Is it church or family business?

Church dropped status as nonprofit, but it pays no taxes on part of property

The Joplin Globe/January 2001
By Mac McCoy

Schell City, Mo. -- The Church of Israel owns nearly 1,400 acres in northeastern Vernon County, and most of it passed through the hands of patriarch Dan Gayman or his immediate family before becoming church property.

Although sale prices aren't listed on the deeds recorded at the Vernon County Courthouse in Nevada, the transactions reveal the intimate relationship between the church and the Gaymans. The Church of Israel, critics charge, is little more than a family business.

And while the church pays taxes on most of its property, it pays nothing on a $100,000 parsonage built in 1995 or the 20-acre complex that contains the church offices, dormitories, and the church annex and video production studio - despite dropping its nonprofit status nearly 20 years ago.

"The question is one of accountability," said Jerry Gentry, a Texas businessman who once was the church's leading patron, and now has become its most vocal opponent. Gentry contributed more than $600,000 to the church over the past decade, but he says his relationship with the church soured because of the cavalier way in which Gayman ran the church.

Gayman denies any impropriety. "I'm an evangelist and have always traveled by faith," he said. "Insofar as any salary, I have none, and I live totally by faith donations. And the Gayman family has never made a dime of profit from the Church of Israel."

Most of the land passed through the family before being acquired by the church, Gayman said, because many landowners wouldn't sell directly to the church because of its racist reputation.

The Gayman family members merely acted as agents, he said, and the money came from third parties who had pledged the funds for land acquisitions. Gayman refused, however, to reveal sale prices or contracts for any of the land in question.

At a secret meeting last November, according to Gentry, church documents relating to land purchases and other matters were destroyed in a "burn barrel." The documents were surrendered by a departing minister, Gentry said, after Gayman handed over $20,000 in cash and the deed to one of the church parsonages in exchange for mutual silence.

The 1,400 acres are needed for a homestead program to attract young, white families to the rural church, Gayman said. According to the financial advice Gayman offers on the Church of Israel's Web site, Israelites (descendants of white northern Europeans) should sell all urban property and reinvest in rural areas; convert all bank deposits into "tangible" wealth such as farmland, tools or precious metals; establish a business that provides expendable goods such as food, clothing, or shelter; and learn to live debt-free.

Gayman said he "suspected" about 10 families are already on church land through the program.

Definition of 'church' vague

The Church of Israel isn't the biggest private landholder in Vernon County - a handful of farms top 4,000 acres - but it's easily the most controversial.

Dogged by decades of associations with violent right-wing factions, the church in recent years has attempted to drop below media radar by toning down its separatist rhetoric and denying connections to the Christian Identity movement. But despite such denials, the church remains among the oldest and largest of the Identity institutions in America.

Established in 1941 as a self-reliant and exclusively white religious community, the invitation-only church is consistently cited by watch groups as one of the most racist in America. Since 1976, it has been ruled by Dan Gayman, who deposed his brother Duane for control of a majority of the congregation.

Previously known as the Church of Christ at Halley's Bluff and then the Church of Our Christian Heritage, the church was dissolved as a Missouri not-for-profit corporation in 1982 and reformed under its present name as an independent "free association religious body."

Although Dan Gayman denies being a part of the unregistered-church movement, Gentry says the Church of Israel has a vital interest.

As with other anti-government facets of the Identity subculture, such as the resistance to Social Security numbers and civil marriage licenses, the unregistered-church movement holds that by registering as not-for-profit, churches effectively are "owned" by the state and federal governments. The movement has resulted in the recent standoff between the Indianapolis Baptist Temple and the IRS over back taxes.

Because the Church of Israel is no longer a nonprofit organization, it is not required to file public annual reports, and any dealings it has with the IRS in connection with income taxes are confidential.

Church property used for worship is exempt from taxes in Missouri, but the state leaves the determination of what constitutes a "church" to the county assessor, according to the State Tax Commission.

"The burden is on the taxpayer to prove the (church) exemption," said Lori Maddox, the commission's assistant counsel. But, she said, the only requirements are that the property is used exclusively for valid religious worship (as evidenced by a belief in a "supreme being") and that the church can demonstrate that no profit is made.

Federal or state nonprofit status is not required, Maddox said, and services do not have to be open to the public. Although the state can deny charitable exemptions based on racial discrimination, there is no such penalty for churches that discriminate.

Holdings and taxes

Vernon County Assessor Cherie Koshko said the 20-acre church complex (also called the compound by some) and one of the two parsonages were considered tax-exempt, as allowed by state law. But, Koshko said, she was unaware the church had neither state or federal nonprofit status, which often supports exemption requests.

The church pays $4,444 annually on the taxed portion of the 1,397 acres it owns, which includes mostly agricultural and residential properties. The total market value of the taxed properties ranges from $540,000 to about $1.2 million, depending on estimates.

The tax amount from the Vernon County assessor's office is based on an assessed valuation of $107,860, which represents 12 percent to 19 percent of the appraised market value, depending on classification. Using that formula, the market value of the taxed property held by the Church of Israel is roughly between $540,000 and $860,000, or about $386 to $615 an acre.

But, the average selling price for land and buildings in Vernon County is $883 an acre, according to the latest figures from the Missouri Department of Agriculture. Using that estimate, the church's holdings could be worth twice as much, or about $1.2 million, on the open market. Much of the land in northeastern Vernon County is isolated and subject to flooding, however, which tends to reduce market value; its actual worth may be lower than the countywide average.

