Former-Exclusive Brethren members detail the church's money-go-round

A cult-like church that exerts almost complete control over its members has metastasised into a multinational corporation with massive buying power.

The Exclusive Brethren - now rebranded the Plymouth Brethren Christian Church - says it does not own, operate or hold any commercial business interests itself, but members run their own "family businesses".

However, many leading New Zealand companies are lining up to join the list of preferred suppliers to what former members describe as a captive market.

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Every Monday, employees at Brethren companies nationwide religiously watch the latest Silver Bulletin, a short online video interspersing business advice with the latest exclusive offers to members.

Senior executives from a range of leading brands, including Air New Zealand, Office Max and Freightways, make cameo appearances thanking the flock for their business and offering details on new deals.

Brethren and their companies are encouraged to buy their supplies, groceries, petrol, internet, insurance - the whole range of goods and services - from companies that give cash back to the church through a range of kickback arrangements.

A broker with the insurance company, Crombie Lockwood, said he was instructed to use a special code with Brethren clients, discounting his commission by 20 percent, which went to the listed "sub-agency", UBT (Universal Business Team) a church-controlled company.

"The thing I find disturbing is these are businesses, so their insurance premiums are tax deductible and on top of that they also claim back the GST - so I view it almost like a legalised form of money laundering.

"It's a round circle scheme - they are using their businesses to pay 'donations' back to their own church and then they are claiming that back as a tax deductible expense."

The broker, whom RNZ has agreed not to name, said while they were not doing anything illegal, he was uncomfortable with the way in which the church treated former members in particular.

"When I read about some of the conduct the Brethren get up to, it's more like a cult-like organisation than a mainstream religion.

"My own personal view is that as a large multinational corporate that prides itself on being one of the top 100 most ethical companies in the world, it [Crombie Lockwood] shouldn't be participating in a kickback scheme like this."

Bulk purchasing power is smart business - but according to former members, Brethren were not really "free to choose". They were used as cash-cows by their leaders.

Church and business and family life are inextricably intertwined in a way that means all parts of their lives are controlled.

Here is how the money-go-round works: large New Zealand retail businesses get guaranteed customers (the Brethren who are directed to purchase their goods and services) in return for rebates, which go to UBT.

This Sydney-based "global consultancy group" claims to provide "services and advice" to about 3000 Brethren-owned businesses in 19 countries, with a combined revenue of more than $12.6 billion NZD. It also produces The Silver Bulletin.

Profits from UBT are funnelled as donations into the National Assistance Fund (NAF), which then sends the receipts back to UBT to cut the tax.

Yesterday RNZ revealed the unusual structure of this charity, which is wholly controlled by the Plymouth Brethren Christian Church but with no formal constitutional link to it.

NAF then dishes out grants to PBCC trusts, which are not registered charities and therefore not subject to any scrutiny.

In addition to the kickbacks, Brethren-owned businesses also move a percentage of their profits into trusts or directly to the National Assistance Fund.

Business owners are sent annual questionnaires about their turnover, gross profit and net profit and NAF representatives then suggest how much they should donate from their business.

Wellington man Peter Hart, who was excommunicated two years ago, said he was happy to give to the charity and often gave more than was "suggested".

However, he baulked at paying hundreds of dollars a month to join UBT for "business advice" he did not have time to read or services he did not need.

"It was known in my local church that I wasn't subscribing to it and I was treated with disdain, like a black sheep. And in other parts of the country, I was known for being against UBT, so that was where I felt the pressure."

However, staying out of UBT made it easier for him to eventually leave the church, he agreed.

"Personally I don't agree with the church having a business arm that everyone has to join.

"That's not the role the church should play."

Charities researcher Michael Gousmett said it appeared Brethren businesses were being used to generate donations, which also reduced the amount of tax paid by those companies.

"So let's say their profit was $200,000 and they decided to donate $50,000. Then they can claim that as a deduction in their accounts and reduce their tax liability at the end of the day. But that comes at a cost to the taxpayer because it's obviously a cost to the revenue."

According to the companies register, the seven directors and shareholders of the Fund's corporate trustee are current directors or shareholders of 79 other companies.

Private individuals or businesses are free to spend their money how they like - but Dr Gousmett argues trading by charities should be taxed.

"And in this case, the companies involved appear to be under the control of the church."

Brethren families as well as businesses are also encouraged to buy goods and services from companies which give cash back to UBT and the National Assistance Fund, including petrol and groceries.

Brethren have built 36 Campus & Co supermarkets in New Zealand for their members' exclusive use, staffed partly by "volunteers".

All church members work in Brethren-owned businesses.

If they leave the church, they lose their livelihoods - many former Brethren claim they were forced to sign over their own companies to relatives.

Another ex-member, whom RNZ has agreed not to name, said he managed to hold onto his position in the family business, despite huge pressure from church leaders - but said many others were not so fortunate.

The companies themselves were also interconnected through supply chains and personal relationships, controlled by the church's supreme leader Bruce Hales, who took a close personal interest in their performance, he said.

"It's like the inside of a golf ball in there, everything is all tied together, with a very centralised structure and power dynamic."

He likened the Brethren business ecosystem to a giant game of Jenga.

"When you pull out one of those Jenga blocks it can make the whole pile quite unstable. So that's a very, very unsatisfactory situation for Bruce Hales."

As well as forcing Brethren businesses to purchase locked-down computers, phones and IT services, UBT also charged "consultancy fees", which could amount to hundreds of thousands of dollars, and even started taking controlling stakes in profitable companies through a venture called Vision Accelerator.

Church spokesperson Doug Watt said the decision to purchase or work with UBT or the Vision Foundation was "entirely an individual business decision that occurs in a competitive marketplace".

Users of UBT's internet security product ("often a Mum or Dad") were able to customise its filters, he said.

"Group buying is a common business practice, using the power of group buying to deliver improved pricing or other benefits (such as rebates). Many of UBT's vendors are leading global brands which provide a wide range of products and services, from travel, corporate fuel cards to insurances."

Wellington man Rob McLean, who was excommunicated from the church over a decade ago and forced to relinquish his business, said for many older Brethren, this was history repeating itself.

Bruce Hales' father John, and his brother ran a "commercial system" between 1960 and 1965, which gave them control of Brethren businesses.

"Even housewives had to fill out diaries accounting for what they had done every hour and spent," McLean said.

However, then global leader (Jim Taylor) condemned "commerce in the assembly" and excommunicated the Hales brothers and those involved had to "publicly repent".

John Hales was eventually accepted back into the church and became its global leader - but the commercial system was not revived until after his death when his son, Bruce Hales, took over.

"We had to go to business meetings, paid thousands of dollars to go to business meetings all round New Zealand. And all the old people in the Exclusive Brethren now, they're all depressed, because they know it's all wrong. They are using church connections to run their business and control people."

Rob McLean said he believed making money should not be the primary goal of an organisation calling itself a church.