Bakker Is Sentenced for Fraud and Conspiracy Summary

  • Last updated on November 10, 2022

With the prosecution and conviction of Jim Bakker of the PTL Ministries on twenty-four counts of fraud and conspiracy, authorities entered into regulation and oversight of television evangelism.

Summary of Event

On October 24, 1989, Federal District Judge Robert Potter sentenced Jim Bakker to an unusually harsh sentence of forty-five years in prison and a fine of $500,000 for fraud and conspiracy involving Bakker’s evangelical television enterprise, the PTL (Praise the Lord) Ministries. Television;religious programs Bakker and his wife, Tammy Faye Bakker, by that time had become caricatures of television evangelists. They attracted a loyal viewership and obtained millions of dollars in contributions. At the same time, they epitomized what many people considered the worst traits of television evangelists, or televangelists, living an opulent lifestyle and branching out from saving souls to building condominiums and even a theme park, Heritage USA. Heritage USA PTL Ministries Televangelism Investment fraud [kw]Bakker Is Sentenced for Fraud and Conspiracy (Oct. 24, 1989) [kw]Sentenced for Fraud and Conspiracy, Bakker Is (Oct. 24, 1989) [kw]Fraud and Conspiracy, Bakker Is Sentenced for (Oct. 24, 1989) [kw]Conspiracy, Bakker Is Sentenced for Fraud and (Oct. 24, 1989) PTL Ministries Televangelism Investment fraud [g]North America;Oct. 24, 1989: Bakker Is Sentenced for Fraud and Conspiracy[07400] [g]United States;Oct. 24, 1989: Bakker Is Sentenced for Fraud and Conspiracy[07400] [c]Crime and scandal;Oct. 24, 1989: Bakker Is Sentenced for Fraud and Conspiracy[07400] [c]Radio and television;Oct. 24, 1989: Bakker Is Sentenced for Fraud and Conspiracy[07400] [c]Business and labor;Oct. 24, 1989: Bakker Is Sentenced for Fraud and Conspiracy[07400] Bakker, Jim Bakker, Tammy Faye Dortch, Richard Falwell, Jerry

The Bakkers both came from lower-class backgrounds. They met at North Central Bible College in Minneapolis, Minnesota, and were married on April 1, 1961. North Central’s rules against students marrying while attending school propelled the two to leave college and enter a life of evangelism through the Assemblies of God Assemblies of God church. They conducted traveling revivals in tents and developed a “crisis” approach to appealing for funds, in which they asserted that their ministry faced a “disaster” unless it received increased offerings.

The Bakkers’ success, especially their appeal to children through a Christian puppet ministry that Tammy Faye developed, earned them a chance to meet Pat Robertson, Robertson, Pat who had formed the Christian Broadcasting Network Christian Broadcasting Network (CBN), the nation’s first Christian television network. Robertson was the son of a U.S. senator from Virginia and was a Yale-educated lawyer. He saw potential in the Bakkers and indicated to them that he wanted to create a Christian television talk show along the lines of Johnny Carson’s popular late-night program. Later, during federal investigations, Bakker often used analogies to Carson’s show, suggesting that his salary and perks were commensurate with those of other talk-show hosts.

Bakker gave an impromptu performance on a fund-raising telethon for CBN in which he broke down and cried as he appealed for donations. The telethon raised enough money to bail CBN out of debt and to fund the network’s operations fully for the forthcoming year. Given a chance to develop the late-night talk-show concept, Bakker created The 700 Club, 700 Club, The (television program)[Seven Hundred Club] which first aired on CBN in November, 1966. Both the Bakkers then started to experience health and emotional problems, and Jim fought with CBN staff. Robertson decided that the Bakkers were becoming a liability, and in 1972 they left CBN.

Shortly thereafter, the Bakkers formed a nonprofit corporation, Trinity Broadcasting Systems, Trinity Broadcasting Systems in South Carolina. In 1974, they moved their operations to Charlotte, North Carolina, and aired their own show, The PTL Club, PTL Club, The (television program) on a single television station. By 1976, The PTL Club was broadcast to more than seventy television stations and twenty cable systems in the United States, Canada, and Mexico.

