LCMS Commission on Constitutional Matters — Minutes St. Louis, Missouri — June 9, 1978, Page 4

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83. Separate Incorporation of Church Extension Fund (Ag. 1290, A-F): A considerable portion of the
afternoon was spent on this item. The Board of Directors of the Texas District had raised with the
Commission several questions regarding the proposal of the Church Extension Fund Board to separately
incorporate the Fund. Present for the discussion were Dr. Fred Lietz, Mr. Phil Draheim, and Rev. Elton
Bauerkemper, Texas District secretary.
Dr. Lietz detailed the reasons for the recommendation of separate incorporation. The Securities
Commissions in various states require offering circulars and these requirements differ from state to state.
This was brought to the attention of the CEF Board in 1975. The 1977 Dallas convention authorized the
Board to continue its efforts toward meeting these requirements. Several serious problems have been
encountered in recent years. The Fund's relationship to the Synod has aroused the curiosity of some state
authorities who have required a total financial statement of the entire Synod. The Synod's operating
deficit was considered to add an element of risk to the Church Extension Fund's operations. Furthermore,
since the Synod has been sued in several suits involving a teacher in Detroit to the extent of $54,000,000,
disclosure of this fact was necessary, which also tended to question the liquidity of the Fund.
Furthermore, explanations had to be given regarding the $160,000,000 in assets listed by the Synod. As a
result of all this, consultations with various attorneys resulted in the advice that the synodical Church
Extension Fund be separately incorporated. The Board of Directors saw no difficulty in this but gave
encouragement in its January, 1978 meeting. Area meetings were held with representatives of District
Church Extension Funds during the month of March to explain the situation and to gain support.