herbert W.

Armstrong, the Pastor General), in which Rader makes

elaborate offers of compensation and other benefits in ex-

change for a promise by Garner Ted Armstrong that he will

not reveal the internal financial affairs of the Church. A

copy of this letter is attached hereto, marked Exhibit D.

13. Much of the information I have obtained in recent

weeks comes from persons who are employed full time by

the Church, and who have asked me to keep the source of

my information confidential, because they are afraid to lose

their jobs. However, I can and will identify them, if called

upon by the Court to do so. These people have advised me

that many of the Church’s records, particularly those per-

taining to executive compensation and expense accounts,

and to transactions between the Church and various entities

owned or controlled by Rader, have been removed from the

Church’s main office in Pasadena to the suite of offices

maintained by Rader and his law and accounting firm (and

his affiliated companies) in Century City. I have also been

advised that many records are being mechanically shredded

or destroyed.

14. I have recently learned that many properties which

have been owned by the Church for a long time have recently

been sold and converted into cash. As indicated in the dec-

laration of my wife, Shirley Timmons (being filed concur-

rently herewith), the Church has sold many parcels of prop-

erty in the last year. I am generally familiar with real estate

values, and I believe they were sold for substantially less

than their market value. For example, Ambassador College

ae 1

sold a residence to Stanley Rader in September for $225,-

000, which was described in a People Magazine article on

November 20, 1978, as a ‘*$300,000 Pasadena home, com-

plete with a Porsche and an Aston Martin in the driveway.’

14. [sic] The principal liquidation effort, however, does

not relate to properties in California, but rather to a large

facility owned and operated by the Church in Big Sandy,

Texas. This facility consists of 1,600 acres, and includes

a complete college campus and Church retreat, with all

appropriate buildings and structures, including 330 build-

ings, twenty-five houses, a 16,000-seat convention, a sixty-

acre lake, a nine-hole golf course, a landing strip, airplane

hangar, four large dormitories, and gymnasium-auditorium

seating 3,500. Recently, the management of the Church

announced that the Church was selling the Big Sandy facility

for 10.6 million dollars to a Texas businessman, named F.

William Menge, who was allegedly given it to the James

Robison Evangelistic Association. This event was publicly

reported in the Baptist Press, with the comment that Ro-

bison’s associates placed the property’s value at between

$30,000,000 and $50,000,000.’’ A copy of an article from

the Los Angeles Times for November 4, 1978, referring to

these matters is attached hereto, marked Exhibit G [actually,

F].

15. On Sunday, December 17, 1978, an article ap-

peared in the Corpus Christi Caller, a publicly distributed

newspaper in Corpus Christi, Texas, under the heading,

‘Road to Roloff’s New Paradise Proves Rocky.’’ In this

article, a copy of which is attached hereto, marked Exhibit

G, the newspaper declares that the property is going to be

given by Menge, not to Robison, but to one Lester Roloff,

another evangelist, indicating that the ‘‘gift’’ may be part

of some tax-saving scheme on the part of Menge, the busi-

nessman who is actually purchasing it. Among other things,

ee,

the article declares that ‘‘the price is a steal. For a mere

10.6 million dollars, Roloff Evangelistic Enterprises is get-

ting a piece of property recently appraised at close to

$30,000,000, and according to one real estate agent,

couldn’t be reproduced for less than $50,000,000.”

16. While I am not intimately familiar with current real

estate values in Texas, I have visited the Big Sandy facility,

and am familiar with its physical characteristics. I also am

familiar with construction costs from my experience as a

contractor. In my opinion, the Big Sandy facility is worth

very much more than the reported sale price of $10,600,000,

and also very much more than the sum of $8,400,000 at-

tributed to it by Rader in his recently published **balance

sheet.’’ Furthermore, the Big Sandy facility is of a special

significance to the membership, because it one of the few

facilities which is owned by the Church and which is suitable

for use for conclaves and other religious gatherings.

I declare under penalty of perjury that the foregoing is

true and correct.

Executed this 27th day of December, 1978, at Beverly

Hills, California.

/s/ Alvin E. Timmons

ALVIN E. TIMMONS

a oe

EXERPTS FROM EXHIBIT A TO DECLARATION

OF ALVIN EARL TIMMONS: PASTOR’S REPORT

[LETTER HEAD]

CLEARING THE AIR ON A SERIOUS RUMOR

We regret that it is necessary to advise you of another

problem we have uncovered.

