$100 Billion?!? (A Placeholder)

Hey all, I assume by now you’ve all seen the Washington Post story about the tax whistleblower. If your Twitter is anything at all like mine, your mentions have simply exploded over the last hour or two.

And I’m planning on writing something about it. But it broke as I was getting dinner in kids and kids in bed, and one of the advantages to being in academia rather than legal practice is that when news breaks, I can go to bed and look at it the next day.

There are some fascinating questions here, and I’ll try to address them in a careful, reasoned way. But I’m not going to do it until tomorrow. So until then, have a wonderful night! (And dream of taxes. Or Baby Yoda. I’m cool either way.)

Comments

  1. I’ve heard for years that the church pays tithing on tithing donations. It looks like this is that account.

  2. Having done some legal work involving the Church, I would be very surprised if things are as alleged. The Church is meticulous about compliance in at least some areas, so it would be a shock to me if there were a failure as massive as what is alleged. But, of course, I could be wrong.

  3. I was just telling someone that until Sam Brunson weighs in, this isn’t even worth talking about. Looking forward to your analysis.

  4. GrouchyIguana says:

    Knowing people on the board of DMBA and Ensign, their primary complaint is that the church is overly conservative in their oversight and investments. So though I can see some naive decisions possible, I’d be surprised if it’s anything of the magnitude being suggested. On the other hand, I’d love to see greater transparency and accountability. Hopefully the Post will write about the investigation’s findings. However, my experience with the Post is that the salacious news on the Church makes the front page, eg. the White Salamander letter, but the follow up corrections and full story, eg. the Hoffman forgeries, are relegated to the Religion section if they make the paper at all. It’s a shame, considering that WaPo is generally well written.

  5. Grouchy Iguana says:

    Knowing people on the board of DMBA and Ensign, their primary complaint is that the church is overly conservative in their oversight and investments. So though I can see some naive decisions possible, I’d be surprised if it’s anything of the magnitude being suggested. On the other hand, I’d love to see greater transparency and accountability. Hopefully the Post will write about the investigation’s findings. However, my experience with the Post is that the salacious news on the Church makes the front page, eg. the White Salamander letter, but the follow up corrections and full story, eg. the Hoffman forgeries, are relegated to the Religion section if they make the paper at all. It’s a shame, considering that WaPo is generally well written.

  6. It was inevitable that someone with this type of information would eventually leave the Church and expose this information. My expectation is that the church will poo poo the story and say it’s inaccurate — while continuing to refuse to provide any transparency whatsoever. Until they show me otherwise I will accept the verified statement of a person who used to manage their money as a more reliable source than the church itself. Sorry, PR Department, you cannot have it both ways.

  7. CJ Douglass says:

    I will withhold judgement for now, but even if a fraction of it is true: moral high ground is earned. If you’re going to preach tithing first, before housing, paying debts, even before feeding your own children then you damn well better have your own house in order.

    Either way, I’m so glad I get to talk to my friends about why I’m not a dupe this Christmas season, instead of why Jesus is King.

  8. John Mansfield says:

    As my son drove away to seminary half an hour ago, I brought in the WaPo from the driveway, pulled off the plastic rain protectors, and saw the front page headline an inch above the fold “Mormon Church allegedly stockpiled $100 billion”. Second-most prominent story placement for the day after “Democrats in center fall in line on impeachment”. And like others, I think it is an informative benefit that Sam Brunson writes about such issues so well.

  9. John Mansfield,
    Where do you live that you get home delivery of the Washington Post? I live in Southern Maryland…just curious.

  10. It’s hard to overlook the fact that the whistleblowers are disaffected ex-members, and that their statements seem to take issue with the concept of tithing as much as with the alleged lack of compliance with tax law, and that rather than simply report his complaint, he’s seeking a specific result (revocation of the fund’s tax-exempt status).

    Imagine how the Ukraine whistleblower’s testimony would’ve been received if he had been a Republican but had recently become a Democrat, and rather than simply report the quid pro quo, stated that he was trying to get Congress to impeach the president. … Well … the Republicans pretty much acted as if that’s what happened anyway. But you get my point.

    It also sounds to me like there may be a difference of opinion as to what counts as a “charitable” purpose, and the whistleblower may be aware of the Church’s position but is bringing this complaint in order to force the Church to make financial disclosures.

  11. it's a series of tubes says:

    Some thoughts, in no particular order:

    If the church was willfully violating the tax code, all appropriate penalties under the law should be imposed, and the cost in goodwill would be incalculable. A mass exodus would likely follow; at the very least, a precipitous drop in tithing rates and volume would occur.

