A View of the Basis of Current Church Accountability Problems

Norm Smith


The claim of this article is that there are three factors presently working in the Seventh-day Adventist church which taken together hold great potential for harm. Each by itself or any two without the third might be less troubling.

This is a view from one outside the inner circles of church government. This writer would be pleased to be shown to be in error concerning the views expressed in the following.

This combination of three factors makes the church highly vulnerable to embarrassing misconduct. First, is a leadership that is impervious to member oversight. Second, is a leadership, which because of their position in the church, is exposed to financial temptation. This temptation is greatly enhanced by the marked discrepancy between hospital and denominational pay scales. Third, is the lack of effective safeguards against the vulnerability from the first two factors. Whether it is desirable or practical to alter the first two factors is open to debate. The entire point of this writing is that the church at least needs to address the third factor and put in place adequate safeguards and avenues of verification that would permit church members to determine with reasonable certainty that church operations are being conducted in an ethical manner. In short, church leaders need to be willing to demonstrate accountability to church members, and church members should insist that they be accountable.

Leadership Circles

It is the contention of this writer that the Seventh-day Adventist church is governed by a ruling group or network who cooperate to maintain the group’s position of control by assuring that potential new group “members” are "loyal." By the term “ruling group” no sense of conceit or superiority is implied, rather it denotes a limited and almost impermeable circle of political control. It is not even being argued here that the existence of such a group is in itself necessarily objectionable. No matter how open and democratic church elections might become, those with the interest and energy to lead will find the means to do so and usually will cooperate with others of similar interest in maintaining their positions of control. However, it is the thesis here that the rule of such a group under current circumstances, poses grave dangers for the church if the situation is not widely recognized for what it is and if effective constraints are not put in place to limit harmful behaviors into which the ruling group might be tempted to venture.

Admission to the ruling circles in the church does not come from the initiative of an individual seeking to promote his goals for the church, nor does it come from wide support among church members for an individual to govern or support for that individual’s agenda. Rather it comes from being recommended for office by someone who is already in a higher office. Indeed, our church does hold to the formality of church elections. However, it is a rare conference president who is politically clumsy enough to be turned out of office and even the local executive committee is selected without direct input from the broad constituency. In reality, rank and file church members have no effective input into elections beyond the local conference level, and even there the process is very indirect. Delegates to the local conference constituency meetings select a nominating committee in advance of the constituency meeting. Selection to the nominating committee is generally a recognition “contest” in which constituents try to identify a group of members who are at least known to a significant fraction of the delegates. This nominating committee meets in private to select executive committee members and, almost always, to re-nominate the conference president. Their recommendations are usually “rubber stamped” by the general local conference constituency. This may not be the worst way to select the executive committee, but it certainly cannot be called an open election, especially since there is the seldom spurned opportunity for conference leaders to “work with” the nominating committee and influence the process.

The local conference executive committees elected in this way are not themselves fully a part of the ruling network. It is with the selection of conference presidents and officers of the “higher” conferences that the “network” comes into full play. New conference presidents are seldom newly selected by the local conference constituency meeting. Usually the position becomes vacant between meetings. The local executive committee will be involved in the selection of the next president, but the selection will be from a short list approved if not provided by the president of the next higher-level conference. This presumptive prerogative to supply the list of qualified candidates is at the heart of the perpetuation of the ruling network. Another key element is the network members’ ability to influence the selection of "supportive" constituents and executive committee members for the union, division and general conferences. The net result is that the rank and file church members have almost no input into the selection of leaders beyond the local conference.

Winston Churchill said, “Democracy is the worst form of government except for all the others.” Because it involves competition and conflict, it is sometimes argued that democracy is not a good form of church governance. There is no argument made here for a change in the form of Seventh-day Adventist church government, even though change may be desirable. What is urged here is the adoption of safeguards against the temptation to misconduct to which our current form of governance has demonstrated its susceptibility. This is not the place to review examples of the expensive missteps to which our church’s leading network has succumbed. Adventists who are particularly engaged in church life are aware of at least several of these past misadventures. Argued here, at a more abstract level, is the case for safeguards against future catastrophes. The avoidance here of individual failings and unpleasant details of painful past episodes should not lead any reader to conclude that the problems and threats to the well being of our church are not indeed real. Added reason for not focusing here on past details is that this series of past regrettable situations in the church is here claimed to be only the symptoms of an underlying dysfunctional aspect of church structure. True, such specific situations involve human failure, but here we focus on the inadequate structure, which leaves the church highly vulnerable to the seemingly inevitable human failure. One might well question at what point does this history of debacles pass from being a sequence of isolated mistakes to becoming a symptom of more pervasive dysfunction. In the view of this writer, one of the strongest evidences that the case is one of deep-seated dysfunction is the complete unwillingness on the part of the higher conference leaders to engage in any meaningful dialogue with groups of members who are concerned about such problems.

