Liberal Reading of FCC Minority Rule Has Helped TBN’s Growth

The spectacular growth of Tustin-based Trinity Broadcasting Network has been aided in part by liberal interpretation of a federal policy designed to promote minority broadcast ownership, a review of federal documents shows.

For years, under Federal Communications Commission rules aimed at restraining the power of the major commercial networks, only seven full-power commercial television stations could be owned by a single individual, group or company. In 1984, under deregulation, the FCC raised the permissible number of commercial stations to 12, a mark that TBN reached in 1987.

Minority Clause

As TBN founder and president, Paul F. Crouch explained to his viewers in late October that he had been informed that under another FCC policy, the total could be raised to 14--if the additional two stations were “minority-owned” or controlled. The purpose of the provision, according to the FCC, was to provide the public with a “diversity of viewpoints” on the dial, as well as to encourage investment in minority organizations.

So, Crouch told his audience with a smile and characteristic candor, he promptly formed a new, nonprofit, tax-exempt company called National Minority TV, with himself--a Caucasian--as president and one of three voting directors. He said he made one of his secretaries at TBN, Jane Duff, who is black, a director and vice president of NMTV, and the Rev. Phillip David Espinoza of La Trinidad Church in San Fernando director and secretary-treasurer, which meets the FCC requirements for minority control.

NMTV subsequently applied to build a new station in the Midland-Odessa, Tex., area and to purchase an existing one in Portland, Ore., with the intention of carrying TBN’s full 24-hour slate of Christian programming.

(In addition to its 14 full-power commercial stations, TBN also owns three full-power educational stations and 75 low-power stations, the latter two not subject to ownership limitations. Together, these holdings make the network the largest holder of FCC licenses in the United States.)

Neither Is Paid

According to documents filed with the IRS, neither Duff, who earned $21,405 for her work at TBN in 1987, nor Espinoza receives any additional compensation for serving as directors of the corporation. Duff, who has a secretary of her own and the title of assistant to the president, is also listed as a director of two of TBN’s educational stations, KLUJ-TV, Harlingen, Tex., and KITU-TV, Beaumont, Tex., and she serves on the boards of TBN’s station in Ciskei, South Africa, and another on the Caribbean island of Nevis. Her husband, Ralph Duff, an Irvine medical consultant, is listed as assistant secretary and member of the board of Trinity Broadcasting of Florida Inc. The Duffs’ son, Reggie, is chief of security at TBN.

The NMTV application to buy the financially troubled Portland station makes no mention of Duff’s status as an employee of TBN, and there is no written record of further inquiries by the FCC.

According to Alan Glasser, a staff attorney with the FCC, the commission requested additional documentation from NMTV to make certain that each of the three listed directors had equal voting rights in the corporation.

“We had our doubts,” Glasser said. “It doesn’t take a quantum leap to see that Mr. Crouch had the money” required to buy, build and equip the stations.

But after examining the corporation’s papers, Glasser said, the commission decided that NMTV’s structure was “consistent with the policy” providing for minority ownership and control. He said he could not recall whether commission officials were aware that Duff was Crouch’s employee, but if they had been aware of it, it would have been considered “a minor thing.”

Declined Comment

Crouch, who said recently that it seems as though “the FCC is working for TBN most of the time these days,” declined to comment on minority participation in NMTV.

Duff did not return phone calls from The Times and there was no answer at the telephone number listed at the address that Espinoza filed with the FCC.

One FCC observer, Andrew Schwartzman of the Media Access Project, a Washington-based group, said the FCC is “not disposed to look too carefully” at compliance with the spirit of the minority ownership provision.

National Minority Television is not the only instance in which Crouch has approached members of minority groups in order to expand TBN’s influence.

All American TV Inc., a nonprofit corporation with offices in the City of Commerce, owns four full-power, commercial UHF stations, all carrying TBN’s Christian programming. These are in Gadsden-Birmingham, Ala., La Salle-Chicago, Ill., St. Joseph-Kansas City, Mo. and in Bartlesville-Tulsa, Okla.

According to documents filed by TBN with the IRS, TBN, in 1987, had an outstanding loan to AATV of $3.75 million, a “significant portion” of which is still owed, according to All American. During that same period, AATV reported an operating deficit of more than $800,000 and a net worth of minus $1.5 million.

Took Over AATV

In mid-1988, Terry Hickey, TBN’s vice president of finance and its highest-paid employee apart from Crouch, left TBN to become executive director of AATV. Hickey declined to return repeated phone calls and Paul Crouch did not respond to inquiries.

However, the president of All American TV, Sonny Arguinzoni, did respond to written questions from The Times regarding his and All American’s relationship to Crouch and TBN. AATV was founded, Arguinzoni said, by himself and Nicky Cruz, author of “The Cross and the Switchblade,” who now serves as vice president and a director of the company. According to documents filed with the IRS by All American TV, neither Arguinzoni nor Cruz receives any pay for their work as officers and directors of the company.

Arguinzoni, a 49-year-old former New York gang member and heroin addict, has for nearly 30 years ministered to troubled Latino young people. Of Puerto Rican background, Arguinzoni escaped his drug addiction and troubled youth with the help of Cruz and urban evangelist David Wilkerson, a story recounted in Arguinzoni’s autobiography, “Once a Junkie.”

Arguinzoni came to California to attend the Latin American Bible Institute in La Puente, which is operated by the Assemblies of God--the denomination to which Crouch belongs--and went on to establish a church and street ministry called “Victory Outreach,” now located in La Puente.

Free Use of Studios

For more than 7 years, Arguinzoni has hosted a weekly, half-hour talk show on TBN--a show produced and paid for by the network--called “Treasures Out of Darkness.” In addition to the loan to AATV and the program-affiliation agreement with TBN, Arguinzoni said, TBN provides AATV with the free use of its Tustin studios for local production.

According to a source familiar with the terms of the agreement between TBN and All American, who asked that his name not be used, Arguinzoni is committed to running TBN’s complete menu of programming for at least the next 5 years.

Research assistance for this article was provided by Lori Silver in Washington.