As the Bakkers’ popularity grew, they broke ground for a large construction project called Heritage Village, a $4 million miniature version of Colonial Williamsburg. This project, like all of Jim Bakker’s operations, relied heavily on donations for operating revenues. The television audience gave generously, with contributions rising from $817,000 in 1975 to $5.5 million a year later.

Bakker’s operations expanded rapidly. In 1978, PTL broadcasting was beamed over a $1 million satellite system for around-the-clock religious programming. Eventually, PTL satellite transmissions reached twelve million homes through thirteen hundred cable systems as well as independent systems. The primary show changed its name from The PTL Club to The Jim and Tammy Show Jim and Tammy Show, The (television program) and remained the central fund-raising vehicle for Bakker’s activities.

As Jim Bakker’s visibility increased, his studio audiences grew to such an extent that Heritage Village could no longer hold the visitors. The PTL Ministries thus announced plans in 1978 to move to another, larger facility, Heritage USA, a twelve-hundred-acre (eventually expanded to twenty-two hundred acres) site on the border of North Carolina and South Carolina. Bakker’s plans for Heritage USA included a university, a two-thousand-seat auditorium, chalets, a campground, and facilities for swimming, tennis, and other recreational activities.

During the early part of his ministry, Bakker made simple direct appeals for funds to television audiences, often predicting an impending disaster for the PTL if money did not come in. Frequently he and Tammy Faye used tears to extract contributions from viewers. Although greeted with cynicism by critics, who often contended that neither the crises nor the emotions were genuine, these emotional appeals did not break any laws. Even then, however, Bakker lived an opulent lifestyle and received huge salaries and abundant perks from the PTL directors.

In 1983, Bakker graduated to a different type of financing. He informed PTL executives of a plan to build a 504-room hotel, called the Grand Hotel, on the Heritage USA property. It would provide a vacation getaway in a Christian environment. Bakker planned to offer “lifetime partnerships” for up to half of the hotel’s rooms, with each partnership available at a cost of $1,000. Lifetime partners could stay at the Grand Hotel whenever they chose. Construction started on the hotel in 1983, but Bakker did not pitch his plan to PTL viewers until February, 1984, at which time, he explained, the facility’s financing revolved around sales of the lifetime partnerships. Bakker announced that the number of partnerships would be capped at twenty-five thousand and that any applications beyond that number would be refunded.

By July, 1984, the PTL had accepted more than thirty-nine thousand lifetime partners (either fully or partially paid) for a facility that technically had availability for only twenty-five thousand. These sales gave the PTL an additional income of more than $3 million. The revenue from the twenty-five thousand fully paid lifetime partners, $25 million, was originally to have paid for the entire construction of the hotel and for lodging the lifetime partners. That money proved not to be enough even to complete the hotel. Over the next two years, using the pretext that they had received bad checks from some of those who applied for lifetime partnerships, Bakker reopened partnerships repeatedly. Each time, the total number of fully paid partnerships swelled. By May 31, 1987, internal records showed that PTL had oversold the Grand Hotel by forty thousand, netting the organization almost $67 million. Tammy Faye Bakker continued to tell viewers that the money from partnerships was not “pay-the-bills money” for PTL’s broadcasting expenses, and she appealed for more funds.

U.S. marshals escort former PTL Ministries leader Jim Bakker from his lawyer’s office on August 31, 1989, in Charlotte, North Carolina. Bakker was taken under order to the federal prison hospital at Butner for psychiatric evaluation to determine if he was competent to continue standing trial.

(AP/Wide World Photos)

While in the midst of the hotel scheme, Jim Bakker introduced new “limited lifetime opportunities” such as the Towers Hotel, another large hotel project, and Bunkhouse Units, a group of small lodges. Bakker used a chalkboard to explain the financing of the Towers Hotel to the television audience, a move that provided investigators with critical pieces of evidence against him in his subsequent trial. Like the Grand, the Towers eventually oversold by several times, and the original advertised limit of 30,000 was exceeded by 38,755, giving PTL almost $75 million in additional funds. The Bunkhouse Units netted 9,682 partners for only eight bunkhouse partnerships, pulling still another $6.6 million into the PTL.

