When the U.S. government extended pandemic hardship loans to thousands of religious institutions, Jim Bakker and Morningside USA, his ministry in Blue Eye, Missouri, were among the most high-profile recipients.
On April 28, the pastor received approval for an amount between $650,000 and $1.7 million in Paycheck Protection Program funds.
Weeks before, the Missouri attorney general filed a complaint, the New York attorney general sent a cease-and-desist warning and the Federal Drug Administration and Federal Trade Commission sent warning letters alleging Bakker engaged in deceptive practices by touting purported health benefits of a silver product on The Jim Bakker Show — including a suggestion it could be used to treat or prevent COVID-19 infection, something the FDA says is false. In June, the Arkansas attorney general's office followed with its own lawsuit.
Applicants seeking PPP loans were asked to certify they weren’t engaged in any activity that is illegal under federal, state or local law. The question is whether Bakker’s involvement in ongoing litigation and fraud allegations will rise to the level of a Small Business Administration review.
It’s likely, according to attorney Daniel Grooms, a former federal prosecutor who worked in the Justice Department for 15 years. “There is every reason to think that an entity, led by a person with the profile he has, given his history, and given the ongoing fraud issues surrounding the product he was selling, that those ongoing investigations and the ongoing attention ... it would be realistic to think that would lead to further investigation of his PPP loans,” Grooms said.
An SBA spokesperson refused to comment on any specific loan recipient. However, he provided an explanation about how the loan program was administered, saying the agency made no eligibility determinations during the approval process. After the fact, the SBA will review organizations and companies to identify those that may have submitted inaccurate self-certifications. The agency may seek repayment with the potential for civil or criminal penalties if a fraudulent application was submitted.
Bakker’s attorneys argue no laws were violated and provided this statement: “We strongly believe that Morningside’s offering of a legal product, sold by stores across the country, did not violate any laws; a fact underscored by the FDA taking no action against Morningside and issuing its letter closing the warning letter process on July 14th. The allegations made by the Missouri and Arkansas attorneys general concern only this product, and Morningside had suspended its offering of that product prior to the date of its PPP loan application.”
Bakker gained notoriety in the late 1980s and 1990s as a result of his trial and financial fraud conviction relating to Heritage USA, his TV studio, Christian-oriented theme park and water park attraction with shopping, hotels and condominiums in Fort Mill, South Carolina. After serving five years in federal prison, he shifted from preaching the prosperity gospel to an apocalyptic end-times message.