The following is a letter sent to church leaders in 2004 by Greg Zanetti, at the time a board member of Calvary Chapel.
November 8, 2004
Greg Zanetti
Re: Committee Meeting Response
Dear Pete, Skip, and Paul,
I am writing because I left our committee meeting in California concerned and disturbed about the direction Skip and Paul want to take Calvary Albuquerque.
I was so concerned in fact; I consulted with an attorney to obtain legal advice. My attorney is familiar with New Mexico 501c3 law and has been through this type of situation before. He is also a Christian.
He recommended that I write this letter to all of you so you will know the legal ramifications of what Skip and Paul are proposing. I also wanted you to have a record of how I see the events that got us to this point.
First, I must take issue with he notion that Calvary Albuquerque "sent" Skip to Ocean Hills on some sort of mission outreach.
This is not true. Skip left. No one in Albuquerque asked Skip to go to Ocean Hills. In fact, many tried to get Skip to stay. Skip sought the Ocean Hills opportunity without the knowledge of the Albuquerque board members. Please also recall that Ocean Hills was Skip's second attempt to leave. Initially, Skip informed me that he was negotiating a deal with a church in Palm Desert. That deal fell through and Ocean Hills later materialized.
I also need to note that at the time and, unbeknownst to Albuquerque board members, Paul Saber helped negotiate Skip's departure even while he was serving as a board member of Calvary Albuquerque. According to my attorney, this was likely a breach of his fiduciary responsibility to Calvary Albuquerque.
The facts are clear. Skip left voluntarily to pastor an established church with apparently tens of millions of dollars in assets. This was not, nor is, a mission outreach of Calvary Chapel of Albuquerque. With Skip's departure and decision to pastor another flock, there were consequences for both Skip and Calvary Albuquerque. That is what we are dealing with now.
To be sure, I believe that God sent Skip and any attempt to change that diminishes His work. I will not be party to diminishing God's work nor at re-writing a history that is not true.
Second, the idea that Skip will always be a part of Calvary Chapel Albuquerque is certainly accepted on a spiritual level. No one disputes the amazing work that God, Skip, and the congregation did during his tenure here. With that said, however, in a practical, day-to-day sense, Skip cannot reasonably be a part of Calvary Albuquerque's from 850 miles away.
We are all fortunate that God has clearly anointed Pete for his ministry at Calvary Albuquerque. Calvary Albuquerque is flourishing under his leadership. However, the notion that Skip is providing mentorship and guidance to Pete in a meaningful way regarding the operation of Calvary Albuquerque is not supported by the facts.
This is not meant as a criticism. Managing and leading from hundreds of miles away is impractical. In addition, Skip has made it clear that his schedule is full and his duties in California demand much of his time. This too makes it difficult, if not impossible, to provide the mentorship and leadership to Pete that Skip purports to have done or will do.
Moving on...the Calvary Board approved and paid Skip a very generous, tax-advantaged severance package to ensure that he had a warm send off and to help him with his transition to his new church.
His acceptance of that money further indicated that he had, indeed severed his day-to-day operational relationship with Calvary Albuquerque.
It is my understanding that upon Skip's departure, in addition to the automobiles, office furniture and equipment he took as part of his severance, he also had the Line on Line stage equipment with an approximate $26,000 net book value and published inventory invoiced at $140,000 shipped to himself at Ocean Hills Community Church. I understand that Ocean Hills was invoiced for these assets but there has been no acknowledgement that Calvary Albuquerque is owed for these assets. The $166,000 receivable from this transaction must be resolved prior to the year-end audit.
Moreover, while Skip's willingness to stay on the Board for a year was appreciated by all of us, it was understood that Skip's California duties would demand more of his time and that a permanent place on Calvary Albuquerque's Board was not in Skip's plans. As a result, we in Albuquerque did the prudent thing and began making plans for Calvary Albuquerque's future without Skip and Skip's chosen board members.