    If the church’s approach is an unexplored or gray area (many, many instances of this in the tax world) and ultimately found to be in noncompliance, still a problem. Huge goodwill costs, but not malicious.

    As noted above, the “whistleblower” is a disaffected ex-member who stands to receive, per IRS policy, between 15% and 30% of any IRS collections. The person may in fact be correct (time will tell) but they are certainly not nobly disinterested. Interested to the tune of billions of dollars, potentially.

  12. To be fair, I don’t think we should dismiss a complaint because the whistleblower has something to gain from it (that is, a lot of money); those provisions are in the law to incentivize people to come forward and reveal misdeeds. If there weren’t a significant draw, the financial, social, and professional costs of whistleblowing would likely be ruinous to any whistleblower.

  13. I can’t imagine that the IRS is unaware of a fund that has built to $100 billion. That isn’t adding up for me. I would think the Church has been audited numerous times over the past 20 years, if not continuously audited (as many large organizatoons are).

  14. It would surprise me if the church is running afoul of tax laws and I’ll withhold judgment on that. But I am increasingly uncomfortable with the lack of transparency and by all available information it seems to me that the church spends only a fraction of its money on charitable causes compared to its assets, and that’s disappointing to me to the point that it was very difficult for me to choose to pay tithing this year and I’m not sure I will next year. Too much trust being lost (especially coupling this with the handbook changes that broke the same day).

  15. Last Lemming says:

    So tempting to comment. Must…wait…for…Sam……ungh!!

  16. The whistleblower IRS ploy is just an excuse for the disaffected member to come forward with sensitive information that would otherwise ruin his career and expose him to legal action. He can’t say, “I’m no longer a member and don’t work for the investment company any more, so here’s the insider info I know,” as that would violate his non-disclosure agreements.

    But through alleging something illegal, he can claim protection as a whistleblower and assume immunity from agreements because he thought he was acting in best interest of the law.

    As always, I’m sure his brain is sophisticated enough to lie to himself, but ultimately you can read through this all that he loves his money and can’t stand paying tithing when he’d rather signal his virtue about what the church ought to do with it’s money. Not much to see here with those who have experience of developing eyes to see and ears to hear.

  17. Christian Cardall says:

    I have neither the information nor the expertise to address some of the more specific legal issues raised, but I have a few general comments.

    1. Presiding Bishop Gérald Caussé’s July 2018 article “The Spiritual Foundations of Church Financial Self-Reliance” from the Church’s magazine is essential reading for anyone interested in fruitful thought or conversation on this subject.

    2. Out of curiosity I googled “U.S. debt per person” and compared this with the reported assets of the Church divided by 15 million members. Uncannily, the numbers were within 1.6% of each other in magnitude (and of course, of opposite sign). As a matter of reasonable scale, therefore, the Church is about as prudent as the U.S. Government is foolish. That sounds about right.

    3. Several competing priorities ought to be kept in appropriate balance: immediate relief to those in need; performing the Church’s divinely appointed mission, which as a byproduct produces a self-reliant and resilient people; husbanding of resources in preparation for predominant growth in developing nations; and reserves against potential cataclysm. Again as a matter of scale, looks like the numbers involved would allow the Church to weather a meltdown of maybe a decade or so. Seems fair to allow for prudence on that scale.

    4. The tone of the investigative document (polemic, sensationalist), personal expectations of reward (a percentage of any recovered monies), and the distressed emotional state often accompanying major life changes (such as faith transitions of recently disaffected members), leave an impression of lashing out with political motivation as opposed to the appropriate sobriety of an impartial, objective, dispassionate, and responsible analysis.

    5. My overall attitude is captured by Jesus’ instruction to the Twelve in the New Testament: “Behold, I send you forth as sheep in the midst of wolves: be ye therefore wise as serpents, and harmless as doves” (Matthew 10:16). The First Presidency and Quorum of the Twelve are capable men, in addition to being selflessly committed to the Lord’s work in love for God and his children, to the best of their inspiration, understanding, and ability. The Lord blesses their efforts and blesses his people.

  18. TL;DR: disgruntled former Mormon seeks billion-dollar payout based on PowerPoint slide.

    Yep, username checks out.

  19. Stray thoughts:

    I can’t imagine $100 billion in assets going overlooked by the IRS unless the SEC simply does not talk to the IRS (something I happen to know occurs at least some of the time) or all of that is in private equity, which is really hard to imagine being the case.

