Decade-long litigation between groups founded by Rev. Sun-Myung Moon nears its possible conclusion in D.C. Court of Appeals.
NATHANIEL EISEN
Washington City Paper
SEPTEMBER 7 2021
The property at 16th Street and Columbia Road NW in Adams Morgan affiliated with the Family Federation for World Peace and Unificationism International
The property at 16th Street and Columbia Road NW in Adams Morgan affiliated with the American arm of the Unification Church
If the Sunni-Shia schism or Martin Luther’s revolt against Catholicism had taken place in an American courtroom, they might have resembled the scene at the D.C. Court of Appeals (or rather, on its split-screen simulcast) on June 17. There, lawyers representing two of the main factions of the post-Reverend Sun Myung Moon Unification Church debated whether Unificationism was a religious denomination or a nondenominational movement and which exact peace festivals (there were many) Reverend Moon supported while he was alive. They became particularly entangled with the meta-issue of how to characterize their fight, with the defendants claiming it was a dispute over religious doctrine and leadership and therefore off limits to the court under the First Amendment, and the plaintiffs claiming it was a case about misappropriation of church property and violations of nonprofit law.
Americans under the age of 40 are far less likely to have heard of the Unification Church than their parents. Readers may also not know the Washington Times newspaper and the seemingly permanently-under-construction gray stone building at the corner of 16th Street and Columbia Road NW in Adams Morgan are both owned by the American arm of the Church. They also might be surprised by the millions of dollars the Church-affiliated nonprofit at the center of this litigation spent subsidizing the seemingly incongruous corps of the Kirov Academy of Ballet in Brookland and the Contras in Nicaragua. They might not have even heard of a mass wedding. But we get ahead of ourselves.
The oral arguments on June 17 were for an appeal of a D.C. Superior Court ruling from March 2019. That court found partially in favor of the plaintiffs, led by Family Federation for World Peace and Unification International. FFWPUI claims to lead the global religious movement of Unificationism, and is helmed at present by the widow of Reverend Moon, Hak Ja Han. It sued Reverend Moon’s eldest son, Preston Moon, his handpicked directors of the board of the nonprofit corporation Unification Church International, and UCI itself, in 2011 over a series of decisions that culminated in the UCI board donating assets, whose value was conservatively estimated at roughly half a billion dollars, to an unaffiliated Swiss foundation. Agreeing with the plaintiffs’ core arguments, the Superior Court ordered the offending directors to be replaced and the value of the assets returned to the nonprofit. The case—one of just several legal skirmishes among the factions—has been closely followed by members of the Church, estimated to number three million worldwide. They now await the ruling from the Court of Appeals.
That court’s decision could either end the proceedings (assuming an appeal to the U.S. Supreme Court is not pursued and granted) or return the case to the lower court, likely for a jury trial. Regardless of the outcome, the case has already illuminated how Washington has continued to be a locus of business, religious, and ideological activities for the Unification movement. It has also illustrated the tensions between a charismatic religious movement (one led by a single individual whose followers view them as imbued with superhuman wisdom, spiritual, or other powers) and the secular rules by which American church-owned corporations operate.
The Unification Church
Reverend Moon founded the Unification Church in the Republic of Korea in the 1950s. The religious movement is dedicated to the unification of Christianity and eventually all religions under its banner, and its liturgy and practices contain a mix of Christian and Korean shamanistic elements. Moon, who proclaimed himself a messianic figure, eventually followed some of his early disciples to the United States in 1972. He and his wife Hak Ja Han, viewed by believers as the “True Parents of Humanity,” settled in New York’s Hudson Valley and raised a family while also founding church branches in numerous other countries.
Initially known for the mass weddings of thousands it conducted among believers, the church was considered a cult by many in the U.S. in the 1960s and 1970s. This was especially true among the parents who hired so-called deprogrammers to bring back their young adult children who had become devotees. The U.S. government was also suspicious—in the late 1970s, Congress investigated Moon and his top deputies for connections to a Korean Central Intelligence Agency campaign to bribe members of Congress and otherwise sway public policy. In 1982, Moon was convicted of tax fraud and served 13 months in prison.
