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

[webbles]

32 minutes ago, SeekingUnderstanding said:

Where do you get this number from? 

The "Letter to the IRS Director" says:

Quote

The COP is famously tight lipped about what its total tithes and organizations are, but one EPA senior leader suspected in 2019 that they are $6-$7 billion annually with maybe $5-$6 billion in expenses.

Exhibit F.1 of "Letter to the IRS Directory" also uses $7 billion for tithing received and $1 billion for surplus.

Exhibit Q.1 of "Letter to the IRS Directory" charts out the amount of "contributions to the EPA fund" for each year from 1996 to 2019.  In 2019, the contribution is calculated as $2.96 billion.  If we assume the church is saving 1/7 of the tithing received, then the amount of tithing received in 2019 would be around $20.72 billion and the expenses would have been $17.76 billion.

So, the range is from $6 billion to $17.76 billion in expenses.  It probably lies somewhere inside of there.

[SeekingUnderstanding]

49 minutes ago, webbles said:

The "Letter to the IRS Director" says:

Exhibit F.1 of "Letter to the IRS Directory" also uses $7 billion for tithing received and $1 billion for surplus.

Exhibit Q.1 of "Letter to the IRS Directory" charts out the amount 

Quote

Edited August 18, 2021 by SeekingUnderstanding

[webbles]

16 minutes ago, SeekingUnderstanding said:

You appear to be misreading the document. The document states:

Whatever math you were doing is not correct. 

I think you misread my post because I quoted what you just quoted.  You should re-read Exhibit Q.1 and go over the numbers there.  It is estimating the contribution amount.  With those numbers, make a guess on what percentage the church is contributing (I went with 1/7 since that is what the EPA senior leader suspected).

[JustAnAustralian]

3 hours ago, smac97 said:

Again, Huntsman donated tithing from, he says, 1993 to 2017.

Interestingly enough, despite the initial statement of claim specifying 2017, James Huntsman's deposition says his last donation was in January 2015. (page 101 of PDF https://storage.courtlistener.com/recap/gov.uscourts.cacd.814559/gov.uscourts.cacd.814559.32.2.pdf, red box #1)

[SeekingUnderstanding]

29 minutes ago, webbles said:

I think you misread my post because I quoted what you just quoted.  You should re-read Exhibit Q.1 and go over the numbers there.  It is estimating the contribution amount.  With those numbers, make a guess on what percentage the church is contributing (I went with 1/7 since that is what the EPA senior leader suspected).

Haha yes sorry! On my phone then got a call and ended up misreading. I actually edited the post best I could for now, but you have my apologies for that. I do think your 1/7 is unsupported by the documents. The only thing supported by the documents (which provide no references so are a bit suspect here) is 5-6 billion in operating expenses. 

[webbles]

1 minute ago, SeekingUnderstanding said:

Haha yes sorry! On my phone then got a call and ended up misreading. I actually edited the post best I could for now, but you have my apologies for that. I do think your 1/7 is unsupported by the documents. The only thing supported by the documents (which provide no references so are a bit suspect here) is 5-6 billion in operating expenses. 

The 1/7 is supported with that same statement.  He suspected that the church tithes was 6-7 billion and the expenses was 5-6 billion.  So that's roughly 1/7 savings.  If we take the extreme end (5 billion in expenses and 7 billion in tithes), then it is 2/7 in savings.  And using the numbers from exhibit Q (which is more supported than that statement), that would give the church an annual expense of $10.36 billion.

[mgy401]

Just a random thought, in light of the BSA’s current experience:

If my math is right, $100 billion would settle a class-action lawsuit of five thousand sex abuse victims at $20 million per claim; while preventing the Church from having to liquidate its temples, meetinghouses, and/or humanitarian assets.

