It’s true: In March 2022, the FEC fined the DNC and Hillary Clinton’s presidential election campaign for incorrectly declaring payments to an oppo research firm involved with the Steele dossier. As a Democratic voter in 2016, I must say that news of the fine means…absolutely nothing to me. The stakes in the 2016 election were a lot higher than whether the FEC agreed with every point of the Clinton campaign’s interpretation of campaign finance law.
This isn’t to say that following accounting rules isn’t important. It is! But I don’t expect Clinton personally directed someone to misfile the paperwork, and in any case the multiple reasons I preferred her as a candidate had nothing to do with the strategy of her campaign accountant.
I do sympathize with the accountant, though. I assume there was some strategic reason for checking off whatever box got them in trouble, just like there’s a strategic reason that I claimed the home office deduction on my taxes this year – it lowers my tax bill. TurboTax tells me that estimating the size of my office and house is fine, so I made a good-faith effort, but if an IRS inspector shows up with a tape measure, some of the deduction might be disallowed and I’d have to pay back taxes. (And that’s just one of the places where I had to take my best guess about interpreting how to apply tax law in a situation that’s slightly complicated but not all that uncommon. Even TurboTax threw up its hands on how to deal with adult children who are no longer dependents but still part of an ACA health plan associated with the business of a self-employed taxpayer.)
Tax law and election finances are all very interesting, of course, but of all the consequences of the 2016 election, a $113,000 fine (in total) for a million-dollar payment doesn’t rank in the top thousand. If I’m disappointed in anything, it’s that the Steele dossier didn’t result in Trump being hounded out of office. Compared to that, how the check got cut for the legwork is completely uninteresting.
(No crowing, Trump voters. There was an FEC fine for the Trump campaign that we can substitute just as easily.)
* * *
I’d like to propose as a basic rule of thumb that if you wouldn’t be outraged by Your Candidate or Your Party doing something, you shouldn’t let outrage overtake you when the Church does something similar. If the DNC had $50 billion, I’d be ecstatic. If their investment advisor suggested an aggressive strategy to avoid filing paperwork that didn’t ultimately work out, resulting in a $5 million fine, well, the DNC should have a talk with its accountant. I look to the DNC and Democratic politicians for many things, but not for a campaign finance strategy that never results in FEC action. People get too ambitious and make mistakes. If that happens, I’m not going to start voting for Trump, cheering for Republican candidates, or donating to the RNC.
If you’ve been following the story of the Church’s SEC settlement with intense interest, I have some bad news for you: The people at church have already moved on. A business professor brought up the SEC fine in Sunday School a couple weeks ago; he thought the online reactions were exaggerated to the point of ridiculousness. I know that outrage is addictive and scandal is delicious, but there’s a high bar for religious scandal these days, and filing delayed paperwork isn’t going to cut it. This isn’t to say that it’s impossible for scandal to ever touch Church leaders (or My Party; the Lewinsky affair was genuinely appalling). But without some element of corruption or vice, agonized agitation over the delayed filing of form 13F seems very much like Republicans hyperventilating over Hillary Clinton earning money from people wanting to hear her speak.
There’s a good reason that the Church doesn’t want to disclose what its market positions are if it can, and I wish its investments could have remained opaque. Have you seen how acrimonious people get? How certain they are that they could invest, divest, or otherwise spend the Church’s funds better than the Church can? The people who want transparency the most are the ones who transparency most harms by tempting them to see themselves as stakeholders and not cross-bearers, as stewards over the vineyard rather than tenders of a vine. If $5 million let us avoid that for twenty years, I’d say it was worth it.
This isn’t about the “delayed filing of form 13F.” And I think you know it, too.
Oh, and for the record, I’m not one to call for total transparency on the part of the Church’s finances. I will remain a full tithe payer without the transparency. Also, I’m not in “agonized agitation.” But creating shell companies for the express purpose of hiding the Church’s wealth from both outsiders and its members is unethical and dishonorable. If an individual transfers assets to shell companies on the eve of filing bankruptcy, it’s called a “fraudulent transfer.”
I repeat, this is not about forms.
Excellent post, Jonathan.
May I reach across the aisle and shake your hand?
I’m fine with shell companies for the reasons you note and do feel like much of this is people waiting to pounce for any kind of scandal, and now that there’s an actual fine some of them feel like this is going to be as close as they’re going to get.
That being said, my understanding is that there were a few spots where they had people sign things that were demonstrably untrue, and that for me is a red line, but I suspect that’s a mid-level management issue. I suspect the brethren basically approved “we’re going to use shell companies to not have to reveal the size of our endowment” not the nuts and bolts which, in this case, included some actions that did appear to be dishonest. (Again, shell companies are not dishonest nor is keeping the amount confidential, but having somebody sign and say they had full oversight over something when they clearly did not is).
The initial disclosure of the size of the church’s investments was the final thing that pushed my family out of the church. Up to that point we were active tithe paying members with multiple callings each.
I have been financial clerk as well as a church auditor. I would have been excommunicated for mistakes in handling church finances. Heck, there was a district in my mission where I discovered that a district President had innapropriately used the branch finances to pay for a suicidal members funeral and then tried to cover up that he had done so because he didn’t have enough fast offering money to cover it. Over their course of the year he pulled money away from each branch to hide the initial large sum. When I discovered it and it was reported to church headquarters, he was formally tried in a church court and he was told that to repent he needed to pay the initial sum for the funeral back to the church out of his personal money or face excommunication. He did it and almost went bankrupt in the process.
So I guess to you this is no big deal that the church has billions in extra cash to invest and then was embarrassed by how much it was and then tried to hide it by dividing it into multiple shell companies over decades instead of being open and transparent about its finances.
To me it is a big deal because the church expects a more honest and transparent accounting of the Lord’s tithing of its members than it does of itself. It is a big deal to me because I was part of it. My family paid tithing even when it hurt. I sat through so many trainings from Salt Lake as financial clerk about how important careful accounting was. 45 years I paid in every year. I paid tithing instead of saving for retirement early in my career. It is a big deal. If my work did this I would quit. My church did it and it was one of the reasons I quit.
We don’t need to defend wrongdoing by church leaders to be good members of the church. I don’t think it pleases the Lord. We worship the Lord, not church leaders. I don’t like these type of “this is no big deal” posts.
I propose a better rule of thumb – let’s hold the church to a higher standard than political parties. Let’s hold the church to its own standard. Let the leaders of the church who claim to be the Lord’s stewards bear that cross.
Some wish that church members have moved on. For glaringly obvious reasons, conversations at church are not a good evaluation of if they have moved on. But I predict this issue will have a far greater shelf life than any of us want. I know several active LDS families who have now reduced their donations to just enough to maintain their temple recommends. It will likely affect missionary work in the long term and a bit of the luster and innocence conveyed by church leadership now rings hollow. It doesn’t take much research to discover that several of Gordon B. Hinckley’s statements to the public about church wealth were misleading. Are those who signed the falsified 13F forms “honest in their dealings with their fellow man”? I suggest a good comparison would be the “lying for the Lord” which took place in the late 19th century as children were questioned by federal authorities about plural marriages in their communities. It didn’t take long for several leaders of that period to realize that the church had created a generation of liars. They had to make some changes then and we likely have to make changes now.