In 1977, Moon established Unification Church International, a nonprofit corporation incorporated in D.C., to hold church assets, and in 1982, he founded the Washington Times. The reliably conservative and bombastic paper helped Moon gain acceptance and influence upon his release from prison, especially, though not exclusively, in Republican political circles. At a certain point, UCI took ownership of the Times’ parent company and, according to the briefs in this case, subsidized the Times with somewhere between $1 billion and $2 billion between 1982 and 2006.
Simmering battles between Hak Ja Han, and three of his children, Hyun-Jin (Preston), In-Jin (Tatiana), and Hyung-Jin (Sean) Moon for control of the religious movement, its money, and institutions, have erupted since his death in 2012. These were presaged by actions Reverend Moon took in his final decades.
In 1994, Reverend Moon declared that the Unification Church had achieved its providential purposes and declared an “end of the church” era. Under this new doctrine, Reverend and Mrs. Moon opened their mass wedding ceremonies to non-Unificationists and redirected some resources away from spreading Unificationism and toward initiatives ostensibly promoting families, peace, and interreligious dialogue. In 1998, Moon named Preston, his second-eldest living son, vice president of FFWPUI, which had been recently created to direct the movement globally under the new doctrine. During the inauguration ceremony, Reverend Moon named Preston the “fourth Adam,” indicating, some church scholars and officials and Preston himself say, that Preston would be Reverend Moon’s spiritual successor, although Hak Ja Han, who was publicly venerated with Reverend Moon during his life, has also claimed that title since his death.
In 2006, Preston added the titles of president of UCI and chair of its board of directors, and his hold on key institutions seemed near complete. However, after Preston sent a letter critical of church direction to his parents in 2008, they replaced him with his younger brother Sean, then pastor of the powerful Unification Church in Seoul, as vice president of FFWPUI and in several other institutional roles. The previously subterranean schism erupted.
The circumstances and significance of the declaration of the “end of church era,” of Preston’s removal from various positions, and Sean’s ascendancy—and even more so the ultimate question of the direction and spiritual leadership of the Church today—are all disputed. (Sean and Hak Ja Han are, if anything, more estranged than she and Preston are. In 2019, Sean filed a lawsuit in federal court in New York seeking to be named rightful leader of the Church, which was dismissed. He and his U.S. congregation, the Sanctuary Church in Pennsylvania, have gained notoriety for his apocalyptic sermons, devotion to assault weapons, and his attempt to supplant Hak Ja Han via a posthumous arranged marriage for his father. Meanwhile, Tatiana, with the support of Sean, staged her own board takeover of the American arm of the Church in 2008 before resigning several years later, at least in part due to an extramarital affair.)
The Lawsuit
One prize all factions would like to claim is the tax-paying nonprofit Unification Church International, which now goes exclusively by the acronym UCI. When Reverend Moon formed UCI, its articles of incorporation charged it with supporting activities of Unification Churches around the world as well as educational and other activities in keeping with the principles of the Unification Church. UCI was the holding company for many for-profit enterprises, such as a real estate company called US Property Development Corporation and a lucrative fishing and seafood empire known as True World Foods, as well as net money losers such as the Times. For years it disbursed funds both from these enterprises and from donations from Unification Church entities, especially in Japan. (Multiple Japanese widows filed lawsuits claiming they were pressured to give money to the Church to ensure their deceased husbands’ souls would be saved.)
FFWPUI, now effectively under the leadership of Hak Ja Han, and the Church arm in Japan that provided the majority of donated funds to UCI have sued Preston Moon and other directors of UCI, as well as the corporation itself. They accuse them of unlawfully diverting half of UCI’s assets from their intended purposes, in breach of their “fiduciary duties” as directors of a nonprofit.