    The fact that this comes from a disaffected member with a substantial financial interest is relevant, but I don’t think it’s dispositive. The IRS ought to investigate if there’s any credibility, and the membership should know the results of that audit. This whole thing is evidence that the Church should use external auditors (something that maybe Sam suggested some time ago? Can’t remember where that idea came from).

    $100 billion sounds like a lot of money. It is a lot of money, actually. But there are all kinds of ways one could slice and dice that to make it sound bigger or smaller. There are multiple individuals who personally control more assets than that (which is absolutely stunning to me the more I think about that number). I think the best comparison for that fund would be Harvard’s endowment. Harvard has an endowment of $50 billion and something like 370,000 living alumni. So if, for whatever reason, you wanted to compare endowment per “member”, Harvard’s is much larger. If you wanted to compare the endowment to the operating budget (Harvard’s is about $5 billion), the Church’s is much larger. To me, if true, that number means that the Church can probably quit saving for a rainy day with excess revenues and start directly funding other charitable programs.

    If the purpose of the fund is to ride out financial and other disasters, that number isn’t really $100 billion, since whatever financial catastrophe this might be saved for would undoubtedly significantly reduce the value of the fund. That said, if properly managed, if the number is correct, the fund is almost certainly sufficient to serve that purpose.

    Something just “feels” wrong about the whistleblowers. I can’t quite put my finger on it, but it seems very much like conspiracy theorists who throw facts out that are poorly understood. Maybe part of it is that he appears to both claim knowledge of matters while at the same time claiming a high level of secrecy. For example, he points to only two expenditures, but admits that he wasn’t one of the few people who get to see the big picture. My brief experience in a large organization tells me that people are intentionally siloed (I’m not making the judgment whether that’s good or bad) such that people won’t see the whole thing. That raises suspicion on the part of the organization, but it also seems to undercut credibility. When armed with an incomplete picture and the worst assumptions, anything can look prett ybad.

  20. Two observations on the comments so far: First, don’t automatically dismiss the whistleblower as a disgruntled former Mormon. He was working for the Church and apparently became so disturbed by what he found out that he felt compelled to report it. Second, $100 billion? Saving it for the Second Coming, according to the reported statements by Ensign Peak Advisors’ president? Can you imagine what pain and suffering in the here and now $100 billion could alleviate? I think it’s time for the Church to start publishing annual financial statements again. Why keep the donors in the dark?

  21. Kevin Winters says:

    It’s interesting: so many people harping on the fact that he is a disaffected member but no one seems to be connecting the dots that maybe what he found in his work with the Church is what caused the disaffection. Imagine if you are a member and you see massive abuse of authority as it relates to funds the Church receives from its members based on a principle that asks them to put those funds ahead of their other needs or wants, all while the same entity is hoarding billions of dollars while so many of its members are in abject poverty. That wouldn’t make you question?

    Also, as a no-longer-Mormon, I find the automatic “they aren’t a member anymore so they are suspect” narrative to be insulting. Keep your stigmas to yourself. Or, better yet, work on them and stop impugning bad motives to anyone for the sole reason that they leave the Church.

  22. Thank you Christian Cardall; I read the article-Presiding Bishop Gérald Caussé’s July 2018 “The Spiritual Foundations of Church Financial Self-Reliance” f

  23. The things I find most suspect about the whistleblower is the unprofessionalism of the complaint: prepared by his (health care consultant) brother, over barely a couple months, without apparently consulting with a tax lawyer, and released to the public accompanied by a slideshow (one whose title is an allusion to the “Letter to a CES Director,” which is really inside Mormon baseball and has no legal import). It doesn’t seem like they’ve done their part very well, even if there is substance to their claims.

  24. We’ve seen this already. Kirtland. Things work out.

  25. “It also sounds to me like there may be a difference of opinion as to what counts as a “charitable” purpose…….” If there is any ambiguity as to whether or not a multi billion dollar mall with a Tiffany’s store overlooking the temple is a charitable purpose, well, somebody has lost their way.

