by Matthew Heller
There was a young face at the August 2011 board meeting of Trinity Broadcasting Network, the four-decade-old Costa Mesa-based televangelism empire. Brittany Koper, the perky granddaughter of TBN’s founders, had, just two months earlier at age 26, been promoted to corporate treasurer. And with her new title came access to the innermost secrets of the world’s
largest Christian TV network, an enterprise with $175 million in annual revenue—more than half in donations from viewers—and $827 million in assets.
Those assets and TBN are tightly controlled by the Crouch clan. Grandpa Paul, the CEO and president, and Grandma Jan, first vice president and programming director, are the network’s founders, public faces, and members of its three-seat board, along with younger son Matthew. At the time of that meeting, Paul Jr.—their older son and Brittany’s father—was chief of staff and widely viewed as heir-apparent to the TBN throne. Young Brittany would surely fit right into the Crouchocracy.
But she had been reviewing TBN’s books, and, at that board meeting in the vaulted-ceiling living room of her grandmother’s Newport Beach mansion, she told her grandparents she had uncovered something. It had to do with 50-year-old Uncle Matt and the $1.2 million of TBN money he received for a movie project, a 3-D Jesus biopic. Jan, according to a court document, was miffed by the payments because no script had been approved.
The following day, Aug. 30, Brittany and husband Michael Koper, a TBN staffer, dropped a bombshell. “We think current TBN practices and procedures violate the IRS code, and state and federal laws,” they wrote in a memo to Paul Sr., continuing to list no fewer than 10 areas of concern. Among other things, they said, TBN’s relationship with Matt’s film company needed to be addressed because of possible conflicts of interest.
The memo opened a crack in the Crouch family that since has become a chasm. Lawsuits ensued, and acrimonious charges and countercharges have been filed that include claims of extravagant spending, including an $8 million Hawker jet for Jan’s personal use, and a $100,000 RV for her dogs. But from a legal standpoint, the most damaging revelation of all may involve TBN’s decision to fund Matthew’s movie-making ambitions, specifically his Jesus movie.
As whistle-blower Brittany told The Orange County Register: “God is using me to clean house and get TBN into the hands of someone who will make sure it’s run properly.”
The network has survived other scandals, but none involved allegations by high-level insiders, let alone family members. And none involved allegations that tax-exempt donor funds were illegally diverted to a for-profit company run by a Crouch family member. “This is by far the most serious situation TBN has ever been in,” says Ole Anthony, president of the Trinity Foundation, a televangelism watchdog organization based in Dallas. “It has the potential of ending TBN, or the Crouches being a part of it.”
Paul and Jan Crouch remain one of televangelism’s signature success stories. A former small-town Missouri minister who was an announcer and director for a radio station, Paul moved to Southern California in 1961 with his wife and two young sons for a job with the Assemblies of God film studios in Burbank. A decade later, he took over as general manager at KHOF-TV, a San Bernardino station devoted to Christian programming. One night after a 1973 station-sponsored rally at Hollywood High School, Paul says in his autobiography, God offered him some very specific career advice: “Paul, I release you from your ministry at KHOF-TV.”
Paul took this as an invitation to form a new TV ministry. “He was calling me to a path unknown,” he recalls. Paul paid $10,000 a month for four hours of airtime a night on KBSA-TV in Santa Ana and produced shows in an industrial complex, using a Sears shower curtain as a backdrop. With the purchase of its first station, KLXA-TV, in 1974—and with the early help of fellow televangelists Jim and Tammy Faye Bakker, then friends of the Crouches—Trinity Broadcasting Network was on its way.
The Crouches rode a wave of televangelism fervor that also fueled the rise of the Bakkers, Jerry Falwell, and Pat Robertson. The couple didn’t sell advertising time on their shows; they relied on donations that they solicited from viewers with its version of the “prosperity gospel,” which holds that the more you give to TBN, the more God will give to you, His generosity only the greater toward those who can least afford to give. “He’ll give you thousands, hundreds of thousands,” Paul Sr. told viewers during a 2003 telethon. “He’ll give millions and billions of dollars.”
Annual donations were $92.5 million in 2010, and that money helps TBN reach audiences worldwide through more than 3,200 television stations, 21 satellites, and thousands of cable systems. The Crouches still appear on “Praise the Lord” and “Behind the Scenes,” with Jan sporting her familiar false eyelashes and pink wigs. And for their efforts, they enjoy handsome salaries—in 2010, nearly $400,000 for Paul and $364,000 for Jan—and perks including his-and-her mansions in Newport Beach and dozens of other homes across the country.
