A rehabilitation facility at the centre of mistreatment and abuse allegations has gone into voluntary administration, effective from Wednesday.
The development was confirmed by Esther Foundation's interim CEO Phil Sparrow and came as a growing number of women spoke out about allegations of abuse.
In a statement, the Esther Foundation said recent media coverage had caused "significant reputational damage".
"Such that our funding base has reduced to the extent that we are likely [to] become insolvent in the very near future, and accordingly under law we cannot continue to operate in this event," the Foundation stated.
"Under the Association Incorporation Act 2015 (WA) the Board has the authority to appoint a voluntary administrator in the likely event of insolvency in the very near future.
"The predicted outcome of this administration process will be the closure and winding up of the Foundation.
"Throughout this process, we are continuing to seek an appropriate professional organisation to ensure the continuity of care and alternative program support for the women and children that currently remain in our care, and to work to ensure ongoing employment for our staff."
The Foundation said its interim CEO was working with the administrator to achieve the best outcome possible for residents and staff.
"Thank you to those that have worked tirelessly for the cause of young women in need, and have supported us in various ways over the years and thank you to those that have reached out to us with support throughout this exceedingly difficult situation," the foundation said.
Former Esther Foundation poster girl outlines allegations
A decade ago, newspaper articles described Chloe Payne's time at the Esther Foundation as transformational.
"From teenage tearaway to award-winning charity worker," a 2010 newspaper article read.
The article described how the 16-year-old "oozed confidence" as she addressed a marquee full of "Perth's movers and shakers".
She was speaking to the crowd about her time at the Esther Foundation, a Christian-based residential rehabilitation program she was sent to as a 15-year-old in 2009.
But looking back now, Ms Payne claims the promotional speeches and photo shoots she took part in belied what was really going on behind closed doors.
"I wasn't given a proper treatment plan or diagnosis. Nothing. And I was given medications that I should not have been given by people that were not trained at all to be giving them."
Ms Payne claims when she tried to run away from the organisation, she was put in a small room by a female staff member and "sat on".
"I remember being told to calm down, that I had demons inside of me and that they would pray for me for the demons to leave," she said.
Ms Payne's old journal entries from her time at the foundation detail suicide ideation, depression and anxiety.
"To be so young, to be so ill, [and] to be forced into a program and then given nothing but exorcisms and church, and shoved into rooms of houses with pastors and people that you don't know to pray for you for hours on end in tongues, speaking in these strange languages — it was very confronting and scary," she said.
"We didn't need to be told that we had demons inside of us."
The Esther Foundation, which has been operating in Perth since the mid-1990s, was supposed to offer a safe refuge to vulnerable women and girls like Ms Payne.
But in recent weeks, a number of women have come forward with allegations of psychological and physical abuse.
'Nothing has changed'
7.30 has spoken with more than 20 women with allegations about being mistreated during their time as residents.
Ms Payne, who once acted as a poster girl for the organisation, has added her voice to that chorus.
Ms Payne also claimed the Esther Foundation's founder and former director Patricia Lavater would berate her and other residents.
"The anxiety of her [Patricia Lavater's] heels coming down the hallway ... I still ... when I wear heels, and I come down a hallway, you just catch yourself having little moments,'" she said.
"It should not be like that. The director of a program where you are at to get mental health support, supposedly. You should not have those fears about them coming into the house."
While Ms Lavater left the foundation in 2019, 7.30 has confirmed she now works at a different Christian rehabilitation centre in Perth.
Former Esther Foundation resident Cara Phillips claimed that while she was a resident at the Esther Foundation in 2005, she had to shadow Ms Lavater by staying within 2 metres of her and was not allowed to ask for anything unless she was given permission.
"Nothing has changed," Ms Phillips said.
"I think that there needs to be actual reform in that space, so that this kind of situation does not happen again."
Medical treatment through 'all-night prayer meetings'
Amanda Gray was 16 when she was sent to the Esther Foundation in 2003 after being treated for drug addiction at another rehabilitation clinic.
She said her medical care was inadequate.
"Their form of medical treatment would be all-night prayer meetings," she said.
"Their answer to my withdrawals was restraining me on a bed while 10 or 15 adults prayed in tongues, like a made-up language, with their hands on me while I was restrained. That went on for hours, at one point.
"It was terrifying."
Ms Gray also claimed she was physically abused.
"I tried two times to escape by running away — just run like I'd seen so many other girls do," she said.
"The first time, I got a few blocks and then the van, the house van, was behind me and [the staff were] heckling me.
"They'd shove me back into the van and sit on, like physically sit on me in the back of this van. And that happened twice, which was devastating."
The foundation's rapid expansion
The Esther Foundation grew out of the Pentecostal New Day Ministries in Perth in the 1990s.
In 1995, Ms Lavater took over, and a decade later was joined by her now ex-husband Rod Lavater, who became the organisation's administrator.
Together they rapidly expanded the organisation, with residents being treated while living in several houses in the Perth suburbs of Como and South Perth.
Ms Lavater was praised for her work and was named West Australian of the Year for Community Service in 2008.
In 2018, the organisation moved its services to Kalamunda after the WA government invested millions in renovating and furnishing a former convent to lease to the foundation for a peppercorn rent.
It was at this time Lucy Lorenti entered the facility after her psychiatrist suggested she attend for help with an eating disorder.
Ms Lorenti said she was told it would be like a camp.
"But when I arrived, I was put in a house with older women who had just come out of jail, drug addicts ... it was terrifying," she said.
"The people who were supposedly giving us therapy were just girls who had been through the program themselves.
Her mother Katharine Lorenti told 7.30 she thought Lucy would be seeing a psychiatrist.
"But later I found out she had only been treated by counsellors with no formal training," she said.
"Lucy was told not to tell us anything.
