CHAPTER 13

 

 

The Plain Truth About "Sixty Minutes”

 

 

 

 

Mike Comes Calling

 

On April 15, 1979, some 35 million viewers of the CBS‑TV "Sixty Minutes" show were seduced into believing they would be given a firsthand peek into alleged corrupt goings‑on in the world of religion. "God and Mammon" was the title of the show, and host Mike Wallace, in sonorous and doleful voice, promised a "tale of backbiting and power struggle, of fat expense accounts and disinheritance." Instead, the audience got a thoroughly distorted picture, slickly tailored to fit the preconceived line that Wallace, his producers, and staff had concocted.

What is not generally known is that the fifteen‑minute segment, which also included interviews with Garner Ted Armstrong and Hillel Chodos, was culled from four and one‑half hours of discussion during which, unhappily for Mike, his thesis was thoroughly demolished. Cut from the show as seen on TV were the real facts, freely offered, which would weaken or destroy the point he wanted to make. Of even greater import‑the tape on which he based many of his questions was not only illegally obtained but also represented as one document two letters written on separate occasions.

In order to understand the "plain truth" about "Sixty Minutes," we should go back to our first involvement with its representatives. In October 1977, 1 received a telephone call from one Norman Gorin, who identified himself as an executive producer for the show. Gorin said that Garner Ted Armstrong's immorality had come to his attention and he planned to do an episode about

 

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it. When I queried him about how these matters had come to his "attention," his replies convinced me that his information came from people who were feeding him lies and gross distortions about the Church.

Consequently, 1 told Mr. Gorin that neither 1 nor any responsible member of the Church would give him an interview. Verbally, and later in writing, I informed him that most of his information was untrue, warned that use of it on his program would be construed as evidence of malice and, if it was aired, we would institute suit immediately.

The main thrust of that projected program would have been an "expose" of Garner Ted, who would be centerpiece of a story about alleged unsavory activities within the Church. It was clear that the proposed segment would in no way reflect the truth of what the Church was seeking to accomplish; moreover, I felt it essential to protect the Work by protecting Garner Ted from public exposure.

Gorin seemed to drop the matter until the California attorney general put the Church on the front pages of the newspapers again. A little more than a year later, I received another message from Gorin. I didn't reply because I felt his attitude and information were still the same.

In mid‑January, Wallace himself telephoned. He was staying at the Beverly Hills Hotel, en route to Thailand, and wanted to discuss a possible show. I told him I still wasn't interested and that Mr. Armstrong would never be interviewed. Mr. Armstrong believed Time Magazine had distorted his views in 1972 and intended never to grant another interview. Wallace pleaded that 1, at least, see him for a short time. I finally agreed and met him that evening at La Scala, a restaurant in Los Angeles. I had already put in a full day in court, followed by hours of consultation with our lawyers.

At dinner, Wallace told me the focus of the program. The story, as he now saw it, had shifted from emphasis on Garner Ted to an exploration of the Constitutional issue of separation of Church and State. As a responsible member of the press, he expressed himself as deeply concerned about violations of the First

 

 

 

 

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Amendment. He led me to believe he felt we had a mutual interest in judicial and other Constitutional guarantees; he promised a balanced presentation.

On that basis, I agreed to the program. "Mr. Armstrong will never see you," I told him, "but I'll be very happy to go before your cameras in any setting. I have nothing to hide, never have. You can ask me any questions, and as long as it doesn't reflect upon anyone else, I'm going to give you straight answers."

That was the way I had been treating the press all along, often astonishing them with frank statements. For example, a few days earlier one of the reporters had asked me, "You live in a million dollar home, don't you?"

"No, not at all." I said. "It was a two‑million‑dollar home, actually, the finest dwelling in Beverly Hills. I take umbrage when you say just a fine home." I told the reporter that when Walter Annenberg returned after serving as U.S. ambassador to Great Britain, he wanted to buy my home. He offered me $1.2 million and was surprised when I turned it down. I wasn't embarrassed by the question and answered it fully.

I told Wallace that he could film me in my office, in the auditorium, on campus, at a press conference, or wherever he chose. However, I stipulated that the program could not be televised until the entire interview had been completed and a written release obtained.

"I have nothing whatever to hide," I repeated, but said quite frankly: "I have to tell you I'm not convinced you are a completely responsible member of the press. I've talked to many media people and they feel as I do. You impress me as a journalist whose primary aim is to entertain rather than inform the public."

When the interview was over, I said I would know whether he was really serious about presenting a balanced picture. Allan Browne had joined us for dinner and I insisted he be present during the filming.

Wallace agreed to the rules. I soon discovered he had never wanted Herbert Armstrong and actually was training his guns on me, but wasn't about to present it that way. I agreed because I realized he would be doing the story with or without me anyway,

 

 

 

 

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and it was to our advantage to get into his hands the information that would tell our side of the story. Mr. Armstrong, of course, was totally convinced that Wallace lacked integrity and was far worse than most legitimate journalists working in print or even television.

On February 7, 1979, my office was transformed into a tele­vision studio and the interview with Wallace began. It was about six weeks after the start of our problems with the attorney gen­eral and proved just about the only bright moment of those dis­mal days. For the first three and a half hours, the redoubtable Mike floundered from one disastrous point to another.

Each time he asked a question he thought might prove em­barrassing to me, he got an answer, but not one he apparently expected. He made the mistake of trying to trip me up on my own documents, an absurdity considering that I had been living with them night and day and he had barely done his homework on any of them. I discovered as the interview progressed that Mike Wal­lace's vaunted reputation as a sharp interviewer who can pinion a subject with a quick feint and a thrust to the heart was vastly overrated. He is neither bright nor fast enough in his thinking to match wits with persons trained to pick up nuances and spot in a moment of time every flaw in a presentation. We may say, chari­tably, that that sort of thing is not his field of expertise; he is an entertainer, not a brilliant legal cross‑examiner.

