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PASTOR GENERAL'S REPORT, MARCH 19, 1982
PAGE 5
It appears now that the decision not to honor his contract was not only
legally and financially sound but providential. For now we must ask the
question, if the Church had honored it, would some other person be accusing
the Church today of "bribery" to prevent the leaking of the accusations in
the "leaked" letter?
Further,
does not
in lies.
facts so
it seems appropriate to comment here that the Church did not and
have to request lies from anyone. The Church does not need to deal
The Church is only interested in attempting to document the actual
as to defend itself from the false accusations of its accusers.
One of the first areas of inquiry with Arthur �ndersen was to seek their
advice as to the appropriateness of finaneial expenditures between the
Church and the Ambassador Foundation. The commencement of the inquiry must
have touched a nerve because promptly a fiery telex was received from Jack
Kessler. As of March 1, 1981, he certainly felt there was no basis for the
"leaked" letter accusations because he stated:
The question was asked whether they thought there was any impro
priety
in
the Church's giving funding to the Foundation in order
for the Foundation to carry on its activities••••To me it's em
barrassing for Church officials to wonder aloud whether we're
committing some major fraud of this nature. There was no need to
ask Arthur Andersen what they thought since they have just given
us completely unqualified opinions two years in a row.
It is surprising he now chooses to ignore the exonerating effect of �rthur
Andersen's two years of "unqualified opinions."
The Church's investigation also uncovered a matter that caused it grave
concern. It uncovered the existence of two corporations in Nevada that had
ostensible legal authority to appoint a successor to Mr. Herbert W.
Armstrong in the event of his inability to govern the Church. Neither Mr.
Armstrong, nor the ministers whom he looked to for aid in spiritually guid
ing the Church, nor I, who served as house counsel for the Church for years,
had any knowledge of these two corporations. There has been absolutely no
satisfactory documented legal evidence that any of such persons would have
had any legal control whatsoever of these corporations.
Jack Kessler was one of the attorneys who created these corporations and
who was named as a Director of one of them. The other Directors were people
in his office who were not members of the Church. Only after the many
demand letters by the Church upon Mr. Kessler or his associates, attempting
to effectuate the immediate dissolution of these corporations, and only
after many dilatory responses, and only after the preparation of the plead
ings by the Church of a lawsuit to force their dissolution, were documents
received from Mr. Kessler's office which permitted the dissolution of the
two corporations without the need of filing a lawsuit.
Church Attempts at Recovering Its Property
Demands were then made to commence recovering of all corporate monies,
records and property from Mr. Kessler and some of the former officials and
employees. An accounting was requested from Jack Kessler for Church monies
that were in his possession. In due time a statement was received from one
of Mr. Kessler's firms, which sought to account for $150,000 of the funds