Friday, September 20, 2024

How much money the Exclusive Brethren’s ‘ecosystem’ really makes

Markets in church real estate.  You can expect their business to grow.


How much money the Exclusive Brethren’s ‘ecosystem’ really makes 

 The Plymouth Brethren Christian Church’s Hales family has clocked up a slew of new record-setting property sales as the Australian Tax Office continues its investigation. 

By Michael Bachelard and Lucy Macken SEPTEMBER 20, 2024

Fundamentalist Christian sect the Exclusive Brethren has amassed hundreds of millions of dollars in its tax-free charities at the same time as private companies run by the family of the church’s supreme leader have made millions from COVID contracts.

Recently released financial records give an indication of how cash circulates around what the Plymouth Brethren Christian Church calls its “community ecosystem” revealing, in particular, a massive boost from the pandemic for its leaders’ private business and the central role of one its charities.
The new figures come as the family of global leader Bruce Hales – known by some inside the sect as the “royal family” – continue their multimillion-dollar trade in high-end Sydney housing.

Recently updated property settlement records show Dean Hales, one son of the Brethren’s “Man of God” Bruce Hales, has sold his landmark Beecroft residence for $7.25 million, making it the Sydney suburb’s highest house price sale.
Dean’s brother, Gareth, has also recently sold about $14 million worth of property, while Gareth’s 25-year-old eldest son, Justin, has spent $8 million buying two neighbouring houses on large blocks in North Epping.
The Hales family has spent years accumulating a portfolio of some of the best mansions and estates across Sydney’s north-west with a value totalling more than $75 million.
Financial records reveal that the businesses of brothers Dean, Gareth and Charles Hales, between them made $1.2 billion in revenue in Australia in a single year of the COVID pandemic.

The Exclusive Brethren, who began calling themselves the Plymouth Brethren Christian Church a number of years ago, urges its followers – who call themselves “saints” – to maintain an “utter hatred” of the outside world. Bruce Hales directs Brethren businesses to “spoil the Egyptians” (non-Brethren people, governments and businesses) by charging the highest possible price to take their money.
“It doesn’t belong to them anyhow, so we’ve just got to relieve them of it!” Hales snr told his flock in 2004.
Women in the Brethren are treated as second-class citizens, taking the back seats in church meetings. Homosexuality is condemned, and Brethren members do not vote, even though they have been active in conservative political campaigns, including secretly donating to the Liberal and National parties and growing close to former prime minister John Howard.

The charities

A key entity in the Brethrens’ “community ecosystem” is a charity, the Vision Foundation, which holds net assets worth more than $123 million.
Its charitable purpose listed on the regulator’s website, is “offering family support services” for the “general community in Australia”, though the charity exists overwhelmingly for the benefit of the Plymouth Brethren Christian Church.
Former members of the church, who cannot speak publicly for fear of the ramifications for their families still inside, said the Vision Foundation and a number of associated investment funds were now “the all embracing global receptacle for money” in the church.
The charity’s cash comes from Brethren members, and Vision then pours tens of millions of dollars into a series of investment vehicles, including Vision Income Fund in Australia. Similar funds exist in New Zealand and the UK, and the three funds between them control assets of $582 million.
The Australian Vision Income Fund is set up as an “attribution managed investment trust”, a structure commonly used by private equity funds.
An accounting source with knowledge of these trusts, but not authorised to speak publicly, told this masthead that such funds are taxed concessionally to encourage foreign investment into Australian assets.
A Plymouth Brethren Christian Church spokesman said Brethren members donate to the “Vision cluster”, and that “Vision Invest manages several managed investment funds that ... invest the funds on their behalf”.
The spokesman said those funds were then entrusted to “external fund managers”.
“In line with the relevant standards, these funds, both retail and wholesale, have independent third-party responsible entity or trustees,” he said.
Vision Foundation is just one of a suite of at least 10 Brethren charities in Australia – including their government-funded private school network – which between them have net assets of $295 million. This makes the 15,000-strong Australian church among the nation’s most well-heeled charitable enterprises. Oxfam and Save The Children, for example, have assets of about $20 million each, and World Vision has $97 million in net assets, according to records published by the Australian Charities and Not-for Profits Commission.
Vision Foundation’s accounts, released in August – seven months after the due date – show it had paid $93 million in investments and loans to related parties. Assets in an associated business, the Vision Growth Fund, were revalued upwards by $56 million, and the foundation also reported receiving a $27 million “gift” in the form of shares in another company run by a senior Exclusive Brethren man.
The Brethren spokesman said: “The fact is that members of the Plymouth Brethren Christian Church are generally a very disciplined, hardworking bunch. We go to church regularly, we’re usually first in and last out of the office, and we often start and build our own businesses, and on the basis of the latter, some of us have been quite successful.”
The spokesman said the Vision Foundation was a charitable endowment that invests in “welfare activities … and support of religion”, including the church’s school system and its only public-facing charity, the Rapid Relief Team (RRT).
The RRT’s most recent financial records show a cash surplus of $4.6 million. But this masthead can reveal that taxpayers have given it $680,000 via federal government grants since 2020. The grants bought mobile coffee machines, cooking equipment, lighting towers and other equipment. The largest grants, of up to $22,000 each, were paid under the Commonwealth’s “Stronger Communities” scheme.
The Rapid Relief Team primarily gives food and drink to emergency workers at the sites of natural disasters. The taxpayer-funded grants – most made under the Morrison government – came after local MPs invited Brethren members to apply for them.