In addition to the office complex and parsonage, the church pays no property taxes on six vehicles, including a pair of Lincoln passenger cars and a Ford pickup truck.

While Gayman was attempting to illustrate his austere lifestyle by describing how he used an aging church van for transportation, he was reminded of the 1989 and 1993 Lincolns the church owns.

"Yes, we can use them as well," he agreed, but said both are older cars with high mileage and that they are for the use of the church's other pastors as well.

Koshko, a native of Schell City, said she would have to investigate state guidelines to determine whether the Church of Israel's tax-exempt status should be changed or modified. Currently, she said, churches are not required to file any forms or other documentation with her office in support of their exempt status.

"I just took over the duties of assessor in August," she said, "and I have not researched in depth about churches and religious organizations."

In addition to the Church of Israel, six other ministries associated with the Gayman family are listed on deeds recorded at the Vernon County Courthouse. None of these associated churches is currently nonprofit.

They include the "Church of Jesus Christ at Whispering Oaks," which was incorporated by Dan Gayman and his immediate family as a Missouri nonprofit organization in 1976. Its authority to do business was forfeited by the secretary of state's office in 1992 for failing to file annual reports. The church is still in existence, however, and owns 123 acres adjoining the church colony, although the church's original bylaws provide for only officers, and no members.

Another entity, the "Anglican Orthodox Christian Communion Church," owns property and gives a Church of Israel address on deeds, but lists no officers.

Some of the property transactions appear unusual for a church. In 1989, for example, the church assumed a $35,000 loan with the Bank of Harwood on property owned by Dale and Lena Gayman, a brother and sister-in-law of Dan Gayman's. Eight years later, the church bought the building the defunct rural bank owned in Harwood, near Schell City, from the Tri-County State Bank of El Dorado Springs. The sale price for the bank was listed at $10.

Dan Gayman said the bank building was donated to the church by the Tri-County State Bank because it was such an important landmark to the residents of Harwood, a community of a few dozen families a few miles south of the church colony. The building is used for storage, he said.

Thomas H. Kifer, president of Tri-County State Bank, said he wasn't with the bank at the time, but he confirmed the 1997 donation.

"In an effort to support the community of Harwood, the decision was made to find a recipient that would receive and use the building," Kifer said. "The Church of Israel responded."

Also, Gayman said, the $35,000 loan was assumed from his brother Dale because the family that originally pledged to buy the property for the church had suffered a misfortune that did not allow it to fulfill its pledge. Dale Gayman, he said, was simply acting as an agent for the church, and although borrowing money is against church tenets, an exception was made.

Falling out

Gentry, who openly believes blacks and Asians are "primate species" created before Adam, says he was drawn to the Church of Israel after reading Gayman's treatise on Genesis 3:15, and he attended church at Schell City after the church adopted Saturday services in 1987. Gayman is considered a leader in the Christian Identity movement, which holds that Anglo-Saxons, and not modern Jews, are the true chosen people of the Bible. But Gentry broke with Gayman in November by taking the opposing side in a church split.

The 57-year-old millionaire championed a departing minister, Scott Stinson, who thought the church was keeping too low of a public profile. Gentry negotiated a severance package for Stinson that included a $20,000 cash payment from a church safe and the deed to a $100,000 parsonage.

The documents, which Stinson had taken as "insurance," were burned after the severance package was executed, Gentry said.

Later, the church board of trustees reneged on the deal, claiming that Gayman did not have the authority to negotiate the package without the approval of the full board. While the board sent letters demanding the return of the cash and the deed, Gentry, the church Web master, began posting confidential church documents on the Internet.

Complaints about Gayman's administration have persisted within the church for years, Gentry says, and he cites a letter written by church member Mike Corlett to Gayman in 1996:

"The church is represented as one of unity, loving concern for each other in Christ, and total dedication to the advancement of the Kingdom of God. In actual fact, the local church is divided between the 'Gayman clan' and its interests and desires, and the 'outsiders.'" The church appears to be a private resource operated by the Gayman family, and the balance of the congregation is expected to either support that effort or stand by quietly and not interfere."

The Kingdom of God, Corlett said, was secondary to the financial support and continued security of the Gayman family. Although there was much good in the sermons that Dan Gayman delivered, Corlett charged, Gayman himself had turned a blind eye to his own conduct and that of those close to him.

"It is simply understood that the family, and its inner circle of friends, directs the course of the church, decides what and who receive the money, and what uses are made of the facilities; in fact, every facet of the church's life and growth," Corlett wrote.

Corlett, who suffered from diabetes, died last year.

Tim Gayman, the 36-year-old estranged son of Dan Gayman, says his father is motivated by greed and power. The Church of Israel, he says, is a cult-like organization that practices spiritual abuse which destroys most families it comes into contact with.

"The 'playing church' and pretending to be great Christians has gone on for far too long," Tim Gayman and his wife, Sarah, said in a recent letter to Gentry. "It's our hope and prayer that God will supernaturally break the cycle of lies and deceit before more families and marriages are destroyed by him." The 'Gayman Family, Inc.' is all Dan is concerned about. Continuing to amass a fortune and maintain control of his assets, including the Church of Israel and the people who worship and tithe there, are his main goals in life."