All this might sound familiar to observers of the Crystal Cathedral Ministries, another Orange County religious institution also recently riven by intergenerational conflict. But a unique aspect of TBN is that the largesse of their viewers also enabled the Crouches to enter the movie business with their younger son. According to Brittany Koper’s court declaration, TBN has invested $50 million in Gener8Xion Entertainment, Matt Crouch’s company that produced movies such as “Megiddo: The Omega Code 2” and “One Night With the King”—films which, despite marquee names and heavy promotion on TBN shows, did paltry box office. As compiled by the Internet Movie Database, revenue from Gener8Xion films totals about $32 million. But Colby May, a Washington, D.C., attorney to whom all questions about the Crouches are referred, says the finances are not the couple’s focus. “They believe that film is an effective way by which they can fulfill their purposes,” he explains. As with other mass media, film “is an opportunity to promote their message of hope and faith.”
Even if the movies don’t make money at the box office, May adds, TBN gives away DVDs of the films to viewers as “fulfilment” for their donations. “They become an ‘evergreen’ product” of enormous value, he says.
But TBN critics say the partnership is a textbook example of how the network has squandered donor funds on ventures that, at best, skirt the boundaries of compliance with IRS rules for tax-exempt organizations. “How would the international TBN ‘partners’ [donors] feel if they knew their generous donations were essentially given to a family-owned for-profit movie-production corporation?” Trinity Foundation asked in an August 2010 report to the U.S Senate and the IRS on the network’s tax-exempt status.
TBN only got mixed up in films, Anthony says, because Matt “is a Hollywood wannabe, always has been, [who] talked his father into putting money into badly produced movies.”
Boyish, short, and spiky-haired, Matt Crouch was born in Rapid City, S.D., before his family made the move west. In a 2001 interview with the Los Angeles Times, he called his years growing up in the glare of the TBN spotlight “intense” and said he saw little of his parents some weeks when they were building their broadcast empire. “I was raised a lot by my brother, quite frankly.”
Matt worked mostly behind the scenes at TBN, but by the mid-1980s was producing the flagship “Praise the Lord” show. “He always had a camera in front of him” as he was growing up, says TBN spokesman May. “He certainly had an eye for it.” When the Crouches made their first foray into Hollywood with “China Cry,” a 1990 biopic about the persecution of Christian minister Nora Lam in that officially atheist country, he was credited as associate producer.
In 1992, Matt and wife Laurie formed Gener8Xion Entertainment with a mission of making wholesome, Christian movies, a niche they felt had been ignored by mainstream Hollywood filmmakers. According to the Los Angeles Times, he also offered his services as a producer to ministers seeking access for their own TBN programming. By the mid-1990s, his company had moved into a Hollywood complex that once housed Hanna-Barbera Productions, and had bought a nearby home for $1.15 million.
One early employee was Sean Abbananto, who served as vice president of marketing and whose prior industry experience involved acting in adult films. “The thing I enjoyed about Matt and Gener8Xion is that that stuff didn’t bother them,” Abbananto told the Times. “They were more interested in what you’re doing now, as opposed to what you did then.”
Gener8Xion scored a modest hit in 1999 with “The Omega Code,” a Michael York thriller about a hidden code of prophecy in the Torah; the movie cost at least $7.2 million to make and grossed $12.6 million. But two of the company’s next films—“Carman: The Champion” and “Megiddo: The Omega Code 2”—were less successful, with the sequel, which cost $25 million to make, grossing only $6 million in ticket sales.
In 2002, Matt merged Gener8Xion with CDMI, a venture capital firm focused on the entertainment industry run by a friend, Carlos De Mattos. “CDMI wanted to do something with Matt Crouch,” recalls former Gener8Xion board member John Dempsey. The attractions included Matt’s connections to the evangelical community and his access to TBN. “He had TV time to promote his movies on his father’s channel,” Dempsey says, adding that Matt “seemed very legitimate and passionate about it. ... He took his job as CEO seriously. He had every intention of making quality, family-oriented films.”
The first fruit of the merger was “One Night With the King,” a $20 million epic based on the biblical story of Esther that featured Hollywood legends Omar Sharif and Peter O’Toole. “ ‘One Night With the King’ is the rebirth of the epic for this day and age,” the film’s production notes proclaimed. At the October 2006 red-carpet Westwood premiere, broadcast live on TBN, Matt gushed about his parents: “You know what I feel like would be an awesome thing to do right now? To thank my sweet little mom and dad, Paul and Jan Crouch.”
