“But the point of Canon Press is to — when they make money from it — is to turn the money back around into books, the publication of additional books. . . The church oversees the ministry, but the funds that Canon Press makes cycle back into the publication of more books.” Douglas Wilson
“Boy, what is it with you people? You think not getting caught in a lie is the same thing as telling the truth?” Three Days of the Condor
We have been considering various deceptions by Douglas Wilson as examples of his doctrine of “lying to the enemies of God who have forfeited their right to the truth.” This essay provides another example.
Executive Summary
In 2002 Pastor Douglas Wilson of Christ Church in Moscow, Idaho, filed a legal appeal with the State of Idaho to obtain 501(c)(3) property tax exemption for the Kirk’s building in downtown Moscow. Doug Wilson sought the exemption even though he knew that the Kirk did not qualify for it pursuant to the terms of Internal Revenue Code. Therefore, Mr. Wilson bore false witness to the court in sworn testimony at a public hearing. He and his minions misrepresented the truth about how Canon Press distributed its profits, and Mr. Wilson won his appeal. You can listen to the audio recording here and you can see a diagram of the funneling operation here.
The Subject of Doug Wilson’s Misrepresentations: Royalties
Christ Church used Canon Press’ status as a 501(c)(3) ministry of the church to funnel money via royalties to Douglas Wilson in violation of Internal Revenue Code, which states:
Inurement/Private Benefit — Charitable Organizations
A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator’s family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. (IRS)
This illegal use of a 501(c)(3) shelter began after 1993; we do not know if or when the Kirk ended it. In 2012 Christ Church sold Canon Press to Doug Wilson’s son, N.D. Wilson, for an undisclosed sum.
When Doug Wilson Deceived the Court: 2002
In 2000 Christ Church bought its first property in downtown Moscow and occupied it in 2001. The Kirk used this structure for its church offices, but it also deployed it for illegal activities such as classrooms for New St. Andrews College and classrooms for Greyfriars Hall (a different educational institution than NSA). Additionally, Christ Church used this property to house Canon Press.
In 2002 the Kirk applied to the county for property tax exemption, but a bureaucratic snafu delayed the application and the county subsequently denied it. Christ Church appealed the denial and on November 25, 2002, the Idaho Board of Tax Appeals heard the Kirk’s appeal. At this hearing three members of the Kirk — Douglas Wilson (minister), Eric Burnett (treasurer), and Greg Dickison (attorney) — deceived the court into believing that Canon Press did not pay royalties to Douglas Wilson. Christ Church would have lost its appeal if these men had not resorted to deception.
Proof of Royalties
The scanned image on the right (click to enlarge) was the standard contract that Canon Press used for all its books during that period. This contract was for the book Easy Chairs, Hard Words: Conversations on the Liberty of God, by Douglas Wilson. Mr. Wilson signed it on January 6, 1998, and on page 2, under the heading called “Royalties,” it states:
“The author shall be paid royalties based on the sale of the Work at the rate of 10% of gross sales, defined as gross income from all sales of the Work regardless of purchase price. . . .”
Canon Press entered into this agreement with Doug Wilson for all his books, in violation of the IRS’s prohibition against “private benefit,” which states:
“No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual.” (IRS)
The words “no part of the net earnings” are all inclusive. They literally mean “no part,” which includes the “10% of gross sales” that Canon Press paid to Doug Wilson.
Proof That Royalties Would Have Invalidated the Appeal
We know that Canon Press still used this contract after 2002, because two citizens used an identical document in 2004 to challenge the Kirk’s property tax exemption — and they won. Listen to a Latah County Commissioner cite the “Royalties” clause as well as the gross sales as his cause to revoke the Kirk’s property tax exemption:
“My whole position is, is a fairness issue. We want to — if there, it this property qualifies for an exemption, why it should be exempt. But if it doesn’t, why ah, if they should be paying some [inaudible] portion or all of it in property tax and they’re not paying it, why then that just means that the rest of the taxpayers in Latah County got to pick up the slack, because we operate on fixed budgets. Got nothing to do with . . . with ah — well it does have to do with valuations, but if you exempt a property, why that doesn’t mean the amount of tax collected in your county goes down; it just means that it shifted to the other taxpayers. In my opinion the property with Christ Church comes down to the, ah — what is it? Canon Press — whether or not — whether there is a, there is a piece of — a parcel in there that is rented out to a third party or another party that was exempted from the exemption or portioned out from the exemption. I guess I really question whether Canon church should be exempt or not — that portion of the property. It was brought to my attention that there was — in the information there was a million dollars’ worth of business done there, and I think the part that bothered me the most was the . . . was the royalties that the author of some of that material received. It seemed to me that probably, ah, we have no records as to what that amounted to in the way of dollars but it could have been quite a bit. And ah . . . I don’t . . . You know there’s . . . there’s for-profit publishing companies, maybe not in Moscow, Idaho, but around that do this type of thing for profit, so for this one to be doing it in a nonprofit or in an exempt status bothered me. . . (Latah County Commissioner Jack Nelson, Board of Equalization hearing, July 12, 2004)
Douglas Wilson knew that his royalties alone were sufficient to lose the appeal, which was the reason for his misrepresentations. He wanted his for-profit enterprise to enjoy nonprofit status.