"When we met Lucy for breakfast there were always secrets she wasn't allowed to speak about."
In 2019, only one year after Ms Lorenti ran away from the facility, the federal government announced it would provide $4 million over seven years to the Esther Foundation to support its ongoing work and fund an expansion of programs.
Prime Minister Scott Morrison personally attended the facility to present the grant.
"I don't invest in things that don't work," he said at the time.
"If I have, I stop them."
So far, the foundation has received nearly half the allocated funds.
In a statement to 7.30, the Commonwealth Department of Health said the funding agreement included specific requirements regarding working with vulnerable people, and its compliance was being actively monitored.
Lucy Lorenti said she was outraged when she heard about the $4 million grant.
"I thought, 'How could a place that is abusing women every day be receiving this sort of money? … No-one has done their research here,''" she said.
Questions asked
Dr Catherine Williams, a research director at the Centre for Public Integrity, has also raised concerns about whether sufficient due diligence was done before the federal government awarded the organisation $4 million.
"It's not clear at this point what the government knew about Esther and the program that was running, because of the lack of transparency around the grant process," Dr Williams said.
"But if it didn't ensure that the program it was funding was being provided by qualified persons, that's a significant deficiency of the administrative process.
"The department needs to release the information around the process via which the Esther Foundation was granted money so that we can establish whether the requirements of the applicable legislative framework were met.
In a statement, a spokeswoman for Health Minister Greg Hunt said funding of the Esther Foundation was included in the 2019-20 budget as part of a measure called "Prioritising Mental Health - caring for our community".
"The Minister for Health and the Prime Minister visited the Esther Foundation in 2019 when the grant was awarded," she said.
"Malcolm Turnbull also visited the Esther Foundation in mid-2018 when he was prime minister.
"The Esther Foundation is a holistic residential recovery and empowerment program for women from crisis backgrounds. In particular, it helps young women who are recovering from sexual abuse, domestic violence and drug abuse.
New CEO uncovers 'legacy issues'
In 2019, Anina Findling was appointed the new CEO of the Esther Foundation.
Around the same time, Cara Phillips, who entered the Esther Foundation in 2004, began speaking out about her treatment at Esther.
"I realised there were human rights abuses going on, it was a cult, and that if I don't say something, I'm allowing it to continue," she said.
In 2019, Ms Phillips contacted the new CEO and began outlining former residents' complaints, including psychological and physical abuse.
Ms Findling told 7.30 she spent her first six months at the organisation listening to complaints and uncovering extensive "legacy issues".
Ms Findling, who left the organisation in 2021, also said that during her time she ended a lot of the organisation's extreme approaches to spirituality and stopped the use of all unlicensed counsellors and therapists.
After an extended period of leave, in consultation with the board, Ms Lavater departed the organisation in 2019.
Involvement of the WA government
Successive WA governments have also supported the Esther Foundation, including the 2010 purchase of a $3.9 million former convent where the residential program is now located.
Former WA premier Colin Barnett, who personally championed the Esther Foundation and signed off on the convent purchase, said he was not aware of concerns about psychological harm or abuse of residents at the time.
Mr Barnett said he personally donated to the foundation and encouraged friends and businesspeople to do the same.
He said he initially had a lot of confidence in the organisation.
"I could see these very vulnerable young kids, many of them had been living on the streets, all sorts of things. So they impressed me," he said.
"I mean, these young women came out and they told their stories openly, and said, 'We're getting better,' and most of them were staying off drugs.
"The only hesitation I had was, was it being used to promote particular religious views?
"I was conscious that there was a religious background to everything, and that always makes me just a little bit wary."
In 2010 Esther Foundation received a further $113,832 from the WA government, under the Royalties for Regions program, to assist with another residential program it was running in the south-west of WA.
Inquiry called
Western Australia's Minister for Child Protection, Women's Interests and Community Services, Simone McGurk, said her office had received many complaints about the foundation, including some she said "could be worthy of investigation by the police".
She has now instigated an investigation by a parliamentary committee into the allegations of abuse.
The investigation, to be completed by December, will also consider the suitability of the government oversight measures currently in place.
Ms McGurk said she was also pursuing the matter with the federal government.
"I have written to the Federal Health Minister and the Federal Minister for Charities to see if the allegations will have any impact on the organisation's charity status," she said.
"I am yet to receive a response."
Relief at 'being taken seriously'
Ms Phillips said she felt a wave of relief when she heard the announcement of a government inquiry into the Esther Foundation.
"Our stories are being taken seriously," she said.
"They are believed.
"I hope that as a result of this inquiry, legislation is put in place that will reform the way rehabilitation centres and therapeutic communities are accredited and run.
"So that people seeking help are not traumatised further, but can find the help they seek, and be free."
Apology issued
The current Esther Foundation board has issued an unreserved apology to any former residents who have suffered hurt or abuse.
It said the organisation had undergone a complete overhaul and change of management since the time of the allegations.
It said it would cooperate with any investigation, criminal or otherwise, and appoint "an independent and suitably qualified person" to work with former residents who want to share their story.
In response to the government inquiry, it said: "We reaffirm our support and commitment to assist all who have suffered under past leadership at Esther Foundation, and to fully cooperate with this inquiry."
But Ms Phillips said the board's apology was too little, too late.
"I spent five months writing to the board [in 2019] so they were definitely aware of what happened," she said.
"I ended my document with the sentence: 'Now that you are aware of these abuses, if you do not take action, then you will be held accountable.'
"And so for them to come back now and say, 'We're shocked and horrified and had no idea,' this is not a sincere apology to me."
WA Police has urged anyone who thinks they have been a victim of a crime to report it, saying it will investigate to the "fullest extent possible".
Watch this story on 7.30 on ABC TV and ABC iview.
