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Religious Broadcasters Vote New Ethics Code In Wake Of PTL Scandal

February 3, 1988

WASHINGTON (AP) _ Religious broadcasters on Wednesday voted to put teeth in a new financial and fund-raising code of ethics they hope will restore credibility in an industry shaken by the PTL ministry scandal.

Members of the National Religious Broadcasters voted 324-6 to make compliance with the code of ethics a requirement for membership in the organization, said Ben Armstrong, executive director of the group.

″On a self-regulatory basis, NRB has taken action representing some three- quarters of the total religious broadcasting in the United States,″ he said.

″We feel this will cause people to realize that we have nothing to hide and that we are fully disclosing finances and eliminating possible family control of boards and showing to the public we have open books and open policy.″

The code requires member ministries to submit annually full, independent audits disclosing every source of income and every expenditure. Members whose donated income from broadcasting ministry is less than $500,000 need only submit an unaudited financial statement.

All of the financial information, except salaries, will be available to the public, Armstrong said.

The code also requires members to keep fund-raising materials for a year and submit samples upon request to the association’s Ethics and Financial Integrity Commission, which administers policy on ethics and financial responsibility.

In addition, the new policy requires members to have a board of at least five directors, the majority of whom are not related to the ministry’s executives and not on the ministry staff. Smaller ministries are exempt from the requirement, he said.

The ethics commission will draft guidelines that will be used to evaluate ministries for accreditation, including acceptable salary levels, said NRB spokeswoman Audrey Langdon. She said the basis of the guidelines will be the Internal Revenue Service’s requirements for tax exemption and the traditional practices of most ministries.

The NRB’s board of directors adopted the code last September, but compliance has been voluntary.

Armstrong said that revision of the organization’s ethics guidelines was begun before Jim Bakker resigned as head of the PTL ministry last March, after admitting to a 1980 sexual encounter with church secretary Jessica Hahn.

But he said ″the PTL incident has heightened rather than lessened the interest in accountability, and my guess is there wouldn’t be these kind of teeth were it not for what has transpired in the past year. That caused everyone to think it is time to do something.″

After Bakker resigned, the church subsequently filed for protection from creditors under the federal bankruptcy code and a spotlight focused on Bakker’s extravagent lifestyle.

The Internal Revenue Service says PTL owes $62 million in back taxes. The IRS also is trying to revoke PTL’s tax-exempt status because it says top PTL officials received $14.9 million in excessive compensation between 1981 and 1987, $9.4 million of which went to Bakker and his wife, Tammy.

About a quarter of NRB’s membership attended the closed meeting at which the vote was taken during the organization’s annual convention here.

Armstrong said the six who voted against making the code mandatory were concerned that the cost of meeting the financial requirements would be too high for some members.

Under the new rules, members must apply for certification between June 1 and September 1. They then will have two years to bring their ministries into compliance, Armstrong said.

Armstrong said part of the reason the code was adopted was to pre-empt possible government regulation.

″If an industry doesn’t organize itself, then what follows is government regulation,″ he said. ″If we didn’t do it the government would.″