    Jack Anderson was able to obtain several years of presidential daily briefings apparently obtained from a disgruntled wife of a CIA officer who had taken them home under the pretense of writing a book. Whatever any of their motivations may or may not have been, it didn’t necessarily make them wrong.

    https://www.fordlibrarymuseum.gov/library/guides/findingaid/vanattadpapers.asp

  26. If the church has been paying tithing on the tithing for decades (like I’ve heard it has for decades), then that amount of money will add up. Not only that, it will start growing by itself. It’s what Elisabeth Warren is trying to communicate with the wealth tax. At some point, an amassed amount of wealth just starts generating more wealth. This savings account has crossed that line.
    Personally, I find it good that the church has kept its house in order long enough to not touch that money.
    Having such a headlining number implies that the church leadership are personally enriching themselves. But not even the complaint makes that accusation. The complaint is the opposite, the fund is effectively not spending any money at all. No one is being personally enriched! The two withdrawals fall under values earned from interest. Now you can argue that interest earned from charitable donations should only be used for charitable purposes, but that certainly is a grey area.
    We could change tax law to say “All charitable donations need to be redistributed in seven years” (or something like that), but that currently doesn’t exist. I suspect that the current law doesn’t address unspent donation funds.
    Another thing to think about is that if the church believed that the second coming of Christ would result in a break down of society, resulting in a preppers “defend your food supply with your guns” wet dream, then the church shouldn’t be investing in financial assets at all. But it is setting aside massive financial assets for the second coming. That’s something interesting to think about too.
    So one day the apostles decided “The church should pay tithing on the tithing” and never thought “What amount makes for sufficient savings?” As a result, everyone keeps the program of paying tithing on the tithing, because that’s what the people before them did, and until Christ comes again, that’s what they’re going to keep doing.

  27. A couple of my thoughts:

    The IRS most likely is not auditing the church and probably won’t audit them even with this complaint. The tax code has pretty strict rules about auditing churches. For example, a high up treasury official has to have a reasonable belief that they either aren’t a church (which would be an incredibly tough sell) or that it’s carrying on an unrelated trade or business that it hasn’t been appropriately taxed. Before an audit can begin, they have to inform the church which is allowed to set up a conference to discuss and resolve concerns without an audit taking place. If they even get to this point (where no audit has taken place, but an inquiry has begun) and the IRS doesn’t come up with tax they owe, prove they’re not a church, or require significant changes to their structure, then the IRS is barred from initiating any other inquiries for 5 years. Under these rules, the IRS is unlikely to ever audit any church without substantial evidence that they will find something big.

    I think that the whistleblower is likely just trying to get this information to the public and probably knows he’s not getting any money out of it.

    I’m an accountant. When I’ve worked for large entities, they try to be transparent about the big financial picture to get everyone on board and in the same page. The accountants I know who work for the church say it operates the opposite way, only giving each person just enough information to accomplish they’re job.

    I doubt the church is doing anything blatantly against the tax code here. There is absolutely gray area in the tax code and it’s possible they are living in that gray area, but again, that’s unlikely to cause an audit.

    I find the amount of money the church brings in compared with the amount they use to help the needy to be disappointing, but that doesn’t make it illegal.

  28. Kevin, it’s not just that he’s disaffected. I get that somebody would be disaffected if they saw financial malfeasance. However, there are a number of details that don’t add up (literally). For example, I don’t think the Church can survive on a budget of only $6 billion. The Church employs 33,000 people in Utah. Just to make a round number, let’s assume that’s 40,000 worldwide. If the average cost to employ somebody in the Church is $100,000 when you consider wages and salaries, health benefits, retirement benefits, office space, and equipment, then $4 billion is taken up on costs of full-time employees alone. Add to that temple and chapel construction and maintenance, media production work, materials publication and printing, welfare square, church farms, bishops’ storehouses, canning, missions (another huge cost, likely $500 million to $1 billion), and I’m not seeing how the Church could possibly operate on a budget of $6 billion.

    So many of the assumptions on which these guys’ claims rest just don’t seem plausible to me.

  29. Kevin Winters says:

    DCS, then focus on the implausibility of the claims, not on the membership status of the whistleblower.

  30. The disaffection, motives, or intent of the whistle blower are completely irrelevant. There are only 2 questions here:
    1.) Did the church violate tax law?
    2.) Does the church ethically use its funds?

    The first question I will leave up to the IRS. Despite all the brilliant minds opining on this board, not even Sam can resolve that question. Leave it to the IRS.

    The second question is not a legal question but rather a relativistic moral and theological question which has no objective answer. Most likely your personal answer to that question is directly correlated to your devotion to the church.

  31. “not even Sam can resolve that question”

    Ummm, he is an expert on tax law. He is generally wrong about music and has questionable political takes, but I think he can tell us how the law applies to these facts. Of course, the IRS and the courts would determine fault. But saying that only the IRS can say anything on this is silly.

  32. nobody, really says:

    Does anyone else remember those horrible days of ward budget assessments? Then they announced that after years of careful investments and generous tithe-paying members, they would be banishing that practice.

