A federal prosecutor is expected today to ask that televangelist Jim Bakker and at least two of his top aides be criminally charged with fraud and conspiracy, according to sources familiar with the investigation. For the past 16 months, a federal grand jury in Charlotte, N.C., has been investigating Mr. Bakker and the management of the ministry he headed, PTL. It has been looking at whether Bakker and his associates conspired to defraud supporters by raising money for one purpose, then spending it on another, possibly for the Bakkers' and top aides' personal benefit. Because PTL solicited money on television and through the mail, that could constitute wire and mail fraud.
The grand jury has also been looking at possible tax fraud, says one defense lawyer with knowledge of the investigation. These charges would likely include failure to report income. For example, the grand jury is thought to be considering whether the Bakkers used PTL funds to buy real estate, but then never declared it as income for themselves, thus paying a smaller tax bill.
Bakker and his aides have denied any wrongdoing.
Late last month, Bakker and two top PTL officers, Richard Dortch and Roe Messner, received so-called ``target letters'' from Charles Alexander, the United States attorney conducting the investigation. The letters said the men were targets of the grand jury investigation, and invited them to testify before the panel. The men reportedly declined.
The grand jury was also thought to be investigating two other aides, David and James Taggart, though it is unclear whether they received any letters.
Target letters are usually sent at the tail end of an investigation, which suggests that the grand jury has considered the evidence and is ready to indict. According to one Justice Department source, Mr. Alexander has told top Justice officials that he will recommend indictments the next time the grand jury convened, which is scheduled for today.
Any criminal case would be complicated by the First Amendment, which separates church and state, says Ben Cotten, who represents the Taggarts.
``That question always arises when you prosecute a person with a religious dimension,'' he says.
The government shouldn't tell a religious ministry how to spend its money, he says, and it's not clear that using PTL funds for Bakker's personal use constitutes fraud.
``If Jim Bakker buys 13 new suits,'' he says, using a hypothetical example, ``and he's on television every night, and he's responsible for raising money for the electronic ministry, then [buying the suits] isn't a misuse of funds.'' Criminal charges would be the third and probably most devastating legal blow to Bakker, who with his wife, Tammy, sat atop a multimillion-dollar religious empire until last year. Bakker resigned as head of PTL in March 1987 after it was revealed that he had had an affair with a church secretary.
In addition to the potential criminal charges, the Bakkers are also embroiled in a civil class action suit and PTL's bankruptcy proceedings.
In the class action suit, former supporters allege that he misused donations solicited over PTL's television program. That suit may be slowed down by the criminal case, says David Tolbert, who is representing Mr. Messner.
For one thing, it would discourage Bakker and the other defendants from testifying, since that would waive their Fifth Amendment rights in the criminal case. And if they are convicted, ``it may be difficult to collect [money damages] from those enjoying the comforts of prison,'' adds Brad Leggett, an attorney for PTL.
The Bakkers also face formidable dollar losses in the PTL bankruptcy case. Earlier this month a federal bankruptcy judge ruled that the Bakkers owe PTL $6.6 million. Last year, the Bakkers said they had only $37,000 to their name.
But PTL lawyers suspect the two have squirreled away at least some of the $9.4 million they received in salary from PTL between 1981 and '87. For one thing, the Bakkers recently sold a home in Palm Springs, Calif., and still own another home in Palm Desert, for which they paid $285,000 in March. Mr. Leggett, the lawyer for PTL, is also trying to see if PTL can get at the $600,000 PTL put into the Bakkers' retirement fund.
PTL needs all the money it can get. The government claims it owes at least $62 million in back taxes.
In April, the Internal Revenue Service stripped the ministry of its tax-exempt status, which meant that donations were no longer tax-deductible. The bankruptcy court has yet to decide whether to let the IRS decision stand. But Mr. Leggett says that contributions dropped so low as a result of the IRS action that PTL was forced to stop operating as a ministry. It now raises money through a new corporation, Heritage Ministry.
Dec. 12 will likely see the dismantling of the electronic ministry Bakker built up. At that time, the pieces of the PTL empire - 22,000 acres of land, a television satellite network, and a 504-room hotel, among other things - will be put on the auction block.
All these legal proceedings will have a chilling effect on religious broadcasting, says defense lawyer Cotten. ``There's no question, once you start exploring the books and questioning the finances of one electronic ministry, including what is a reasonable salary,'' others will become concerned the government will do the same to them, he says.
But ``the most meaningful consequences'' of the Bakkers' travails will be felt by ``the unchurched community who ... might otherwise be reached if not for these shenanigans,'' says Clemson University professor Charles Dunn. ``That person on the fence has another reason not to join.''