In the introduction to his television show, Wallace promised the story of a Church "whose one hundred thousand members each year contribute eighty million dollars.

"And that is more money than is collected by Billy Graham and Oral Roberts combined," he said. "It is the story of Herbert W. Armstrong, founder of the Worldwide Church of God; of his son, Garner Ted, once thought of as heir apparent, who has now been cast out of the Church by his father, and of an unlikely Church figure, an accountant, lawyer, and businessman, chief adviser to Herbert W. Armstrong, Stanley Rader. Finally, it is the story of how the state of California is now trying to hold the Worldwide Church of God accountable for all the tax‑exempt money that pours into its Pasadena headquarters. The California

 

 

 

 

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attorney general wants the Church to open its books so they can find out if Herbert Armstrong and Stanley Rader have been siphoning off Church money for their personal use."

The show proceeded. But 35 million persons in the television audience saw and heard a sharply edited, doctored‑up version of the interview that had taken place. A number of my statements, central to the understanding of vital points, were eliminated completely. (One recalls with a shudder the eighteen‑and‑one‑half‑minute gap in the Watergate tapes!) The facts about the actions of the attorney general, his reasons for the takeover and the aims of the receiver and his aides were explained. None of this was aired. Other explanations were shortened or spliced into footage out of context to create a picture of the Church that was contorted out of all resemblance to reality.

Bits and pieces from the lengthy interview, covering Church holdings, expense accounts, and charges by dissidents were excised and reassembled cleverly to advance the "Sixty Minutes" portrayal of Church leaders as greedy and corrupt and the Church itself split by dissension.

To illustrate how this was done and to reveal‑perhaps for the first time‑the technique employed by this popular program in presenting material, I have gone back to the original interview to show the reader what actually was said in key passages. What follows demonstrates all too plainly that the version seen and heard by 35 million persons that Sunday bore little resemblance to what had actually taken place in my office in February. *

 

What 35 Million People Were Not Allowed to Hear

 

WALLACE: Mr. Rader, why is the Worldwide Church of God apparently in such turmoil right now?

 

RADER: Well, I don't really feel that the Church itself is in turmoil. I think that the state of California has brought an un-

 

 

* I had taken the precaution of having the interview taped by our own personnel. The text has been edited solely for clarity and elimination of repetitive speech patterns.

 

 

 

 

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justified legal action against the Church that has caused us some difficulty.

 

WALLACE: Why would the state of California be interested in causing trouble, if you will, for the Worldwide Church of God--- you do good work?

 

RADER: Of course we do. And that's what makes their action so unconscionable. But, you must look at the composite picture at this time. You not only have the state of California acting through the deputy attorney general but you have a small group of dissenters who would like to change the government of the Church from a hierarchal system to something like a congrega­tional system. Then you have some people such as the plaintiff's lawyer and others who would like to be receiver who are in it strictly to make money.

 

WALLACE: The receiver is in it to make money?

 

RADER: The whole receivership business is a money‑making busi­ness. They are the vultures of the economic world.

 

WALLACE: Wait a second. About whom are you speaking spe­cifically?

 

RADER: I'm talking about the receiver.

 

WALLACE: Judge Steven Weisman, who just resigned . . .

 

RADER: Judge Steven Weisman, who just resigned as receiver, was what we considered from a Church standpoint as an abom­ination. But besides that, he was an economic vulture. He came in here and the first thing he did is he took $150,000 of our tithes and put it into his own pocketbook.

 

WALLACE: Well, that was at the rate of $150 an hour, I believe.

 

RADER: That's right.

 

WALLACE: He was appointed by the court; he didn't just come in of his own free will and accord.

 

RADER: No, but he was hand picked.

 

 

 

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WALLACE: By?

 

RADER: By plaintiffs counsel.

 

WALLACE: And when you say plaintiff's counsel, you mean the deputy attorney general, Mr. Tapper, and Hillel Chodos, who was deputized as an attorney general.

 

BROWNE: Right.

 

RADER: Well, Mr. Tapper would have had to approve Mr. Weisman as the receiver. Mr. Chodos, on the other hand, undoubtedly picked him deliberately out of all the other possible receivers.

 

WALLACE: Ah! Weisman, for the purpose of?

 

RADER: Perhaps helping Mr. Weisman. Mr. Weisman is a retired judge, had never had a receivership before, had been seeking work of this kind for some time in the community.

 

WALLACE: Are you suggesting that Tapper, Chodos, Weisman, are in cahoots, if you will, to milk the Worldwide Church of God for their own benefit?

 

RADER: I am more than suggesting, I'm stating it emphatically so no one can misunderstand it.

 

WALLACE: That this is a money‑making operation for Chodos, Tapper, Weisman?

 

RADER: Not Tapper. Tapper is a deputy attorney general, he has his own problems that he's going to have to account for. Chodos is in it for the money as was the receiver. And the dissident group, I think we will find out, is a small group, a very small group of Church members.

 

WALLACE: Well, now some people who are not in the so‑called dissidents group, who are also disenchanted, say, "Why don't we simply open up our books? We have nothing to hide."

 

RADER: I say that. And I certainly am not a dissident. I've opened up the books of this organization eight separate times to the Internal Revenue Service, eight separate times, and received a

 

 

 

 

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complete bill of health. And they start with the same basic question  "Are you a Church and are you continuing to operate exclusively for the purposes for which you were established The last time the IRS was here, they stayed eighteen months looking over everything.

 

WALLACE: And you got a clean bill of health?

 

RADER: A clean bill of health.

