Rev. Falwell, Directors Quit Board at PTL

Rebuffed in their financial reorganization proposal for PTL, the Rev. Jerry Falwell and his board of directors resigned Thursday from the beleaguered evangelistic empire with a parting shot at the ministry’s disgraced founder, Jim Bakker.

Calling Bakker’s leadership of PTL “the greatest scab and cancer on the face of Christianity in 2,000 years,” Falwell nevertheless predicted that Bakker would eventually return to the television network and resort at Fort Mill, S.C.

“If the people (at PTL) need us and want us, we’ll be back as fast as we can get there,” Bakker said in a telephone interview with The Times from his home in Gatlinburg, Tenn. “We will go back to help get PTL back together again.”

Asked to Assume Control

Last March, Falwell was asked to assume control of PTL by Bakker, who announced that he had sex with a church secretary, Jessica Hahn, in 1980 and arranged to pay her money to keep the encounter quiet. Amid later disclosures of lavish salaries and bonuses given to the television evangelist and his wife, Tammy Faye Bakker, the Assemblies of God removed Bakker’s ministerial credentials in May for misconduct, including “alleged bisexual activities.”

But last spring, as Falwell, a fundamentalist Baptist, replaced the Pentecostal leaders of PTL with a new board and executives, Bakker began claiming that he had never intended to relinquish the ministry permanently.

Falwell, in a news conference Thursday at PTL’s Heritage USA resort, said he had vowed over the last six months never to allow Bakker to return “and rape the American people like he has.” A federal grand jury is investigating possible mail fraud and tax violations by PTL under Bakker’s leadership.

But Falwell said that he gave up when a federal bankruptcy judge in Columbia, S.C., Wednesday invited creditors of PTL to submit a reorganization plan to be considered along with the one submitted by Falwell’s board. More than $60 million is owed to creditors, many of whom favor the return of Bakker to the PTL ministry. PTL stands for “Praise the Lord” and “People That Love.”

U.S. Bankruptcy Judge Rufus Reynolds, who is overseeing the ministry’s reorganization under Chapter 11 of the U.S. Bankruptcy Code, ruled that Falwell’s reorganization plan did not take into account the wishes of the creditors and PTL’s “lifetime partners.” The partners contributed $1,000 in exchange for three nights per year at one of the park’s two hotels--a plan that Falwell said was oversubscribed under Bakker’s ministry.

In his interview with The Times, Bakker refused to say whether he has been asked by creditors to take charge of PTL. However, he did say: “I’ve heard a lot of rumors that there are those people who would like to have us back. My understanding is that the judge will approve a vehicle to run PTL, and who will drive it will be up to the board and that group” of creditors.

Bakker dismissed suggestions of a potential “walkout” of PTL staff members should he return.

“I hope everyone who would not be happy with us would feel free to do what they would like to do,” said Bakker. “I also feel that . . . staff fired (since his departure from PTL in March) should be given an even chance to return.”

‘Plotted to Steal PTL’

Bakker told a news conference Thursday that he believed that Falwell was stepping down because he did not want to face Bakker’s attorney, Melvin Belli, in bankruptcy court. “If they tell the truth, they will have to reveal that they plotted to steal PTL,” Bakker said.

The bankruptcy judge insisted that he was not taking sides in the dispute. “I’m not for either side; I’m for success,” Reynolds said. His ruling was intended to bring both sides to the negotiating table to work out a compromise reorganization plan, he said. Reynolds acted on a motion by attorneys representing a group owed $50 million. They told the judge that PTL’s present management refused to return their calls or to provide requested financial information.

Falwell said the bankruptcy judge’s decision to allow competing reorganization plans, to be filed within a week, also dashed the ministry’s plans to borrow $5 million to $10 million from a Wall Street investor. The loan was earmarked to pay operating expenses and payroll checks for the organization’s 1,100 staff workers, said Don Hardister, Bakker’s bodyguard of 11 years who is now a spokesman for PTL.

“It is as black a mood as it can get here . . . all of us are ready to walk,” Hardister said in an telephone interview. “Dr. Falwell asked us to stay, but I don’t know how long we can work for nothing. . . . We certainly won’t work for Bakker.”

