CASE 3.3 THE PTL CLUB Jim and Tammy Bakker founded the PTL (Praise the Lord) Club, a religious broadcasting network, in 1974. A little more than one decade later, the PTL Club had more than 500,000 members and annual revenues of almost $130 million. Bakker and his close associates came under intense scrutiny in 1987 when it was disclosed that PTL funds had been used to pay a former church secretary to remain silent concerning a brief liaison involving herself and Bakker. That disclosure resulted in a series of investigations of PTL's finances by the Internal Revenue Service, the Federal Bureau of Investigation, the U.S. Postal Service, and numerous other federal and state agencies. In March 1987, Bakker was forced to resign as PTL's chairman. Two years later, he was convicted of fraud and conspiracy charges, fined $500,000, and sentenced to forty-five years in federal prison. The Bakker scandal spurred a nationwide debate concerning the lack of regulatory oversight of the financial affairs and fund-raising activities of reli- gious broadcasting companies. Public documents disclosed that Bakker and his associates were being paid huge salaries and bonuses from the funds PTL raised through the use of televised appeals. In 1986, the Bakkers received almost $2 million, and in the first three months of 1987, when PTL was experiencing severe cash flow problems, the couple was paid $640,000. The organization was also criticized for the flamboyant life-styles of its officers. The executive suites at PTL's Fort Mill, South Carolina, headquarters were decorated in opulent style, including gold-plated bathroom fixtures and extravagant chandeliers. Bakker 1. In early 1991, a federal appeals court upheld Bakker's conviction on the fraud and conspiracy charges but voided Bakker's forty-five-year sentence, as well as the $500,000 fine, and ordered that a new sentencing hearing be held. According to the appeals court, the trial judge who imposed the lengthy sentence on Bakker may have allowed his personal religious predispositions to influence his sentencing decision. Following the re-sentencing hearing in August 1991, Bakker's sentence was set at eighteen years. In 1994, Bakker was transferred to a halfway house to serve the remaining few months of his sentence, which had been signifi- cantly reduced for good behavior. After being released from the halfway house, Bakker reported that he planned to return to the ministry. 197 17