Pastor General's Report

There has been a systematic effort to destroy the reputations of Mr. Herbert W. Armstrong and those closest to him. This effort was spearheaded by Garner Ted Armstrong, but aided and abetted by those seeking favor with him. Mr. Armstrong has written and spoken about this during the past few months, and I am certain that you will recall similar efforts on his part to correct the problem during the past several years.

Although my record of performance is well known and well documented, there has nonetheless been a conspiracy to place a cloud over it, and to impune my character, my reputation and my professional integrity. My financial arrangements with the Church, matters which are of record and known to all parties with the right to know them, have been falsely distorted and made to appear wrongful. Accordingly, I am taking this opportunity to share the record with you in order to put to rest once and for all the speculations and misapprehensions in this area.

When I first met Mr. Armstrong the Work was very small the total gross revenues from all sources was less than $800,000 annually. Mr. Armstrong soon learned that he could rely on me to get problems solved — problems that were not being solved by others for whatever reasons. He asked me to represent the Work on a retainer basis. We agreed that the Work would prosper, and in time I would be compensated in accordance with the scriptural principle that "a servant is worthy of his hire." I had great faith in the Work and in Mr. Armstrong and I threw myself into my responsibilities with the zeal and energy necessary to get the job done — with little regard to my compensation.

By 1969, I had helped Mr. Armstrong in many ways and we had come to love one another very much. We had a very special relationship which I shall always cherish as will my wife and my children. I was still very successful on two other fronts — in my law practice and in my public accounting practice. At that time, however, Mr. Armstrong and Mr. Portune asked me to come into the Work "a little more" by giving up all other professional activities that — required my own commitment of time and energy. We agreed and, from that time forward, I devoted all my time, talent and energy to Mr. Armstrong and the Work. We agreed that whatever it took to meet my financial requirements would be provided.

Prior to 1969 the only financial dealings that I had with the Work were for the payment of my professional services, with one exception. At Mr. Armstrong's specific request in 1967, I managed to arrange for the financing of the first Falcon aircraft after all other attempts to do so by Mr. Portune and his colleagues in the business office had been unsuccessful. The only way that I was able to provide the financing for the completion of the purchase of the falcon from Pan American Airways was to arrange a tripartite agreement between Mid-Atlantic Leasing, Pan American Airways and the Church. Mid-Atlantic Leasing was a partnership which was formed for the transaction. The partnership was willing to act as the lessor if it would be guaranteed certain tax shelter benefits. Furthermore, since it was impossible for a partnership to be assured of the Church's credit-worthiness, the partnership required that 1) I take part in the transaction and that 2) I indemnify each of the other partners in the event of the Church's default in any material respect.

After careful consideration and much discussion with all parties, it was agreed that the financial arrangements were equitable for all parties and that my participation would not be in conflict with the Church or any professional responsibilities that I might have had as a result of my relationship to the Work as a lawyer and as an advisor to Mr. Armstrong.

At that time, it was also clearly foreseeable that at the termination of the lease the provisions of the tax law would result in a definite tax loss for me. The Church agreed to indemnify me from such loss if, in fact, it were to occur. In July 1977, the lease was terminated, but well in advance of the termination date provided for in the lease agreement. Accordingly, I am now in the process of calculating the actual economic loss that I have suffered as a result of the transaction that began in 1967.

In the fall of 1969, Mr. Armstrong decided to terminate the services of his advertising agency, M. B. Scott, Inc., and he determined that it would be in the best interest of the Work that the time-buying function be transferred to an agency that would be more under the control of the Work. Mr. Armstrong and Mr. Fortune were both aware of my vast background and experience in the advertising field as a result of my contact over the years with Mr. Scott and other advertising agencies, as well as my broad overview of the entire communications field as a result of my law practice. Hence I was asked to form an Advertising Agency and to limit its activities to representation of the Work.

From the late fall of 1969 until March 1975 when I was baptized, I was the president of Worldwide Advertising Inc., although several years prior to that time I had delegated away most of the day-by-day operations. During the years 1969 through 1975, copies of the Worldwide Advertising income tax returns were made available to Mr. Fortune and my remunneration to Worldwide Advertising was, of course, included as an important item on those tax returns.

In 1975, upon my baptism, and of course after becoming a director and an officer of the church and the college, it was necessary for me to divest myself of any and all interest in Worldwide Advertising.

Prior to 1971, I never lived in a faculty or college home. Although Mr. Armstrong and others thought it would be better for me to live in the Pasadena area, my wife was unwilling to make the move from Beverly Hills and hence we did not. In 1971, however, it became clear to Mr. Armstrong, to Mr. Portune and to me that there would be benefits of a substantial nature to the Work if I were to be able to undertake the responsibility of seeing to the needs of the very important overseas visitors that were corning to California at Mr. Armstrong's invitation, and also to maintain a residence that would lend itself to the type of formal and large scale receptions also necessary to fulfill the various responsibilities of the Work as a result of its ever-increasing activities throughout the World.

Accordingly, a more appropriate home was found in Beverly Hills that was, in Mr. Armstrong's opinion, the perfect residence for such activities. We did not feel, however, that it would be possible for me to live in such a residence on a tax-free basis as did our ministers and faculty members. Hence, we agreed that I would purchase the home. Financing would be arranged with the help of the Church and my remuneration would be adequate to cover the increased costs.

For many, many years Mr. Armstrong has stated on more than one occasion that I am the highest-paid individual in the Church. This fact is well known to responsible persons at Headquarters. Whether I should be the most highly-paid person in the Work, of course, is something for Mr. Armstrong, as Christ's apostle, to decide. I do not feel, however, that I should be embarrassed that Mr. Armstrong has felt that I have been "a servant worthy of his hire."

I have had no other financial dealings with the Work and I have never been involved as a recipient directly or indirectly of any favor, financial or otherwise, from any person or institution that has had dealings with the Work. My reputation in the community is without blemish and I intend to keep it that way.

I love the Work, I love the brethren. I am a dedicated and loyal servant of the living God and I would hope to be able to serve God, Jesus Christ, the Work and the brethren as well as Mr. Armstrong for many years to come. However, as I have told Mr. Armstrong repeatedly over the years, "Perhaps it is time for me to leave the scene for the benefit of the Work." I am still willing, as he well knows, to make that move if it would be in the best interest of the Work. But, in the past and in the present, Mr. Armstrong insists that this would not be the case and that he needs me.

I hope that I shall hear from you if there are any questions that I have left unanswered that may be in your minds or, if by communicating here today with you so openly, I raise questions that were not there before.

With Christian love, Stan Rader

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Pastor General's ReportAugust 14, 1978Vol 2 No. 31