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Financial Walls Closing In On Church

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By BAIRD HELGESON and MICHELLE BEARDEN

bhelgeson@tampatrib.com and mbearden@tampatrib.com

Published: November 6, 2008

Updated: 11/06/2008 10:54 pm

TAMPA - The future of Without Walls International Church is in question now that a credit union wants to foreclose on the megaministry.

The church defaulted on a $1 million loan due in August, prompting the California-based Evangelical Christian Credit Union to file foreclosure proceedings Tuesday.

The filing also includes a $12 million loan made in December 2003, when Without Walls was looking to expand its ministry headquartered at 2511 N. Grady Ave. On Thursday, the credit union initiated a similar foreclosure proceeding involving two additional loans for the church's branch in Lakeland. The credit union declined to release details of those loans.

Without Walls issued a statement Thursday that said it has done its best to meet ministerial goals and financial obligations in the wake of the economic downturn and adverse publicity.

"We were in the process of negotiating acceptable alternatives that would work for both the church and its lender," the statement said. "Since the lender knew we had a sales contract for the sale of certain assets that would have covered our obligations to it, the church was shocked to receive notice of foreclosure."

The statement also blamed the credit union.

"In these times, it seems completely unfair and unreasonable for a lender that includes the term 'Christian' in its name to file a foreclosure action against a church that has been financially compliant for eight years, does good in the community and has attempted to ensure that its lender gets paid," the church statement said.

Credit union spokesman Jac La Tour said the lender filed for foreclosure after months of trying to negotiate a more affordable loan agreement with the church.

An agreement was reached, La Tour said Thursday, but Randy White, the senior pastor, never signed it.

The $1 million loan should have been paid off in August. When the church failed to do that, the credit union immediately sought repayment of the larger loan, due in January, according to the court filing.

Touted in 2004 by Church Growth Today as the nation's second fastest-growing Christian congregation, the ministry took in as much as $40 million a year. But it has faced many hurdles in the past couple years. Among them: an ongoing U.S. Senate inquiry into its finances; the divorce of cofounders Randy and Paula White; and a dramatic drop in attendance.

For months, there have been signs of financial struggles at Without Walls.

In August, the church's controller resigned citing serious concerns, according to a copy of his resignation letter obtained by The Tampa Tribune.

Church accountant Camillo Gargano wrote in the Aug. 28 letter that the ministry was in "turmoil."

"Handling of finances by upper management is contrary with my fiduciary responsibility," it states.

Management didn't seem bothered by the financial problems, and used "bullying, excessive force and verbal abuse as a management style," Gargano wrote.

"Not only is it unconscionable for me to work in such a hostile environment, but it is also physically and mentally debilitating to work under such stressful circumstances," he wrote.

Gargano said he later submitted a second, less-critical letter at the request of church staffers.

He resigned after Randy White ordered him to pay White's $24,000 American Express bill, even though it would mean the ministry couldn't make payroll for the week, Gargano said in a September interview.

Part of the credit card bill was a $13,000 payment for mirrors installed in the church. The rest included personal expenses that White told Gargano he would pay back to the ministry, the controller said.

White sent text messages to Gargano insisting he pay the credit card bill. Gargano saved the messages.

Gargano, who attended church elsewhere, said during his 17 months employed there he constantly scrambled to find money to pay salaries and bills, and that little or no money went for ministerial work.

The church owed vendors $400,000 by late August, he said. Several vendors reached by the Tribune declined comment.

In September, the church released a statement saying it disputed Gargano's version of events, but did not elaborate.

The controller resigned his position the same month the church defaulted on the loan.

La Tour said it's "extremely rare" for his lending organization to initiate foreclosure proceedings. He said it has happened less than 10 times in the organization's 44-year history. The credit union provides financing for churches, Christian schools, other evangelical ministries, and missionaries in more than 100 countries.

For several months, the Whites have tried to sell the Tampa property, housed in a former Canada Dry headquarters, and their ministry in Lakeland, the former 10,000-seat Carpenters Home Church.

In March, Without Walls Central in Lakeland announced the congregation planned to buy the sanctuary on 75 acres and break away from its founding church.

At that time, White told his congregation at the main campus that Scott Thomas, Lakeland campus pastor, and he had a "master plan" for expanding the ministry, but the two were not ready to share it.

"Sometimes you just have to be smarter than the devil," he told the congregation.

In its statement Thursday, Without Walls said it will continue to hold services and activities as usual.

To read past coverage of Without Walls and to post a comment, go to TBO.com, keyword: Without Walls. Reporter Baird Helgeson can be reached at (813) 259-7668. Michelle Bearden can be reached at (813) 259-7613.

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