January 2006

ARTICLE TOOLS

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Leaders of the Christian Brotherhood Newsletter, a medical cost-sharing program involving more than 15,000 Christians nationwide, say their organization has recovered from a messy 2001 financial scandal. Now they want to restore public confidence.

"The people who did the bad things to this ministry are gone," said executive director Howard Russell. "We are again doing the right things for the right reasons. We do what the church in Acts did. It worked then, and it works now."

The Barberton, Ohio-based newsletter is a faith-based approach to health care that helps Christians to "carry each other's burdens." During the past 10 years, the newsletter has redistributed more than $400 million to subscribers facing medical bills.

It almost collapsed in the late 1990s when founder Bruce Hawthorn and subordinates diverted $25 million into their own pockets, leaving the ministry with $24 million in unpaid claims. A 2001 lawsuit by the Ohio attorney general and an IRS investigation stopped the abuses. The new management team, led by Russell, has reduced the unpaid claims by 90 percent to less than $2.4 million, while also continuing to meet current claims.

Financial statements reveal nothing suspicious—just an organization struggling to get back on a growth path, said Niles Logue, business professor at Gordon College. Revenue and subscriber numbers have dropped from the heady days when 35,000 members donated $50 million per year, to about 15,000 donating $16 million in 2005.

Numerous safeguards—both government-ordered and self-imposed—are now in place. The newsletter has installed a new board of trustees, implemented rigorous conflict-of-interest policies, and applied for membership with the Evangelical Council for Financial ...