“Quakers make good victims,” says Steve Schroeder.He should know; as a federal prosecutor since 1974, he’s seen enough of them. Fraud victims, that is; Quakers were a relatively new experience. In particular, the ones who quoted the Gospel to him about staying out of court.
I thought he was referring to Paul, in the familiar passage from First Corinthians 6: “If one of you has a dispute with a fellow Christian, how dare he go before heathen judges instead of letting God’s people settle the matter?…Would it not be better for you to be robbed?” (V 1,7)
But Schroeder thought not. He was certain it was the Gospel that had been quoted to him, but was unsure of the specific passage.
Me too. The closest I can find is Matthew 5:25f (repeated in Luke 12:58f):
“If someone brings a lawsuit against you and takes you to court, settle the dispute with him while there is time, before you get to court. Once you are there, he will turn you over to the judge, who will hand you over to the police, and you will be put in jail. There you will stay, I tell you, until you pay the last penny of your fine.”
One might think this verse was directed more at wrongdoers than victims. But perhaps one would be mistaken; the first sentence could be construed as advice to stay out of court regardless. Accepting such an interpretation would indeed set one up to be a “good victim.”
Especially if you were a friend of Phil Harmon.
It was Hallowe’en, October 31, 1997 when Philip E. Harmon formally pleaded guilty to federal charges of conspiracy and tax fraud in Seattle, Washington. The amounts swindled from his victims, according to prosecutors, could total as much as $30,000,000. Numbers this big made the event a lead story in the city’s newspapers and TV news shows. These headlines were but the latest in a series, as the story had unfolded over the previous year:First had come the news of an investigation by Washington state investment authorities, which began in early 1996. Then a federal court issued a restraining order in February, 1997, followed by an injunction in mid-March. A week later, on March 26, 1997, Philip Harmon was arrested, and spent almost a week in jail before being released on $350,000 bail. In May, Harmon was forced into involuntary bankruptcy.
By August, facing a list of felony charges including obstruction of justice and money laundering as well as several varieties of fraud, Harmon had signed an informal plea agreement to reduced charges of conspiracy and tax fraud.
All this was well-publicized; the news of Harmon’s arrest even made it into the pages of Quaker Life, the magazine of Friends United Meeting.
However, when Northwest Yearly Meeting gathered in late July on the campus of George Fox University in Newberg, Oregon, the minutes of its six days of sessions recorded no mention whatever of Harmon or his legal difficulties.
Of all the silences surrounding these Quaker scandals, the silence at Northwest YM is the loudest, the deepest, and the most troubling of all. Consider these items:
- Harmon had sold Northwest its health insurance plan for employees and pastors. When this plan had collapsed in February, 1997, the Yearly Meeting was left with at least $20,000 in unpaid medical bills.Harmon had defrauded numerous prominent members of the Yearly Meeting, or their children, of their life savings. Among these were some of Harmon’s own relatives.
Harmon’s son Steve, and his son-in-law Terrill “Terry” Beebe, who were implicated in the frauds and faced possible indictment, were prominent in the yearly meeting in their own right; Steve Harmon represented the Yearly Meeting on the George Fox U board, and the campus featured a dormitory named after Beebe’s father.
When I asked Northwest’s Superintendent, Joe Gerick, about the lack of references to the Harmon scandal in the minutes, he grinned and shrugged.
“Nobody brought it up,” he said.
McKinley Avenue was a strongly holiness-influenced church, where pastors preached the importance of knowing Jesus, and the duties of plain living and avoidance of perilous worldly influences like movies, dancing, makeup and bobby sox. An uncle, Ed Harmon, spent his entire career as a pastor in the yearly meeting. His salary the first year in the pastorate was $45.18; now that’s simplicity.
A friend who knew Philip’s parents, describes them as “fine people, simple, hardworking, rough-hewn. An elder in the yearly meeting can recall young Howie, Phil and their sister Leona as peppy and lively kids at Oregon’s church summer camps.
Howard Harmon’s sons Howard Jr. and Philip were clearly ambitious, and as the saying goes, the apples did not fall far from the tree. Both enrolled in George Fox College, and Howard went into the ministry, where he rose to finish his career as Superintendent of what had become Northwest Yearly Meeting.
Philip took a different course, but in the same stream. Starting at George Fox in 1954, he dropped out after two years, in his own words, because “Quite frankly, I didn’t have enough money.” To earn money, he became a salesman, and by 1959 had moved from Oregon to Seattle, where he was active in Friends Memorial Church.
In 1970, Harmon was licensed to sell insurance in Washington state. He was a good salesman, and some of his best customers were Quakers. In September of 1972, he formed the National Friends Insurance Trust (NFIT), of which Friends United Meeting and the Evangelical Friends Alliance were the first two groups to sign up. At its peak, NFIT covered as many as 1750 people, from 25 yearly meetings and other groups.
The original idea of the trust was to pool the insurance premiums of member groups, and thereby to get discount rates on group health coverage. And for about fifteen years, it appears that’s just what the Trust did.
By 1978, Harmon had moved from Seattle to Camano Island, Washington, a small town about an hour north of the city. Business must have been good, because he settled into a large house with shore frontage. From its wide, rambling deck, Harmon could look out along a scenic stretch of Puget Sound. The Harmon compound ultimately expanded to include a sizeable enclosed swimming pool, a two-story four-bay garage, and enough acreage for his son Steve to build a house of his own next door. (We’ll hear more about Steve’s house….)
[This post is part of a detailed report on the activities of Philip Harmon and the National Friends Insurance Trust, particularly among Quaker groups. Watch for additional excerpts on this site. The full report is available now, by snailmail. To order the complete report, send $10.00 (postpaid) to: A Friendly Letter, P.O. Box 82, Bellefonte PA 16823.]