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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

A few weeks ago, Independent politician Andrew Wilkie stood up in parliament, and dropped a bombshell on Australian megachurch, Hillsong. He exposed details of Hillsong’s finances, and how purchases were made for some of its key leaders. Now, several days after the speech, we have access to these documents and the questions they raise are becoming clearer. Could Hillsong have broken charity regulations? What does the new leadership at the church have to say? And what does it all mean for the future of Hillsong?

Today, associate editor of The Saturday Paper Martin Mckenzie-Murray, on how Hillsong spent its money, and why a whistleblower thought they needed to come forward.

It’s Tuesday, March 21.

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RUBY:

Marty, on 9 March, independent politician Andrew Wilkie he stands up in parliament and he delivers this speech, which comes as a huge shock to anyone who follows what is happening at Hillsong Church. Tell me about what he says.

MARTY:

Sure, can I set up the context first, which I think it is quite interesting? So Andrew Wilkie stands enjoying parliamentary privilege, which is, you know, his immunity from defamation.

Archival Tape – Andrew Wilkie:

“Deputy Speaker last year, a whistleblower provided me with financial records and board papers that show Hillsong…”

MARTY:

And announces that last year he had received a massive cache of documents from a whistleblower pertaining to alleged and systemic financial malfeasance by the church and by large cache, I mean large. It took parliamentary staff more than a week to scan all these documents and make them available for public inspection. Many, many thousands of pages.

Archival Tape – Andrew Wilkie:

“And these documents show former leader Brian Houston treating private jets like Ubers - again all with church money.”

MARTY:

Andrew Wilkie stood and said that there was kind of rampant, very conspicuous wealth and this point is made in the whistleblowers documents as well…

Archival Tape – Andrew Wilkie:

“Deputy Speaker, Hillsong followers believe that the money they put in the poor box goes to the poor. But these documents show how that money is actually used to do the kind of shopping that would embarrass a Kardashian.”

MARTY:

…that they treated private flights like Uber's. This kind of very gaudy, conspicuous expenditure on flights and accommodation…

Archival Tape – Andrew Wilkie:

“This document shows how in 2021, four members of the Houston family and their friends enjoyed a three day luxury retreat in Cancun, Mexico, using $150,000 of church money.”

MARTY:

Fine dinners, fine drinks…

Archival Tape – Andrew Wilkie:

“For example, a $6500 Cartier watch, $2500 in Louis Vuitton luggage.”

MARTY:

…the improper use of honorariums to pastors so that they could sort of avoid income tax.

Archival Tape – Andrew Wilkie:

“Shopping sprees for designer clothes at Saks Fifth Avenue, even $16,000 for custom skateboards!”

RUBY:

Right, okay… So it sounds like there are some quote unquote “conspicuous expenditures” happening within the Hillsong leadership. But is any of that conduct, that is alleged, is any of it actually illegal?

MARTY:

So there's a number of allegations that Hillsong have systematically evaded tax or perhaps acted fraudulently in its transfer of monies overseas. And the whistleblower says, if financially or emotionally vulnerable people have these financial requests made of them, they should know the quality of governance of this church. If you're moving very large amounts of tax exempt Australian income overseas, then you can be in breach of Australian law. If you're not declaring all of your income, as is alleged here, that they failed to declare some $80 million of income, then we have a big problem there. If directors aren't discharging their professional duties with proper due diligence, regulators might have a problem there. And almost immediately, a spokesperson for the church denied any illegality and expressed disappointment that Andrew Wilkie had not contacted the church before, before tabling these documents and making his speech. It was quite a strident denial.

RUBY:

Ok so the church is saying they haven’t done anything illegal. But in a way that isn’t up to them - or Wilkie to actually decide. It’s the people who regulate these sorts of matters - the Australian Charity and Not for Profit Commission the ACNC - or perhaps the tax office or securities commission. So are those bodies investigating this?

