Ex-Plymouth Brethren Christian Church members call for its charitable status to be stripped

Former member of the church, Rob McLean, believes it is a money-spinner for its leaders. Photo / RNZ

By Ruth Hill, Nicky Hager of RNZ

Former members of the Plymouth Brethren Christian Church are calling for it to be stripped of its charitable status, which allows its adherents to claim millions of dollars in tax breaks each year.

The secretive, cult-like church, previously known as the Exclusive Brethren, says its members donate money and volunteer their time to ensure their way of life is sustainable and to contribute to society.

However, an RNZ investigation has found hundreds of thousands of dollars were sent every year to Sydney businessman Bruce Hales, also known as the Elect Vessel.

'I was given all these envelopes, I didn't know what was in them'

It was meant to be a spiritual pilgrimage.

But as he handed over the bulging envelopes of cash to a North Dakota pig farmer, it occurred to Rob McLean that he was part of a more mercenary mission.

The Exclusive Brethren member was among a delegation sent to the United States in the 1980s to meet that farmer, James Symington, who despite losing his sight and both legs to diabetes, held onto his position as global leader of the Brethren until his death.

McLean said he was given the envelopes by church elders just before he left New Zealand.

"I was given all this money from various parts of New Zealand, there was about 20 of us that went, it was like a church group. I was given all these envelopes, I didn't know what was in them. They said 'You give these to Mr Symington, that's our giving from our church'."

Other ex-members have confirmed how Brethren were routinely directed to smuggle large sums of cash across international borders to avoid customs regulations.

Four decades later, McLean believes the church - now rebranded as the Plymouth Brethren Christian Church - has become even more of a money-spinner for its leaders.

Ex-members have described how assemblies sent cash payments to Hales and members of his family, which would add up to hundreds of thousands of dollars a year from New Zealand alone, and millions from Brethren around the world.

Another ex-member Peter Hart, who was excommunicated two years ago, said Brethren congregations (called "assemblies") varied the cash payments so they did not look like wages and attract the attention of tax authorities.

"So we didn't give every month, and we had to give a different amount every time."

Assemblies also gave thousands to an offshore fund (controlled by Bruce Hales) called GCF - General Charitable Fund - which was believed to be for legal costs.

Furthermore, members contributed towards Hales' personal security costs, which were substantial.

"We were told there were threats against his life.

"Every assembly building had [to] have a carpark with internal access so he could enter without anyone seeing him, and two exits."

McLean, who lost his family and business when he was ex-communicated, believes the global church operates like a pyramid scheme, with Hales at the top.

"They ask Hales, 'Are we giving you enough Mr Hales?' And he says 'No, no, I'm doing a lot of travelling, I think you could up it a bit'.

"I remember hearing that and it sounded so wrong."

Those below Hales received graduated amounts according to their proximity to him.

The Plymouth Brethren declined to be interviewed but supplied responses to written questions.

A spokesperson for the Plymouth Brethren in New Zealand, Doug Watt, noted it was "common in many Churches for small gifts to be given from the Church plate to further the work of the ministry and to support those providing pastoral care".

"We are no different. Gifts to our church leaders ensure that pastoral care, and the costs associated with it, for example travel, continue as pastoral care plays an important role in our way of life."

According to ex-members, people were also expected to make large donations as individuals and through their businesses and family trusts to a registered charity called the National Assistance Fund (NAF).

Another former Brethren, whom RNZ has agreed not to name, said NAF was a conduit for cash, to allow other Brethren organisations to avoid public scrutiny.

"Most charities are set up to raise money and dispense it for a charitable purpose," he explained.

"But NAF doesn't do either of those things. Money is raised by private, non-charitable Brethren organisations and spent by private, non-charitable Brethren organisations. And NAF has no control over either of those things."

The charity's carefully worded mission statement declares it will "source and apply resources for the benefit of persons in NZ", without defining "persons".

"There is no encompassing phrase like 'society' or 'all persons' - nothing a regulator could use to force the PBCC to, say, open their schools to non-PBCC members.

"The trouble is that the donors and beneficiaries are all in the same tiny group, all controlled by the same man. Outsiders do not and cannot benefit."

