First AME Church is at a crossroads

As the pastor of the oldest black church in Los Angeles, the Rev. John J. Hunter earned a generous salary, lived in a $2-million home and drove a Mercedes-Benz paid for by the church. His wife earned $147,000 a year running nonprofit organizations connected to the 19,000-member congregation.

But over the last few years, the hilltop church in the West Adams district has fallen into debt.

The First African Methodist Episcopal Church owes nearly $500,000 to creditors. Some vendors say they have not been paid in more than a year.

DOCUMENT: Read the lawsuit

The financial woes have sparked an ugly battle for control of the church and its nonprofit corporations.

A civil lawsuit filed by the church this week accuses the former pastor, his wife and a small “cabal” of church leaders of “holding dictatorial control over [the church] … for their own personal gain — both financially and for self-aggrandizement.”

The bishop who oversees AME churches in the western United States abruptly transferred Hunter to a church in San Francisco in late October. But that church took the rare step of rejecting Hunter. On the day he was supposed to deliver his first sermon, church members physically blocked him from taking the pulpit.

Now Hunter is fighting to regain his position as pastor at First African Methodist Episcopal. He continues to live in the posh Encino home that the church pays for while the new pastor, the Rev. J. Edgar Boyd, lives in a hotel and is not receiving a salary. Hunter’s wife, Denise, is also refusing to relinquish control of the church’s nonprofit organizations, according to the lawsuit.

Hunter has had a rocky tenure at the church. Since taking over First AME in 2004, Hunter has been sued for sexual harassment, a civil claim that was settled for an undisclosed amount. The Times reported in 2008 that an internal audit found he charged $122,000 in jewelry, family vacations and clothing to the church’s credit card. He later agreed to a nine-year repayment plan.

In interviews this week, Hunter defended his stewardship of the church and said he was “blindsided” by the lawsuit.

“My life, my ministry has been characterized by those attacking me,” Hunter said. “To be then characterized as some looter and somebody who’s been greedy … nothing can be further from the truth.”

Hunter denied that he took advantage of his position and said church officials approved his $239,000 annual salary and perks, which he said were not out of line for an experienced pastor in his position. He also said he’s not to blame for the church’s financial troubles.

“The church was struggling financially because we are in a recession,” he said. “That is the challenge of those that engage in ministry.”

But many at the church simply wanted him to go quietly, saying the congregation needed a fresh start.

“It just vexed my spirit that he preached this word from the pulpit and some of the things he preached contradicted his life,” said Dwayne Foster, a longtime member. “The church is struggling, and he was asking people to give and tithe more while he was sitting in a parsonage in Encino and putting personal stuff on his corporate credit card.”

Foster left the congregation for a year and a half in protest. He came back after the pastor was reassigned.

A 14-page civil lawsuit filed against the Hunters on Tuesday is filled with allegations of improprieties.

The lawsuit cited the sale of six parcels of church land worth $6.5 million, a transaction Hunter has publicly counted among his successes. The lawsuit alleges that “whereabouts of the sale proceeds remain a mystery.”

In addition to the church’s sizable debt, the lawsuit said recorded judgments against the church total an additional $200,000.

The troubles extend to the church’s nonprofit corporations, which were formed in the wake of the 1992 L.A. riots to provide loans and other support to help rebuild the community.

The lawsuit alleges that Denise Hunter orchestrated a “coup” to seize control of the nonprofits that she ran “as her own personal fiefdom.” Federal tax records show the nonprofits have assets worth several million dollars.

One day after Hunter was moved from the Los Angeles church, Denise Hunter filed documents with the California secretary of state’s office, appointing herself the corporations’ new “agent for service,” allowing her to act on behalf of the organizations, according to the state agency.

The lawsuit alleges that she removed all the corporations’ files from church offices and told 100 employees that she — not the new pastor — was the chief executive. Since then, she has denied the church access to the financial records, the lawsuit states.

“She recently admitted to Pastor Boyd that her coup is designed to sever any supervision, control and influence” of the church and its parent over the corporations, the lawsuit states.

As a result, the church has asked a court for an immediate injunction barring the Hunters from access to corporation facilities, records and funds. The church also asked for a court-appointed receiver to take control of the corporations.

Hunter defended his wife’s actions, saying she was simply completing long-planned changes.

“There was a vision to separate the corporations and church before I became pastor,” he said. “Nothing illegal or wrong is done here. Everything is proper.”

Rickey Ivie, an attorney for the nonprofit corporations and board, called the lawsuit “unprofessional, unnecessary and exceedingly premature” and said he expected them to be “completely vindicated of any claim of impropriety.”

The nonprofits were formed after the L.A. riots under the Rev. Cecil “Chip” L. Murray, whose fatherly presence and civic activism propelled him and the church to be influential forces for change. Under his 27-year leadership, the congregation grew from several hundred to 16,000.

Hunter took the helm in 2004 after Murray reached the church’s mandatory retirement age.

Hunter’s reign divided the church, according to some members. His supporters describe him as a charismatic preacher who helped those in need, and he successfully fended off several attempts to have him removed.

But in late October, Bishop T. Larry Kirkland unexpectedly transferred Hunter to a 650-member congregation in San Francisco.

“It’s like a death and it’s just so ungodly,” said an emotional Hunter, noting that he was not given the chance to address his

congregation a final time. “It’s contrary to the way that decent human beings conduct themselves and certainly contrary to all church law.”

He has taken a medical leave of absence while the church’s national board considers his petition for reinstatement.

Kirkland has not returned calls requesting comment on Hunter’s status or the lawsuit.

But at a Nov. 4 church service, the bishop stood before thousands of congregants who gathered to welcome Boyd to Los Angeles.

“This is our flagship church,” Kirkland said, “and we cannot afford to let it go down.”

angel.jennings@latimes.com