In the years following Preston’s election as UCI board chair in 2006, the Board elected other directors loyal to him and what he claims is his non-hierarchical, non-sectarian vision of the Unification Church. These board members changed the name of the nonprofit to simply UCI. They amended its articles of incorporation, including by removing all references to the Unification Church, God, and the Divine Principle (the movement’s first core text containing the compiled teachings of Reverend Moon). They replaced these terms with a reference to the principles and theology of the “Unification Movement,” which they say is synonymous with “Unification Church,” but better reflects Preston’s (and, they claim, Reverend Moon’s) nonsectarian vision. (The difference between “movement” and “church” took up hours of deposition testimony).
The plaintiffs cite emails from UCI’s lawyers who worked on those changes suggesting they were intended to allow for the transactions that immediately followed. Most prominently, UCI transferred title to multiple real estate assets in South Korea then worth at least half a billion dollars, to a Swiss entity named Kingdom Investments Foundation. The defendants claim that the donations’ only purposes were to gain preferential tax treatment and secure financing for final construction of “Parc1,” a commercial development long sought by Reverend Moon, on one of the parcels of real estate in Seoul. (Construction on the dual-tower building—the second tallest in Seoul—finished in 2020. The shorter of the two towers sold for roughly $1.2 billion). They also claim that the donations would have been acceptable under the old articles of incorporation regardless, and that the ultimate profits from the assets will be used by the Swiss foundation to support the aims of the Unification Movement.
The core legal arguments in the appeal concern the First Amendment’s religion clauses. From the outset, the defendants have argued that the courts did not have jurisdiction to hear this litigation, because of a rule often known as the “ecclesiastical abstention doctrine.” The Supreme Court has said that the First Amendment requires secular courts to refrain from deciding what are essentially religious questions—issues such as religious doctrine or leadership. These courts may decide disputes over church property, but only where they can do so without doing the above, either by deferring to an established religious authority that has already determined the rightful owner of the property or by relying on “neutral principles of law.”
The plaintiffs claim this is not a dispute that implicates theology or church succession. It is, they say, purely about whether the UCI directors breached their “fiduciary duties” under nonprofit law, first by amending the articles of incorporation and then through the donations to KIF. The trial court ultimately agreed with them and granted summary judgment, which it is only supposed to do if there are no genuine disputes on any factual issues that would affect its application of the law.
The defendants claim that the trial court erred—and that in siding for the plaintiffs, it did exactly what the ecclesiastical abstention doctrine forbids. They point to the fact that the trial court relied heavily on its finding that the 2010 changes to the articles of incorporation were significant—a judgment they say is inextricably linked to interpretation of religious terms. They further contend that the trial court’s remedies—which included ordering the removal of Preston Moon and the other offending directors, restitution to UCI of the value of the assets transferred to KIF, and selection of new directors in consultation with FFWPUI—constitute impermissibly taking sides in an ongoing church schism.
As the briefs and oral arguments make clear, one complicating factor in the case is that prior to Preston’s takeover, no matter what UCI’s bylaws said, Reverend Moon effectively controlled appointments to the UCI board, including Preston’s in 2006, just as, no matter what UCI’s articles of incorporation at the time said about the corporation’s purposes, the practice seems to have been to fund those organizations Reverend Moon selected. It’s not immediately clear which way these facts cut. The plaintiffs cited evidence that Reverend Moon opposed some of the challenged donations by Preston and that the major donation to KIF was deliberately kept from him, demonstrating the break from past practice. But these practices also demonstrate the artificiality of the plaintiffs’ reliance on these secular corporate documents as the source of so-called neutral principles of law.
Those donations before 2006 should also be of interest both to church members and wider society. For example, the defendants have claimed that prior to Preston’s takeover, less than 5 percent of the donations made by UCI went to brick and mortar churches or Unification Church-affiliated entities. Instead, donations went to subsidizing the Washington Times, as well as other political and cultural activities favored by Reverend Moon, including the Kirov Ballet Academy, Bridgeport University in Connecticut, and the anti-communist organization CAUSA, which has been accused of funding right-wing paramilitaries, including the Contras, in Latin America.
