the Prophet margin

Mary Morrissey's megachurch is $20 million in debt. Can she pull off a resurrection?

First, there's the hair, artfully streaked and styled. Then, there's her dress, always impeccable. Finally, there's the financial controversy that's threatening to bring down the multimillion-dollar institution she's built around her own persona.

The similarities haven't escaped the notice of the Rev. Dr. Mary Manin Morrissey.

"Following in the steps of Martha Stewart, I'm being very careful about not saying what I'm not supposed to say," Morrissey joked last month to parishioners at the Living Enrichment Center, her 4,000-plus-member megachurch in Wilsonville.

Morrissey doesn't sell designer brownies and bedsheets. Rather, she's an internationally known saleswoman for New Thought Christianity, a century-old movement that is short on dogma and long on personal affirmation.

She's a 54-year-old woman who went from being a "disgraced" pregnant teen at Beaverton High School to a bestselling author who hangs with the Dalai Lama and the pope. She presides over one of the biggest congregations in the metro area, in a facility that boasts a swimming pool, bookstore, cafe and coffee shop.

But Morrissey's empire, like Stewart's, is beginning to crumble. On Sunday, she announced to parishioners that the church, which has been unable to keep up with the mortgage payments on its 93-acre campus, will soon have to move.

The news gave some certainty to a congregation that, until recently, had no idea of the extent of the church's debt--now pegged at $20 million--and what its attorney called a "delicate" plan for paying it off.

A religious institution in financial trouble is hardly unprecedented. And, frankly, neither is the notion that a pastor may have played loose with the church's checkbook.

But the nondenominational Living Enrichment Center is hardly your typical church. Morrissey's followers include local business executives and developers--people not known for gullibility or bad investments.

"I can't think of a high-profile case where one of these churches, which has grown for more than a decade, has imploded financially," says Mark A. Shibley, an associate professor of sociology at Southern Oregon University who has studied churches like the LEC.

"It would surprise me that a megachurch that grows up in a corporate culture would not be able to manage its books. It would make me think it has something to do with personalities and individuals, rather than the church's structure."

It may be months, if not years, before Morrissey's role in the LEC's financial crisis can been fully investigated and revealed. But already, the church's debt has some troubling aspects.

First, there's the size. In November, Morrissey told parishioners it was $600,000. Then, in late February, it rose to $15 million. A month later, it was $20 million.

It's also unclear what caused the debt.

So far, congregants haven't asked--at least not publicly--why the church owed more than $10 million on property that it purchased, in the early '90s, for less than $3 million. There have been capital improvements, to be sure, but not $7 million worth.

The church's vice president of operations, Marty McCall, said she did not know who had purchased the property, or for what amount, because the sale was handled by the owner (who lives in Honolulu), not the church.

McCall said regardless of the purchase price, the church's $10.2 million mortgage debt has been wiped out, leaving the congregation to grapple with a debt that still totals over $10 million, and the prospect of finding a new home.

McCall promised that additional information explaining how the debt was incurred would be forthcoming in future weeks.

The largest portion of the remaining debt, $8 million in parishioner loans, also has puzzling aspects. Although $6 million of the money was loaned to Morrissey personally, all of it was intended to be used for the nonprofit church.

But Morrissey has acknowledged that some of this money was instead diverted to a for-profit venture, New Thought Broadcasting, that was run by her and her husband, Ed. (The company, which aimed to make New Thought material available online, closed its doors in mid-March.)

Then there's the issue of Morrissey's pay. In March, the congregation was told that the debt includes more than $600,000 in unpaid compensation owed to Ed Morrissey. Mary Morrissey, they were told, had agreed to waive a comparable amount of unpaid compensation owed to her. This upset at least one church member, who was under the impression that Mary Morrissey was living off proceeds from such things as her book and tape sales.

"I got so angry, I had to leave," says the now-former congregant. "Mary has stood up and said, so many times, that she takes no salary."

Finally, there's a disturbing allegation from a mentally disabled woman who says the Morrisseys swindled her out of her $245,000 nest egg to get financing for their now-scuttled broadcasting venture. (See "Love Thy Investor," page 23.)

As a result of these and other revelations, at least one parishioner has filed a private lawsuit. The state Division of Finance and Corporate Securities has opened a formal securities-fraud investigation into New Thought Broadcasting, and the Internal Revenue Service reportedly is not far behind.

If the allegations that face Morrissey, like those Stewart faced, are proven, they could produce not only disgrace and financial ruin, but jail time. As Morrissey said during an April 18 meeting with parishioners, "You may read in the newspaper that your minister is under criminal investigation."

While attendance has dropped 22 percent in recent weeks, most of Morrissey's parishioners seem to be keeping the faith.

