Dear Friend,

Welcome to the online edition of A Friendly Letter. In addition to back issues, there are some new reports as well. The major new report is about two multi-million dollar financial frauds, perpetrated on Quakers and other churches. Another new addition is a personal tribute to Bill Kriedler, a very fine Quaker minister who died in June, 2000.

To read the full text of my 40,000- word report on the two major church frauds, click here.

I didn’t expect to write any such report. When I laid down A Friendly Letter in early 1993, I thought I was finished reporting on Quaker scandals.

It turns out I was wrong.

For months, in late 1996, I’d heard stories about how several Quaker groups recently became ensnared in a Ponzi-type con game, centered on a business called Productions Plus. Its collapse left a number of them facing financial chaos, and induced the early or forced departure of more than one high Quaker official.

These reports, which came from several parts of the country, were credible and disturbing; but at first I was otherwise occupied and paid only limited attention.

Then in the spring of 1997 they took a quantum leap when Philip Harmon, a very prominent figure in Pacific Northwest Quaker circles, was arrested and charged with fraud to the tune of fourteen million dollars. Harmon has now pled guilty and is serving an eight year sentence in federal prison, and the total amount of the frauds has been upped to more than $40 million.

Most of this missing $40 million came from the retirement nest eggs of several hundred Friends, mostly pastors, widows, and persons of modest to middling means. Another large chunk was insurance premiums paid into a Friends health plan Harmon promoted. Among the subscribers were many elderly persons, pastors, and other Quaker organizational staff, some with serious ongoing medical problems.

The retirement nest eggs are gone. So is the health insurance, with many thousands in claims unpaid. The federal indictment charged Harmon with conspiracy, witness tampering, obstruction of justice and money laundering all as part of the fraud. Two of his close associates, also Friends, have been accused of complicity in these schemes. Washington state officials, the U.S. Attorney, and the FBI are still on the case. They have even given their effort an official “Code name”: Operation Island Scam.

In the Productions Plus Ponzi scandal, the main alleged perpetrator, one Priscilla Deters, is facing trial in federal court on fourteen counts or wire and mail fraud, for swindles totaling at least six million dollars.

Added together, the amounts at stake, the range of groups affected, and the number of “weighty” Friends involved dwarf any Quaker financial malfeasance I ever heard of or read about.

However, unless you live near Seattle or Wichita, where the two federal cases were filed, chances are you have probably heard very little of all this.

That’s because little of it has been reported in Quaker publications, except for one substantial article and several brief items in Quaker Life.

Ditto for most of the yearly meetings and organizations involved; few of the actual facts have been reported to their constituents in any full or candid fashion.

What does this mean? It means, among other things:

• The full list of victims, and their losses, has not been revealed;
• The extent and implications of leadership involvement and responsibility have not been disclosed or threshed;
• Nor have any needed reforms been openly discussed; in short,
• The all too common Quaker reactions of avoidance, denial–and in some cases even coverup–have clicked quietly into place.

This Quaker silence in the face of Quaker scandal is itself scandalous; but readers of A Friendly Letter know it is nothing new. Back in 1981, it played a large part in launching this newsletter.

As I said, though, I was busy; but the more I learned about all these allegations, the harder it was to ignore them. The current silence, and the magnitude of what it conceals, gnawed at me all through the summer. Finally, they moved, or rather pushed, me to two conclusions:

First,

• that these frauds and swindles need to be thoroughly investigated, a full report written, and then made available to all interested and concerned Friends; and

Second,

that no such report will be written or made public, unless I do it.

This second conclusion was reached reluctantly, and after long hesitation: I was still busy, with several worthwhile projects on my plate.

For another, digging into Quaker misdeeds is a disheartening business: the Society of Friends means too much to me to take any pleasure from what I am likely to find out.

And not least, as you remember well enough, such work usually elicits howls of protest from those whose oxen are gored. You may also recall how weary I grew of the barrage against A Friendly Letter. This project will likely face such criticism, in spades.

Nevertheless, in Eleventh Month (November) of 1997 I put my other tasks on the back burner for awhile, and dusted off my reporter’s notebook. What the heck; as the saying goes, sacred cows make the best hamburgers, and I’m not a vegetarian anymore. Generous gifts from former subscribers and friends released me for it, and the report, after four months of intensive work, was finally completed in February of 1998.

This report was first distributed to the subscribers/supporters, and then to other interested readers. You can now read that report, in full, on this website, by clicking here.

When the report was done, the story was not finished. It is not finished yet.

Priscilla Deters’ trial, which was set for late last year, was delayed while she was taken into custody for a psychiatric evaluation. She was found competent to stand trial and released just before Christmas. The trial was rescheduled for Second Month (February) 24, in Wichita, Kansas.

I attended the trial, and my daily dispatches are also available here as updates. She was convicted, and you will also find an update on the sentencing of both Detersand Phil Harmon in Seattle. Like Harmon, Deters is currently serving a prison sentence.

Proecutors have stated that more indictments in the Harmon case are likely soon. Watch for updates here as the case continues to unfold.

Several online readers of this report have sent in valuable leads and new information. Any other readers who have leads or information relevant to these scandals is invited and urged to pass these on to me, either by e-mail, via snailmail (at P.O. Box 82, Bellefonte PA 16823) or by phone: 814-355-8323 FAX: 814-355-4990. If needed, confidentiality of sources will be preserved.

Again, the full report is now posted here. To order printed copies, write to:

A Friendly Letter
P.O. Box 82,
Bellefonte PA 16823

The price is $10.00 postpaid.

Yours in the Light,

 

 

Chuck Fager

Copyright © 1998 by Chuck Fager. All rights reserved.