Grassley, former ranking member of the Senate Finance Committee, raised eyebrows in conservative Republican circles during 2007 when he announced that he had sent letters to six Christian ministries requesting detailed data on expenses, executive compensation and amenities given to executives. At the time, Grassley said he was “following up on complaints from the public and news coverage regarding certain practices at six ministries” that “involve governing boards that aren’t independent and allow generous salaries and housing allowances and amenities such as private jets and Rolls Royces.”

The ministries initially targeted by Grassley — led by Kenneth Copeland, Creflo Dollar, Benny Hinn, Eddie Long, Joyce Meyer and Randy and Paula White — are not required to file financial disclosures with the Internal Revenue Service because they are designated as tax-exempt churches.

In delivering the review to members of the Senate Finance Committee, Grassley noted that “the tax-exempt sector is so big that from time to time, certain practices draw public concern.”

“My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations,” he said.

The 61-page staff memo, which is available in full below, indicates that only two of the four targets — specifically Benny Hinn of Texas and Joyce Meyer of Missouri — complied in full with the request made by Grassley on behalf of the Senate Finance Committee. None of those who refused to cooperate with the government’s investigation have been penalized, and none of the organizations, cooperating or not, have been charged with any specific findings.

The other four either did not provide a response or provided incomplete responses. As a result, Committee staff obtained information about these churches from public sources and third party informants. Informants were either current or former officers, directors,  and key employees, current or former members, or watch dog groups. … All most all of those who spoke with us insisted on complete anonymity while others were too frightened to speak to us even anonymously. Some had received warnings from the churches that they would be sued if they violated confidentiality agreements they had signed.

Authors of the review note that multiple “assumed” or “doing business as” names were used by the ministries, none of which filed disclosures with the IRS.

The number of types of entities, including private airports and aircraft leasing companies, raises concerns about the use of the church’s tax-exempt status to avoid taxation. However, given the four churches’ refusal to provide tax information, we are unable to determine whether and the extent to which they are reporting and paying taxes on income earned in those entities.

The authors also note that, after details of the initial investigation were released, “constituents from across the country” requested additional investigations of other churches and religious organizations that were perceived to be providing leaders with excessive perks or compensation, or targeting specific vulnerable members of the general population for fundraising. The organizations named by constituents “included several media ministries, several other non-denominational churches, some Catholic and Baptist churches, the Church of Scientology, Kabballah Centres, the New York City mosque being built near the World Trade Center site, a church that sends prayer solicitations via mail with requests for donations, and a voodoo church that solicits donations through its website.” Although staff did not make direct contact with these organizations, some information related to them was included in the overwall review.

Committee staff conducting the review found that, despite the 1979 creation of the Evangelical Council for Financial Accountability intended to provide oversight and guidance, many of the questions posed decades ago in connection to accountability within media-based ministries are still applicable today. Despite that, however, there are no direct conclusions within the review regarding oversight or violations of tax rules. There is also no direct discussion on if the lavish salaries drawn by some, or if the often family- or friend-generated oversight of “church” accounts is appropriate or excessive. (It is worth noting that the six initially targeted ministries prescribe to a religious theory that God blesses the faithful with worldly riches, and often utilize their own wealth as a testament to that belief.)

In the wake of the review’s release, however, the ECFA did announce the formation of “an independent, national commission” to lead a review and provide input on “major accountability and policy issues affecting churches and other religious organizations.”

“The challenge is to encourage good governance and best practices and so preserve confidence in the tax-exempt sector without imposing regulations that inhibit religious freedom or are functionally ineffective,” Grassley said.  “I look forward to working with the ECFA and other organizations in a productive way.”

In that vein, the review offers several avenues for continued discussion centered around tax-exemptions allowed for parishes and peripheral groups as well as the current lack of legal requirements for a church to provide transparency to its congregation and donors. But, as the review itself states, these are the same questions that have been raised for years.