"This is a tough situation," says retired Nike executive Rod Tallman, a longtime member whose ex-wife is on the church's board. "Mary and the LEC are doing very valuable work, for our community and on a global scale. I would ask people to focus on that, rather than on what's happening now."

Another LEC member, professional mediator Holly Wells, is equally supportive.

"I have not heard anything, from any source, that indicates she has done anything intentionally wrong," says Wells, who has contributed to a legal defense fund for Morrissey. "I've seen no sign of somebody who is running away, being sneaky or manipulative. I really believe in her, what she does, who she is."

In the 1965 Beaverton High School yearbook, the sophomore class officers are posed for their obligatory photograph.

Of the eight, only one--14-year-Mary Manin--is looking directly at the camera. Petite and pretty, poised and confident, she is at the beginning of a triumphant high-school career: Sophomore class officer, junior-class homecoming princess, aspiring college student.

But her plans took a detour at the end of her junior year, when 16-year-old Mary became pregnant.

Marrying her boyfriend, college freshman Haven Boggs, "was the only possible choice," she wrote three decades later in her first book, Building Your Field of Dreams.

"My parents mourned me as if I had died," she wrote. "All the dreams they had had for me--graduation, college, easing into family life at a more mature age--evaporated into nothingness. I sat terrified on a hard courthouse bench with Haven as we waited for our marriage license. My mother sat opposite us on another bench, crying uncontrollably."

Teri Johnson Joly, who planned the class of 1967's 10th, 20th and 30th-year reunions, remembers Mary Manin's predicament vividly.

"She was pretty popular," says Joly, who became reacquainted with her former friend and classmate when she began attending the LEC years later. "Her junior year was a huge year for her. She was very involved in school and leadership and everything."

But pregnant girls, even those who got married, weren't welcome at Beaverton High in the mid-'60s. So Morrissey finished her secondary education, at night, at Portland's now-defunct Washington High School. "Apparently we weren't fit to be seen during the day," she writes of the "disgraced girls and delinquent boys" who became her classmates.

The couple's first child, a son, was born midway through Mary's senior year. A second son followed 21 months later; then two more children in 1975 and 1977.

Morrissey attended college, getting a degree in elementary education before the couple moved from Washington County to Phoenix, Ariz., where joined her husband in ministry school.

After graduating from the School of Christian Philosophy, the couple returned to Washington County, where, in 1980, Morrissey says an "inner voice told me to take our ministry on the road."

For the next year, the family of six lived in a trailer towed by a Checker cab, putting on self-designed workshops at scores of churches and religious centers around North America.

The traveling ministry ended in Alberta, Canada, where a hailstorm defaced the Checker cab.

"When we arrived in Oregon, we immediately put in a claim for the battered cab," writes Morrissey. "A few weeks later, the insurance company sent us a check for $2,500. Written at the bottom of that check was the notation, 'Hailstorm. An act of God.' The message couldn't get any clearer than that."

That "message," she says, was to start a local ministry.

Using the insurance money, the couple bought a banner that read "Living Enrichment Center" and paid the rent on the first of several temporary homes, which included a Beaverton movie theater. "Each Sunday, with the smell of stale popcorn wafting through the air, I stood on the stage and preached into the inky darkness," writes Morrissey.

Her theology was "New Thought" Christianity, an outgrowth of the 19th-century transcendental movement of Emerson and Thoreau. New Thought uses various messengers to encourage its followers to live on Earth as fully as possible instead of focusing on Heaven. While the choir may be singing gospel music, there's not a crucifix to be seen, and Morrissey, on any given Sunday, is just as likely to be quoting from Buddha or Gandhi as Jesus.

The ecumenical mix appeals to the church's parishioners.

"My husband was raised Catholic; I was raised Lutheran," says former LEC member Karen Gars. "We were looking for a spiritual home, but not a dogmatic church."

According to Morrissey, the foundational belief of New Thought is what she calls "co-creation": People and God working together toward a shared goal, including the goal of financial prosperity.

That may explain why the membership rolls have included the names of prominent local businessmen such as retired Nike executive Tallman, entrepreneur Tom Holce and developer Mike Ragsdale.

But the message only partly explains the LEC's popularity. Of the hundreds of Oregon churches that identify themselves as New Thought, Morrissey's is the only one whose membership rises above a few hundred. Her congregation of more than 4,000 local contributing members rivals that of the Portland area's largest synagogues and Catholic parishes.

James K. Wellman Jr. isn't surprised that Morrissey's feel-good message has taken root in the Pacific Northwest's notoriously non-religious soil.

"Spirituality in the Pacific Northwest is fairly flexible and plastic," says Wellman, who is an assistant professor of Western religion at the University of Washington. "It's a wide-open religious market, and if you have a charismatic leader who puts on a good show, people dig it."