    Now, without the Scouts taking over half of each ward and branch budget, it will be interesting to see if the Church itself will become self-reliant.

    But, I’d love to see them stop funding BYUs.

  33. Heptaparaparshinokh says:

    For perspective:

    I live across the street from a pastor who served a year in county jail for defrauding his congregation, an African-American Baptist church in a traditionally black (but increasingly Latino) city, of two million dollars, and threatening congregants who raised flags. Nice guy, very handsome, very personable, but an absolute snake. He is now pastor of a church two miles away from his old haunts, and the brand new Tesla and $40,000 Jeep in his driveway indicate to me that he’s probably back to his old tricks.

    This isn’t that situation, and it’s not the medieval Catholic Church piling up resources to threaten recalcitrant sovereigns with mercenary armies. This is a pile of money that is just sitting there adding to itself, built for historically understandable reasons. None of the Brethren live anything resembling a lavish lifestyle, examples of which are abundantly visible along the Wasatch Front (to the extent that The Real Housewives of Salt Lake actually is going to happen).

  34. We are saving money for the Second Coming? Where in the world did that come from?

  35. I think the fact that this is a disaffected member is absolutely relevant, but again, not dispositive. It goes to motive. It’s clear that he doesn’t have the entire picture, and his membership status colors his interpretation of the information that he does have. A disinterested observer would be far more hesitant to draw certain conclusions until further evidence is available, such as that the fund hasn’t been spent on “charitable” purposes (the Washington Post article acknowldges that they received no documentation to back this claim up). So, no, his membership status does not mean he’s lying. But it’s certainly something to note when considering the weight of the evidence.

  36. I like how Elder Clausse refers to the parable of the talent- maybe it fits here-In the parable of the talents, the lord who asked for an accounting from his servants chastised the one who had not invested the money entrusted to him but instead had hid that money in the earth. He characterized the servant as “wicked and slothful” for not investing that money for a reasonable financial return. Consistent with this spiritual principle, the Church’s financial reserves are not left idle in nonproductive bank accounts but are instead employed where they can produce a return.
    These invested funds can be accessed in times of hardship to ensure the ongoing, uninterrupted work of the Church’s mission, programs, and operations and to meet emergency financial needs. The funds are also needed to provide additional financial resources to support the Church’s mission to prepare for the Lord’s Second Coming. They will help sustain Church growth as prophecy is fulfilled that the gospel of Jesus Christ will be taught and the Church established in all nations of the earth. We anticipate that a large part of this growth will take place in the developing and populous nations of the world. Ever-increasing financial means will be required to provide thousands of meetinghouses, additional temples, and other essential resources to bless members’ lives wherever they are. In short, all these funds exist for no other reason than to support the Church’s divinely appointed mission.

  37. Perma Banned says:

    I guess some butt-hurt folks here would prefer the church return to the days of no liquidity and debts. That would make them feel much better about the church. Maybe then they would return to the church. Right?

  38. Just a few thoughts to add to the mix, ones that I found interesting:

    1. Considering Ensign Peak Advisors as an endowment fund (which is, I think, the right lens), then the Church is operating at an annual budget equal to about 6% of its endowment. Gates Foundation and Harvard operate with annual budgets equal to about 10% of their endowment. This doesn’t strike me as that big of a difference.

    2. Based on my understanding of Exempt Org federal tax law, the Commensurate Test discussed in the article will only matter if Ensign is considered all on its own and not part of the Church’s larger activities. Ensign is a Supporting Organization (and most likely a Type 1 SO) which means it will probably be considered part of the Church’s entire efforts. There likely won’t be a tax violation here. The two disbursements to Church businesses could also be considered proper under the tax law if they were treated as actual investments.

    3. Based on a quick and rough calculation I did this morning using the $$ in the article, starting with $12b in 1997 and adding ~$1b/year (I rounded down a little b/c I was too lazy to adjust for inflation), then $100b in 2019 would reflect somewhere between a 7–8% annual return. That is entirely reasonable. Also, 2/3s of the $100b would be investment returns, not directly collected tithing.

    4. This huge amount of wealth is a relatively new problem for the leaders of the Church to manage, one with no precedent in its history. I am willing to cut them some slack as they wrestle with it.

    5. This may partly explain why the Church changed the fundraising rules at BYU in a way that cut back dramatically on gifts from large donors. This change required a huge step up in the financial commitment from the Church. If it was motivated by a desire to use Church wealth in place of donor $$, so it could go elsewhere, that strikes me as a great decision.

