Forgive Us Our Debts?

[March 24th, 2004] Mary Manin Morrissey has met the Dalai Lama, spoken before the United Nations and written an acclaimed book on spirituality. But on Sunday she stood before hundreds of members of her Living Enrichment Center in a new role: failed business executive.

As Morrissey looked on from the back of the room, the center's new vice president of operations, Marty McCall, told the congregants, "Mary is no longer our CEO."

McCall, standing in the center's cavernous, high-ceilinged auditorium, was speaking at a meeting called to discuss a $20 million debt that threatens the survival of the Wilsonville megachurch and will test the faith of its 5,000 members.

McCall was quick to note that Morrissey is staying on as "our full-time spiritual leader." But the applause which greeted that statement couldn't mask the fact that the debt is grim news for a congregation that's often told to focus on the positive.

Morrissey founded the nondenominational Learning Enrichment Center 28 years ago in her Beaverton living room. Her teachings in the New Thought movement, which blend 19th-century philosophy with New Age trappings, struck a chord with many Oregonians who had dropped out of other churches or never attended in the first place. Eleven years ago, Morrissey moved the growing congregation to its Wilsonville campus, whose facilities include a rose garden, an athletic field and the Namasté Retreat Center.

Morrissey spoke only briefly at Sunday's meeting, saying she had been "over-optimistic" about the church's financial potential, optimism that she said was "fueled by our theology of operating on faith."

The church's financial problems first became public last week, when The Oregonian reported that it had been sued by the city of Wilsonville for unpaid taxes and utility fees.

"That's a story we wish hadn't gotten in the papers, but it did," Charles Markley, a Portland lawyer retained by the church, said Sunday. But, as the parishioners learned in painful detail, the $56,077 owed to Wilsonville is the least of their problems.

The church's debt, which is four times its annual budget, includes $10.2 million owed to its mortgage holders and--perhaps most worrisome--$8 million in unsecured, overdue loans from members themselves, a figure that drew a soft, collective gasp from the Sunday faithful.

"A great many" of those loans were made directly to Morrissey, McCall said.

The meeting was one of a series being held by the church on its debt, which McCall said she was told, only last November, totaled $600,000.

So far, no one has accused Morrissey of defrauding the Learning Enrichment Center, whose financial records, as a religious organization, do not have to be made public. Instead, Markley said the church had overestimated the growth of the congregation and underestimated the cost of maintaining the campus when it moved to its Wilsonville site 11 years ago.

According to Melissa Watters, a local financial investigator, that faith-based aspect often gets businesses into money trouble. "This happens a lot," says Watters, whose Portland-area firm, Watters & Levey, deals with problems ranging from poor bookkeeping to actual fraud.

"People get caught up in the wonder-ness of it all," she says. "They have a big figure who is the one who teaches them, puts them in the right direction. They want complete faith in that person. They don't take the time to ask the questions, 'Where is my money going?' and 'How is it going to be used?'"

Some of the cash was used to prop up New Thought Broadcasting, a self-described "a spiritual radio, television and Internet network" run by Morrissey's husband, Edward. Markley said the church "held an interest" in the broadcasting company, which broadcast Mary Morrissey's messages.

"In about 20 minutes, I determined that it needed to be closed, and needed to be closed immediately, until it had a way of paying its ongoing expenses," Markley said.

Markley told congregants that Morrissey's removal as chief executive officer and the institution of new financial controls were intended, "to a large extent, to take Rev. Mary away from the business and financial side."

"This is a business," said Markley, whose law firm specializes in business restructuring. "It's a faith-based business, but it's still a multimillion-dollar business, and it needs to be reorganized."

Markley told the congregation that a plan to repay the $20 million debt--some of which is owed to the Internal Revenue Service and the Oregon Department of Revenue--has been worked out. But he made it clear that the plan depends on at least 25 percent of the congregants who made loans agreeing to write them off.

"It's a delicate plan," said Markley. "It depends very heavily on not having any other financial surprises."