A bodybuilder’s lawsuit against TV preacher Pat Robertson over a high-protein diet drink has opened a rare window on the inner workings of the televangelist’s business empire – and may expose tax abuses.
The legal action by Phillip Busch goes back to 2001. Robertson had been promoting an “age-defying” shake on his “700 Club” program that he claimed could help people lose weight. Busch, a Texas resident, contacted Robertson’s show after using the shake and losing 200 pounds. Busch then began bulking up as a weight lifter.
Robertson flew Busch to Virginia Beach where he appeared on the “700 Club” and filmed a TV spot promoting the drink. Busch had hoped to become a full-time spokesman for the shake but was later shocked to learn that Robertson had sold the recipe to General Nutrition Corporation (GNC), which owns a chain of health-food stores.
Busch is suing Robertson, claiming that his image was used for commercial purposes without compensation. As the case winds its way through the courts, the legal discovery process has brought to light numerous e-mails and other documents that shed light on how Robertson runs his various enterprises.
Although best known as a television preacher, Robertson has long had an interest in other ventures. He once ran a multi-level marketing company and owned a firm that sold skin-care products. Robertson has always claimed that he keeps his for-profit businesses separate from his non-profit ministry, but some critics are not so sure.
A recent article in the Virginian-Pilot asserts that the development of the shake was closely intertwined with Robertson’s television show. A letter promoting the shake to nutrition store managers referred to the “built-in demand” the show had created for the shake, and several CBN executives were involved in its development and marketing. CBN also produced a commercial for the product.
These actions may amount to free advertising. John Colombo, an expert on tax-exempt organizations at the University of Illinois College of Law, told the newspaper the case raises important questions.
“It seems to me that arguably CBN was inappropriately conferring benefits on Pat Robertson as a result of giving him free advertising and free exposure for his product,” Colombo said. “If they’re giving away stuff to Pat Robertson that they shouldn’t be giving away, then that’s a problem.”
Busch asserts that Robertson and CBN conspired to promote the shake using CBN’s tax-free status. Later, they cashed in on the product. If Robertson used the resources of a non-profit to generate huge profits for himself, he may have violated federal tax law.
Robertson’s attorneys insist that is not the case. During a legal deposition, Robertson asserted that the shake formula he promoted on the air was an entirely different product than what was produced for GNC.
Robertson said the GNC formula, sold as ready-to-mix powder, was “a shake that was put together, high protein, available in commercial stores, that we did not have anything to do with.”
But the Virginian-Pilot reported that “e-mails and other correspondence that have become part of the court record suggest an intertwining of the two dating to March 2004.” In one undated letter to GNC store managers, Robertson pointed out that 750,000 “700 Club” viewers had requested information about the shake.
In April of 2005, CBN produced a TV spot about the drink. The commercial implied that the recipe Robertson had posted online and the GNC product were the same. The copy read, “Thousands of people are already losing weight with Pat’s Diet Shake, and now all the wholesome ingredients that went into Pat’s original recipe have been concentrated into one easy-to-make shake.”
Busch’s suit is ongoing. GNC has since dropped Robertson’s shake mix, but it has been picked up by another health-food chain, the Vitamin Shoppe.
In a related matter, Busch filed a complaint with the Norfolk Police Department claiming that Robertson threatened him during a deposition at a federal courthouse in February. A federal magistrate looked into the matter and concluded that what Robertson said was “inappropriate” but did not rise to the level of a threat.
It’s still not clear exactly what Robertson said to Busch. Busch claims Robertson threatened to kill him and his family. But U.S. Magistrate Judge James Bradberry concluded Robertson did not go that far.
Robertson apparently warned Busch that God would take his strength away. He argues he was not threatening Busch but merely pointing out that God might punish him for his actions.