MARTY:

Yeah, so there's this complication in Andrew Wilkie speech in Parliament, he said all of these allegations are disturbing of Hillsong, the lavishness and the allegedly kind of brazen disregard for Australian laws and regulations. But he says equally alarming was the indifference of various Australian regulators like the Australian Charities and Not for Profits Commission, which is the federal regulator for that sector. And the Australian Taxation Office, he said, were indifferent to these. Now, this is where it gets a little bit complicated, because the ACNC said Wilkie was wrong and that they'd been investigating Hillsong since March of last year. The status of that investigation we don't know. Now the very fact that the ACNC were moved to correct Wilkie is quite extraordinary. They themselves said it is extremely rare to discuss a matter that's currently under investigation, but they thought it was important to correct Wilkie.

Now the reason that they don't do that is by their very charter, they're incredibly secretive, so they don't make any comments on matters that are under investigation. And if misconduct was found, they wouldn't necessarily make that public. And I think this is one of the motivating factors of the whistle blower that the regulation of especially the religious organisations, is so generous. It's so generous in its tax exemptions, it's so generous in its demands for financial disclosure. It's so generous in the secrecy that it allows their operations that the ventilation of alleged misconduct is almost impossible. And so that secrecy was, I think, a deep motivating factor of the whistle blower who thought, ‘I have to go through Wilkie’.

RUBY:

Right - so it sounds like this whistleblower, they were concerned that what they say was happening at Hillsong wasn’t being investigated properly, or at least, there wasn’t enough transparency around the investigation and that is what prompted them to leak these documents. So do we know any more about who the whistleblower is and what was motivating them?

MARTY:

What was clear to me is a very intense frustration. Whistle blower was someone close to the church with an intimate knowledge of its financial dealings and I think felt that the current regulatory environment for charities and religious organisations is such that these alleged crimes and financial malfeasance just would not be ventilated without this very dramatic act of going rogue and leaking this to Andrew Wilkie.

And the additional point is made quite passionately by the whistleblower that this is all in the public interest for a number of reasons. One, that allegedly Australian laws are being broken. Australian taxpayers money is being abused, and also that Hillsong, like other churches, make demands for donations or tithes, and that's ideally donating 10% of your own income as a congregant to the church. And Hillsong keep making these demands, even though they have several quite lavish revenue streams through merchandise, music, film, DVDs, it's colleges. And I think the thing that seemed to really distress the whistle blower was this great kind of conspicuous gulf between the amount of money that Hillsong generated through various revenue streams and the conspicuous wealth and expenditure of its directors and the relatively paltry amount that seemed to go to good deeds.

RUBY:

We’ll be back after this.

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RUBY:

So, Marty – this whistleblower, they have made these really serious allegations against Hillsong along with disclosing this spending – Hillsong says they haven’t done anything illegal. Let's talk a bit more about what they actually say about this because there’s a new leadership at the church now, and there’s a sense that they are trying to put forward a few face of accountability. So tell me about their response?

MARTY:

The Sunday after that Thursday, Phil Dooley, who's now the global senior pastor of Hillsong, i.e. the church's leader who replaced Brian Houston last year, apologised to the congregation.

Archival Tape – Phil Dooley:

“This week, Andrew Wilkie used parliamentary privilege to table thousands of documents that he'd received about Hillsong Church. Our church, your church and my church.”

MARTY:

And said that the church would be commissioning accountants to conduct an independent investigation into the allegations.

Archival Tape – Phil Dooley:

“I'm deeply disappointed that Mr. Wilkie would choose to use parliamentary privilege so that he does not have to be held accountable for whatever he tabled.”

MARTY:

And then there was Brian Houston, the church's founder himself, who tweeted quite angrily that Andrew Wilkie speech and allegations were spurious and unfounded. And again, like the church, he said that he had wished Andrew Wilkie had contacted him.

Archival Tape – Phil Dooley:

“... there was no obstacle to Mr. Wilkie contacting the church for an explanation. Clearly he doesn't appear to be interested in the answer. And it kind of feels like being king hit from behind. But Jesus loves you, Mr. Wilkie.”