Given that something like 60K victims came forward in the BSA bankruptcy (with the BSA historically averaging a roughly equivalent number of members as the LDS Church up until the mid-1980s or so), and that a Portland jury gave a BSA victim (who also happened to have been a member of an LDS troop) $18.5 million back in 2010:  is anyone who faults the Church for a rainy-day fund of this magnitude prepared to go on-record and guarantee that either the Church is liable for far fewer than 5,000 sex abuse cases, or that a sex abuse victim doesn’t deserve/could never obtain a $20 million settlement against an entity with as many meetinghouses and temples as the Church has?

If there were no rainy-day find, and your stake president came to you and said “our local temple is facing a judgment lien and we need every adult member to pay $1,000 in the next month to keep the temple out of a sheriff’s sale”—could you do it?  Would you do it?

Edited August 18, 2021 by mgy401

[Calm]

6 minutes ago, mgy401 said:

either the Church is liable for far fewer than 5,000 sex abuse cases

One contributing factor would be the Church’s scout leaders were called to the position, though no doubt some volunteered before getting called (like me when there was no Akela for my son’s troop even though I was completely clueless and only took it on the condition they keep looking).

This would likely lead to a lower number of predators finding their way into leader position (I am aware of several in the Church who were assaulted through scouting connections/activities, so not suggesting it didn’t happen or was rare…I have no clue what the numbers might be).

Edited August 18, 2021 by Calm

[Hamba Tuhan]

1 hour ago, mgy401 said:

Is anyone who faults the Church for a rainy-day fund of this magnitude prepared to go on-record and guarantee that either the Church is liable for far fewer than 10,000 sex abuse cases, or that a sex abuse victim doesn’t deserve/could never obtain a $20 million settlement?

This is a potentially important point. Six years ago, we enacted legislative changes at the national level that allow victims of historical cases of abuse (not just sexual) to sue institutions regardless of when the abuse was alleged to have occurred. As a result, more than 100,000 cases have been filed so far. The result has been a huge hit to the companies that provide liability insurance to institutions. It has been so bad that literally all insurers have stopped providing coverage for organisations that deliver foster care, with all current policies due to expire before the end of the calendar year.

This will leave charitable organisations working in this space fully financially liable for any historical abuse claim filed in future. Many of these organisations are small enough that a single case will bankrupt them, and even larger organisations will fold in the face of dozens of claims. Barring significant changes, the outcome will be the collapse of our child protection system.

I attended a forum with a number of foster care charities and insurance companies last month, and the main point made by the latter is that they did not generate large enough financial reserves to deal with this situation because they had no idea what was coming. Past premiums were collected and invested based on historical models that did not take into account the current surge of abuse claims. Pulling out of the market is the only way these insurers have of surviving.

One of the CEOs at the forum heads an insurance company that solely works with charities and other community service providers. He said he fears that they will eventually have to cease operations altogether as foster care provision may just be the leading edge of all this, with law suits spreading to things like scout groups, youth sporting organisations, etc.

As I have stated dozens of times on this forum already, I have zero concern about the Church creating a reserve. I don't know exactly what's coming, but in the end, it will not have gone to waste. Prudence = security.

Edited August 18, 2021 by Hamba Tuhan

[mgy401]

34 minutes ago, Calm said:

One contributing factor would be the Church’s scout leaders were called to the position, though no doubt some volunteered before getting called (like me when there was no Akela for my son’s troop even though I was completely clueless and only took it on the condition they keep looking).

This would likely lead to a lower number of predators finding their way into leader position (I am aware of several in the Church who were assaulted through scouting connections/activities, so not suggesting it didn’t happen or was rare…I have no clue what the numbers might be).

I would hope so; but just as a matter of sheer numbers—we have 30,000 units, each of which has a bishopric, an EQ presidency, an RS presidency, a Primary presidency, a YW presidency, and (until recently) a YM presidency as well as the standard Boy Scout/Cub Scout leadership structure; as well as over a dozen teachers and scores of home teachers/visiting teachers—and they all rotate every couple of years.  (My memory is fuzzy, but I think there was even a case where the Church was imputed liability for no other reason than that the perp held the priesthood office of “high priest”.)

