July 25, 2005

Federal probe rocks Seventh-day Adventist Church

Lake Region Conference accused of financial irregularities, immigration violations.

By CAROL DRAEGER
Tribune Staff Writer
The following people were put on paid administrative leave in the wake of auditing and illegal immigration practices in the Lake Region Conference of the Seventh-day Adventist Church, based in Chicago.

Hugo Gambetta, vice president for multicultural ministries. He was stripped of his ministerial credentials and license on Friday. He had been on paid administrative leave since July 11.

Treasurer Leroy B. Hampton resigned last week after his July 11 suspension.

Four pastors, all ministers in Chicago churches, are on paid leave: Ciro Aviles, Osmin Hernandez, William Rojas and Alfredo Solis.


BERRIEN SPRINGS -- The Lake Region Conference of the Seventh-day Adventist Church is under federal investigation in connection with misuse of funds and illegal immigration activities, which could threaten the organization's nonprofit status.

The revelations shocked many of the estimated 730 delegates who attended a special meeting Sunday at Andrews University.

"There's been a lot of instances of lying and a case of personal enrichment," Walter Wright, president of the Lake Union Conference, told delegates.

Most delegates knew about the financial crisis and poor internal audit.

That news was relayed to about 25,000 churchgoers in 109 worship centers in the Midwest on July 16.

Many knew that the conference's vice president of multicultural ministries, a treasurer and four pastors were on paid administrative leave in the wake of the Lake Region Conference audit.

But the harsh reality, voiced by Wright, silenced many delegates who earlier in the morning raised serious objections about the competency of conference leaders and lack of input they have in selecting leaders.

Many, such as a woman from a church in Cassopolis, said they felt disenfranchised.

Late in the afternoon the gymnasium where delegates met fell silent when Wright began talking about federal authorities being on the doorstep of Lake Region Conference leaders. He noted that the ramifications of the inquiries could affect the entire church.

"The effect can be devastating," Wright said.

"If the church loses its tax-exempt status because of things in our conference, that is a real possibility," he told delegates.

According to an internal audit of the conference in 2003 about $18 million in assets were understated or not reported to the government.

The conference also did not report financial statements of "at least six charitable gift annuity agreements" in 2003 and 2004. The result means that in those two years auditors could not "reasonably determine" the conference's total assets and liabilities, according to a memo dated February 2005 to the executive committee of the Lake Region Conference.

Wright also told delegates the church's employment of immigrants who may be in the country illegally has raised eyebrows of federal officials.

"What if the Department of Homeland Security comes into our offices and says we're going to close you down because you're not reporting illegal aliens and they threaten our national security?" Wright asked.

Then he answered his own question.

"That can happen because of our conference," he said.

Wright made it clear the conference is "cooperating with all federal entities" while the investigation continues.

In a separate interview, Gary Burns, director of communication for the Seventh-day Adventist Church Lake Union headquarters, could not elaborate about alleged illegal immigration practices of the church.

Burns said the Seventh-day Adventist church is a world church, headquartered in Maryland, with operations in 200 countries.

Wright's Lake Union Conference is the parent organization of the Lake Region Conference and four other conferences.

Only the Lake Region Conference, which is championed as a multicultural ministry with growing Hispanic membership, is embroiled in the financial irregularities and alleged immigration violations.

The Chicago-based Lake Region Conference was organized in 1945.

Wright remained optimistic that the conference would survive.

"Look at our dear friends, the Catholics," he said.

"We can't shuffle people. They didn't act when they should've," he said referring to Catholic leaders who sometimes moved priests to new parishes instead of punishing them for sexual misconduct.

"We won't do that," he said.

At least one of those persons named is formerly from Southern California.

Terrible news. How the devil can control even our leaders--getting them to sin, and to commit fraud against the government!

Power corrupts.

HEY TO ALL

we need to pray for this situation.

and our leaders

GOD AND JESUS are more powerful than the devil


dgrimm60

You are correct about needing to pray.

However, I must say that the church has taken the correct steps. This is refreshing to realize that maybe the time of cover up is beginning to coming to an end.

As long as we live in the world we will have deficient leaders. It does not mean that every leader is corrupt, but it does show the down fall of those sitting in positions of power.

Praise God for men of God that cannot be bought or sold.

This is a good thing and a bad thing to happen. However, the alleged actions of those on leave are wrong. Other leaders are watching and will turn from their ways and repent by turning from their past actions and make the needed corrections however painful.

$18m under evaluation. How did the auditors miss that?

From my understanding, all of this started with an audit that returned a bad audit report. The decision to notify the Government Officials may have come from that audit that revealed a great need for an investigation.

If I were the auditor, I would have reported back to the GC and if nothing was done, I would probably report it to the officials myself.

I would say the audit found it, but the extent reached further than what was covered by that audit. That is why the investigation continues.

I would go so far as to say that there will be more people leaving or getting things straight before they come under the gun.

However, there are many auditors that just don't audit as much as they should or are involved and just remain silent.

I have also seen treasurers that have been set up as the fall guy. So those dismissed should receive legal counsel if they are innocent. This does happen in our church.

My background is in accounting Fran. I was a financial/management accountant for about ten years and much of the work I got involved in was in the preparation of final accounts for audit.

One of the areas we were specifically over cautious about was the declaration of fixed and intangible assets, and especially in property the whole area of accounting for investment or dealing property and how we treated revaluation and other such reserves related to asset valuation.

We would be seriously brought to task even if there was a discrepancy of a couple thousand on multi million pound investments. So whilst I recognise that if those who have been dismissed are innocent I still cannot understand how any reputable audit firm could miss such a valuation. Mind you there was Enron, Worldcom, etc, etc.

David said this. "My background is in accounting Fran. I was a financial/management accountant for about ten years and much of the work I got involved in was in the preparation of final accounts for audit."
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My background is in the hard knocks department, but I do have my ear to the ground. About 10-15 years ago this conference bought a pice of land for the sole purpose to build a school on this property, but after raising monies for this purpose a shopping center needed to be built first with stores open on Sabbath, the selling of smokes/booze & such. But the set of plans for this shopping center was inferior/faulty. Things turned from bad to worse, money/money/money was gathered from everywhere to keep this project afloat, and still it wasn't enough. For months, maybe years, not one dime of TITHE monies was sent to the GC. Those at the GC knew that this conference was in trouble even to them [Lake Union]hocking big SDA churches that were morgage free behind the members backs. For these men that are responsible,to be sent home with pay is THIS fair??? Or does leadership have the foggest idea of what being fair is all about anymore once they step off the platform of truth?

Ed, the following are the names of the six people (according to news reports) that were placed on paid administrative leave:

Hugo Gmbetta, a Conference Vice-president
Leroy Hampton, Conference Treasurer
Ciro Aviles,Pastor
Osmin Hernand, Pastor
William rojas, Pstor
Alfredo Solis, Pastor

I doubt that any of these six people were involved in your cited case 10 - 15 years ago. If any were, I doubt that the four pastors were so involved.

In any case, it is a simply matter of justice that people charged with misconduct be placed on administrative leave with pay until such time that the charges be considered to be valid.

Are all of the above mentioned persons facing financial irregularity AND illegal immigration activities?

I hope all of our conferences know what is happening in the Lake Region Conference and will, if necessary, clean house FAST! We definitely do not need Homeland Security coming to say more than hello at our conference offices.

Denise