AIG’s Complaint Against Kentucky

The last time we wrote about this topic was a few days ago: AIG’s Suit Against Kentucky Is Coming. As you already know, Answers in Genesis (AIG) is the creationist ministry of Ken Ham (ol’ Hambo) — the Australian entrepreneur who has become the ayatollah of Appalachia, famed for the infamous, mind-boggling Creation Museum.

AIG is planning to build their Ark Encounter project in Kentucky, and their application to receive potentially millions of dollars in sales tax rebates has been denied. The lawsuit has now been filed and the complaint is here. It’s a 48-page pdf file. Let’s take a look at it.

The first several paragraphs describe the parties and explain why the court has jurisdiction. They’re suing in Federal court in the Eastern District of Kentucky for injunctive relief, declaratory relief, and damages, so it won’t be a jury trial.

The plaintiffs are: (1) Ark Encounter, LLC, a for-profit company “centered on factually presenting the historical truth of Noah and the Ark, the Genesis Flood, and other historical accounts recorded in the Bible”; (2) Crosswater Canyon, Inc. (which owns Ark Encounter), a 501(c)(3) religious non-profit corporation, the purpose of which “is to support the ministry of Answers in Genesis’; and (3) Answers in Genesis, Inc., the purpose of which is “to provide seminars, lectures, debates, books, along with other forms of media, museums, facilities, and exhibitions that uphold the authority and inerrancy of the Bible as it relates to origins and history.” AIG owns Crosswater Canyon, and Crosswater Canyon owns (or controls) Ark Encounter.

The defendants are Bob Stewart, who is Secretary of the Kentucky Tourism, Arts, and Heritage Cabinet (which runs the tax rebate program), and Steven Beshear, Governor of Kentucky. That takes us through paragraph 13. What follows is a description of AIG’s Statement of Faith and the glorious work they’ve done to “be a catalyst for reformation by reclaiming the foundations of Christian faith which are found in the Bible.”

Paragraph 33 tells us: “AiG leaders believed an attraction centering on Noah’s Ark — much like the Creation Museum — would be an evangelistic opportunity and outreach for its ministry, enabling AiG to teach the world about the Bible and the message of salvation in a creative and entertaining way.”

We think paragraphs 50 and 51 crucial. They say:

Due to the large nature of the project, AiG had already considered having a separate but wholly owned 501(c)(3) religious, non-profit subsidiary (Crosswater Canyon, Inc.) oversee and manage the Ark attraction. But given the apparent need for private investors, AiG was also advised to form a for-profit limited liability company structure (Ark Encounter, LLC) for the project, so that Crosswater Canyon/AiG would manage the project and hold a substantial (approximately 20%) ownership interest in the LLC, and a group of qualified (accredited) investors would hold the remaining (approximately 80%) ownership interest.

AiG planned for Crosswater Canyon to serve as the managing member of the LLC. Under this structure, Crosswater/AiG would at all times retain specific management authority to supervise, manage and control the content, storyline and message presented in all exhibits and attractions throughout the project.

So Ark Encounter is a for-profit company, mostly owned by private investors, but it’s controlled by a religious non-profit company (Crosswater Canyon), which is controlled by AIG (also a religious non-profit company).

Then we’ve given a long history of the idea for developing Ark Encounter, the feasibility studies they made, the places they considered for its location, and the negotiations they had with Kentucky regarding that state’s incentives for the tourism industry. In paragraphs 67 through 69, we’re told that as far back as October of 2009, AIG met with officials of the Kentucky Department of Travel and Tourism, and were told of concerns about “separation of church and state” issues due to the “faith-based” nature of the Ark project. They kept looking at other locations in other states. Later they were told “the religious nature of the project would not be a barrier for receiving the [tourism] Act [tax] incentives” (paragraph 79).

Paragraph 100 says that in October of 2010 “Kentucky officials confirmed that their legal concerns had been fully addressed and they assured AiG leaders the project would qualify for incentives under the Act.” The next paragraph says the Governor of Kentucky “voiced his full encouragement and promised to publicly support AiG’s application for the tourism incentives.” That’s when AIG decided to locate the thing in Kentucky and they submitted their application for the tourism incentives. In November of 2010 they contracted to buy land for the project. Then they had a press conference, at which the Governor expressed his approval.

In December of 2010 they got preliminary approval, but were required to provide that they would “not discriminate on the basis of religion in hiring workers for the Ark project.” (Paragraph 118.) They got their approval.

Then it goes on and on about financing and the sale of bonds. But they only raised enough for Phase One of the project — the Ark itself — and because it was a scaled-back project, they had to make a new application for the tourism benefits. That pretty much takes us through paragraph 150, on page 29. Isn’t this fun?

