James huntsman (jon's brother) sues church for 'fraud'

[Calm]

18 minutes ago, JustAnAustralian said:

I'm putting this in a separate comment for easy of replies etc, but Mr Jonelis (Huntsman's lawer) seems out of his depth with religious stuff.

I'm not a lawyer, nor do I play one on tv, but I keep seeing objections like this (taken from bottom of PDF page 28)

Just after he said he and his wife gave a large tithing donation, there was this.

Could a lawyer explain how that question is any of the things Mr Jonelis says it is in his objection?

Not a lawyer…betting God may be seen as undefined here.

[Analytics]

Just a few comments...

On 8/10/2021 at 11:48 AM, smac97 said:

First, and most important, summary judgment should be granted because the statements by the Church on which Huntsman relies, are true. The first of the five statements identified by Huntsman is the most specific, with the other four following along in kind. The first statement was made by the Church’s thenpresident with respect to a particular Church-financed project to invest in and revitalize the area next to Church headquarters in downtown Salt Lake City, Utah, known as the City Creek project. The president said the funding for the project would come from “earnings of invested reserve funds” and from “commercial entities” owned by the Church, rather than from “tithing funds.” The undisputed summary judgment record confirms that the statement was entirely true: no tithing funds were used. The undisputed evidence shows that the other allegedly fraudulent statements are likewise true.

Okay, so tithing funds weren't used for commercial purposes. Rather, its "earnings on invested reserve funds" were. Got it.

On 8/10/2021 at 11:48 AM, smac97 said:

Second, although the Court need not reach this second ground, summary judgment should also be granted because Huntsman cannot establish reliance on the Church’s statements. Fraud claims must be pled and proved with particularity.  Fraud claimants cannot identify statements made years earlier and then later claim they subjectively relied on those statements when the evidence shows such claimed reliance is unreasonable and unjustified. Here, Huntsman regularly tithed and made other contributions to his Church for all of his adult life until he lost his faith.  Huntsman makes vague allegations that he made his annual contributions over the course of more than two decades because he believed none of them would be used for long-term investments. But these allegations are an advocate’s afterthoughts.  Huntsman is a sophisticated businessman who grew up in an environment in which the Church owned and operated many long-term investments and he began making tithing contributions after the Church made clear its plan to invest some amount of tithing contributions into reserve funds to save for a rainy day. Because Huntsman’s purported reliance is unjustified, summary judgment is warranted on this ground as well.

The Church is basically arguing that once tithing funds are funneled into the "reserve fund", they stop being tithing funds. Their argument is basically, "We don't use tithing funds to fund our commercial enterprises! We wouldn't do that. That would be immoral. What we do is put tithing money into our checking account. We then use the money from the checking account to fund our commercial enterprises."

You might argue that the principal invested into the reserve fund is "tithing funds," but the interest earned on the tithing funds are not tithing funds and that it was the interest used for the construction projects, not the principal.

If that is what they intended, an honest disclosure to the membership would be something like the following: "Of the tithing money we receive every year, we are going to use some of it to build temples, fund the Church education system, build churches, etc., but then we are going to divert a substantial amount every year to a "reserve fund." The money we save in the reserve fund will be invested so that the investment income can be use for commercial purposes such as building luxury malls and apartment complexes, bailing out insurance companies, etc."    

On 8/10/2021 at 11:48 AM, smac97 said:

Third, summary judgment is also appropriate because the First Amendment prohibits plaintiffs from using the courts as vehicles to conduct fishing expeditions into how and why churches use their unrestricted, voluntary contributions to further their useful purposes. Here, Huntsman appears to be interested in generating publicity and embarrassing his former Church in whose doctrines and practices he no longer believes. He has made no secret of his intention to attempt wide-ranging discovery into how the Church uses the contributions it receives, naming the Church’s three highest ecclesiastical authorities as people “likely to have discoverable information” about the church’s “use of tithing funds.” (SUF 126.)  Any such discovery would be an impermissible intrusion on the Church’s First Amendment-protected ability to use the voluntary contributions it receives as it sees fit.

That argument seems strange to me. I would think that what the First Amendment does and was intended to do is protect the religious rights of people, not of churches. If a corporation is categorized as a church, does the First Amendment really grant that corporation the ability to secretly use its income in any way it sees fit?

If the Church is using its tithing funds in the way it has allegedly "made clear," how and why would discovery about how it really uses its tithing funds be embarrassing?     

[smac97]

2 hours ago, Analytics said:

Just a few comments...

Quote

First, and most important, summary judgment should be granted because the statements by the Church on which Huntsman relies, are true. The first of the five statements identified by Huntsman is the most specific, with the other four following along in kind. The first statement was made by the Church’s thenpresident with respect to a particular Church-financed project to invest in and revitalize the area next to Church headquarters in downtown Salt Lake City, Utah, known as the City Creek project. The president said the funding for the project would come from “earnings of invested reserve funds” and from “commercial entities” owned by the Church, rather than from “tithing funds.” The undisputed summary judgment record confirms that the statement was entirely true: no tithing funds were used. The undisputed evidence shows that the other allegedly fraudulent statements are likewise true.

Okay, so tithing funds weren't used for commercial purposes. Rather, its "earnings on invested reserve funds" were. Got it.

I'm not an accountant or an finance expert, but it seems to make sense to differentiate "reserve funds" from "earnings" generated from the investment thereof.

If the Church uses "reserve funds" (X) to generate additional funds (Y), and if Y funds were used to fund City Creek, rather than X funds, then . . . "no tithing funds were used."

2 hours ago, Analytics said:

Quote

Second, although the Court need not reach this second ground, summary judgment should also be granted because Huntsman cannot establish reliance on the Church’s statements. Fraud claims must be pled and proved with particularity.  Fraud claimants cannot identify statements made years earlier and then later claim they subjectively relied on those statements when the evidence shows such claimed reliance is unreasonable and unjustified. Here, Huntsman regularly tithed and made other contributions to his Church for all of his adult life until he lost his faith.  Huntsman makes vague allegations that he made his annual contributions over the course of more than two decades because he believed none of them would be used for long-term investments. But these allegations are an advocate’s afterthoughts.  Huntsman is a sophisticated businessman who grew up in an environment in which the Church owned and operated many long-term investments and he began making tithing contributions after the Church made clear its plan to invest some amount of tithing contributions into reserve funds to save for a rainy day. Because Huntsman’s purported reliance is unjustified, summary judgment is warranted on this ground as well.