MARTY:

There's a few issues that are illuminated in this and certainly ones that have really angered and frustrated the whistleblower. That is the generous tax exemptions of charities and religious organisations; The lack of disclosure - the ACNC recently required charities to report the salaries of their staff in their annual financial reports, but that doesn't apply to religious organisations. We should ask if we've got the balance of kind of secrecy protections, lack of disclosure on tax exemptions, right? There's exemptions for charities originated a very long time ago and were there so politicians can encourage their wealthy mates to donate to charities. Now we have an issue. However, if religious organisations have commercial very considerable commercial arms. So the generosity of these exemptions, the financial complexity. Hillsong has so many entities. And, you know, I think the whistleblower makes the point that the complexity is kind of part of the point. It's deliberate. It's a way of moving monies around. Are the regulators sufficiently empowered? Are we too generous in disclosure laws and taxation exemptions, and are we properly regulating what are now massive, in this case, global megachurches with a very, very complicated financial structure?

RUBY:

Right, and as you say Hillsong is a global megachurch – But it has faced significant troubles in recent years. There are the allegations against founder Brian Houston, charges he denies. There’s the fact he’s now also had to leave the church...So if you factor those into the new allegations, these financial allegations against Hillsong, how much is this all damaging the image of the church?

MARTY:

It's been an interesting couple of years for Hillsong, to say the least. I think in one way it kind of accords in a way with the church, and I say that for this reason Hillsong is Pentecostal, which is not a denomination itself, but a belief that the Holy Spirit can be observably manifest in spiritual gifts like exorcism and physical healing through touch and speaking in tongues. So there's a sort of public performance or expectation of miracles that is a part of it. Hillsong is also defined by its founder, Brian Houston's importation of the theatrics of American evangelism and the thing that defines it as well as the prosperity, gospel, which is this sort of kind of long, very American, gaudy belief that God wants you to be materially wealthy. He wants you to be rich and that success and wealth is likely a sign of virtue and piety that you have upheld your contract with God. These aren't things to be embarrassed about. And Hillsong was kind of treated like this spiritual investment bank whereby you didn't just donate to the church because it might be a nice thing to do, and they could reinvest those funds in, let's say, building an orphanage. The idea was that if you literally give to God through Hillsong, if you donate your income to Hillsong, you'll be lavishly rewarded, that there will be dividends. God will pay dividends upon your own investment to Hillsong. So this idea of wealth, material wealth and success was really conspicuously embedded and cherished in Hillsong. And so I think the image that Andrew Wilkie and the whistleblower's documents paints of jet setting glamour accords, I think, with the image of Hillsong itself.

RUBY:

And that image you talk about, for so long Hillsong’s image has also been one of success – this growth from one church in Sydney into a giant global church. But we know the church is contending with huge problems now, Marty. So, just how prosperous does the future look for Hillsong now, at it contends with all these allegations and challenges?

MARTY:

It's sort of hard to overstate how blighted the last couple of years have been. Yeah, the church has been absolutely battered. I think close observers of the church that I've spoken to still felt a year or so ago that it was too big to fail. But things have gotten so bad now that I think if not the dissolution of the church, certainly its massive shrinking doesn't seem impossible anymore. So in 2021, Brian Houston was arrested and charged for concealing the sex crimes of his father. Houston accepts that his father was in fact a serial child rapist, but pleaded not guilty to concealing those crimes from authorities. The trial began in December and it will conclude in June. Last year Brian Houston is moved out and resigned from the church that he founded because of sexual impropriety and breaching moral code. And now we have the Hillsong Papers. I mean, all of this has occurred in the last couple of years. You know, I'm not going to prophecy the collapse of the church, but I do know that those who have been watching it very closely. Asking the question which seemed unthinkable a couple of years ago and that is, can Hillsong survive?

RUBY:

Marty, thank you so much for your time.

MARTY:

Thank you.

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RUBY:

Also in the news today…

The embattled banking giant Credit Suisse, which has faced liquidity concerns in recent weeks, will be taken over by another Switzerland-based banking firm – UBS.

The take over, announced on Monday, will be financed by the Central Bank of Switzerland, which brokered the deal.

The deal values Credit Suisse at just 4.8 billion dollars, well below the publicly traded value of the company on Friday of 11.7 billion dollars.

And…

Victoria will move to ban the Nazi salute, after Neo-nazis performed the gesture on the steps of parliament house at a rally over the weekend, where they were supporting anti-trans activists.

The move follows criticism of how police dealt with the demonstration from LGBTI activists, who alleged police were more heavy-handed in dealing with counter-protestors than those making the nazi salutes.

I’m Ruby Jones, this is 7am - see you tomorrow.

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