Mega church launches an audit

Prayer Palace also hires PR firm in wake of questions over its spending practices

Toronto Star/March 13, 2007
By Jessica Leeder and Dale Brazao

A Toronto mega church whose spending practices were questioned in a recent Star investigation has hired a public relations firm specializing in "crisis communication" and launched an internal financial probe, a spokesman said yesterday.

The Prayer Palace, which annually takes in about $3 million in cash and other donations, hired an auditor to "show everything is above-board and there is no money being laundered anywhere," said Frank Fernandez, a church member who spoke on behalf of the Prayer Palace during local radio station AM640's morning broadcast.

The church's newly appointed public relations consultant, Strategic Communications Solutions' Peter Turkington, said in a news release the church has hired a "forensic accounting firm to show that the Star's innuendos are entirely incorrect." Turkington later told the Star the audit will be conducted by Toronto accountant Bruce Armstrong, a member of LECG Canada Ltd.

The audit launch comes one week after the Star published a story on the Prayer Palace as part of an ongoing investigation into Canadian charities. With a 3,000-member congregation, the Prayer Palace is one of the largest churches in Canada, but spends only a small fraction of its income on charitable work. Instead, some of the charity's most highly touted programs are paid for by many of the church's working class members, whose lifestyles stand in sharp contrast to those led by church leaders.

Head pastor Paul Melnichuk and his twin sons, junior pastors Tom and Tim Melnichuk, each own multi-million dollar estates north of the city, they share a waterfront vacation villa in Florida and drive luxurious cars, including Porsches, a Lexus, a Mercedes-Benz and BMWs. The pastors have refused repeated requests for comment. Reporters were told that written questions submitted to the pastors via the church regarding their properties and other possessions were "not related to charities."

No further explanation was given.

The Star was unable to access the Prayer Palace's internal documents, so it could not determine if money donated to the church went into the pastors' houses.

Since the article's March 4 publication, reporters involved in the story have been inundated with phone calls from angry Prayer Palace members.

"You have touched God's anointed! Be careful! Be careful that you don't drop dead one of these days," shouted one caller who identified himself as Roger.

Other callers said that to ignore their warnings would be to invite tragedy into reporters' lives, including leprosy and possible physical harm.

One caller issued a death threat; another called a reporter a "Mormon ... a racist."

The Star also received hundreds of calls and emails from readers concerned about the Prayer Palace's finances.

Dozens of callers told the Star they planned to log specific complaints with the Canada Revenue Agency, which regulates charities, in hopes the agency would launch its own probe.

The CRA does not discuss specific charities and would not say whether the Star's articles have prompted an agency review of the Prayer Palace.

The public relations firm hired by Prayer Palace, Strategic Communications Solutions, is based in Oshawa and Oakville. According to its website, the company helps clients respond to crises such as allegations of impropriety. The auditor hired by the church is a member of LECG, a company that provides expert testimony and analysis to clients around the world, according to its website.

The Star's investigation, based on government property and financial documents, interviews with three dozen current and former church members, contractors who worked on church and Melnichuk family building projects, and family associates, also uncovered a deal Melnichuk made with a construction company to pave his own King City driveway instead of paying rental fees it owed the church.

In his radio interview yesterday, Fernandez addressed the driveway deal, saying the pastor "didn't ask for any specific deals. He says somebody went out for him and asked for the driveway to be done," Fernandez said, adding: "There is no hidden agenda here with respect to money."

Last week Marek Tufman, a lawyer for the Prayer Palace, threatened to bring an injunction against the Star unless the newspaper agreed to stop publishing stories regarding the Prayer Palace. The Star responded, saying such agreements run contrary to the paper's policy.

In response, Tufman told Star lawyers: "Your clients have been warned. We trust that they will understand the wisdom of conducting themselves properly."