Like several others who have already commented, I feel no obligation to defend the Church when what the Church did was wrong. I feel no need to ignore the impact this has had on people’s testimonies and the reputation of the Church. And those who create “this is no big deal” types of posts know that this really is a big deal or they wouldn’t write such posts.
It’s fine for you to support the church leaders decisions, but the OP is just flat out wrong on a number of items. To name just one, the 13F forms were not late. As far as we know they were all filled on time. In fact, extra forms were filed on time from shell companies. By companies registered in different states. That had mailboxes and voicemail boxes with instructions to delete communications not from them SEC. Signed by people who saw only the signature pages and didn’t know what they were signing, two of whom resigned their positions when they found out.
It almost seems like OP didn’t read the SEC order and findings, or is talking about a completely different situation.
So support the church if you want, but do it honestly. Perhaps one should review the SEC findings and church response and write a post that conforms to the best known facts.
But one part of the OP that I like is this: “I’d like to propose as a basic rule of thumb that if you wouldn’t be outraged by Your Candidate or Your Party doing something, you shouldn’t let outrage overtake you when the Church does something similar”. This highlights the confirmation bias involved. People will tend to have outrage towards an opposing party but not their own.
On the other hand, it might be better to use a more neutral example. Perhaps the Democratic Party doesn’t have 50 billion, but there are many funds that are required to file 13F that are not political parties. Berkshire Hathaway for example has more invested than Ensign Peak. Harvard and Yale have smaller endowment funds that are also invested. And some investors or speculators do mimic Berkshire Hathaways holdings, albeit months later when the 13F forms are finally available. ***But they still file their 13F forms*** directly and not through fake shell companies signed by people that only see the signature page and don’t even know what they are signing. And investment funds that disagree with the law can and do publicly say so and lobby for the law to change.
For a person that thinks $5 million and a bit of lost integrity is a small price to pay to hire investments, I wonder what said person would think of Berkshire Hathaway, and its CEO Warren Buffet, if it did the same thing. And I wonder if that person thinks that the church have its leaders sold adhere to the same standard, a higher standard, or a lower standard. I wonder.
Just to echo some of the previous comments, the original post creates a false equivalency between political parties and the Church. That comparison fails in numerous ways, but the most egregious is the expectation that we have from each institution.
Moreover, these events contradict the concepts taught over the pulpit. We are told to be scrupulously honest in all things…and this episode (if you can call a two-decade strategy an “episode”) belies that at the level of the Church leadership. Trying to deflect the blame to mid-level managers or claiming ignorance on the part of the leadership fails as well; it is clear from the SEC documents and from Church policy that the First Presidency and Presiding Bishopric are the ones at the top of the organizational hierarchy and decision-making process.
I can understand the desire for some, including the author, to defend the Church. It is the default position for many, especially if one feels that the Church is constantly under attack in various ways by “the world.” Yet in this instance, there really is no defense. And this will not go away, regardless of anecdotal evidence from a particular ward or branch. One example: my TBM wife, who has happily paid tithing her entire life, confessed that in the wake of these revelations she had second thoughts about paying money to the Church for the first time in 50+ years. While I will not extrapolate that to any broader conclusions, it is indicative of the effect that these decisions can and likely will have.
The Church expects a great deal from its members; we should not expect any less from the institution or the leadership.
Amusing! I always thought that I paid tithing because the Lord told me to do so. Don’t recall anywhere that is says I can stop paying tithing once the church has a certain amount of savings.
And if it is true that one of the concerns was that some members would stop paying tithing if they knew the level of church investments, it would seem, based on the reactions I’m seeing, they were right.
To suggest that the church leaders knowingly engaged in illegal behavior is ridiculous. These types of investment structures are set up based on recommendations from investment counsellors and advice from legal counsel specializing in that area of the law.
Unfortunately it sometimes it turns out that the regulators and/or courts do not agree that the structure is acceptable and fines result but that doesn’t mean that the initial intent was to subvert the law. And that scenario is a far cry from one where church leaders are sitting around saying we know this is an illegal activity but we are going to do it anyway and hope we don’t get caught which is what so many of you seem to think was the case!!
Rockwell, if we’re going to look at investment funds, let’s look at Barclays, BofA/Merrill Lynch, Citigroup, Credit Suisse,
Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS, some of the largest and most sophisticated players in finance. Last year they were fined $125 million each for violating “recordkeeping provisions of the federal securities laws.” But their employees have not resigned, their clients haven’t abandoned them and the world continues to revolve.
Brian, I’ve also been a financial clerk, and you’re vastly exaggerating the consequences of making a mistake.
There are a range of available reactions here, and stoking your own outrage is not just unnecessary, it’s harmful. You don’t have to do it to yourself, and it hurts you and others when you do.
Ojiisan: I can’t speak for everyone. I understand and know that financial rules can be arcane, obscure and difficult to follow. I so seriously doubt that “the church” (meaning our highly level of church leaders?) “knowlngly engaged in illegal behavior.” It is not something that I can believe.
However, it seems obvious to me that our church leaders knowingly engaged in evasive and misleading behavior.
If we obey certain commandments only because we are duped into doing so, are we really being obedient?
Don’t see how anyone was duped into paying tithing.
As I noted, the commandment is to pay tithing not to pay tithing until the church reaches a certain level of investments.
So yes, you are being obedient when you follow the commandment and pay your tithing.
If the best defense is that political campaigns and investment funds behave similarly, then that kind of has the opposite effect of making me feel better about it.
A: You say that the Church expects a great deal from its members, and that we should do the same. The mutuality of that relationship seems like a good approach to take. It is a great comfort to me that the Church doesn’t expect perfection from me. I’ve tried to do the best I can, but I’ve taught some really terrible lessons now and then, served as ward mission leader in a ward with virtually no nonmembers within its boundaries and been a wholly inadequate Cub Scout leader, and I’m really bad at my current calling. So far the Church has not wholly disowned me and hopefully it will remain so. I trust that whoever had the job of coming up with legal strategy on this one was also doing the best job he or she could. I don’t feel entitled to ask for more, considering my track record.
YFA: In fact, I think it would be a lot healthier for everyone to assume that the Church’s long-term investments operate pretty much like an investment fund, without ascribing any particular significance to them. The only information in “Mormon Church adds/loses billions in wealth” news articles is the completely unremarkable fact that markets rise and fall.
I’d like to suggest a different analogy to a different Clinton. Many were outraged when Bill Clinton committed perjury by lying to an investigator. Others did not think it was a big deal. Everyone knew that he did something wrong.
The Church leaders had people sign documents that read in part “The institutional investment manager filing this report and the person by whom it is signed hereby represent that the person signing the report is authorized to submit it, that all information
contained herein is true, correct and complete, and that it is understood that all required items, statements, schedules, lists, and tables, are considered integral parts of this form.”
The information in the form was not true, correct, or complete. It was a lie. The leadership wanted to hide how much money they had. It was not an accident. This was illegal. I strongly suspect that the legal advice they got told them that what they were doing was illegal. We know that the Church auditors warned the leadership about what they were doing.
This does not mean the Church is false. This does not mean that tithing is not a commandment. It does mean that the Church leadership did something wrong. People who feel betrayed get to feel outrage. People who don’t care, can move on. Any other feeling that people have is fine as well. We don’t get to tell others what to do with this information on either side. There is no virtue in feeling one way or the other, in my opinion.
