Former Harvest Bible Chapel pastor was paid more than $1 million a year; expenses questioned
End the year with a net money surplus, more people attending church, and more major gifts than the targeted amounts.
Because he did so in 2016 and 2017, former Harvest Bible Chapel senior pastor James MacDonald took home a total of $273,125 in incentive bonuses over the course of those two years, according to a financial and legal review the church released Thursday night.
The review covers January 2016 through mid-February 2019.
MacDonald did not respond to requests for comment on this or any other story the Daily Herald has written about him in the past year.
The bonuses were part of a short-term incentive program for MacDonald and members of the church's executive leadership team at the time.
And the church's current elder board is now questioning whether the incentive program motivated those former workers to spend money wooing donors with meals, trips and gifts.
An overall theme throughout the report is "lack of documentation." As in, some of the spending done by MacDonald or on his behalf could be legitimately related to church operations, but without receipts or other documentation, the forensic accountants could not tell.
That would include, from January 2016 to February 2019: $170,851 spent on hunting and fishing trips; $139,502 spent on meals and entertainment; the installation of an internet service tower and security equipment at MacDonald's house near Harvest's Elgin church; and more than $94,000 for clothing and eyewear.
The gifts, in some cases, were enormous. The report mentions MacDonald gave away two $16,000 motorcycles.
The report says accountants learned MacDonald often gave clothing to others.
He was not required to wear certain clothing for his job, and the clothing purchased was suitable for general or personal wear. Without documentation proving a business connection, the amount spent should have been reported to the IRS as taxable income. Only $17,277 was, the report states.
WLS radio host Mancow Muller, who blew the whistle on MacDonald in an essay for the Daily Herald, has said MacDonald gave a $2,000 pair of custom purple Gucci boots to Ides of March singer Jim Peterik.
According to the report, in 2015 the executive committee approved an overall compensation package of $1.24 million for MacDonald; that rose to $1.37 million in 2016 and $1.387 million in 2017. The 2019 package was supposed to be $1.27 million, the report says.
The compensation included salary, payment from "Walk In the Word" ministries, a "family travel" bonus, deferred compensation, other retirement benefits, health insurance, a "teacher license agreement," the incentive-program bonus, and discretionary bonuses.
The report discusses $900,000 in spending on a private credit card account and $1 million in private checking accounts, which were overseen by MacDonald and several top church workers, not the church's financial department.
According to the report, federal tax law requires employers to: prove an expense has a business connection; maintain adequate substantiation of the expense, including purpose; and require employees to return excess advances that exceed substantiated business expenses.
The report says that $120,660 was spent for the "direct personal benefit" of MacDonald's relatives. It does not say which ones, but MacDonald's two sons were pastors at Harvest, and his daughter worked in administration.
Church treasurer Tim Stoner also said there were other expenses that are being questioned, including $22,000 paid for college tuition. That amount was not listed in the report. He also said that before 2016, $250,000 was spent on home improvements.
The church is asking MacDonald to provide evidence the questioned spending was approved, and if not, to reimburse the church.