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PASTOR GENERAL'S REPORT, July 11, 1980
Page 14
"And the head of this company did not wish to carry on the burden of this
entertainment himself.
Didn't like to do that sort of thing, didn't feel
he was up to it.
Didn't feel he ought to but knew it had to be done,
somebody had to do it. But he felt that the current residence of the
key person in his organization was 'not befitting a person in those
circumstances'--those that he had in mind.
"Because this (key1 person could not afford to finance or maintain such
a property, the company made arrangements so that he could. The company
borrowed $300,000 from the Bank of America and reloaned it to the employee
or person at 7% per annum secured by a deed of trust on the property.
"The house that the company had selected cost $655,000 as furnished in
1967. So that the individual could afford to make his payments, the
company agreed to give him a sizeable bonus and an increase in regular
monthly compensation sufficient to enable him to meet the increased
obligations, and agreed to pay for 60% of all maintenance expenses, all
direct food, liquor, entertainment expenses and an allowance for de
preciation based upon company usage of the home.
"The Internal Revenue Service questioned the transaction but the court
found that even though the taxpayer was the president of the company and
in some position to influence his company's decision, because he was not
a stockholder at the time the contract was negotiated, the arrangement
was an arms�length bargain.
It held therefore that if the respondent-
that's the IRS--feels that the actuai use of the residence does not
justify the dollar amount of reimbursements, he has picked the wrong
target.
"Now those are some facts.
[But] the Attorney General keeps crying in
every forum, any time he can find a listener--whether it's on radio or
television. But he's kind of stuck now. He's kind of like a record
that's just on the same thing now. He's zeroing in on me and on one
transaction now.
[So] everytime I appear someplace I'm asked the same
question: 'What about this house, Mr. Rader, over there in Beverly Hills?
We understand that the Church bought you a house and that you sold it
and pocketed the proceeds.
1
"Now these facts I read you have nothing to do with the Worldwide Church
of God! But you'll find those facts recited-rn�9�United States Tax
Court case [and] of all things (didn't change any dates or amounts) it
concerns the Ralph M. Parson's Company [a huge multi-national engineering
firm based in Pasadena]. You see, Mr. Parsons didn't want to do all the
things that had to be done.
But he had somebody in his organization who
could do all those things that needed to be done.
"Now Mr. Leonard, who is the president, didn't want to live in Pasadena:
I don't know why. Maybe his wife didn't like it. My wife didn't like
Pasadena at one time. So the president of the company had a house bought
over there in Beverly Hills. Parsons himself picked it out.
"And the price of the home was even more expensive than the home that I
had. The money was borrowed by Parsons and reloaned. And the facbs are
almost identical. The only one that doesn't know about these facts yet
is the Attorney General. And I'm sure it's not the only case. Thete