It is not apparent how much, if any, money donated by American church members or raised by their selling trinkets in airports and door to door wound up in the coffers of UCI. At the very least, those donations and efforts—such as the $2500 per family solicited to build a multi-million dollar events center in Las Vegas—freed up UCI funds for acquiring real estate and to fund Reverend Moon’s chosen causes.
It seems that the most likely paths the Court of Appeals could take would be 1) to affirm the lower court’s grant of summary judgment for the plaintiffs, 2) overturn that order but direct the case to go to trial or 3) direct the lower court to grant summary judgment to the defendants on the basis of their ecclesiastical abstention arguments, leading to dismissal of the case.
The procedural history taken on its own suggests the latter option is unlikely. A three-judge panel of the Court of Appeals in 2015 overturned the lower court’s dismissal on ecclesiastical abstention grounds, arguing it was premature. Judge Stephen Glickman was one of the judges on that panel and also serves on the panel hearing the current appeal, perhaps indicating at least one judge unpersuaded by the abstention arguments. In 2018, the Court of Appeals upheld a grant of preliminary injunction that required UCI not to donate any more funds—again, over the defendant’s First Amendment arguments. However, with the more voluminous record now before it, the court may decide differently.
Michael Helfand, a professor at Pepperdine University’s Caruso School of Law who has studied the origins and development of the ecclesiastical abstention doctrine, thinks dismissal is likely, given the law as it stands today. When asked about a more extreme hypothetical raised in oral arguments of a nonprofit founded to fund Lutheran churches, whose articles were amended so that it would henceforward fund Catholic churches, Helfand didn’t think a court could find those changes significant enough to violate some principle of nonprofit law without itself violating the present ecclesiastical abstention doctrine. While it may seem common sense that “‘there are certain types of religious propositions we should be able to tell the difference between’” as he paraphrased, “Courts generally, at least since the 1960s, have not said things like that.”
Judge Glickman indicated some attraction to the second option of a full trial during oral arguments. Noting the numerous findings of the trial court judge as to a lack of care, diligence, etc. on the part of the directors (which might technically fall outside the scope of the duty of loyalty claim), as well as hints of self-dealing, Judge Glickman stated, in a colloquy with the defense attorney, “it might be the case that we would say summary judgment should not have been granted; that’s different from saying that the whole case has to end because we must abstain from treating of religious issues.”
Finally, if the district court upholds the lower court findings, it will likely be in large part because the Directors donated over half of UCI’s assets at once to a foundation over which they had no effective control. The judges at oral arguments were clearly wrestling with the question of why the donation to KIF would be outside the purposes of the 1980 articles, if subsidies to the Washington Times, the ballet company, and other non-religious causes were not. They seemed reluctant to endorse the idea that Reverend Moon’s approval or disapproval was enough to distinguish these donations, since nowhere do the 1980 articles make reference to seeking such approval and it’s unclear whether nonprofit directors could legally base their decisions on the whims of a single individual with no formal role in the organization. However, they also were troubled by the fact that the UCI directors had no real ability to predict, much less control, what KIF would do with the proceeds of selling the developed real estate assets. As stated by Judge Joshua Deahl during oral arguments: “They attached no strings to it at all to make sure it goes to its purpose, which has a bit of a stink to it, counsel.” (The defense argued that the donation agreement and Swiss Foundation’s own founding documents bound it to funding Unification Movement activities; the judges were skeptical of the enforceability of those documents).
Attempts to reach the Family Federation for World Peace and Unification International were unsuccessful. Defendants UCI and Preston Moon declined to comment through their lawyers.
American corporate law is dedicated to creating some daylight between the fictitious legal entities of corporations—i.e. organizations—and the so-called “natural persons” who run and staff them. What happens when those lines get blurred and the additional element of religion gets introduced? Something like the scene on June 17.
