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D. Stage Four: Techno-legal Regulation (1977-present)

As important as the televangelism scandals seemed at the time, they were relatively unimportant in terms of the overall regulatory picture. As noted at the beginning of this inquiry, the scandals did not escape the attention of various government regulatory agencies, but there was no zealous crusade to legislate or find existing regulatory structures that could be used to put the pinch on broadcasters. This was true for at least three reasons.

First, religious broadcasters succeeded in creating the impression that they had taken bold initiatives toward self-regulation. Several months before the PTL scandal broke, NRB approved in principle a plan to create an Ethics and Financial Integrity Commission (EFICOM). In the wake of the PTL scandal, NRB contracted with the Evangelical Council for Financial Accountability (ECFA) to independently manage EFICOM. In the end, NRB rhetoric was stronger than self-regulatory reality. [45] Impressions, nonetheless, counted for much.

Second, legislators who might have been inclined to craft legislation designed to reign in religious broadcasters quickly became aware of the difficulty of doing so without tackling much broader issues of broadcast regulation. The 1970s and 1980s witnessed ever-broadening acceptance of what could

appear in print, cinema, and on the airwaves under the "free speech" protection of the First Amendment. To regulate even the most outrageous televangelists would necessarily pose the question of the limits of First Amendment protection for the bizarre antics of the likes of Howard Stern and Morton Downey Jr. If the First Amendment doesn't protect broadcasters like Stern, then perhaps censorship of "Geraldo" and "Donahue" would be around the corner. Even the thought of a slippery slope towards greater regulation of commercial broadcasting serves as a powerful antidote against proposals to regulate radio and television preachers.

The third, and perhaps most important factor mitigating against the rush to regulate the televangelists, was the fact that the marketplace itself responded swiftly and effectively. Upon learning of the televangelism scandals of 1987-88, tens of thousands of formerly loyal viewers closed their checkbooks with devastating consequences. Virtually every television ministry in America was negatively impacted by the scandals. Six years after the scandals first broke; the religious broadcasting industry remains shrouded with public doubt as to its integrity. Of course, formerly loyal viewers had time to sort things out. And, on the whole, non-scandalized ministries eventually recovered both viewers and revenues.

In sharp contrast, scandalized ministries suffered serious and ostensibly permanent losses. Jim and Tammy Faye Bakker were forced to leave the air when the PTL scandal broke. Their network went bankrupt within a week, heroic fund-raising efforts of Jerry Falwell notwithstanding. The scandalized ministries of Jimmy Swaggart, Oral Roberts and Robert Tilton have all paid a heavy price as well. Even though all three remain on the air, each has been reduced to but a shadow of bygone glory. And there is no credible evidence to suggest that any of them will be able to rebuild to the point where they approach past financial and audience achievements.

The marketplace, then, has constituted a key force in both formal and informal regulation of religious broadcasters. Ultimately, a free press, not government regulatory intervention, brought the crimes and moral misdeeds of these televangelists to the attention of the public. The viewing public, in turn, played an important regulatory role by switching channels and closing their checkbooks. It may not be a perfect regulatory system, but it worked efficiently throughout the late 1980s.

As I read the history of religious broadcast regulation, the

fourth stage had been in progress fully a decade, when the scandals of the late 1980s broke. A defining feature of the fourth stage has been the rapid development of expensive, highly sophisticated delivery technology. Another defining feature of the fourth stage has been the expanding role litigation has come to play in the affairs of religious broadcasters. This latter feature is an inevitable consequence of rapid, technologically driven growth and of the expanding role litigation has played generally in promoting individual and collective advancement.

Footnotes

1. Technology

In a strict sense, technology does not regulate religious broadcasting. But technology is a powerful factor in defining the parameters wherein broadcasting operates. The growth of communication technologies permitted rapid expansion of syndicated programming, satellite transmission, personalized direct mail and telemarketing, among other things. These innovations in communications technology were the driving force behind the phenomenal growth of televangelism during the 1970s and 1980s. Television ministries became big precisely because all of these technologies made rapid growth of parachurch organizations possible.

The technological advances that spawned dozens of syndicated religious television programs seems now to be working toward the concentration of economic power in religious broadcasting. This process can be dated to April 29, 1977, when the Christian Broadcasting Network transmitted its first satellite broadcast. In rapid succession, Trinity Broadcasting Network was founded in southern California, followed by the PTL Network in North Carolina. All three networks had state-of-the-art technology poised to deliver religious programming via cable even before the wiring of the nation for cable began in earnest. That cabling process was substantially achieved in the 1980s and continues towards saturation in the 1990s.

