Sunday, March 26, 2006

Gift of Radio Station to Calvary Sparked Little Static

Monday, March 20, 2006

By Andrew Webb

Journal Staff Writer

A Christian radio station that figured prominently in the recent power struggle at Calvary Chapel was donated to the church five years ago in a transaction that attracted scant attention.

Bryan Folk, a youth activities leader for an East Mountains evangelical church, was one of two people who formally opposed the deal, urging the Federal Communications Commission to reject the transfer of Albuquerque-based KLYT 88.3-FM to a Calvary-run nonprofit.

The reason: He argued that the nonprofit Christian Broadcasting Academy Inc., which had run KLYT for several years, was not affiliated with any particular church.

"I told the FCC I didn't think it was right to have a public broadcasting station, the only (Christian) one in town, being taken over by one particular denomination," he said recently.

He also claims the deal was set up to benefit former Calvary pastor Skip Heitzig.

Folk said members at Calvary dominated the board of Christian Broadcasting Academy, the company that was operating KLYT.

The president of the Christian Broadcasting Academy Board at the time was Paul Saber, a Calvary Albuquerque board member and prominent backer of Heitzig.

"It just didn't smell right."

Folk said of his objection to the transfer. "It wasn't just gifting (the station) to Calvary; it went straight to Skip."

The Christian Broadcasting Academy Board chaired by Saber voted to give the 31-year-old radio station to a nonprofit subsidiary of Calvary called Connection Communications Associates.

The president of Connection Communications was Heitzig, who founded Calvary Chapel of Albuquerque, and at the time was its senior pastor. Connection Communications ran another Albuquerque station, KTKN.

The FCC permitted the transfer of KLYT and its statewide network of translators on Jan. 1, 2001.

Radio ministry

Fast forward to 2006, when a simmering dispute at the city's biggest nondenominational church boils over into public view.

The resignation letter by Heitzig's hand-picked successor, Pete Nelson, said Heitzig in March 2004 proposed transferring the radio station assets to a company he controlled.

Nelson and board members from Albuquerque voted against the move, which did not occur.

"We were both well aware that the radio stations were very valuable CA (Calvary Albuquerque) assets," Nelson wrote in his letter. "Further, it was my understanding that these radio station assets serve as collateral under a bond indenture of CA and could not be transferred ... without breaching the CA covenants under the debt documents."

Heitzig released letters and statements last week concerning the controversy.

He said proposals involving the radio station were simply matters for discussion and exploration, then rejected.

Although Heitzig left Albuquerque in early 2004 to lead Ocean Hills Community Church in California, the local church still funds "The Connection," Heitzig's daily half-hour radio program.

The program is heard on radio stations around the country and on the Internet.

Both the radio stations and "The Connection" are supported by church funds, generated by tithings and donations, as well as merchandise sold by the Calif.-based producers of "The Connection," said Calvary Associate Pastor and spokesman Chip Lusko.

"All the revenues come back to the church to help underwrite the cost of the radio ministry," he said.

That merchandise includes a vast collection of books, CDs and other materials produced or written by Heitzig and his wife, Lenya.

In a 2004 letter to church officials, former Calvary board member Greg Zanetti said the church had subsidized "The Connection" to the tune of $6 million since 1994 and was continuing to support it with $500,000 per year, despite the fact Heitzig had left Calvary.

Some former church officials, including Nelson, have contended that Heitzig was using local church money to advance a nationwide ministry and have questioned the loyalties of its largely out-of-state board.

"His vision appears to have (Calvary Albuquerque) serving as part of this larger national ministry and includes having (Calvary Albuquerque) provide significant financial resources to fund this national ministry," Nelson wrote in his resignation letter to the board.

In late December, Heitzig wrote to Nelson that, even as he transitioned out of his pastoral duties in Albuququerque, he never intended to leave the radio ministry in New Mexico.

"KLYT was gifted to Calvary ABQ because of my past track record in the community with reaching out to youth."

He wrote that the board specifically insisted on his involvement in order that the programming and expansion be sustained.

Spreading the gospel

Radio— especially low-power FM stations with networks of inexpensive translator stations— is one of evangelical Christianity's key mediums for spreading the gospel. A 2000 study by the Hartford Institute for Religious Research found that nearly 50 percent of megachurches— those with 2,000 or more members— used radio as part of communicating to the flock.

The global Calvary movement also operates a nationwide radio network, Calvary Satellite Network, or CSN, which showcases music and sermons from evangelists like Billy Graham, national Calvary founder Chuck Smith and Heitzig.

Today, Calvary operates two radio stations.

KLYT, otherwise known as M88, plays youth-oriented Christian music and programs statewide and in southern Colorado. First founded in the mid-1970s and run by a network of evangelical churches, KLYT has been frequently referred to as one of the country's longest-running youth-oriented Christian radio stations.

KNKT, or Connection 107.1, is an adult-oriented station broadcasting contemporary music, talk and religious services in Albuquerque and Santa Fe. It has operated since 1986.

Stations were key assets

Because churches do not have to report to the Internal Revenue Service, tracking financial information for Calvary is difficult. But the scant records available for the short-lived nonprofit Connection Communications Association show that the two radio stations were key church assets.

At the end of 2000, an IRS form 990 filed by Christian Broadcasting Academy showed KLYT had assets of $300,219.

It had total annual revenues of about $26,000, lost nearly $500,000 per year and depended largely on donations from listeners and fundraising concerts and other events for its survival.

Christian Broadcasting Academy dissolved in 2001, and Calvary's Connection Communication Association filed its first 990, reporting on its year running KLYT and KTKN.

That report placed total assets at $3.5 million after accounts payable and other expenses.

Total revenues were $4.7 million, most of which came from "noncash" direct public support totaling $4.2 million. The tax filing did not detail the source of that funding.

Lusko said he did not know where the $4.2 million came from.

The nonprofit Connection Communications Association continued to run the stations for two more years, recording annual revenues of $600,000 to $700,000. Expenses exceeded revenues by about $100,000 for those two years.

In 2003, all the radio station's assets were donated by the Connection Communications Association to Calvary Chapel, which does not have to report to the IRS, and no financial information is available after 2003.

Connection Communications is still cited as the copyright holder on Web sites for the two radio stations and for Heitzig's radio show, "The Connection."

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