Watchdog group files complaint against Minnesota church

Associated Press/February 8, 2007

Washington -- A watchdog group filed an IRS complaint Thursday against the Living Word Christian Center, claiming the Brooklyn Park church engaged in illegal financial transactions with its pastor and founder, Mac Hammond.

The watchdog group, Citizens for Responsibility and Ethics in Washington, said that the church gave Hammond favorable deals that allowed him to purchase a plane, partially on credit, and lease it back. According to the complaint, the church paid Hammond twice the amount per month to rent the plane that Hammond paid the church to buy it.

That leaseback deal may have violated federal tax law rules that ban "insiders" from getting favorable financial deals from a 501(c)(3) organization, the complaint says, adding that Hammond and his wife are listed as two of the church's seven board members.

The complaint also says that the church made eight loans totaling $1.9 million to Hammond at favorable rates and terms. Two of the loans were related to the plane and one was for Hammond to buy a private house in Florida, the complaint says.

The church released a statement saying all its contracts and financial transactions are reviewed by its law firm and audited by its accounting firm, and that the church makes every effort to comply with tax laws.

"Living Word and those outside professionals involved in the conduct of our financial affairs remain confident any fair review of our dealings will reveal the validity of our effort to consistently be an accountable and honest ministry before God, our congregation and our community," said the Rev. Marc Redman, associate pastor.

This is the second IRS complaint that Citizens for Responsibility and Ethics has filed against the church. In October, the group filed a complaint claiming that Hammond had violated the church's tax-exempt status by declaring at a church event that he would vote for GOP congressional candidate Michele Bachmann. Bachmann went on to win a seat in Congress.