The Church is basically arguing that once tithing funds are funneled into the "reserve fund", they stop being tithing funds.  Their argument is basically, "We don't use tithing funds to fund our commercial enterprises! We wouldn't do that. That would be immoral. What we do is put tithing money into our checking account. We then use the money from the checking account to fund our commercial enterprises."

I'm not sure that is correct.  Instead, the Church seems to be saying that "reserve funds" (X funds above) generated "earnings" (Y funds), with the latter being used to fund City Creek.

2 hours ago, Analytics said:

You might argue that the principal invested into the reserve fund is "tithing funds," but the interest earned on the tithing funds are not tithing funds and that it was the interest used for the construction projects, not the principal.

I think that is what is being said, yes.

2 hours ago, Analytics said:

If that is what they intended, an honest disclosure to the membership would be something like the following: "Of the tithing money we receive every year, we are going to use some of it to build temples, fund the Church education system, build churches, etc., but then we are going to divert a substantial amount every year to a "reserve fund." The money we save in the reserve fund will be invested so that the investment income can be use for commercial purposes such as building luxury malls and apartment complexes, bailing out insurance companies, etc."

Sorta stacking the deck here, arncha?  Your proposed disclosure is "honest," and the Church's was . . . not.

By your reckoning, the Parable fo the Talents is dishonest because Matthew 25 only says that the servant who was given five talents "went and traded with the same, and made them other five talents."

Anyway, I think the membership of the Church wants the Brethren to be good stewards of tithed funds.  By virtually every metric, they have succeeded in that.  From this 2018 Trib article:

Quote

Quinn estimates — and estimating is about the best even a top-notch researcher can do — the church took in about $33 billion in tithing in 2010, based on a model of projected growth rates that followed a consistent pattern starting in the 1950s. It earns another $15 billion annually, he says, in returns on its profit-making investments. (The Bloomberg Businessweek piece from five years ago cited an investigation pegging the LDS Church’s worth at $40 billion.)

No matter the precise bottom line, these figures represent an astonishing accomplishment, Quinn says.

“It is an American success story without parallel,” the longtime historian says in an interview. “No institution, no church, no business, no nonprofit organization in America has had this kind of history.”

...

Yet LDS general authorities — from the most senior apostle to the lowest-ranking Seventy — all receive the same yearly “living allowance”: $120,000. Though the church has enormous wealth, he {Quinn} says, none of the leaders is getting rich off it.

...

{Quinn} says the LDS Church’s financial trajectory, as well as the self-sacrificing actions of its hierarchy, is “an enormously faith-promoting story.”

If everyday Mormons could grasp “the larger picture,” he says, they would “breathe a sigh of relief and see the church is not a profit-making business.”

...

Quinn’s tome does not reveal any hidden slush funds, untoward personal spending or malfeasance at the highest levels, Wimmer says, but it offers insights through the arc of history the professor has never before recognized.

“I felt by the end I knew where the church is today,” Wimmer says, “and how it got there.”

Like Quinn, the economist was impressed by the skilled leadership of men who brought their financial wizardry to their religious assignments.

...

They brought Canadian N. Eldon Tanner on board as an apostle. Tapping his enormous financial know-how, the church began to rebuild its nest egg, cutting back on building projects and overseeing investments until it could get back in the black.

Tanner was “methodically rescuing the church from the brink,” Quinn writes. “By 1964, commercial income accounted for about 40 to 45 percent of its total income.”

Step by step, the historian writes, Tanner introduced the church to “corporate financing.”

It never looked back.

...

At the same time, Mormon authorities did not act like corporate giants, enriching themselves on profits.

Through the years, they paid themselves less than what others in their employ made, Quinn says. Today, that is sometimes barely half as much as some of the church’s skilled bureaucrats.

CEOs of other top nonprofits, including Harvard, Yale and the United Way, make almost 10 times as much, he says. “It was truly humbling to see these men who preside over an institution making tens of billions of dollars turning [the funds] back to the benefit of the rank and file.”

That fulfills what Mormon leader Brigham Young, known as the “Lion of the Lord,” said in 1875. At that time, Joseph Smith’s successor and his apostles signed a document, decrying America’s approach to unregulated capitalism, including the “growth of wealth in the hands of a comparatively few individuals.”

The country’s “priceless legacy,” they wrote, was “endangered by the monstrous power which this accumulation of wealth gives to a few individuals and a few powerful corporations.”

By pocketing such relatively small salaries and using church assets to serve the members, Quinn says, Mormon leaders have “maintained the spirit of that attitude.”

...

LDS author, researcher and blogger Jana Riess hasn’t read Quinn’s book, but was intrigued by his positive view of Mormon leaders and their handling of money for the global faith.

“If the church was in dire financial trouble as recently as the 1950s, that means there are still people in the hierarchy who remember that,” Riess reasons. “I tend to think the generation gap that exists in the church [apostles with an average age of 76] as always negative.

But having institutional memory — at least among a few — can be very helpful.”

The Cincinnati-based writer is also impressed with Quinn’s description of LDS leadership as a “form of service,” she says. “They are clearly not in it to get rich.”

The Church operates within its means.  

The Church avoids debt.

The Church sets aside a portion fo its funds each year for saving and investing for the future.

The leaders of the Church, despite having access to huge amounts of money, are not "act{ing} like corporate giants, enriching themselves on profits."  No jetset, high-of-the-hog profligacy.

If a state government was as fiscally prudent as the Church I think its residents would be thrilled.  

If investors in a publicly-traded corporation found out that the head honchos were drawing very modest salaries, and otherwise living very moderate lives, while at the same time working very long hours, the investors would be ecstatic.

If the Church was not practicing what it preaches, you would accuse it of hypocrisy.  And yet even when the Church does practice what it preaches, you still manage to find fault.  Armchair Quarterback, thy name is Roger.  

2 hours ago, Analytics said:

Quote

Third, summary judgment is also appropriate because the First Amendment prohibits plaintiffs from using the courts as vehicles to conduct fishing expeditions into how and why churches use their unrestricted, voluntary contributions to further their useful purposes. Here, Huntsman appears to be interested in generating publicity and embarrassing his former Church in whose doctrines and practices he no longer believes. He has made no secret of his intention to attempt wide-ranging discovery into how the Church uses the contributions it receives, naming the Church’s three highest ecclesiastical authorities as people “likely to have discoverable information” about the church’s “use of tithing funds.” (SUF 126.)  Any such discovery would be an impermissible intrusion on the Church’s First Amendment-protected ability to use the voluntary contributions it receives as it sees fit.

