Three church planters received $1.3 million between 1999 and 2005 from the Baptist General Convention of Texas to start 258 churches in the Rio Grande Valley, only five of which appear to remain active, according to a five-month investigation into use of church funds unveiled Tuesday.
A report by an independent investigator found evidence of misuse of church-starting funds, lax guidelines for approving funds and failure by BGCT administrators to investigate possible irregularities.
The report does not allege criminal wrongdoing, but notes it was limited in scope. Investigators could not subpoena individuals in order to compel them to testify or say for sure those interviewed voluntarily would answer questions the same way under oath in a court of law.
The report, presented to the BGCT Executive Board, found no proof that Otto Arango–who developed a new strategy training lay people to begin churches, which in turn train members to do the same–and proteges Aaron de la Torre and Armando Vera–used church funds for personal gain. They claim all money went into other ministries.
But it but did find instances of money being placed in personal accounts, which the report commented “certainly raises questions.”
Investigators found that many churches started by the three men were home Bible studies or cell groups that did not meet the convention’s own guidelines for how to determine what constitutes a church.
Some of the churches were fictitious from the start, but the BGCT did not verify the existence of new churches or track congregational mortality rates well enough to determine the exact number of “phantom churches.”
No one on BGCT staff, the report said, appeared to be responsible for discerning whether the stated intent to begin a church was reliable.
In one reported misuse of funds, de la Torre and Arango allegedly split start-up funds for churches 50/50. De la Torre sent checks made out to his church to Arango, who deposited them in a bank account and wrote checks to de la Torre for one-half the amount of BGCT funding in return.
Another example involved checks sent to Vera’s church for church starts. If a start failed, the money was not returned to BGCT but rather used for the sponsoring church’s other missions or general fund.
Two BGCT staff members named in the report resigned last week after executive leaders previewed it.
The report says David Guel, BGCT church consultant for the Valley, admitted to “sloppy work” in not making sure paperwork was properly signed, blaming work overload.
Abe Zabeneh, director of the Church Starting Center, said he relaxed guidelines for approving funds because he thought associational leaders objected to the strategy, prompted by jealousy of Arango’s success.
Guel told investigators there was an unspoken understanding it was acceptable to transfer funds for a failed church start to another new church, and Zabeneh said there were no specific guidelines about what to do with funds if a church start failed.
The report found no evidence that BGCT Executive Director Charles Wade knew church-starting guidelines were relaxed or funds were being misused.
The report faults BGCT staff for poor record-keeping, unreliable information and slow response in providing requested information, impeding the investigation and adding to its cost.
It also identifies numerous “red flags,” which in hindsight could have prompted a much-earlier investigation.
One included an investigation by the FBI between 2000 and 2003 into the possibility the BGCT was a victim of fraud in connection with the funding of house churches. While cooperating with the FBI investigation, the BGCT did not generate an internal probe.
The report calls for reviewing church-starting guidelines, better record keeping and internal controls, immediate response to allegations of improprieties and better verification.
The BGCT hired Diana Dillard, a Brownsville attorney, to conduct the outside probe of possible irregularities in May 2006, following persistent rumors and questioning about new church starts using Arango’s philosophy.
The report concludes:
“The BGCT is committed to the principle of developing new churches in the State of Texas through the work of the Church Starting Center. Between 1999 and 2005, the convergence of Dr. Arango’s promising new vision for planting new churches and the failure of the BGCT to strictly adhere to its Guidelines provided an opportunity for misappropriation and misuse of BGCT funds.
“Between 1999 and 2005, Dr. Arango, Pastor de la Torre and Pastor Vera sponsored 258 new churches in the Valley, which received over $1,300,000 in start up and monthly funds from the BGCT. Some of the new churches they started became churches and are active today; however, many of the new churches arguably were not churches but were extension units. Some were phantom churches that did not exist at all. Others ceased activity but still received funds or ceased activity and ceased receiving funds.
“The BGCT had controls in place to prevent these issues from occurring. However, there are additional controls that, if implemented, can aid in the prevention of similar issues from occurring again in the future. The BGCT should implement as many of these controls as possible to the extent they are consistent and can be reconciled with the BGCT mission of starting new churches. Finally, whether reinforcing the existing controls or supplementing them with new ones, the BGCT through its staff, management and board must remain vigilant and monitor all programs and funds.”
The report also mentions E.B. Brooks, former director of BGCT missions and now executive director of the Piper Institute for Church Planting. Arango is founder and president of the institute, which operates separately from the BGCT and was not included in the investigation.
Bob Allen is managing editor of EthicsDaily.com.