The Theft of a Black Baptist Church in Gentrified Rip City: An Investigative Report (Part 1 of 5)

Editor’s Note: Today, Atticus Review introduces the first article in a five-part Atticus Uncovered series about the unauthorized taking of Portland’s Mt. Zion Baptist Church. This investigative report continues through Friday, and includes a complete list of the people and organizations involved at the bottom of each day’s story.

Swindled Church Nets White Baptists Big Bucks

PORTLAND, OREGON — There are ways to sell a church property legally, procedures dictated by state law and church bylaws. Typically, they require a formal vote by the congregation.

A phone call is not one of them. A simple call from a newly installed white trustee of an inner Northeast Portland, Oregon African-American church does not suffice. A call to the white secretary of a local affiliate of the giant Southern Baptist Convention (SBC) doesn’t hold water, either. And finally, a phone call to transfer ownership of a church adds insult to injury when the church’s founding pastor–Rev. Percy N. Manuel, an African-American whose indomitable will kept Mt. Zion Baptist Church afloat for 17 years–is barely cold in the ground.

Yet Sharon Stone, the new trustee who’d seized Mt. Zion’s frayed reins with a sure grip, phoned Lila O’Banion, the secretary of the Interstate Baptist Association (IBA), a 70-church, metro-Portland affiliate of the SBC. “I called Lila and said Percy wanted it to go to Interstate, and Lila took care of it from there,” said Stone.

Stone added, “I let Lila know—Lila took care of it.” She continued, “I let Lila know that Percy wanted to protect the church and have IBA own it. Lila said she’d take care of it.”

And soon enough, in April 2004, the graceful, deteriorating barn of a building, built by Portland’s Volga Germans in 1914 on the corner of NE 9^th and Fremont, was deeded to the IBA for a “true consideration” of $0.00. Along with the soaring (by this residential neighborhood’s standards) church itself, with its tall windows and full immersion baptismal pool under the floorboards, there was a nice-sized parish house and a small parking lot, all on a quarter-acre, corner lot across from spacious Irving Park.

To summarize:

It was a property transfer beset with irregularities and illegalities. The office of Oregon Attorney General Ellen F. Rosenblum has already formally stated that the conveyance violated one state law; it may have broken a second.

Furthermore, Mt. Zion’s bylaws were ostensibly changed to strip the authority to sell the church from the members as a whole and place that power in the hands of only two trustees. Yet this change was effected so poorly as to be meaningless.

One of the purported ‘trustees’ who signed the deed was improperly elected and thus lacked the authority to sell the church. What’s more, the deed itself is a dog’s breakfast—such a botched job that one expert marveled how it was even accepted by Multnomah County.

The property transfer occurred during a formal leadership vacuum at both Mt. Zion and the IBA. At the former, a new lead pastor had yet to be called, and the inexperienced, interim pastor had yet to be ordained. As to the IBA, it had no executive director from September 2003 to September 2004.

The sale of Mt. Zion Baptist Church was a property transfer beset with irregularities and illegalities.

The IBA did not record the transfer with the county for 22 months and kept it secret from the congregation longer than that. This sketchy move, risky though it was to IBA’s status as the purported new owner, meant that facts on the ground ultimately trumped legalities. Unaware that they were in a ‘ghost-church’—that the property had been snatched out from under them—the congregation soldiered on for years under Percy Manuel’s designated successor, a dynamic, young(ish) new preacher.

Given that deception, Mt. Zion even paid back thousands of dollars on a loan for a furnace it no longer owned, the checks cashed by a larger Baptist umbrella organization with which the IBA was affiliated, the Northwest Baptist Convention (NWBC). And with remarkable cheek, Sharon Stone signed a $45,000(!) loan application to fix a leaky roof and internal water damage—this for a church that years before she’d instructed O’Banion to take possession on behalf of the IBA.

