Tony Mauro--Legal Times: The Secrets of Jay Sekulow--Bilking Fundies!

[BJW]

The Secrets of Jay Sekulow
Tony Mauro--Legal Times

Full article at:
http://www.law.com/jsp/article.jsp?id=1130499506270

Detailed expose of another hypocritical, greedy "God Warrior" and the interconnections and shady financial self-dealings of the fundie-fascists and the repugs. Well worth clicking the link and reading the entire piece!

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This is the public Jay Sekulow, the man who has become a familiar face on television in recent months and who has been a fixture in Washington legal circles as head of the ACLJ, an organization founded by religious broadcaster Pat Robertson in 1990.

But there is another side to Jay Sekulow, one that, until now, has been obscured from the public. It is the Jay Sekulow who, through the ACLJ and a string of interconnected nonprofit and for-profit entities, has built a financial empire that generates millions of dollars a year and supports a lavish lifestyle -- complete with multiple homes, chauffeur-driven cars, and a private jet that he once used to ferry Supreme Court Justice Antonin Scalia.

That less-known side of Sekulow was revealed in several interviews with former associates of his and in hundreds of pages of court and tax documents reviewed by Legal Times. Critics say Sekulow's lifestyle is at odds with his role as the head of a charitable organization that solicits small donations for legal work in God's name.

For example, in 2001 one of Sekulow's nonprofit organizations paid a total of $2,374,833 to purchase two homes used primarily by Sekulow and his wife. The same nonprofit also subsidized a third home he uses in North Carolina.

At various times in recent years, Sekulow's wife, brother, sister-in-law, and two sons have been on the boards or payrolls of organizations under his control or have received generous payments as contractors. Sekulow's brother Gary is the chief financial officer of both nonprofit organizations that fund his activities, a fact that detractors say diminishes accountability for his spending.

According to documents filed with the Internal Revenue Service, funds from his nonprofits have also been used to lease a private jet from companies under his family's control. And two years ago, Sekulow outsourced his own legal services from the ACLJ, shifting from a position with a publicly disclosed salary to that of a private contractor that requires no public disclosure. He acknowledged to Legal Times that his salary from that arrangement is "above $600,000" a year.

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"Some of us truly believed God told us to serve Jay," says one former employee, who requested anonymity out of fear of reprisal. "But not to help him live like Louis XIV. We are coming forward because we need to believe there is fairness in this world."

Another says: "Jay sends so many discordant signals. He talks about doing God's work for his donors, and then he flies off in his plane to play golf."

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But critics say the extravagant spending burns up money that Sekulow solicits from donors for legal causes. Citing the high cost of litigating Supreme Court cases, Sekulow wrote in a 2003 fund-raising letter, "We are asking God to prompt every member of the ACLJ to get involved personally in this effort." He added later, "Please send a generous gift right away."

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A review of publicly available tax and court documents, as well as interviews with several former employees, paints a stark portrait of Sekulow as a hard-charging man who emerged from bankruptcy and allegations of securities fraud in the late 1980s to build a complex network of personal, business, and nonprofit entities. At times, those financial dealings have alienated employees and been criticized in court.

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At the time of his successful Supreme Court debut, Sekulow was also dealing with a trial of another sort. His private practice, which focused on creating tax shelters and financial deals for the renovation of historic buildings in Atlanta, collapsed when investors sued him for securities violations related to the renovation deals. He and his firm filed for bankruptcy protection in 1987, and more than a dozen creditors filed suit. A later story in the Atlanta Constitution said he left a trail of angry investors and employees. "God brought Jay to his knees then," a former employee told Legal Times.

But Sekulow bounced back up, in part by creating a new nonprofit, Christian Advocates Serving Evangelism, which still exists today and serves as an important conduit for funds that finance Sekulow's activities. "I almost feel like God raised me back from the dead," Sekulow told the Atlanta paper in 1991. "It was a spiritual rebirth."

It was 1990 when Christian broadcaster Pat Robertson decided to create the ACLJ, and it was no accident that its acronym was one letter away from that of the American Civil Liberties Union. "Someone has got to stop the ACLU in court," said Robertson when he launched the organization.

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Sekulow boasts he can reach 940,000 followers by e-mail within three hours, and several times a year he sends out upward of 2 million pieces of regular mail. He also has a weekly television show airing on Christian networks.

Using those same tools, Sekulow is also an accomplished fund-raiser, according to the Form 990 that the ACLJ, like other nonprofits, files annually with the IRS. According to the ACLJ's 2003 return, the most recent available, it received $14.5 million in donations that year.

That isn't the entire story. When donors respond to solicitations and write out checks to the ACLJ, some of the money never makes it into ACLJ coffers but instead winds up with CASE, Sekulow's separate entity. Certain solicitations mention CASE in fine print as an entity "doing business as" the ACLJ. Sekulow confirms that checks resulting from these mailings are routed to CASE.

Internal critics say that the lesser-known CASE is where Sekulow reports most family-related transactions and other financial information that would be unflattering if revealed on the IRS forms filed by the more visible ACLJ.

The amounts involved are substantial. CASE reported receiving nearly $14 million in donations for 2003. Its board of directors has three members: Jay Sekulow; his wife, Pam; and his son Jordan, who sometimes appears on Sekulow's radio show. The ACLJ also has only a three-member board: Pat Robertson, who is unpaid; Jay Sekulow; and Thomas Monaghan, a Kentucky-based lawyer who was paid $224,995 in salary, benefits, and expenses by the ACLJ in 2003.

Sekulow serves as chief counsel for both the ACLJ and CASE. His brother Gary serves as chief financial officer for both organizations. As one former employee puts it: "With Gary there, nobody is looking at what Jay is doing. Nobody." Jay Sekulow notes that his brother is a certified public accountant. Gary was paid $200,000 by CASE and $143,699 by the ACLJ in 2003. Gary Sekulow could not be reached for comment.

