Kong Hee says about CHC, Phil Pringle and the C3 Church Movement,
“You can’t talk about City Harvest Church without talking about C3. Or Christian City Church. You know Pastor Phil has been there for me; praying with me; encouraging me; discipling me; telling me how to do the work of the ministry; taught me how to collect an offering; how to give an altar call; how to build a church; build a team. So Pastor Phil, from the depth of my heart, for Sun and myself, we wouldn’t be where we are today without you and Pastor Chris. Let’s give Pastor Phil and Pastor Chris a big clap.” – Kong Hee, Kong Hee, Session 8: (00:24), Presence Conference 2010.
The above quote is something to think about while reading the below article. Before reading this sixth article, make sure you have read his earlier articles:
An Insightful Analysis To The CHC System (Part 1)
An Insightful Analysis To The CHC System (Part 2)
An Insightful Analysis To The CHC System (Part 3)
An Inisghtful Analysis To The CHC System (Part 4)
An Insightful Analysis To The CHC System (Part 5)
Marc Ronez is back! Here is Ronez’s sixth article analysing the CHC situation:
City Harvest Case part 6: The Smog of the Crossover Financing
The revelations about the large sums of money (tens of millions of dollars) used liberally to finance Sun Ho’s failed attempt to breakthrough on the U.S. music scene and about her carefree, luxury lifestyle, have shocked many City Harvest Church members, the christians community at large and even the wider public. Reading through online forums, it is clear that many people felt that the amounts spent were extravagant and questioned what this “U.S. pop star adventure” had really got to do with the Christian evangelisation project it proclaimed to be.
The important questions we should ask and aim to answer here are:
- Who actually paid for the Crossover Project?
- How was the financing practically arranged?
- Why was it done this way?
The financing of the Crossover project is one of the most important issues we have to examine in my series of posts about the CHC case because this is where we can possibly confirm or disprove most clearly the deception and fraudulent intent of the CHC leaders being prosecuted. This issue of financing is at the center of the prosecution case in the ongoing trial as without it, there would be no case to be answered. So let’s now explore the key issues in detail.
1 – WHO paid for the Crossover Project?
From the COC Report, the CAD investigations, the trial proceedings and even by the own admissions of the defendants including Pastor Kong Hee himself, it has been confirmed very CLEARLY that Sun Ho music career and U.S. Crossover had essentially been financed by CHC church funds.
This is now a fact recognised by everybody. However according to the prosecution, this very fact had, for many years, been kept under cover by the CHC leadership and actually the prosecuted CHC leaders are today “in the dock” precisely because they have “deliberately schemed to conceal the movement and use of church funds [for the crossover] from church members”.
Indeed from the facts and testimonies brought to light during the court proceeding and cross examinations, it has been revealed that the general body of the Church members were actually led to believe that Sun Ho’s crossover was NOT financed by the church. As Chew Eng Han (CHC former investment manager) pointed out during his cross-examination of Pastor Kong Hee a few days ago, the Senior Pastor of CHC apparently preferred to keep the Crossover funding “indirect and discreet“. For many years, Pastor Kong Hee never publicly mentioned anything about any kind of Church Financing for Sun Ho’s U.S. Crossover. Quite on the contrary in fact, as with much fanfare, he had claimed in 2005 in front of the church congregation that Sun Ho had been “invited” to the United States by a major music record company who offered her a US 5 million dollar contract. On hearing the news, the church members cheered with the comforting belief that this was miracle from God who was opening doors for Sun Ho and a clear proof that God was supporting her Crossover to the secular music world. Everybody listening also naturally assumed that this contract would finance her salary and the production of her future U.S. singles and albums. Over the years, Pastor Kong Hee repeatedly claimed that his wife was a pop star, that she was very successful in her music career collecting many accolades and awards in the process. He even joked on occasions that she was making a lot more more money than him. He had also stressed that while Sun Ho was “shining for Christ” in the music world, she had officially been released from ministry, and hence her music career was her own business completely independent from the Church. Theofficial story CHC members were fed with was that she had largely financed her music career and U.S. breakthrough attempt with what she was earning from her recording contract and royalties from her previous albums and singles. While in the church, some members knew that the church was providing some form of support to Sun Ho’s crossover and sometimes were even involved in it, very few were really aware of the full extent of this support and most members did not bother to ask any questions for the reasons explained in my previous posts “City Harvest Case Part 2 – If there is a Fraud what would be the Motives?” and “City Harvest Case Part 3 – The Opportunity Makes The Thief“, relating to PRESSURES and OPPORTUNITIES factors in unethical decision-making.
