Money for nothing?
INSP puts highly touted and state-supported projects on hold
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Yogi Berra might call it a case of "déjà vu all over again."
A Christian television ministry in suburban Charlotte, N.C., grows quickly-in just five years-from less than $30 million in annual income to nearly $70 million. The ministry embarks on a $100 million building project. Then come accusations of excess and abuse of donor funds.
This is not a description of Jim and Tammy Bakker's PTL Network, which closed 20 years ago. It describes The Inspiration Networks.
In some ways, the similarities are not a surprise. The Inspiration Networks began in 1990, when televangelist Morris Cerullo bought what was left of PTL for $7 million. For the first decade, it looked as though INSP, as it has branded itself, might be different. Until 1999, the organization did not solicit donations on-air, receiving most of its income by selling "blocks" of time to mostly mainstream evangelicals such as Charles Stanley and D. James Kennedy.
But it also struggled financially. In 1999, income was only about $16 million per year, and assets had actually declined. So that year the network started asking for donations on-air. The year before, donations had amounted to less than 10 percent of the organization's income. By 2007, overall revenue had grown to almost $70 million, with as much as $40 million coming from donations.
And this supposedly nonprofit ministry suddenly became wildly profitable, generating about $39 million in "income greater than expenses" between 2002 and 2006 alone. Assets-including a lot of cash-grew to $116 million by 2007. It is now the second-largest Christian media network in the nation.
But what to do with all that cash? In early 2006, David Cerullo, son of Morris and now president of INSP, hired Christian PR guru Larry Ross to help him announce the creation of the $100 million City of Light, where both ministry and for-profit organizations (such as INSP's production company MediaComm, which does work for NASCAR and others) would be housed just over the South Carolina border from Charlotte.
INSP promised to create jobs and spur economic development. In return, the state of South Carolina spent $1.2 million on road improvements at the site. The network also received a direct payment of more than $500,000 from a state program designed to encourage infrastructure improvement. Pat Robertson, Rod Parsley, and South Carolina Gov. Mark Sanford attended the project's groundbreaking event, which was broadcast live on The Inspiration Network itself. Benny Hinn participated via satellite.
But the project has turned out to be less than promised. According to a two-part investigation by The Charlotte Observer, only two of the nine promised projects have been started. Several of the for-profit projects-the ones with the greatest chance of generating jobs and tax revenue-have been put on hold. INSP blamed the economic downturn for the delays, saying that the promises haven't been broken; only their timing has been affected.
But the economic downturn did not prevent David Cerullo from paying himself $1.5 million in 2007. In addition, Cerullo's wife Barbara, and children Ben and Becky, are also on the payroll. And one construction project is moving forward: a new home for David and Barbara Cerullo. The home is under construction, so its final value can't be determined. Building permits obtained by The Charlotte Observer put its value at $2 million. Public records placing the value of the lot at $950,000, and a construction loan of $3.15 million, suggest the home could be worth much more.
These new developments caused the government of South Carolina, in June, to revoke some of INSP's tax exemptions. The organization itself, which aggressively sought media coverage when it announced its City of Light, has suddenly gone silent. WORLD repeatedly sought comment from INSP for this story. Dave Wagner, a Charlotte television reporter who broke many of the new developments surrounding INSP, said, "I have had more access to U.S. presidents than I've had to David Cerullo. Despite repeated requests, I was told that he wasn't available to talk."
Wagner noted that-for better or worse-many people treat TV preachers and ministries as their church. "I'm a minister's son, and the church budget has always been an open book," Wagner said. "It concerns me if people don't know how their church dollars are being spent."
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