Let us first say that it is not God’s way to accuse. It is not

God’s way to make public accusations against an individual.

God’s way is to forgive when a person repents and to cover

the wrong. This is what we tried to do.

However, sometimes it is necessary to bring up facts when

a failure to do so will perhaps lead some people to fall away

from God’s Truth. It is to protect the flock that we bring

you this information.

Ted Armstrong has been disseminating false and defamatory

rumors designed to destroy this Work. The latest accusation

concerns Mr. Ray Wright and the financial aspects of God’s

Work. To save some of the brethren, who may be weak in

the faith, from falling away due to not having all the facts,

we must again set the record straight.

These are the facts: Ted Armstrong, when he was serving

in the office of Executive Vice President of the Church and

President of the College, was the direct overseer of God’s

money. He authorized a member of his staff, Mr. Raymond

L. Wright, to misuse monies that the faithful members of

God’s family had contributed. And, so none of you will

doubt, we have that written authorization in our possession.

Ted Armstrong authorized Mr. Wright to pay secretly, out

of Church funds, God’s money to a private corporation

owned by Mr. Wright and Robert Kuhn in Texas. Ted

Armstrong's act of authorizing such payment of Church

funds laid the foundation and permitted a greater misuse of

God’s tithe money in subsequent months.

a ae

In spite of the clandestine procedures involved, the scheme

was uncovered during an audit by Mr. Jack Kessler, and

others on the internal auditing staff.

But there is good news in the final analysis. The experience

has served to prove the effectiveness of God’s auditing

procedures and we are pleased to report that by virtue of

‘swift legal action having been taken, God’s Work has been

able to either recover God’s tithe money or obtain adequate

assurance of its repayment.

The two men still in God’s Work have repented of their

involvement in this matter. And when a man repents of his

sins God forgives him of the spiritual wrong. He separates

his sin as far as East is from the West and he stands clean

and forgiven before God.

As the scripture reads, if we do not forgive our brethren

once they have repented, then God will not forgive us for

our sins (Matt. 6:14-15). Therefore, let us now forgive and

forget the matter as to those who remain faithful to God’s

Work, and go on and defend the Work in renewed faith

against those that Satan is using in an attempt to destroy it

through every possible means available.

Stanley R. Rader

Ralph K. Helge

FURNISHING INFORMATION REGARDING

FALSE AND VILE ACCUSATIONS

It has come to our attention that among other means GTA

has now started what appears to be a telephone calling

campaign in an attempt to destroy the faith of some mem-

bers. He is making not only false but vile accusations against

the brethren.

It is clear that God holds the Church responsible for pre-

serving the flock; that the Church has a duty to prevent the

flock from being led into tribulation or eternal death.

—66—

The Church has now had to determine what is the most

effective means of protecting the flock from this Satanic

attack of false and vile accusations. It has been concluded

that refuting each false and vile rumor is not in all cases an

adequate means of carrying out its solemn obligation.

The Church has now determined that in order to adequately

discharge its duty to preserve the flock, the Church must

and will file suit against GTA or his associates under the

appropriate circumstances, in order to stop the physical

source of the rumors. Such action will be taken against any

person who would lend themselves as an instrument of Satan

to destroy the flock.

Ted Armstrong has not only been disfellowshipped but is

likewise spreading false doctrine or doctrine which is false

as applied. Therefore, in the first instance the brethren

should not be receiving calls or any other communications

from him or his associates (11 Jn. 10, Rom. 16:17).

If, however, for any reason such communications have been

received in the past or, for any reason are received in the

future, the Church is now requesting that all such com-

munications be forwarded to the Church's legal office. As

we can assume that a countermeasure Satan would inspire

at this point would be to temporarily suspend the false and

vile accusations, or to contact people to whom they were

made and request that they alter the accusations that were

told or not respond to this request.

Therefore, we would emphasize the importance of furnish-

ing information regarding accusations already made as well.

Further, we would call to the attention of all the brethren,

ministers and members alike, of the spiritual obligation im-

posed upon the Christian of coming forth as a witness with

any facts he knows or has heard of (Lev. 5:1).

- ATG OTT

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