Unfortunately the reality was very different from what was then the “official” CHC storyline. Sun Ho’s business activities were not doing so well, her royalties from previous albums and singles were drying up and in fact, her earlier musical successes had been “grossly exaggerated“ according to Chew Eng Han who pointed out and provided documentary evidences to prove that “all the while Church money was spent to boost Sun Ho’s CD sales and her position on the music charts“, furthermore CHC members were encouraged to buy her albums and even to buy more than one copy, in fact as many copies as possible. They were told by their cell group leaders that they could give the additional CDs to bless their families and friends. It was also revealed during cross-examination of former CHC board member John Lam that CHC had spent about half a million dollars buying at least 32,000 copies of Sun Ho’s unsold CDs supposedly to bless other congregations around Asia with Sun Ho’s music. Did these congregations really asked for her music? Finally the famous US 5 million dollar recording contract offer mentioned above actually never materialised simply because it never existed in the first place except in the fertile imagination of Pastor Kong Hee as explained in my previous post “City Harvest Case part 5: CHC’s Crossover or Sun Ho’s Crossover“. Hence with not enough money of her own to finance her American music adventure, it must have been quite clear from the beginning for the CHC leadership that for Sun Ho’s crossover to materialise, it had to be financed by the church. That meant with the money received from its faithful members.
2 – HOW was the Crossover financing arranged?
From the COC Report, the CAD investigations and the trial proceedings, it has been further revealed that the financing of the Crossover was arranged using a variety of indirect and often rather complicated schemes. I would list the key ones as follows:
1. The Xtron Productions & Firna SGD 24 million Bonds,
2. The SGD 3.6 million Multi-Purpose Account (“MPA”),
3. The CHCKL (CHC Kuala Lumpur) SGD 2.1 million “Love gift”.
Let’s examine now the various financing channels more closely in order to answer the HOW question:
CHANNEL 1: The Xtron Productions & Firna Bonds
Instead of trying to get a strong mandate from Church members in order to be able to invest directly Church funds into the Crossover project, the prosecuted CHC leaders decided that CHC would do it indirectly by investing in Bonds issued by Xtron productions and Firna using the monies from the building fund. Like for any Bond mechanism, an interest and a maturity date for the principal repayment was agreed between the parties involved. Then from 2007 to 2009 S$ 13 million and S$ 11 million (a total of S$ 24 million) were transferred from the church building fund in several tranches as part of the bonds purchase agreement with those 2 companies. But those were not ordinary bonds. The catch was that Xtron had been set up primarily to organise the financing of and manage Sun Ho’s music career. And Firna belongs to Indonesian businessman and long-time CHC member, Wahju Hanafi, who had agreed to support the crossover project. So in order to raise the necessary funds, Xtron and Firna had issued a series of bonds that were then bought by CHC, meaning that effectively Xtron & Firna took loans from CHC. The proceeds of the bonds was then used to finance the various expenses related to the crossover project and Sun Ho’s music actitivities.
The problem is that the COC and prosecution consider that the SGD 24 millions were ILLEGALLY diverted from the church building fund. According to COC and prosecution, the deception comes from the fact that the transactions were presented as regular bond investments and that apart from the persons incriminated, the other board members, the executive members and the ordinary members were not told of the actual purpose of the bonds which was to fund Sun Ho attempt to breakthrough on the U.S. music scene. Furthermore the prosecution and trial proceedings have also highlighted the complete lack of independence of Xtron from CHC and the multiple problematic conflict of interests in the management of Xtron.
The COC and prosecution also claimed that when the external auditor started to raise difficult questions about the above mentioned Xtron & Firna bonds, the prosecuted leaders rushed to arrange another transfer of about SGD 26 million to make it look like the bond had been properly redeemed, hence the so-called “round-tripping”.
The prosecuted CHC leaders and City Harvest Church have disputed the allegations that the church was cheated of any money, claiming that the Board of CHC had the full authority to decide how to best invest the available church funds (including the monies of the building funds) and that all decisions were made following proper procedures further claiming that eventually all the sums invested had been repaid in full to the church with the agreed interest.