Again, if you will recall, Skip's initial plan was to turn the whole church operation over to Pete and walk-away. It was Ray Ziler, in particular, who was worried about the appearance of such an abrupt move. Ray, Pete, Jim Williams, and I all understood that Skip and his absentee board members (Franklin Graham, Raul Ries, Greg Laurie, and Paul Saber) would stay on a year to help Pete, but then we would be on our own. During the transition year, it was understood that Pete would invite new members to the board to permit a period of overlap so that absentee members could leave the board in a stable condition.
I believe it is clear the absentee board members are more loyal to Skip as an individual than they are to Calvary Albuquerque as an organization. They do not attend church here. They do not tithe here. They only visit when asked by Skip. Paul Saber has personally disclosed to me that his first loyalty is to Skip personally and not Calvary Albuquerque. I believe this makes him a good friend to Skip, but by his actions and loyalty, he is compromised as a Calvary Albuquerque board member. His undisclosed negotiation of Skip's departure only further supports that belief.
To further make my point, I need to remind everyone of the vote concerning the radio stations in March of this year. Skip and all of the absentee board members voted to transfer the radio assets and operation to an entity that Skip and Paul would control. These absentee board members did not disclose in their voting that they were also members of the Ocean Hills board, a fact that was only later revealed.
Furthermore, and by way of background, when the Calvary Albuquerque Board met in November of 2003 to discuss Skip's departure, the topic of Calvary Albuquerque's $7.5 million debt was discussed. The fact is, Skip was leaving at a time when Calvary Albuquerque's debt was at the highest level it had ever been. I, among others, expressed concern about Skip's departure with debt levels so high and a pending bank approval of an additional line of credit.
Franklin and Paul (and, if I recall, Greg Laurie) did not want to tell the bank of Skip's pending departure, which sent immediate red flags up with Ray and me. We voiced our dissent and proposed transparency and disclosure to the bank. We were voted down. Ultimately, Skip privately approved of appropriate disclosures to the bank, which were made by Bob Church and Ray Ziler.
Beyond this, however, Skip assured us that although our debt was high, we had the radio stations as collateral. All of which brings me to the March 2004 meeting.
At that meeting, an attempt was made to remove the radio station assets from Calvary Albuquerque and put them under the control of a separate absentee board in California. Franklin Graham even made a statement along the lines of, "God told me He had given those radio stations to Skip." Ray Ziler interdicted and stated that this transfer could be illegal as the radio stations were serving as collateral on our loans.
Nevertheless, the absentee board members voted to pursue the asset transfer.
According to my attorney there were two major problems with this action. First, since five Calvary Albuquerque board members also serve on the Ocean Hills Board there was an apparent conflict of interest when they voted over the objection of Albuquerque based board members to transfer assets from Calvary Albuquerque to another entity under the control of these (or some of these) Calvary Albuquerque board members.
Even more troubling though, is the breach of fiduciary responsibility to Calvary Chapel of Albuquerque. Those radio stations are assets of the church, not personal assets or assets of some other organization or board. The Calvary Albuquerque congregation, who are the principal stakeholders in those assets, paid for them.
The point is, by that vote, the five absentee board members demonstrated that Calvary Albuquerque's interests were not first and foremost in their minds. In no way can the wresting away of a significant asset from the church be deemed in the best interests of Calvary Albuquerque. I believe they demonstrated that their loyalty lies elsewhere. This also demonstrates a structural problem with our board.
All of which brings me to the governance issue, which was discussed at our recent committee meeting in California.
The notion that there should be an "Executive Board" at the top of our organizational chart with Calvary Albuquerque, Calvary Ocean Hills, the radio stations, and the Connection ministry below is shocking and appalling to me.
According to my attorney, this would be a breach of our fiduciary duty to turn over control of a New Mexico 501c3 Corporation to an absentee board comprised of members with no vested local interest in Calvary Albuquerque. In no way does ceding governance to this "Executive Board" constitute the execution of our duties as board members of Calvary Albuquerque.
