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Master’s University President Pays Son-In-Law Millions Of Dollars Through Nonprofits

In the ongoing investigation into The Master’s University following its placement on probation, KHTS has uncovered millions of dollars that have been paid to John MacArthur’s son-in-law, Kory Welch.

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In an article published on September 28, 2018, KHTS explored the various claims of a conflict of interest existing between Master’s University School President John MacArthur, the president’s son-in-law, Kory Welch, and a company owned by Welch.

According to school tax returns filed with the IRS on an annual basis, Welch’s advertising and graphic design company, WeKreative, held an annual contract with the school, with the total amount paid equaling $180,000 in 2016.

Related: More Allegations Against Master’s University Surface

KHTS learned that while the school had the $180,000 contract with WeKreative, Welch was also paid as a “consultant” overseeing the Master’s University marketing department — the department which his company had a contract with.

Additionally, it would appear that although Master’s has stated the president’s son-in-law was brought on because of his “experience” and that the bidding for the marketing contract was “competitive,” Welch and his wife seem to have had at least five companies that have been canceled or suspended by the California Franchise Tax Board due to a failure to pay taxes since the early 2000’s.

And lastly, it would seem that board officials had publicly announced Welch as the chief operating officer — which would give him greater control of not only the marketing department, but a number of other departments as well — in March 2018, but according to the 2017-2018 academic catalogue that was published a year prior, Welch was already listed as COO and chief marketing officer under the “administration” section.

While Welch is not explicitly named, financial statements released on behalf of Master’s University and Seminary state, “During the years ended June 30, 2017 and 2016, (The Master’s University) paid $392,900 and $137,071 respectively, to the businesses owned by a family member of management for marketing, public relations and video production services.”

When questioned on this, representatives from The Master’s University would not comment on the specific totals Welch himself received in compensation, but reiterated that WeKreative had an annual contract for $180,000 at the company’s nonprofit rate that amounts to 1,200 hours of work.

“Over the past 12 months, however, WeKreative has documentation to show they provided more than 3,000 billable hours of work for TMU,” said Brian Harr, the Director of Communications at Master’s University. “The school was not billed for the extra 1,800 hours.”

Related: Master’s University Officials Hope To ‘Mitigate Findings,’ Do Not Believe ‘Every Assertion’ In Commission’s Report

The Master’s University is not the only organization related to MacArthur that Welch has financial ties with.

According to individual audits and 990 forms from the 2003 to 2016 fiscal years, Welch and his companies have received over $7 million in payments from Grace to You — the nonprofit media arm for his father-in-law’s church, Grace Community.

Beginning in 2003, Welch received $145,700, for the “production of materials.” Then, in 2006 as the Grace to You video production director, he received $130,228 in total compensation. By 2007, the last year that it would appear Welch received a formal salary from Grace to You, he received $103,677 worth of compensation as the director of television broadcasting.

After 2007, the tax returns indicate that Welch was no longer a paid employee at Grace to You, but The Welch Group — a company founded by Welch in 2006 — began receiving annual payments from Grace to You for post-production and graphic design contract services in the fiscal year starting on July 1, 2008.

Over the course of the next decade, The Welch Group or companies owned by Welch were paid by Grace to You, with the lowest amount received by a Welch-owned company being $658,950 in 2010, and the largest amount being $794,000 during the fiscal year that ended June 30, 2017.

Related: Master’s University President Calls Allegations Against School ‘Untrue,’ ‘Persecution’

Coupled with those payments, the ministry made a $20,000 loan to Welch for purposes of him purchasing a personal residence. The loan was given with zero percent interest and total loan forgiveness within five years, meaning that Welch was likely not required to pay a single dollar back.

In addition, The Welch Group was loaned approximately $8,500 by Grace to You for “goods and services” and “asset purchase.”

An accountant that KHTS has spoken with stated that it is highly unusual for a business to receive a loan from a client in order to complete the services that the company was hired to do.

Additionally, according to the submitted and signed 990 forms, the loans were not board-approved or put into a written contract. There was no written agreement signed by the board guaranteeing that Welch had to pay the money back.

In total, it would appear Welch and his companies have received approximately $7,610,399 from Grace to You and The Master’s University since 2003. This final figure includes the sum total of the payments listed in the 2003 through 2016 tax returns for both organizations, but does not include the most recent fiscal year for both organizations, as they are not available to the public as of the time of publication.

KHTS reached out to both Grace to You and Kory Welch, but neither had been able to comment by time of publication for this story.

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Master’s University President Pays Son-In-Law Millions Of Dollars Through Nonprofits

16 comments

  1. I believe, that those in ministry should be beyond reproach. If the information published in this article is factual, those who stand for Christ, preach Christ, will stand before a holy God and account for their actions. Pastors and Elders are held to a high calling and will be held double accountable for any impropriety.
    I pray that there is a sold explanation. If not, MacArthur’s ministry will have a black cloud hanging over it. Sadly, another good man will have tainted his testimony of Christ. Money is a slippery slope and just another sin that traps the heart of man.