For the past 10 years, Grassley has served as either the majority or minority leader on the Senate Finance Committee, which has exclusive branch jurisdiction over tax policy. Due to GOP term limits, Grassley will continue as a senior member of the committee, but has transferred his leadership role to the Senate Judiciary Committee. The release of the review was Grassley’s final official act in a leadership position on the Finance Committee.

Memo from U.S. Sen. Chuck Grassley to Senate Finance Committee: Review of Media-based Ministries

The Iowa Independent reports:

Several sources, including a a former state lawmaker running against Republican U.S. Sen. Chuck Grassley, say [Sen. Tom] Harkin was adamant in his support of using reconciliation to pass health care reform when he addressed a recent closed-door gathering of state Democratic leaders, although he is remaining quiet on the current push by his senate colleagues.

Sen. Max Baucus (D-Mont.) and Sen. Charles Grassley (D-Iowa) (WDCpix)

Liberals love it. Conservatives hate it. Moderates have proposed some compromises, and the Obama administration is weighing ways to appease all camps. Whatever battles are brewing in this year’s looming health care reform debate, none is likely to reach the intensity of that over a government-sponsored insurance plan.

Supporters of adopting a public plan, a national insurance program anyone could opt into, argue that it’s an indispensable component of the Democrats’ soon-to-be-unveiled health care overhaul proposals, providing an affordable option to patients and keeping private insurers honest through increased competition. But critics contend that a federal plan is the first step to a single-payer system, tipping the scales unfairly with government subsidies and threatening the very existence of the private insurance market.

Illustration by: Matt Mahurin

Aside from aligning Democrats against Republicans, the young debate is also threatening to put liberal Democrats at odds with moderates, incite another intra-party rift between Democratic leaders in the House and Senate, and leave President Barack Obama — who wants to pass reforms supported by all parties — struggling to find some middle ground.

The episode highlights the difficulties facing Democrats in Congress and the White House as they try this year to make good on one of their very highest legislative priorities: revamping the nation’s health care delivery system in an effort to cover the 46 million uninsured Americans and slow the skyrocketing growth in medical costs. The debate will be a test of the political skill and will of party leaders, who are trumpeting the urgency of health reforms at the same time they’re urging caution in enacting them; who are hoping to trim the fat in the health care system at the same time they don’t want to eliminate jobs in the middle of a recession; and who are proposing enormously expensive reforms at a time of record deficits.

Lawmakers will also have to contend with the powerful insurance industry, which opposes the adoption of a public plan — and is lobbying furiously to keep it out of the Democrats’ proposal.

On Friday, the debate over public plans was launched in full after news leaked that Sen. Edward Kennedy (D-Mass.), chairman of the Senate health committee, intends to include the government-sponsored option as part of his sweeping reform proposal, expected to be unveiled next week. The leak inspired thoughts that Kennedy’s bill would be much more liberal than that being drafted by Senate Finance Committee Chairman Max Baucus (D-Mont.), who works closely with Sen. Charles Grassley (R-Iowa), a fierce opponent of the public option.

Kennedy and Baucus insist they remain on the same page, issuing a rare Saturday statement vowing to craft “complementary legislation that can be quickly merged into one bill for consideration on the Senate floor before the August recess.”

Joseph Antos, a health-policy analyst at the conservative American Enterprise Institute, said the leak — probably intentional — was likely intended to send a message to liberal Democrats that Kennedy’s on their side. It might also have been a message to Baucus that he’d better be prepared to nudge his proposal left — a situation that puts the Senate Finance Committee chairman in a squeeze between an allegiance to party and the promise to find bipartisan consensus on health care reform.

“He wants to be left of the 50-yard line, but he doesn’t want to be too far left of the 50-yard line,” Antos said of Baucus. “It’s the sort of thing we’ve seen often out of the Finance Committee … There’s a lot of game-playing going on here.”

The same dilemma faces Obama, who appears torn between his support for a public plan and a desire to have a bipartisan bill. The White House did not return requests for comment Wednesday.