That argument seems strange to me. I would think that what the First Amendment does and was intended to do is protect the religious rights of people, not of churches.

I don't think that is a correct distinction.  Broadly speaking, constitutional rights accrue not only to individuals, but also to groups of individuals.  See,e.g., here:

Quote

Corporations and other types of organizations have long exercised a range of constitutional rights, including those found under the Contracts Clause,6 Due Process Clause,7  Fourteenth Amendment Equal Protection Clause,8 First Amendment,9 Fourth Amendment,10 Fifth Amendment Takings and Double Jeopardy Clauses,11 Sixth Amendment,12 and Seventh Amendment.13
...
7 See Minneapolis & St. Louis Ry. Co. v. Beckwith, 129 U.S. 26, 28 (1889) (recognizing corporations receive protection for the “enjoyment of property,” including the ability to challenge “legislation injuriously affecting it”).

8 See Metro. Life Ins. Co. v. Ward, 470 U.S. 869, 881 n.9 (1985) (citing the “well established” Equal Protection Clause rights of corporations); Santa Clara Cnty. v. S. Pac. R.R. Co., 118 U.S. 394, 396 (1886) (noting that the Court agreed that the Equal Protection Clause applied to corporations at issue).

9 See Citizens United, 130 S. Ct. at 903 (“[T]he First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.”).

10 See Marshall v. Barlow’s, Inc., 436 U.S. 307, 325 (1978) (declaring a statute unconstitutional because it violated the corporation’s Fourth Amendment right to be free from warrantless search).

11 See United States v. Martin Linen Supply Co., 430 U.S. 564, 575 (1977) (assuming corporations are protected by Double Jeopardy Clause rights); Russian Volunteer Fleet v. United States, 282 U.S. 481, 489 (1931) (discussing the Takings Clause as applied to a foreign corporation).

12 See S. Union Co. v. United States, 132 S. Ct. 2344, 2351-52 (2012) (holding that the Sixth Amendment can protect a corporation from criminal fines).

13 See Ross v. Bernhard, 396 U.S. 531, 542 (1970) (holding that in a derivative shareholder action, shareholders possess the same right to trial by jury as a corporation). 

Do you think it strange that Freedom of the Press and Freedom of Speech are rights belonging not just to individuals but also to, say, media organizations?  The New York Times?  CNN?  Fox? 

Do political parties have the right to sue to address election disputes?

Do racial groups have a right to sue (such as black men who are targeted for racial profiling)?

How do you propose to limit the Freedom of Peaceable Assembly to individuals but not groups?

"Special pleading" is "an informal fallacy wherein one cites something as an exception to a general or universal principle, without justifying the special exception."  "The First Amendment protects the religious rights of people, not of churches" seems to commit that fallacy.

2 hours ago, Analytics said:

If a corporation is categorized as a church, does the First Amendment really grant that corporation the ability to secretly use its income in any way it sees fit?

Wow.  A very loaded question there.  Are you still torturing puppies for fun and profit?

If an individual is given money as a gift, can the government constrain that individual from using the money for some or all lawful purposes?

And by "secretly" do you mean "anything other than not broadcasting each and every expenditure down to the penny?"  Do you accept that standard that as to your spending habits?  Can I publicly question your integrity because you haven't publicly disclosed your personal finances to the world?  "We still haven't seen Analytics publish how he spent his discretionary income in 2020.  What is he hiding?  Why all the secrecy?  Is it really appropriate for him to use his income in any way he sees fit?"

2 hours ago, Analytics said:

If the Church is using its tithing funds in the way it has allegedly "made clear," how and why would discovery about how it really uses its tithing funds be embarrassing?     

From the Motion: "Here, Huntsman appears to be interested in generating publicity and embarrassing his former Church..."  It is Huntsman's intent to embarrass that is being noted here.

By way of comparison, your comments here are seemingly intended to find fault with the Church.  Whether or not you actually and legitimately have found fault is a separate issue.

Thanks,

-Smac

Edited August 16, 2021 by smac97

[webbles]

2 hours ago, Analytics said:

If that is what they intended, an honest disclosure to the membership would be something like the following: "Of the tithing money we receive every year, we are going to use some of it to build temples, fund the Church education system, build churches, etc., but then we are going to divert a substantial amount every year to a "reserve fund." The money we save in the reserve fund will be invested so that the investment income can be use for commercial purposes such as building luxury malls and apartment complexes, bailing out insurance companies, etc."    

I would think the honest disclosure would be more like: "Of the tithing money we receive every year, we are going to use some of it to build temples, fund the Church education system, build churches, etc., but then we are going to divert a substantial amount every year to a "reserve fund." The money we save in the reserve fund will be invested and those investments may include luxury malls, apartment complexes, insurance companies, etc."

I also think that "honest disclosure" is actually what they have disclosed.  City Creek mall is an investment.  Same with the insurance company.

[smac97]

On 8/10/2021 at 6:48 PM, JustAnAustralian said:

I'm putting this in a separate comment for easy of replies etc, but Mr Jonelis (Huntsman's lawer) seems out of his depth with religious stuff.

Yes, the Complaint filed by this fellow is . . . not very good.  

On 8/10/2021 at 6:48 PM, JustAnAustralian said:

I'm not a lawyer, nor do I play one on tv, but I keep seeing objections like this (taken from bottom of PDF page 28)

For other readers, this is the PDF in question.

On 8/10/2021 at 6:48 PM, JustAnAustralian said:

Just after he said he and his wife gave a large tithing donation, there was this.

Quote

Q In 2003, at that time, did you believe you were obeying one of God's commandments by paying tithing?

MR. JONELIS: Objection. Vague and ambiguous, lacks foundation, argumentative.

Could a lawyer explain how that question is any of the things Mr Jonelis says it is in his objection?

Broadly speaking, most of the time during a deposition an attorney should refrain from objecting, as the judge is not there to grant or overrule the objection.  Instead, it is understood that objections are "reserved," meaning that they can be brought up later on (such as in a motion for summary judgment or at trial).

