Lawsuit Against Mars Hill Church Leaders – Resource Bibliography (UPDATED)

RESOURCE BIBLIOGRAPHY ON FIVE POTENTIAL LEGAL ISSUES

The two main purposes of this post are (1) to list and describe five key potential legal issues that are relevant to a probable RICO civil suit against at least four key leaders from Mars Hill Church, and (2) to compile links to research resources that provide historical background, analysis, and/or interpretation of those issues.

According to a report posted December 8, 2014, on Warren Throckmorton’s blog, Former Executive Elders of Mars Hill Church May Face RICO Lawsuit, “a lawsuit is being prepared with Mark Driscoll, Sutton Turner, David Bruskas, and Jamie Munson named as defendants.” (I have added tag links to the four named probable defendants.)

UPDATE 12-27-2014. According to the blog article, Letter: The Legal Case Against Mars Hill Church, posted December 26, 2014, the Mars Hill Church CFO Kerry Dodd is also named. The full list of defendants in the complaint is found in this paragraph from the letter sent by Brian Fahling, lawyer for the plaintiffs, to Karen Cobb of Frey Buck P.S., lawyer for the defendants:

**The named defendants in the complaint are: Mark Driscoll, Sutton Turner, Dave Bruskas, Jamie Munson, Kerry Dodd, Resurgence Publishing, Inc. (Governing person: Sutton Turner; Director: David Bruskas), On Mission, LLC (Governing persons: OMCRU Investments, LLC and Lasting Legacy, LLC; Manager: Mark Driscoll), OMCRU Investments, LLC (Governing Person: On Mission Charitable Remainder Unitrust), Lasting Legacy, LLC (Governing person and member/manager: Mark Driscoll), On Mission Charitable Remainder Unitrust (Trustee: Mark Driscoll). The LLC’s and Trusts are alleged as co-conspirators in the complaint pertaining only to allegations regarding the improper use of Mars Hill Church funds and personnel, and the engagement of ResultSource, to promote Driscoll’s Book, Real Marriage.**

A link to a PDF file with the 11-page letter has also been posted. It contains some explanation of the RICO statutes; general description of the activities in question; lists of plaintiffs and defendants; and three key activities at issue: the Campus Fund, the Global Fund (with a four-page timeline of evidence), and the ResultSource contract for Mark and Grace Driscoll’s book, Real Marriage.

For the time being, I am leaving unchanged the research material and links on the initial five issues plus trademarks. Even though some of these are not directly part of the RICO complaint, they are concerns related to issues for mediation.

An initial list of legal issues I have been following is below. These may or may not be addressed in the civil suit. My plan for this resource bibliography is to update the list of issues (if needed, once the lawsuit is filed and issues are publicized). Also, I will start with posts from key researchers/bloggers about Mars Hill Church, and will add links from other sources as time allows.

  1. Inurement – misusing a public non-profit for private benefit.
  2. Misappropriation of restricted donations that were solicited to fund a designated project.
  3. Lack of transparency, including intentional obfuscation or alteration of evidence (i.e., “spoliation” of evidence).
  4. Governance policies and practices.
  5. Conflicts of interest, especially by board members and employees.

At the end, I have also added a section with directions for locating Mars Hill Church-related trademarks, as those may come into play in what is happening.

For detailed information and links to IRS and other regulatory resources on these five initial issues, see my post, Mark Driscoll and Mars Hill Church Research Guide – Part 2C – Five Potential Legal/Ethical Problems for Mars Hill Church, Mark Driscoll, and Its Other Leaders. The “Key Points and Significance” sections below are copied from that post.

UPDATE August 17, 2015. An official website detailing the RICO lawsuit against Mars Hill Church was launched approximately August 15th. See Mars Hill Lawsuit.

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General Sources

I will be adding to this resource article bibliography in layers, beginning with the following key bloggers who have posted research and analysis materials about the situation at Mars Hill Church. I may add posts and reports from other sources after I’ve gone through their sites and list relevant articles, categories, tags, and labels.