During this period, Richard Dortch, a PTL director who held a high post in the Assemblies of God church organization, frequently served as Jim Bakker’s point man in meetings of the board of directors. Dortch consistently raised the issue of increasing Bakker’s salary, which the board always endorsed. He also tried to cover up the sexual encounter Bakker had with Jessica Hahn Hahn, Jessica in 1980 and had intimate knowledge of the partnerships scam.

In 1983, the Internal Revenue Service Internal Revenue Service (IRS) began a quiet investigation of the PTL, focusing in particular on the relationship between the PTL’s quasi-commercial activities and its tax-exempt status. In 1985, just as the Charlotte Observer gained information about the Jessica Hahn affair, the IRS announced that it had started to investigate Jim Bakker’s private accounts. The Bakkers also had to deal with adverse publicity surrounding the adultery case of Marvin Gorman, a televangelist in Louisiana, and the spectacle of famed televangelist Oral Roberts Roberts, Oral claiming that God would “call him home” if he was unable to raise $31 million for medical missionary scholarships.

In early 1987, undaunted by media criticism, mounting federal and state investigations of its operations, and a running battle with its own religious oversight body, the PTL announced plans for a $100 million ministry center. At the time, attempts to bribe Jessica Hahn into silence had failed, and the Assemblies of God, as well as the PTL, had to deal with Bakker’s adultery. Led by televangelists Jimmy Swaggart, Swaggart, Jimmy Paul Ankerberg, Ankerberg, Paul and Jerry Falwell, a number of prominent religious leaders called for Bakker’s resignation. In April, 1987, Bakker and his entire PTL board resigned, and Jerry Falwell took over as interim director of the PTL. Falwell failed to raise enough funds to put the ministry in the black, and the PTL went into bankruptcy on June 12, 1987.

Following court cases against Bakker and some of his associates, Richard Dortch was convicted of wire and mail fraud. He pleaded guilty to reduced charges, for which he received eight years in jail, in return for his testimony against Bakker. In a federal trial, Bakker was found guilty of fraud involving the Towers partnerships. Judge Robert Potter found the crimes so serious that he sentenced Bakker to forty-five years in prison and a $500,000 fine. Jim and Tammy Faye Bakker divorced in 1992, while Jim was in prison; he was paroled in 1994, having served only five years of his sentence. Bakker remarried in 1998, and in 2003 he began broadcasting The New Jim Bakker Show from Branson, Missouri, with his wife, Lori Graham Bakker.

Significance

With the collapse of the PTL, televangelism in the United States suffered dramatic setbacks. Jerry Falwell and his board resigned from their directorship of the PTL in 1987, and shortly thereafter, Falwell announced his resignation as president of the Moral Majority, Moral Majority a Christian political action organization that had wielded considerable political clout during the early 1980’s. In 1988, Jimmy Swaggart himself, who had worked to have the Assemblies of God expel Marvin Gorman for sexual infidelities, was caught in a sex scandal and had to resign his position. Oral Roberts’s public statements that God would kill him if he did not raise a certain amount of money destroyed his credibility with many Christians and non-Christians alike.

Prior to the PTL scandal, however, the finances of religious organizations remained relatively unexamined. With the costs of broadcasting so immense, virtually all televangelists had to appeal for funds over the air, regardless of how faithfully they carried out the commandment to be good stewards of God’s money. The Bakkers were part of a new type of Christian ministry, preceded by the extravagant Reverend Ike Reverend Ike in New York City during the 1970’s. Reverend Ike, a black preacher who wore mink coats and rode in a white Rolls-Royce, told his parishioners, most of whom were poor or from the middle class, that the best way to help the poor was “not be one of them.” His message had a certain appeal, especially to churchgoers in inner cities who for years had heard from their local churches that they should “hold on” to God, or, conversely, to “let go and let God.”