Pam Sekulow is not listed on ACLJ tax forms. But CASE reported to the IRS that she was secretary-treasurer of that organization with an annual salary of $180,878. Former employees say that she currently has few operational duties, but Jay Sekulow, speaking for her, says she has significant responsibilities, including event planning.

Sekulow says his son Jordan is paid by his company, Regency Productions, which produces the radio show. His other son, Logan, has a late-night comedy show that airs on Christian television networks and is sponsored by CASE.

And what about Sekulow's own salary? In an interview with Legal Times in June, Sekulow estimated his salary to be $275,000, but that appears to be an incomplete number. In 2002, for example, the ACLJ reported paying him $255,042, and CASE paid him $228,783, for a total of $483,825.

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The bottom line: Sekulow performs legal services as before, but now he is paid as an outside contractor, blurring the exact compensation he personally receives from the groups. One former employee quotes Sekulow as saying, before the law firm was created, "We've got to get the salaries off the 990s." Sekulow denies making that statement.

If the figure for his salary is accurate, Sekulow would be the 13th-highest-paid executive of a charitable organization in the United States -- just below the United Way's CEO, Brian Gallagher -- according to a ranking by the American Institute of Philanthropy, another charity watchdog group.

Hopkins, the nonprofit expert, says this relationship involving CASE, the ACLJ, and Sekulow's law firm could be viewed as an improper "private benefit" even if Sekulow is being paid at a reasonable rate. Under this doctrine, nonprofits are barred from conferring substantial benefits that "serve private interests" on individuals other than those the charitable organization is supposed to serve.

Sekulow, asked about the law firm, says it was not created for deceptive purposes but rather to better protect the attorney-client relationship between lawyers doing work for the ACLJ and CASE and their clients. He also says the law firm has other clients unrelated to the ACLJ or CASE. Roth too says the goal of establishing the firm was to protect client confidentiality. Monaghan could not be reached for comment.

The 2003 filing by CASE reveals several other transactions between the nonprofit and Sekulow family-owned businesses. CASE leased an interest in the plane used by Sekulow from two companies that own the plane. One is a company owned by Kim Sekulow, Gary's wife. The company is not named on the form, but former employees say it is PGMS of Georgia -- a company that also is the agent for syndication of Sekulow's radio show. The other for-profit company that CASE leased the plane from in 2003 is Sekulow's for-profit corporation, Regency Productions.

Sekulow created Regency in 1995 to produce his radio show, and it has become a major source of income for him and his family. The company figured in allegations of fraud made in the course of a bankruptcy proceeding filed in the Western District of Oklahoma last year.

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When the firm declared bankruptcy, it claimed in its filing that Sekulow and other directors had depleted company funds for personal gain. It alleged that while Sekulow was on the board of directors, Amerivision paid more than $5 million to Regency between 1998 and 2000.

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Beyond that, also while Sekulow was on the board, Amerivision gave more than $3 million in charitable contributions to the ACLJ, CASE, and other ACLJ affiliates, according to the lawsuit. In reply, Sekulow acknowledged that Amerivision paid "agent commissions" to Regency and other money to Regency, CASE, and the ACLJ, but denied any wrongdoing.

Sekulow says the charges were never proved, adding that he was vindicated because, in April of this year, bankruptcy Judge Niles Jackson approved a reorganization plan for the company submitted by a group that included Sekulow. The company was renamed Affinity 4 and placed under a new board of directors that includes Sekulow and T.D. Jakes, the popular Dallas minister and best-selling author who has also been a visible supporter of Bush in recent months.

As part of the ACLJ's plan to expand, five years ago, Sekulow decided that the Virginia Beach-based group needed a stronger D.C. presence. In 2001, CASE bought a town house at 201 Maryland Ave. N.E. The purchase price was $5 million.

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Renovations on the Maryland Avenue building were extensive, totaling more than $1 million, according to CASE's 2002 return. One redecorated conference room featured a mural costing $41,000. But the ACLJ wasn't done. That same year it plunked down another $1.5 million to purchase a residence next door to its headquarters, at 119 2nd St. N.E. Sekulow and his family stay in the house when they are in Washington.

The D.C. town house is one of three residences used by Sekulow that were paid for or subsidized by CASE. Another is a home in Virginia Beach that was bought by CASE for $852,937 in 2001. The third home, in North Carolina, is described on CASE's IRS filings as a "retreat property." Sekulow says the houses are not for his family's exclusive use.

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Former employees of Sekulow allege that the multiple homes were just one part of an over-the-top lifestyle. They say it was not unusual for Sekulow to drop $800 for lavish meals at Morton's, a high-end steakhouse, and that Sekulow rented luxury suites at the Willard Inter-Continental Hotel in the days before his Supreme Court arguments. Along with the private jet came chauffeured cars and added security, including bodyguards.

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In the past several years a number of staff members have left the ACLJ and affiliated organizations, believing they had strayed from their mission and that continuing to work with Sekulow would violate their Christian ethics. Some were required to sign agreements that they would never disclose internal matters about the ACLJ.

In 1998, Sekulow's high-flying ways brought him in close contact with Justice Scalia, who was scheduled to give an address at Regent University in Virginia Beach on the occasion of its 20th anniversary.

Sekulow offered Scalia the chance to travel from Washington to the event on a jet then owned by CASE. Was it appropriate to give a free ride to a Supreme Court justice before whom Sekulow and the ACLJ regularly argued? Sekulow says the jet was leased to Regent University, the host of the event, for that trip as well as for other occasions-a fact he says was made clear to Scalia. Sekulow, however, declined to provide a copy of the lease document.

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