    6. Distributing $100b to have truly positive impact is very, very hard to do, and requires the efforts of a lot of smart people. (There’s a distressing amount of careless philanthropy in the world.) Gates Foundation in 2018 spent about $1b on operations to give away $3.7b. They are widely regarded as effective stewards over their assets. Rapid vs. restrained grant making is a hot topic in philanthropy and there are strong arguments on both sides of the issue.

  39. I’m not disrespecting Sam, not in the least. I appreciate all of his detailed analyses on financial matters. The point is that not even Sam is able to answer the question. Now obviously he can provide commentary and insight which might help us understand tax law better, and with respect to the complaint. I totally appreciate that. But the legal answer can only come from the IRS. To be precise with my wording, I never said that only the IRS can say anything. Of course anybody can say anything they want (and they do).

  40. Deborah Christensen says:

    Ditto till waiting to until the IRS investigates. If the church has broken tax law then the govt will do their thing and the church will have to pay the penalty ect. The church does have private assets that are not related to the mission of the church or tithing so this is possible; regardless of the motives of the whistle-blower. There will be fall out and life will go on.

    I need to point out the amusing part of the story. The “saving it for the second coming” concept. Will we need money at the time of the second coming? Are we going to present a bank account with $100 billion to the Savior. What is he going to do with it? I may be wrong but I believe there are members of the church who think there is something divine about capitalism. They really believe they will be blessed for making alot of money.

  41. Kevin Winters says:

    Everyone who keeps saying the whistleblower’s membership status is relevant but then mentions things that are *entirely* irrelevant to his membership status: stop. You can’t say, “The whistleblower’s membership status is relevant because his claims don’t add up”. That is a statement about *his claims*.

    At the moment we don’t have enough information to impugn motives: we don’t know why his family left the Church, if the information he has was relevant, if his family has been mocked and judged by ward members or abused by Bishops, or what. At the moment we just don’t know and any claims about how it is “relevant” is only based on stigma. Not only that, but you are perpetuating stigmas that people like me who are no longer members deal with regularly when we relate with members. Please stop unless you actually have something concrete to base your negative connotation of his membership status onto this situation. The knee jerk, “He’s no longer a member so he’s acting in bad faith” is tired and damaging.

  42. I have a similar question to Deborah. Is the “saving for the second coming” part of the report? Or is that just hearsay? Where is that idea coming from? It does seem odd.

  43. Kevin, it would help if you actually addressed what people (including me) have actually said about his membership. It’s one more fact that piles onto other facts that cause suspicion. It’s relevant to assessing the tone of the complaint, which appears to be more of a moral attack than a presentation of legally relevant information. If this had been a truly disinterested report by someone simply pointing to facts, then you might have a point that his membership is irrelevant. But when he directly calls for revocation of tax exemption, calls tithing immoral, etc., then yes, his membership status is absolutely relevant to assessing the entire “report”.

  44. Kevin Winters says:

    DSC: no, being a disaffected member does not in itself “cause suspicion”. Someone can be a member and still have wildly false views, bad motives, and be “suspicious”. Someone can be a disaffected member or non-member and still be honest. As a data point “disaffected member” is neither suspicious nor not suspicious. Again: we don’t know how relevant or irrelevant it is at this point.

    What we do know: the stigma of suspicion against no-longer-Mormons is widespread and rampant. That so many here *immediately* jumped on it like it is highly relevant just establishes and perpetuates the stigma. It is disingenuous for anyone to claim it has relevance when we have no other data beyond their being a disaffected member. Not all disaffected members are equal.

  45. Kevin Winters says:

    DSC: likewise, someone can write a report that is not “a truly disinterested report” but still be done with genuine concern rather than malice. Some people are horrible at writing reports. I work in security: some of my co-workers couldn’t write a disinterested report if their lives depended on it, even though that is the expectation and training. The lack of “disinterest” could come from multiple sources. Or it could actually be a very charged thing for the whistleblower, who believes malfeasance is present on the Church’s end, but still be factually relevant despite the emotion coming from him. There is so much more nuance here and I see the stigma regularly, a stigma I see all too often as a target of it from all too many members. I can’t just let it run rampant here without mentioning it.

  46. Even if they aren’t diverting excess tithes and the interest thereon to for-profit enterprises: the story asserts that they are sitting on $100 billion dollars. Billion. With a B. It’s *a church.* If it’s true – if they are indeed sitting on $100 billion dollars, or even HALF that, or even a quarter – it’s obscene.