It’s a statistical inevitability that over the past fifty years, *some* predators would find their way in; and even an infinitesimal percentage can yield a large absolute number of predators and (because sexual predators tend to have a large number of victims) conceivably thousands or tens of thousands of victims.  Add to that the Church’s storied wealth and its increasing social/political unpopularity and the number of potential jurors who want to “teach those Mormon bigots a lesson”, and . . . yeah.

The BSA has had the luxury of running for the bankruptcy courts and settling its claims for pennies on the dollar while basically divesting itself of all but a handful of its real estate properties.  The Church doesn’t really have that option; it needs the meetinghouses and in the past has taken drastic steps to keep its temples out of receivership.  The only real option is to be prepared to pay every single adverse judgment in full; and no one really knows what kind of reserve it would take to do that.  

Edited August 18, 2021 by mgy401

[Amulek]

4 hours ago, Analytics said:

Say I am a devout member of the church and made $10 million 17 years ago, so I owed the Church $1 million in tithing. I put that $1 million into an investment account and let it grow at 10% for 17 years. Now it has grown to $5 million in my account.

At this point, how much money do I owe the Church?

One-tenth of your annual increase. And increase is understood to be income. 

 

Quote

You might say I owe the Church $1.4 million--I owe $1 million of the original tithing, at an additional $0.4 million on the $4 million in investment income I made.

This isn't really a good example because tithing isn't something that goes into arrears. If you didn't pay tithing in one year you don't have to 'make it up' in the future. 

 

Quote

Somebody who understands the time value of money would say I owe the Church the full $5 million;

And somebody who understands that tithing is based on annual income would disagree. 

 

Quote

That is why the employees at EPA consider all of the money in their accounts to be tithing.

Even the accountants? 

 

[OGHoosier]

1 hour ago, Hamba Tuhan said:

This is a potentially important point. Six years ago, we enacted legislative changes at the national level that allow victims of historical cases of abuse (not just sexual) to sue institutions regardless of when the abuse was alleged to have occurred. As a result, more than 100,000 cases have been filed so far. The result has been a huge hit to the companies that provide liability insurance to institutions. It has been so bad that literally all insurers have stopped providing coverage for organisations that deliver foster care, with all current policies due to expire before the end of the calendar year.

This will leave charitable organisations working in this space fully financially liable for any historical abuse claim filed in future. Many of these organisations are small enough that a single case will bankrupt them, and even larger organisations will fold in the face of dozens of claims. Barring significant changes, the outcome will be the collapse of our child protection system.

I attended a forum with a number of foster care charities and insurance companies last month, and the main point made by the latter is that they did not generate large enough financial reserves to deal with this situation because they had no idea what was coming. Past premiums were collected and invested based on historical models that did not take into account the current surge of abuse claims. Pulling out of the market is the only way these insurers have of surviving.

One of the CEOs at the forum heads an insurance company that solely works with charities and other community service providers. He said he fears that they will eventually have to cease operations altogether as foster care provision may just be the leading edge of all this, with law suits spreading to things like scout groups, youth sporting organisations, etc.

As I have stated dozens of times on this forum already, I have zero concern about the Church creating a reserve. I don't know exactly what's coming, but in the end, it will not have gone to waste. Prudence = security.

Good grief. You've mentioned at some point that you don't live in the US, right? I'm not asking where you live, and it's awful that such a law is in place anywhere, but I'd like to know if its my country that did that. 

[Hamba Tuhan]

20 minutes ago, OGHoosier said:

You've mentioned at some point that you don't live in the US, right?

No, I am not in America. But interestingly, there has been to date zero media coverage of our looming crisis even here. The expectation at this point is some kind of government assumption of liability. I'm unsure if that will materialise or not. What is not on the table is repealing the law that allowed this to occur; public sentiment wouldn't tolerate that.

[OGHoosier]

2 minutes ago, Hamba Tuhan said:

No, I am not in America. But interestingly, there has been to date zero media coverage of our looming crisis even here. The expectation at this point is some kind of government assumption of liability. I'm unsure if that will materialise or not. What is not on the table is repealing the law that allowed this to occur; public sentiment wouldn't tolerate that.

