Loans to the Leaders? Here are the Facts

BCC believes that the Norwegian TV documentary NRK Brennpunkt could not have avoided seeing that the state-funded TV channel was used in the defense strategy of a person charged with fraud .

NRK has based its ​​work on the documentary on a claim that also was central to this person’s defence strategy.

Anyone could borrow for anything at all

“According to Jonathan van der Linden, money from BCC Financial was lent to almost anyone and for anything at all. This included companies you had ownership interests in. What is your comment on this?”   (Excerpt of an e-mail from NRK Brennpunkt to Bernt Aksel Larsen).

The allegation above demonstrates a very troubling relationship between NRK Brennpunkt and their sources. Harald Eraker and NRK Brennpunkt know very well that in connection with his fraud, Jonathan van der Linden has claimed he did nothing more than what the leaders of BCC themselves did, namely to lend money to themselves. This has been part of his defense strategy, which also emerged in the civil case against him in the Netherlands.

NRK Brennpunkt knew very well that this argument was crucial to van der Linden, and that it was very much in his own interests to get NRK to publish it publicly as a fact. Despite the ethical warning lights that must have been flashing brightly, Harald Eraker and NRK Brennpunkt still asked Jonathan van der Linden and the circle around him to explain situations regarding precisely these topics, over and over again.

“Would you or any of your people in you network have any possibility to find an example of this? As we understand it, many local menigheter on paper have gotten back their money, but not in reality (put down on record as loans to BCC, but in reality rotten loans that they never will get back. This would be very important as a counter to Berit H. Nilsen claim some years ago that all local menigheter had gotten back all the money – with interest – that they had transferred to BCC Financial”

(Screenshot of an e-mail from Harald Eraker to Ben van Wijhe, June 3, 2020, our highlight.)

In other words, Harald Eraker asked Psy-Groups client for help from his network to counter claims by BCCs Chairwoman of the Board, Berit Hustad Nilsen. BCC believes that NRK Brennpunkt could not have avoided seeing that the channel has in reality been included as part of the defense strategy in Dutch legal proceedings. When NRK nevertheless chooses to present such questions to BCC, Larsen and Smith about loans in BCC Financial, their perception is that NRK in reality is acting on the side of the accused in the ongoing legal proceedings.

Jumble of misunderstandings and misleading information

When NRK, after almost a year of preparations, began sending its questions to BCC, Larsen and Smith in the fall of 2020, these displayed a jumble of misunderstandings, misleading information and incorrect allegations. When the allegations were countered with facts in the form of auditor-approved accounts and other documentation, and thus proven to be lies, NRK dropped many of them.

Strangely enough, however, it does not seem to have led to any self-criticism regarding their dealings with the sources. New and incorrect allegations continued to emerge, and documentation in BCC’s possession shows that the same sources were also the source of these allegations. NRK Brennpunkt’s working methods seem to follow the American saying: Throw enough mud at the wall, some of it will stick. It is possible that this is an accepted method of procedure in Norwegian investigative journalism. For BCC, on the other hand, NRK Brennpunkt’s procedures appear to be ethically very suspect.

BCC has contributed to Økokrim on the topic

Back to the headline, about loans to leaders via BCC Financial, and the facts surrounding this. In recent years, BCC has needed to account for this several times, including in connection with The National Authority for Investigation and Prosecution of Economic Crime (Økokrim) accusing former board member Bernt Aksel Larsen of financial infidelity against BCC. The case against Larsen was closed according to a closure code that involves the strongest possible exoneration, but before the closure, several people from BCC helped to obtain documentation for Økokrim about loans from BCC Financial. Økokrim also conducted several witness interviews where a lot of time was spent on this topic, who had loans, and what the rules were.

BCC itself has not been involved in the operation of BCC Financial but has in recent years obtained a lot of documentation in various contexts, and therefore knows the business well today. We have previously written about the background for the establishment of BCC Financial as well as more general information, which we will not reiterate here.

In summarizing the activities in BCC Financial, it is important to be aware that this business had several different phases because of the changing needs of the local churches over time. NRK Brennpunkt’s sources disregard this, which is evident by NRKs ​​questions and allegations.

A question is asked pertaining to a certain situation in a particular year, but NRK bases the question on the situation as it was in a completely different year. This is another sign that may indicate that NRK Brennpunkt has been led astray, because if the journalists really were in possession of the original correspondence about BCC Financial, these circumstances would be impossible to overlook.

BCC Financial had to have income to be able to provide good interest rates

When BCC Financial started its operations, there were quite a few local churches that lent it money. BCC Financial used internationally renowned legal advisers to establish the organization, where the main focus was to take care of the needs of local churches. BCC Financial offered a good interest rate on the investments from the local churches, which at that time was extremely attractive to many of them.

“BCC Financial offered a good interest rate on the
investments from the local churches, which at that time
was extremely attractive to many of them.”

In order for BCC Financial to be able to give the local churches a good interest rate on their investments, they also had to lend out funds at significantly higher interest rates to ensure the necessary income. This was done through lending to companies. For the most part, these were companies that engaged extensively in social entrepreneurship in developing countries, in places where BCC conducted missionary work. In practice, these companies supported the missionary activities, and in a good number of cases it would in reality be impossible for BCC to have activities there at all without these companies. FinnTack was such a company, which at the time had a loan in BCC Financial, and which at that time also had been deeply involved in humanitarian work in many countries.

Loans to individuals

In the period 2010-2012, there was also a lot of fundraising activity in many local churches. With this in mind, the local church in Oslo and Follo made an agreement that members who wished to contribute could borrow an amount from BCC Financial. The loan program was offered to the approximately 800-1000 adult members, and many of them made use of this. In most cases, the loans amounted to NOK 50,000-150,000. As many know, Kåre J. Smiths family lived in Follo at this time, and his adult children were also among the members who took advantage of the plan. It seems like NRK Brennpunkt’s sources were eager to tell about loans to Smiths children, without saying that this also applied to well over a hundred other members.

