A local television news crew has interviewed Sheri Klouda for a segment that aired on tonight’s 10:00 evening news.

I was called for comment, but my travel schedule precluded a video-recorded interview. Dr. Eugene Merrill, a long-time member of FBC Dallas and emeritus professor at Dallas Theological Seminary had some interesting things to say.

To view the segment and read the story, click here

Yesterday’s post raised the following issue of Paige Patterson’s integrity and accountability:

If it is improper for Sheri Klouda to teach pastors at Southwestern’s School of Theology because she does not meet the New Testament’s enumerated qualifications to serve as a pastor, i.e. she is not a man, then is it proper for Paige Patterson to attempt to hire men who are similarly disqualified for failing to meet other New Testament criteria for pastoral leaders?

I ask this question not as hypothetical, but in order to examine a real case involving a real dilemma that arose at Southwestern Baptist Theological Seminary in 2004, the same year Sheri Klouda was informed she was disqualified to teach in the theology school.

A series of questionable accounting practices and failed ministry ventures caused the lay leadership of First Baptist Church in Euless, TX, to launch an audit of the expense accounts of the pastor and former SBC Executive Commitee Chairman, the Rev. Claude Thomas. By July 1, 2004, the budget of FBC Euless had experienced a $700,000.00 shortfall, causing the church to begin a dangerous downward spiral of deficit spending.

The lay leadership team, comprised of past and present deacon chairmen, finance chairmen, and other prominent laymen, retained an indepedent firm to conduct a targeted audit of certain key areas of the pastoral expense accounts. Specifically, the auditors were charged with the responsibility to examine the following ministry expenses:

1. The credit card statements of the pastor, administrator, and other key staff to determine whether church-issued credit cards were being used exclusively for church-related expenses.
2. The proper authorization of housing allowances and the lawful reporting of executive staff salaries.
3. The existence and amounts of unsecured cash loans made by First Baptist Church of Euless to the Senior Pastor, other ministers, and/or members of the executive staff.
4. The history, structure, and functions of Life Points, the television and radio ministry of Claude Thomas, to determine if the non-profit corporation was solvent.
5. Any and all transactions between First Baptist Euless and Life Points.
6. The total expense and accounting of the Senior Pastor’s 10th anniversary trip to Europe, which was paid by FBCE.
7. The payments and benefits provided by FBCE and/or Life Points to all persons between the years 2002-2004.

During the course of the audit, the lay leadership team discovered the following:

• The Senior Pastor (Thomas) and the minister of administration had together charged over five hundred thousand dollars ($500,000.00) onto church credit cards, including more than one hundred thousand dollars ($100,000.00) in personal expenses and first-class airfare.
• The church was paying the entire balances of the pastor’s credit card(s), though no evidence was available that any serious reimbursement had been made by the pastor for personal expenses, which included but were not limited to purchases at Neiman Marcus and Northeast Mall.
• The pastor was not reporting his expenses on church authorized documents.
• The pastor had received up to fifteen thousand dollars ($15,000.00) in referral fees by the building contractor (who happened to be a relative of the pastor) responsible for construction of the church sanctuary. These referral fees appeared to be, and were, in fact interpreted as “kick-backs” derived from a violation of the church competitive bids policy. It appeared that the pastor hand-picked and awarded a multi-million dollar building contract to his close relative, who in turn gave the pastor “referral fees,” or kick-backs.
• The pastor either authorized or allowed “Excess Benefit Transactions” for both himself and the minister of administration, using church funds to cover tremendous personal luxury expenses beyond the approved and regulated expense accounts in the pastor’s budget.
• The pastor misappropriated over one million dollars ($1,000,000.00) in designated contributions to cover the expenses related to his radio and television ministry, Life Points, Inc., which was twice recommended for dissolution by outside auditors. The pastor made no credible effort to secure 501(c)3 tax-exempt status for Life Points, Inc., thus compromising the good-faith charitable deductions of donors. Evidence suggested that the pastor deceived both church leaders and donors about the solvency of Life Points, Inc.
• The pastor overspent his 10th anniversary budget of twenty five thousand dollars ($25,000.00), pushing the total spent in a 30 day period to over sixty thousand dollars ($60,000.00). In an effort to conceal the real and unauthorized expenditures, the overages were “coded” in the church financial report as “nursery,” “leadership development,” and other inappropriate line-items.
• None of the pastor’s anniversary expenses were reported on his W-2, nor was he issued 1099s by the church administrator, which is a clear violation of IRS guidelines.
• Under the leadership of Claude Thomas, nepotism became the defining feature of church employment and business contracts. Among the many concerns regarding the pastor’s nepotism were the extension of full-salary and benefits to two of his own sons, one of whom did not even reside in the United States. Other violations include over fifty thousand dollars ($50,000.00) being awarded to family members of executive staff for consulting and interior decorating.
• The pastor used the facilities, staff and technology of FBCE to produce, sell and distribute his sermon recordings and published works without any arrangement concerning intellectual properties. The pastor, then, benefited financially from non-church related business ventures while using the church resources to enable, fund and support his failed enterprises.
• Church records reflect that the pastor’s church-issued credit card was used for inappropriate and unlawful charges, including but not limited to luxury restaurants and theatre tickets that were charged to social security expenses, thus constituting potential tax fraud.