Ojiisan, when you write, “And if it is true that one of the concerns was that some members would stop paying tithing if they knew the level of church investments, it would seem, based on the reactions I’m seeing, they were right,” I would argue that you are largely misreading the current reactions. It’s true that some people stopped paying tithing when they learned the amount of money the Church has. But that was revealed years ago. The current outcry has almost nothing to do with the amount of money the Church has and everything to do with, among others things, having members sign legal forms declaring said members held sole discretion over investments in which they had zero discretion.
I think it’s one thing for someone in an organization to be creative with the procedural elements of managing its money and quite another for him to actually spend some of that money for his own personal needs without permission. While the former may (or may not) be irregular it doesn’t necessarily follow that such an action constitutes a breach of morality. While the latter, which is tantamount to embezzlement, is very difficult to justify on moral grounds.
That said — as it applies to the current situation — while the church was fined for noncompliance with the law regarding procedures it in no way abused the actual funds. In fact, I’d say that at least one of the reasons for the church’s strategy — as overzealous as it may have been — was to *protect* those funds from folks who would’ve loved to get their hands on it.
P.S. Come back, brother.
“If you’ve been following the story of the Church’s SEC settlement with intense interest, I have some bad news for you: The people at church have already moved on.” Yes they have. And I’m not surprised. They started filing dishonest filings in 1997. They knew what they were doing. The SEC initiated an investigation several years ago. They recently settled that investigation. The matter is closed to them because they have had the time and information needed to process the issue, see that “mistakes were made,” and come to closure. Contrast that to the members who just learned about something that’s been going on for 26 years. We are still processing. We still have questions. We need time. To shut the matter down because they have moved on is not how a healthy organization should operate.
“filing delayed paperwork isn’t going to cut it.” This isn’t what happened, and it’s not my job to educate you on the subject. I suggest you return to the SEC order, re-read it, and edit your post.
“There’s a good reason that the Church doesn’t want to disclose what its market positions are if it can, and I wish its investments could have remained opaque.” Agree to disagree. Pray tell, what is the good reason the church doesn’t want to disclose its market positions?
And forgive me if I choose to hold an organization that represents deity to a different standard than a man-made structure. But that’s my right. You may believe the standard is the same, that’s your right.
As a CPA, I’m a licensed professional. Checking the wrong box on a form, signed under penalties of perjury, can cost me my livelihood. So to me this is a very big deal. That being said, not everyone has my background. If others choose to not see this as a big deal, that’s their right, and I have no interest to shame them or change their mind. It’s their life, and it’s their money. Some people still pay tithing to the church. Some people have decided to instead donate that money to other charitable organizations. Some choose instead to keep the money for personal reasons. These second and third groups, in my experience, do not advocate their position nor do they demand others follow suit. We are all trying to do the best we can with the limited resources we have.
This post is just another reminder that our faith community has no interest in expanding its stakes to make room for good people with different perspectives. If you don’t Mormon the way the OP does, shame on you. Thank you for the reminder why so many of us no longer bother.
“If $5 million let us avoid that for twenty years, I’d say it was worth it.” Time will tell.
President Gordon B. Hinckley, 21 years ago, to Helmut Nemetschek of ZDF German Television, in answer to his query about why the Church doesn’t publish annual finances: “Well, we simply think that information belongs to those who make the contributions, not to the world.”
Really? I’m still waiting. This is not about filing forms correctly or about playing shell games with money. It’s about not trusting the members. Just a reminder, the full name of the Church is a double possessive. It is Jesus Christ’s church (not Russell Nelson’s), but it is also ours. We deserve an accounting, at least in summary form, about what the Church is doing with our contributions. President Hinckley even admitted as much. Or was he not being honest?
AM, I think what you’re referring to is B. Clinton’s claim that he “did not have sex with that woman,” that woman being Monica Lewinsky. The reason the scandal persisted was that he did, in fact, have sex with that woman. It was the adultery that fed the scandal. If he had claimed that he did not write a recommendation letter to help an intern get into Darmouth, when in fact he did write such a recommendation letter, few people would have cared. You say you suspect Church leaders were given legal advice that they were doing something illegal, but I very much doubt that. I think it’s more likely they were told something like, “There’s a good chance we can accomplish what you want while remaining compliant if we structure it like this.”
Chadwick, by “the people at church,” I mean the people in your ward and mine. They have already filed this away as a paperwork issue. I’m only informing you of how they see it. The people who are upset are the people who are always upset about everything. As for why the Church wouldn’t want to disclose its financial positions, see the linked post. And you’ve never seen anyone advocate against paying tithing to the Church? Jana Riess is just one prominent example.
Jonathan Green, “the people who are upset are the people who are always upset about everything.” Wow. Patronizing beyond the extreme. I know several close family members and friends who don’t come close to your broad stroke painting here. A cursor reading of comments sections on a variety of sites would reveal this is inaccurate. My TBM wife, for instance, is suddenly having a faith crisis. Such simplistic dismissal of real anguish is unchristian, Jonathan. Come on now, you know better.
Also, the SEC goes after banking and financial organizations all the time. Churches? Almost never. Comparing the two is, as the kids say, suss.
Oh, and tonight, my very real TBM EQ President (who knows I am well informed on the matter) has requested to talk to be about it, because he has still questions and concerns about it and wants to work through them. This is after a 45 minute talk on Sunday about it.
Thanks Johnathan and T&S for talking about this topic.
A couple things…the church has changed a lot regarding what they will/will not do with its fast funds. As a bishop, I could “spend” more than my fast off funds had if I needed to. I never needed to, but I have heard that when that happens, nothing really happens except maybe a stake pres having a chat with you to see what is up. I spent fast off funds on a member suicide as a bishop myself and nobody in the church even asked me about it. Maybe it was an issue in the past, but not 15 years ago when I did it. I didn’t try to hide anything and that may be the difference. Take money from the church, sure, you will more than likely be shopping for another house of worship. Fill out a form wrong, not have the right documentation for a ward audit, fast funds in the red, you will be asked to do better.
To those out of the church or are less than thrilled with the church over this latest blemish…the church is not run by Jesus, but by people like you. Like you, they may be 100% honest 100% of the time. Like you, they may be less than honest some of the time. When Jesus is here, and calling all the shots in the church, then you can have perfection, but until then, the leaders aren’t doing so bad IMO.
If you are freaking out over this so-called sin of the church, I strongly suggest you dont read/study church history.
Having said that, if the leaders are truly hiding the $ over concern that I will stop paying tithes because of the balance, I am disappointed in their lack of faith in me. Hiding the $ from outsiders, I have no problem with. Maybe all this will be the catalyst for members getting more $ info in the future. That would be a good thing I think. Something simple like income and expenses each year and savings balance. Part of the reason why I dont participate in tithing declaration. I will tell you, if you tell me. I still get temple recs without attending tithe dec. Some bishops may not be so nice so check your local rules. :)
My guess is that the size of the church’s portfolio–more than anything else–is what places it in the same category as banks and large corporations in the SEC’s eyes.
And, uh, goes easy on your Elder’s Quorum president, will ya? Make sure he’s aware of the arguments “for” as well as “against” like those that can be found in the Public Square magazine and the Deseret News.
