Yesterday I highlighted an article from The Washington Post in which David Nielsen, a former employee of a Mormon Church’s investment firm—an organization that supposedly to accumulates leftover tithing money to give to charity—accused the firm (Ensign Peak Advisors) of keeping the money and accumulating interest while not giving any to charity. That violates the tax rules for nonprofit organizations. Furthermore, the fund, which has now mounted to $100 billion—yes, 10% of a trillion dollars!—made only two dispersals (total $2 billion), both seemingly illegal donations to bail out a church-run insurance company and shopping mall (profit-making organizations, not charities!). Nielsen stands to gain 10% of any taxes recovered from an Internal Revenue Service investigation, but he gets the money only if the IRS determines that the Church violated the tax code.
The Post presented a pretty damning report, not ameliorated by Mormon official’s statements about squirreling away money for when Jesus returns:
In a speech in March 2018, Caussé [Presiding Bishop of the Church] linked the church’s financial strategy to the “prophecies about the last days.” Just as the church maintains grain silos and emergency warehouses, Caussé said, so it “also methodically follows the practice of setting aside a portion of its revenues each year to prepare for any possible future needs.”
According to the complaint, Ensign’s president, Roger Clarke, has told others that the amassed funds would be used in the event of the second coming of Christ. Clarke did not respond to an email seeking comment.
Now the church has responded—if you consider evasion a response—as reported by the Mormon-owned paper the Deseret News. Click on the screenshot for the story, and go here for the Church’s official response.
We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the Church and its members. All Church funds exist for no other reason than to support the Church’s divinely appointed mission.
Claims being currently circulated are based on a narrow perspective and limited information. The Church complies with all applicable law governing our donations, investments, taxes, and reserves. We continue to welcome the opportunity to work with officials to address questions they may have.
This isn’t much of a response to the specific allegation that Ensign Peak Advisors sequestered the money and didn’t use it for charitable work, except that the response notes that a portion of money is “safeguarded” to build “a prudent reserve for the future” (i.e., for unspecific uses when Jesus comes back). There is no denial of Nielson’s claim about his specific investment operation. And that accusation isn’t ameliorated, either, by further statements reported in the Deseret News:
The church offered no specific comment about the complaint or Nielsen prior to the Post’s story. Instead it directed the Post and other media to past comments by church leaders about church finances. Leaders previously have said the faith provides $40 million a year to address famines, respond to natural disasters, aid refugees, give medical care and training and more through its humanitarian arm, Latter-day Saint Charities.
Latter-day Saint Charities reported in February that the figure is even larger. Its 2018 annual report says the charity has provided more than $2.2 billion, or an average of $64.7 million a year, in 197 countries since its creation in 1985.
“Latter-day Saint Charities has provided more than $2 billion in aid to assist those in need throughout the world,” President Russell M. Nelson said two months ago at the church’s semiannual general conference. “This assistance is offered to recipients regardless of their church affiliation, nationality, race, sexual orientation, gender or political persuasion.”
Their “defense” is to say that they’ve donated $2.2 billion in 34 years, apparently through other charity funds. But that’s only 2.2% of the 100 billion held by Ensign alone, and with interest accumulating on that $100 billion, the Church is making money faster than it hands out in charity.
So what we have is a diversionary “response”, in line with the Church’s well known secrecy. But if the IRS does investigate (not a certainty) and the Church is found to be guilty, it’s not going to look good for the Mormons.
To me, Mormonism is the most bizarre major “religion” in the U.S. (next to Scientology, which is classified as a religion but is really a scam). With its combination of secrecy, weird beliefs and accoutrements (i.e., magic underwear, mandatory tithing), and its clannishness, The Latter Day Saints just creep me out. And they certainly aren’t being open about the latest accusation.
But one of the biggest problems in this whole mess is that the U.S. government holds different standards for different nonprofit organizations. Non-church philanthropies like the Bill and Melinda Gates Foundation have to give a yearly account of their holdings and dispersement, while Church “charities” don’t have to report squat. And that, it seems to me, violates the First Amendment. Whether secular or religious, charities should be treated the same. Why does the government exempt religions from a reporting requirement?