 

WALLACE: So you are satisfied that there are no financial improprieties involved.

 

RADER: None. It's a red herring. A total red herring. And everyone who has been responsible for bringing those false allegations will rue the day that they did.

*

In his questioning, Wallace referred to charges that Herbert Armstrong was old, almost senile, hinting that was the reason lie would not be interviewed.

 

WALLACE: One hears that today at the age of eighty‑seven, almost eighty‑seven, that he is not as completely in charge of his faculties as he was, say, ten or fifteen or twenty or twenty‑five years ago?

 

RADER: Totally untrue. The man is in total command of all of his faculties. He writes today more prolifically and more powerfully than at any other stage of his life. He has produced more radio programs in the last seven months than his son had done in a two‑year period immediately preceding it. He is making radio programs; he has written two complete books, one which will be published this month, one which hopefully will be published by May and three others which will be published in the fall. All of this at the age of eighty‑six, going on eighty‑seven. He's traveled to Israel, he has traveled to Florida, he has traveled to Texas; he speaks once or twice a week.

 

WALLACE: Will he sit down and talk to us?

 

 

 

 

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RADER: No, Mike, as nice a guy as you are, Mr. Armstrong has a very definite feeling about any representative of the press. I don't think it would be good for me to repeat everything he says but he doesn't exactly like them.

 

WALLACE: I gather that he has an attitude somewhat akin to Richard Nixon's.

 

RADER: Much worse, much worse.

 

WALLACE: Why?

 

RADER: Because he has studied the press longer than Richard Nixon.

 

WALLACE: And distrusts the press.

 

RADER: He distrusts their motives, he also questions their ability and their sincerity.

 

WALLACE: Do you?

 

RADER: I . . . let's put it this way: My experience is beginning to be much as his has been for some fifty, sixty years. But, I'm still willing to give the press an opportunity to prove itself as really a fourth estate.

 

WALLACE: Well, then why, if you have this much confidence in Herbert Armstrong, and Herbert Armstrong despises and distrusts the press, why are you sitting down with me?

 

RADER: Because, as I said, I am a slow learner and Mr. Armstrong gives me a chance to make mistakes because he feels I like everyone else must build character. The only way I can build character is by making mistakes.

 

WALLACE: So, in effect, you will not let the American public have the opportunity for an interview.

 

RADER: He won't.

*

Wallace sought to "prove that the Church is tyrannical and a "cult"‑that we throw people out without a hearing.

 

 

 

 

 

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WALLACE: Herbert Armstrong, in effect, has the right to do with the Church what he wants.

 

RADER: You bet your life. You bet your life because he is responsible and accountable to God.

 

WALLACE: Therefore that makes it a cult.

 

RADER: Not at all. Mr. Armstrong is accountable to God as all of us individual members are.

 

WALLACE: But a cult is led by one man. There aren't by‑laws, there aren't rules, there aren't boards, there aren't . . .

RADER: Mike, Mike, I'm surprised at you. You are a very informed man. You're a very cultured man. Would you say that of the pope? I don't think so.

 

WALLACE: But there are bishops and there are cardinals . . .

 

RADER: Ask them the last time they opposed the pope?

 

WALLACE: But they elected the pope. The pope did not elect himself.

 

RADER: Fine, fine, But who elected the first pope?

 

WALLACE: Who elected Herbert Armstrong?

 

RADER: Mr. Armstrong has served as Christ's apostle for forty-six years. By the constant approval of his members, day by day, week by week, year by year, he has proved that he is the only person worthy of that office. And there is no person within this Church who would ever for a moment think otherwise.

 

WALLACE: He is self‑appointed, and he makes the rules.

 

RADER: The foundation of all of our knowledge, secular as well as spiritual, is found in the Bible, which we consider to be the written, inspired Word of God. If it isn't there, we don't follow it. If it is there, we do it.

 

WALLACE: Why are some people afraid of you, Stanley Rader?

 

 

 

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RADER: I don't know, Mike. My wife says I have a very beautiful smile and don't use it enough. Maybe I'm always asked to speak about very serious things. And maybe I appear to be a little bit harder than I am. But the brethren, I've found, Mike, like me very much.

 

WALLACE: In talking to the dissidents who brought the suit against the Church, I find they are people who have been members of the Church for a long time. They say that there is a huge power struggle going on in the Church between, on the one hand, Stanley Rader and the people who are his allies, and on the other hand, Garner Ted Armstrong and people who are his allies. They are simply people who feel that the Church has lost its way, and it spends too much money for things of no consequence, for things that are unworthy.

 

RADER: Well, you've got many questions there. First of all, the Church spends its money in accordance with God's will and purpose of propagating the Gospel of Jesus Christ as a witness unto all nations, according to Matthew 24:14. Whatever we do is done for that purpose.

*

There were many questions concerning expenses, with Wallace charging amounts spent were "incredible" and "money was being thrown around." I informed Wallace emphatically that all monies spent were to propagate the message of the Living Christ. Church members, I said, were kept fully advised about our expenditures and the amounts did not surprise or embarrass me.

 

WALLACE: Who is Professor Osamu Gotoh?

 

RADER: Gotoh, Gotoh, G‑O‑T‑O‑H.

 

WALLACE: Who is he?

 

RADER: Acronym for Go To Heaven. He's a very interesting man. At one time he taught Japanese here. He later became a baptized member of the Church and by 1968 had been hand‑picked by

 

 

 

 

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Mr. Armstrong to ultimately head the entire Japanese effort that we would undertake sometimes in the future.

 

WALLACE: He is a professor where?

 

RADER: At Ambassador College.

 

WALLACE: He used to drive a cab, I am told, in Tokyo.