Even if one assumes that the Church did nothing “illegal” (the cliche that the federal government could indict a ham sandwich is unfortunately apt; dig deeply enough and pretty much anyone could be indicted–even if not convicted–for violating a federal statute), these actions certainly fall well within a set of questionable ethics…and perhaps beyond. The disconnect between these decisions and the expectations that the Church as an institution has for its members–and the behavior urged by the Church’s leadership–is the problem. The Church should be going above and beyond the standard of legality and avoid the appearance of any kind of ethical or legal violation–if speakers in General Conference continue to suggest, for example, that we should not frequent Starbucks for the sake of appearance, that is the least they could do.
Being patronizing and condescending to those who disagree with his position is pretty on-brand for Jonathan Green. His comments (both here and in previous posts) suggest that he believes that his is the only possible correct position. I do not dispute that within his circle he may not see any resonance on this issue, but there is no way for him to extrapolate that to the broader LDS community with any accuracy.
And not to be repetitive, but it is not only the “usual suspects” who are “always upset about everything” that are troubled by these revelations. My wife and parents–all of whom are TBMs who have not blinked at any number of potentially concerning episodes in Church history and with problematic Church policies–have expressed concern with the decisions and directives involved here. I have had multiple conversations with members of the faculty at BYU where this topic is of serious concern. Discussions in my ward (in deeply LDS Utah County) have engaged this topic repeatedly both during and outside of church meetings. I can only imagine what effect this has had on people whose connection with the Church is more tenuous.
I think that many people feel as I do: on one hand, there is a willingness to concede that the ambiguous and sometimes contradictory federal statutes on investments could be a factor in the way this unfolded over more than two decades. On the other hand, however, the refusal of those in positions of trust and leadership to admit fault (even though it is clear that there is culpability on the part of the Church and its personnel–both ecclesiastical and financial) and effectively shut down any further conversation about it outweighs the former considerations. This breach of trust and the hypocrisy it reveals needs to be addressed.
Thanks for the response and other funds that might be good comparisons.
I used Berkshire Hathaway as an example specifically because it is within an order of magnitude of the Ensign Peak in size, because they file their 13Fs, and because people are known mimic their investment strategy, because Berkshire Hathaway is widely considered to be the most successful investment fund. Mimicking the investment strategy is one of the top reasons people cite that the church may have wanted to create the shell companies. (I think the main reason was to keep the public from knowing the size of the investment fund, but that doesn’t really matter to what I’m saying).
I don’t know why you picked the funds you picked, except that they were fined by the SEC. I don’t know why they were fined. It might be interesting to compare that to the fine against EPA, perhaps, to see if the actions and fines are proportional if you’re interested in making that analysis.
But my point really was that original post suggests that instead of getting as upset as one would against an opposing political party, we should be as lenient as we would be with our own political party. I suggested a more neutral comparison, and I’ll grant that your comparison funds in your comment do seem to be a more neutral comparison in terms of biases. But I don’t actually know how they compare in terms of fund size, length of time, or nature of the finable offenses.
Brian Larsen, how many churches have finances that meet the SEC’s threshold? Not many, and it’s not because they’re smaller in membership. Their finances are instead highly distributed among congregations or orders. We don’t have a congregational organization as a consequence of our doctrine: We believe we are the gathered Church of Jesus Christ, not a self-organizing assembly of believers. The finances follow from the organizational structure, which follows from the doctrine. There aren’t a lot of parallels out there in terms of size and scope, so the lack of precedent isn’t too surprising. The Church as an institution is also relatively new to having significant savings, and it might take more than a few decades to develop the necessary institutional knowledge to figure out exactly how to go about it.
You have the chance to help someone through a faith crisis. You have various options at your disposal. What are you going to do about it?
“Ojiisan, when you write, “And if it is true that one of the concerns was that some members would stop paying tithing if they knew the level of church investments, it would seem, based on the reactions I’m seeing, they were right,” I would argue that you are largely misreading the current reactions. It’s true that some people stopped paying tithing when they learned the amount of money the Church has. But that was revealed years ago,”
Sorry not misreading anything. That comment of mine was not about the current reaction. The alleged statement was that the church was afraid that people would stop paying tithing if they knew how much money the church had and when that was disclosed previously some people started to stop paying their tithing which proved that the statement, if correct, was true.
There may be more people now refusing to pay tithing because they don’t like what transpired with the SEC but that is irrelevant to the fact that the alleged statement was validated by people stopping paying their tithing when the amount of the church investments was publicly revealed.
As for the current reaction I find it difficult to justify not following the Lord’s commandment to pay tithing because one thinks the church leaders screwed up when the investing structure was initially set up. As I stated earlier do you really think that the reality is that the church leaders were sitting around saying we know this is an illegal activity but we are going to do it anyway and hope we don’t get caught?
Having had experience with setting up these kind of structures I can tell you that this investment structure was set up based on recommendations from investment counsellors and advice from legal counsel specializing in that area of the law and the church leaders thought it was legal at the time it was set up. They did not do anything thinking it was illegal but doing it anyway.
To the OP: “filing delayed paperwork”
Maybe I’ll have to go back and check, but I don’t remember this being the issue. I remember two issues.
1. The shell companies filed forms 13F as if they had control over their assets, when they never actually had any control; that being maintained by the central Ensign Peak organization. Until 2020 Ensign Peak proper did not file.
2. There was a four year period from 1998 in which Ensign Peak and “senior leadership of the church” (defined in the SEC’s order as the First Presidency and Presiding Bishopric) knew that they needed to file forms 13F quarterly, and yet they did not.
Jonathan, “You have the chance to help someone through a faith crisis. You have various options at your disposal. What are you going to do about it?” I’m going to be loyal to the truth and not avoid the harsh facts. I’m not a sugar coating sort of fellow. This guy can handle the facts. Not everyone, apparently, can.
Ojiisan, “Do you really think that the reality is that the church leaders were sitting around saying we know this is an illegal activity but we are going to do it anyway and hope we don’t get caught?” To some extent, yes, that’s exactly what the SEC order says. A very significant portion of 13f is about discretion. EPA, knew they were supposed to file this from the beginning. They advised Church leadership on what they were doing and the Church leadership directed them on what to do. This wasn’t some ‘misstep.’
Jonathan, “The Church as an institution is also relatively new to having significant savings, and it might take more than a few decades to develop the necessary institutional knowledge to figure out exactly how to go about it.” So, you’re arguing that the people involved were ignorant of the law and the illegality of what they were doing? That’s a hard sell. The Church’s own auditing department called them out on it and they did nothing.
A: I’m not finding any examples of Conference speakers mentioning Starbucks; who do you have in mind? I don’t see a refusal to admit fault; the Newsroom statement express regrets. I don’t see a breach of trust either, as there was no misuse of funds. And I don’t see a case for hypocrisy because the Church isn’t requiring perfection of me, as I mentioned above.
Of course what I write reflects my position. I’m not sure whose position you were expecting. You’ve got to get over mistaking disagreeing with condescension.
If you’ve hung around the world of online LDS discourse long enough, you start to recognize the names of participants and their typical responses. As long as I’ve been around, our discourse community has cultivated some really awful habits that haven’t helped anybody, and it’s about time to admit that it’s a problem. When people post for years about doctrine or history or culture and then pipe up now and then to point out a problem, I take it seriously. But I don’t put much stock anymore in the people who are constantly upset. I think living like that is bad for everyone. Maybe it’s bad for me, too, because I’ll ignore something I should take seriously. This time around, I haven’t come across a case where the comments have surprised me.
