WASHINGTON - February 8 - Today, Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Internal Revenue Service against the Living Word Christian Center (LWCC), in Brooklyn Park, Minnesota. This is the second complaint CREW has filed against the LWCC.

CREW’s complaint alleges that the LWCC, organized under section 501(c)(3) of the Internal Revenue Code (IRC), has engaged in illegal financial transactions with LWCC’s senior pastor and founder, James "Mac" Hammond, in which Hammond has profited from the church’s activities. Hammond and his wife are two of the seven members of the LWCC’s board of trustees, making them “insiders” under federal tax law. Tax law prohibits insiders from benefitting from a 501(c)(3) organization.

Loan documents given to CREW by the blog Minnesota Monitor show that LWCC showered Hammond with favorable financial deals, including a scheme under which Hammond purchased a plane, partially on credit, from the church and then leased it back. The church then paid Hammond twice the amount per month to rent the plane that Hammond paid the church to buy it.

In addition, the plane remained in Hammond’s possession while the church paid all of the related expenses, including rent to store the plane in Hammond’s own hangar.

The leaseback deal may violate tax law “inurement” rules barring financially favorable deals to insiders like Hammond as well as prohibitions against using charitable resources to compensate insiders for activity not related to the organization’s tax exempt purpose.

In addition, between 1999 and 2004, the LWCC made Hammond eight loans totalling $1.9 million at very favorable rates and terms. Two of the loans were related to the purchase of the plane Hammond then leased to the church, three were unsecured in any way and another was for Hammond to buy a private house in Florida.

CREW’s earlier complaint, filed in October 2006, charged Hammond with violating the prohibition on churches engaging in electioneering activity.

Melanie Sloan, CREW’s executive director, said, “Pastor Hammond and the LWCC have shown a disturbing pattern of violating federal tax law and the IRS has done nothing.” Sloan continued, “The IRS has not hesitated to target liberal organizations. When will enough be enough and the IRS finally step in and investigate a conservative church that has repeatedly demonstrated its contempt for federal law?”

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