Has the SGM Board Broken the Law and Defrauded the Pastors of Covenant Life Church? Yes, by All Accounts!
When you start a church or Christian organization you incorporate as a 501(c)(3) charitable organization in order to be tax exempt and receive tax deductible contributions.
In so doing, you write up and submit Articles of Incorporation and Bylaws for approval by the State in which the non-profit will reside. These legal documents then govern the actions of the Board of Directors and Officers. They can be amended and changed but only by following the formal process outlined in those documents. Changes to the Articles of Incorporation must also be registered with the State.
On August 2, 2002, we restated and amended ARTICLE 1 as required by law because we changed the name of the corporation from PDI Ministries, Inc. to Sovereign Grace Ministries, Inc. Receipt of this filing was acknowledged by the State of Maryland on August 16, 2002. For context, I’ve included Articles 1, 2, 3, and 6 below. I will comment on ARTICLE 3 as an aside. The violation of ARTICLE 6 is my concern.
ARTICLES OF AMENDMENT AND RESTATEMENT OF PDI MINISTRIES, INC.
PDI Ministries, Inc., a Maryland nonstock corporation, hereby certifies to the State Department of Assessments and Taxation, that
The charter of the corporation is hereby amended and restated as follows:
ARTICLE 1: Name. The name of the corporation is Sovereign Grace Ministries, Inc., hereinafter referred to as “the Corporation.”
ARTICLE 2: Duration. The period for the duration of the Corporation is perpetual.
ARTICLE 3: Purposes. This Corporation seeks to glorify God by planting and building local churches that provide regular opportunities for worshipping God, prayer, fellowship, teaching, discipline, and ministry to the spiritual and physical needs of members of the body of Jesus Christ, as well as those outside of the body of Christ. This Corporation shall encourage, serve, and equip local churches to freely preach the Gospel of Jesus Christ and to establish and train believers in the grace of God through providing apostolic oversight, pastoral training and equipping, intensive pastoral college training, worship music, and religious literature, and generally utilizing all means and media to extend God's kingdom. To carry out these stated purposes, the Corporation may do any and all lawful acts which may be necessary or useful for the furtherance of said purposes.
ARTICLE 6: Directors. The number of persons who serve on the Board of Directors and the manner in which the directors shall be elected or appointed shall be set forth in the Bylaws, except that one of the directors shall be appointed by the Board of Governing Pastors of Covenant Life Church, Inc. in order to further develop and perpetuate the close working relationship between Covenant Life Church, Inc. and the Corporation, as well as to ensure mutual faithful adherence to our shared religious bonds and convictions.
In ARTICLE 3, SGM has the right and authority to “build local churches…equip local churches…establish and train believers…through providing apostolic oversight” and “any and all lawful acts which may be necessary or useful for the furtherance of said purposes.” This week the SGM Board reasserted its “historical commitment” to “extra local ministry” (i.e., apostolic ministry) and affirmed its role in “leading” all SGM churches in the mission of SGM. They are tightening the reins. More on this topic in a later blog post.
ARTICLE 6 refers to the Bylaws which locate the authority to appoint additional Board Members solely in the hands of existing Board Members. SGM churches and pastors have no legal say or decision making power in the matter. Here is Section 4:2 from the Bylaws.
Section 4.2 Qualification and Appointment. The initial Board of Directors shall make subsequent appointments to the Board of Directors of the Corporation by a majority vote at any regular meeting, or at a special meeting convened for that purpose.
But there is one exception to this procedure explicitly mentioned in the Bylaws and in the Articles of Incorporation. That is, the Governing Board for Covenant Life Church must appoint one SGM Board Member without interference from the existing SGM Board. Here is Section 4.1 from the Bylaws.
Section 4.1 Roles as Directors and Members, Number, and Term. The Board of Directors of the Corporation shall consist of not fewer than four (4) persons and not more than eleven (11) persons, as may be determined from time to time by resolution of the Board of Directors, one of which shall be appointed by the Board of Governing Pastors of Covenant Life Church, Inc., as provided by the Articles of Incorporation. Although the Corporation has no members, its Directors shall be entitled to exercise the rights and powers that members of a nonstock corporation would otherwise enjoy under any Maryland law or rule relating to members of a nonstock corporation.
We find this same provision, and the reasons for it, clearly stated in the Articles of Incorporation.