There are, however, two categories of objections that can and should be raised during the deposition.  One of these is "privilege," meaning that a question has been asked that, if answered, will violate an attorney-client or some other form of confidential privilege (doctor-patient, spousal, etc.).  Thus if such a question is posed during a deposition the attorney representing the deponent (the person being deposed, being asked questions) should object and instruct his client not to answer.

The other broad category is "form of the question"-style objections.  That is what Mr. Jonelis was objecting to here.  He is "preserving" the right to object to Huntsman's answer to this question by objecting during the objection.  That's fine.  Whether or not the question actually was "vague and ambiguous" or "lack{ing} foundation" or "argumentative" is sort of a separate issue.  The attorney needs to preserve the objection during the deposition, as otherwise he may lose the right to object later on to the answer being used as evidence.

Thanks,

-Smac

[Analytics]

2 hours ago, smac97 said:

I'm not an accountant or an finance expert, but it seems to make sense to differentiate "reserve funds" from "earnings" generated from the investment thereof.

If the Church uses "reserve funds" (X) to generate additional funds (Y), and if Y funds were used to fund City Creek, rather than X funds, then . . . "no tithing funds were used."

I'm not sure that is correct.  Instead, the Church seems to be saying that "reserve funds" (X funds above) generated "earnings" (Y funds), with the latter being used to fund City Creek.

I think that is what is being said, yes....

By your reckoning, the Parable fo the Talents is dishonest because Matthew 25 only says that the servant who was given five talents "went and traded with the same, and made them other five talents."

Part of this is theoretical and part of this is semantics. In theory, money has "time value." $1.00 today is equal to $1.05 in a year. The 5% interest isn't categorically different than the $1.00 in principal. It's just a representation of how the value of money changes over time. If the money that goes into the investment fund is sacred tithing money, the investment income on that is also sacred tithing money. If for whatever reason it is immoral to invest the principal on malls, it is equally immoral to invest the interest on malls.

If the Church doesn't believe this mainstream theory about the time value of money and thinks the interest earned on tithing money not spent is categorically different than the tithing money itself, it should clarify that.

2 hours ago, smac97 said:

Sorta stacking the deck here, arncha?  Your proposed disclosure is "honest," and the Church's was . . . not.

I would say the Church was being misleading when it said it was merely saving some money for a rainy day when in fact it was hoarding an obscene amount.

2 hours ago, smac97 said:

Anyway, I think the membership of the Church wants the Brethren to be good stewards of tithed funds.  By virtually every metric, they have succeeded in that.  From this 2018 Trib article:

It's ironic that you rely on the speculations of a historian with terrible money sense rather than facts to prove your point about the Church's pecuniary wisdom. Of course that's the best you can do because the Church is in fact so secretive. That is my point. 

2 hours ago, smac97 said:

The Church operates within its means.  

The Church avoids debt.

The Church sets aside a portion fo its funds each year for saving and investing for the future.

Hoarding is a thing, and what the Church does is best classified as hoarding.

2 hours ago, smac97 said:

The leaders of the Church, despite having access to huge amounts of money, are not "act{ing} like corporate giants, enriching themselves on profits."  No jetset, high-of-the-hog profligacy.

They act like hedge fund managers and act like making money is an end unto itself.

2 hours ago, smac97 said:

If a state government was as fiscally prudent as the Church I think its residents would be thrilled.  

Really? If your annual tax bill was, say, $20,000 and the government only used $15,000 of it to pay for useful public services and put the other $5,000 into its "rainy day fund" of $100 trillion dollars you would be thrilled?

I'd be pissed as hell and would demand that they lower my taxes.

2 hours ago, smac97 said:

If investors in a publicly-traded corporation found out that the head honchos were drawing very modest salaries, and otherwise living very moderate lives, while at the same time working very long hours, the investors would be ecstatic.

A much better analogy would be investors in a publicly-traded corporation finding out that the leaders of the corporations were hoarding cash without a plan to invest it into growing the business or returning any of it to the stockholders in dividends. Stockholders want money to be put to good use, not hoarded. For a decent-sized publicly traded company, whether an executive makes $120,000 a year or $12,000,000 a year is absolutely irrelevant. What they should care about is whether the company's $100,000,000,000 in capital is being put to productive use or is being hoarded. Invest it into something that increases shareholder value or return it to the shareholders in dividends. Don't just sit on it without a plan.

2 hours ago, smac97 said:

If the Church was not practicing what it preaches, you would accuse it of hypocrisy.  And yet even when the Church does practice what it preaches, you still manage to find fault.  Armchair Quarterback, thy name is Roger.  

The Church preaches hoarding? Who knew?

2 hours ago, smac97 said:

I don't think that is a correct distinction.  Broadly speaking, constitutional rights accrue not only to individuals, but also to groups of individuals.  See,e.g., here:

Do you think it strange that Freedom of the Press and Freedom of Speech are rights belonging not just to individuals but also to, say, media organizations?  The New York Times?  CNN?  Fox? 

Do political parties have the right to sue to address election disputes?

Do racial groups have a right to sue (such as black men who are targeted for racial profiling)?

How do you propose to limit the Freedom of Peaceable Assembly to individuals but not groups?

It's weird that the Church is considered a group of individuals, but the individuals in that group aren't allowed to see the details of what the Church does with its resources. It seems obvious that the Church is a distinct entity with its own personhood that is distinct from the members of the organization itself.

2 hours ago, smac97 said:

If an individual is given money as a gift, can the government constrain that individual from using the money for some or all lawful purposes?

You are the attorney, but I'd think the answer is yes; if an individual gives somebody over $15,000 dollars as a gift, that must be reported to the IRS, and some of it will probably be taxed, regardless of what the individual receiving the money wants to do with it.

According to the IRS, 501(c)(3)'s in general "are required to spend annually a certain amount of money or property for charitable purposes, including grants to other charitable organizations.  The amount that must be distributed annually is ascertained by computing the foundation’s distributable amount.  The distributable amount is equal to the foundation’s minimum investment return with certain adjustments...." This is because our lawmakers understand that hoarding money shouldn't be subsidized by taxpayers. If a nonprofit wants to be subsidized, it should use its assets to increase value to society. It shouldn't hoard them.