As if misappropriating the property wasn’t enough, at Stone’s behest following Manuel’s death, the struggling church boosted its dues to the Portland-area IBA and the Northwest-wide NWBC from an annual total of $626 to $5,584—an extraordinary jump—the first year Stone held the reins. Though the congregation had authorized contributions to the two SBC groups of 5% of revenue each (for a total of 10%), $5,584 amounted to more than 18% of Mt. Zion’s 2004 income of $29,669.

Known only to a few, the farce might have continued for years longer had Mt. Zion not begun serious merger talks with a non-SBC church. And only then, as 2006 turned to 2007, was the ruse revealed and, in short order, the congregation was literally locked out of a building it had struggled to maintain for two decades.

Given this litany of fraud and abuse, it’s possible, though the odds are fairly long, that the folks done so dirty might actually receive compensation for their loss—if they move quickly and find the right lawyer. (See Thursday’s article, “Recompense for the Dispossessed?”.)

Ill-wrought Maneuvers

The property transfer came two months after Stone ostensibly stripped the congregation of the power, granted by its bylaws, to decide the church’s fate. This maneuver, key to the plan to transfer the property, occurred on 2/8/04, just 34 days after Manuel’s death. At a “Special-Called Business Meeting,” Stone and another white newcomer engineered a vote to vest the power to sell the church in the hands of two trustees. Not all the trustees—just any two.

Never mind that Mt. Zion was so bereft of leadership, there was only one trustee at the time, Manuel’s loyal follower, Roy L. Granville Jr.

The vote Stone brought about was a huge change that occurred at astonishing speed (as these things go) just a month after Manuel’s death. For, prior to this, Mt. Zion’s bylaws state, “The ownership and disposition of all church property… shall remain vested with the church and subject only to church action…. The trustees shall have no power to buy, sell, mortgage, lease or transfer any property without a specific vote of the church authorizing each action….”

Under “Duties,” the Mt. Zion bylaws reiterate the trustees’ limitations: “Can never act independently of the church. They will act only as directed by the church….”

Rather than the bylaws’ mandate that the power to sell the property rested with the church voting as a body, Stone moved and got the motion passed to place it in the hands of just two trustees. (By contrast, when a somewhat similar neighborhood church, Grace & Truth Chapel, was sold after a presumed vote by the congregation, the deed was signed by the chairman of the board, the secretary and six trustees.)

Moments later that day in February 2004, Stone caused the election of the second trustee who would soon sign an illegitimate deed. This person was elected in the company of three other new trustees that day.

But neither of Stone’s moves resist scrutiny. The first—voiding the congregation’s authority—was an amendment to the bylaws. As such, it violated the bylaws’ own requirement that “thirty days have elapsed between the initial submission of the proposed amendment and the ratification vote.” A reporter combing over boxes of Mt. Zion’s files found no indication of the required advance notice of the proposed amendment.

Similarly, the files yield nothing as to whether this special meeting itself, plus its agenda—in this case a radical change in the church’s governance that led to its loss—was given proper, seven-days advance notice as is mandated by both Oregon law (ORS 65.214) and Mt. Zion’s own bylaws.

Perhaps proper notice was given church members, both the 30-days notice detailing the amendment itself, plus the 7-days heads-up on the meeting. Perhaps such notice was disseminated but, crucial though these documents were, they somehow failed to make it into the files to join the paid gas bills and cancelled checks for janitorial supplies. The possibility should be entertained.

But there’s a second, even more unassailably fatal problem with the changes Stone sought to enact at the February meeting: the second trustee who signed the inadequate deed conveying the church to Lila O’Banion’s employer, the IBA—one of four elected that day—was improperly elected. “Trustees shall serve on a rotating basis with one new trustee being elected every year,” the bylaws state. Stone over-reached with her motion at the meeting to elect four trustees.

Regarding these impediments—the improperly amended bylaws and improperly elected signer of the deed—Brooks M. Foster, a shareholder with the Chenoweth Law Group PC, said they may invalidate an “unauthorized” transfer of the property.