“One of the directors shall be appointed by the Board of Governing Pastors of Covenant Life Church, Inc. in order to further develop and perpetuate the close working relationship between Covenant Life Church, Inc. and the Corporation, as well as to ensure mutual faithful adherence to our shared religious bonds and convictions.” (Article 6 in SGM Articles of Incorporation)
On Tuesday, “SGM’s New Board Selection Process” was sent to the SGM pastors. In violation of this provision, the CLC Governing Board was cut out of the picture in appointing their Board Member. That means the selection process is illegal unless changes to remove this provision were already made in accordance with the Articles and Bylaws.
Whatever the case, the SGM Board broke their relational commitment “to further develop and perpetuate the close working relationship” between CLC and SGM. They also broke their accountability commitment to “ensure mutual faithful adherence to our shared religious bonds and convictions.”
Tommy Hill (Executive Director for SGM) and Chip Grange (Legal Counsel for SGM) are intimately familiar with this provision. Of necessity, they’ve closely studied these two documents over the last 8 months including Section 11 on Indemnification (i.e., lawsuits) in the Bylaws. In fact, one must conclude under the circumstances, that the entire Board is informed of said provisions under the circumstances. They know one Director appointed by the CLC Governing Board must serve on the SGM Board at all times.
I’ve have sought to get answers but been ignored. Time to post again. Here is the email history. Corby Megordan is the Administrator for CLC.
From: Brent Detwiler
Sent: Wednesday, February 29, 2012 9:37 AM
To: Chip Grange; Tommy Hill
Subject: Changes to Articles and Bylaws
Hello Tommy and Chip,
Have there been any changes to SGM Articles of Incorporation from August 13, 2002 or the SGM Bylaws from June 11, 2003? See attached. Please answer these two important questions upon receipt of this email.
From: Brent Detwiler [mailto:email@example.com]
Sent: Wednesday, February 29, 2012 12:16 PM
To: Corby Megorden
Subject: FW: Changes to Articles and Bylaws
I don’t think Tommy or Chip will answer my questions. Do you know if any changes have been made to the Articles or Bylaws?
From: Corby Megorden
Sent: Wednesday, February 29, 2012 2:13 PM
To: Brent Detwiler
Subject: Re: Changes to Articles and Bylaws
I am just not sure – do not think they have changed but cannot speak to it.
From: Brent Detwiler
Sent: Wednesday, February 29, 2012 5:03 PM
To: Tommy Hill
Cc: Chip Grange
Subject: RE: Changes to Articles and Bylaws
I wrote this morning and asked for an immediate response given the simple (but important) nature of my questions. They are easy to answer. It is now late in the day and I’ve not heard from either of you. Please provide me a response before 6 pm. Let me expand upon my inquiry.
Under the Articles of Incorporation and Bylaws, the SGM Board must always have one Board Member solely appointed by the CLC Governing Board unless you have taken the legal steps necessary to change this provision. Let me ask again. Have you properly amended the Articles of Incorporation per the Bylaws (below) and filed such an amendment with the State of Maryland? If not, you are in violation of the law and defrauded the CLC Board. If you have made such changes, why didn’t you notify the CLC Board? Corby has no knowledge of such action.
Please answer before 6 pm.
Section 12: AMENDMENTS
The Articles of Incorporation and these Bylaws may be amended, altered, or repealed by a majority vote of the members of the Board of Directors in attendance at any regular meeting of the Board or at any special meeting of the Board if notice of the proposed alteration or repeal is contained in the notice of such meeting or notice is properly waived as outlined in Section 5 of these Bylaws. Notice of any meeting of the Board of Directors in which the proposed amendment, alteration or repeal of these Bylaws is contained shall be in writing and shall be mailed to each director not less than 7 days prior to the meeting.
It is now the next day. I’ve heard nothing. This is par for the course. What the SGM Board has done is illegal and terribly unethical. How can they break these spiritual and legal commitments or not tell the CLC Governing Board (Joshua Harris, Kenneth Maresco, Grant Layman, Corby Megordan) they’ve changed the Articles of Incorporation and Bylaws? I know how. It is called deceit. These men steadfastly refuse to walk in the light.
The SGM Board doesn’t want the CLC Board to have any say in appointing a new Director to the permanent Board. In so doing, they appear willing to break the law. But I doubt we’ll know for sure because they remain unaccountable and always refuse to answer incriminating questions which require truthful answers. Their commitment to cover up is pervasive.
In all seriousness, nothing they say or do can be trusted. This is just another evidence.