Texas Baptist 'Valleygate' lawsuit settled

The Valleygate lawsuit filed by the Rev. Otto Arango alleging libel and slander by the Baptist General Convention of Texas and others has been settled in mediation and without an admission of fault to or by Arago, according to confidential sources and documents we were provided.

The overall terms of the settlement "are confidential."

The burden of the settlement with Arango is shared, we were informed, by the Baptist General Convention of Texas (BGCT), the Dallas-based Texas Baptist Standard, Calvary Baptist Church of Mineral Wells, Texas, and the other defendants, through their insurance carriers.

Terms were apparently agreed to in mediation last month.

It was Cavalry Baptist Church Pastor David Montoya, through his blogging as the Spiritual Samurai, who first called attention to the issues involved.

Asked to comment on the matter today, Montoya told us, "I understand that the insurance company for my church has settled on my behalf as well as the church. The amount is confidential. I never had any malice toward Pastor Arango. I was upset with the people in charge of Church Planting at the BGCT back at that time for their complete lack of oversight as found by the investigators in their 2006 report, that was to whom my blogging was directed."

As Sam Hodges of the Dallas Morning News explained in August, 2008, when the original action was filed:

The Rev. Otto Arango claims he was defamed by the Dallas-based BGCT as it dealt with allegations of "phantom churches" and misspent money in a scandal that came to be known in Baptist circles as "Valleygate."

In an independent investigation commissioned by the BGCT noted that Dr. Arango and two other pastors sponsored a reported 258 new churches, which together received more than $1.3 million in BGCT funds.

But many of those new churches failed, others were mere "extension units" of existing churches, and some never existed at all, the investigators found in a report sharply critical of the BGCT for lax oversight.

Although the investigators' report referred to a "troubling deposits of checks into Dr. Arango's personal bank account," no criminal charges were filed. The BGCT chose not to pursue recovery of any of the more than $1.3 million in BGCT funds involved, arguing that civil action was “neither practical nor would it represent good stewardship of churches’ resources.”

Arango's subsequent suit was filed in Hidalgo County (TX) District Court and sought damages for both lost earnings and "past and future mental anguish." Arango's attorney said in 2008 that the matter had made it hard for Arango to continue working with churches in Texas and across Latin America.

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