Report: MacDonald reaped 'significant' personal financial benefit at Harvest Bible Chapel

Harvest Bible Chapel megachurch suffered a "massive corporate governance failure," primarily due to former Senior Pastor James MacDonald's "powerful and subversive style of leadership," according to a legal and forensic accountant review the church released Thursday night.

"MacDonald seems to have acted in his own personal interests - reaping significant personal financial benefit, avoiding accountability to any governing board, and with heavy-fisted exclusionary leadership," the report, submitted by the law firm Wagenmaker and Oberly, states.

MacDonald developed an inner circle of leaders through which he controlled the church, marginalized broader leadership including previous elders, and used "aggressive tactic that thwarted healthy nonprofit governance," the report says.

It also said that Harvest's use of consensus to make decisions was "flawed" because it allowed MacDonald's "strong and strident voice to inordinately influence others."

The church hired Wagenmaker and Oberly for the review in the spring, after it fired MacDonald in February, saying he had not behaved in a manner above reproach and had demonstrated "a sinful pattern of inappropriate language, anger and domineering behavior."

MacDonald had been with the church since it was just 18 members meeting at a school in Rolling Meadows in 1988. The church now has seven campuses, and last year claimed at least 12,000 people worshipped with it.

The report released Thursday says the church's governance failure was most apparent in its finances.

In particular, the church's former elders treated the "Walk In the Word" radio and television ministry as a separate financial entity, but it wasn't, the report says. The ministry is Harvest's, according to the report.

The report also confirmed that the church had two bank accounts that its accounting staff did not know about: an "executive" account and a "Walk In the Word" reserve account. The report discusses $3.1 million in spending from those accounts.

Those accounts were controlled indirectly by MacDonald and directly by the church's former chief financial officer, chief operating officer and an executive assistant, according to the report.

The executive account was used primarily for deferred compensation for MacDonald. During the three years reviewed, he received $350,000 of that a year.

But the other account paid for personal expenses, as much as $94,000 in clothing and $170,000 in hunting expenses for MacDonald, as well as vehicle repairs, the report states.

The report also says MacDonald was being paid a base salary of $650,000 a year. His total compensation - including housing allowance, deferred compensation, a license to use his teaching materials and other items - ranged from $1.24 million to $1.38 million.

He also received an incentive bonus based on general revenues, attendance and major gifts.

It also said it found a 2017 compensation analysis the church commissioned, performed by another law firm, "of dubious reliability."

Thursday's meeting was conducted at the church's Elgin campus by current board chairman Brian Laird and treasurer Tim Stoner. The two are members of the new elder board that the church installed this spring, after the church fired MacDonald.

The report discusses potential federal tax implications for MacDonald, such as whether some of the purchases will have to be reported retroactively as income, and whether the IRS would deem the compensation "excessive" for a nonprofit entity.

"We are sorry that you had to hear this hard information," Laird told the crowd. The report was broadcast live to Harvest's other campuses.

Stoner likened it to treating a wound: cleaning it out may sting, but is necessary for the church to heal.

"We allowed the ends to justify the means by which this (the church's spiritual work and massive growth) was done. And this was wrong," Laird said.

Laird said the church will ask MacDonald to pay back an undetermined amount of money to the church, but will also give MacDonald the opportunity to provide proof that any of the expenses in question were approved by the former leaders.

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