Supporters of the public plan option argue that it’s vital if Democrats hope to slow the growth of health care spending, which is skyrocketing at a rate well above that of the rest of the economy. A government-sponsored plan, they say, could provide cheaper coverage because it wouldn’t have to pay the marketing and outreach costs that burden private insurers; it would cater to more people, lowering costs for reasons of sheer volume, and it wouldn’t be bound to produce profits for shareholders.

There are other advantages to the public option. Ron Pollack, executive director of Families USA, a consumer health care group, pointed out that private insurers operating under Medicare have been known to alter the terms of coverage, leaving patients without necessary treatments. A public plan, Pollack argued, “provides some stability” to patients. The government option would also create an enormous database of health coverage information that could inform future policy decisions, Pollack said — information private insurers often won’t disclose for proprietary reasons.

Conservatives and the insurance industry have other thoughts. Summing up the criticisms of the public plan option, Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday argued that a federally subsidized plan could offer “artificially lower prices” that would quickly attract interest from individuals and businesses alike. The result, McConnell contended, would be the death of the private insurance market.

“The very concept of a government ‘option’ is itself misleading,” McConnell said on the Senate floor. “What starts out as an option could quickly become the only option.”

Sen. Judd Gregg (R-N.H.), who floated his own health reform proposal this week, said the public option would eventually lead to “delays and rationing” for patients.

“The first rule of health care is, do no harm,” Gregg told MSNBC Tuesday. “Well, one thing which would do serious harm would be if the federal government came in and stood between you and your doctor or created a system which led to delays and rationing, which is what a public plan would.”

Several proposals floated on Capitol Hill in recent weeks seek to satisfy both supporters and critics of the public plan option. Under one measure, sponsored by Sen. Charles Schumer (D-N.Y.), the government would administer, but not be permitted to subsidize, the public plan. Instead the plan would have to rely on premiums and co-payments to cover claims, like any other insurer. The Schumer plan would also force the public plan to pay health care providers at rates higher than Medicare pays.

Another proposal would offer private plans the opportunity to expand coverage and reduce rates on their own, with the public option kicking in only in regions of the country where the private market failed to meet certain minimum thresholds of coverage and cost. Opponents of that strategy, including Schumer, argue that the nation’s 46 million uninsured residents are evidence enough that those thresholds have already been met.

Antos, of AEI, said one of those compromises could work, but first the language surrounding the debate would have to change so that the Republicans who’ve so adamantly opposed the public option wouldn’t be seen going back on their word.

“You’ve got to find a face-saving way,” Antos said. “So the first thing you do, you don’t call it a public plan.”

Douglas Holtz-Eakin, former head of the Congressional Budget Office, said that, without any details, it’s still too early to speculate about the fate of public plans in the coming debate. “There are many different flavors of a public option,” said Holtz-Eakin, the chief economist for the 2008 presidential campaign of Sen. John McCain (R-Ariz.). “We’ve got to see a specific proposal.”

Robert Blendon, a professor of health policy at Harvard University, pointed out that, even if the Senate isn’t able to pass the public plan provision, House Democrats will almost certainly include that option in their version of the bill, which is currently being drafted by Reps. Henry Waxman (D-Calif.), Charles Rangel (D-N.Y.) and George Miller (D-Calif.). For all the controversy swirling around public plans, Blendon added, there’s a larger barrier to the Democrats’ push for health care reform this year.

“This is very contentious, but not as contentious as how they plan to pay for it,” said Blendon, an expert on the Clinton administration’s failed attempt to pass comprehensive health care reform in 1993. “If they can find savings someplace, they would not stop the train for this issue. They would find some Sen. Schumer-like compromise and push the thing on through.”

David Cutler, a health economist at Harvard University who’s advised the Obama administration, downplayed the significance of the partisan griping over public plans, arguing on Tuesday that overall support for health care reform this year remains as strong as ever.

“You see these sorts of splinters,” Cutler said, “but you don’t see anyone walking out yet … We are in so much better shape than 16 years ago.”