So did anything wrong happen? Was it illegal? Well considering that there is a trial going on precisely looking at the legality of those transactions, the judge will obviously have the final say about what is legal and what is not. However based on the information available, I would like to make a few observations:
- Bonds are just financial instruments. They are like any tools. You can put them to a good or a bad use. So we should not blame the tools, it is the users who are responsible. The purpose of a bond is to allow organisations who need funds to be able to borrow them from the organisations who have excess cash and wish to invest that cash to get a return. While usually considered safer than investing in shares because of the fixed interest rate and the commitnent to return the capital in full after a fixed term, bonds are not without risks. There is always the possibility that the company issuing the bond could go bankrupt and hence being unable to repay the principal leaving the investors without recourse “naked in the cold”.
- Firna & Xtron bonds should have been categorised as high risk (i.e. junk) bonds. First as exposed during trial proceedings Firna was having cash flow issues & Xtron seems to have been a financially weak and troubled organisation. Second the proceeds of the bonds were to be used for an extremely high risk project, i.e. launching the career of a modestly successful Asian pop artist in the U.S.
- Furthermore, it was mentioned during the trial proceedings that the “interest rate that Firna was paying to CHC was lower than what the company would have been able to get from banks“. So here we find out that not only CHC was investing in “Junk bonds” but the church did not even get the high interests than usually compensate for the high risk taken. In fact, it appears that CHC was shortchanged with a lower than market interest rate.
- Another “twist” in the CHC case, is that there was a complete confusion of roles between the borrower Xtron and the lender CHC. The trial proceedings and cross-examinations have highlighted the near complete lack of independence of Xtron from CHC: First the directors of Xtron were handpicked by Pastor Tan Ye Peng and Pastor Kong Hee and were insiders and loyal followers of the CHC Senior Pastor. Second Serina Wee, former CHC finance Manager, appears to have had “her hands” in the accounts of all 3 organisations CHC, Firna and Xtron and was reporting directly to Pastor Tan and Pastor Kong Hee. Finally most of, if not all, the important decisions about the Crossover were made directly by Pastor Kong Hee and his wife Sun Ho and were then rubber stamped by CHC and Xtron quite LITERALLY as it has been revealed during cross examination that actual rubber stamps of key signatories were created and used.
- Chew Eng Han, in his role of CHC investment manager, came up with and arranged the bonds scheme as a solution to the desire of Pastor Kong Hee (Senior Pastor of CHC) to keep the funding of the Crossover “indirect and discreet”. Hence the issue was not about raising money for the Crossover, rather it was about transferring it quietly from the building fund. Based on the above mentioned considerations, we can conclude that the way the bonds were arranged constitutes clearly a perveteduse of the bond mechanism.
There are at least 2 other financing channels that while not part of the current prosecution case are worth mentioning as they may also shed some light on the intend of the parties involved.
CHANNEL 2: The Multi-Purpose Account (“MPA”)
The existence of the MPA, a private fund that was set up and was used to pay for Sun Ho and Kong Hee private expenditures between 2006 and 2010, was first exposed to light by the COC report in 2010. More recently under Cross-examination by Chew Eng Han, Pastor Kong Hee was given an opportunity to explain himself about it and he declared: “The MPA was set up by some of Xtron donors in 2006 to support Sun and my livelihood in the mission field because at the end of 2005 both of us went off church payroll.” He also added that ” secondarily it was set up for us to use it for Crossover-related expenses…” Initially 28 couples and a few individuals were approached and enlisted as MPA donors.
First, we may wonder what were really Pastor Kong Hee expenses in the mission field? This a fair question as it has been revealed during the trial proceedings that his business class flight expenses were mostly paid by the church, his luxury hotel accommodation expenses were either paid by CHC or by the church inviting him, his large support staff and equipment were provided by CHC and finally, quite a number of mission trips consisted of lucrative paid preaching engagements in other mega churches. Sun Ho on her side, was paid by Xtron for “her efforts” for the Crossover. So did they really need more money?
Second, according to the COC report, a total of S$3.6 millions were collected through the MPA fund over a three and half years period. This translates to about S$1 million per year to share between Sun Ho and Kong Hee. A more than substantial “compensation” for “going off the church payroll”. The actual use of the funds while supposedly dedicated to the crossover project and other mission trips was in practice completely non-transparent and left to the entire discretion of Pastor Kong Hee and his wife. In essence they did whatever they wanted with the money and did not have to be accountable to anybody.
