2013 Presentations (Communicative Events)

Government Regulation of Religious Organizations: The Example of Religious Fraud

Marshall, WIlliam P.

State regulation of religious organizations raises a number of conflicting concerns. On one side, religiously affiliated charitable organizations are subject to the same problems of fraud, mismanagement, self-dealing, and discrimination that plague non-religious charities. Excluding religiously-affiliated organizations from state purview, therefore, can seriously undercut many of the state’s legitimate regulatory concerns. On the other side, constitutional and customary norms of church-separation call for special caution when the state attempts to investigate and oversee the activities of religiously-affiliated entities. Overly aggressive state efforts to regulate religious entities can be constitutionally problematic and, even when legally permissible, can create a troubling appearance of state abuse of power. This paper discusses some of the constitutional and prudential concerns that are raised by state regulation of religiously affiliated charitable organizations. Part I makes a brief introductory point. Any search for clear constitutional standards in this area is likely to be frustrating. Because the principles and policies underlying the constitutional commitment to religious freedom are often themselves contradictory, the law in this area is always likely to be ambiguous and in flux. Understanding the constitutional issues then can take us only so far in determining how the state should approach its oversight and regulation. Part II then examines some of the prudential concerns that should apply when the state regulates religious organizations, focusing particularly on government investigations and prosecutions of religious organizations for fraud. Using United States v. Ballard as an illustration, the section examines why the government needs to be especially sensitive to religious freedom concerns when initiating such prosecutions even when its actions are otherwise fully constitutional. Part III then offers some possible guidelines that the states should consider when approaching religious fraud cases.