 

RADER: He might have in 1945 or '46 when he was about twenty‑one, twenty‑two years old, but I wouldn't hold that against him. I know some very fine people who served in cafeterias. I've had to watch the fraternity boys while they danced.

 

WALLACE: Let me run down some expenses for Professor Osamu Gotoh: July 1st '76, April 30, 1977‑travel and lodging expense, July, $9,000; August, $38,000; September, $25,000; October, a mere $4,000; $12,000 in November; $30,000 in December; $23,000 in January; $14,000 in February; $13,000 March; $12,000 April. Thousands of dollars. That's just travel and lodging. Public relations expenses totaled during that time, $174,000. Monthly credit card expense, $358,000 total during that time.

 

RADER: That must have been a slow period.

 

WALLACE: Tokyo AICF allocation, that's for the foundation, $50,000. Grand total in the ten‑month period, for Professor Osamu Gotoh‑$415,000, for what?

 

RADER: What year was that?

 

WALLACE: 1976 to'77. July to April.

 

RADER: Probably a slow year, Mike. I could probably show you years where he spent more than that. See, he was in charge of Mr. Armstrong's entire overseas evangelistic effort. He arranged everything.

 

WALLACE: In Japan?

 

RADER: No. Worldwide.

 

WALLACE: $415,000 in ten months is an incredible sum.

 

 

 

 

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RADER: Mike, Mike, you're making it sound incredible. You know better. This is the very type of thing you talked about before. What do you think it cost Billy Graham to go around the world on his evangelistic efforts? Why don't you ask Billy, "Billy, what does it cost you to go to Manila?" We went there first, you know. We had 25,000 people there every night for three nights. What do you think it cost to get 25,000 people into that stadium? It cost money for public relations, it cost money for advertising. it cost money to rent the place, it cost money for the entertainment, it cost money for the banquets, it cost money to get people there. You know that, you know that as well as I do.

 

WALLACE: Are you suggesting that he, Herbert Armstrong, held this kind of meeting, revival meeting, that Billy Graham . . .

 

RADER: Exactly. I mentioned Manila because we were the first.

 

WALLACE: The meeting was held in Manila, over how many nights?

 

RADER: Three nights.

 

WALLACE: At a cost of .

 

RADER: Oh, I don't know, I'm just saying that's the type of thing that Mr. Gotoh did for us. We had those campaigns around the world. That's what Mr. Gotoh did. Then he picked up the tabs for all of it.

 

WALLACE: He picked up the tabs for all of what?

 

RADER: For all of those expenses. Everything from ground transportation to hall rental. Airplane fares for himself and other people, gifts, you name it, he did it.

 

WALLACE: So you were well satisfied with the work that Professor Gotoh did?

 

RADER: I was well satisfied. Mr. Armstrong, more importantly, was well satisfied. Mr. Armstrong said repeatedly that he is, has been, a very valuable member of the team.

 

WALLACE: Who is Dr. Singh?

 

 

 

 

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RADER: Dr. Nagendra Singh is a member of the International Court of Justice at The Hague. Prior to that time he was the secretary general to the president of India. He is a member of one of the leading families of India.

 

WALLACE: Dr. Singh is an important man to you people?

 

RADER: Dr. Singh is an important man to the world. He's a man who stands for peace and he embraces all of mankind. He is a very transcendent man.

 

WALLACE: Why would Gotoh pay for Dr. Singh, $8,000 TWA, a trip from Amsterdam to Tokyo and back?

 

RADER: Dr. Singh appeared in Tokyo on behalf of Mr. Armstrong. He also appeared in Nairobi on behalf of Mr. Armstrong. He appeared several times in New York on behalf of Mr. Armstrong

 

WALLACE: This is simply Amsterdam, Tokyo, Amsterdam.

 

RADER: Yes.

 

WALLACE: $8,000.

 

RADER: Amsterdam is where he was based, at The Hague. The airport for The Hague is Amsterdam. He went from Amsterdam to Tokyo to appear on Mr. Armstrong's behalf on the platform, introducing Mr. Armstrong, then he returned. He went with his wife back and forth. Two round. trip tickets, first class. He's a member of the International Court of Justice at The Hague.

 

WALLACE: Ambassador Mugo?

 

RADER: Ambassador Mugo at the time was ambassador from Kenya to Paris. He was helpful to us in working with, not only the black nations in black Africa, but also because he was ambassador from Nairobi to Paris. He also covered the Vatican and he covered Yugoslavia and Italy. And he was very instrumental in helping us to meet other emissaries from those black African nations.

 

 

 

 

 

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WALLACE: Ambassador Mugo expense‑Regency Hotel, September 1, 1975, $5,393.

 

RADER: We pay for …

 

WALLACE: Just a moment. Gotoh, TWA, again for Mugo, $19,000 to TWA, August 20, 1975.

 

RADER: That's for Mugo and his family, a large family, with four children. They were invited by Mr. Armstrong to visit the United States, to visit Ambassador College and to make appearances with us in various places in the United States, helping us in our efforts to extend a helping hand to the black African nations.

 

WALLACE: December '75‑Gotoh's hotel bill in Switzerland on American Express‑$6,324.

 

RADER: I don't know what you mean. Should it be $8,000, $12,000 or $2,000? It doesn't mean anything.

 

WALLACE: It's an expensive bill is all I'm suggesting. RADER: Mr. Gotoh has very good taste and Mr. Gotoh was an ambassador to the rest of the world from the Church.

 

WALLACE: American Express‑Gotoh‑December 24, 1975. Hilgie's in Paris, $2,237.

 

RADER: Mr. Gotoh was Japanese. If you know the Japanese customs of doing business, you would find that the Japanese like to bear gifts and this was one of the things we could never break Mr. Gotoh of doing. He didn't buy expensive gifts, he bought many small gifts. He liked to go into an office, whether it be an office of a minister of the government or president, with something. Sometimes he would give a pen. Sometimes he'd give a scarf. This was his way of making himself a little bit more acceptable.