 

[Calm]

39 minutes ago, Hamba Tuhan said:

public sentiment wouldn't tolerate that.

Someone must pay and they want to feel something is being done for victims,  but it appears very, very shortsighted from here.  Did no one point out the issue with coverage for the children needing care now?

[Hamba Tuhan]

1 minute ago, Calm said:

Did no one point out the issue with coverage for the children needing care now?

Nope. It would appear that no one ever predicted this outcome. A classic example of the 'law of unintended consequences', I suspect.

[Calm]

1 minute ago, Hamba Tuhan said:

Nope. It would appear that no one ever predicted this outcome. A classic example of the 'law of unintended consequences', I suspect.

Was your country not prone to lawsuits before this because it seems rather obvious to me…but I remember being in Canada which had limits on malpractice at least then (don’t have a clue if same now)and it was obvious that when my mind went to “well, did they sue?”, the other person wasn’t thinking that way.

[Hamba Tuhan]

5 minutes ago, Calm said:

Was your country not prone to lawsuits before this because it seems rather obvious to me…

Previously, the statute of limitations was three years from the date when the alleged abuse occurred. Very often, victims only acknowledge abuse as adults, so there were very few cases. In addition, the legal changes are retrospective, allowing litigation for cases that are literally decades old. The CEO I mentioned above said they are currently working on a case that occurred in 1984. And he said no one at this point can predict what happens next: does the surge taper off, or is this the new normal?

To circle back to the main topic, this is just one more reason why I'm not swayed by people who claim they positively know what the Church's future needs will be -- even more so since those crying 'obscene hoarding' have provided zero evidence that, unlike the rest of us, they would be bothered if the Church were forced to fold at some point in future.

[Analytics]

13 hours ago, Danzo said:

Who owns it?

Like all nonprofits, nobody owns Ensign Peak Advisors. Yes, it's controlled by a board of trustees who uncoincidentally are the same people who control the Church. But from a legal and technical perspective, nobody owns Ensign Peak Advisors. 

13 hours ago, Danzo said:

Does it invest its own funds or does it invest the churches funds?

Ensign Peaks Advisors invests its own funds. When James Huntsman donates money to the Church, the money is no longer his and belongs to the Church. Likewise, when the Church makes donations to Ensign Peak Advisors, the money is no longer the Church's and and belongs to Ensign Peak Advisors.

This gets back to the reason Ensign Peak Advisors was created in the first place. On August 4, 1997, Time magazine published an article called "Mormon Inc." about the Church's commercial and financial empire. Gordon B. Hinckley became extremely concerned about the ramifications of people knowing about how much money the Church had. President Hinckley and his advisors decided the best way for the Church to appear less opulent was for the Church to be less opulent. 

8 weeks after the Time article was published, the non-profit Ensign Peak Advisors was incorporated, and the Church made a charitable donation of several billion dollars to it. When that happened, the money ceased belonging to the Church and commenced belonged to Ensign Peak Advisors. Now every time the Church makes a donation to Ensign Peak Advisors, there is a credit to the Church's balance sheet (making it smaller) and a debit to Ensign Peak Advisor's balance sheet (making it bigger). 

Ensign Peak Advisors is a private foundation.

[Analytics]

14 hours ago, smac97 said:

Feel free to demonstrate this "rightfully considered" thing.  Point me to case law that establishes that the subjective religiously-motivated sentiments possibly expressed by some "employees at EPA" are determinative in ascertaining whether interest accrued from investing donated tithes also counts as "donated tithes." 

Strictly speaking, in all likelihood none of the Church's money is donated tithes and none of it is interest. The only way the money itself could be construed as one of those things is if the Church has a special account called the "tithing" account and another special account called the "interest" account. But nobody sets up their balance sheet that way. When I pay my internet bill, I have no way of proving that the specific $65 dollars I spent comes from my day job, my pizza delivery job, or the investment income I made. All the money in the account is fungible. 

