There has been little oversight of BFA from state and federal authorities. In Arizona, a new state law releases many BFA companies from filing annual financial reports with the Arizona Corporation Commission. With little oversight, BFA has been accountable only to its directors. And for years, directors permitted BFA to transform itself into a real-estate investing machine that loaned millions to insiders while charities scrambled for funds. However, the New Times investigation reveals that BFA used millions of dollars of investors' money to fund insider real-estate deals that provided only a trickle of support for hurting Southern Baptist charities.
State law prohibits directors from borrowing from non-profit corporations.
In a letter to New Times, BFA asserted that no laws were violated because Hoover did the deals with BFA's for-profit subsidiary companies. This assertion appears to be contradicted by BFA's own financial statement, which discloses the debt. Other Southern Baptist foundations interviewed for this article say they avoid investing in real estate because it is too risky. They claim they do not lend money to insiders for legal and ethical reasons. Many of Hunsinger's Arizona corporations are managed by BFA, share its Phoenix address and designate a BFA staff attorney as statutory agent.