And Morrissey definitely puts on a good show. As one observer puts it, "People don't come to worship God. They come to worship Mary."

Morrissey is no fire-and-brimstone evangelist. She has a sly, sometimes self-deprecating sense of humor and tells stories--some personal, some from non-Christian sources--to make her points. On Easter Sunday, wearing a dove-gray suit whose color subtly played off the purple banners hanging behind her, she used Christ's resurrection as a metaphor to talk about "rolling away the stones" that keep ordinary mortals from reaching their full potential.

In addition, Morrissey brings in compelling guests, including bestselling authors Wayne Dyer and Jean Houston (who gained notoriety for helping Hillary Clinton to "channel" former First Lady Eleanor Roosevelt).

"Pretty high-powered speakers for little old Wilsonville," says Garst.

The Lake Oswego woman began attending LEC in 1992, a pivotal year for both the church and its minister.

That was the year, Morrissey writes in Building Your Field of Dreams, in which she "reached the difficult decision to face the end of my 26-year marriage."

Morrissey declined to answer WW's written question about whether she became involved with her second husband, Edward P. Morrissey, before she divorced Haven Boggs. But Boggs, a family therapist, says she was.

"There were a lot of surprises for me," Boggs says of 1992. "Things I didn't know Mary was doing, like seeing someone else. I guess I just didn't know her."

That same year, LEC moved from its rented theater home in Beaverton to a 43-acre campus in Wilsonville, the state's former Callahan Center, where injured workers had received rehabilitation services. Later, it also purchased an adjacent, wooded, 50-acre parcel.

Today, the church looks more like a first-class conference center. The main building has a coffee shop, a cafe and an expansive bookstore, run by Morrissey's sister, with Morrissey's books and tapes prominently on display.

A broad, switchback rampway banks down a level to a visitors' table piled with brochures on the church's various ministries. Behind the table are a 900-plus-seat, carpeted auditorium--and the locker rooms for the building's swimming pool.

There's also the Namasté Retreat and Conference Center, nature trails and a gazebo.

The grounds that the LEC will soon abandon served as symbols of the stature that Morrissey has achieved. Her Sunday-morning service is broadcast locally on PAX-TV and, church officials say, by other cable stations to 2.5 million homes across the country.

She's been photographed hand in hand with the Dalai Lama; facilitated dialogues with His Holiness John Paul II and other world spiritual leaders; and become friends with bestselling authors such as Deepak Chopra.

It's everything Beaverton High School's sophomore class president and junior-class homecoming princess could have dreamed of, everything a pregnant 16-year-old must have thought she couldn't achieve.

And yet Morrissey is at risk of losing it all, as the LEC's financial crisis polarizes her former and present congregants and the church--like Martha Stewart's empire--faces financial collapse.

Initially, Morrissey blamed the $20 million debt on over-optimism about the church's financial ability to maintain the Wilsonville site, as well as environmental restrictions on the property that, she said, made it impossible to obtain needed refinancing.

But in mid-April, she added a new culprit: her husband.

Ed Morrissey is a certified public accountant who held an executive position in the LEC until approximately mid-2002. More important, he has been an officer in the couple's broadcast company since it was incorporated in 2000. (The company, most recently known as PersonPlanet Communications Inc., registered an assumed business name--New Thought Broadcasting--in May 2003.)

Mary Morrissey implied that it was her husband who diverted funds earmarked for the church and used them for their ill-fated business venture.

"I can't defend it, because it's indefensible," she told parishioners on April 18. "I can just say that's what I believe happened."

Ed Morrissey's attorney, Michael Levine, declined to comment to WW on Mary Morrissey's implied allegations.

So far, neither Mary Morrissey nor her attorney has explained how Ed Morrissey could have diverted that money to New Thought Broadcasting without his wife's knowledge or consent.

"The fact is, unfortunately, that neither Mary nor anyone else at this point can answer questions about the disposition of funds loaned to Mary and [the] LEC," lawyer Steve Ungar wrote in an April 19 email to WW. "Why? Because the finances of [the] LEC, New Thought Broadcasting, Mary Morrissey and Ed Morrissey were treated not separately, but as a kind of 'financial family.' The technical accounting term for this is commingling."

The same day he responded to WW, Ungar, who specializes in criminal defense, contacted the state's Division of Finance and Corporate Securities to say securities laws "may have been violated," according to Dave Tatman, chief of enforcement.

Tatman says Ungar voluntarily produced 25 boxes of New Thought Broadcasting's records. "It was presented as a good-faith effort to cooperate with us," he says. But, he adds, "it's not a bad defense to overload the other side." (In addition, under federal sentencing guidelines, such cooperation, called "self-disclosure," could result in a reduced sentence for Morrissey if she is subsequently convicted of a crime.)

