Last December, the Ohio attorney general accused CBN founder Bruce Hawthorn of mishandling millions of subscriber dollars. Payments for medical claims had fallen more than two years behind. And the number of subscriber families plummeted from 25,000 early last year to fewer than 11,000 this summer.
In April, an Ohio court put the nonprofit ministry into receivership. Meanwhile, the IRS ordered CBN to pay $750,000 in assessments to reimburse the federal agency for costs associated with its investigation. At one point, the IRS also threatened to revoke CBN’s tax-exempt status.
But attorney Scott Haley, appointed by the court as receiver, slashed overhead expenses, cut the staff size in half, used savings to begin to pay off the backlog of unpaid claims, and launched an independent audit. Haley paid the IRS assessment in July, mortgaging several pieces of ministry real estate to come up with the funds.
A new board was formed on August 13 to rebuild the ministry. The new board chairman is John Conley, president of Circleville Bible College near Columbus.
One returning board member is Howard Russell, the Tennessee pastor ousted by founder Hawthorn in a power struggle last year.
Haley and CBN staff say the hemorrhage of money and members has stopped. From April through June, subscriber payments exceeded new claims. Haley told the court in July that more than half of the backlogged claims from 1999 had been paid.
“I’m very encouraged,” Russell told CT. “There have been times in the past several months when I was not optimistic, but the new board’s top priority is to assure full integrity in this ministry.”
At the current subscriber and income level, CBN said it would take 18 months to clear unpaid claims. The new board will begin a nationwide search for a new chief executive.
The revival effort got an additional boost on October 3. A state appeals court ruled that Hawthorn’s attempt last December to oust dissident board members was both illegal and void. This decision, according to Russell, opens the way for Hawthorn to be completely removed from CBN operations.
Copyright © 2001 Christianity Today. Click for reprint information.
Related Elsewhere:
The Christian Brotherhood Newsletter Web site has information on how it works but not on the controversies.
Christianity Today‘s earlier coverage of the Christian Brotherhood Newsletter includes:
Health Ministry in Receivership | Arrangement designed to save Christian Brotherhood Newsletter, not dissolve it. (June 16, 2001)
Health Ministry Fraud Alleged | Ohio seeks $16 million in damages against Christian Brotherhood Newsletter. (Mar. 9, 2001)
Bearing (some but not all) Burdens | Clean-living Christians create an unusual way to share medical expenses. (Sept. 15, 2000)