The Falsehoods
Douglas Wilson misrepresented several facts that morning; here are two:
- First, Doug Wilson scripted his testimony to create the false impression that Canon Press existed to give away books to the Kirk:
“When Canon Press publishes a new book — within the last month or so they had two titles — and the titles are taken to church on Sunday morning and an announcement is made that every household can feel free to pick up a free copy of the book.” (@25:09)
This statement may be true but it was not “the whole truth.” Presumably Mr. Wilson hoped to persuade the court that Canon Press was not a commercial enterprise, which would have terminated any further inquiry. He planned to stay far away from the subject of royalties and his scripted Q&A suggests that he didn’t intend to overtly deceive unless the questions got too close, which they did.
- When the Latah County Assessor probed Doug Wilson about Canon Press’ finances, Mr. Wilson shifted to his native tongue. He lied:
Latah County Assessor: “Well, has that been a financially favorable endeavor? Is that —”
Douglas Wilson: “It has been financially self-sustaining for Canon Press. But the point of Canon Press is to — when they make money from it — is to turn the money back around into books, the publication of additional books. So it would be inaccurate to say that Canon Press is functioning as a cash cow for the church. The church oversees the ministry, but the funds that Canon Press makes cycle back into the publication of more books. The same with Credenda; Credenda receives donations to publish the magazine. The money that comes in is used to publish more magazines, it’s not a — the church is not siphoning funds out of these lucrative businesses.” (@42:28)
In this testimony Doug Wilson crossed the line between false impressions and demonstrable lies:
“But the point of Canon Press is to — when they make money from it — is to turn the money back around into books, the publication of additional books. . . the funds that Canon Press makes cycle back into the publication of more books. . . The money that comes in is used to publish more magazines, it’s not a — the church is not siphoning funds out of these lucrative businesses.”
These statements were only true after Doug Wilson took his “10% of gross sales.” To be sure, “the point of Canon Press” was to pay Doug Wilson first, before they turned “the money back around into books.” The funds that Canon Press made cycled “back into the publication of more books” only after Doug Wilson took his cut. And the church was “siphoning funds” from Canon Press (and likely Credenda/Agenda) in order to pay Doug Wilson his royalties. Mr. Wilson omitted these facts from his testimony. He did not tell “the truth, the whole truth, and nothing but the truth,” as he swore to do.
Proof That the Falsehoods Worked
In the following exchange from the hearing, the County Assessor and the Chairwoman repeated out loud what they believed Doug Wilson stated in his testimony:
County Assessor: “Well, in my case because I don’t have any better information regarding Canon Press in front of me than, than I did in, in July because we didn’t question it at that time. The only thing that I look at is a . . . profit . . . is the only question because 602(b) an entity qualifies if it’s designed — not designed for profit and Mr. Wilson indicated that any proceeds that come from Canon Press are put directly back into Canon Press rather than being profit that goes into the church itself, so that would be my only concern.”
Chairwoman: “I know Mr. Wilson is gone but I’ll ask Eric this. Now is Canon Press — it may have been brought up and I may be lost here — but at Canon Press is it, it has its own organizational entity, or is it part of. . .”
Kirk Treasurer: “This is Eric Burnett. It is part of the church. It is included under the church’s employer identification number with the federal government, so all the, all the payroll that’s paid is paid by Christ Church, though it’s maintained separately within just to make sure that Canon Press is covering its own expenses. They don’t roll any of the profits into anything other than books and continued operations.”
Chairwoman: “So, if Canon Press were to quote, ‘make a profit,’ they would take that profit and maybe, I don’t want to put words in your mouth, but from what I’m hearing you say, put it back into the operation, they’d either expand their operation, make more books, or something like that?”
Kirk Treasurer: “Right. The only exception would be that they help to contribute to with building expenses, making sure that the building is maintained and —” (@59:53)
Neither representative from Christ Church corrected the court in the matter of Doug Wilson’s falsehoods. They let the Chairwoman and the County Assessor believe the deceptions, which was their intent from the beginning. Worse, the Kirk Treasurer exasperated the deceit by claiming only one exception, which did not include the royalties: “The only exception would be. . . .”
Epilogue
If Douglas Wilson had honored his oath to tell “the truth, the whole truth, and nothing but truth,” then he would have informed the court that he pinched “10% of gross sales” from “the net earnings” of his charity. This would have invalidated his appeal in 2002 and it would have removed the need for two citizens to challenge his exemption in 2004. But that day Doug Wilson lied to the court. Or as he says, he lied “to the enemies of God who have forfeited their right to the truth.”
On December 7, 2005, the Moscow-Pullman Daily News reported that the Attorney General for the State of Idaho did not prosecute Doug Wilson and the Kirk treasurer for perjury because “The investigation found the two were never specifically asked, and so did not testify, about matters concerning royalties of books published by Canon Press.”
This raises an obvious question: What in Douglas Wilson’s testimony gives anyone a reason to believe that he would have told “the truth, the whole truth, and nothing but the truth,” if the court had specifically asked him about royalties? He has convinced me that he went to that hearing bent on securing tax exemption no matter how many lies he had to tell. After all, he did file the appeal knowing he didn’t qualify. Maybe someone should ask him how he would have answered.
Or better yet, put him under oath. See if that makes a difference.