Former church member Rob McLean believes it is a source of income for its leaders. Photo/RNZ
By Ruth Hill, RNZ’s Nicky Hager
Former members of the Plymouth Brethren Christian Church are calling for it to be stripped of its charitable status, which allows its members to claim millions of dollars in tax breaks every year.
The cult-like secret church, formerly known as Exclusive Brethren, says its members donate money and volunteer their time to ensure their way of life is sustainable and to contribute to society.
However, an RNZ investigation revealed that hundreds of thousands of dollars are sent to Sydney businessman Bruce Hales, also known as Elect Vessel, each year.
“I was given all these envelopes, I did not know what they contained”
It was supposed to be a spiritual pilgrimage.
But as he delivered the bulging envelopes of cash to a North Dakota pig farmer, Rob McLean realized he was part of a more mercenary mission.
Member Exclusive Brethren was part of a delegation sent to the United States in the 1980s to meet this farmer, James Symington, who despite losing his sight and both legs to diabetes, maintained his position as a world leader of the Brothers until his death.
McLean said church elders gave him the envelopes just before he left New Zealand.
“I was given all this money from different parts of New Zealand, there were about 20 of us going, it was like a church group. I was given all these envelopes, I didn’t know what what was in it. They said, ‘You give it to Mr. Symington, it’s our gift from our church’.”
Other former members confirmed how the Brethren were regularly asked to smuggle large sums of money across international borders to avoid customs regulations.
Four decades later, McLean believes the church – now renamed Plymouth Brethren Christian Church – has become even more of a source of income for its leaders.
Ex-members have described how the Assemblies sent cash payments to Hales and his family members, which would amount to hundreds of thousands of dollars a year in New Zealand alone and millions of Brethren around the world.
Fellow ex-member Peter Hart, who was excommunicated two years ago, said Brethren congregations (known as “assemblies”) vary cash payments so they don’t look like salaries and attract not the attention of the tax authorities.
“So we didn’t give every month and we had to give a different amount each time.”
The assemblies also donated thousands of dollars to an offshore fund (controlled by Bruce Hales) called GCF – General Charitable Fund – which was supposed to cover legal costs.
Additionally, the members contributed to Hales’ personal security costs, which were substantial.
“We were told there were threats against his life.
“Each assembly building had [to] have a parking lot with interior access so that he can enter without anyone seeing him, and two exits.”
McLean, who lost his family and business when he was excommunicated, believes the global church operates like a pyramid scheme, with Hales at the top.
“They ask Hales, ‘Do we give you enough, Mr. Hales?’ And he says ‘No, no, I travel a lot, I think you could increase a little’.
“I remember hearing that and it sounded so wrong.”
Those below Hales received graduated amounts based on their proximity to him.
The Plymouth Brethren declined to be interviewed but provided answers to written questions.
A spokesman for the Plymouth Brethren in New Zealand, Doug Watt, noted that it was “common in many churches for small gifts to be given from the church plate to further the work of the ministry. and to support those who provide pastoral care”.
“We are no different. Gifts to our church leaders ensure that pastoral care and associated costs, such as travel, continue because pastoral care plays an important role in our way of life.”
According to former members, people were also required to make large donations as individuals and through their businesses and family trusts to a registered charity called the National Assistance Fund (NAF).
Another former Brethren, whom RNZ agreed not to name, said the NAF was a way to get money, to enable other Brethren organizations to avoid public scrutiny.
“Most charities are created to raise funds and distribute them for charitable purposes,” he explained.
“But the NAF does none of these things. The money is raised by private non-charitable Brethren organizations and spent by private non-charitable Brethren organizations. And the NAF has no control over either another one of those things.”
The charity’s carefully worded mission statement states that it will “source and apply resources for the benefit of people in New Zealand”, without defining “people”.
“There is no all-encompassing phrase like ‘society’ or ‘all persons’ – nothing that a regulator can use to force the PBCC to, for example, open its schools to non-PBCC members.
“The problem is that the givers and the recipients are all in the same little group, all controlled by the same man. Outsiders don’t benefit and can’t benefit.”
