A critical cash shortage caused by recent heavy purchases and problems with the Ohio Commerce Department is shaking the foundation of television preacher Rex Humbard’s conglomerate. The department’s securities commission recently issued restraining orders on Humbard’s sale of securities: because the securities were not registered properly, sales were technically illegal. Subsequently, several other mid-western states followed suit. (Ohio officials say more than $12 million was raised through the sales over the last ten years, though not all sales were illegal.)
Expenses were reportedly already exceeding the estimated current $8 million annual income of Humbard’s Cathedral of Tomorrow when the shutoff came. Of this amount, $2 million came from sale of securities and $6 million came from donations and commercial holdings. (Operational expenses are said to be $3 million, video $3 million, and mortgage and taxes $2 million. The telecasts on 360 stations in North America and forty elsewhere reportedly bring in $5 million annually in donations.)
After income from securities dried up, an ex-Humbard aide estimated the cash flow was down to $100,000 per week, half that required to stay afloat. Reserves were being bled off to pay for a television tower, a college, a commercial office complex in downtown Akron (in which Humbard reportedly loses nearly $25,000 per month), and other business projects (see October 8, 1971, issue, page 42). As a result, Humbard has been forced to cut back. For example, the annual Cathedral of Tomorrow New Year’s Eve Special was canceled in some cities, and the weekly television show may be moved to cheaper time slots.
Even though Humbard has been selling securities illegally for ten years (the state cited ...1
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