My attorney says this is illegal and should not be pursued.
I further reject what Paul said at our committee meeting that our duty as Calvary Board members is to look out for the "interests of the church as a whole." No. Our job as Calvary Albuquerque board members is to watch out for the best interests of Calvary Albuquerque. We are a corporation of the State of New Mexico and our legal charge and obligation is limited to the specific focus of Calvary Albuquerque.
Furthermore, my understanding is that the Calvary Organization has a history of independence. Each Calvary stands on its own.
Therefore, to usurp the governance and control of our local church to another governing body is a gross breach of our duties and responsibilities as Calvary Albuquerque Board members. In addition, it flies in the face of all Calvary precedent. Moreover, this idea was not represented to Pete or any other board member upon Skip's departure.
Regarding the governance and control of the radio stations, that too, is something that should stay local. The radio stations are assets of Calvary Albuquerque paid for with Calvary Albuquerque tithes and offerings.
If Calvary Ocean Hills or some other entity wants to buy the assets of the radio stations at the market price, then legally that is something that could possibly be pursued. If a solution can be worked out with the bondholders, Calvary Albuquerque might be able to sell the radio stations to another entity subject to the related bond debt.
However, turning over control of the radio stations to an absentee board, or any other board for that matter, will once again, according to my attorney, be a breach of our fiduciary responsibility and likely deemed illegal under the laws of the State of New Mexico. Irrespective of these legalities, I believe the board would be grossly negligent to let this happen to the Calvary Albuquerque stakeholders.
Regarding the Connection Ministries I need to remind you all that financially this has been a losing proposition for many years. Subsidies paid by Calvary Albuquerque to support the Connection over its history total approximately $6 million. I asked Bob Church for the numbers, and the fact is Connection Ministries will again be subsidized by an estimated $500,000 again in 2004.
I do not believe this is good stewardship of God's money. Further, fellow board member Greg Laurie has repeatedly voiced his own belief that radio ministries must be self-supporting. We all understand that the "fruit" of saved lives cannot always be seen from a radio ministry. According to Pastor Laurie, however, the surrogate fruit has to be self-support. This has not happened in any year over the past ten years with the Connection and self-sufficiency in not indicated within the foreseeable future.
Indeed recently an additional $68,000 was spend in an attempt to get the Connection Ministry to be self-supporting. A similar consulting engagement was funded in a prior year. No marked improvement has resulted from either of these engagements.
Nevertheless, we have continued to fund Connection over the past year out of respect for Skip and to ease his transition. My understanding upon Skip's departure was, however, that once the transition period was over (again, one year) Skip's new church would decide whether to pick up this cost since he was their senior pastor.
Even when Skip was senior pastor here, the Board was examining if this truly were the best use of our congregation's tithes. Now that Skip is not here, I do not believe it is possible to justify continuing this expenditure. To continue to fund this ministry is not in keeping with being good stewards of God's money or with being good fiduciaries of Calvary Albuquerque's funds.
Furthermore, I believe that if the Calvary Albuquerque congregation knew that we continued to fund this ministry at this level (with Calvary Albuquerque's debt so high) for the senior pastor of Calvary Ocean Hills, it would not be received well. Again, according to my attorney, the potential for lawsuits against all of us as board members would be quite high.
Next, I need to address the new idea that Skip is the permanent CEO of Calvary Albuquerque with personal and financial authority while Pete is merely the custodian of the pulpit. This is neither fair to Calvary Albuquerque, its staff nor to our senior pastor, Pete Nelson. Further, it is not what Skip represented to Pete or us when he left.
Skip made it very clear to Ray Ziler, Jim Williams and me that this was to be Pete's church. Skip has apparently now reversed that view. From what I could gather in California, Pete's only transgression was recommending a new board member, so I do not understand why the sudden loss of Skip's confidence when Pete has performed so well.
