Robert Schuller's Glass House of God

[Moxley Confidential] Picking through the shards of the bankrupt televangelism empire.

Legendary Garden Grove televangelist Robert H. Schuller once noted, "High achievers spot rich opportunities swiftly." The creator of Crystal Cathedral, a best-selling author and star of Hour of Power broadcasts, Schuller has long served as Exhibit A of that credo. In the 1950s, he saw an opportunity to build a profitable church, grabbed it and—thanks largely to donations from poor and lower-middle-class folks trying to win the blessings of God—created an $89-million religious empire with hints of opulence.

But last October, the reverend's church and TV show filed for federal bankruptcy protection after he spent nearly $50 million more than he had in dozens of bank accounts. Church officials have attempted to blame the crisis on Schuller's unswerving, daily commitment to aiding the poor.

Yet the bankruptcy records shatter Schuller's noble public image. For example, in the months leading up to the Chapter 11 filing, the reverend paid himself, a shell corporation he controls, his wife, his son, his daughters and their husbands and children more than $2 million while simultaneously stiffing 550 creditors, including mom-and-pop businesses. Compare that number with Schuller's charity. For example, during a four-month period when the ministry took in donations totaling more than $14 million, Schuller gave an average of just $22 a day to feed the poor, according to church records.

Thomas Pitilli

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Records also show that the reverend wasn't a cheapskate in one charity case. Indeed, the recipients of his generosity weren't poor at all. They were a wealthy Newport Beach couple, Kenneth and Glenia Reafsnyder. Ken's first wife was a member of Buena Park's Knott family, founders of Knott's Berry Farm. He also palled around with actor John Wayne.

In 1995, Schuller agreed to divert $4,000 a month in church donations to the Reafsnyders for the rest of their lives in exchange for a quarter ownership in the couple's home. Ken has since died, but the deal calls on Crystal Cathedral Ministries to continue to pay Glenia. In 2008, the ministry increased the payments to $4,500 a month while reducing its ownership percentage. This means that the church's current 8.5 percent portion of the house has cost more than $1,250,000—$55,000 more than the value of the entire house.

Speaking of houses, over the years the Schuller family has purchased oceanfront property in Orange County, a Big Bear vacation house, a San Diego County time-share, a Colorado mansion and a Honolulu condo. Just before filing for bankruptcy, Schuller sold a San Juan Capistrano property that had been bequeathed to the church decades ago and pocketed $22.5 million. The reverend's son, Robert Anthony Schuller, has lived in a $2.2-million oceanfront Laguna Beach dream house worthy of an Architectural Digest feature. Fred Southard, a longtime Schuller aide, lives behind palatial, guarded gates in a 13-room, 13,600-square-foot Newport Coast estate that could fetch $3 million on the open market.

I doubt that most Telemundo viewers, plenty of whom have sent portions of their hard-earned livings in response to Schuller's routine Hour of Power pleas for donations, are aware of how their money is spent. Would they be alarmed that, according to the bankruptcy files, Schuller loaded the Crystal Cathedral with sculptures worth at least $2.6 million? That he placed on ministry walls art worth almost $500,000? That the church's electricity bills cost $105,000 each month? That more than $100,000 was spent on the ministry's lobby furniture? That more than $1.6 million was spent on office furniture? That it wasn't uncommon for the church to buy $600 chairs? Or, that the church owned 12 vehicles—including a Cadillac and a Lincoln Town Car—and that it gave Schuller's son a Mercedes-Benz?

An inspection of church financial affairs in the 90 days prior to revealing the bankruptcy is also enlightening. In addition to the previously mentioned salaries he and his family took, Schuller diverted $18,000 to a Scottsdale custom-home builder; $42,000 to his Beijing office; $5,200 for gourmet fruit; $1,039 to an out-of-state relative and $389 for beauty products. He even transferred $14,872 to one of his shell companies.

You might assume that church officials would at least pretend they had nothing to hide. But when Christopher R. Barclay, a federal bankruptcy examiner, arrived at the Crystal Cathedral near the beginning of the year, he discovered that several of Schuller's employees refused to share records or grant interviews. Barclay noted the obstacle in his Jan. 31 status report, which concluded that Schuller had been prone to making "uneconomic arrangements" with church funds. He pointed to unwarranted salaries and perks grabbed by Schuller family members and suspiciously high housing allowances.

Observed a subtle Barclay, "The insider compensation packages by Crystal Cathedral Ministries suggests that [Schuller's] business judgment—historically and more recently—is not beyond reproach."

Yet, it's likely that a rich-beyond-imagination Schuller isn't fretting over his dwindling public persona. He's 84 years old, and has accomplished success seen by few men. He's turned the ministry over to Sheila Schuller Coleman, his eldest daughter. It's up to her to prove the truthfulness in one of his old sayings: "If the ideas are good, cash will somehow flow to where it is needed."

One of her first "good ideas" emerged in March, when she demanded that church leadership, including members of the choir, sign antigay pledges. It was a bizarre move given that no scandal had preceded it. Coleman told an Orange County Register reporter that she merely wanted to "clarify expectations," that under her rule, the Crystal Cathedral would follow the literal meaning of all biblical passages. Churchgoers told the paper her move was unnecessary, heavy-handed and uncharitable.

Of course, if Coleman really wants to make an antigay statement on principle, she could demolish the Crystal Cathedral. Acclaimed architect Philip Johnson designed the world-renowned glass structure for her father in 1977. Johnson, who also designed the Museum of Modern Art in New York City and has since died, was gay.

But even if Coleman never learned her daddy's chief teaching point—be positive and God will reward you—his lawyers didn't miss it. In court filings, they've remained optimistic that, despite a 50-percent drop in church membership to 5,000 attendees, the ministry can eventually pay off all of the debt. To accomplish that feat, however, the Schuller clan is going to have to stir up the congregation and then, despite all the unsettling revelations, ask them to dig deeper into their wallets.

This column appeard in print as "Glass House of God: Picking through the shards of the bankrupt Schuller televangelism empire."

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