The Shadow of Money: Financial Irregularities in the Anti-Cult Organization CAN Cult Awareness Network

The Cult Awareness Network (CAN), a non-profit organization dedicated to fighting so-called "cults," has been at the center of numerous controversies throughout its existence. A thorough analysis of the organization's financial documents, conducted by independent auditors and scholars, has revealed an alarming picture of accounting irregularities and more than questionable financial practices.

Chronic Problems at the Top

From its inception, CAN has been plagued by problems at the top. As early as 1981, former national director John M. Sweeney Jr. raised serious doubts about the management of funds. In a letter dated February 18, 1981, Sweeney expressed concerns regarding:

1. Failure to review corporate accounting books

2. Deposit of over $20,000 in donations into an interest-bearing CD account

3. Failure to use donations for anti-cult projects

4. Expenses for Board trips to Dallas while legitimate bills remained unpaid

5. Threats of telephone service interruption and payment delays

These problems seem to have persisted and even worsened over the years, indicating a systemic issue in the organization's financial management.

The 1987 Turning Point: Centralization and Opacity

In 1987, with the arrival of Cynthia S. Kisser as executive director, radical changes were made to CAN's financial management. According to an internal informant, Kisser centralized control of funds, requiring that all donations, including uncancelled checks, be sent directly to the national office in Illinois.

This move raised concerns among board members, as it:

1. Drastically reduced financial accountability to members

2. Concentrated financial decision-making power in the hands of a few

3. Made it more difficult to monitor the actual use of funds

Former deprogrammer Jonathon Nordquist reported overhearing Kisser tell Mary Krone during a convention: "If the cults ever get hold of our books, we'd be in trouble." This statement raises further doubts about the transparency of CAN's financial practices.

Financial Anomalies: A Disturbing Picture

Detailed examination of CAN's financial records revealed numerous and serious anomalies:

1. Incomplete and disorderly documentation:

   - Significant gaps in income and expense records

   - Absence of detailed journals and records conforming to accounting standards

   - Documents not in chronological order

2. Problematic cash management:

   - Excessive cash withdrawals (e.g., $1,500 for petty cash, when the norm would be $300)

   - Numerous checks issued by CAN to itself, without indication of the final recipient or purpose

   - A $12,000 check issued on 03/25/94 from CAN to CAN itself, without explanation

3. Accounting discrepancies:

   - Differences between issued checks and recorded expenses

   - Missing cancelled checks (e.g., check no. 184 in the 03/25/94 series)

4. Issuance of suspicious checks:

   - Two checks for $600 each issued on 01/19/95 to J. Gordon Melton and Anson Shupe, known CAN critics

   - The scholars, when questioned, denied receiving such payments

   - The $1,200 was never reinserted into the CAN account after the payments were stopped

5. Separate accounts with large sums:

   - A money market account with Merrill Lynch, extremely active but lacking correlated income statements

   - Certificates of deposit with an average value of $40,000

6. Apparent financial difficulties in contrast with investments:

   - Inability to pay Sprint network telephone bills

   - Numerous final disconnection notices

   - Recommendation by treasurer Virginia Hulet to return all Sprint credit cards

7. Improper use of telephone lines:

   - Records indicate substantial use of CAN telephone lines by deprogrammers

Auditors' Concerns and KPMG's Withdrawal

The auditing firm KPMG Peat Marwick, tasked with conducting CAN's annual audits, repeatedly expressed concerns about the organization's financial management:

1. Need to improve accounting principles

2. Suggestion to adopt accrual accounting

3. Lack of internal audits, in violation of auditing standard no. 50

4. On June 1, 1994, KPMG raised doubts about CAN's solvency

5. On June 8, 1995, KPMG highlighted an imbalance between the general ledger and bank reconciliations, existing since July 1994

6. Finally, KPMG chose to discontinue its collaboration with CAN

Unresolved Legal and Financial Issues

Financial irregularities extended even beyond CAN's bankruptcy declaration in 1996:

1. Numerous dispute letters (e.g., contested balance of $26,228.76 with Crown Plaza Hotel, November 1995)

2. Multiple active financial accounts simultaneously

3. 51 ongoing lawsuits in 1994

4. Cynthia Kisser and some staff members continued to receive salaries even after bankruptcy (Kisser $1500 every two weeks)

5. Unclear destination of CAN's final funds during dissolution

Conclusions and Implications

According to two external auditors consulted, CAN's financial practices seem to indicate possible cases of "money laundering" or "asset looting." These accusations raise serious questions about the nature of the organization's financial activities and compliance with tax regulations for non-profit organizations, particularly:

1. Possible violation of IRS rules for 501(c)(3) organizations

2. Failure to respect principles of transparency and financial accountability

3. Potential misuse of donated funds for undeclared purposes

The analysis of CAN's financial documents reveals a picture of financial mismanagement that goes beyond mere negligence. The numerous irregularities and discrepancies suggest the possibility of calculated misappropriations and raise doubts about the true nature of the organization's activities.

This preliminary investigation underscores the need for a more thorough investigation into the Cult Awareness Network's financial practices and raises important questions about the responsibility of the organization's leaders and trustees. The CAN case serves as a warning about the need for greater transparency and control in non-profit organizations, particularly those operating in controversial areas such as the fight against "cults."

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