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$ Among other things, the IRS report called Jim Bakker's compensation for 1981 ($259,770.29), 1982 ($400,765.58) and 1983 ($638,112.27) excessive. The agency raised questions about a host of other Bakker-PTL arrangements. Among them: PTL's purchase of a $390,000 condominium for Bakker in Highland Beach, Fla., in 1982, along with $202,566 that was spent on furniture and fixtures; and an interest-free loan of almost $76,000 to Bakker from the ministry. For its part, the ministry argued that Bakker's salary was reasonable because he was the "guiding light" of the ministry. IRS suspended its long-pursued civil cases when a criminal investigation involving PTL began in June.
All those excesses, however, paled beside PTL's underlying corporate style. PTL ran, says one former executive, on a "theology of building." Recounts Harry Hargrave, a Dallas businessman recruited by Falwell to run the shattered organization: "Jim would build something here, and then he'd have to build something bigger to finish paying for this as well as the enlarged cash flow." That pyramid philosophy led Bakker from his first Heritage Village television studio in Charlotte to Heritage USA and, finally, to the 500-room Heritage Grand Hotel and its sister, the unfinished Heritage Towers. Bakker's ultimate fantasy was a $100 million replication of London's Crystal Palace. A painting of that now canceled project still stands forlornly near the gilded piano in the lobby of the Heritage Grand Hotel.
Bakker's sense of vision was highly erratic as well as expensive. In 1977 he suddenly announced a push for a worldwide network of missions; months later he abandoned that project and broke ground for what was to become Heritage USA. In 1986 Bakker raised $3 million in the span of a month to erect Kevin's House, an adjacent 14-bedroom home for handicapped children. Today only two youngsters live there, and federal investigators are wondering where the money went. The principal victims were PTL's "Lifetime Partners," an estimated 120,000 heads of households who pledged $1,000 or more in exchange for a lifetime guarantee of free hotel lodging. In the past two years, according to PTL officials, the ministry raised $108 million through those time shares, but only $54 million of that went for construction, with the rest paying debts or covering operating expenses.
Since taking over PTL, Falwell has instituted a substantial measure of corporate sobriety. Sales of lifetime partnerships at the Heritage hotels have ceased. A ten-member board, including several businessmen, closely monitors the ministry finances. A new accounting firm is digging through the ruins of PTL's finances, preparing a comprehensive reorganization plan to be presented in federal bankruptcy court this fall.
The rectitude that Falwell is administering at PTL has spilled over into his own Lynchburg ministry. Last month the organization published a rare 16-page report that included a succinct two-page financial summary. For the year ending June 1986, the document noted, ministry revenues totaled $84.1 million and expenses ran to $82.9 million. Total assets were valued at $91.5 million, while liabilities totted up to $56.5 million. However, Falwell would provide TIME with no audited, detailed financial statements for the ministry.