Ungar also has contacted another government agency, the Charitable Activities Section of the Oregon Department of Justice, which has jurisdiction to investigate the activities of the LEC. The attorney in charge of that section, Ross Laybourn, says his office still is considering whether to open a formal investigation.

The IRS declined to comment on information, received by WW, that it also is involved.

To former congregant Garst, Morrissey's solicitation of loans on behalf of the church smacks of what she calls "affinity fraud," a term which applies to investment scams that prey upon members of identifiable groups, such as religious and ethnic communities.

Melissa Watters, a local financial investigator, says members of such groups are particularly vulnerable to solicitations made by another member of their group.

"They have complete faith in that person," she explains. "They don't take the time to ask the questions: 'Where is my money going?' and 'How is it going to be spent?'"

At least one former parishioner feels that Morrissey took advantage of that faith. "I've been after Mary for years to be honest," says the parishioner, who declined to be named for publication. "I've told her, 'There's only one thing you can do: Tell the truth.' But big untruths are being told right at this minute."

Morrissey has accepted moral responsibility for her church's current predicament. But seems intent on keeping the ministry she started so many years ago.

"When I search my heart, and I go down deep in all of this, I know what I believed at the time, and I know what my intent was," she said on April 18. "I find zero that says I shouldn't be standing here."


Many of the Living Enrichment Center members who loaned money to their spiritual leader are socially sophisticated and financially secure.

But at least one of them is neither. Rather, she's a mentally disabled woman who has filed for bankruptcy and is struggling to live on less than $900 a month because, she says, the Rev. Dr. Mary Manin Morrissey, and Morrissey's husband, misled her into investing $245,000 in their for-profit company.

"I've been very disillusioned," says the 55-year-old woman, who spoke to WW on condition that her name not be used. "Who can you possibly trust, if you can't trust your minister?"

Morrissey declined to answer WW's written questions about the woman, who had watched Morrissey's Sunday-morning cable-television program from her home.

"She has hired an attorney and made legal claims against me," Morrissey said of the woman, who has not yet filed a lawsuit. "I will answer these questions in the appropriate forum."

According to the woman, her investment, made in summer 2003, was a response to Morrissey's televised, tearful plea for money to "save the church."

"I thought I was loaning the money to the church," says the woman. "Or to Mary, because she was handling everything. She promised that there would be no problem for me, no possible way that I could lose my money. And of course I thought she was just wonderful."

The woman says she agreed to loan the $245,000 after repeated telephone entreaties from Morrissey, who, the woman says, promised her a 7 percent return over three years.

But instead of a promissory note, she says, the Morrisseys asked her to sign a subscription agreement for 245,000 shares in their broadcast company. The woman says she signed the subscription agreement only after both Morrisseys, who met with her at the church, assured her that its terms did not apply to her.

According to her, Morrissey's husband, Edward P. Morrissey, even drew her a diagram to illustrate how her money would be protected by other assets, including those of the nonprofit religious organization that runs the Living Enrichment Center.

The $245,000 came from a lump-sum Social Security Disability payment, according to the woman's attorney. Now, he says, she has less than $10,000 left in savings and is living on ongoing disability benefits of less than $900 a month.

"I don't know what my future holds," says the woman, who suffers from bipolar disorder. "I can't work, and I have no money. I feel like the dumbest thing on Earth."

After she hired an attorney, the woman says, she received a final telephone call from Mary Morrissey. "She offered to come to my house right away and to minister to me," says the woman, who says she has met Morrissey only twice, both times in connection with the $245,000. "And she said, 'No matter what, you know I still love you.'" --JREditor's note: In the original version of this story, WW misidentified the LEC as the Learning Enrichment Center.

Ed and Mary Manin Morrissey live on Tigard's Bull Mountain in a house with a real market value of $386,260.

On Sunday, Morrissey told parishioners, "I'm offering everything I have to this debt.... So if you're looking for a nice house on Bull Mountain...."

Morrissey, embarking on the effort to reduce the church's debt, dubbed 2004 as "The Year of the Miracle."

In mid-April, Mary Morrissey told parishioners that her husband, Ed, had been hospitalized for depressive disorder and suicidal behavior.

Despite the laughter and standing ovations, the debt, and the resulting controversy, have not left the church untouched. Attendance is down 22 percent since January, McCall said on Sunday, and at least two other, smaller churches have been formed by former LEC congregants.

In April, Morrissey offered the congregation some advice for dealing with tough situations: "When you walk through the valley of the shadow of death, don't pitch a tent."

The church building grounds are owned by Living Enrichment Center Properties L.L.C. of Honolulu and are managed by Watamull Properties Corporation.

WWeek 2015

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