There are rough notes for this “Special-Called” meeting in Stone’s hand, written in pen and full of cross-outs and insertions. The new trustees are numbered one through four in ink. And the first three names are in ink: Bennie L. Manuel, Sharon J. Stone and Theresa D. Lassise (the latter two both white, Lassise new to the church). But the fourth name, Ethel L. Sanders, an African-American, is in pencil; it came later.

It’s an odd thing, installing Percy’s widow, Bennie Manuel, as a trustee, a grieving, soft-spoken, 85-year-old woman who’s just lost her husband of 65 years, father to her six children. There’s also the issue of granting power to two white women, Stone and Lassise, in a historically black church. Apparently a fourth new trustee was needed to provide cover, in effect. Stone just didn’t know who till she filled in Sanders name later, in pencil.

Improperly amended church bylaws and an improperly elected trustee signing what clearly appears to be an illegitimate deed may invalidate the transfer of Mt. Zion Baptist Church to the Interstate Baptist Association.

As to the clause on only needing the signatures of two trustees, the clause that led to losing the church, Stone made it up on the fly. Her rough draft features ten edits in a single, fairly straight-forward sentence. No, none of this was lawyered-up.

Yet by keeping the transfer unrecorded with Multnomah County and otherwise secret from the congregation for at least 22 months, facts on the ground prevailed over the bylaws’ legal niceties. With no bank issuing a mortgage and no title company overseeing the transaction—plus a non-combative pastor leading Mt. Zion when push finally came to shove—the property was effectively transferred for no consideration. It’s a deed, needless to say, that does not appear in the church files.

The deed filed, eventually, with the county, it’s a sketchy document notarized in incompetent fashion. Yet on this flimsy basis, the IBA netted $200,000 when it sold the property five years later. Hundreds of thousands of dollars in repairs and improvements have since been sunk into it by its current owner and that owner’s tenant. (See Friday’s article, “A Success Story with Stealth Issues of its Own.”)

Blank Lines and a Near Two-Year Delay

Mt. Zion is located on the east side of the Willamette River in—in recent years—a gentrified neighborhood a short hop to downtown Portland. Stone, the outsider from a much less gritty area far across the river, claimed even the most minor of Mt. Zion’s affairs as her purview. Though the church had a safe, she angered Rev. Manuel by taking its checkbook home at night.

Former Mt. Zion member Dee Baker said, “Sharon was very tight, she kept things close. She was a control freak…. It was hard to approach her. She didn’t smile at all.”

Former trustee Robert Hill agreed. “Sharon had a very tight rein on the church books and property…. She was like the president of the church.”

And yet, on the crucial matter of deeding the church away within weeks of Manuel’s death, Stone said, “My last involvement in the sale was calling Lila”–IBA secretary, Lila O’Banion.

She said this standing in her driveway minutes after her husband, Doug, had threatened to call the cops on Will Warren, Roy Granville and a reporter. A tall, charismatic, ex-college basketball player and son to a prominent Portland preacher, Warren is Mt. Zion’s usurped, last sitting pastor, a passionate man whose bitterness is steeped in the struggle to lift a floundering church.

Manuel’s most stalwart supporter, Granville was a fixture as trustee since being listed as such on Mt. Zion’s articles of incorporation in November 1986.

Tensions rising in Stone’s driveway, both African-American men stated their claim to the church files lodged in her garage yawning open before them far from their home turf. She and Doug barred the way, asserting they couldn’t possibly find the two boxes in their exceedingly neat garage. And besides, it (somehow) wasn’t convenient for them at that time, they said. After an on-the-record interview with both Stones, the reporter asking questions and visibly taking notes, the two churchmen left empty-handed.

For her part, IBA secretary O’Banion said the conveyance was done “legally” and “properly.” She added, “It was 100-percent above-board.” She had little reaction to being shown the deed beyond saying, “one trustee is enough.” A remarkable statement from someone with her decades in church administration.