Churches, Hospitals and Temptations

Thus we are brought to the second factor mentioned at the outset, the recent increase in temptations facing the church leaders. Historically the church has been a relatively limited operation and the potential for harm was correspondingly less. Yet even before the Adventist Church achieved big business proportions there was potential for harm. Conflict of interest is a continuing available temptation for church leaders. A leader can use his influence to effect real estate and other business transactions of the church to his benefit. The trail to his benefit can be quite obscure. Relatives and friends can be the conduit for channeling benefits back to a leader. For instance, conference trust officers have been known to disperse to themselves, family or friends great deals from estate dissolutions. Church leaders may accept personal gifts, as “outside” influences try to affect the conduct of the church. Leaders can involve the church in high-risk financial schemes from which they also profit. Leaders can be rewarded with finder’s fees for influencing church members to participate in various business ventures.

In recent decades the church has become a much larger operation that to varying degrees still controls a hospital system which has become big business indeed. Reorganizing decisions of the last few decades, especially regarding Adventist hospitals, have placed church leaders squarely in the path of temptation. Even if recent decades had not provided numerous examples of unethical conduct by some church leaders, given our common understanding of fallen human nature, this exposure to enormous temptation should in itself give church members cause for great concern.

In the mid 1970s, several regional medical management corporations were formed to operate many of the health institutions the church owned across North America. Savings of scale and legal liability were arguments provided to justify these actions. With legal insulation, came some loss of direct control. However, the church still maintains a strong influence over the hospitals through the membership of conference leaders on hospital association boards of directors.

At its 1989 Spring Council, the General Conference Committee decided that in order to keep competent executives in health care administration, the hospital administrators would need to be paid on a competitive wage scale for such administrators in the general market. This pay parity was extended to the leaders of the hospital associations. From a business point of view, this decision doubtless had merit. However, more than any other action it served to put church leaders squarely in temptation’s path. Church leaders found themselves on boards of directors of institutions which officers are compensated at a rate several times that of the conference leaders. The temptation for church leaders to find ways to “deal themselves in” became enormous. Further increasing the temptation is that there is little incentive for hospital leaders to resist “dealing in” the church officers on their boards of directors. After all, it is those very church leaders who have the power to vote even further growth in hospital compensation and to overlook mistakes in hospital management or conflict of interest on the part of hospital administrators.

Conference leaders can be “dealt in” on benefits from association with the hospitals in various ways. Potential perks would include “retreats” to resort areas, memberships in expensive clubs, assistance with business investments and taxes and vehicular and home loans. Perhaps the most harmful blurring of interests is when conference officers acquire lucrative hospital employment after, or even during, their tenure in the conference. This path between church and hospitals has already been taken. In secular government circles this problem is the primary concern in what is called the "revolving door."

There is a movement under consideration to more directly deal conference leaders into the ranks of the highly compensated. Attempts have been made to modify the traditional denominational wage scale in which all workers receive nearly the same compensation regardless of their responsibilities. The tradition has been to pay what is needed to maintain a modest standard of living without respect to rank. The decision to highly compensate hospital administrators was a first step away from this practice. Now there is much talk that school administrators and the most qualified professors also need to be more generously compensated. “In order to have first rate schools we need to pay competitive wages,” it is suggested. “Surely, we should spare no effort to give our children a first rate education.” If that next step is successful, it is highly probable that a push to compensate more generously those who direct the work of the conferences will soon follow. “Indeed, we need the best and brightest in those positions that control the entire denomination.” One such push in recent years to further alter the denominational wage scale was defeated. Now this is not to say that it would be illegal or even unethical for certain leaders to be more highly compensated. It would be well if all church employees were better compensated. However, until the policy changes, achieving higher compensation through conflict of interest in business dealings, revolving door practices and secretive perks remains unethical, not to mention demoralizing to the honest majority of employees and those whose tithes and offerings pay the salaries.

Need one think that things are actually all that bad in the church? This article has deliberately steered clear of presenting the parade of debacles that have given cause for alarm. Unethical conduct among the church’s leaders is not so thoroughly entrenched that all hope is lost. Yet it does seem that the ruling network in general has been flirting with misconduct and that too many have crossed the line into unethical conduct. What is abundantly clear is that many church leaders adamantly refuse to provide avenues of verification to the common church members that the church is operated in an ethical manner.

Checks and Balances

The third of the factors that combine to make the church highly vulnerable is that there are not sufficient safeguards against the taking advantage of office for personal gain. When the church was young the members expected Christ to return before there would be any need for safeguards or checks and balances against misconduct. Later the auditing department was established to guard against financial misbehavior on the part of the lower level church employees. The church has never put in place effective safeguards against misconduct among the ruling network. The time to put monitoring arrangements in place is now, before misbehavior in the ruling network of the church becomes the accepted norm.