While the cabling of the nation has resulted in a significant loss of market share for the three major television networks, the religious networks have been among the beneficiaries of this redistribution of viewers. The costs for broadcasting on major networks have always been prohibitive for religious telecasters. This option will become even more prohibitive in the future. Loss of market share by major networks has not driven down the cost of air-time, but merely reduced the trajec-

tory of soaring costs. Similarly, local network-affiliated stations will continue to command top dollar for the purchase of airtime.

This portends a decline in syndicated religious broadcasting on local network stations. Religious broadcasters simply will not be able to raise adequate revenues to pay the high cost of being on the several hundred local network stations. Thus, it is increasingly clear that the future of religious broadcasting is in satellite delivery via cable television. The only economically viable long-term alternative for syndicated broadcasters is to turn to religious networks and a growing number of low power religious stations. Those who have satellite delivery capability, and have established an extensive network of cable systems, to which they can deliver their programs, are in a position to dominate the future market.

At the present time there are four religious networks with significant cable access: Christian Broadcasting Network (CBN), Trinity Broadcasting Network (TBN), Vision Interfaith Satellite Network/American Christian Television System (VISN/ACTS), and Eternal Word Network (EWN). Pat Robertson's CBN now operates under the umbrella of the Family Channel which ranks among the largest cable systems in the nation. In late 1991 the Family Channel reached 92 percent of all cable households and 59 percent of all households in America. [46]

Of the three networks devoted exclusively to religious programming, TBN is the most viable. Founder and owner Paul Crouch has aggressively bought up small powered television stations in addition to expanding cable system coverage. While Crouch is Pentecostal, and this is emphasized in programming, he is well positioned to sell airtime to non-Pentecostal Evangelicals.

VISN is a collaborative effort of 28 main line Protestant, Jewish, Roman Catholic and Eastern Orthodox groups. ACTS was founded by the Radio and Television Commission of the Southern Baptist Church. Neither network allows on-air solici-

tation of funds. Both organizations have experienced financial difficulties and in 1992 began sharing a single cable channel. EWN was founded by Sister Angelica, a Roman Catholic nun from Alabama. While both VISN/ACTS and EWN currently have significant cable outlets across the nation, these operations do not appear to have adequate capitalization or management resources to be competitive in the long run competition for cable outlets. Even now, they are dependent on free access to cable systems. This gratuitous relationship with cable owners is unlikely to persist unless mandated by the Federal Communications Commission, which appears unlikely. The unknown quotient is the potential of technology to produce unforeseen and unanticipated options for production of delivery of television.

Footnotes

2. Litigation

The second half of the Twentieth Century has experienced a significant growth in the social welfare state. Social movements and lobbying have identified ever expanding domains where the benevolent social welfare state "ought" to protect or serve its citizens. Litigation has increasingly become the instrument whereby individuals and organizations press their claims for access to resources. Religious organizations generally, and religious broadcasters in particular, have not escaped this trend. Over the past decade-and-a-half, major ministries have devoted increasing resources to legal matters. Some of the increased legal work reflects a need among religious broadcasters for legal counsel in contractual matters as well as in matters respecting regulatory compliance. But religious broadcasters have been increasingly involved in litigation, both as defendants and as plaintiffs. Legal proceedings involving religious broadcasters have occurred on a wide range of issues. I can here offer only illustrations.

One of the major struggles religious broadcasters have faced is the issue of their tax-exempt status. In 1983 the State Board of Equalization of California revoked the tax-exempt status of Robert Schuller's Crystal Cathedral in response to the use of the cathedral for admission charging events. The Board of Equalization subsequently agreed to a compromise in which taxes would be paid on part of the Crystal Cathedral's "facilities used for such non-exempt commercial purposes as concerts

and community group meetings." [47] A ministry spokesperson characterized the taxation issue as "the beginning of a new kind of harassment [of] religious institutions." [48]

Religious broadcasters as defendants: California was also the scene of Swaggart v. Board of Equalization [49] which has not received great attention, but which nonetheless has had tax exemption implications for religious broadcasters specifically and for religious institutions more generally. This case involved the authority of the state of California to collect taxes on various items, including religious records, tapes, and books sold by the Swaggart ministry to Californians. The Supreme Court upheld a decision by the California appeals court permitting the state to tax items sold by the Swaggart ministry. The decision leaves open the question of whether any religious organization has a constitutional right to tax exemption.