It was one of New Zealand’s biggest charities, but if it were to close tomorrow, “hardly anyone outside of the Brethren would notice,” he said.
“Legitimate charity is exempt from tax because it binds society. It cannot fulfill this role when donors and recipients have overlapping interests. Buying Christmas gifts for a homeless shelter is charitable, but buying them for your whānau is not.”
The regulatory regime was ripe to be operated with mere “paper oversight”, he said.
Charities Services chief executive Natasha Weight said “As an independent and self-governing entity, the National Assistance Fund is responsible for determining how it fulfills its charitable purposes and otherwise fulfills its obligations as a charity. registered charity”.
“A review of recent audited financial reports from the National Assistance Fund indicates that it advances educational, religious and general charitable objectives, in addition to poverty relief,” she said.
Over the past decade, the NAF has received between $26 million and $62 million each year in donations, plus millions more through its investments.
In 2019, donations totaled $61,936,429, which would yield tax refunds of approximately $20 million.
So what does the National Assistance Fund actually do?
It’s a bit of a black box, there are no glossy brochures exposing its good works.
Church members are told that most of their money goes to educating their children, through the Brethren’s private school system, OneSchool Global.
In New Zealand, it is a network of 17 campuses with a number of 1536, which received just under 2.5 million dollars (including GST) from the Ministry of Education for the year 2021 .
Some of the activities of the National Assistance Fund are more mysterious.
According to its annual report, the NAF provided a $30 million loan in 2018 to Sovereign Capital Trust.
The trust companies of both organizations share some of the same directors.
Asked about the loan by RNZ, the PBCC said it was an investment, to secure “sustainable funding” for its charity work.
But does this qualify as “charitable”?
In Britain, the Plymouth Brethren had their application for charity status rejected by the Charity Commission in 2012 on the grounds that it did not meet the ‘public good’ requirement of the law.
Professor Peter Lineham, who has written extensively on the Brethren’s story, said it was because in fact they were just spending the money on themselves. The Commission was also concerned about the Brethren’s treatment of former members.
There were good reasons for religious bodies getting some tax exemption “because religion shouldn’t be made more difficult,” he said.
“But in the case of a church that works only for its own members, that’s the interesting riddle of the story – why are they entitled to tax relief?”
It is also a key part of New Zealand Charities Act that a charity must provide benefit to the public, not individuals or groups.
The church was finally granted charity status in Britain in 2014 after promising its actions towards ex-members would be ‘mitigated with compassion’, and launching its first public charity – the rapid relief team, which was quickly deployed to other countries, including New Zealand.
In 2020, the New Zealand Rapid Relief Team received just under $741,000 in donations.
Meanwhile, the National Assistance Fund has secured more than $34.6 million – more than the $28.2 million from the Red Cross.
Church spokesman Doug Watt said the National Relief Fund supports OneSchool Global, the Rapid Relief Team and “other charitable efforts”.
“Over the past year in Aotearoa, PBCC members have dedicated nearly 13,000 hours of their time supporting community causes at nearly 200 events.
The Rapid Relief Team has helped thousands around the world and raised millions from its own community for refugees displaced by war in Ukraine, he said.
There was “nothing unusual” about the use of trusts by PBCC members, he said.
“Many Kiwis use trust structures, especially many New Zealand business owners. There are nearly half a million trusts in New Zealand.”
As a registered charity, NAF “has fulfilled all of its reporting and operating obligations, including to IRD and Charity Services”.
“It is subject to the same rules and requirements as any other charity, and those commitments are taken seriously.”
However, an RNZ source said the Rapid Relief Team was “a minnow” compared to the “millions upon millions of tax-free dollars” the Brotherhood invested in their other charitable trusts, which supported their internal infrastructure.
“The government subsidizes this group up to $20 million a year to pay for their churches, schools, buildings and everything else, and they shouldn’t be. It’s not a public good, it’s is a public injury.”
There was much to admire in the Brethren’s way of life — including their work ethic and strong family values — at least to family members who remained in the church, he said.
“I don’t want to deny these things. But if charity starts at home, it shouldn’t stop there.”