I said (and emphasized) that this is true "in general." This is because churches are exempt from this regulation--churches are held to a lower standard. But as a matter of principle, if the Bill and Melinda Gates Foundation is required to spend a certain amount of its $47 billion on actual charitable purposes in order to continue to receive its subsidizations, why shouldn't Ensign Peaks also be required to spend a certain amount of its $120 billion on charitable purposes in order to continue to receive its subsidization? Why should churches be held to a lower standard? 

2 hours ago, smac97 said:

And by "secretly" do you mean "anything other than not broadcasting each and every expenditure down to the penny?" 

Of course not. For years now I've been lecturing you about the well-defined and broadly accepted concept of financial transparency. Do you honestly not remember these conversations? I grant that you personally might have your own reasons to reject and oppose this mainstream principle of corporate (and church) governance. But you couldn't possibly be so misinformed as to think I  am advocating for "broadcasting each and every expenditure down to the penny." So what's your point here? Do you think anybody is going to be impressed by this strawman argument?

2 hours ago, smac97 said:

Do you accept that standard that as to your spending habits?  Can I publicly question your integrity because you haven't publicly disclosed your personal finances to the world?  "We still haven't seen Analytics publish how he spent his discretionary income in 2020.  What is he hiding?  Why all the secrecy?  Is it really appropriate for him to use his income in any way he sees fit?"

The reason this analogy is terrible is because I am a private individual who pays taxes. If I were a 501(c)(3) that didn't pay taxes while enjoying the benefits of a civilization supported by others paying taxes, I would in fact endeavor to abide by legal and ethical standards of financial transparency.  

 

[Amulek]

18 hours ago, Analytics said:

In theory, money has "time value." $1.00 today is equal to $1.05 in a year.

So, if I leave a dollar out on my dresser, a year from now I'll find it there with a nickle on top of it as well? Fascinating...

 

Quote

The 5% interest isn't categorically different than the $1.00 in principal. It's just a representation of how the value of money changes over time.

Try telling that to the IRS.

'Well, you see sir, I didn't report the interest earned from my savings account as income because it isn't categorically different from the principal. I mean, the value of money just changes over time - it's trixie like that - and I already paid taxes on the principal before, so we're square.'

Sorry, but that's not going to fly.

The interest earned on an investment is new income; it isn't just the same thing you had before but magically transformed into more than it was previously.

 

Quote

If the money that goes into the investment fund is sacred tithing money, the investment income on that is also sacred tithing money.

Wrong. But I can understand why you want to see it that way (as it's central to your argument).

 

Quote

If the Church doesn't believe this mainstream theory about the time value of money and thinks the interest earned on tithing money not spent is categorically different than the tithing money itself, it should clarify that.

Interest earned from tithing isn't tithing though. So why does the Church need to clarify something that everyone already knows?

 

Quote

I would say the Church was being misleading when it said it was merely saving some money for a rainy day when in fact it was hoarding an obscene amount.

Meh.

 

Quote

Hoarding is a thing, and what the Church does is best classified as hoarding.

Heresy is a thing, and what the Church teaches is best classified as heresy.

That's how comments like this read to me. It's little more than opinion stated as fact.

 

Quote

Really? If your annual tax bill was, say, $20,000 and the government only used $15,000 of it to pay for useful public services and put the other $5,000 into its "rainy day fund" of $100 trillion dollars you would be thrilled?

I'd be pissed as hell and would demand that they lower my taxes.

Actually, I remember my mother (who was in education) telling me about a city which did something like this. When the Great Recession hit they were still able to keep their schools fully staffed and actually hired additional teachers. I don't recall what town it was, but everybody thought their mayor was a genius for having reserves in place to weather the financial crisis.

Which, ironically, is exactly what the Church did with its reserve funds - employing people and creating jobs in the midst of a major economic downturn. And somehow critics are determined to turn that into a bad thing.

 

Quote

If I were a 501(c)(3) that didn't pay taxes while enjoying the benefits of a civilization supported by others paying taxes, I would in fact endeavor to abide by legal and ethical standards of financial transparency.  

If you think the Church isn't abiding by the legal requirements imposed by US law, please feel free to contact your representative.

Only you and I both know they aren't violating any laws. And they aren't doing anything unethical either - unless, by unethical, you simply mean not doing what you want them to do.

In which case, fine; stop giving the church any additional money until they decide to do what you like. It's a free country after all.

 

Edited August 17, 2021 by Amulek
(bunch of weird spacing issues)

[Analytics]

11 minutes ago, Amulek said:

So, if I leave a dollar out on my dresser, a year from now I'll find it there with a nickle on top of it as well? Fascinating...

You are just caviling. 

Time value of money - Wikipedia

According to a Salt Lake Tribune story this morning, a former portfolio manager of Ensign Peaks Advisors claims that inside the Church, they really do look at it the way I do. I'd be shocked if it were otherwise--these guys are in fact professionals and in the real world, my point isn't the least bit controversial: 

Church leaders have have relied on “a distinction without a difference,” Huntsman’s attorneys said, by mounting arguments that it used “earnings versus principal” for spending from church accounts on Salt Lake City’s City Creek Center shopping center and Beneficial Life insurance Co.

“Any use of earnings necessarily stems from a use of the underlying principal itself,” the California film distributor’s lawyers wrote in their motion filed Monday.

To buttress that argument, they included a sworn declaration from whistleblower David Nielsen, a former senior portfolio manger at Ensign Peak Advisors, an investment arm of the church.

Nielsen said that Ensign Peak’s senior managers told him and others the fund had been seeded with tithing money in 1997. But all the funds in the portfolio were repeatedly “referred to and revered” as tithing, “regardless of whether they were referring to principal or earnings on that principal,” stated the former fund manager from 2010 to 2019 at Ensign.

Donations were commingled with earnings, Nielsen said in his new declaration, and “every penny was referred to as the ‘widow’s mite’” — a biblical reference to its sacred nature. Based on his personal knowledge, he said, “it appeared the church’s public statements were intended to conceal the truth about EPA’s use of tithing funds for City Creek mall and Beneficial Life.”

Whether City Creek Center money came from member donations or earnings, it was all called ‘tithing,’ Huntsman alleges in case against LDS Church (sltrib.com)

[Amulek]

4 minutes ago, Analytics said:

You are just caviling. 

Time value of money - Wikipedia

Thanks for the link, but I've already got a degree in Economics and a career spent working in the tax/finance world, which is why I found your comments about the time value of money...wanting.