From testimonies received from various MPA donors, it appears that Pastor Kong Hee did not just wait for donors to give, he proactively approached them to “encourage” them to give more. In his cross examination of Pastor Kong Hee, Chew Eng Han highlighted an incident that in his opinion, demonstrates both Pastor Kong Hee eagerness to collect always more money as well as his willingness to use deceptive meansto do so.
Chew Eng Han mentioned a meeting that was held with the MPA donors in 2010 where Pastor Kong Hee showed them a spreadsheet aimed to demonstrate that the givings received from the donors were not enough to cover his and Sun’s expenses. The spreadsheet showed a deficit of about half a million dollars for 2009. The donors were then given a pledge form and strongly encouraged to give more.
The problem, according to Chew Eng Han, is that the total amount of donations collected of S$512,000 that was mentioned in the spreadsheet for 2009 was minus of royalties and salaries paid to Sun. Hence the true amount collected was in fact S$952,000. Hence CEH claimed that Pastor Kong Hee misled the MPA donors to think that the collections amount was much lower than what it was. This misrepresentation is indeed very troubling and we can speculate that they were possibly 2 reasons to explain it. Pastor Kong Hee may have wanted:
1. to make the MPA donors feel bad about the “low” collection amount and the deficit and compel them to give more
2. to hide the extravagant salary and royalties (S$ 400,000) given to Sun Ho that he was apparently was finding hard to justify
Another issue highlighted in the COC report is the claim that the donors enlisted in the MPA were told that they could “transfer their contributions originally meant for the Church’s building fund to the MPA and hence they ceased or reduced their regular tithes to the church after they contributed funds to the MPA”. This claim was confirmed by direct testimonies of MPA donors. COC report further claims that apart from the small group of donors, the existence of the MPA was concealed to the rest of the Church’s members and great care put in keeping it this way.
This is a highly problematic point here as this would mean that the creation of the MPA directly and negatively impacted the level of contributions of the MPA donors to the tithes and to the building fund. In other words, form a practical perspective, Pastor Kong Hee and Sun Ho did not really go off church payroll as without the MPA, the funds they received would have gone to the church. So in essence, the funds they got from the MPA for their living expenses, i.e. “salaries” were indirectly taken from the church. But this time without in forms of control or scrutiny on the amount and use they could make of it. A much “better deal” for Pastor Kong Hee and Sun Ho. Definitely NOT a good one for the church.
To conclude, while some CHC members and the wider public may be shocked by this MPA account (and the large sums involved), we should stress that from a legal point of view, people can donate their money to whoever they wish to, be the tithes, the building fund or the MPA or anything else and they do not need to publicize what is essentially a private transaction. While the attempt of the CHC leaders to hide the MPA from the rest of the CHC members shows their embarrassment and clearly raise some serious ethical questions. Based on the information currently available, it is hard to find a really solid legal ground for the prosecution to charge the CHC leaders based on the MPA transactions. We need to keep in mind that something unethical may not necessarily be illegal. The MPA donors themselves would have a better case and could try to sue Pastor Kong Hee and Sun Ho if they have given or increase their donations due the misreprsentation of facts mentioned in this section.
Finally CHANNEL 3: The CHCKL ‘Love Gift’ or ‘Transfer’
Another way the CHC leadership used to finance the crossover project was to encourage financial support, i.e. “love gifts” from other churches with whom CHC has established friendly relationships, partnerships and even affiliations. Over the years, many churches have contributed financially to CHC projects including the crossover project. Similarly CHC has contributed financially to many other churches’ important projects such as building funds and so on.
The first issue here is again related to the fact that the use of the funds provided by the “love gifts” has been completely non-transparent and left to the entire discretion of Pastor Kong Hee and Sun Ho. While supposedly dedicated to the crossover project, there was in practice no ways for the donors to check how the money was used and no accountability whatsoever.
The second issue is that while these “give and receive” contributions between churches are a natural part of relationship and partnership building efforts, there is always a risk of abuse when they become formalised, transactional and conditional, i.e. “I give you this ONLY if you give me that..”