Since money is fungible, the Church's claim that it used investment earnings and not principle to pay for the mall is a nonserious, unprovable claim. But as a general economic principle, the idea that "interest follows the money" means interest on tithing is still classified as tithing just as much as it means the interest on my money is still my money.

14 hours ago, smac97 said:

Explain to me how $4 million dollars generated from investments in various business interests can and ought to be construed as factually and legally synonymous with a private party unconditionally donating funds to a religious group.

Since I never claimed any such thing, why should I try to explain it to you?

And what's up with this $4 million example you keep bringing up? Is Huntsman claiming he paid a paltry $1 million in tithing but is suing for $5 million because that $1 million grew with interest to $5 million? If that's the case, I'd think your tight legal interpretation of "the interest follows the principle" applies directly. But that's a different issue than whether the Church can prove its claim that it can distinguish "tithing dollars" and "interest dollars" in its investment portfolio and that when EPA distributed money for the mall and Beneficial Life, it did in fact use the latter and not the former. 

14 hours ago, smac97 said:

Again, no.  "Interest follows principal" pertains to ownership, not time value.

I've cited case law to support my position.  I look forward to you presenting case law to support yours.  

No, you have not cited case law that says "interest follows principal" doesn't pertain to time value. The fact that it applies to ownership does not imply that it doesn't also pertain to time value. 

In any case, I'm talking about broad economic principles. Not case law.

[ksfisher]

3 hours ago, Analytics said:

But as a general economic principle, the idea that "interest follows the money" means interest on tithing is still classified as tithing just as much as it means the interest on my money is still my money.

I'm not sure I understand this.  Trying to make sense of it on a personal level, if I put my paycheck in the bank and it earns interest, is the interest earned still part of my paycheck?  That doesn't really make sense to me.  If you gave me $100 and I invested it, is the investment income still considered money you gave me?

Edited August 18, 2021 by ksfisher

[webbles]

1 hour ago, Analytics said:

Like all nonprofits, nobody owns Ensign Peak Advisors. Yes, it's controlled by a board of trustees who uncoincidentally are the same people who control the Church. But from a legal and technical perspective, nobody owns Ensign Peak Advisors. 

Ensign Peaks Advisors invests its own funds. When James Huntsman donates money to the Church, the money is no longer his and belongs to the Church. Likewise, when the Church makes donations to Ensign Peak Advisors, the money is no longer the Church's and and belongs to Ensign Peak Advisors.

This gets back to the reason Ensign Peak Advisors was created in the first place. On August 4, 1997, Time magazine published an article called "Mormon Inc." about the Church's commercial and financial empire. Gordon B. Hinckley became extremely concerned about the ramifications of people knowing about how much money the Church had. President Hinckley and his advisors decided the best way for the Church to appear less opulent was for the Church to be less opulent. 

8 weeks after the Time article was published, the non-profit Ensign Peak Advisors was incorporated, and the Church made a charitable donation of several billion dollars to it. When that happened, the money ceased belonging to the Church and commenced belonged to Ensign Peak Advisors. Now every time the Church makes a donation to Ensign Peak Advisors, there is a credit to the Church's balance sheet (making it smaller) and a debit to Ensign Peak Advisor's balance sheet (making it bigger). 

Ensign Peak Advisors is a private foundation.

Is the bolded speculation or do you have a source?  Because the Time magazine article didn't just look at what the Church owned, but its entire "empire".  And that still would have included EPA since it is still part of the Church's "empire".  Or do you think that if the Time article was published today, it wouldn't have included the EPA value?  I highly doubt that the reason for the creation of the EPA was to "appear less opulent".

I also found https://www.forbes.com/sites/peterjreilly/2019/12/20/more-on-the-mormon-ensigngate/ which states

Quote

My thinking was that if it was an integrated auxiliary of the church it is really the church accumulating and there is really no rule about that. I consulted with a couple of people who should know and that seems to be the common view.

and

Quote

Now, Ensign will almost surely argue that it is an integral part of the church.

It looks very much like Ensign is still a part of the church, according to tax laws.