James Duncan [Pajama Pages]. For a listing of his articles on Mars Hill/Mark Driscoll, see his tag for Driscoll.

Becky Garrison [especially at Praise the Lord & Pass the Ammunition]. See article listings about Mars Hill Church in her archives.

Warren Throckmorton. See his categories on Mark Driscoll and Mars Hill Church. He also uses an extensive set of tags for sub-topics, and those are listed under various issues below.

Dee Parsons and Deb Martin at The Wartburg Watch. See their category for Mark Driscoll.

WenatcheeTheHatchet. Basically, his entire blog is about Mars Hill Church issues. I will categorize his extensive set of label links later.

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Articles About the Lawsuit

Will the Mars Hill case be a religious freedom case? (April 5, 2014. By Justin Tse, Religion, Ethnicity, Wired).

What Would Jesus Delete? On Mark Driscoll, RICO, Mars Hill, and Lawyers. (April 7, 2014. By Dee Parsons, The Wartburg Watch).

Capstone 2-6: A Lawsuit Against Mars Hill Church Could be a Just Cause Because … (December 1, 2014. futuristguy).

Former Executive Elders of Mars Hill Church May Face RICO Lawsuit (December 8, 2014. Warren Throckmorton).

Letter: The Legal Case Against Mars Hill (December 26, 2014. Warren Throckmorton).

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1. Inurement

Key Points and Significance

Non-profit corporations gain IRS tax-exempt status in part by functioning in the public interest. If they change into operating instead for the private benefit of inside members or related organizations, that is called inurement. In extreme cases of inurement, the organization looks more like a sole proprietorship business than a non-profit enterprise. Activities that can turn out to be inurement may involve misuse of the tax-exempt organization’s property, money, credit, goods, services, facilities, compensation, reimbursement of expenses, or other assets transferred to or benefiting individuals. Inurement is illegal. It can lead to the IRS revoking the privilege of tax-exempt status.

Key issues that have been mentioned related to Mars Hill Church where allegations of inurement may possibly be a factor include the following.

  • Total compensation package for Executive Elders, possibly including severance packages, and whether any of those constitute “excessive compensation.”
  • Compensation for Board of Advisors and Accountability members.
  • The use of tax-exempt donations given to Mars Hill Church, to pay a $200,000+ contract with ResultSource Inc. to ensure the book Real Marriage written by Mark and Grace Driscoll would achieve New York Times Bestseller List status, leading to larger levels of sales and royalty payments.
  • Even though promises were made that royalties on certain sales of the book would be donated back Mars Hill Church, there seems to be the appearance of using church funds almost as the equivalent of a “loan” to cover the ResultSource Inc. contract – and if donations by the Driscolls to Mars Hill were considered repayment, one form of inurement is lack of timely repayment of a loan. [Paragraph 314.2. Quote: The “very existence of a private source of loan credit from an [exempt] organization’s earnings may itself amount to inurement of benefit.”]

Explore Articles on Mars Hill Church and Inurement

CATEGORIES, TAGS, LABELS

For issues of personal benefit to Mark Driscoll, see Warren Throckmorton’s blog and the tags on:

For issues related to excessive compensation to executive elders, see Warren Throckmorton’s blog and the tags on:

ARTICLES

Did Mars HIll Pay $200K to Get Mark Driscoll’s Real Marriage on NYT Bestseller List? (March 6, 2014. The Wartburg Watch)

Mars Hill responds to the book marketing story, and I respond to their response. (March 7, 2014. Pajama Pages)

On Driscoll, it’s called inurement, and it’s probably illegal. (March 8, 2014. Pajama Pages)

See how the Result Source campaign made Mark Driscoll a half million dollars (Updated). (March 10, 2014. Pajama Pages)

How Mark Driscoll Could Have Banked $500,000 With His “Investment” of Church Money. (March 11, 2014. The Wartburg Watch).

