On CNBC's "Capital Report" July 2, Americans United's Barry Lynn and Religious Right warhorse Jerry Falwell had a lively conversation about the role of religion in the presidential campaign. Lynn expressed grave concern about a Bush-Cheney campaign memo that urged church volunteers to enlist their congregations in electioneering activity. He noted that churches could get into trouble with the Internal Revenue Service if they violate the federal tax law ban on partisan activities. Falwell agreed that the memo went too far and said he has been assured by the White House that it was written by an "underling" without "the blessing of anybody at the top." Then Falwell accused Lynn of trying to scare churches from legitimate involvement in social and political activities.

AU's Lynn countered that Falwell isn't the best person for clergy to look to for advice on this subject. Falwell's "Old Time Gospel Hour," Lynn noted, lost its tax exemption for 1986 and 1987 for improper political activities.

Falwell indignantly interrupted. "Never," he shouted. "Never. Never. Not one minute. Not one second. You are wrong.... Never one second did we lose our tax exemption."

Responded Lynn calmly, "Fifty thousand dollars was paid to the federal government. So I don't think people ought to be taking tax advice from Jerry Falwell on this very sensitive matter. This is very serious."

Blustered Falwell in response, "You are telling a lie right now, Barry."

But Falwell's memory seems to have failed him badly. According to an April 7, 1993, New York Times article headlined "Gospel Hour Fined for Political Activity," the IRS in February of that year revoked the Old Time Gospel Hour's tax-free status retroactively for two years for diverting assets and personnel to a political action committee. Falwell also had to pay $50,000 in back taxes. The federal agency required the ministry to issue a public statement signed by Falwell reporting the settlement.

Who you gonna believe? Falwell or the New York Times?