The Bakkers accepted and expanded the prosperity message in the Bible, an approach called “name it and claim it” by critics. Believers were urged to use their faith to obtain material benefits. According to Scripture, a believer had to use prayer to ask for exactly what he or she wanted and then had to believe that God already had provided it. The process involved a continuous exercise of faith applied to the physical world and contained no promise of when the physical existence of spiritual goods would be made manifest. Jim Bakker later stated in his 1996 book I Was Wrong I Was Wrong (Bakker) that he had misinterpreted the Bible in his earlier prosperity theology teachings, which he repudiated.

The Bakkers contributed to attacks on their faith message through their personal abuse of the ministry’s money. Jim Bakker repeatedly received “bonuses” and pay increases far greater than those received by other evangelists and even out of line with the compensation of corporate executives, as measured by return on investment. By challenging investigations of PTL’s finances by the IRS and by newspapers as infringements on religious freedom while he used the public airwaves to perpetrate fraud, Bakker managed for almost two years to deflect public outrage that would have destroyed a business corporation.

The Bakkers never separated their private benefit from that of the ministry. They consistently drained ministry funds for private luxuries, including cars, swimming pools, jewelry, and vacations. Although other faith ministers have obtained similar luxuries, important differences existed: Their churches and facilities were paid for, they used the vast majority of their funds for ministry and not for additional appeals for money, and their congregations grew. The Reverend Frederick K. C. Price, Price, Frederick K. C. for example, preached for nearly twenty years in Los Angeles, beginning in a small church on Crenshaw Boulevard that featured lines of people waiting to get into three packed services every Sunday. By the late 1980’s, Price’s congregation had grown so large that he built the FaithDome, the largest church in the United States, seating ten thousand people in the middle of, as he called it, “the ghetto.” In contrast to the PTL, which had to sell shares in one hotel to pay for construction of the next while the bills of the ministry went unpaid, Price and his contributors paid off the $8 million FaithDome after only a few years.

The PTL scandal reduced contributions to virtually all large-scale Christian ministries in the United States for several years. Perhaps more important, millions of loyal followers had their vision of successful, productive Christian ministers shattered by the deceit and un-Christian behavior of the Bakkers and Jimmy Swaggart. The spiritual damage caused by the PTL far exceeded the temporary decline in financial donations. PTL Ministries Televangelism Investment fraud

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Bakker, Jim. I Was Wrong: The Untold Story of the Shocking Journey from PTL Power to Prison and Beyond. Nashville: Thomas Nelson, 1996. Bakker’s own account of his downfall, his time in prison, and his life after his release is presented as an inspirational story.
  • citation-type="booksimple"

    xlink:type="simple">_______. Move That Mountain. Plainfield, N.J.: Logos International, 1976. Autobiography published long before the scandal provides information on Bakker’s early life and career.
  • citation-type="booksimple"

    xlink:type="simple">Hadden, Jeffrey K., and Anson Shupe. Televangelism: Power and Politics on God’s Frontier. New York: Henry Holt, 1988. Sharply critical treatment of televangelists highlights the 1988 campaign of Pat Robertson for the Republican Party’s presidential nomination. Informative, although clearly biased against the “religious Right.”
  • citation-type="booksimple"

    xlink:type="simple">Robertson, Pat. The Secret Kingdom. Nashville: Thomas Nelson, 1982. One of the first books by a televangelist to reach a widespread audience. Explains many of Robertson’s political ideas as well as his religious beliefs.
  • citation-type="booksimple"

    xlink:type="simple">Shepard, Charles E. Forgiven: The Rise and Fall of Jim Bakker and the PTL Ministry. New York: Atlantic Monthly Press, 1989. One of the most thorough and personal accounts of the PTL available despite the author’s lack of understanding of the motivations of evangelical Christians. Exposes many aspects of the Bakker businesses and relentlessly focuses on Bakker’s personal character, including his sexual deviance and greed, as the primary factor in the PTL scandals.
  • citation-type="booksimple"

    xlink:type="simple">Tidwell, Gary. Anatomy of a Fraud: Inside the Finances of the PTL Ministries. New York: John Wiley & Sons, 1993. Collection of essays based on research conducted by students in a class called “Ethics and Evangelism” at Charleston College. Provides comprehensive information on the PTL bankruptcy proceedings and the responsibilities of the corporate officers.

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