Mark Driscoll prepared hundreds of Mars Hill leaders to “push, push, push” his book. (March 12, 2014. Pajama Pages)

NewSpring and Perry Noble are also Result Source clients. (March 14, 2014. Pajama Pages)

How Mark Driscoll pockets the money he gives to Mars Hill. (March 16, 2014. Pajama Pages)

Mark Driscoll Gives It All to the Church? It Depends on What His Definition of “All” Is. (March 17, 2014. The Wartburg Watch)

Forbes.com on the fallout from the Result Source scandal. (April 18, 2014. Pajama Pages)

ECFA Guidance: a Year’s Severance Pay is “Highly Unusual” (October 17, 2014. Warren Throckmorton)

Mars Hill’s Compensation Process and ECFA Guidelines (October 28, 2014. Warren Throckmorton)

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2. Misappropriation of Restricted/Designated Donations

Key Points and Significance

In standard accounting procedures for non-profits, if a church designates a fund when soliciting donations for it, these are restricted and must be used for the purpose stated – unless there is a clear statement at the time of solicitation that the organization retains the right to use these donations for other purposes at their discretion. Otherwise, the church needs to contact each donor and either request permission to use the money for the unrestricted funds (General Fund) or other purposes, or return the donation. Failure to follow these procedures is misappropriation of funds with solicited designations. It is both unethical and illegal.

Key issues that have been mentioned related to Mars Hill Church where allegations of misappropriation of restricted funds may possibly be a factor include the following.

  • The Global Fund. Donations were apparently solicited in ways which seemed to indicate funds would be used for international projects. For a period of time, donors could select the option for either Global Fund or General Fund on an online payment site. Apparently, no disclaimer for redirection of donations appeared at the time of solicitation. However, it turns out the overwhelming percentage of funds were used for national projects, not international. Around the same time, the definition of “Global Fund” was shifted from what presumably was a designated restriction to any donations from a target audience of those who did not personally attend a Mars Hill Church but participated online through podcasts, etc. At some point, the Global Fund option on the donation site disappeared and only the General Fund was left. Apparently a redirect disclaimer appeared at this time. Also, a generic apology/explanation was issued if donors happened to misunderstand that the Global Fund was strictly for international work. (If it turns out the Global Fund did constitute a non-profit designated restricted fund, then Mars Hill Church would be required to ask donors whether they wanted their contribution returned or redirected.) And there is the possibility that publications and website pages began being changed to reflect the apparently altered definition of “Global Fund,” potentially obscuring the historical track record for contributors interested in understanding what had happened with their donations.
  • The Jesus Festival. Donations were apparently solicited for the specific purpose of presenting a free Jesus Festival. (I have not seen whether there was the required redirect disclaimer at the time of solicitation.) Apparently due to insufficient levels of contributions, the Festival was cancelled, and the funds were used for other purposes. There was some kind of notice about the cancellation, but it apparently was not widely distributed. Around the time the Festival was originally slated to happen, some who donated to it inquired about it.

Explore Articles on Mars Hill Church and Restricted/Designated Funds

CATEGORIES, TAGS, LABELS

For issues related to the Global Fund, see Warren Throckmorton’s blog and the tags on:

For issues related to the Jesus Festival, see Warren Throckmorton’s blog and the tags on:

ARTICLES – GLOBAL FUND

The Petition: Ask Mars Hill Church Where They Spent the Global Fund Money. (Jun 30, 2014. The Wartburg Watch)

Mars Hill Global Becomes Mars Hill Go and Still No Transparency. (October 3, 2014. The Wartburg Watch)

ARTICLES – JESUS FESTIVAL

Mark Driscoll Returns: On Smugness, Allegations, Announcements and Janet Mefferd (August 22, 2014. The Wartburg Watch)

Updates and Musings on The Church Formerly Known as Mars Hill (November 3, 2014. The Wartburg Watch)

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3. Transparency and Spoliation of Evidence

Key Points and Significance

Spoliation of evidence is the destruction or withholding of evidence. It is an issue that can be raised, regardless of whether the forum is a (1) criminal case, (2) civil lawsuit, or (3) regulatory agency action (such as an IRS investigation of a Complaint/Referral against a tax-exempt non-profit organization). Spoliation can apply regardless of whether it was done intentionally or not. Either way, it is considered a serious issue, with a potentially severe range of consequences, such as criminal charges like tampering of evidence. The topic is complicated by the fact that different jurisdictions have different definitions and possible consequences.

