Chuck Gallagher on choices and consequences

Chuck Gallagher had everything going for him. He was a partner in a successful accounting firm, lived in a big house, and even flew his own airplane. He professed to be a Christian and was active in his church. But he would later say he found his identity not in Christ, but in all the stuff he was accumulating. Then he had all that stuff stripped away, become a convicted felon, and learned who he really was and who Jesus is. Today he lives in Greenville, S.C., where we had this conversation.

You were a hotshot business leader in North Carolina. You were a young partner in a CPA firm, making a lot of money, and yet, somehow, that wasn’t enough. What happened to you during that time in your life, which by all appearances looked to be a very successful era? I think the right words are “by all appearances.” Now, I will say I made a lot of good choices. I became a CPA. I had testified before Congress and wrote articles and taught continuing education courses. All of those things were wonderful, but I will also say—this is in the mid-’80s—I was overextended and underfunded. I had way too much debt.

My master’s degree is from Appalachian State University, and I’ll never forget going through the finance course. One of the things that we were taught is power of leverage. It’s just one of those things that stuck with me. It’s like, buy the most expensive house you can barely afford when you get your first job and, over time, you’ll make more money because you’ll get annual increases because of your performance, and your house will go up in value, which creates more equity in your house. … Then the question is, what do people do with equity? If you think about the financial services industry, you borrow against your equity. For what? To buy more stuff because, conceptually, the more stuff you have, the more valuable you are as a person. That was the mentality in the mid ’80s and the mentality that I bought into. The unfortunate thing is I’m not sure it’s a dramatically different thing now.

You became a partner in a CPA firm and started managing other people’s money as a trustee. That’s where you started getting into trouble. Talk about those early moments, that first time you did something that was wrong. It’s crystal clear. I was a trustee of a client’s trust. It was called, at that time, a Clifford Trust, educational trust. I got a call from a local banker, and the banker said to me, “Chuck, you’re two months behind in your house payment. Is there a problem?” The truth is I was two months behind in my house payment, and I could not in my mind just fess up and say, “You’re right. I really can’t manage my money and I need some help. We need to see if we can work through this.”

You were an accountant, and you helped other people manage their money so it would have been a tough confession to make. That was the tough confession. … It was not an expected call. At the moment when I was faced with it, I said, “Well, apparently, the payment’s been misapplied.” This is the mid ’80s so computers were not what they are today. He said, “Well, I’ll check and I’ll get back with you after lunch, but I don’t think so.” In the space between him calling me back and the recognition that, oops, I’m caught, I immediately began to think about how am I going to solve the problem?

There were legitimate, good solutions, but none that immediately came to mind. Partners who controlled the checkbooks, so to speak, were out on an audit. They weren’t immediately available. My mother lived in Maryland. I could have called her. Transferring funds in the mid ’80s was different than it is today, so I had an incredible need. One, I needed to pay the house payment, but the other part is I didn’t want to embarrass myself and show my vulnerability. With that need and with the fact that I was trustee of the trust, which gave me opportunity, I rationalized that I was going to “borrow”—and I say that in quotes—money from the trust to solve my problem.

Now, if I had said, “I’m going to steal money to solve my problem,” I couldn’t live with myself. As human beings, we tend to find, when life gets out of balance, that we try to find a solution to bring it into balance and we can rationalize it in many ways. … I knew it was wrong, but at the moment of making the choice, it was the quickest, easiest, simplest solution to a problem.

Did you ever pay that money back? I paid it back. It’s almost like, at that point in time, the rationalization became cement. It cemented that it must be right and it must be OK and it really must have been a loan if I paid it back.

That wasn’t the end of it? No. I found out it was easy. The next time there was financial need, I knew where I could go to borrow the money. I did it again and paid it back. By this point, then I have now convinced myself that what is clearly wrong, ethically, morally—it was theft, and not talking about it or telling the truth about it is lying—but, all of those things considered, I have now convinced myself as a human being that I can get by with this, and I did it again.

You did this over and over again and you eventually found yourself about a quarter of a million dollars in debt. You were an airplane pilot. You had a big house. You had all the trappings and, by now, you also had a couple of kids. Then, one day you were teaching a class to other accountants in Boise, Idaho. What happened then? I got a call. Actually, I got a pink slip that said, “While you are out, call your office ASAP.” When I did, one of my partners got on the line and he said, “Chuck, one of the clients that you’ve invested some money for, well, they’ve had a change of circumstance and they need to liquidate the investment ASAP. They’ve been driving me crazy. Just tell me where the file is and I’ll start the process.”

Warren, at that moment, God knew and I knew the truth. The truth was I hadn’t invested that client’s money. I had stolen it. The truth further was I had no source with which to repay it to keep the illusion going.

Life changed for you in that moment? Absolutely.

What did you say to your partner? It was earlier in the week, and I said to my partner “Look. It’s not like this is invested with Charles Schwab. We can’t just call Chuck and liquidate the investment. It’s more complicated than that, but I’ll tell you what I’ll do. I’ll make a quick telephone call, get the process started and, by the way, I’m going to be back in the office tomorrow, so just call the client. Tell him I’ve got it under control and we’ll go over the details tomorrow.” … It gave me a moment of breath to recognize what’s coming. Nobody else knew, but I knew what was coming. I just had to collect my thoughts and determine what is the course of action that I’m going to take now.