 

WALLACE: Diner's Club‑Rader‑February 25. One, two, three, four, five, six, seven, eight, nine, ten bills paid on behalf of Rader to the Hilton Hotel in Jerusalem that come to something over $ 10, 000 on one day.

 

 

 

 

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RADER: We had very, very large banquets there. All you'd have to do is call any one of your friends in Israel and they'll let you know that we entertained all the dignitaries of the state. We would take the leading members of the government, academia, industry, and the people and we'd bring them all together. Mr. Armstrong would speak and we'd have a chance to get out our announcement.

*

The following colloquy developed when Wallace questioned a $12,000 expenditure by Armstrong for six crystal pillar griffins of Steuben crystal, earmarked "gifts."

 

RADER: Did you know, Mike, that Dwight Eisenhower was president of the United States for eight years and every time he visited a head of state, he gave a piece of Steuben? Did you know that?

 

WALLACE: Are you suggesting that Herbert Armstrong is a head of state?

 

RADER: Exactly.

WALLACE: And you're his secretary of state?

 

RADER: You've got it. By God, you've got it, Mike. That's the whole key. And it only took you an hour and a half to get there. That's the whole key. This is a state and we are representatives of God and I am Mr. Armstrong's secretary of state.

 

WALLACE: And who elected Herbert Armstrong?

RADER: Mr. Armstrong had the great commission devolve upon him forty‑six years ago.

 

WALLACE: And he runs, in effect, a dictatorship?

 

RADER: Yes. But it is a benevolent dictatorship. And he has the respect, the admiration, and the love of the people.

 

WALLACE The people who tithe, and tithe again, and then third tithe, and special offerings . . .

 

 

 

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RADER: They love him, Mike. They love him and there's no man or combination of men that will ever destroy that love, that respect, or that admiration. Never. It will never happen.

*

One of the lighter moments, in the interview came when Wallace, apparently too vain to wear his eyeglasses while on camera, had difficulty understanding one of our financial papers, confusing fiscal with calendar year. I began to chide him.

 

RADER: Mike, you're not reading it. Mike, come on. You've got to read the top. My goodness. You don't want to make me cross examine you on national television. This is for a twelve‑month period or a fiscal year. So through December 31 we already had spent $258,000.

 

WALLACE: If it's a fiscal year, conceivably, one should perhaps say so.

 

RADER: You can see it right there. Mike, put your glasses on. 1977 to 1978 Budget, July I through June 30th. This is as of December 31. We've already spent $270,000 in half a year.

*

Wallace began to delve into salaries and expense accounts in an attempt to shock and embarrass me. He did not succeed. I even upped his figures a little! I also told him pointedly that all of these expenses were known to the members. Much of my explanation was never heard on the air.

 

WALLACE: How much does Herbert W. Armstrong make?

 

RADER: He doesn't make as much as I do. You should ask how much I make. I don't like to tell you things about Mr. Armstrong. Ask me what I make, and I make more than he does.

 

WALLACE: You make $200,000 a year.

 

RADER: $200,000 plus.

 

 

 

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WALLACE: Plus?

 

RADER: My entire employee benefit package will bring me closer to $300,000.

 

WALLACE: $300,000!

 

RADER: Closer to three than to two.

 

WALLACE: And he.)

 

RADER: Makes less.

 

WALLACE: $200,000?

 

RADER: That's right.

 

WALLACE: Expenses?

 

RADER: Just those expenses which are part and parcel of his overseas mission.

 

WALLACE: On those expenses? Everything else comes out of the $200,000?

 

RADER: He pays for his own. He pays his own way through the world.

 

WALLACE: He does. I have here a copy, February 7, 1978, subject‑Herbert Armstrong, medical. From Edward Bodo to Henry Cornwall. Mr. Armstrong's medical expenses.

 

RADER: We're self‑insured.

 

WALLACE: $6,000

 

RADER: Mike, I have to explain that because you're just going to go down a bad trail and I'll have to ask you to put your glasses on. We don't have medical insurance. We're self‑insured. So for the first time in forty‑six years, Mr. Armstrong became ill and we paid his medical bills, just as we'll pay them for anybody else under our self‑insurance program.

 

WALLACE: Here are checks given to Mrs. Armstrong, $20,000. RADER: They were probably for the expenses for what became a paramedical unit.

 

 

 

 

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WALLACE: Medical reimbursement requested by Mr. Raderno receipts‑$ 3,112.

 

RADER: Remember, Mike, Mr. Armstrong became ill in August of 1977. He would not go to a hospital. He refused. He had round the‑clock medical attention‑three nurses around the clock while he was in his critical stage. After he recovered from that it was cut down. But we did have to turn his home into a paramedical facility.

 

WALLACE: So these are all medical expenses?

 

RADER: Medical expenses.

 

WALLACE: Aren't they extraordinary for Herbert Armstrong?

 

RADER: They are extraordinary in the sense that this is the first time Mr. Armstrong has ever called upon the institution to honor its self‑insurance program.

 

WALLACE: Other expenses he takes care of?

 

RADER: Yes, unless they are expenses of carrying out institutional activities in which . . .

 

WALLACE: Pasadena Pet Hospital‑$25. Pet Corral Dog Food ‑$12. Pet Corral White Rocks‑$.93. T.V. Guide‑thirty‑one cents. Book for Mr. Armstrong‑$ 2.3 9. Handcocks fabrics$2.33. Ben Monte Market‑$33.41. Grand Champion Feed Store‑$26 and $21. Levis‑$25.00. Groceries, hardware, cigarette lighter connector plug‑$I. Molding, shelves, wood, jalousies, frames, pool cleaning, Lifetime Book, Just Pants, The Spot Shop‑$2,565.72. These are non medical expenses for the household of Herbert Armstrong during 1977.