Key issues that have been mentioned related to Mars Hill Church where allegations of spoliation of evidence may possibly be a factor include the following.

  • Email Deletion Policy, December 2013. At one point late in 2013, Mars Hill Church put out a notification that all emails in their system would be automatically deleted after a certain number of days. A group of former elders filed an official letter/notice of potential legal action in order to stop Mars Hill from carrying out that policy. (Which Mars Hill apparently did, and stopped the implementation of the announced new policy.) At issue here was the destruction of evidence. From some of the background reading I did on this issue, it seems clear that print documents, digital documents (such as website posts and emails), audio, and video can constitute relevant evidence in legal actions. So, it is imperative to preserve “discoverables.” That was potentially at issue with the email deletion policy. The possibility or actuality for spoliation of evidence becomes particularly relevant in several contentious issues involving Mars Hill Church media, where online documentation apparently either “disappears” or is altered in a way that substantially changes the meaning of what is there – but typically without any notice that the information has been edited/updated. For instance, that could possibly apply in the situation about the Global Fund – IF disclaimers were added after the fact to “clarify” according to the Mars Hill Executive Elders’ opinion/explanation that the Global Fund was merely a general source of donations and not a specific designation for donations.
  • Website Scrubbing. There are regular reports of Mars Hill Church apparently “scrubbing” items from its site, especially after a controversy about the topic arises. While most websites probably undergo routine changes and updates, that is different from a demonstrated and documented pattern of altering or deleting items that seem to break the trail of factual evidences for research and potential investigations. Couldn’t this be seen as at least as an unethical lack of transparency? But, given the possible severity of some of the other legal risk issues there, it might not be in Mars Hill Church’s best interest to make such changes.

Explore Articles on Mars Hill Church and Spoliation of Evidence

CATEGORIES, TAGS, LABELS

For issues of evidence changing, removal, website scrubbing, etc., see Warren Throckmorton’s blog and the categories and tags on:

  • Email Retention Policy.
  • Mars Hill Global. Global Fund. Mars Hill Go. (These are tags.) There has been substantial alteration made to online information, videos, etc., related to the Mars Hill Global Fund.
  • Mars Hill Church (category). In the list of articles in this category, you can find numerous posts about information that was altered, added, or deleted that could substantially affect the history and interpretation of certain issues or events.

ARTICLES

Megachurch Methods: Mars Hill Email Retention Policy (April 2, 2014. Warren Throckmorton)

Text of Letter From Former Mars Hill Members to Mars Hill Church Asking to Delay Email Deletion (April 5, 2014. Warren Throckmorton). Here is an image of the actual litigation letter.

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4. Governance Policies and Practices

Key Points and Significance

In the Compliance Guide for 501(c)(3) Public Charities, the IRS stresses that they do not get overly specific in requirements for specific forms of governance, or particular policies and procedures. However, they are equally clear that they expect tax-exempt organizations to function with “sound operating and compliance with tax law,” and that the IRS has legal authorization (Section 6033 – Returns by exempt organizations) to ask for information including on governance relevant to those concerns.

Key issues that have been mentioned related to Mars Hill Church where allegations of problems with corporate structure, and governance policies and practices may possibly be a factor include the following.