At the end of the audit, the lay leadership team received and signed a seven-page executive summary, a twenty page audit letter, and hundreds of pages of evidence from church records. Before this information was released to church members, I was given a copy of the audit by a Southwestern trustee.

Copies of the audit, the executive summary, and the letters and agreements between the lay leadership team and Claude Thomas can be found here. The attachment labeled “Schedule K,” that accounts for Thomas’ $61,000.00 European spending spree can be found here.

The registered articles of incorporation for LifePoints, Inc., can be found here. Readers should be alerted to the fact that one of the founding directors of LifePoints, Inc., was Mr. Don O’Neal, who currently serves as a trustee at Southwestern Seminary and whose signature is affixed to the lay leadership audit report.

By the time the audit was finalized, Claude Thomas had retained the help of his lawyer, Thomas Brandon, to fight the move to terminate his employment at First Baptist Church. Brandon was also listed as the legal incorporator for LifePoints, Inc., according to the articles of incorporation. Brandon’s letter to Thomas advising him how to fight the audit can be found here.

When the handwriting started to appear on the wall, Thomas contacted his predecessor at FBC Euless, Jimmy Draper, who is reported to have advised him to resign. With few options before him and needing a safe fall for an easy exit, Thomas went to Paige Patterson for help. Patterson was apprised of the details of the audit, and determined to make room for Claude Thomas on the faculty at Southwestern Seminary over the protest of the seminary’s Vice President of Institutional Development and FBCE Sunday School teacher, Dr. Jack Terry, and at least one former seminary trustee who drove to Fort Worth and demanded a meeting with Patterson to warn him of the fallout if he persisted in hiring Claude Thomas.

Stubborn as ever, Paige Patterson refused the counsel of his vice president, his chief advocates on the board of trustees, and faculty members who had voiced their objections. He called a faculty meeting, announced his intention to hire Thomas to provide him with a place to rehabilitate his ministry, and issued a press release that Thomas would join Southwestern’s faculty to teach preachers. Thomas would simultaneously fill the role of “special assistant to the president,” leaving all Southern Baptists wondering how, exactly, Claude Thomas would assist Paige Patterson?

Because when it comes to the extravagant spending of institutional resources and feathering his own nest, Patterson needs little assistance. Incidentally, few people were surprised when Claude Thomas’ name was added to the list of those expressing support of NAMB’s embattled former president, Bob Reccord, who stood accused of similar fiscal mismanagement and graft. But I digress…

When it became apparent that Patterson was recalcitrant about the matter, I was asked by a Southwestern trustee to review the audit and provide a position paper for him to share with fellow trustees in an effort to stop Patterson’s appointment of Thomas.