  47. “being a disaffected member does not *in itself*…” Correct. But it’s one of many relevant facts. You’re correct about your assessment of the capabilities for honesty among all people. I agree 100%. But in this case, under these facts, the fact that this report is coming from somebody who appears to have an ax to grind is totally relevant for the same reason that accusations from jilted lovers and disgruntled employees earn a greater amount of skepticism than those of someone whose involvement is not personal and for whom there is very little “revenge” motive. That doesn’t mean emotionally charged claims are untrue; I haven’t claimed that, and I don’t think others here have either. But it absolutely provides a basis for understanding the biases of the person making the allegations. Someone’s relationship with the person or organization about whom they are making allegations is always relevant and never dispositive.

  48. We should only really care when this fund is converted into gold and diamonds….then the end is near.

  49. “Director of Central Intelligence William E. Colby personally appealed to those who had learned about AZORIAN not to disclose the project. For a while they cooperated, but on February 18, 1975 the Los Angeles Times published an account that made connections between the robbery, Hughes, CIA, and the recovery operation. After that, investigative reporter Jack Anderson broke the story on national television, asserting that Navy experts had told him the sunken submarine contained no real secrets and that the project was a waste of taxpayers’ money.”

    https://www.cia.gov/about-cia/cia-museum/experience-the-collection/text-version/stories/project-azorian.html

  50. Kevin Winters says:

    DSC: “the fact that this report is coming from somebody who appears to have an ax to grind is totally relevant”

    Ok, but what is the “ax”? Do we know this is out of spite? Do we know if the whistleblower is just *really* bad at writing reports (hence his request for someone not even in the right field to help)? Is it that they aren’t good about differentiating between fact and opinions about the facts? Maybe their “ax” is the belief in massive malfeasance on the Church’s part? Maybe they aren’t the fired employee, maybe they are the abused spouse?

    The variations for the nature and context of the “ax” makes it impossible to make assumptions about motives. All you are going off of is the “ex-member = bad” stigma. And, sure, maybe your assumption turns out to be true and malicious motives are behind the whistleblower’s actions. But we don’t and can’t know that now based on the data we have.

  51. Thanks to Aaron for his thoughtful remarks (and to others likewise, as applicable). I am curious about the family history and background of the whistleblower, not as a means of corroborating (or not) his charges; those will be competently sorted, one hopes, by the IRS. I rather am wondering about the human story here – for instance, why his wife left the church – if she left due to the exclusion of women the priesthood, etc. Her leaving the church seems to have been a antecedent, causative factor in his departure from Ensign Peak Advisors (which amusingly has the acronym “EPA,” meaning we have to spell it out to avoid confusion).

  52. @DSC, I don’t necessarily think that membership has anything to do with it. I agree that there are obvious elements of moral outrage in the complaint, but there’s no reason that couldn’t or shouldn’t come from an active member. If I, an active member, were to discover that the Church has been holding on to many billions of dollars that were donated at great personal cost by the donors, and that were expected to be used for charitable purposes (but have not been), I would find that morally outrageous. If I were to learn that not only were those funds not distributed as explained by leaders and expected by members, but that the Church was intentionally hiding that fact from tax authorities, I would find that even more outrageous morally.

    To Kevin’s point, I think it’s problematic when we treat every former-Mormon as morally suspect and constantly doubt their motivations. It may be true that disaffected members no longer feel the need to apologize or explain away problems that they observe, and that may be a good thing–it allows one to observe issues without feeling personally threatened by the issues. When we constantly doubt the motivations of every former member, I think we act in an un-Christlike way and exacerbate feelings of mistrust between members and non-members.

  53. All is well…Zion prospereth.

  54. Regardless of the outcome, I can only hope this produces increased transparency. I for one would like to know the actual operating budget of the church, and what its money gets spent on. Neither of my children will attend a BYU institution, and while I’m not so crass as to insist that I have to directly benefit from any gifts I make, it’s not really a selling point for me to say that my tithing dollars have funded BYU. As I told someone else: I’m perfectly fine with an impoverished church that asks me for my money. It’s a better look than an incredibly wealthy church that does so.

  55. I will agree, though, that the title of the complaint–“Letter to an IRS Director”–is definitely intentional and does give an indication that the complainant is significantly disaffected. And reading even the executive summary corroborates that since the complainant asks the Church to “repent of fiscal gluttony”. That’s not really the language of a disinterested party.