We see the same phenomenon when it comes to another category of loans. As mentioned, BCC Financial also provided other loans, at higher interest rates. For example, agreements were entered into with companies such as FinnTack, where employees who wanted to buy shares in the company could borrow money for this from BCC Financial. Some of Smiths family also took advantage of this offer, as did dozens of other employees.

NRK Brennpunkt asked Kåre J. Smith why his family were given loans from BCC Financial. When the reality was that loans were given to large groups of people, and Smiths children and children-in-law happened to be part of the group, it is BCC’s opinion that it is unreasonable for NRK to pose these questions as if Smiths family received special treatment. This begs the question whether NRK Brennpunkt again left it to their sources in van der Lindens circle to define the allegations, without making sure they understood the complexity of the case themselves.

Another group of BCC members who borrowed money from BCC Financial were young missionaries who spent long periods of time in developing countries. Some of these lived and worked for many years under conditions that put them in a demanding financial situation, and which also in practice excluded them from the possibility of, for example, entering into lease agreements at Brunstad. Loans were therefore also provided to such persons in a number of cases.

Introduction of covenants

After a period of operation, BCC Financial asked its legal advisers to conduct a thorough review of the entire business with a view to ensuring good compliance with regulations and standards in various countries. The review was carried out by an international consultancy firm, which was also the one originally involved in providing advice in the formation of the company. The consultants recommended the voluntary introduction of so-called covenants, agreements between the borrower and the lender about which rules shall apply to the loans. These rules specified that loans should not be granted for purposes that were not directly non-profit purposes. The advisers recommendations and proposals for covenants were reviewed with the Assembly of Representatives for BCC in the summer of 2012, and covenants entered into force in early 2013.

In accordance with the consultants recommendations, a so-called grace period was also granted until the end of 2017 for existing loans that could not be defined within the new definition of purpose. The journalists at NRK Brennpunkt claim that there was a breach of covenants, but in some cases the allegations apply to the period before covenants entered into force, and in other cases to loans that were covered by the so-called grace period”.

Loans to the “leaders”

NRK Brennpunkt seems to think that Kåre J. Smith and Bernt Aksel Larsen have borrowed money from BCC Financial and thereby made themselves rich. Such a claim is in itself quite unreasonable when one considers the large sums these two have contributed both in direct donations to BCC and in other financial contributions to good causes. But technically it is true that companies owned by Bernt Aksel Larsen and Kåre J. Smith have borrowed money from BCC Financial. On the other hand, this has in no way enriched them. We can take a look at the loans in question.

“On the other hand, this has
in no way enriched them.”

Nordli Gård and a building for use by BCC

For many years, Bernt Aksel Larsens spouse, Heidi Larsen, owned “Nordli Gård,” the property the family lived on. This farm is centrally located in relation to many of the people who were involved in BCCs work and administration. BCC therefore approached Larsen and asked if it was possible to construct a new building that could be rented by BCC, with a view to accommodation for visitors, among other things. The Larsens agreed to this but made it clear that BCC then had to arrange a construction loan. During the construction period, a number of payments were made from BCC Financial during construction of this building. Of course, the loans were later paid in full with interest.

NRK Brennpunkt has claimed that the Larsens enriched themselves at Nordli Gård, both by means of these loans and through work by volunteers. Again, we see that the journalists clearly rely on e-mails and misleading information. Had NRK Brennpunkt studied the accounts, they would have easily seen that the Larsens, after a 15-year ownership period, actually sold the property at a loss.

Project in India, on behalf of BCC

During the same period as the construction at Nordli Gård, a major construction project was also underway in India. In this country, it is a very time-consuming process for a Christian church to obtain property rights. Larsen therefore, together with several other people, made his name available as the owner of a company where the property in India was bought and developed. BCC Financial lent out money in connection with this project. Since Larsen was formally listed as an owner, you could possibly technically say that the money went to his company, but this is still very misleading.

Larsen had a written agreement with BCC that the property and the company fully belonged to church purposes, and this agreement was also approved by the auditor. The loans that were paid to build the Indian congregations conference center were paid to India, not to Larsen. Again, it is a simple matter to see these realities in the accounts.

Help for a local church in USA

Last but not least, Kåre J. Smith and Bernt Aksel Larsen provided financial assistance when a local church in the USA had serious financial problems 8-10 years ago. In this connection, the two contributed $ 2.5 million of their own funds to clean up these problems, which had put the local congregation and several of its members in great difficulty. At this very moment, however, Smith and Larsen were in the process of carrying out a major business transaction, and the contribution to the American local church made it impossible for them to finance the transaction. So, as a condition for the contribution, they stipulated that they must be able to borrow money to complete the transaction. This was discussed in a larger forum with representatives from BCC and several other organizations and local churches, and the result was that loans were granted from BCC Financial. The loan was fully repaid with interest about three years later.

So when NRK Brennpunkt are of the opinion that Bernt Aksel Larsen and Kåre J. Smith have enriched themselves through BCC Financial, this is the exact opposite of the truth.

Everything can stand the light of day

There was full transparency regarding the loan lists from BCC Financial to the local churches and cash pooling participants. BCC has reviewed all the loan lists and is of the opinion that there are no loans that cannot stand the light of day. For BCCs part, it would be no problem to publish both these and accounting notes publicly. However, posting such information about individuals would be a violation of privacy rules, and BCC is therefore prevented from doing so.

On the other hand, we publish auditor-approved accounts for all years. These are available from the links below.