 

RADER: What you don't understand is those items are then picked up on our books and records and charged to his accounts receivable and then he reimburses it. [Emphasis added.] We have a very fine system of accounting. The mere fact that you have all those items indicates that we have a fine system. If we didn't have that system, we'd have some kind of system that other institutions have where you wouldn't be able to treat that kind of

 

 

 

 

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deal. This information is accumulated. It is charged to his accounts receivable. At the end of the year he pays it.

*

Wallace returned to a discussion of my salary and benefits, claiming that I was a "rich man."

 

WALLACE: I would say with a $200,000 a year salary, a $100,000 a year expense account and a consultant fee of $100,000 a year after retirement according to your contract which runs to the year 2003, you're a rich man.

 

RADER: That makes me well paid, doesn't necessarily make me rich. You can't count the money in my pocket, Mike.

 

WALLACE: I can't count the money in your pocket. I can count, however, the amount of profit you made on the sale of your house on Loma Vista.

*

Here, he questioned who made the mortgage payments on Loma Vista, sold at a profit to me of $1.2 million, trying to prove that Church funds were being used. He also seemed concerned that I was not paying my share of taxes. I answered frankly but, as we will see later, may not have convinced him.

 

WALLACE: Mr. Rader, you say that you paid totally for that house in which you realized a profit of $1,200,000. I have here your executive expense report from January 1, 1977 to December 31, 1977, which says, house payment, $28,000. Apparently somebody was paying $2,406 a month on your behalf.

 

RADER: There's nothing inconsistent in that. You asked me a few moments ago whether my salary under my contract was $200,000. I said yes, plus employment benefit packages. As a convenience to me, the Church, when I was traveling, and I was traveling up to three hundred days a year, made those payments on my behalf. That is additional compensation as part of my package provided for by my contract. They issue a 1099 form

 

 

 

 

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at the end of the year along with a W‑2 pick it up on my tax return, and I told you if you took those payments plus my $200,000 a year, it comes closer to $300,000 than $200,000.

 

WALLACE: Why don't you have a $300,000 salary?

 

RADER: I do.

 

WALLACE: Do you pay taxes on a $300,000 salary?

 

RADER: I just told you that. A total of $200,000 comes on the W‑2 form and the balance of it comes on a 1099 form and I pay tax on it. If I were a minister, those payments over and above my $200,000 would not have been taxable to me. They would have still been for my benefit, but they would not have been taxable. This is part of my employment benefit package. I pay tax on the whole thing. It is what this organization has determined I am worth. They paid it to me or on my behalf. Therefore I paid for my house. I pay for everything else I own.

 

WALLACE: Is there some place in your employment contract that says you are entitled to that?

 

RADER: Yes, of course. In paragraph 3.3 and paragraph 3.2. Both points.

 

WALLACE: Paragraph 3.2 and 3: "Expenses. Church shall pay for all expenses incurred by or on behalf of Rader in performing as chief adviser, including but not limited to all travel, lodging, entertainment, and meal expenses. So that all out‑of‑pocket expenses incurred by Rader in the performance of his duties as chief adviser shall be promptly reimbursed."

 

RADER: My home, in other words

 

WALLACE: And then 3.3, his fringe benefits: vacations, sick leaves, employee group insurance and other fringe benefits. It says nothing about paying for your home, though.

 

RADER: The fringe benefits include the same benefits for me as I told you exist for the ministers‑exactly the same.

 

WALLACE: In other words, the ministers can sell their house at a profit?

 

 

 

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RADER: Those who own their own homes.

 

WALLACE: How many of them do?

 

RADER: Many. And those who own their own homes can receive benefit payments for the maintenance of the home and they won't even be taxable on those payments. If they should sell their home, the home naturally belongs to them. This is very open and shut. It's a very simple, basic thing.

 

WALLACE: Why would this payment not appear as salary but as executive expense report‑House Payment, $28,000?

 

RADER: That's exactly what it is. It's executive expense report. It's not salary. It's not subject to withholding tax, per se, but the laws of the land require it to be reported on a 1099 form.

 

WALLACE: Oh, then you don't pay a tax on it?

 

RADER: I pay it. I pay it on my income tax return because it's reported to me as earnings other than wages on what's called Form 1099.

 

WALLACE: I just want to understand something. Do you pay an income tax?

 

RADER: Yes.

 

WALLACE: On $300,000 a year?

 

RADER: Closer to $300,000 than any other number you could pick.

 

WALLACE: Including the house payment?

 

RADER: Exactly.

 

WALLACE: Who pays those taxes for you?

 

RADER: I do. I do.

*

After more than four hours, I walked angrily out of my office, abruptly terminating the interview, when Wallace introduced

 

 

 

 

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what he said was a tape of a conversation Herbert Armstrong had with a third, unidentified party.

I did not object to the substance of what he was presenting I had already made all of it public myself, both in court and in the Worldwide News. But I was appalled at the unauthorized and illegal taping of Herbert Armstrong. The offense was magnified, I felt, because two tapes made at different times were spliced to appear as one!

As he played the tape, 1 caught the discrepancy. Part of it was excerpted from a seven‑page letter written by Armstrong to me. The other half, I surmised from the contents, must have been taped some months earlier.

Wallace led into this discussion by asking if I knew I had been the bete noire of Armstrong in early January. He quoted what he said was a letter from Armstrong and, when I denounced it as a "fabrication," proceeded to play the tape.

Only a very small portion of what I actually told Mike Wallace was broadcast. Here is the complete exchange:

 

WALLACE: There's no doubt in your mind that that's Mr. Herbert W. Armstrong?