According to the COC report, some of the prosecuted CHC leaders have crossed the red line when between December 2007 and May 2010, some S$2.1 millions from CHC were channeled to the U.S. crossover project via an affiliated church in Malaysia (City Harvest Church Kuala Lumpur, CHCKL). In the CHC accounts, the funds transferred are recorded as a donation to the building fund of CHCKL. However the COC report claims that the same funds were actually then transmitted by CHCKL to support the Crossover Project in the United States under the guise of a love gift. The COC investigations apparently revealed that clear instructions were given via email by some of the accused CHC Leaders in Singapore to CHCKL to transfer the so-called “donations” to the Crossover in the U.S. disguised as “love gifts” and hence exposing the true purpose of the original “donations”.
If there is clear written evidences that support the claims of the COC report, this would be a very serious accusation as it would give another clear evidence of deception and wrongdoing from the persons involved in the transactions. But without such evidences, it would difficult to prove anything as these reciprocal “give and take” transactions are actually quite common place between. While we may speculate about the intentions of the parties involved when we can observe those “give and take transactions”, it is hard to prove the fraudulent intent without clear and documented instructions that reveal that actual intent.
3 – WHY was the Crossover Financing arranged in the indirect, complicated and non-transparentmanner described in the previous section?
It is worth to note that the key issue under scrutiny at the CHC trial, i.e. the financing of the Crossover, has been carefully eluded by CHC leaders in their public statements. The fact that investigations and then the court case were underway has repeatedly been used as an excuse to diffuse requests for more information and more disclosure on the Crossover financing. When the public and church members asked questions about the financing, the standard CHC leadership’s response has been to say, “Please understand that we cannot disclose more about issues that are under scrutiny in this trial. Do not make pre-judgment. Let our case be heard in court at the right place and time.“
So well now finally, it is the time and actually the last opportunity for Pastor Kong Hee and the other prosecuted CHC leaders to tell their version of the truth before court judgment is passed and I would like to ask them a few simple questions:
- Why use various and often complicated schemes to arrange the financing for the Crossover project?
– Why not do it directly and transparently?
– Why keep church members in the dark and even misleading them for many years about the financing of the Crossover project?
As already mentioned, Pastor Kong Hee admitted during cross examination that he preferred to keep the funding “indirect and discreet” despite Chew Eng Han’s and fellow CHC board member John Lam’s suggestion for a direct and open funding for the crossover project.
When asked during cross examination what were the reasons behind his resistance to open and direct funding of the Crossover project and his preference for indirect and discreet financing arrangements, Pastor Kong Hee, provided over time essentially 3 lines of reasoning to justify his choices:
Objective 1: Protect the church financial position
As technically the church did not directly finance Sun Ho’s Crossover, as the funds were invested into Corporate Bonds that were supposed to be repaid in full at a certain date with interest. Hence they can claim that no actual money was spent on the Crossover project from the Church, that there was only profits to be earned from the interests received. The Board could rationalize that they were prudent with this approach avoiding the Church to be exposed to the possible losses resulting from Sun Ho’s albums failure to generate sales. In such a case, the losses would have to be covered by Xtron and Firna.
Critical view: The problem is that protection can be an illusion if the risk of borrowers going bankrupt is high and hence are unable to repay the principal, the church would loose all the money invested. On the other hand, despite taking most of the financial risks, with a bond mechanism, CHC would only have received the unrest income and would not have benefited from the upside in case Sun Ho’s album had been successful. In other words, profits were to be privatised for Sun Ho’s benefits, while losses would have ultimately to be covered by the church and its members.
Objective 2: Protect the Crossover Project
Pastor Kong Hee said he felt the Crossover project would fail if Sun Ho was seen as being openly backed by a church. He was concerned that she could be categorised as a Gospel Singer or that exposing too openly her christian evangelization agenda would generate tremendous opposition in the non-christian world. Particularly in countries like China, a Christian label would have been a non-starter. And even in the U.S., there are quite a lot of negative views about religions. Hence Sun Ho had to go “undercover” and while she was indirectly financed by the church, she had to keep quiet about it. She was supposed to be a secular singer, singing secular songs, on secular labels. Furthermore people could have the “misconception” that “Sun’s popularity was not real”, and that the “church was using its funds to promote one of its members’ career”, he said.
Critical view: The issue was not about pasting a Christian label on Sun Ho’s forehead , advertising on it. But ensure a proper and strong mandate from the people who provided the financing, at the very least, theentire board and the Executive member should have been approached to approve the financing of the project and the ordinary members should have been informed.