  2. That is such a bogus and irresponsible headline. Why don’t you also talk about Welch’s business employees that have to be paid. Welch did not pocket all of the money…it’s called a business for a reason! I’m so sick sensationalized headlines to grab the attention of people at the expense of good people. KHTS is becoming a tabloid “news” if you want to call it that. I hope KHTS spends as much time correcting this when the other side comes out.

  3. This is an incredibly poorly reported story and uses “big numbers” with “little context” to manufacture a hit piece. This is what happens when people with little idea of how to read financial documents googles a “990” and tries to decipher it.

    Here are some questions a reporter with a little financial/business understanding would ask:

    How many employees are part of the company? How does the hourly billing rate compare to other marketing companies? Why would a company only bill for 1200 hours when they had 3000+ billable hours? Considering that, did the company even have a net profit off last year’s contract?

    Big organizations have big contracts. Its unavoidable. Just because a contract hits six figures doesn’t mean that someone’s been enriched.

    MacArthur has a solid track record fiscal frugality—none of which was even explored, but provides (probably inconvenient) context.

  4. John Macarthur’s Grace To You paying his son-in-law’s companies millions of dollars is not just a “conflict of intererst” but should be investigated for being criminal conduct. And did Grace To You engage in any competitive bidding for these very lucrative contracts? If they claim they did, then rest assured it’s just another lie told by the John Macarthur.

  5. Responsible writers will check their sources and not push out a story before they get the whole story.
    Responsible readers should get more of the story. https://www.masters.edu/news/an-inside-perspective-on-Kory-Welch.html
    Lets put the University of California, Santa Barbara and College of the Canyons under a microscope (both schools the writer attended) and see how much they spend on marketing and media. We could examine with a guilty-until-proven-innocent approach and surely we will find issues. Oh, and let’s make our conclusion before we finish examining. Wait, COC and UCSB match Caleb’s views so let’s not do that.

  6. You can see Caleb pushed this one out without all of the information. See the last statement. He didn’t want all of the information. He wanted to get the story out before having to wait any longer.
    You’re right biases were involved. An unbiased writer gets the whole story before publishing. It’s shameful to try and defame an organization. What is your response to the statement in the Master’s article about using total numbers and assuming they all went to Kory while having employees and costs to pay? Those aren’t earning numbers yet Caleb misguides the readers into assuming they are all earnings.

  7. LA California is such a small town . JMac was forced to hire relatives. Who else was he going to hire?

  8. Thank you! I had the same thoughts. It is completely reasonable for a company to be paid this amount when there are multiple employees involved and work has been done for multiple years.

  9. This is just a smear campaign. The figures are typical and unimpressive.

    Why don’t you conduct and publish an investigation and expose the overpaid actors and athletes who does not have any substantial contribution to society other than entertainment.

  10. The world is God’s and everything in it. When I asked to go to Master’s University on scholarship, the coaches did not care of my urgent need to be freed from other persecution and be given a scholarship in Jesus Christ’s name that I had asked God for in Jesus Christ’s name. I even put together a video of me scoring 281 points in about 30 minutes. No response. Yet when I prayed they would respond urgently to my need to know if I will be given work to do at the University for a short time, they did not respond causing me grief for disobeying the spirit and my prayers and still haven’t responded, yet they sent their loan shark trapper by text to acquire further application materials who would not respond about the athletics program also. It is an extortion fraud scheme like every other University requiring in estimates of $50,000 dollars to attend and won’t give freely when asked of, yet attacks like wolves for “debt”. All my debt is forgiven in Christ Jesus and they still attack me and I am never subject to that excessive form of extortion and they would rather work on other things than the urgent needs and prayers of believers in Jesus Christ like me that lead a manner of life appropriate with Jesus Christ’s words. They are false Christians is the sense I was given and they have not given word about the injury they caused me in true preparation for the team and their subsequent neglect that went on for days. God is very angry with them I am sure. The tuition price is enough cause to see they are bent on having riches and not doing God’s work. They also make players sign a waiver saying that they can incur death by the practices of the University and other serious injuries only from their basketball team. It is seriously insane what they are doing.

  11. They’re looking for about $75,000,000.00 per tuition payment period from students, to run electricity, and water through a few buildings and food and clothing for their workers? It does not add up. It is literally extortion. Literally they can go buy a cell phone for a few dollars and film actual ministry about the word of God, not huge productions from “mega-churches” whom the majority attending by no way believe in Jesus Christ at all, they are there for a show and entertainment and theater like real life church, why millions of dollars? The answer is extortion and riches because they themselves won’t even offer me a place to stay when asked of. And another truth the basketball team isn’t like minded with me. It is a scam to hurt the public and make themselves rich.

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About Caleb Lunetta

Caleb has been a Santa Clarita resident for most of his life. After attending Hart High School, Caleb went on to study political science at the University of California, Santa Barbara along with College of the Canyons.