OP: “Chadwick, by “the people at church,” I mean the people in your ward and mine. They have already filed this away as a paperwork issue. I’m only informing you of how they see it.” Oh, so you read minds too?
OP: “The people who are upset are the people who are always upset about everything.” If you say so. That’s not been my experience. I tend to get upset with upsetting things. I find dishonesty upsetting. YMMV.
OP: “As for why the Church wouldn’t want to disclose its financial positions, see the linked post. And you’ve never seen anyone advocate against paying tithing to the Church? Jana Riess is just one prominent example.” I’ve read Jana Riess articles. She never once told people to do as she does. She explained her position and backed it up with scripture. Yet this post attempts to gaslight those unhappy with dishonest acts because you (and apparently everyone at church except for me) doesn’t care.
REC911: “To those out of the church or are less than thrilled with the church over this latest blemish…the church is not run by Jesus, but by people like you” Tell that to Elder Hamilton.
Ojisan” “Having had experience with setting up these kind of structures I can tell you that this investment structure was set up based on recommendations from investment counsellors and advice from legal counsel specializing in that area of the law and the church leaders thought it was legal at the time it was set up. They did not do anything thinking it was illegal but doing it anyway.” So you’ve purposefully advised clients to set up structures and encouraged them to lie when they sign their name as an investment manager that they have discretion over the funds when they do not? Yikes.
I note that you change what B. Clinton did to something that is not illegal. Clinton lied under oath This is perjury. This is why he was sanctioned by the Supreme Court. Some thought the perjury was outrageous. Others felt that it was not a big deal. Both positions are ok. People get to feel the way they feel.
What the church leaders did was illegal. I cannot imagine a reputable lawyer telling them that it would be fine if the SEC discovered it. It’s ok, though, if you don’t think the law-breaking is a big deal. I think it is unacceptable to act like those who are hurt have no right to feel their feelings.
So you’ve purposefully advised clients to set up structures and encouraged them to lie when they sign their name as an investment manager that they have discretion over the funds when they do not?
Hard to explain to someone who has no experience in the area but rules relating to structures like this are not always black and white and it is necessary to try to interpret the regulations to determine what type of structure will be acceptable. Sometimes you wind up setting up something that the regulator does not agree is acceptable. Happens reasonably often with tax structures and investment structures. The fact that the regulator does not agree that the structure works does not mean there was an intent to do something illegal.
And it doesn’t even necessarily mean it is an unacceptable structure. If you are willing to take the chance you can take it to court and sometimes the judge will disagree with the regulator and say the structure is acceptable. However, it is often easier and more cost effect to simply pay the fine and move on. But in so doing you are forced to accept the regulator’s version of the facts even if you disagree with them.
So no I never encouraged someone to lie or break the law and I don’t think that anyone intentionally did that here.
“If you are willing to take the chance you can take it to court and sometimes the judge will disagree with the regulator and say the structure is acceptable. However, it is often easier and more cost effect to simply pay the fine and move on. But in so doing you are forced to accept the regulator’s version of the facts even if you disagree with them.”
I think this is the crux of the matter with regard to most of the disagreement between folks on the blogs. Some of us don’t take the SEC’s allegations at face value and others do.
I agree with you–that the church might have fought the SEC’s allegations in court but chose instead to pay the fine. My guess is that they believed that particular course of action would cause the least damage to the church in the long run.
If the church were transparent about its finances the impact of EP and SEC find could be quantifiably measured in donation amounts. I am sure that leaders in Salt Lake will review those numbers but members won’t know.
Hamilton of the Seventy? He would be like a stake pres to me….trying his best but not to believed every time his lips move.
Hey, you asked! :)
“I know for sure that the Lord directs the affairs of His Church.” President Nelson, April 2021
Did the Lord direct this particular affair?
JG: “If you’ve hung around the world of online LDS discourse long enough, you start to recognize the names of participants and their typical responses. As long as I’ve been around, our discourse community has cultivated some really awful habits that haven’t helped anybody, and it’s about time to admit that it’s a problem.”
That’s one reason I just don’t engage much on the blogs anymore. It’s gotten too predictable and with 10 kids, I have better things to do. But I appreciate your thoughtful engagement.
If you think “affairs” means filing 13F’s, where we build temples, what stocks to buy, saying prayers again 2nd hour, yet more endowment changes, mormon is now a swear word, then we dont agree with what “affairs” mean.
This notion that a “prophet” means God is in every detail cant go away fast enough IMO. This thinking will make it impossible for those who believe that way, to stay in the church. In fact, the majority of those who left, thought this way. My testimony is not based on prophets, scriptures, temples, programs, policy or procedures (all good things when applied correctly) and certainly not in filing 13F forms. The business side of the church has and will do things not everyone will like, but the gospel still works the way it was intended. At least for me. :)
So to answer your question….certainly not.
I agree with you, Rec. But I’m not so sure the brethren do. See, for example, Bishop Causse’s statement about how the decisions regarding church funds are made by the “spirit of revelation.”
Your Food – Oh for sure the brethren think otherwise. Bishop Causse’s remarks translates to “the spirit of revelation” picked some bad stocks the last couple years. Now why would the spirit do that? I believe that revelation is available to these leaders but that does not mean they hear or follow it 100% of the time. I personally believe we (top leaders) have an unhealthy obsession with the $ in the church but support those who I sustained to control it. That doesn’t mean I have to agree with everything they do like most members believe.
Ojisan: “Hard to explain to someone who has no experience in the area…” I’m a corporate tax managing director with EY. Try me.
Yes, the law cannot be written to cover every circumstance. But the law stated that the the investment manager over the new LLC was to have control over the assets. He did not, meaning that the filing should have occurred at the level where control was maintained. That’s not hard. That this is simply the SEC’s claim as Jack would have you believe is also false. Two of the managers who worked for EPA had to be replaced because they were not comfortable signing their name to something that was not true.
This OP and the comments are, as the kids would say, a response to “tell me you didn’t read the SEC order without telling me you didn’t read the SEC order.”
Re: Bishop Causse’s Statement:
I think it’s imperative that we follow the Liahona’s directions through the wilderness. Even so, that’s not to say that it will tell you which tree to rest under.
If any single Democratic Organization were sitting on $50 Billion I would absolutely have questions about what it’s doing when it’s not being spent in the service of winning elections and policy goals for Democratic constituents. Sure, I’d entertain talk of seed corn and endowments and rainy days and dry powder and such, and I’d reckon with the limits of my influence over what’s done with the money in the end… but none of that would diminish my privilege or even responsibility to speak or lobby about it where I can. While I’d respect a good attempt at maximizing use of those funds, I’d resent attempts to get around disclosure laws. And most of all, nobody would pretend that how that money is spent (or not spent) should be beyond politics of individual opinion, public discussion, or networks within the party.
> the people who want transparency the most are the ones who transparency most harms by tempting them to see themselves as stakeholders and not cross-bearers, as stewards over the vineyard rather than tenders of a vine.
These are false dichotomies. The church may *choose* to sort people into these categories, it may even find some benefits in doing so, but it doesn’t mean that’s they’re truly exclusive, or the way it must be done, or even that it’s the wisest way.
And if there’s a dark gravity that much money can influence on the souls of those who are merely aware of it, what’s the potential effect on those drawn into its orbit to manage it, much less those who can exercise its direction without accountability?