Bylaw Changes in 2007 – Was it the Spiritual Equivalent of a “Hostile Takeover”? The main allegation on governance is that the change in bylaws in late 2007 consolidated what looks to be absolute control of Mars Hill decision-making in Mark Driscoll and those he selects as Executive Elders and Board of Advisors and Accountability (BOAA) members. In effect, he can stack the decks with those who will comply with his wishes. If this is so, then in effect, it also means that a tax-exempt non-profit entity functions as if it were a sole proprietorship owned by Mark Driscoll. To consider whether this is so, you may want to go through the IRS documents on governance listed earlier in this section, and then compare the lists of governance practices they are concerned about and see how the bylaws of Mars Hill Church compare with them. Then, you may want to look at demonstrated patterns of behavior of all Executive Elders and BOAA members since 2007 to see if their practices conform to the requirements of their governing bylaws. Here is a series of PDFs with Mars Hill bylaws from the recent past to the present.

Some questions to consider:

  • What is the Mars Hill policy on “whistleblowers”? How does that relate to non-disclosure, non-compete, non-disparagement agreement that have sometimes apparently been required in order for staff members to receive a severance package upon their departure? What about the staff resignation process, where someone who is resigning is apparently required to list any “issues” they have with the church’s leaders?
  • Is it disingenuous for Mark Driscoll to declare that he is just following the bylaws, as if that is an objective source of governance, when there seems to be strong evidence that he consolidated power through getting the bylaws changed to his liking in 2007?
  • Is there genuine independent oversight of Mars Hill Church? Or is it an autocracy? Or an oligarchy?
  • If you had to identify the equivalent of “shareholders” of Mars Hill Church from the apparent power they have, who would you say “owns” Mars Hill?

Explore Research Articles on Mars Hill Church and Governance

Top 15 Non-profit Board Governance Mistakes (From a Legal Perspective), by Ellis Carter (CharityLawyer, October 5, 2009). An important checklist for considering governance problems at Mars Hill Church.

Mars Hill Church to Former Employees: Don’t Talk (March 5, 2014. Warren Throckmorton)

A Former Mars Hill Pastor Speaks Out and Why Others Are Afraid: The Mars Hill Church Non-Disclosure Agreement (March 9, 2014. Warren Throckmorton). See also the PDF of the Mars Hill Separation and Release Agreement.

Former Executive Pastor Repents for Culture of Fear at Mars Hill Church (March 25, 2014. Warren Throckmorton)

If You Are a Leader at Mars Hill Church and Leave, Here is Where Mars Hill Says You Can’t Serve (May 28, 2014. Warren Throckmorton)

Megachurch Methods: Pastor Fired Because He Wouldn’t Sign Non-Compete Clause (May 28, 2014. Warren Throckmorton)

Mars Hill Everett Lead Pastor Comments about Departure of Elder Forced Out Over Non-Compete Clause (May 28, 2014. Warren Throckmorton)

Mars Hill’s Non-Disparagement Clause, the Attorney General, and Blowing Whistles in ECFA Organizations (October 27, 2014. Warren Throckmorton)

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5. Conflicts of Interest

Key Points and Significance

The other four issues covered in this post all have some elements where conflicts of interest potentially arise. In all of them, it would seem someone wrongfully benefits. It may be with:

  • Money through flawed financial practices (inurement).
  • Appearance of doing good through misleading fund-raising (misappropriation of restricted donations).
  • Prestige through maintaining a false public image of doing good via “spin” (spoliation of evidence).
  • Power through personal or self-biased group control (governance).

Eventually, each and all of these contribute to a profile where a tax-exempt non-profit no longer functions in the public interest, but for the private benefit of insiders and related organizations.

Key issues that have been mentioned related to Mars Hill Church where allegations of conflicts of interest may possibly be a factor include the following.