 

RADER: There's no doubt in my mind that the second half of the tape was his reading of a letter which I referred to in court. It was addressed to me as a result of an exchange of letters that I had with him beginning in October, when I had asked him to relieve me of these administrative responsibilities. I said if he wanted to, although it wasn't true, he could use my health as a reason. In December, as a matter of fact, as a prelude to this, taking my suggestion, he wrote to the entirety of the Church and told them that I was thinking of resigning because of poor health. But you don't have the whole tape there‑a seven‑page letter. *

 

* The letter is reprinted in its entirety in Appendix D. Refuting the Wallace charge that Mr. Rader was the "bete noire" of Mr. Armstrong, the letter includes the Pastor General's statement that "I do want you and need you to continue as my personal assistant and adviser."

 

 

 

 

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WALLACE: We have the whole tape.

 

RADER: Now that tape was illegally acquired. It must have been recorded by Wayne Cole.

 

WALLACE: You said that you did not believe that Herbert W. Armstrong would have said those things about Stanley Rader.

 

RADER: No, that's not . . .

 

WALLACE: Now you admit . . .

 

RADER: That's not what I had . . .

 

WALLACE: That's what you said, Mr. Rader.

 

RADER: Oh no. Oh no.

 

WALLACE: And now you acknowledge that is his voice.

 

RADER: I didn't say that. Those are two parts of two different tapes at two different times. The first part of that tape might have been five or six months old. You stated, Mr. Wallace, you stated . . .

 

WALLACE: Stated what?

 

RADER: . . . right here that, would I believe that just a few weeks ago I was Herbert Armstrong's b6te noire? The second half of that tape does not suggest that. The first half of that tape does. Now I say you've acquired this by illegal means. I intend to have my attorneys today not only sue you if you use this, but I mean this now. I want you to go to the district attorney today. Let him know that Wayne Cole improperly recorded this. I'll defend Mr. Armstrong and the Church on that basis. This is obviously something that was recorded by Cole. Remember, Cole went there as part of the conspiracy on December the 28th. I have a copy of the . . .

 

WALLACE: I must say that you've had your attorney here during this entire interview, and you're addressing him, Allan Browne, at this moment.

 

RADER: At this point, I want it known that you have been given a tape illegally acquired in violation of the California wiretapping

 

 

 

 

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laws, and perhaps some federal laws as well. I'm not sure of that. I'm sure the party that Mr. Armstrong‑, was talking to was the party that addressed the letter to him on December 28th, which Mr. Armstrong alludes to in part in the actual letter, which I have a copy of, and which I've been willing to produce in court, and which I read to the entirety of the Church a couple of days after I received it. But that's no secret.

 

WALLACE: Mr. Rader, you know what I'd like to know is why all of this backbiting and fighting and money and power and trouble? Why all this storm and brine in the Worldwide Church of God? What kind of people are you? Are you for God? Are you for, are you for, are you a godly man?

 

RADER: I am, and Mr. Armstrong is. I'm wondering about you, Mike? I'm wondering about you.

 

WALLACE: Why?

 

RADER: Because you have used a piece of a tape that's a fractured tape. You know it was illegally acquired. I find it reprehensible and unconscionable. And if there is anything I can do to see to it that you do not have access to that kind of material ever again, I shall do so. So I want you to know that. Whether I don't know whether . . .

 

WALLACE: You've made that clear.

 

RADER: No, no. Not just for me. You have used a tape, and I have to tell Mr. Armstrong now, his contempt has always been real. But on a scale of zero to 100 you've now come close to 98. You have played that tape in front of other people here. It's a fractured tape.

 

WALLACE: The only other people here are our staff and your attorney.

 

RADER: That's not privileged, not privileged. I feel that a great injustice has been done to the spiritual leader of this Church. I'd like everyone's name, including these staff people. and Gorin as well. If necessary, I'll go to court and get an injunction on

 

 

 

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the whole bit, just on the basis of that tape because the head, the spiritual head of this Church . . .

 

WALLACE: Why does that tape worry you so?

 

RADER: It worries me only in one respect, that a person coming here as a supposedly responsible member of the press, representing a responsible entity such as CBS, knowing he has a tape illegally acquired, would use it in front of other people. That, to me, is reprehensible, Mike. If I had known that, I'd have never let you step foot on this property.

 

WALLACE: You mean, you mean?

 

RADER: The contents mean nothing. It's the fact that you have received it illegally. I warned you that some of the papers you have on the floor were stolen from this office by Ted Armstrong. I told you that. And I told you we'd already told the deputy attorney general, as well as the receiver, that he's on notice about those papers. When you asked me about other papers, which were mine, I said they weren't stolen from me. They were probably taken from this office. This violates Mr. Armstrong's rights of privacy, his human dignity. And you have been a party to it and you should be punished for it.

 

WALLACE: What about the substance?

 

RADER: I told you that I would be very happy to give you a copy of the seven‑page letter that he wrote to me . . .

 

WALLACE: No, the substance of that tape?

 

RADER: That tape is not a complete tape. There is a seven‑page letter. I'll go to any court in any land and prove to you that the tape is not a complete record. I've already made the letter public to the entirety of the Church and it's been printed.

 

WALLACE: The tape is nothing more than what I read to you beforehand, and you said it's impossible . . .

 

RADER: There were two tapes.

 

 

 

 

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WALLACE: I say the tape is nothing more than what I read to you ahead of time. And you said at that time it couldn't possibly be Herbert Armstrong.