Sure, transparency is not a panacea and sometimes even creates its own problems. It’s hard to spend money well to solve problems; in fact it’s easier to *cause* problems by directing large sums of money than fix them. Investing is easier, with clearer metrics for success and rewards. The church has leadership with memories of hard times personally and institutionally. All these are reasonable defenses of the church’s wealth, its right to posses and grow that wealth, and be careful with how it’s spent. There are probably others, and I’m as happy to mount these as anybody.
But the dark gravity is already obvious if we’re crafting defenses that it’s necessary for us to not only avoid disclosure but evade compliance in our quest to do so. D&C 121 is pretty clear about what the means for maintaining power and influence are, and this isn’t on the list, and there’s more darkness in the idea that we did good by evading compliance for twenty years than there is in the hearts of those who may feel overentitled to direct how the church’s resources are spent.
The money is already as much of a curse as a blessing if this is where we’re at. And this isn’t even as heavy as the curse can get.
W, I’ll have to go with no, the money really is a blessing. A temple trip for me was until recently an all-day commitment, but now the travel time has been cut in half thanks to a new temple that required no effort on my part. Back when I wrote checks as a financial clerk, we didn’t have to check the balance in the ward account – the checks always cleared instantly, and people got their rent or therapy or septic tank or whatever emergency needs they were faced with. Downtown SLC needed some multi-billion dollar urban renewal and the Church just paid for it out of pocket. That’s awesome and awe-inspiring. We get a youth talk about paying tithing once a year maybe, and that’s pretty much it, no arm-twisting to pay my share of fixing the church building’s leaking roof.
Chadwick, I’ve read the SEC order. It’s not especially long or difficult to read. It’s kind of interesting, actually. Along the way it lays out a series of criteria for investor independence, as if to say: A more sophisticated approach would have checked these boxes. The weakest part of the SEC order is the description of harm: because Ensign Peak didn’t file form 13F, the SEC was deprived of information, and that’s basically it. Privacy for the sake of privacy. The SEC ultimately didn’t buy the strategy, but there’s nothing interesting to drive a scandal, no market manipulation or payoffs or personal enrichment.
You have to understand that long-time members of the Church only get where we are after decades of being told to be scandalized by just about everything from our foundational history and scripture to the latest curriculum update. If you leap from outrage to outrage, your chances of sticking around diminish dramatically. The only way to survive is to say no, this seems more or less like people trying to do their job as best as possible, and save the outrage for when it matters – and I’m telling you, how and when form 13F got filed is not one of those times.
Up thread, Rockwell suggests using a more neutral point of comparison than a favored or opposing political party. What about Greenpeace or the Sierra Club? I’m not especially environmentally conscious. I like clean air, but I also like economic growth. And if the Sierra Club had $50 billion to work with, then…fine? It’s not my organization, but good for them? And if the Sierra Club was fined $5 million for how it reported its assets, then…whatever?
Yeah, if you’ve read the SEC Order and then state that the problem was ‘filing delayed paper work,’ then either you didn’t understand the SEC order or you’re intentionally misleading people. I generally want to give people the benefit of the doubt, but sometimes . . .
Brian, it’s true that I’ve used some shorthand descriptions and it’s fair to want a more detailed formulation. How about “issued 13F forms through separate shell companies instead of identifying all assets with Ensign Peak”? You can probably do better, but you’ll still have to come up with something short enough to be comprehensible.
“But creating shell companies for the express purpose of hiding the Church’s wealth from both outsiders and its members is unethical and dishonorable.”
That’s not at all what was against SEC regs.
They just didn’t pay for separate fund managers for each fund.
If the church is guilty of anything it’s of being cheap… see the firing of the janitors as well.
Thirteen people were told to declare (by signing forms) that they had sole discretion (control) over assets when, in fact, they had zero discretion (control). They were asked to sign the final page of declarations which they had neither the legal right to sign, nor sufficient information for them to be able to sign. These forms also stated that said signers lived in places they did not.
Your ‘short hand’ (Jonathan) or jpv’s claim that the only thing they are guilty of is ‘being cheap’ is extremely disingenuous to the situation.
Chadwick clearly read and understands the SEC Order and is not afraid to address it head-on. It’s a shame the same can’t be said for the OP and others here.
Brian, no, that’s lower-level, Ensign Peak operational stuff, not the big picture takeaway. As jpv says, you can fix it by hiring people in the right places. You have to make a good faith effort to sum things up in a sentence, not pick out details. I don’t think anyone’s going to be satisfied with, “Ensign Peak needed to set up the shell corporations differently to satisfy SEC scrutiny,” but that’s what your details amount to.
In a bureaucracy, the difference between good/evil or compliance/corruption is a flow chart. Appealing to the immorality of wrongly filed paperwork in the absence of actual wrongdoing is a fruitless hobby. It seems that most of the people mad about this really want to be mad about it.
Some folks are saying that today’s bank failure is the largest since the Great Depression. I don’t want to suggest that there’s more economic trouble coming down the pike–and that’s why the church went to extra lengths to protect its investments. Even so, the first thing that went through my mind when I heard about the failure was: wow–I’m glad the church is in good financial shape.
That said, if things were to spiral downwards economically I don’t think most folks would care too much about whatever procedural mistakes the church made in the course of managing its funds when they’re helping us to keep the lights on.
Well, Jonathan, what I wrote was what the violation was. So that’s the big picture. Believe me, I’m not happy about it. Stephen Cranney also reads it correctly. This wasn’t an instance of not understanding something. It was deliberate. You can call ot lower-level if you want to, but hey, lipstick on a pig. My good faith effort is at least as, well, more, accurate than your ‘delayed filing’. Talk about good faith indeed.
It’s clear that some people are bothered by this and some are not. Maybe we should acknowledge everyone’s right to their individual judgment. If you don’t think it’s morally questionable, fine. I personally find the behavior of EPA and church leaders sleazy and more in keeping with oligarchs hiding yachts than a church whose affairs are directed by Jesus.
Brian, your summary uses the passive voice: people were told, people were asked. That obscures the difference between what Church leaders did (and which members might care about) and what Ensign Peak did (which is less relevant). If your big takeaway is all on the Ensign Peak side, then make that clear.
I agree with Anon above who said this will have a longer shelf-life than we care to admit, and that many members have not “moved on” as quickly as the Brethren have.
I love that the Church is smart about its money, and am disappointed in the blatant dishonesty in this scheme. I lay the “blame” at the feet of President Hinckley and Bishop Burton. And when I meet President Hinckley again, I’ll tell him that I love him and am grateful for all he gave to the Church…and I’m disappointed in this action. Ensign Peak employees were faced with the decision to either support God’s Kingdom and be unethical, OR stand up against the Brethren. And for what?!? What has been whispered in private rooms is now shouted from the housetops.
Interesting to re-read October 2006 Conference in light of this situation. Bishop Edgley spoke about honesty and integrity…and then a few speakers later, President Hinckley talked about the difficulty managing a worldwide church and how “nothing escapes the view of the First Presidency.” I wonder if Bishop Edgley was saying, “I don’t like this dishonest approach in which we are engaged” and President Hinckley responded, “The First Presidency will take responsibility for any blowback.”
Jonathan, I understand passive voice. So do the Church lawyers and the SEC lawyers. There’s a reason (or reasons) parts of the SEC Order identify clear actors and parts don’t. My big takeaway is that the problem is not what you claim by writing ‘delayed filing.’ Unless, of course, by ‘delayed,’ you mean ‘dishonest.’ That’s all I’m saying.