  56. A few facts stand out from reviewing available, additional information. In particular, the whistleblower, not long before his move to Ensign, spent five years at DE Shaw, a quantitatively-intensive investment firm known for hiring high-octane talent (e.g., poaching PhD physics students from MIT). The whistleblower is evidently gifted. His twin brother, who submitted the documentation to the Washington Post (evidently against the whistleblower’s wishes), is also accomplished and seemingly has a bit extra horsepower under the hood. Neither are likely to have played their roles here foolishly nor lightly. Here is a five-points backgrounder: https://heavy.com/news/2019/12/david-nielsen/

  57. My BA and MA are from the University of Utah. I have taught at BYU and BYU-I. Of my three children: the oldest is on a mission and will be attending NYU, the next is a high school senior and not considering any church schools. The youngest has a few years.

    That said: The funding of universities, even BYU, is one of the things I most enthusiastically support the Church doing.

  58. What was the motivation for writing the expose and sending to the Washington Post? What was the motivation for identifying themselves in the expose? Those are red flags for me. Concerns about legal malfeasance would be addressed through the wistleblower complaint alone. It seems to me these two wanted to make a name for themselves.

  59. Should Church finances be run the way Harvard’s or the Gates Foundation’s are run? Is $1 trillion enough for a “rainy day” fund? Should the Church be expected to have a better public position on questions like these instead of just being defensive? What about scriptures like Matt. 6:19-21 (“Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal”) or other passages that talk about wealth (Jesus and the rich young man) or “carrying no purse” when traveling, as a demonstration of faith that the Lord will provide?

    These are all discussions that don’t happen in any meaningful way unless there’s transparency in the finances. It feels like this really needs to change.

  60. I intentionally withheld judgement on the report’s author (the whistleblower’s brother)… right up until I read the first few pages of his expose on Scribd. If anyone has an ax to grind, this guy does.

    It’s all there: sensationalism, polemic, guilt by weird tangential association to other weird tangential religions, speculation, presumption, moralistic questioning based on speculation and presumption with a hint of condescension.

    This is not a dispassionate report. It’s a passionate diatribe, full of sound and fury. Now I’m left to wonder if it signifies anything.

    The main concern I have for both people involved (the author and the whistleblower) is that their full names (with middle initials, because we’re Mormons, you know) were published on the front page of the Washington Post. I don’t enjoy the thought that they they (and their families) for sure by now have been completely doxxed. The fact that the author outed his brother in a national newspaper against his wishes also doesn’t sit right with me. The whole thing smells salamandery.

  61. Jonovitch, I just briefly looked through the expose, and I need to add to your adjectives that it is juvenile and unprofessional. Exhibits have been tampered with without always clearly showing how. There’s an entire exhibit that purports to be an email exchange, but it has been copied into Microsoft Word and redacted from there. It doesn’t take an attorney to realize that that essentially nullfies the exhibit as evidence. Despite synplexity’s assertion, this has been played extremely foolishly and lightly. The polemicism evident in the document undercuts the regulatory complaint, which in turn undercuts the polemic objective by making the evidence extremely difficult to take seriously.

  62. Ryan Mullen says:

    Aaron,

    “Also, 2/3s of the $100b would be investment returns, not directly collected tithing.” I’m curious as to what this distinction means to you. I, perhaps naively, would assign whatever restrictions the church places on tithing “principal” to also apply to tithing “returns”.

  63. The phraseology of the title seems purposeful to me, though that may just be my bias showing: “Letter to an IRS Director” is pretty similar to “Letter to a CES Director.” It’s a weird way to phrase it otherwise–he obviously knows who the IRS’s whistleblower is, so he could just say “Letter to Lee D. Martin.” Or, “To Whom It May Concern.”

  64. Oddly enough the statement released by the first presidency made me feels worse instead of better about the whole thing. Instead of a dismissive statement from the PR people three days after the fact, we get a statement from the FP within 24 hours– a statement which denies breaking the law, but not much else.

  65. Deborah Christensen says:

    to Bryan S at 11:06 am
    Here’s the paragraph in the WP article”
    “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.”

  66. To the people shocked or confused about generating a return on money in preparation for the second coming, consider the name of the church you belong to, and read the parable of the talents.

    I’m happy the church leaders take these things seriously and merge the principles taught there with prudent professionals.

  67. Lcn:

    One could also consider the name of the church I belong to, and read Christ’s words to take no thought for the morrow. Or his praise of the widow’s mite. Or his command to take care of the least of these. Or of the Prodigal Son whose father didn’t withhold from a reckless son.

    I’m not saying we shouldn’t consider the parable you cite above. But there are other teachings that make your statement incomplete.