Herbert W Armstrong

The Andersen Audit and New Lines of Credit

The Church-commissioned audit by Arthur Andersen and Company is, for all practical purposes, completed now, Mr. Rader announced. The results should be released in about two weeks. He was also pleased to announce that "we've given them complete cooperation — total access to everything we have... There is nothing that they have requested that we haven't given them."

The Church asked the auditors to meet with some of our new bankers together with representatives of our business office. The banks are now assured, on the strength of our record, that we are good clients and have eagerly extended lines of credit to us. Our readers will recall that our former banking and credit arrangements were destroyed when the state pounced on the Church without notice and the receiver dropped the ball in failing to protect the sterling banking relationships God's Church had built over many years.

Although new banks are prepared and willing to extend us the credit we need during the low income periods of the year, "Unfortunately," Mr. Rader continued, "we are not prepared at this point to accept the credit, the loans, because we are still waiting for a precise clarification of one point in the court order that was finally signed, as you will recall, by the Honorable Judge Title."

That court order said that we must give the Attorney General 30 days notice before we borrow any money. But herein lies the snag: Mr. Rader went on to explain that "We are not about to give the Attorney General notice of anything that we do, other than to serve him formally with bits and pieces of the lawsuit filings as they are required. For us to give notice to the Attorney General would be to admit that he has jurisdiction over us. The issue that we are concerned about is that he doesn't have any jurisdiction!"

So we will be going back before Judge Title to get a clarification on that point in the court order, which our lawyers believe was automatically stayed by reason of the appeal anyway. If we don't get a ruling from Judge Title which will permit us financial freedom, we will go up immediately to the appellate court on this very narrow point and the matter should be resolved.

Summary of the Lawsuit

In order to summarize for the audience where we are in the lawsuit, Mr. Rader read a statement he had prepared, which he also enlarged upon as it was read. We have reproduced the essence of that statement below:

The war rages on. The last few months have witnessed a new effort by the Attorney General to establish his dominion and control over the Church. The Attorney General claims that the state owns the Church property (he has stated that again). He has said the Church has no proprietary interest in its own assets, its own records (all of which, of course, is absurd!). He has claimed that he may require us to justify our expenditures at his whim, without probable cause. And he has attempted to bolster these desperate claims through waves of legal maneuvers all designed to force us to surrender our constitutional rights, which we will not do. Mr. Armstrong said there will be no compromise.

He [the Attorney General] will not succeed. Two days ago, a dissident ex-member who originally was one of the parties who instigated this travesty, admitted under oath that he, as a member, was aware of all the facts that the state claims we concealed from the members, and that he had become unhappy and acted as he did only after Ted Armstrong and Ted Armstrong's son [Mark] - spoke to him and bitterly condemned us.

Other dissident instigators have been compelled to testify and shortly will do so, which I expect will result in further admissions that the charges made against us are baseless, and as Mr. Herbert Armstrong has thought for some time — as a matter of fact, from the very beginning — was all the result of Ted Armstrong's efforts. (His son, as you recall, stood over him in Tucson back in July, and said, ''I will destroy you," or words to that effect, threatening him with his fist in his face.)

We are now beginning to launch our own offensive in forcing the state to disclose what Church documents it possesses in violation of our rights. We are getting to the bottom of the conspiracy which resulted in this mockery of the Constitution.

In short, progress is slow, and sometimes painful, but progress is being made. The credit belongs to you people here today and to the brethren out there in the field who have worked and fought for what is right and continue to support Christ's Work. He is directing it and we'll all be led to victory.

State Clings to Hope of Making Its Point

Through the whole "procedural grind," as the pre-trial stage of the lawsuit has been described, the legal battle is one of exchanging of papers, jockeying for position and appearances in court. Not very exciting, but tactics which are very important to both sides. Mr. Rader mentioned how the state is trying to "lift itself up by its own bootstraps"... meaning that they cannot prove what they have alleged. "[So] they are hoping that they can prove something else — which they won't be able to — but now they are in this peculiar position... They want to be able to at least establish from this lawsuit that even if they are wrong vis-a-vis us, they still had a right to do what they did.

"And that is why," continued Mr. Rader, "Mr. Armstrong will not let them off the hook regardless. He not only wants to be totally vindicated, but to also prove that they don't have a right to do what they did, because if they had a right to do what they did, even after we've won this lawsuit, they could turn right around a year from now and come in and say, 'We don't like what you are doing. We have a right to come in here by whim and caprice and tell you what to do.'" Mr. Armstrong is simply not going to be in the position where he is told by the state what is the gospel and how or how not to fulfill the great commission.

Mr. Rader said "a sovereign [such as the state of California] would be willing to loose a lawsuit against us, not being able to prove that we did something wrong, and still try to prove what? That they had a right to make the inquiry and to do what they did about making the inquiry. In other words, they are going to try desperately to win that point. They are going to try desperately to win the fight that they had a right to file a lawsuit, to put a receiver in." But the state doesn't have the jurisdiction lawsuit, to put a receiver in." But the state doesn't have the jurisdiction that it claims it has over us.

Conspiracy Being Brought Into the Glaring Light of Day

The cast cf characters in the conspiracy against God's Church is now pretty well known to us. "I would say we know that the people who were involved were the people whose names appeared [as relators in the lawsuit] and a lawyer back in New Jersey and a lawyer here and a Deputy Attorney General, a corrupt judge and the ex-judge who wanted to make a lot of money," said Mr. Rader. "But I don't think they thought the problem through very carefully," he observed. "They relied upon a lot of information that was false, and they didn't protect themselves for what would happen if it were to backfire. But they were told by others, such as C. Wayne Cole, that there wouldn't be any resistance, that everybody wanted Mr. Armstrong out of here and that he was holding things up. Ron Dart has been quoted as saying, 'If Mr. Armstrong had only died years ago, this Work would have been better off!' Anybody believe that in this room? That's what he has been quoted as saying: 'If he'd only died years ago, what we could have accomplished."'

Mr. Rader continued, "In other words, they didn't think the problem through... What would happen if Mr. Armstrong wasn't some senile old fool, lying down there in Tucson in a state of semi-consciousness? (That is what they were told, 'Mr. Armstrong didn't know where it was all at!') But they found out in a hurry. His letters alone destroyed them! The whole power of the state of 21 million people found out that Mr. Armstrong was not as his 'son,' Ben Chapman, had stated in an affidavit."

It was also noted by Mr. Rader that "We now have incontrovertible evidence, both in writing and under oath, that the conspiracy began prior to July 1978 [which was the earliest we had traced it to until now]." And what did all these people say had been done which was wrong? Nothing. They admit that — they just would have "done it differently!" Mr. Rader reminded everyone that we have God's protection over us, "but that spiritual source they didn't count on."

Mr. Armstrong "On Top of Things"

Mr. Armstrong has been conducting many meetings in his home in Tucson with various key personnel, keeping right on top of things. "Anything that has been changed or has been cancelled or anything of that sort has been done directly by Mr. Armstrong after meeting with various people involved," Mr. Rader assured the audience. "Mr. Armstrong has taken all of these things very firmly into hand and is meeting with people by himself and then making these decisions based upon that."

Mr. Rader stated that considering the brethren and their support from the field, "We are much more solid today in every respect than we were on January 1, and Mr. Armstrong is still getting the Church right... as time goes on we will be stronger yet."