 

[Amulek]

9 minutes ago, Analytics said:

To buttress that argument, they included a sworn declaration from whistleblower David Nielsen, a former senior portfolio manger at Ensign Peak Advisors, an investment arm of the church.

Nielsen said that Ensign Peak’s senior managers told him and others the fund had been seeded with tithing money in 1997. But all the funds in the portfolio were repeatedly “referred to and revered” as tithing, “regardless of whether they were referring to principal or earnings on that principal,” stated the former fund manager from 2010 to 2019 at Ensign.

How the funds were referred to in-house doesn't change what the funds actually are (i.e., principal vs earnings).

You get that, right?

 

[Analytics]

3 minutes ago, Amulek said:

Thanks for the link, but I've already got a degree in Economics and a career spent working in the tax/finance world, which is why I found your comments about the time value of money...wanting.

Now that you've proven your point with an appeal to your own authority, the issue is settled.

Since a dollar today has the same value as a dollar the day I die, I'm now going to pay all my bills with IOUs that are payable after I'm dead. I'm going to put the money into an investment account, which will grow with compound interest, which I will keep. After I'm dead the IOUs can be exchanged for cash, without late penalties and without interest. If anybody complains, I'll tell them that Amulek with his B.S. in Economics assures me that a dollar paid on the date a bill is due is exactly equal in value to a dollar on the day I die and that they are being irrational by arbitrarily insisting the money gets paid now rather than then.

[2BizE]

If the church receives $1 billion in tithing that money is considered a charitable tax-free contribution to the church.  If the $1B is invested and the increase in the investment is no longer considered tithing, then is that increase taxable? Does the church pay taxes on its “non-tithing” increase?

[Analytics]

48 minutes ago, Amulek said:

Actually, I remember my mother (who was in education) telling me about a city which did something like this. When the Great Recession hit they were still able to keep their schools fully staffed and actually hired additional teachers. I don't recall what town it was, but everybody thought their mayor was a genius for having reserves in place to weather the financial crisis.

Which, ironically, is exactly what the Church did with its reserve funds - employing people and creating jobs in the midst of a major economic downturn. And somehow critics are determined to turn that into a bad thing.

Having reserve funds is great. In general, an organization the size of the Church should have reserves around $10 billion to $20 billion. Exactly where the line is drawn is blurry and subject to debate, but saving much more than $20 billion "for a rainy day" is indisputably hoarding.

That said, what specifically are you referring to when you claim that "is exactly what the Church did with its reserve funds - employing people and creating jobs in the midst of a major economic downturn." Are you referring to building a mall?

Is it saving hundreds of billions of tithing dollars so that if there is another great recession, it can build another mall?

[Tacenda]

13 minutes ago, Analytics said:

Having reserve funds is great. In general, an organization the size of the Church should have reserves around $10 billion to $20 billion. Exactly where the line is drawn is blurry and subject to debate, but saving much more than $20 billion "for a rainy day" is indisputably hoarding.

That said, what specifically are you referring to when you claim that "is exactly what the Church did with its reserve funds - employing people and creating jobs in the midst of a major economic downturn." Are you referring to building a mall?

Is it saving hundreds of billions of tithing dollars so that if there is another great recession, it can build another mall?

Rainy day fund, that is not going to be used until the end times, seems a little useless. The time should be now, little by little that could delay end times, wars, famine, starvation, climate change destruction, homelessness, well-being, world hunger and so many things. If hoarding unnecessarily is done in the church it's shameful. The only thing I can think of that answers why, is maybe because of the past where the church was nearly broke.

Edited August 17, 2021 by Tacenda

[Analytics]

42 minutes ago, 2BizE said:

If the church receives $1 billion in tithing that money is considered a charitable tax-free contribution to the church.  If the $1B is invested and the increase in the investment is no longer considered tithing, then is that increase taxable? Does the church pay taxes on its “non-tithing” increase?

In general, churches can collect investment income tax free.

The issue is whether Ensign Peak Advisors is really just a department of the Church (i.e. an "integrated auxiliary"), or if its a standalone charity that happens to be wholly owned by the Church.

If EPA is a standalone charity, its behavior classifies it as a Private Foundation that doesn't spend any of its money on actual charitable or religious purposes. Ever. That being the case, it owes the IRS tens of billions in back taxes. 

From my position, the EPA really is a Private Foundation and isn't the least bit integrated into the Church. That is obvious. But the Church has so much political power, I just can't conceive of the IRS or the courts ruling against it. 

[smac97]

On 8/10/2021 at 10:48 AM, smac97 said:

An update: LDS Church asks judge to dismiss Huntsman lawsuit alleging fraud

Quote

The Church of Jesus Christ of Latter-day Saints is asking a federal judge to dismiss a fraud lawsuit filed by a member of a high-profile Utah family.

In a new court filing obtained by FOX 13 on Tuesday, lawyers for the faith ask a Los Angeles federal judge to dismiss James Huntsman's lawsuit.

"James Huntsman seeks an extraordinary remedy—the refund of his voluntary, unrestricted contributions to his former church, The Church of Jesus Christ of Latter-day Saints," church attorney Rick Richmond wrote in the filing. "Huntsman quit making contributions and resigned from the Church because he had a crisis of faith and no longer believes in certain religious doctrines or practices. Huntsman attempts to avoid the obvious obstacles to seeking a refund by cloaking his claim in the garb of a fraud action."

Huntsman, the brother of former Utah governor Jon Huntsman Jr. and a member of the wealthy Utah family, sued the church alleging fraud. Specifically, he claims that tithing dollars were spent on commercial ventures, including the City Creek Center project in downtown Salt Lake City, instead of charitable purposes. The lawsuit filed by James Huntsman seeks millions in damages and he claims he will take any money he wins to donate to charities "supporting LGBTQ, African-American, and women’s rights."

But in their motion to dismiss the lawsuit, the Latter-day Saint church repeats its claim that no tithing dollars were used to fund City Creek. Instead, the money came from its real-estate arm and other sources, including Ensign Peak and a source of money that was redacted in the court filing.

 

Huntsman's attorneys have now filed a response to the above-reference motion.  See here:

Quote

A former manager for The Church of Jesus Christ of Latter-day Saints' investment arm who filed a whistleblower complaint with the Internal Revenue Service has given a sworn declaration in James Huntsman's high-profile fraud lawsuit against the faith.