In April of 2014, while their new application was pending, they were notified that the state had concerns about the evangelical mission of AiG and the Ark project, and that “Providing tax incentives that would further any such overt evangelism amounts to impermissible state funding of religious indoctrination.” (Paragraphs 155 – 156). AIG was “confused and disappointed.”

Then we’re told of a long series of letters and meetings. Eventually (paragraph 180) AIG was again given preliminary approval. But then Americans United for Separation of Church and State started complaining (paragraph 182). In August of 2014, AIG was told that the tourism agency wouldn’t recommend final approval (paragraph 193) because an ad for employment said that the employee would have to sign AIG’s statement of faith.

There was another series of letters and meetings. Nothing changed. That gets us through paragraph 204 on page 40. (Your Curmudgeon regrets that he decided to undertake this task, but we’ve gone too far to quit now.)

The remainder of the complaint is a description of the specific legal violations of law AIG claims the state of Kentucky has violated by denying them the tax incentives. That’s really all you need to look at. It’s mostly based on alleged violation of AIG’s right to freedom of speech, the Free Exercise clause of the First Amendment, the Equal Protection clause of the 14th Amendment, the due process clause of the Fifth Amendment, and some provision of the Kentucky Constitution.

As we’ve pointed out before, if Ark Encounter were a tax-exempt religious organization, it could enjoy all the freedom it wants to hire whomever they want (as AIG already does), without receiving tax incentives. However, their claim is that they have a right to do those things as a for-profit company and receive the tax incentives. That’s what the case will be all about. Also, AIG chose to proceed without final approval of their second application, in the belief (or hope) that they’d receive it, despite some warning signs along the way. But that may not matter. Their claim is that they have a right to final approval. The judge will somehow sort it all out.

So there you are, dear reader. Now we’ll just have to wait. Most of the pleadings that get filed will be boring, and we probably won’t bother with too many of them, but we expect that there will be some interesting moments. However, we don’t expect much commentary by ol’ Hambo at his blog, because the lawyers will probably advise him to let them do the talking.

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20 responses to “AIG’s Complaint Against Kentucky

  1. They’re suing in Federal court in the Eastern District of Kentucky for injunctive relief, declaratory relief, and damages, so it won’t be a jury trial.

    I.e., milk the state for as much money as a result of this suit, plus get their tax incentives restored? What a scam!

  2. I wonder why the AiG Creation Museum itself is not applying for the tax rebates. Is there a line of legal reasoning that applies to the Ark but not the museum? If the Ark get the rebates it will be interesting to see how much the AiG organization changes to capitalize on it – will the museum gift shop become an off-site division of the Ark Park? Perhaps the whole museum, zip-line, etc. will become divisions of the Ark….

  3. They want to have it both ways: make money off their Ark Asylum and still have it treated as nonprofit. That smells like fraud to me.

  4. Sometimes I think that Ken’s penchant to deny reality would one day be his downfall.

  5. Charles Deetz ;)

    Hammy is hung up on the new conservative fad of ‘religious freedom’ persecution complex. Its a lot more fun and less lying than the creationist shtick. But it requires whining, lots of whining. I hope someone tells him to shut up.

  6. Stephen Kennedy

    Why is Hambo going to court? One can see the reason if they go to the Ark Encounter section of AIG’s website where a running total is kept of donations received and lifetime passes sold since December, 2010. It is now inched up to about $18.1 million. However, the goal is stated as $29.5 million and this is likely the minimum amount AIG will need to finance the project.

    AIG is skating on thin financial ice here. The bond sale raised enough to prevent forced redemption of all bonds sold but is still less than they expected and AIG concedes that it had to purchase several million dollars worth of the ark bonds itself to keep the offering from failing. This probably exhausted what ever resources AIG had to close the gap between the funds collected to date the funds needed to complete the project. In addition, AIG is going to have to make several million dollars in interest payments on the bonds before the ark park even opens.

    Seeing that in over four years they could only raise about $18 million, it is unlikely that another $11 million more is coming in over the next year. In addition, actual costs will almost certainly than what has been budgeted for.

    This means AIG is going to have to the capital markets, probably banks, to borrow the funds needed to get the ark park up and running. Hambo no doubt figured that an $18 million tax subsidy guarantee would convince lenders to come up with a similar amount.

    Without the tax subsidy the ark park is not nearly as credit worthy as it would be if it were getting the subsidies.

  7. Where does the money go when Hambo declares bankruptcy? He’ll have to pay off his creditors first, and his donors will be left with nothing.