 

[webbles]

14 minutes ago, Analytics said:

But as a general economic principle, the idea that "interest follows the money" means interest on tithing is still classified as tithing just as much as it means the interest on my money is still my money.

But from the laws point of view, does it mean that?  Because this is a law case, not a "general economic" class.  Also, does it mean that from a "regular citizen" point of view (or even a "regular Church member")?  Because if this went to a jury (which I don't think this type of case does, but I don't know), then that is who would decide.  I don't see how arguing that it is a "general economic principle" is really all that useful.

[HappyJackWagon]

13 hours ago, mgy401 said:

Just a random thought, in light of the BSA’s current experience:

If my math is right, $100 billion would settle a class-action lawsuit of five thousand sex abuse victims at $20 million per claim; while preventing the Church from having to liquidate its temples, meetinghouses, and/or humanitarian assets.

Given that something like 60K victims came forward in the BSA bankruptcy (with the BSA historically averaging a roughly equivalent number of members as the LDS Church up until the mid-1980s or so), and that a Portland jury gave a BSA victim (who also happened to have been a member of an LDS troop) $18.5 million back in 2010:  is anyone who faults the Church for a rainy-day fund of this magnitude prepared to go on-record and guarantee that either the Church is liable for far fewer than 5,000 sex abuse cases, or that a sex abuse victim doesn’t deserve/could never obtain a $20 million settlement against an entity with as many meetinghouses and temples as the Church has?

If there were no rainy-day find, and your stake president came to you and said “our local temple is facing a judgment lien and we need every adult member to pay $1,000 in the next month to keep the temple out of a sheriff’s sale”—could you do it?  Would you do it?

Holy crap. That would be a lot of money set aside to take fund potential sx abuse cases against the church. So...potentially the "rainy day" could simply be sx abuses victims claims against the church.

Personally I don't think there  would be that many claims but I guess it's possible. If the church viewed this as even a possibility I would think it would be taking stronger steps towards child protection. It puts Sam Young's criticism of the church's child protection policies in a different light. He could have been helping the church save billions in expenses. But he got X'd for that so I'm guessing the church doesn't really think that is a possibility or a purpose for the $100 Billion + rainy day fund

[Analytics]

2 minutes ago, ksfisher said:

I'm not sure I understand this.  Trying to make sense of it on a personal level, if I put my paycheck in the bank and it earns interest, is the interest earned still part of my paycheck?  That doesn't really make sense to me.  If you have me $100 and I invested it, is the investment income still considered money you gave me?

All I'm saying is that if you put your paycheck in the bank and it grows with interest, then the money in your bank account is your paycheck that has grown with interest. As an example, if you put $1,000 in your bank today and it grows to $1,050 in a year, then the present value of your 8/18/2021 paycheck is $1,000 and the future value of your 8/18/2021 paycheck is $1,050. If for whatever reason your boss owes you $1,000 today but doesn't pay you until a year from now, then he should pay $1,050, which is the $1,000 he originally owed you, plus interest.

Of course if you look at your bank statement it will have a credit of $1,000 for the original deposit and subsequent credits for the $50 in interest. Of course. 

But if you then withdraw some money from your account, how do you know that the specific dollars you withdraw are from the original deposit, from interest, or from a mixture of the two? The fact is you can't. Once the money is in your account, every dollar is indistinguishable from every other dollar.

The Church is arguing that it can tell which dollars in EPA's account are interest and which dollars are principal, and that it when it paid for the mall and the bailout, it was using interest dollars only. Because of that, it claims it was being completely honest and forthright when it said no tithing money was used.

Huntsman is claiming that it's silly for them to claim they can distinguish interest dollars from tithing dollars. And even if they could distinguish them and really did use interest dollars only, "interest follows the money" means they still used tithing dollars. It's logical:

• It used tithing dollars to create interest dollars
• It used those interest dollars to fund the mall
• Therefore, it used tithing dollars to fund the mall

You could argue the tithing dollars were used indirectly. But they were still used.