Other Resignations

Among those who resigned along with Falwell were Norman Roy Grutman, a PTL attorney and board member from New York; Jerry Nims, an Atlanta businessman and chief executive officer of PTL, and Harry Hargrave, chief operating officer of PTL.

Also quitting were PTL show co-hosts Doug Oldham and Garry McSpadden, and the Rev. Sam Johnson, who was appointed by Falwell as pastor of the park’s Heritage Village church.

“In good conscience the 10 members of the board of PTL cannot sit on a board that could have the slightest potential for the return of Jim Bakker,” Falwell told reporters.

“The problem is, barring a miracle of God,” Falwell added, “Mr. Bakker will be sitting here in six months running this ministry and I cannot think of a greater ill that could befall this ministry.”

Asked if Bakker has won the fight over the ministry, Falwell replied, “No. The Christian family has lost the war.”

A spokesman for the Bakkers, interviewed by telephone on the condition that he not be identified further, said Thursday that Bakker may want to return to PTL as a consultant rather than assuming the reins again. The spokesman said that Kansas City contractor Roe Messner, who is the largest creditor and the builder of a still-unfinished second hotel at the park, may be asked to chair a new board.

At the Bakkers’ $148,000 Gatlinburg home, Tammy Faye Bakker fought to hold back tears when she recounted telling her husband that she felt homesick.

“I looked at Jim and said, ‘Honey, I want to go home.’ Then I realized we were home in Gatlinburg, which we love so much,” she said. But she added, “Our family has sacrificed a lot to build Heritage USA and I want to go home.”

The Bakkers went to Gatlinburg in June and set up permanent residence in July after selling a home in Palm Springs, where they had lived in seclusion after Bakker’s resignation from PTL.

According to a report by PTL auditors released in July, Bakker and his wife drew $792,000 in total compensation from the ministry in the 2 1/2 months before Bakker stepped down on March 19. The Bakkers’ salaries for 1986 were estimated to be $1.6 million, and Falwell said they had received $4.8 million in salaries and bonuses since January of 1984.

Thursday’s unexpected turn of events may have derailed the Bakkers’ plans to announce next week a nationwide “farewell” tour.

“We don’t know at this stage what will develop in the next 24 hours,” Bakker said. “If PTL wants us . . . if they need our help, that would be our priority in life.”

The resignations announced by Falwell and other PTL board members must be approved by Reynolds, who has guided the ministry’s reorganization since June. Falwell said attorneys would submit them to Reynolds “at the earliest possible moment.”

The board’s last act, Falwell said, was to return a clause to the ministry’s bylaws that would give the Assemblies of God, a Pentecostal denomination based in Springfield, Mo., the authority to name a board of directors, subject to approval by Reynolds.

However, Juleen Turnage, head of public relations for the Assemblies of God, said the church had not been alerted beforehand. “It is strictly up to the bankruptcy judge to make a decision on that clause. We can’t take it (PTL) back because it was never ours,” she said.

‘Never Been a Quitter’

Falwell, who has not received any payment for his work with PTL, said, “I feel a painful sense of relief--painful because of not being able to finish what I started. I’ve never been a quitter.”

In an interview in August, Falwell said he was optimistic about the pace of donations to maintain the monthly budget and about his board’s reorganization plan. He said the board’s proposal was to offer PTL’s lifetime partners discounts at the park hotel and a chance to own stock in a proposed for-profit corporation that would encompass PTL’s entertainment enterprises.

Falwell indicated strongly in the interview that he would not stay at PTL indefinitely, but he added that it would “destabilize everything” if he were to announce in advance that he was going to leave on a certain date.

Falwell’s ministry includes Liberty University and the Thomas Road Baptist Church in Lynchburg, Va., whose Sunday service is syndicated as the “Old Time Gospel Hour” on television.

He said that PTL’s main program, the “PTL Club,” will remain on the air at least three weeks, but that the Heritage USA payroll would not be met today. Hargrave predicted that all the park employees would be paid by Tuesday.

Times religion writer Russell Chandler also contributed to this article.