Mormon Church responds to allegations of rat-holing money and not paying owed taxes

December 18, 2019 • 12:00 pm

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.

Here’s what the Church says:

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?

h/t: Wayne

30 thoughts on “Mormon Church responds to allegations of rat-holing money and not paying owed taxes

    1. Actually, we’re planning to render it all to Caesar but since he’s not around we’ll hang on to it for a bit longer.

  1. “…for unspecific uses when Jesus comes back”

    Wait, does that mean Jesus can’t come up with a truck full of dosh on a moment’s notice? What kind of a savior is that?

  2. 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).

    And the difference between a religion and a scam?

    About 6.6 million more members nationwide — much of it concentrated in states that get more than their fair share of representation in the US senate and electoral college.

    1. “And the difference between a religion and a scam?”
      Time and level of popularity, plain and simple. Talking snakes, virgin births (common to many historical religions), burning bushes, etc., only seem less bizarre because they have been ingrained in the culture for so long. Ditto for the wild claims of Islam.

      The Mormon church has always been a hybrid between a religion and a multinational corporation, and many individual members are quite keen on increasing personal wealth. The latter fact has been suggested to account for the fact that Utah has an unusually high rate of white-collar crime and affinity fraud (where members bilk other members out of money via Ponzi schemes).

    2. Both seem to have started as deliberate scams, unlike (say) Paul who created a Christianity (seems that there were others) sincerely. That he was totally wrong about reality is not the point.

  3. I would put SDA in there with the Mormons as strange religion. And they both seem to be preoccupied with the second coming or the end of times garbage. The Mormons always wanted all the flock to store away 2 years worth of food and clothes. You needed to have a full basement to live Mormon to store that much stuff. From my experience, not many of them did it but they were suppose to. The SDA are preoccupied with health and hospitals. Just on a much smaller scale than the Catholics. The Mormons pile up the money but for what? Is this to bribe Jesus when he returns?

  4. “But He loves you. He loves you, and He needs money! He always needs money! He’s all-powerful, all-perfect, all-knowing, and all-wise, somehow just can’t handle money!”

    If anyone doesn’t know who said this it is worth a few minutes of Googling to find out and some temporary relief from the injustice of the repositories of religion.

    1. I must admit that I have watched Carlin’s 10-minute bit on religion on YouTube at least half a dozen times over the years. He deftly skewers so many religious hypocrisies in only 10 minutes in such a well-thought out routine. And then there is the explanation of his “decision” to worship the actor Joe Pesci instead of god because Joe is a guy who “gets things done”. A must-watch. Carlin was to standup what Hitchens’ was to the essay format. Both sorely missed.

  5. I always thought Scientology as a religion was a real stretch. Spaceology maybe. Mostly it is just a big ponzi scheme. They sell believers on reaching levels. Soon as you reach this one, they have another one but it costs even more. By the time you get to the 7th or 8th level you are so broke you get out. As with all schemes, it is run by one crazy, lying bastard at the top. Kind of like Trump University.

  6. “All Church funds exist for no other reason than to support the Church’s divinely appointed mission.”

    Nifty tax tip. It’s just that simple!

  7. RE: “Why does the government exempt religions from a reporting requirement?”

    Because that’s what the religion industry and a large majority of the credulous, wishful-thinking and unthinking U.S. population demand.

  8. The Mormons are obviously following a bit of advice in John Gardner’s great novel “Grendel”, which is the Beowulf saga as told from the monster’s point of view. In one episode, Grendel goes to visit an old, wise dragon, who offers the following instructions in the dragon code of life:

    (1) Find for yourself a hoard of gold;
    (2) then sit on it.

    1. Obviously they and the Mormons did not learn from CS Lewis, who (allegorically?) claimed that one *became* a dragon by sitting on too much gold. (This is in _The Voyage of the Dawn Treader_.)

  9. but he gets the money only if the IRS determines that the Church violated the tax code.

    So, given the entrenching of religion in the US system, that’s not going to happen.

  10. Mormonism actually bridges the gap between Scientology and “traditional” Christianity quite nicely. Despite frequent dissembling on this count, they’re scriptural literalists, but they’ve also seasoned their doctrine with plenty of sci-fi elements. They specify a planet — Kolob — that is either where god lives or near there. And, if you’re really good, Mormon doctrine teaches that you’ll get to make planets and such of your own after you’re dead.

    It’s also worth noting that, according to Mormon eschatology, the Second Coming of Christ will involve worldwide cataclysm and wholesale societal collapse, culminating in the literal cleansing of the earth by fire, after which Jesus will personally rule the world for 1000 years. Hard to pin down when, exactly, in all of that, those cash stores will come in handy. Maybe after society collapses – and with it, presumably, the modern monetary system – Jesus will establish a new central bank and reimburse the Mormons all that stored up cash.

  11. While I agree with the author’s reactions to Mormonism, and believe that if there is a God he surely enjoins coffee drinking, I don’t see any reason why Mormonism isn’t a legitimate religion, and not just a “religion”.

    Second, the financial shenanigans described do sound illegal (but perhaps arguably more of a bad seed than an institutional abuse), but small potatoes compared to the Vatican banks purported money laundering operations:

    At least the Vatican is not laundering money for terrorists these days, but we all know which religious charity to give money to if we want to do that.

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