The new board chair of Potter’s Field Ministries says a third-party financial audit is underway following the closure of the Whitefish-based nonprofit and its subsidiaries due to allegations of fraud, financial mismanagement and abuse. Two law firms investigating over 100 allegations against the ministry question the integrity of the audit.
In a recent public statement, Thousand Oaks, California Mayor and Pastor at Godspeak Calvary Chapel Rob McCoy, who now chairs Potter’s Field’s board, said that a third-party audit of the 501c3 nonprofit’s finances is being conducted by a volunteer CPA not associated with the organization.
"Now this isn’t a full audit, but it’s the best I could do without any funding to get a different set of eyes on the books to make sure that there’s nothing of immediate concern."
McCoy says a full audit will be conducted once Potter’s Field is able to liquidate its assets.
Potter’s Field and its former heads, Mike and Pam Rozell, face allegations that they broke state labor laws by coercing employees into marathon 60 to 80 hour work weeks at ministry offices or its popular restaurant chain, Mudman Burgers. Workers allegedly received just a few dollars per hour and worked some hours for free. There are also allegations of psychological and emotional abuse as well as threats of physical violence.
McCoy does acknowledge that workers signed contracts stating that time worked over 40 hours would be considered volunteering, which directly violates Montana state law.
"Those contracts aren’t feasible from what I’ve read," McCoy says. "You can’t have someone do volunteer hours in a location where they’re paid."
The allegations against the Rozells and their organizations are drawing scrutiny from two law firms. Peter Janci is with Portland-based Crew Janci, which partnered with Edmiston and Colton in Billings to investigate the numerous allegations against Potter’s Field.
"So we’re aware over 100 people that allege different forms of mistreatment and exploitation or abuse. Those range from egregious violations of wage and hour laws, financial exploitation. There are allegations that we're investigating of sexual harassment and sexual assault."
Janci says the firm hasn’t yet decided whether to take legal action, but he does question the integrity of the current financial audit.
"And while we certainly recognize that it may be valuable to the organization for them to take a look and learn from their lessons, that is not, in our view, a substitute for rigorous third-party scrutiny and analysis of what happened and investigation into what happened.”
Janci says the state Attorney General’s Office should be looking into allegations of financial fraud and misuse of money.
AG Spokesperson John Barnes says that after the AG’s office received questions from the public and press it reached out to Potter’s Field and its legal counsel to understand its intentions of closing down. Under Montana state law, any nonprofit that wishes to dissolve must submit a plan to the AG’s office and the Secretary of State detailing the sale of its assets and other steps to close the organization.
Barnes says the AG’s office has not received any complaints about, or allegations against, Potter’s Field and its subsidiaries. He says the office is not investigating Potter’s Field finances at this time.
"Well, I can’t say what might happen in the future," Barnes says, "I can just tell you at this point we’re in conversation with their counsel and leadership to get a sense of where things are at. Based on how those conversations go, we would determine what steps, if any, need to be taken next vis-a-vis our office or the nonprofit."
Barnes would not detail those conversations, but says information will be released in the future.
Potter’s Field board chair Rob McCoy disclosed that the AG’s office found the nonprofit’s plan for closing to be legally flawed. Neither the AG’s office nor McCoy explained the primary legal issue that would prevent Potter’s Field from dissolving.
"The other area we fell into difficulty with is if we wanted to liquidate the properties, the title company, the realtors, etc, we’ll need the original board members," McCoy says.
He says former Potter’s Field leaders Mike and Pam Rozell, as well as other board members, have agreed to stay on during the liquidation process. McCoy says once the process is complete, all board members will step down and be replaced. New board members will oversee the ministry’s sponsorship program for missionaries working with kids overseas. All other programs are due to be closed down.