It was one of the largest charities in New Zealand, but if it were to shut down tomorrow, "almost no one outside the Brethren would notice", he said.

"Legitimate charity is tax-exempt because it binds society together. It can't fulfil this role when donors and beneficiaries have overlapping interests. Buying Christmas presents for a homeless shelter is charitable, but buying them for your whānau is not."

The regulatory regime was ripe for exploitation with just "paper-thin oversight", he said.

Charities Services general manager Natasha Weight said "as an independent, self-governing entity, the National Assistance Fund is responsible for determining how it fulfils its charitable purposes, and otherwise meets its obligations as a registered charity".

"A review of the National Assistance Fund's recent audited financial reports indicate that it is advancing educational, religious and general charitable purposes, in addition to the relief of poverty," she said.

In the last decade, NAF has received between $26 million and $62 million each year in donations, plus millions more from its investments.

In 2019, donations totalled $61,936,429, which would yield tax rebates of around $20 million.

So what does the National Assistance Fund actually do?

It is a bit of a black box, there are no glossy brochures expounding its good works.

Church members are told most of their cash goes towards educating their children, through the Brethren's private school system, OneSchool Global.

In New Zealand, it is a network of 17 campuses with a roll of 1536, which received just under $2.5 million (including GST) from the Education Ministry for the 2021 year.

Some of the activities of the National Assistance Fund are more mysterious.

According to its annual report, NAF made a $30 million loan in 2018 to Sovereign Capital Trust.

The trust companies for both organisations share some of the same directors.

When asked about this loan by RNZ, the PBCC said it was an investment, to ensure "sustainable funding" for its charitable work.

But does this qualify as "charitable"?

In Britain, the Plymouth Brethren had its application for charitable status rejected by the Charity Commission in 2012 on the grounds it did not meet the "public benefit" requirement of the law.

Professor Peter Lineham, who has written extensively on Brethren history, said this was because in effect they were just spending the money on themselves. The Commission was also concerned about the Brethren's treatment of former members.

There was a good case for religious bodies having some exemption from taxation "because religion ought not to be made more difficult", he said.

"But in the case of a church which only operates for its own members, that's the interesting puzzle about the story - why are they entitled to tax relief?"

It is also a key element of New Zealand charities law that a charity must provide benefits to the public, and not to private individuals or groups.

The church was finally granted charitable status in Britain in 2014 after promising its actions towards ex-members would be "mitigated by compassion", and launching its first public charity - the Rapid Relief Team, which was quickly rolled out to other countries, including New Zealand.

In 2020, New Zealand's Rapid Relief Team received just under $741,000 in donations.

Meanwhile, the National Assistance Fund got over $34.6 million - more than the Red Cross' $28.2m.

Church spokesperson Doug Watt said the National Assistance Fund supported OneSchool Global, the Rapid Relief Team and "other charitable endeavours".

"Over the last year, in Aotearoa, members of the PBCC volunteered nearly 13,000 hours of time in support of community causes at nearly 200 events."

The Rapid Relief Team helped thousands of people around the world and had raised millions from its own community for refugees displaced by the war in Ukraine, he said.

There was "nothing unusual" in the use of trusts by PBCC members, he said.

"Many Kiwis use trust structures, particularly many New Zealand business owners, there are nearly half a million trusts in New Zealand."

As a registered charity, NAF "met all of its reporting and operating obligations including to the IRD and Charities Services".

"It is subject to the same rules and requirements as every other charity, and these commitments are taken seriously."

However, a RNZ source said the Rapid Relief Team was "a minnow" compared with the "millions and millions of tax-free dollars" the Brethren put through their other charitable trusts, which supported their internal infrastructure.

"The government is subsiding this group by up to $20 million a year to pay for their churches, and schools and buildings and whatever else, and they shouldn't be. They're not a public benefit,they're a public detriment."

There was a lot to admire in the Brethren way of life - including their work ethic and strong family values - at least towards those family members who remained in the church, he said.

"I don't want to deny those things. But while charity begins at home, it shouldn't end there."