Religion-based tax exemption challenges have also been brought against the ministries of television preachers by individuals. In Virginia, two Lynchburg residents appealed a Circuit Court ruling granting Jerry Falwell's Liberty University the right to issue $61 million in tax-free government bonds on the grounds that this violated the Separation Clause. [50] Ultimately, the Virginia Supreme Court blocked the issuance of the tax-free bonds. Falwell, electing not to appeal to the Supreme Court, turned to Kemper Securities for assistance with a private bond sale. Kemper, finding no market interest in the bonds, withdrew from the underwriting agreement. Falwell, in turn, sued Kemper for default. [51] The parties agreed to submit the dispute to arbitration. Arbitrators subsequently found the case "without merit." [52]

Religious broadcasters as plaintiffs: Jerry Falwell sued Hustler magazine for "intentional infliction of emotional distress" resulting from a satirical parody. [53] In anticipation of his bid for the Republican nomination for the presidency in 1988,

Pat Robertson sued former California Congressman Paul "Pete" McCloskey and Indiana Congressman Andrew Jacobs for making statements about his Korean War military record that were alleged to be "wanton and reckless." [54] Neither Falwell nor Robertson's suits were ultimately successful, but they illustrate a perceived need to protect the good name and reputation of religious broadcasters. Interestingly, both Falwell and Robertson publicly interpreted the litigation outcome as vindicating their positions.

Apart from the need to litigate, legal departments have become a part of virtually every television ministry for other reasons. They seek to develop endowments and trust funds for long term support of their ministries. In addition to developing trusts and endowments, the legal departments of television ministries, more often than other nonprofit organizations, face challenges to wills by heirs of those who have made significant bequests.

More recently, radio and television ministries have found themselves embroiled in controversy and litigation with former employees. In the wake of the PTL scandals, CBN placed The 700 Club co-host Danuta Soderman on "temporary leave of absence" after the publication of her autobiography that included a discussion of a love affair outside of marriage. CBN, sensing that this could be grist for media that was on a feeding frenzy with the PTL scandal, concluded that they could not risk having Soderman, who had been called the, "Barbara Walters of Christian television," on the air. Ms. Soderman quietly disappeared from the scene. [55]

Religious broadcasters also need good legal counsel to keep abreast of developments in constitutional law affect free exercise. Take for example, Employment Division v. Smith [56] a Supreme Court case potentially with significant implications for the regulation of religious broadcasting. If Smith effectively establishes the precedent that religious organizations are entitled to no substantive protection under the Free Exercise Clause of the First Amendment, then religious broadcasters--along with other religious organizations--stand to be entangled in a much broader web of government regulation.

Or, take the recent passage of the Religious Freedom Restoration Act [57] (RFRA), an act intended to lessen, if not altogether to defeat, the impact of Smith. Will RFRA substantially alter the fact that religious broadcasters have become deeply and increasingly involved in all kinds of litigation? Probably not. But, as a general proposition, we can postulate that religious broadcasters can expect to continue to spend precious resources on legal matters. It follows that, whereas larger ministries can more easily allocate resources to deal with legal costs, small ministries can be easily overwhelmed by such costs.

In the years since the PTL scandal, other religious broadcast employees have declined passively to accept what they perceive to be mistreatment by their employers. James Dobson's radio program Focus on the Family is broadcast daily on 1,350 outlets, second only to Paul Harvey. When co-host Gil Moegerle's marriage ended in divorce in 1987, Dobson reassigned Moegerle to the film department. Some months later, Moegerle married an employee of the ministry. Subsequently, both resigned claiming they were forced out. Moegerle sued claiming, among other things, "invasion of privacy, interference with business activities, and wrongful termination." [58] More recently, Bob Larson Ministries, which broadcasts a radio and television talk-show, has been a hotbed of employee grievances, including wrongful dismissal, sexual harassment, nonpayment of accrued overtime, and the like. [59] The day of religious broadcast employees passively accepting managerial decisions that affect their lives appears now to be a thing of the past.

This discussion of the impact of technology and the increasing propensity for problems to be resolved by litigation draws attention to the fact that the religious broadcasting industry no longer lives in a world apart. They have entered the mainstream of society. They have utilized technology to great advantage, even as technology has shaped the character of their ministry. An increasingly litigious society is similarly impacting religious broadcasting in ways that are only now beginning to be understood.

Footnotes