But “One Night With the King” grossed just $13.5 million at the box office. Sharif and O’Toole might have been hoping to recapture some of their old “Lawrence of Arabia” magic, but one movie critic said of their cameo appearances: “Well, perhaps it’s best to pretend we never noticed.” And with distributors and theatrical exhibitors getting their split of the ticket sales, Gener8Xion, which lost $1.2 million on revenue of only $451,000 in 2005, sank deeper into red ink. Losses in 2006 totaled $5.8 million on revenue of $5.7 million. In the company’s annual financial statement, its auditors expressed doubt about its ability to continue as a going concern and, on Internet message boards, investors vented about its performance.
“Why is it that a company with such good ideas and good films with a family orientation can’t make it?” one investor asked in October 2008. “Where is the marketing? Where are the new projects? Why only two movies in six years?”
Public records show Matt Crouch made $331,154 in salary in fiscal 2005, $308,888 in 2006, and $367,379 in 2007. But after November 2008, Gener8Xion stopped filing financial statements with the Securities and Exchange Commission. In May 2011, it agreed to cease trading on the over-the-counter market. By that time, Matt had resigned as CEO, selling 8.8 million shares in the company for $88,000, or 1 cent a share—considerably less than the $25 million at which those shares were valued shortly after Gener8Xion went public.
But Matthew Crouch hasn’t exactly fallen on hard times. Brittany Koper told The Register that “his lifestyle makes my grandparents’ lifestyle look tame. You can’t even compare. My grandfather has a luxury car—but Matt had a new luxury car every other week, and his wife would have one, too.” And he allegedly got paid by TBN for work on a movie that was never made.
The origins of Gener8xion’s 3-D Jesus movie are murky. The company’s last annual financial statement, for the fiscal year ending Oct. 31, 2007, mentions that it owned the rights to the script for “The Prodigal Son,” a feature it planned “to enhance by applying an animation technique that incorporates 3-D effects.” TBN’s 2010 federal tax return says it paid Gener8Xion $150,000 for the preproduction costs of a “film project.” The film’s total budget would not exceed $1 million, TBN said. It did not name the project, but a former TBN employee who asked not to be identified says, “It has to be that 3-D Jesus movie.”
TBN ledgers attached to Brittany Koper’s court declaration show the network paid $1.2 million to Gener8Xion between October 2010 and May 2011. But at a TBN board meeting on Aug. 29, 2011, Jan Crouch blew a fuse. “I screamed at the fact that that kind of money had gone for the Jesus yesterday today and forever movie,” she wrote in a Sept. 2, 2011, email that was copied to her sons and granddaughter. “I am on a search for whoooooooooooooooooooo approved ... a script that was not approved.” She continued: “I think Matt said some expenses had been made. But all was stopped. I’m still trying to see how this occurred.”
While Jan comes across in this email and others as a mightily miffed matriarch, Brittany says the 3-D Jesus payments may have been made through her grandparents’ “dinner approvals” decision-making style. “Approvals for Gener8Xion are acquired by Matt from you or Grandma without the full details being explained or understood and often at dinner with no one else present,” she wrote her grandfather in her bombshell memo. This “has led to Matt outright lying about how much TBN is paying Gener8Xion and gaining your vague approval to proceed.”
As a matter of privacy law, the IRS can neither confirm nor deny the existence of an investigation. Any illicit payments to Gener8Xion could put TBN out of compliance with IRS restrictions on tax-free donor money for religious purposes. In addition, the IRS prohibits “excess benefit transactions” in which a tax-exempt organization provides an economic benefit to any person who is “in a position to exercise substantial influence over the affairs” of the organization. In an email to his mother, Paul Jr. said the 3-D Jesus movie payments were “a clear violation” of TBN policy and “could even threaten the [tax-exempt] status of the network.”
In its report to the Senate and the IRS, the Trinity Foundation alleged that TBN had converted donor funds intended for religious purposes into “private corporate money” benefiting Matt. “With Gener8Xion’s major movie productions, TBN donated $10 million and loaned approximately $45 million or more of TBN donor money to [Gener8Xion],” the report said. Ole Anthony believes the records released by Brittany Koper support that allegation. “The charges of financial misdealings [the Kopers] have brought ... are long-term serious,” he says.
Jan congratulated her granddaughter for doing “a good, wonderful, needed search.” But within weeks, TBN fired Brittany and Michael Koper and then, through an affiliated entity, sued them for fraud, alleging they embezzled $1.3 million to buy real estate and cars and make family loans. The Kopers struck back with a lawsuit claiming they were fired in September 2011 in retaliation for exposing financial misdeeds at TBN. Another case filed by Joseph McVeigh, an uncle of Michael Koper who worked at the network, detailed expenses that included the jet for Jan’s use, and the RV for her dogs.