David Nielsen's statement was included in a late night court filing by Huntsman, who alleges the Latter-day Saint church used tithing money for improper purposes, including funding downtown's City Creek Center project. Huntsman is the brother of former Utah governor Jon Huntsman Jr. and a member of the wealthy family.

The LDS Church is asking a federal judge to dismiss Huntsman's lawsuit, insisting that tithing dollars were not used to fund City Creek Center or bail out Beneficial Life Insurance.

Huntsman's legal team filed a response to the Church's request to dismiss the lawsuit.

So David Nielsen, the putative "whistleblower" about Ensign Peak, has worked with Huntsmans' attorneys and signed an affidavit supporting their opposition to the Church's motion for summary judgment.

Huntsman's memorandum opposing the Church's motion is available online here.  The linked memo does not include Nielsen's affidavit, but it does quote the affidavit.

Quote

"The Church’s present summary judgment motion is nothing more than its latest calculated effort to deceive the public and distort the facts. More specifically, to support its untenable position that tithing funds were not solicited through fraudulent means, the Church has painted a wildly-complex narrative, which is clearly intended to further obfuscate the truth about where tithing monies went," Huntsman's attorney, David Jonelis, wrote in the filing.

The memo is drafted a bit better than previous documents, but it's still a bit . . . much.

It looks like the gist of the argument is that David Nielsen is saying that EPA (Ensign Peak) employees "referred to and revered all EPA funds as 'tithing' money, regardless of whether they were referring to principal or earnings on that principal."  (Memo, p. 4.)  Pp. 4-5 of the Memo are the key factual(ish) arguments made by Huntsman, apparently based entiretly on Nielsen's affidavit.

The legal argument is mostly on pp. 9-11.  The gist of it is that the Church is saying that earnings on invested tithed funds, and not the principal (tithed funds) were used to fund City Creek.  They don't cite much in the way of case law.  Very little, in fact.  

The dispute seems to center on the "earnings versus principal" thing that we've discussed for a while.  In the end, I doubt a claim for fraud works in this context.  

Huntsman's attorneys do a pretty good job on rebutting the Church's "reasonable reliance" argument (pp. 12-14 of his Memo).

I think Huntsman's attorneys make a mistake when they invoke what looks like a religious argument.  For example, on p. 15 they state: "Simply stated, this is a case about fraud, not faith, and implicates no religious
principles or tenets of Mormonism.11"  Footnote 11 then states: "As stated succinctly in the Mormon scripture, greed is incompatible with faith. See 1 Timothy 6:10 (“For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows”)."  Quoting scripture to a federal judge while arguing that your lawsuit against a religious group "implicates no religious principles or tenets" is, in my view, an unforced error.  Federal judges really don't want to be in the business of litigating issues of faith, yet Huntsman cites the Bible when characterizing the Church's behavior.

I'm low on time, so I can't comment further at the moment.  

Thanks,

-Smac

EDIT TO ADD: Here is a link to Nielsen's affidavit. And here is the slide referenced in Nielsen's affidavit:

Boy, this all sounds very nefarious!

Edited August 17, 2021 by smac97

[bluebell]

50 minutes ago, Tacenda said:

Rainy day fund, that is not going to be used until the end times, seems a little useless. The time should be now, little by little that could delay end times, wars, famine, starvation, climate change destruction, homelessness, well-being, world hunger and so many things. If hoarding unnecessarily is done in the church it's shameful. The only thing I can think of that answers why, is maybe because of the past where the church was nearly broke.

Do you believe that the church shares your opinion that slowly using the rainy day fund could delay the second coming of Christ?

Because, as far as the church is concerned, all of this end time stuff is what happens before He comes.

[Teancum]

23 hours ago, smac97 said:

Do you accept that standard that as to your spending habits?  Can I publicly question your integrity because you haven't publicly disclosed your personal finances to the world?  "We still haven't seen Analytics publish how he spent his discretionary income in 2020.  What is he hiding?  Why all the secrecy?  Is it really appropriate for him to use his income in any way he sees fit?"

This is is silly argument the apologists often make when church financial secrecy is discussed. It is a tortured argument.  I will tell you this. When I start soliciting other people for 10% of their income and require it to get in the place where they are to receive the highest ordinances for the best place n heaven then I will be happy to disclose may personal finances.  Till then not so much. 

[smac97]

50 minutes ago, Tacenda said:

Rainy day fund, that is not going to be used until the end times, seems a little useless.

I quite agree.  Weird, then, that this allegation is floating around.

50 minutes ago, Tacenda said:

The time should be now, little by little that could delay end times, wars, famine, starvation, climate change destruction, homelessness, well-being, world hunger and so many things. If hoarding unnecessarily is done in the church it's shameful. The only thing I can think of that answers why, is maybe because of the past where the church was nearly broke.

Oh, I dunno.  Was Joseph "hoarding" during the seven years of plenty?  It depends, I suppose, on one's point of view.

Thanks,

-Smac

[smac97]

2 minutes ago, bluebell said:

Do you believe that the church shares your opinion that slowly using the rainy day fund could delay the second coming of Christ?

This seems at odds with what the Brethren have said.  See, e.g. here:

Quote

Myth #4: If we will live the gospel and purify our lives, we can hasten the Lord’s coming and help to usher in the glorious Millennium.

To be sure, Latter-day Saints far and wide can strive to create a spiritual environment in their own homes that is, as President David O. McKay used to describe it, a little bit of heaven on earth.

We can seek to establish and move forward the cause of Zion (D&C 6:6; 11:6; 14:6; 21:7). We can assist Zion to acquire its destined beauty and holiness (D&C 82:14). We can help to “redeem” Zion (D&C 100:13; 103:15) through living the law of the celestial kingdom (D&C 105:5, 32). In summary, we can hasten the establishment of the earthly City of Holiness (Moses 7:19, 62), the place of the pure in heart (D&C 97:21), no matter where we live. 

But the day of the Second Coming of the Lord in glory is fixed, set, established, just as was the day of his first coming. Isaiah or Nephi or Abinadi did not call upon the people to repent so that the Holy One of Israel could come into mortality sooner. The Second Coming may not be postponed by unbridled wickedness nor hurried by consummate righteousness.  