As an aside, I had the opportunity to talk to Tom Stipe and asked him about Calvary governance. During the conversation he disclosed to me that Skip told him he was handing the reins of Calvary Albuquerque to Pete with "no strings attached."
Skip's change of heart is not healthy for Pete, the Calvary Albuquerque staff or for the congregation of Calvary Albuquerque. My understanding was that Skip would help mentor Pete for an interim period of time (1 year) and, at that point, Pete would be free to choose his own board members and shepherd his own flock. He would also assume all the duties and responsibilities Skip enjoyed as senior pastor during his tenure here.
The fact is Pete does not need a set of milestones (as Skip and Paul proposed at our committee meeting) to prove his ability to run Calvary Albuquerque. He has already proven himself. Since Skip left, attendance has risen. Tithing is up over 7%. There have been no negative doctrinal issues and Pete as been faithful to the Word and God's teaching. His ethics and personal life are beyond reproach. Angie's' women's ministry is equally successful. The staff has embraced Pete as the senior pastor. And, most importantly the congregation has accepted him as their senior pastor, as do I.
You also need to know that since Skip left the congregation has changed. It is not the same body as last December. This was to be expected. Some left. Many more came. Pete is their pastor and he should be afforded the authority that goes with the responsibility.
Skip and Paul are proposing that Pete keep the responsibility without the authority. This again, is neither fair nor healthy. I therefore ask that Skip resign as Chairman and nominate Pete as the successor. It would be the noble and right thing to do.
According to our by-laws, as senior pastor, Pete is to be the President of the Corporation. He also has the authority to appoint new board members for approval by the board. I have asked Pete to present new board members for the board's approval at the next meeting. We have an obligation to vote on them and to give him a local board that he can turn to for advice and counsel.
Also, any attempt by the board to change our by-laws to facilitate the changes Skip and Paul want will likely be deemed another breach of fiduciary responsibility and I will vigorously resist such an attempt.
Pete needs the same autonomy at Calvary Albuquerque that Skip has at Ocean Hills and Greg Laurie and Raul Ries have at their churches. All board members should accept this prima facie.
Next, I was taken aback by Chuck Fromm's presence at the California meeting. I knew nothing of him prior to the meeting and, as a result, was reluctant to speak freely in front of a stranger.
I read the re-cap that Chuck sent regarding our meeting and found too much "spin" for my liking. Furthermore, Chuck disclosed to me that he visits with Skip 3-4 times a week. Therefore, I do not consider him an impartial moderator, but rather an advocate for the changes Skip and Paul are proposing and that I am opposing.
I would ask that Chuck not be asked to any more board or committee meetings since he is not a member of our board.
In summary, I am rejecting, for reasons stated herein, the proposal advanced by Skip, Paul and Mr. Fromm.
Finally, I can understand that Skip may feel a sense of entitlement as the founding pastor of Calvary Albuquerque. The fact is though; God gave Skip stewardship over Calvary Albuquerque for a set period of time. Skip was then called to steward another ministry and another flock. Skip never had ownership. None of us do.
When Skip left a chain of events occurred. Not only was Skip called to California, but also Pete was equally called to Albuquerque. I implore Skip and Paul to please stop hindering God's work through Pete.
The bottom line is if we continue to pursue the radical changes Skip and Paul are proposing, all board members will be exposed legally and financially. If word of these proposed changes gets out to the flock, it would be very damaging to Skip's reputation and could grievously harm the body. I know none of you wants that to happen. Nor do I.
Skip has indicated a fear that his work will be marred or destroyed. I believe God will ensure that Skip's past work will be built on and grow. Have faith.
Signed Your Brother in Christ,
Greg Zanetti
Calvary Albuquerque Committee and Board Member
Cc: Paul Saber
Pete Nelson
Raul Ries
Greg Laurie
Franklin Graham
Jim Williams
Ray Ziler
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