  8. On page 23 of the lawsuit ( https://cdn-assets.answersinge… ) we see that “AE, LLC[Ark Encounter] was required by KTDFA[Kentucky Tourism Dept] to agree to a provision[in 2010] in the MOA providing that AE,LLC would not discriminate on the basis of religion in hiring workers for the Ark project.”.

    Then on page 24, we find regarding the MOA “Despite their concerns about the prohibition on religious hiring, AiG leaders reluctantly conceded on
    this point because of their decision to utilize and involve a variety of private investors. Due to the anticipated substantial private (non-religious) ownership in the project, AE, LLC determined it may not be allowed the exemption available under federal and state law to utilize a religious preference in hiring. Still, AiG leaders planned for AE, LLC, with Crosswater Canyon having a substantial interest and holding the position of managing member, to develop hiring policies that would require employees to maintain high moral standards and agree not to oppose certain beliefs about the authenticity of biblical accounts, regardless of their religious affiliation.”

    There you have in it AiG’s own words. They agreed in 2010 in a Memorandum of Agreement with the Kentucky Tourism Department to not
    discriminate on the basis of religion. They were caught with their CAD Designer Posting for the Ark Encounter—and when the State of Kentucky notified them that they would not receive the incentives for this and other reasons—they claimed Kentucky was the one who in the wrong. Furthermore—the entire reason why they were willing to sign an agreement to not discriminate in hiring was because they wanted private investors. When they didn’t get them, they came up with the bond offering idea and somehow thought that relieved them of the agreement not to discriminate. Idiots. Can there be any doubt that this is not a decision made because of a “firmly held religious belief” and purely because they thought they could get more money with the first approach?


  9. Charles Deetz ;)

    @Daniel, so if private investors wanted non-discrimination that’s okay, but if the government ‘requires’ it, it isn’t? Quite a two faced “firmly held money-first belief” it seems!

  10. @Charles

    Exactly. If I was a judge, I’d look at the first MOA between AIG and Kentucky and laugh them out of court. I understand that it’ll be slightly more complicated than that, but it’s still clear that Ham and Co. are spinning this as being a religious freedom/free speech issue when they clearly were just looking for the fastest and most profitable way to operate their sideshow attraction.

  11. Diogenes Lamp

    Daniel, excellent comments. I can’t see any way that this comedic lawsuit could get traction in the courts– unless the judge is a Christian Nation activist who doesn’t care what the law says. And yes, there are many such people, e.g. Alabama’s scofflaw Roy Moore. Several Southern states are currently passing or have passed laws saying that their government officials, clerks etc. do not have to obey any law, federal or otherwise, if it conflicts with their religion (I.e. they won’t treat gays as equals.) The Christian Nation shock troops want nullification crises, anarchy and total impunity– for Christians.

  12. “and his donors will be left with nothing.”
    DocBill, you’re not feeling any pity, do you?

  13. Reading through the history of events included in AiG’s complaint, it is clear that Kentucky consistently informed AiG that they could not approve the application if AiG practiced discriminatory hiring practices. They expressed concerns consistently about the state supporting what amounts to an evangelical effort – including requesting assurances that there would be no proselytizing, religious worship ceremonies, etc. at the park. What’s amazing to me is that AiG made it through the process as far as they did.

    AiG’s own complaint pretty much seals their fate. They clearly describe that AE LLC is a paper for-profit corporation set up only to raise money, and that all the work is being done by the religious non-profits. In their complaint, they make the case for the state to deny tax subsidies. It’s hard to imagine what the state’s attorneys could add.

  14. @Ed
    They asked, presumably with a straight face, that there be no proselytizing at the park?
    I am at a loss of words.

  15. @TomS
    That’s hilarious. Kenny also talks about his right to free speech being infringed upon. In what way? He runs on and on ad nauseum about things he knows nothing about and how everyone but him is going to h–l. He’d make a great standup comedian if he didn’t believe what he says.

  16. So Ken Ham is getting pro bono legal counsel and representation (I bet you he’s even convinced them to pay for the right to take the case!) and some clickbait for the true believers, leading them to send Ham more of their hard-earned cash? Sounds like a win for Ham no matter what.

  17. I hope when Hambo loses either AIG and/or Freedom Guard (his pro bono law firm) has to pay the state of Kentucky’s legal fees. Hambo breached the contract there is no question.
    SC great synopsis, nothing like legalese to bore you out of your gourd.

  18. Those corporations, both profit-making and religious, with millions of dollars, are getting pro bono representation?

  19. Why not? Think about all the souls that ol’ Hambo will save. Personally, I might add, How can we put a price on that? He deserves his spot in eternity and I’m going to save him a seat right next to mine. LOL

  20. Wrote an open letter to Hambo to give him some ideas of how he could solve his legal problems: