Tennessee lawyer's family, firm collect millions from charities

USA Today/September 5, 2011

Back in the 1980s, Jay Sekulow's career was in shambles. His Atlanta-based law firm had failed, leaving him millions in debt and bankrupt.

Then he got a lifeline from a surprising source — the U.S. Supreme Court.

Sekulow's client, San Franscisco-based Jews for Jesus, was locked in a legal dispute with commissioners at the Los Angeles airport. The group wanted to hand out religious literature there. Airport officials said no. Sekulow argued the commission's actions violated the First Amendment.

The Supreme Court ruled 9-0 in Jews for Jesus' favor, a victory that launched Sekulow's new calling as a crusader for Christians who believed their legal rights were being threatened.

Sekulow's story was chronicled in major newspapers.

For Sekulow, it was like being born again.

"I almost feel like God raised me back from the dead," he told the Atlanta Journal Constitution in 1991. "It was a spiritual rebirth."

Sekulow, a celebrity among conservative Christians, now sits as the principal officer of two closely related multimillion-dollar legal charities: Christian Advocates Serving Evangelism, which he founded in San Francisco, and the better-known American Center for Law and Justice, founded by Christian broadcaster Pat Robertson and based in Virginia Beach.

Jay Sekulow Live — a call-in radio show — draws millions of listeners. He's a regular commentator on Fox News and splits his time living between Franklin, Tenn., and the Washington, D.C., area. Attorneys from his two charities are suing to rescind national health care reform and to block the proposed mosque near ground zero.

Along with its spiritual benefits, Sekulow's new calling has come with significant financial benefits.

Since 1998, the two charities have paid out more than $33 million to members of Sekulow's family and businesses they own or co-own, according to the charities' federal tax returns.

One of the charities is controlled by the Sekulow family — tax documents show that all four of CASE's board members are Sekulows and another is an officer — an arrangement criticized by a nonprofit watchdog group.

The founder of a different Christian legal organization takes aim at the idea of Sekulow profiting in the name of religion, saying it isn't what Jesus would do.

The American Center for Law and Justice's tax attorney says the payments to the Sekulows and businesses they own or co-own are all made for the charities' benefit and have passed an IRS audit. Sekulow's supporters say he is a humble man dedicated to the Christian cause.

Members of the Sekulow family declined requests for interviews. John Hoover, a Washington, D.C.-based tax attorney with Dow Lohnes who advises ACLJ, responded to written questions from The Tennessean.

"The arrangements between ACLJ, CASE, and companies of which Jay Sekulow has an ownership interest are on terms and conditions more advantageous than the organizations could obtain otherwise," he wrote.

But Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group, said there's a problem when a charity's board is dominated by family members.

Nonprofit board members are supposed to be independent and look out for the best interests of donors. That's nearly impossible with so many family members on a board, he said, after reviewing three years of CASE and ACLJ tax returns.

"Are they going to operate in the best interest of the family or the best interest of the charity or the public?" he said. "They are only human."

John Whitehead, founder of the conservative Rutherford Institute, a Christian civil rights charity founded in 1982, was more blunt about Sekulow, whose work he has followed for years.

When Christian charities become successful, he said, they can lose sight of the ethics of their faith, which include handling money with care. Six-figure salaries and perks like a private jet clash with Christian ideals about charity.

"If you read the New Testament, the founder of Christianity said, 'I have no place to lay my head,' " Whitehead said. "I am aghast at modern evangelism and the money."

The IRS requires nonprofits to disclose the compensation of their leaders.

But a donor to ACLJ wouldn't know how much Sekulow is earning from his work with the organization, even though he is described as CEO, chief counsel and board member on its tax forms. ACLJ reports that Sekulow has taken no salary since 2002.

However, ACLJ's 2009 tax form shows it paid $2,382,770 to the law firm 50 percent owned by Sekulow --(AT) Constitutional Litigation and Advocacy Group. The firm's office address is in a building owned by CASE.

In addition, Sekulow was paid $85,747 by CASE in fiscal year 2009.

'Very small' income

In a phone call, Ronn Torossian, a public relations executive serving as ACLJ's spokesman, portrayed Sekulow as a great lawyer getting by on modest pay.

"You are asking about one of the most successful lawyers in the country whose income is very small and owns a very small home," he said.

Property records show Jay and Pam Sekulow own three homes, including one they bought in 2008 in Franklin for $655,000 and another in Norfolk, Va., bought in 2005 for $690,000. Their third home, which once belonged to CASE, is in Waynesville, N.C., and is assessed at $262,800, according to Haywood County, N.C., tax records.

Sekulow's supporters say they believe he acts with integrity in his business and personal dealings. They describe him as a humble and generous man who is dedicated to serving God.

Darren Tyler's Conduit Church meets at a high school in Thompson's Station, Tenn., a right it indirectly owes to Sekulow. In 1993, Sekulow won a case — one of nine he's won at the Supreme Court level — that allowed churches more access to rent space at schools.

Along with the church, Tyler also leads a small nonprofit that works in Haiti. He said that Sekulow interviewed him on air several times after the Haitian earthquake in 2010, raising thousands of dollars to rebuild homes in that impoverished country. Sekulow also donated to the rebuilding, Tyler said.

"That's the Jay Sekulow I know," he said.

2 charities, 1 name

Sekulow was running CASE before he became involved in ACLJ in the 1990s. Today both charities operate under the name American Center for Law and Justice. When supporters send donations to ACLJ, the funds actually go to CASE, which handles the fundraising for both groups, tax records show.

Borochoff worries that donors will search for details about ACLJ's finances and find only the tax returns for that group, not CASE, so they won't get full details of how their donations are spent. Many of the transactions that benefit members of the Sekulow family are disclosed on the CASE returns, but not the ACLJ's.

"People should know where their money is going," he said.

The ACLJ website does include a notice at the bottom of the page saying that CASE does business as the ACLJ. Torossian, the spokesman, said all donors get a receipt that makes clear that the funds went to CASE.

Borochoff said it's obvious that the Sekulows are talented and very effective attorneys. He'd like to see them change the way that CASE and ACLJ operate, so that questions about their business practices don't interfere with their mission.

In his eyes, that involves merging CASE and ACLJ and adding more non-family members to the organization's board of directors.

"They need to operate more seriously as an organization," he said.

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