 

RADER: I think you'd better scrap everything because now you're on my list. You announce somebody, I have to go at. And I'll have to stand every bit of our resources to get you because you have violated Mr. Armstrong. You have set the spiritual head of this Work up, you have violated every one of his rights of privacy by taking that illegal tape. You violated. You're the receiver of something that's improper. You've exposed it to these people here. And if it's the last thing we do, we're going to make you pay for it. Now I hope you print that on the air., It's not running now.

 

WALLACE: We're going to have to get it from .

 

RADER: Get it.

 

WALLACE: . . . for we want to get you saying that.

 

RADER: That's very important. I mean, to me, it's despicable.

The contents, no. I'll make them public. Today I'll give the whole press the story. I'll also give them the whole seven page letter and then let them compare what you have played with the seven page letter. But my seven‑page letter is a letter from Mr. Herbert Armstrong. That was acquired illegally. And you're using it, and you have involved these people‑very despicable.

 

CBS STAFF MAN: We don't know who else has heard that tape.

 

RADER: Many other people have heard that tape. That's my entire point. This becomes major. It's not minor. And I've got to go public with it. To protect Mr. Armstrong, I must go public. I mean, his letter to me has been published already. But what you have done, you have a tape recording which you have no right to have. You should have destroyed it as a responsible journalist; you should have destroyed it. You shared it with people here. That was despicable as anything I could think of. Mr. Armstrong will write a letter immediately about it to the entirety

 

 

 

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of the brethren. So the ball will start rolling as of today. It's got to.

 

WALLACE: And will he disavow what he says in it?

 

RADER: There are major Constitutional issues involved here, and they border on the criminal. You have definitely violated criminal or penal codes of the State of California. There's no question about it. You're not privileged for having that tape. Now we've all heard it. I think it's a very serious thing. What he says in the second half of that tape was read‑he was reading something to somebody over the phone. And I have the entirety of the letter. I'm not embarrassed about the letter, but the letter has to be read in the context of three letters from me that predated it, plus his letter to the brethren four weeks before, acting on one of my letters.

 

 

The Sham of “Investigative Reporting”

 

By this time I'm afraid I had little Christian charity left in me for Wallace, so I terminated the interview and went to a waiting press conference. Wallace, however, had something else on his mind. When the program was shown on the air, he concluded it with the statement that I was being investigated by the Internal Revenue Service for criminal tax evasion.

There is no doubt that he intended this to bolster the thrust of his television segment‑that there is some merit to the charges made against the Church, Herbert Armstrong, and myself. As I have already pointed out to the members, Wallace's intent throughout this whole affair was revealed by what he left out here too.

For although he brought up the investigation, he failed to disclose that I had voluntarily given the IRS complete access to my financial records, as well as the Church's financial records about me. Neither did he report that the investigation had been going on for two and a half months and that no improprieties or wrongdoing had been found. Again, he did not reveal the "source" of his information. I have no doubt in my mind that the "source"

 

 

 

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also was responsible for (a) the surreptitious and unlawful re­cording of Mr. Armstrong's telephone conversations‑; (b) the instigation and initiation of the attorney general's baseless law­suit; and (c) initiation of the Internal Revenue Service investi­gation itself.

In this respect, I am reminded that commencing in 1974, the Church, Herbert Armstrong, and I were hounded and harassed for several years by the U.S. Customs Service in our travels spreading God's work. Customs was seeking evidence linking the Church and its leaders to the smuggling of drugs, gold, and diamonds. When we sought to ascertain, through the Freedom of Information Act, the identities of the people making these baseless accusations against us, we were told that even that law did not permit the disclosure of those "sources." Even after we demonstrated that the charges were false, the government still refused to tell us who had unjustly subjected us to several years of harassment. Indeed, it is not unlikely that the same "source" ‑one or more dissident Church members out to destroy the Church for their own gain‑is responsible both for our harass­ment by the Customs Service and for the instant wholesale state intrusion and Internal Revenue Service examination.

What lessons should we learn from these experiences? I believe that basically there are three. First, as the Watergate episode also teaches, government officials are capable of monstrous abuses of power, in the course of which they use government agencies as instruments to oppress those who do not share their beliefs and biases. "Enemy lists" whose members are without just cause subject to "investigation" by the IRS and other agen­cies, office break‑ins, and wiretaps are not figments of the imag­ination; they are, until political and religious freedom are re­stored in this country, the price which you, Herbert Armstrong, 1, and others may be paying for doing God's Work. Although we must fight against such oppression, we must bear it with pride while we carry out His Will.

Second, government officials and agencies, in attempts to make names for themselves, procure larger budget appropriations, and gain other political objectives, frequently act precipitously on

 

 

 

 

 

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the specious claims of irresponsible or vindictive persons, with­out any independent investigation or corroboration of those claims. To facilitate these attempts, however, the politicians keep the identities of the real accusers secret, lest the innocent victim confront them and, in doing so, expose the politicians as the charlatans they are.

Finally, in their own inimitable way, the media frequently are, intentionally or unwittingly, the primary instruments of op­pression. Their cry of "freedom of the press" is, in reality, but a subterfuge for the right to slant public opinion in favor of the media's own personal and political prejudices through sensation­alism and biased reporting.

So‑called "investigative reporting" only too often is a mis­nomer for the most blatant form of yellow journalism. The "in­vestigator" usually starts with his conclusion (that is, the view he wishes the public to hold) and carefully builds up to it through selective investigation (again, frequently from "undisclosed sources"), selective and/or incorrect quotation, and subtly placed innuendo. The masquerade of most "investigative report­ing" as news is therefore a sham.

Wallace illustrated this only too clearly in his "God and Mammon" segment.

One final word: Wallace took the title of his telecast from Matthew 6:24. 1 commend to him another passage from the same gospel:

"Every idle word that men shall speak, they shall give account thereof in the day of judgment." (Matthew 12:36.)