“The God of heaven has ordained that day,” President Gordon B. Hinckley stated. “The prophets of all dispensations have spoken of it. We know not when it will come, but its dawning is certain.” (Teachings of Gordon B. Hinckley, 1997, 577; emphasis added; see also Bruce R. McConkie, The Millennial Messiah, 1982, 26-27, 405.)

If we can't "hasten" the day of the Lord's coming, I think it stands to reason that we can't delay it either.

And here:

Quote

Elder Bruce R. McConkie (1915–85) of the Quorum of the Twelve Apostles wrote:

“The time for the Second Coming of Christ is as fixed and certain as was the hour of his birth. It will not vary as much as a single second from the divine decree. He will come at the appointed time. The Millennium will not be ushered in prematurely because men turn to righteousness, nor will it be delayed because iniquity abounds. …

“… [Jesus Christ] knows the set time and so does his Father” (The Millennial Messiah: The Second Coming of the Son of Man [1982], 26–27).

Interesting stuff.

Thanks,

-Smac

[Amulek]

34 minutes ago, Analytics said:

Now that you've proven your point with an appeal to your own authority, the issue is settled.

I wasn't referring to my education and experience to prove a point. I was merely tying to communicate that I don't need your simplistic, Wikipedia level explanations about the time value of money in order to be conversant on the subject.

 

Quote

Since a dollar today has the same value as a dollar the day I die, [...]

Ignoring the fact that I never said this, I suppose it depends on what you mean by "value."

A dollar today will have the same face value as a dollar whenever you die (which, hopefully, won't happen for a very long time); that much is certainly true.

Whether or not that dollar will have the same purchasing power, however, is dependent on a number of factors (e.g., inflation/deflation, government behavior, cost of goods, etc.).

There's actually more to it than that - none of which is captured by your simplistic "$1.00 today is equal to $1.05 in a year" comment that you made to smac.

But, hey, if condescension is your thing, let's go with it.

 

[smac97]

11 minutes ago, Teancum said:

This is is silly argument the apologists often make when church financial secrecy is discussed. It is a tortured argument. 

I dunno.  I think critics impose some pretty unserious expectations/requirements on the Church, and then throw fits when those expectations/requirements are not met.

11 minutes ago, Teancum said:

I will tell you this. When I start soliciting other people for 10% of their income and require it to get in the place where they are to receive the highest ordinances for the best place n heaven then I will be happy to disclose may personal finances.  Till then not so much. 

Speaking of "tortured argument..."

Payment of tithing is a voluntary exercise.

Thanks,

-Smac

[bluebell]

3 minutes ago, smac97 said:

This seems at odds with what the Brethren have said.  See, e.g. here:

If we can't "hasten" the day of the Lord's coming, I think it stands to reason that we can't delay it either.

And here:

Interesting stuff.

Thanks,

-Smac

I agree.

I'm wondering if Tacenda expects the church to act against its beliefs in this matter, and if she does, I'm wondering whether or not she believes that is a reasonable expectation.

[Danzo]

58 minutes ago, Analytics said:

In general, churches can collect investment income tax free.

The issue is whether Ensign Peak Advisors is really just a department of the Church (i.e. an "integrated auxiliary"), or if its a standalone charity that happens to be wholly owned by the Church.

If EPA is a standalone charity, its behavior classifies it as a Private Foundation that doesn't spend any of its money on actual charitable or religious purposes. Ever. That being the case, it owes the IRS tens of billions in back taxes. 

From my position, the EPA really is a Private Foundation and isn't the least bit integrated into the Church. That is obvious. But the Church has so much political power, I just can't conceive of the IRS or the courts ruling against it. 

Private Foundation?

Explain to me (who prepares form 990 PF for a living) why it would be a private foundation.

Citations from the Internal Revenue Code, or Treasury regulations would be helpful.

[Analytics]

33 minutes ago, smac97 said:

The legal argument is mostly on pp. 9-11.  The gist of it is that the Church is saying that earnings on invested tithed funds, and not the principal (tithed funds) were used to fund City Creek.  They don't cite much in the way of case law.  Very little, in fact.  

The dispute seems to center on the "earnings versus principal" thing that we've discussed for a while.  In the end, I doubt a claim for fraud works in this context.  

As I’ve repeated in this thread, as a matter of principle I find the argument that interest and principal are independent to be weak. It’s nice to read that the Supreme Court has said “the rule that ‘interest follows principal’ has been established under English common law since at least the mid 1700's. Not surprisingly, this rule has become firmly embedded in the common law of the various States.”

The statement “no tithing money was used” (because it was really just interest on tithing money that was used) was misleading, at best. But whether it crosses to the level of actual fraud is something I'm on the fence about. My instincts is that it was not fraud--just as reasonable people don't take what Tucker Carlson says at face value, reasonable people don't take what Gordon B. Hinckley says at face value.

46 minutes ago, smac97 said:

I think Huntsman's attorneys make a mistake when they invoke what looks like a religious argument.  For example, on p. 15 they state: "Simply stated, this is a case about fraud, not faith, and implicates no religious
principles or tenets of Mormonism.11"  Footnote 11 then states: "As stated succinctly in the Mormon scripture, greed is incompatible with faith. See 1 Timothy 6:10 (“For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows”)."  Quoting scripture to a federal judge while arguing that your lawsuit against a religious group "implicates no religious principles or tenets" is, in my view, an unforced error.  Federal judges really don't want to be in the business of litigating issues of faith, yet Huntsman cites the Bible when characterizing the Church's behavior.

In context, Huntsman's explicit point is that this is a case about fraud, not faith, and implicates no religious principles or tenets of Mormonism. The footnote is an example of one of the "religious principles or tenets of Mormonism" that are not being litigated. Yes, it gratuitously implies that the Church is hypocritical on this point. But it is a one-liner in a footnote. The judge may or may not chuckle, but I can't imagine him thinking this is asking him to litigate an issue of faith.  

I thought this line does in fact get to the heart of it:

Did the Church use tithing funds to develop the City Creek Mall and bail out Beneficial Life Insurance notwithstanding its repeated representations that tithing funds were not used for such non-charitable purposes? If the answer is yes (which it is), Mr. Huntsman wins the case. If the answer is no (as the Church has misled its members to believe), Mr. Huntsman loses.

In other words, would a reasonable person think investment income on "tithing funds" are also "tithing funds"?