What was that course of action? First, I considered suicide. That seemed to make the most sense to me. I had disgraced myself. I had disgraced the profession. My wife had no clue about it; I had two young sons. But I also hate pain. To end my life would have been painful, at least from my perspective, so I started calling a psychologist, psychiatrist, whomever. That was quite frustrating, I might admit, but I finally got someone.

I have no idea who it was. I don’t know if it’s a psychiatrist, a psychologist, or the janitor. No clue. He said to me something that was very powerful. He said, “Son. You have made a terrible mistake, but you are not a mistake.” He said, “The choices that you make tonight will define your life in the future and the legacy you leave for your two sons. Make those choices wisely.”

It’s probably not too much to say that he saved your life that night. Absolutely. I don’t think there’s any question about that.

What happened next? I came home, and I knew I had to meet with my partners and my wife. I chose partners first. I thought I might need a practice round. It was an interesting conversation. I decided on the way home that the best I could do was to be totally transparent. Unbeknownst to them, I sat down with them in the conference room. They thought it was going to be a great meeting. It turned out to be something dramatically different than what they anticipated.

One of my partners suggested I consider suicide. The other one fired me. … Of course, I told my wife, who had no clue what was taking place. That was a devastating revelation to her. Coming home, I was met by my oldest son, who jumped in my arms, “Daddy, I’m so glad you’re home.” It quickly turned to several days and a weekend and weeks that followed that was dramatically different than anyone back in my hometown was anticipating.

At this point, you’re not thinking you’re going to go to jail, right? I anticipated jail was a possibility, but candidly, with the help of family and friends, initiated by the pastor in my church, I was able to piece together funds to make restitution.

Would you say that you were Christian during this time? I was a Christian during this time. Up to this point, I had been music director in the church for 16 years. I was clearly living my faith at one level and living a deceitful life at another.

After selling your house and everything else you owned, were you able to pay all that money back? With the help of family and friends, yes. Everyone was paid back with interest. They did not want to prosecute me. The local [district attorney] didn’t want to prosecute me. He felt like I had lost my license as a CPA, lost my job, made restitution, but that didn’t stop the federal government.

I’ll never forget, two guys came to my front door in decent suits, knocked on the door, and they said, “Is Charles Gallagher there?” When you’re called by your Christian name, you typically have problems in the South. One was from the Department of Labor. He felt like I should be criminally prosecuted for embezzling money from a retirement plan. … The other was from the IRS—beautiful gold badge—but he felt like I should be criminally prosecuted for not paying tax on stolen money, which never crossed my mind.

You ended up getting convicted of those federal charges and sentenced to 18 months in prison, of which you served 16. In the federal system, you’re going to serve 85 percent of your sentence, which was, functionally, 16 months.

What did you learn in that process? In my mind, I was identified by everything that surrounded me: the house, the car, the clothes, the titles, the stuff. Kids today might call it bling, but that was the identity. …

Then, you all of a sudden are stripped of all of the stuff. It’s like looking in the mirror and saying, “OK, what is the real truth? Who is Chuck Gallagher?”

Prison clearly showed me that every choice we make in life has a consequence. I don’t care what the choice is. I don’t care when it’s made. The unfortunate thing is, when you get so caught up in the illusion, you start to believe there’s no consequence, which is not true. You will reap what you sow even if you don’t think you’re going to. I reaped what I sowed.

You had two small kids at home, about 5 and 8 years old at that time. You had to have a very difficult conversation with your children from prison, a three-minute conversation because that’s all the time they would give you. On Christmas Day of 1995, … when everyone else is out celebrating Christmas and spending time with their children and just enjoying the love, I was standing in line with a group of men who were allocated three minutes on a phone call to be able to call home collect and say to my two sons, “Merry Christmas. Daddy loves you.”

It was the first Christmas I had ever missed with those children. It really brought home the power to me of what consequences can be and how they can be faced and the fact that I wasn’t the only person experiencing that consequence. I made the choices, but I was living a consequence, as was everyone immediately connected with me. I can’t lose the fact that other people had to experience consequences from my poor choices.

Did your marriage survive that? The marriage did not survive. Now, in fairness, it survived for a number of years. … The issue with my ex-wife was, every time I opened my mouth, was I telling the truth or was I telling a lie?

You’ve clearly had to put your life back together. How have you done that? First, getting out of prison, I sold cemetery property door-to-door. I found that not many people wanted to give convicted felons an opportunity. I accept that. It’s true today. I will typically say, “Do what other people are unwilling to do, and, if you do that and are given that opportunity, you better be the best at it.”

God has used you in very powerful ways because of that prison experience. Was it worth it? It was. The question that’s asked of me often is, “If you had to do it over, would you do it again?” The answer is no, knowing what I know today. I wouldn’t want to do that and experience it, but I have to say I don’t regret where I am today from that experience. Prison was the worst time of my life, but the best thing that could have ever happened to me. I would never have the opportunity to talk with people and influence people and share with people the truth of living faith if it weren’t for the fact that prison was a part of my life.

What are you doing now? Today, I’m the chief operating officer of a national company. I also speak around the country and outside of the country on choices and consequences, helping people see the ease at which good, smart Christian people can make bad choices, what those patterns are, and how we can recognize them and prevent them. If there’s a soul out there that somehow, from my experience, can learn what not to do, I think then there’s some pay-it-forward to that.

Listen to Warren Smith’s complete conversation with Chuck Gallagher on Listening In.