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Internal church documents reveal that one of the charity’s purposes is to “engage with a person of influence or status at a local level”.

Big business, big property

The most obvious sign of the wealth generated at the top of the 53,000 strong global church is the ostentatious spending of its Sydney-based “royal” family.
Dean Hales, the son of Bruce and the head of company Ox Tools and major shareholder in medical diagnostics company 2San, recently sold his $7.25 million Beecroft house, which was built in 1914 and designed by architect William Nixon.
The 2750-square-metre property with a swimming pool had previously claimed a record result when Hales purchased it in 2021 for $5. 8 million.
The house was sold to fellow members of the Exclusive Brethren sect, Gary and Melissa Thorncroft, who have promptly sold their nearby Beecroft home for $3.67 million. Dean Hales remains an Eastwood local at the house he has owned since 2006, but also holds the suburb record for nearby Epping after he and his wife Nerolie purchased a 4116-square-metre estate in 2022 for $7.5 million – well above the $6 million price guide at the time.
Financial records show Dean Hales’ company made an extraordinary windfall from COVID with 2San Pty Ltd’s revenue jumping from just $29,000 in 2021 to $739 million the following year – with only six employees.
A 2San spokesperson agreed the company had “experienced exponential growth” because, “in short, we made good business decisions”.
Records also show hundreds of millions of dollars in complex related party transactions with 2San’s parent company in the UK – in which Dean Hales is the most significant shareholder – and another related entity in Denmark. There are also Canadian and US arms of the business.
In July, 2San ran into trouble with the Australian health regulator, the Therapeutic Goods Administration (TGA), for illegally importing and distributing medical devices, particularly bacterial vaginosis tests and pregnancy test kits which were not included in the Australian Register of Therapeutic Goods. The 2San spokesperson put this down to a packaging issue.
The company was also fined $66,000 in 2022 for persistently failing to provide information to the TGA about its rapid antigen tests.
Dean Hales’ brother Gareth has also been involved in high-end property sales recently. Gareth, with another brother, Charles, made a fortune when their office fit-out company, Unispace, sold for $300 million. Gareth and Charles also made millions out of the COVID pandemic through their global medical supply company Sante Group. The Australian company, Sante, started in 2020 the month after the COVID pandemic was declared, and made $415 million in revenue in Australia alone in its first year.
Media reports from the UK show Sante Global LLP received up to $2 billion in contracts for supplying personal protective equipment to the UK government during the pandemic. This secured the brothers’ spot on The Times COVID rich list, but also courted controversy when it was later revealed they had won the supply contracts through the “VIP lane” after the company had lobbied a Tory cabinet minister, Michael Gove.
The Guardian reported in February that the “founders of Unispace” had told Gove in emails they were “praying fervently for all men and for you and the Conservative party at this difficult time”. The Conservatives lost the July election to Labour.
Gareth Hales’ Dural property purchase set a suburb record in 2022 when it settled at $9.5 million with no need for finance. But the purchase caused consternation within the church because its opulence ran counter to the church’s frayed doctrine of living a simple and humble life.
Bruce Hales preached to his flock in 2009: “You wouldn’t want anything ostentatious or grandiose” when it came to housing. But the recently sold Dural property is a two-hectare estate set behind a gated entry and includes a five-bedroom residence with marble foyer, bespoke home theatre, billiard room with a wet bar, as well as a heated swimming pool, flood-lit tennis court, fire pit and a small golf driving range.
This year, however, Gareth has sold the property again. The price is yet to be revealed at settlement, but property portals indicate it resold for a loss, at $8.45 million.
A West Pennant Hills luxury mansion with tennis court, swimming pool and billiard table that set a suburb high of $5.5 million when purchased in 2021 by Gareth has also been sold in recent weeks on the quiet. The off-market sale price is undisclosed until settlement.
Asked if Gareth was planning to leave the country, the Brethren spokesman said: “We checked with Gareth for you, and while he does travel internationally a lot for work, he still calls Australia home, and fully intends to continue to do so. He is not leaving.”
Meanwhile, Justin Hales, Gareth’s 25-year-old eldest son and a former director of Unispace, has spent more than $8 million on two houses in North Epping. The first was purchased a year ago for $2.9 million, and its neighbour, a four-bedroom house on 1100 square metres, was added last month for yet another suburb high, this time of $5.13 million.
The Hales family are well known locally for their neighbourly purchases, then consolidating smaller blocks to build mega mansions.
In Eastwood, the three largest, and arguably most expensive, mansions are all owned by members of the Hales family and are built across the site of what was previously two houses.
The Australian Taxation Office launched an investigation into the Exclusive Brethren in March, with its “Private Wealth – Behaviours of Concern” team spending weeks conducting an “access without prior notice” raid on the global headquarters of businesses run by church members. It also raided properties in rural NSW and Western Australia.
In a statement uploaded to its website in July, the ATO said its wealth program was on the lookout, among other things, for “complex and opaque business structures aimed at disguising beneficial ownership”. Asked last week about the ongoing investigation into the Brethren church’s financial ecosystem, the ATO declined to comment on the affairs of individual entities.
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