Objective 3: Protect the church members’ peace of mind
The Roland Poon affair in 2003 with the allegations that CHC was using its funds to promote the senior pastor’s wife music career subjected the church to massive amount of criticisms and attacks from the media and the general public. While Roland Poon retracted his accusations and apologised, the whole event created a lot of disstressing turmoils and confusions in the church. As Pastor Kong Hee shared in court, “the reality of life is such that you cannot manage and control what’s happening in the public domain. So it was more a wake-up call for us, that we’ve got to be very careful what we share.” Pastor Kong Hee felt it was important to protect church members from such negative environment in the future. Hence moving forward, the board members decided that the church should not directly financially support the Crossover project and should be more careful about what information can be shared publicly with the church members about the crossover project. Therefore revealing publicly that Sun Ho’s crossover would now be funded indirectly after having just made representations that “no church funds had been used to support Sun Ho’s career” would invite another round of unwanted scrutiny and negative reactions.
Critical view: This line of reasoning is hard to understand as precisely after the Roland Poon affair, CHC should have wanted to build and get a very strong mandate from its members for the Crossover project. And if they could not get the mandate they should not have done it. It is very demeaning Pastor Kong Hee to assume that the church members are so weak that they will break and run away under the weight of external criticisms aboutCHC leadership’s actions if those criticisms are not justified. And it is wrong to deceive church members about the actual use of the money the Church has received from them for a specific purpose i.e. acquiring a new church building. There is not peace of mind in deception.
An Hidden Agenda?
As a risk management and governance practitioner, I have investigated a wide range of fraud cases over the years, and based on my experience, when I observe the diversity and complexity of some of the schemes used to finance the Crossover project, this is a “Red flag” and a source of concern for me. Let me explain why in simple terms. When you need or want to finance something and you have the choice between 2 approaches to do it:
1. a more simple and transparent financing solution such as openly and directly raising or at least allocating funds for the crossover project with all the relevant stakeholder’s kept in the loop and,
2. a complicated and indirect way such as investing in multiple bonds with specially created and controlled or friendly partners’ companies, creating special private accounts to receive funds from various parties , and so on while excluding many important stakeholders from the loop.
And you choose the complicated and indirect way, it usually means that you have an hidden agenda. There is something you want to be able to do away from prying eyes. This is what appear to have happened in the CHC case, as what the CHC leaders have done is to practically create an organisational BLACK BOX. As the name indicate, the purpose of a “black box” is to prevent any form of unwanted scrutiny by allowing the people inside it to conceal their activities from external parties. The practical key objectives are to ensure:
1. Lack of Control: Prevent important stakeholders from being able to CONTROL what is happening in the black box as formal decisions authority has been delegated to the people in charge of the black box.
2. Lack of Transparency: Prevent important stakeholders from being able to KNOW what is happening inside the black box as information is intentionally not shared or misleading, or the situation is too complicated to have the full picture of what is going on. For example, Sun Ho apparently received large amounts of money for her living expenses from at least three different sources: Xtron, the MPA and the CHCKL gift. People aware of one source may not have been kept in the loop about the other sources.
Within the black box, Pastor Kong Hee, Sun Ho and other CHC leaders could use the money received at their entire discretion with little control and no accountability to anyone. The danger is that without scrutiny and accountability, the people inside the black box will be tempted to take advantage of the situation for their own benefits as I will explain in the next section.
Using CHC to create a Private Cash Distributor
The COC report, the CAD investigations, the court proceedings and in particular the cross examinations have shed some very unsavory light on a range of practices and a system that we could characterise as a form of “Cash Distributor system”for the benefits of a few private parties. I will illustrate it focussing on the case of Pastor Kong Hee because while many others were involved, he is the leader of the Church and hence holds ultimate responsibility for the system that was put in place.
When Pastor Kong Hee decided to go off Church payroll in 2005, declaring that he would by faith rely on his private business activities which included royalties from his book writing, CDs, revenues from his retailing business and so on, church members applauded with respectful deference as they interpreted his decision of working for the body of Christ without salary as an act self-sacrifice, a selfless commitment to God’s kingdom. In fact, many members were worried for him and wondering how he was going to be able to pay for his living expenses. They should not have worried at all… As the COC report, CAD investigations and the trial proceedings have exposed a web of practices that Pastor Kong Hee engaged into that more than compensated for his “loss” of a fixed salary and shed a very different light on what may have been his true motivations for going off the church payroll. While Pastor Kong Hee was not anymore drawing a salary from the church, he was in total control both spiritual and managerial of the church he had founded. He was to use this situation to his advantage and with a little bit of creativity, vast amount of money was soon going to start to flow to him from multiple directions. Let me just describe some of the schemes that have been exposed during by the COC reports and during the trial proceedings:
1 – You need to sell more books, CDs, DVDs?