Another relevant passive voice: “We regret mistakes made.”
So the discussion has devolved into pedantic assessments of grammar. I guess the only thing left is reaching (falling to?) the level of Godwin’s Law…
The Starbucks comments were not from General Conference; I misremembered that they were made by the Newsroom minions during the 2019 clarification of the Word of Wisdom. The point still stands.
Just because you do not believe that there was a breach of trust or staggering hypocrisy in this instance, Jonathan, does not mean that (a) others do not see it, or (b) that you are correct. Moreover, you seem to think that the combination of your doctorate and your defense of the Church and its actions makes you impervious to error…which to most would appear to be condescension, which is only underscored by the fact that you think you know what someone thinks on an issue simply because you recognize their name on a blog.
To Jack and others who have given a full-throated defense to the Church, you are certainly entitled to your opinion about what this means to you. You are not, however, entitled to your own facts.
Today marks the 47th anniversary of my family joining the Church. I have spent about 30% of that time working (indirectly) for the Church as a faculty member at BYU over the past two decades. Overall, I think my family has benefitted tremendously from that membership and from the teachings of the gospel. There are some things that the Church does exceptionally well; there are other things on which the Church needs to improve; and there are a few things that the Church needs desperately to change and/or for which it should apologize (e.g. the priesthood ban and the current situation with Ensign Peak–saying “mistakes were made” is not, in fact, an apology or an admission of fault). It is only when the Church (or its subsidiaries like BYU) goes against its doctrine and stated principles in a clearly hypocritical way that I criticize the institution. Unfortunately, that happens far more often that one would hope.
Because the church chose not to defend itself against the SEC’s allegations does not mean that those allegations must be true. IMHO, the church chose the course that would cause the least damage to the organization in the long run.
IMO, think the First Presidency made known to its legal counsel what they hoped to achieve–and the counsel came back with an idea that seemed to work within the legal framework as they understood it at the time–and so they were given the green light. But that’s not to say that the FP was aware of all of the details involved in the mechanics of managing its funds.
That said, what concerns me the most is that some folks might rush to judgment as the saints did when the Kirtland Safety Society collapsed. It’s been estimated that a third of the saints in Kirtland left the church–and some of those folks charged him as a false prophet because of his supposed lack of foresight and honesty. And the sad irony is that years later we would learn that the collapse was due (primarily) to a national economic down turn that cause banks to fail all across the country. And an even greater irony was the fact that the saints in Kirtland had experienced a marvelous pentecostal outpouring of the spirit not too long before the economic down turn.
So let’s not only keep our heads on our shoulders–but our hearts open to alternative explanations. These are good people by every measure–and so it seems (to me) that both the rational *and* compassionate thing to do is to give them the benefit of the doubt–at least until we can get a little more hindsight on the situation as with the failure of the KSS.
“…and some of those folks charged [Joseph Smith] as a false prophet…”
A: Here’s a link to the 2019 Newsroom statement that you seem to be referring to: https://newsroom.churchofjesuschrist.org/article/statement-word-of-wisdom-august-2019
There was a slightly longer statement for youth that states that as a rule of thumb, coffee shops sell drinks with coffee in them, so don’t buy drinks there: https://www.churchofjesuschrist.org/study/new-era/2019/08/vaping-coffee-tea-and-marijuana?lang=eng
I still don’t see a mention of Starbucks, or anything about avoiding the appearance of evil. Maybe your point doesn’t still stand? A link to what you meant would help.
You have a strange interpretation of what it means to take a position and defend it in response to criticism. That’s usually taken as a sign of “having an opinion,” not “believing oneself to be infallible.”
I know what people think online because they tell me in writing. They’re usually very clear about it! For members of my ward, I look for other signs of what issues really concern them, and I’m just not seeing it on this one. But, you know, maybe I’m wrong.
Everyone’s working from the same set of facts here. To me, the most plausible explanation of those facts is that Church leaders wanted to keep people from connecting its investments back to the Church, and its financial advisors laid out a plan for how to accomplish that while remaining compliant with SEC regulations, and 20 years later the SEC found that the plan was not, in fact, compliant. That doesn’t require any nefarious intent, outbursts of evil cackling, or even attempted dishonesty.
Jonathan, your most plausible explanation would suggest that the Church’s financial advisors weren’t aware of what 13f required when in fact, most of 13f is explicitly about discretion. If the Church’s financial advisors really didn’t understand that what they were doing was outside the bounds of the law, then, quite honestly, they are terrible at their job, and so are the Church’s lawyers. But sure, let’s pretend that’s the case. That still doesn’t account for the fact that the Church’s own auditing department twice told said advisers that what they were doing would not be liked by the SEC and they changed nothing after receiving this information.
Jonathan, let’s just hit right to heart of the matter: is it illegal (or hey, just for kicks, let’s just keep it at unethical) to ask someone to sign a legal document while withholding from them the terms, conditions, and statements of validity of said document?
Brian, it takes 17-20 years before the auditing department raises those warnings, and I think that timeline is relevant. What looks plausible in 1997 – in terms of dollar amounts, regulatory environment, market expectations, and probably personnel involved – is substantially different than in the mid to late 2010s. Church leaders at that time still had direct experience of the Depression, World War II and Postwar eras, and a church with precarious finances. The people who turned that into a surplus of a few billion aren’t necessarily the ones prepared to manage a fund 10 times bigger. So once the auditing department flags the regulatory risk 15-20 years later, how do you unwind what’s become business as usual, and how much time does it take?
Maybe someone at Ensign Peak would have a different perspective and argue differently, but the way signatures were gathered does seem to have been bad and dumb.
Johnathan makes a great point that I have not thought of or heard mentioned and that is what did these accounts look like 20 years ago? What were even the regulations 20 years ago. Was it something that was put in place and kind of forgotten after the funds grew for 20 years? Some will say the church should have still caught it and made changes and that is a valid point but we have to look at this, like all church history, through 20 year old lenses and not current ones. Like someone much smarter than me said somewhere else about this, these rules by the SEC and fines given are to protect the men, women and institutions that invest in these large funds. The church runs their own funds with their own people so they are not hurting anyone or could cause harm to any “investor” but themselves. I think we need to look at it this way too.
REC911, Ensign Peak and Church Leadership (First Presidency and Presiding Bishopric) knew in 1998 that they were supposed to file form 13f. And no, they didn’t forget about them, they still filed reports, just not accurate or honest ones. Also, after the Church auditing department informed Church leaders and Ensign Peak that the SEC would not like what they were doing, Church Leadership and the EPA did not start filing correct forms for 6 years, much more than any outfit would need to file correctly.
Finally, I know it’s fashionable to argue that no one was hurt by this, but that does not negate the dishonest practice that was taking place, which, in fact, hurts the people involved in such dishonesty. And, of course, the people who then find out that such dishonesty was taking place, eg. a spouse that was cheating upon when they learn of the affair. Really, again, it’s almost like people didn’t read the SEC Order.
I don’t think EPA’s fudging its paper can be placed in the same category as marital infidelity.
Also, as I stated earlier, I think the primary point of contention for many of us has to do with whether or not we view the SEC’s order as the final word on the matter–with respect to how things *really* went down, that is. And there are many folks (like myself) who simply believe that there’s another side to the story.