  • Board Membership. Are past and/or current board members (both Executive Elders and Board of Advisors and Accountability/BOAA) relatively free from conflicts of interest in their relationships with one another personally and professionally, and their boards are therefore substantially “independent”? Does filling empty positions on the BOAA with people who have close personal or financial dealings with Mars Hill constitute a potential conflict of interest? Does designating local people with close personal or financial dealings with Mark Driscoll to serve on the team investigating official charges against him constitute a potential conflict of interest?
  • Real Marriage Book, ResultSource Contract, and Mars Hill Church. Mark and Grace Driscoll wrote the book Real Marriage. But On Mission LLC owns the copyright and therefore received the royalties from it. On Mission LLC is in turn governed by (distributes funds to) OMCRU Investments LLC, which is in turn governed by/distributes funds to (1) On Mission CRUT (of which a/the beneficiary is the Mars Hill Church non-profit) and to (2) Lasting Legacy LLC (which according to some research apparently was involved in the purchase of the current home that the Driscoll family lives in). However, funds from tax-exempt donations to Mars Hill Church non-profit were apparently used to pay a contract with outside agency ResultSource Inc., which basically was used to ensure enough copies of Real Marriage were purchased to get it on the New York Times Bestseller List.

Explore Articles on Mars Hill Church and Conflicts of Interest

CATEGORIES, TAGS, LABELS

For issues of various leaders with potential conflicts of interest, see Warren Throckmorton’s blog and the tags on:

ARTICLES

Mark Driscoll – Prophet, Priest, and/or King? (June 28, 2013. The Wartburg Watch)

Mark Driscoll and His Mars Hill “Advisory” Board: Time to Step Down. (March 10, 2014. The Wartburg Watch)

Mars Hill and Mark Driscoll: Of Profit$, Priest$ and King$ [Updated 6/3]. (June 2, 2014. The Wartburg Watch)

‘Blessed Subtraction’ at Mars Hill Church (September 10, 2014. The Wartburg Watch)

The Mars Hill Church Board of Elders and Board of Advisors and Accountability (October 4, 2014. Warren Throckmorton). This provides a then-up-to-date listing of all members of the Board of Elders (BOE) and BOAA, as of October 4, 2014. Mark Driscoll resigned from his position at Mars Hill Church on October 15, 2014.

a brief observation about the March 7, 2014 statement by the Mars Hill Board of Advisors & Accountability that presupposed conflict of interest as characteristic of MH governance (November 30, 2014, Wenatchee The Hatchet).

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Trademarks and Mars Hill Church

The misuse of trademarks, logos, word marks, and other such intellectual property has been noted as one of the top problems that non-profits tend to get into. If you want to research the series of registered trademarks related to Mars Hill Church, here is the procedure:

1. Go to the United States Patent and Trademark Office site.

2. Choose SEARCH TRADEMARKS (right hand side of the screen).

3. Select BASIC WORD MARK SEARCH.

  • Search Term = Mars Hill Church
  • Field = ALL
  • Submit Query

In the results, not all of Mars Hill items belong to Mars Hill Church in Seattle. The registered trademarks links that are relevant include:

  • Mars Hill Church
  • Mars Hill Music
  • Re:Lit
  • Re:Sound
  • Re:Train
  • R
  • Resurgence

Click on the link for a profile page that includes the registered owner of the trademark.

UPDATES

12-09-2014. Initial version posted.

12-12-2014. Additional links added.

12-23-2014. Trademark section added.

12-26-2014 and 12-27-2014. UPDATE added, which includes details and links related to the RICO complaint.

01-08-2015. Link added on Conflicts of Interest.

 

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2 thoughts on “Lawsuit Against Mars Hill Church Leaders – Resource Bibliography (UPDATED)

    • Thanks for your feedback. I come to research situations with many, many questions and it takes a while to go through a “slow-cook” reasoning method of observe-analyze-interpret-apply, but that’s the way I seem to be able to arrive at satisfying answers … they’ve settled out and settled in over time. I try to produce something that helps in the discovery, discernment, and decision-making processes. So, it’s encouraging to hear that my reasoning process connects, even if my conclusions may differ from or deeply challenge what readers conclude.

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