On the evening before the October 2004 trustee meeting, I delivered twenty copies of my review to a hotel in South Ft. Worth where seminary trustees were staying. I made my way up the elevator to a suite where a caucus of trustees had gathered to review the FBC Euless audit, and called my trustee friend on my cell phone from the hallway. He stepped outside, leaving the door open long enough for me to see that a group of trustees were meeting inside the hotel room, and I gave him the stack of papers.

The actual document I delivered can be found here.

That evening, a cadre of seminary trustees counted votes and determined that enough opposition existed to derail the appointment of Claude Thomas and limit Patterson’s ability to abuse seminary resources and potentially jeopardize the school’s credibility.

When trustees arrived at the seminary campus the next morning, a second press release had been prepared and was timestamped 8:00 AM. This new press release explained that, upon further reflection, Claude Thomas would decline Patterson’s job offer. Baptist Press carried the story, which included this peculiar statement from Paige Patterson:

When I think of all the people who have come to Christ under Pastor Thomas’ ministry, all the young people whose weddings he performed, all the memorial services he preached, all the families he comforted, all the troubled souls that he counseled, all the wounded and hurting that he consoled and encouraged, I could not but covet his ministry to my young preachers.

The full text of the Southwestern Seminary Press Releases can be viewed here.

By early the next year, Thomas’ Baptist Press column was discontinued, and LifePoints, Inc., was dissolved by the State of Texas. The only remaining component of the FBC Euless audit is Keystone Church, which filed articles of incorporation with the State of Texas on September 9, 2005, and lists Claude Thomas as a member of the church’s corporate board of directors.

The evidence of Patterson’s inequities and inconsistencies when it comes to enforcing the biblical guidelines for pastoral ministry are indeed peculiar. When it comes to women’s roles, Patterson regulates his faculty like a Shiite cleric. When it comes to the love of money, his heart is strangely warmed.

Why fire Klouda and try to hire Thomas? Why insist on a strict interpretation of 1 Timothy 2:12, but “lax the parameters” when applying 1 Timothy 3:3?

And how could the trustees have been so “sloppy” in hiring Klouda in 2002, but so vigilant when it came to hiring Thomas in 2004? Did that many trustees rotate off the board? What could have happened between 2002 and 2004 to explain these discrepancies?

Oh, yes. I remember what happened.

For more than a year now, Wade Burleson and I have been told that we were making “unfounded claims.” We’ve been accused of rumor and falsehood, slander and lies. We’ve been told to put up or shut up, to release documentation or stop protesting.

Today, the slow but steady release of documentation begins, and I’m willing to make a few predictions:

1. Those who have called for documentation will attempt to shame Wade Burleson and me for providing it.

2. People will argue that I have acted without charity for Claude Thomas and his family by releasing this information, but they will forget that this would never have happened if Paige Patterson wasn’t permitted to throw Southwestern Seminary into a vortex of liability.

3. Southwestern Seminary trustees will either be forced to deal with the Klouda matter by paying her a hefty settlement, issuing an apology to her, and formally censuring Paige Patterson, or they will circle their wagons and watch the seminary suffer repeated embarrassment, enrollment declines, and loss of faculty morale.

4. Paige Patterson will either announce his retirement from Southwestern Seminary, or he will make one last ditch effort to hold onto the reins of his power through an attempt to change the subject, most likely by attempting to coerce Dwight McKissic’s resignation from the board of trustees. If Patterson thinks his head is on the chopping block, he will try to make sure his neck isn’t the only one that’s severed.

5. Documentation regarding Patterson’s attempts to manipulate the International Mission Board will begin to surface, and Wade Burleson will be exonerated for having made so bold a claim.