I don’t imagine the law has changed much, although I wonder how much the regulatory environment of the 1990s influenced decision making. I remember a business columnist around 1997 expressing surprise over the kind of corporate governance deals the SEC was approving, but any effect on what Ensign Peak may have thought is just speculation on my part. It’s still useful to keep in mind that the situation has changed over time.
Jack, I’d be interesting to see Ensign Peak’s reasoning, although I don’t expect there are many differences of fact.
I should be fairer to what I think is A’s basic point that the Church should avoid the appearance of dishonest practices. I assume people in finance take a more nuanced view of compliance, but using shell corporations in the way Ensign Peak hoped to – even if it had been successful – does raise questions among laypeople. My guess is that church leaders hoped to avoid another kind of appearance of evil, an endless round of “Mormon Church Invests in Big Tobacco” every time it bought shares in an investment fund that in turn held shares of Philip Morris. (And it’s not an imaginary concern – the takes just on City Creek were horrendous.) So you pick one or the other appearance of evil. (It’s fair to point out that one kind doesn’t involve skirting reporting requirements or end up saddling you with both types when the plan falls apart.)
I agree that it probably wouldn’t look much different from a distance. Even so, one gets the notion (from reading the order) that the senior leadership of the church knew enough to be held accountable on moral grounds for giving the greenlight to EPA’s strategies–and I’m not convinced of that.
What really bothers me is the years of penny pinching and cuts we’ve had to endure while the church sits on billions of dollars. Our paid cleaner was “released” and all the members given the supposed privilege of cleaning the meetinghouse. Budgets for activities slashed to “simplify and make more meaningful”. I’m fed up of giving thousands of dollars to the church and our ward budget getting tighter and tighter, the church acting as if there’s barely enough to make ends meet. Being prudent financially is one thing, but taking and hoarding like Smaug while our meetinghouse gets neglected because the burden of maintaining it has fallen on the already overburdened members – often doing two or three callings and having, you know, non-church commitments too – is something else entirely.
Listen, I’m as close to a so-called “TBM” (whatever that patronizing term is supposed to mean) as the church could reasonably ask for: RM, BYUI grad, temple married, current recommend holder, stake leadership calling, read the Book of Mormon daily, dog-eared complete works of Hugh Nibley on my shelf, and am still paying my tithing after careful prayer.
But the sheer fact that I’m praying about whether to keep paying tithing in the first place should tell you just how much the SEC fine has irritated and annoyed me (and I still do not rule out taking the Jana Reiss approach in the future). All those pious lectures in college about Karl G Maeser’s vaunted chalkline, only for the senior leadership to pull a stunt like this?? All those awkward times in Rexburg when I had to enforce the no-shorts-rule as a Men’s locker-room attendant, only for the First Presidency to be dishonest in their dealings with their fellow man?!
You want to talk harm: I no longer take these men seriously. Oh, I still believe that they sincerely pray for and follow the promptings of the Holy Spirit as they understand them; but I no longer believe they are any better at it than I am. (As a missionary, I sincerely thought these men had all seen Christ in vision, mind you.) I can still love them and forgive them as I hope God one day forgives me, but again, I can’t really take them seriously anymore.
“If the Church’s financial advisors really didn’t understand that what they were doing was outside the bounds of the law, then, quite honestly, they are terrible at their job, and so are the Church’s lawyers.”
This is where I’ll chime in too late and too long. If you think federal regulations are easy to comply with, and that this issue is so black-and-white that no “good” lawyer could suggest it, you don’t know much about federal regulations. Compliance is hard. Parsing regulatory language is hard. Knowing how the regulator interprets its own regs is hard. Reading case law is hard, since cases go all over the place. It’s far more guess-and-check than you’re thinking. To be sure, the SEC has always been the SEC, but it has been headed by about 30 different chairpersons since EP formed, and under 4-5 presidents with vastly different views on regulations; each chairperson had different points of emphasis and interpretation of the regulations. “Control” is usually a multipart test in the law leading to various interpretations by various agencies and judges. If you’re thinking this was all simple from the get-go, it’s because you’re working backwards from an answer.
Let me put it another way: let’s assume that a high-priced New York or LA firm, with no other ties to the Church, provided the Church with this strategy–not Kirton McConkie or the Church’s own finance department. Would that change your view? It shouldn’t, but it probably does, and my guess is that’s exactly what happened.
I’ll also add in the same vein that people above have described “shell” companies as if multiple entities was evidence itself of nefarious intent. “Shell” is an inherently loaded term. Any business of any serious size has many subsidiary entities below it (or sisters). I work for a mid-size company–not a mom-and-pop, but nowhere close to an Exxon or HP. We have at least two-dozen special purpose entities. I don’t know any company our size that doesn’t. They usually exist to limit exposure from liability or tax burden, and *are entirely legal.*
Finally, based on a not-insignificant amount of personal experience, I’ll note that (1) rarely does the federal government (or any other person) prove all allegations as set forth in its complaint if the matter is actually brought to trial, (2) that almost no one wants to litigate against the federal government if they can pay a nominal fine, even when they are sure they right, because the cure is typically much worse than the disease, and (3) you can rarely settle with the federal government without a consent decree in which the government sets forth its complaint nearly verbatim. (The government requires it so if enforcement becomes a problem again in the future, it can show a judge that the entity was a repeat offender). People keep asking others to go and read the settlement more closely, but everyone seems to be skipping the part where the Church says it neither admits nor denies the allegations. Admittedly, it’s because it’s done this that it’s now bound to keep its mouth shut while bloggers opine that it’s “sleazy.” That’s a trade-off.
I’ll say again that I’m not in love with this corporate structure. From what I’ve seen, I wish they’d been more conservative. But this isn’t the scandal it’s being made out to be. If this was a normal company, I’d say this is just a cost of doing business. It’s not a normal company, of course, and maybe that makes all the difference to you. But it probably shouldn’t.
J – Thanks for sharing. Welcome to how all members should look at the leadership IMO. It is not healthy to think they can do no wrong or never have or never will. Non of them have seen Jesus but that is ok. They get their revelation just like we do. The church was still restored and this is the best God has on the earth right now. And here is the real beauty of it all…..if God is ok with them in those positions, he will be super comfortable with you/me and our imperfections! To me that is a comforting message, not a “stop paying tithing” message. We dont have to be perfect to get revelations, Gods blessings, or His love. Trust me, not looking at them as God speaking every time their lips move is the way to go. I sustain the Pres as the Prophet when he is acting as one and speaking for God. I do not, nor ever have, thought that they were always speaking for God. Just the fact that all the prophets before Nelson were ok with the word Mormon, should tell you something. All the temple changes, heck all the changes when there is a new leader. Like God has one listening now to tell what He wants done because the last one was not listening….not happening.
jimbob – well said. The government told me I was wrong twice with my taxes and wanted to fine me. They were wrong both times and owed me more $. Got to love the gov.
Brian Larsen: “Ensign Peak and Church Leadership (First Presidency and Presiding Bishopric) knew in 1998 that they were supposed to file form 13f. And no, they didn’t forget about them, they still filed reports, just not accurate or honest ones.”
The leadership knew in 1998 that they needed to file form 13F. But (assuming I’m reading the SEC order correctly, which I think I am) there was a 4 year period in which they didn’t file the reports, so it’s not true that they still filed. They didn’t file until after the creation of the first shell company.