Asked about Stone’s role in transferring the church property, O’Banion said, “I can’t say, I don’t know.” She said this before the interview with Stone, so she wasn’t confronted with Stone’s tale of dumping it in O’Banion’s lap. However speciously, this reporter has twice been threatened with arrest should I attempt to interview O’Banion again. No matter. But at least a dozen calls attempting to follow up with her have not been returned.

(It’s worth noting that Doug Stone has dropped by the IBA office on occasion to chat, said O’Banion. She also said she occasionally saw Sharon Stone at an SBC church, the Antioch Christian Fellowship on SW 35 Avenue whose building houses the IBA. It’s far closer to Stone’s southwest Portland home than is Mt. Zion across the Willamette River in northeast Portland. Doug Stone said that he and Sharon encounter O’Banion once in a while to say hello.)

The clause that led to losing the church was made up on the fly. There’s also the issue of granting power to two white women in a historically black church.

Along with the irregularities mentioned above, the office of state AG Rosenblum said the transfer of a property now worth well over half-a-million dollars was in violation of ORS 65.534(7). The law states that the AG has to receive written notice 20 days before a religious corporation, “[s]ells, leases, exchanges or otherwise disposes of all or substantially all of its property.” A second option is the AG granting a written waiver of the notice requirement. Mt. Zion neither provided notice nor received a waiver, according to the AG.

Additionally, the “Bargain & Sale Deed” itself raises questions. Dated 4/19/04, it was signed by Roy Granville and Percy Manuel’s 85-year-old widow, Bennie L. Manuel, the ‘trustee’ who was improperly elected at the special meeting two months before. Granville confirmed it as his signature; Manuel’s was confirmed by one of her daughters and by comparison to a notarized legal document she later signed.

Manuel’s rock, Roy Granville was the one who got up at 5:00 a.m. on freezing Sunday mornings to try to coax a balky furnace into life to get some semblance of heat into the cavernous church before the old ladies showed up. Then he’d wipe down the pews and clean the bathrooms. A successful insurance salesman, he reached often and deep into his own pocket for such trifles as keeping the lights on another month. A man key to the church’s survival, his love for it and its pastor are beyond question.

Having worked and sacrificed for it for 18 years, Granville’s reasons for signing the instrument tossing Mt. Zion away is discussed in Part 3: “Plundering the Corpse.”

The deed itself features odd lacunae. That is, the lines in the “notary’s acknowledgement,” where the notary writes signatories’ church titles indicating their authority to sell the property, are left blank.

Saying the notary may be on the hook for damages, Bill Anderson, vice president of legislative affairs for the National Notary Association, said with the blank lines, the deed sounds so unprofessional, he’s surprised the county didn’t kick it back to the buyer to rectify. (Under state law, Multnomah County doesn’t police the validity of recorded deeds.)

Gary M. Berne, shareholder in the law firm Stoll Berne, said the blanks in the deed were a botched job, but not invalidating in and of themselves. But, Berne, added, “It’s bizarre for the buyer not to want to prove it’s a clean title. Not to want to show that they really have it.” He added, “With an entity like a church with a potentially divided board or membership, you would want to make sure you really have it.”

That assumes it’s a legal conveyance not being kept secret from the congregation.

Another question is who supplied the deed—the actual legal form—that Granville and Bennie Manuel signed. Granville said it wasn’t him. It’s possible, theoretically, that Mother Manuel, the elderly widow, did so, though she was a woman long accustomed to deferring to her strong-willed husband in church affairs. As to the third person known to be present, the notary, Phillip G. Faulk, it’s not a notary’s role.

What is known is that Stone and O’Banion, two crackerjack professional secretaries (Doug Stone said his wife types over 100 words a minute), discussed making the property transfer happen.

Asked about the lines in the deed he left blank, Faulk said, “Maybe I missed that, maybe I did something wrong.” As to whether Bennie Manuel had standing to sell the church, he said, “That’s a good question.” Noting that any possible mistake was long gone, he said, “That’s it. I’m done.” Then he hung up. He also cancelled a scheduled, in-person interview.