In May, Brittany opened an unprecedented window into the secretive world of TBN, filing a court declaration on behalf of McVeigh to which she attached internal emails that focus on the $1.2 million in payments for Matt’s 3-D Jesus movie. Among those documents was a Sept. 1, 2011, email to Brittany—sent three days after her grandmother’s eruption at the board meeting—in which Jan questioned the payments, pointing out that she had stopped the project before a script was ever approved. “I’m shocked. Beyond shocked,” TBN’s first lady protested.
The emails flew fast among the Crouches. The next day, Paul Jr. suggested his mother wasn’t blameless: “Since Matt went on the board in 2007, $4.5M dollars has flowed to Gener8Xion mostly under your signature. Including $1.2M for a movie that doesn’t exist.”
TBN spokesman Colby May says all payments to Gener8Xion, including those for the 3-D Jesus movie, conform with tax laws. TBN, he says, has invested “probably no more than $18 million over the last 20 years. ... The ministry has certainly recouped all of its investment and all of its funding.” The animated 3-D Jesus movie with computer-generated imagery, he insists, could be released early next year.
As for the emails and other internal documents released by Brittany, May says they are fakes. The Kopers “embezzled an enormous amount of money,” he says. “They’ve forged documents. It’s been just a forensic nightmare in the wake of their deception.”
If the emails are forgeries, they certainly are creative ones. In one, Jan, expressing her disgust with TBN’s finance department, says: “Oh God, are Gramma’s eyes opened. I’m coming back to go through that dept like crap thru a goose.” The Kopers call the embezzlement and forgery charges “baseless” and say they will defend them in court. No trial date is set.
Wherever the truth lies, the split within the Crouch family is undeniable. The Kopers have moved to New York and, according to Brittany, she has not spoken to her grandparents since October 2011. “It’s like I’m dead to them,” she said in a radio interview. A text she sent saying, “I love you so much, Grandma. Thank you for teaching me about Jesus,” went unanswered. Paul Jr. resigned from TBN shortly after the embezzlement claims were filed against his daughter and now works for a Christian network in Michigan that primarily targets African-American audiences.
Matt, meanwhile, appears to have moved into his brother’s former role as heir-apparent to the TBN empire. He regularly co-hosts “Behind the Scenes” with his father. “His primary focus is working with his father” in the ministry program, May reports. And in a recent broadcast, he and Paul Sr. offered what could be construed as a thinly veiled threat to their accusers.
“There have been a few attempts in the TBN history to upset TBN, to stop TBN,” Matt reminded his father. “There have been a few fools in the 38-, 39-year history, coming up on 40 years. You know, any attempt at stopping TBN, they have no idea who they’re actually pushing into a corner. You and Mom get pushed into a corner—God help [them].”
Paul Sr. listened with his right fist clenched, then said, “God help anyone who would try to get in the way of TBN.”
A Rogue’s Gallery
Not all high-profile broadcast ministry controversies involve money
Aimee Semple McPherson
The radio evangelist and founder of the Angelus Temple in Echo Park allegedly faked her own death in 1926, and later claimed to have been kidnapped and abandoned in the desert. In 1944, she died of an accidental overdose of barbiturates. Comedian Milton Berle once claimed to have had a brief affair with her.
Jim and Tammy Faye Bakker
A motel room encounter with church secretary Jessica Hahn led to “The PTL Club” host stepping down in 1987. Hahn, who parlayed her infamy into a Playboy spread, told CNN’s Larry King that Bakker—author of the autobiographical “I Was Wrong”—was distraught because he thought his wife Tammy Faye was sleeping with the choir director.
Caught twice with prostitutes, most recently when stopped for a 1991 traffic violation in Indio with one in his car. In 1988, he had resigned from the nation’s largest Pentecostal denomination after a rival minister released photos of Swaggart with a New Orleans prostitute.
The founder of the New Life megachurch in Colorado Springs resigned in 2006 in the wake of accusations by former escort Mike Jones that the two had a three-year sexual relationship. The church later revealed that Haggard paid hush money to a member of his congregation with whom he’d had an “inappropriate relationship.”
Paul Crouch Sr.
The Trinity Broadcasting Network co-founder paid $425,000 in 1998 to settle the wrongful-termination lawsuit of Enoch Lonnie Ford, who claimed he had a tryst with Crouch while employed at TBN. —Martin J. Smith