FILED · 1987 · PENTECOSTAL · FINANCIAL

PTL Ministries and the Jim Bakker Fraud

The collapse of the PTL televangelism empire after the disclosure of a payoff to Jessica Hahn led to a federal fraud prosecution of Jim Bakker for the oversale of lifetime-partnership memberships in PTL's Heritage USA resort.

Pentecostal & Charismatic · Evangelical & Non-denominational · Contemporary · Financial fraud · Jim Bakker

What happened

PTL ("Praise the Lord") Ministries was, by the mid-1980s, one of the largest televangelism organisations in the United States. Founded by Jim Bakker and his then-wife Tammy Faye Bakker, PTL operated a satellite television network, a 2,300-acre Christian theme park and resort complex (Heritage USA) in Fort Mill, South Carolina, and an aggressive direct-mail fundraising operation.

In March 1987, the Charlotte Observer reported that PTL had paid approximately $279,000 to Jessica Hahn, a former church secretary, as part of an agreement related to a 1980 incident with Bakker. Bakker resigned from PTL the same month. Subsequent reporting and federal investigation established that PTL had sold "lifetime partnerships" — memberships entitling holders to several days of annual lodging at the planned Heritage Grand Hotel and related facilities — far in excess of the capacity that could ever accommodate them.

Approximately 153,000 lifetime partnerships were sold, generating an estimated $158 million. Hotel capacity was inadequate by orders of magnitude. The proceeds were commingled with PTL's general operating funds; substantial sums were diverted to executive salaries and bonuses. The Justice Department's trial evidence established that Bakker personally received $3,783,808 in salaries, bonuses, and retirement-fund contributions from PTL between 1983 and 1987, exclusive of additional ministry-paid benefits.

Conviction

In October 1989, a federal jury in Charlotte, North Carolina convicted Bakker on 24 counts of mail fraud, wire fraud, and conspiracy. He was sentenced to 45 years in federal prison. The sentence was reduced on appeal; he was paroled in 1994 after serving approximately five years.

The criminal conviction is well established in the appellate record (United States v. Bakker, 925 F.2d 728 (4th Cir. 1991)). The Fourth Circuit affirmed the convictions while vacating the sentence and remanding for resentencing on the ground that the trial judge had improperly considered Bakker's religious beliefs at sentencing.

Aftermath

Heritage USA closed in 1989. PTL filed for bankruptcy. The IRS revoked PTL's tax-exempt status. Tammy Faye Bakker divorced Jim Bakker in 1992. The PTL satellite network was acquired by other religious broadcasters.

Significance

The PTL prosecution is the most prominent federal criminal prosecution in the history of American televangelism. It established that the routine accounting and donor-protection standards applicable to other charitable enterprises apply to religious broadcasters and that the First Amendment is not a defence to mail fraud.

Sources

  • United States v. Bakker, 925 F.2d 728 (4th Cir. 1991).
  • Charlotte Observer, investigative series on PTL, 1987 forward. Pulitzer Prize for Public Service, 1988.
  • Charles E. Shepard, Forgiven: The Rise and Fall of Jim Bakker and the PTL Ministry (Atlantic Monthly Press, 1989).
  • Trial record, United States v. Bakker, US District Court for the Western District of North Carolina, 1989.