(Faulk did say he was a notary at Ainsworth Drug & Gifts for five years, including the year Mt. Zion was taken; the store now closed, his employment was confirmed by its former owner, Ken Hatch. It was located less than a dozen blocks down Ainsworth Street from Granville’s home. Asked about Granville, Faulk said, “Probably he was a customer, the name rings a bell.” Granville doesn’t recall Faulk.)

O’Banion agreed that the inadequate notary’s acknowledgement was “not good practice.” But, she concluded, “If the county took it and didn’t challenge it, then it’s OK.” However, it is not the county’s role to challenge deeds.

Perhaps the oddest thing about the deed is that it wasn’t actually recorded with Multnomah County until 2/16/06, just shy of 22 months after it was signed and notarized. Asked about the delay recording the deed, O’Banion said, “I thought that was taken care of.”

Saying he’d never heard of such a protracted delay, Berne, the attorney, said it’s awfully risky since with an unrecorded deed of sale, “if someone gets a judgment or a lien, then they could supersede the buyer.”

Former church member Dee Baker has worked for years in real estate. She said such a delay indicates the buyer is keeping the transaction under his hat. And indeed the property transfer was kept from the congregation. Percy and Bennie’s daughter, Dora J. Hill, a church member who later had authority to sign its checks, said she knew nothing of the conveyance to the IBA. This lack of contemporaneous disclosure was echoed by several church members, including Baker and Will Warren, Mt. Zion’s last pastor.

Subsequently appraised of the filing’s timing, Warren contends that the deed was filed only after the church was starting to think about pursuing a merger with a non-SBC church, the evangelical giant, Living Hope, which is now located in Vancouver, Washington. (More on this potential merger in Wednesday’s article.)

The Baptists Ate Their Own

Such irregularities are, in part, the product of the weak governing structure of a church so denuded of resources as to be ripe for the plucking. Even with a few white new members, Mt. Zion limped along, a dozen or so souls in attendance on any given Sunday in 2002 and 2003 (Rev. Manuel’s last years), many of them African-American women of a certain age. Warren said there were no elders or deacons because Manuel felt he didn’t have the talent in the congregation. God has to send the people, rueful clergy say.

Dr. J.K. Minton ran the IBA from 1994 to 1998. Speaking of Mt. Zion’s leadership gap, Minton said, “At that point, Percy was the church.”

According to attorney Brooks Foster, “This is a warning to have proper governing structures, and don’t let this happen to you if you want to keep the church in your community. It’s not enough to donate as a member, you have to help run it from a business standpoint and be on the lookout for people trying to seize your assets…. Everyone in that congregation lost out.”

One apparent irony is that the Southern Baptists did it to one of their own. For Mt. Zion Baptist Church was a full, dues-paying member of both the IBA and the larger umbrella group with which the IBA is affiliated, the Northwest Baptist Convention. The NWBC is a 460-church organization for Southern Baptist Convention churches throughout Oregon, Washington and parts of Idaho.

While the IBA is a bare-bones affair, with O’Banion sometimes holding down the fort, the NWBC and its legal and financial arm, the Northwest Baptist Foundation (NWBF), are substantial, professionally managed organizations. Currently, the NWBC has 30 employees—strategists and church planters and the like. And its de facto subsidiary, the NWBF, currently has nine employees.

Have proper governing structures if you want to keep the church in your community. It’s not enough to donate as a member, you have to help run it from a business standpoint and be on the lookout for people trying to seize your assets.

Following Manuel’s death at age 87 in January 2004, The Witness (the “Official Newsjournal [sic] of the NWBC”) ran a laudatory obituary quoting then NWBC Executive Director, Jeff Iorg. He praised Manuel as having “made a powerful contribution to better relationships between African-American and Anglo leaders in the Northwest Baptist Convention. … I am proud to have called him my friend.”