Most Seventh-day Adventists will not join a labor union for several reasons, one being that it is not possible to verify that unions are operated in an ethical manner. Of course, one would hope that within the church both the ethical conduct of leaders and the availability of verification would be far better than what is found in a labor union. But the necessary transparency will only occur if church leaders view church members as valued shareholders, rather than as nosy children.

The auditors of our church deserve credit for keeping the level of criminal fraud and embezzlement in the church relatively low. However, the current auditing arrangement together with the current arrangement of church governance leaves the church inadequately protected from conflict of interest, profiteering, bullying and other semi-legal forms of unethical conduct. The damage that can be done by those who engage in such legal forms of unethical behavior can often far exceed the damage that is done by a lone embezzler. The church indeed has policies against some of these misbehaviors, but it is clear from recent history that church leaders can flout these policies with little fear of consequences unless the misconduct spills into full public view. Unfortunately, the average church member has very little insight into how business often gets done at the high conference levels. Worse still, is that even when insight is possible, there is no effective non-rebellious means for church members to influence church conduct.

What can be done to encourage ethical conduct among church leaders and verify compliance with protocols created to safeguard ethical behavior? The auditing system already in place is certainly a good first step. But there are at least two important problems with the existing mechanism. First, while it is good at preventing embezzlement by lower level church leaders, it is not arranged to prevent misbehavior on the part of the high church leaders. The highly positioned church leaders are the bosses of the auditors. How can auditors objectively audit those who have dominion over them? Second, the scope of the auditing department’s investigation is too narrow. It targets malfeasance—that is, fraud and embezzlement. That which is legal but unethical, such as conflict of interest and profiteering, is beyond its scope. Its scope should be expanded to monitor policy compliance and ethical conduct in general.

Beyond expanding the purview of the auditors, another important way to protect the church would be the establishment of a denominational “freedom of information act” similar to that provided by the United States government. This would encourage the rise of independent journalism within the church. Although this would be a vast improvement over the current low degree of public accountability in church operations, it would still leave large gaps in the need for verification of ethical behavior. For one thing, even if given unrestrained access to appropriate information, the average church member does not have the resources, and seldom has the training, to adequately assess complicated corporate accounting documents. It is altogether too easy to hide a mischievous reality from prying “outsiders.” What is necessary is for the church leaders to demonstrate proactively to rank and file members that the Lord’s business is being conducted ethically by the institution of reliable monitoring safeguards, checks and balances.

There are doubtless a variety of workable approaches to implement such verification. However, several components of one workable system that would have minimal impact on existing processes would seem clear. It must, as suggested above, involve greatly increasing the scope and independence of the auditing department. Even secular democracies recognize the need for checks and balances. It is not that auditors are inherently more trustworthy than administrators, but they must be set free to provide their professional assessments independent of the parties they are assessing. The role of the auditing department should be greatly expanded to monitor compliance with all church financial and business-related policies. It should monitor all church administrative activities for conflict of interest and profiteering, and such auditors should be present at all conference committee and constituency meetings.

Another necessary adjustment in the direction of accountability is to institutionalize a far greater ethical oversight role for the local conference executive committees. The local executive committees are the only leading groups in the church with any continuity that come even close to being selected by a vote of church members. They should be the first line of defense. They are the ones who accept initial responsibility for the tithes and contributions that the members entrust to the church. They are the ones who pass on a sizable fraction of these funds to the higher conferences. They are the ones who could take the initiative to require accountability of conference administrators for those funds. They are the ones who elect delegates to the higher conferences and should be requiring an accounting from them. They are the ones who are the most directly accessible to church members.

In order for the auditing department to accomplish its expanded mission, it needs to be made truly independent of the church administration. How can this be done? The local conference executive committees hold the key. The auditing department should report directly to each local conference executive committee and be funded directly by them. An appropriate fraction of the money now passed on to the union and higher conferences should be paid directly to the auditing department, as if it were a separate branch of government. The administrative branch should have no power to hire and fire in the auditing branch. Any high-level hiring in the auditing branch should be done with the majority approval of the local executive committees and any firing should be done with the approval of two-thirds of these committees. Although it is not assumed that local executive committees have any more of a lock on ethical conduct than church administrators, there is some safety in numbers and the fact that the different local executive committees do not overlap or fraternize to any significant degree.

No doubt various kinds of inertia would make such an adjustment difficult. But it is also clear that such an independent auditing and ethics monitoring branch of church governance, reporting directly to local conference executive committees, would help significantly to verify that church administrators are operating in an ethical manner. It is hard to know whether the lock of the ruling network is so strong that there is no chance of such a mechanism being implemented.

It is this writers belief that there is still a significant segment of the ruling network that is committed to strict ethical behavior and that with these the notion of transparent, independent accountability would find traction.

Unless church administrators have something to hide, it seems that Union Conference, Division, and the General Conference leaders would see this notion of open accountability as a win-win situation. There are many church members who hope that they would adopt the issue as their own and become champions of accountability rather than its detractors.