First get your church to buy your books, CDs, DVDs and so on to distribute them as teaching materials for your members and to bless other churches. Second, strongly encourage your church members to buy your books, CDs, DVDs and so on for their own edification. Make sure you get hefty royalties above market rate through the use of controlled distribution channels such as the Church affiliated bookstore (Example: Pastors Kong Hee and Tan Ye Peng Literature at Attributes & then Ink Room)
2 – You need money for your living expenses?
Encourage and collect “Love gifts” from some of your faithful members who would feel honored to support the honorary pastor or any other pastors in the church. Focus on the richest and most loyal members. (example: the MPA account)
3 – You have a personal self-serving dream?
Package your personal self-centered dream as a people focused evangelisation project and get the financial support from your own church and from other friendly churches from around the world (example: The Crossover project). Make sure you share some of the benefits with your supporters, so that you can ensure their long-term loyalty. Also help your partners’ churches too with your church’s money for their own projects as reciprocity is key to long-term success.
4- You want more money for whatever reasons such as buying luxury condos?
Develop trusted relationships with other mega churches leaders and arrange reciprocal invitations that involve highly compensated (Love gifts again) speaking and preaching gigs (example: some of Kong Hee’s and other top church Leaders’ speaking and preaching engagements around the world)
5 – You want to be a guaranteed successful Entrepreneur?
Start a a private commercial company in an area of interest for your church. You can try many different activities: start a book store, a coffee place, a production company, a design company, a catering company, a cleaning company, an event management company, an investment company, an accounting company and so on so that you can multiply to potential sources of income. You do not need to worry about any competition as you will become a privileged service provider for your growing and very rich church despite charging sometimes higher than market fees. Then make sure you give some of these companies to your supporters so that you can ensure their long-term loyalty (example: Attributes, Advante, AMAC and so on).
6- You want to save cost in your private business?
When you start your private commercial company or business, give it a Christian Twist so that you make into a church ministry work and minimise your running cost by using church staff and church members volunteers at minimal or even no cost to operate your own private business (for example Pastor Kong Hee’s speaking gigs around Asia, Attributes, Xtron and Skin Couture shops and so on).
The above list shows that the problematic practices in CHC go way beyond isolated incidents and are in fact part of an institutionalised system to turn CHC into a cash distributor for the private benefit of the few parties who controlled the system. To conclude, through this series on the CHC case, I have highlighted first in my post “City Harvest Case Part 2 – If there is a Fraud what would be the Motives?” the personal factors, that could have “motivated” the prosecuted leaders to engage into committing the unethical or even fraudulent acts they are accused of. Then in my post “City Harvest Case Part 3 – The Opportunity Makes The Thief“, the spotlight was put on how through carefully oriented teaching, one-way communication, selective information disclosure, strong peer pressures and church leaders’ close supervision of church cell groups, Pastor Kong Hee and other CHC leaders worked hard and effectively to create a culture of OBEDIENCE and CONFORMITY in City Harvest church. This coupled with intently weakly designed corporate governance rules and a poor oversight control structure, led CHC to become an environment very VULNERABLE and in fact FAVOURABLE for possible unethical or even fraudulent activities by providing multiple OPPORTUNITIES to “break the rules” and the ability to CONCEAL their activities. In this post, we have demonstrated that the prosecuted CHC leaders have taken advantage of the opportunities created by the CHC system for their own self-interested benefits.
In my Last post “City Harvest Case part 7: The Fruits of the Crossover Tree“, I will conclude the series by examining the impact of the Crossover project on the Church, its members, the Christian community and the wider public to find out whether the Crossover project yielded positive results that might have made it worth it in the end. And we will critically analyse whether “the end justify the means” or not. So keep on the look out for my final post on the CHC case.
Source: Marc Ronez, City Harvest Case part 6: The Smog of the Crossover Financing, The Risk Management Paradox, , 25/08/2014. (Accessed 28/08/2014.)