Another pastor was quoted as saying, “[H]e’s one of the greats in the Northwest who joined the black and white communities. He joined them and loved them both.”

Rev. Manuel was indeed a committed pastor of the Southern Baptist Convention, the largest Protestant denomination in the country. This though it was founded in a defense of slavery and has seen reason to apologize for its racist past. Warren said Manuel felt African-Americans should remain in the SBC to reform it from within.

An imposing man of 6’2” according to his driver’s license, Manuel was an ambitious Kingdom man, moving from a storefront church on Williams Avenue and founding Mt. Zion at age 70. Originally from Mississippi, he moved to Portland in 1945 with his childhood sweetheart, Bennie, and worked as a scheduler for Tektronix in Beaverton for 20 years before heeding the call.

His was a message not for the faint of heart. The church bulletin for Pastor Appreciation Sunday in November 2002 featured a rather stern photo of him and a comely one of Bennie, along with this: “Theme: Preaching an Uncompromising Gospel.” Another bulletin offered a quote from the famous evangelist, Billy Sunday: “If nine-tenths of you were as weak physically as you are spiritually, you couldn’t walk.”

Said Manuel’s friend, Donald T. Frazier Sr., senior pastor of Genesis Community Fellowship, “He was a very passionate, loving man, but a sound preacher. He preached to ten people like it was ten-thousand.” And preach at Mt. Zion he did, old-fashioned bible-preaching, for 17 years in the church he founded.

This five-part investigative report continues tomorrow with Part 2: “Troy Smith to the Rescue?”.

Church photos courtesy of Alamedahistory.org
Other photos provided by author

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Key People
(Listed alphabetically by last name; race indicated in parentheses as it is a prominent element of the story)

• Dee Baker (Af-Am): former Mt. Zion member
• Robin Butler (W): IBA Executive Director, September 2000 to September 2003
• Keith Evans (W): Lead Pastor, Greater Gresham Baptist Church; former President, Northwest Baptist Convention
• Phillip G. Faulk (race unknown): notary public
• Pastor Donald T. Frazier (Af-Am): Senior Pastor, Genesis Community Fellowship, friend to Percy Manuel, mentor to Will Warren
• Roy L. Granville Jr. (Af-Am): Mt. Zion founding trustee and stalwart supporter
• Robert Hill (Af-Am): former Mt. Zion trustee
• Roy J. Johnson (W): IBA Executive Director in the 1980s
• Theresa D. Lassise (W): an improperly elected Mt. Zion trustee
• Bennie L. Manuel (Af-Am): Percy’s widow and improperly elected Mt. Zion trustee
• Pastor Percy N. Manuel (Af-Am.): founder of Mt. Zion Baptist Church
• Dr. J. K. Minton (W): IBA Executive Director 1994 to 1998
• Lila O’Banion (W): IBA secretary
• Clint Overall (W): Northwest Baptist Foundation Legal Counsel
• Ellen F. Rosenblum (W): Oregon State Attorney General
• Bruce Sloan (W): IBA Executive Director, September 2004 to June 2009
• Troy L. Smith (W): SBC pastor, IBA official and head of S.A.F.E. alcohol and drug treatment ministry; Sharon Stone’s sometime employer
• Doug Stone (W): Sharon Stone’s husband, former Mt. Zion member
• Sharon Stone (W): holder of numerous posts, Mt. Zion; former employee of Troy L. Smith
• Will Warren (Af-Am): Mt. Zion’s last sitting pastor

Key Organizations

• Interstate Baptist Association: a 70-church, metro-Portland affiliate of the SBC
• Living Hope: Washington State-based mega-church
• Northwest Baptist Convention: a 460-church umbrella organization for SBC churches in Oregon, Washington and parts of Idaho
• Northwest Baptist Foundation: the NWBC’s legal and financial arm
• Southern Baptist Convention: largely white, America’s largest Protestant denomination

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