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


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12 minutes ago, smac97 said:

I will re-state: Then "fraud" doesn't really enter into the picture as regarding this lawsuit, I think.

I think the Church keeps pretty good records, and follows "generally accepted accounting principles."

Nielsen filed his complaint against the Church 15 months ago.  It appears that the IRS either A) never investigated or else B) investigated and found no wrongdoing.  Either way there is no investigation by the IRS of Nielsen's allegations.  I think that merits some attention.

Thanks,

-Smac

Some attention to investigate why the IRS isn't investigating now?  Eh, it doesn't merit any of my attention. If the IRS isn't investigating I don't see any good reason for me to investigate.

When I donate money to build up our Lord's kingdom I don't care how those with that stewardship in our Lord's kingdom do it.

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43 minutes ago, ttribe said:

And I'm telling you that your hand-waving and oversimplification grossly understates the challenge associated with the matters in this case.  Your comment betrays a lack of understanding of both the nuance and complexity of the issues which would need to be identified, measured and presented should this case proceed into discovery and beyond.

Yes my comment does betray that lack of understanding, doesn't it.  Thank you for pointing that out.  I don't have that lack of understanding.

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24 minutes ago, JLHPROF said:

I'm not able to debate you on business or accounting.  I know very little.  Likewise I know little about the 501c designation and what entities are permitted to do within that limit.

However, the fraud claim is a bit more clear.  I think since fraud requires deception and the scriptures clearly define tithing usage for any member to read it's hard to say anyone was misled.  The proscribed use of tithing in publicly available Church teachings is sufficiently vague to allow for many, many uses, not all of them ecclesiastical.  And it's sufficiently clear that many of these non-religious uses can apply.

 

While you may feel as though the statements within scripture are sufficient notice to the general membership of the Church, the law and the courts are likely to take a far more comprehensive look which would go well beyond that.

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8 minutes ago, Ahab said:

Some attention to investigate why the IRS isn't investigating now?  Eh, it doesn't merit any of my attention. If the IRS isn't investigating I don't see any good reason for me to investigate.

I meant that the IRS not investigating the Church merits attention.  The IRS reviewed Nielsen's complaint - the same one on which James Huntsman's federal lawsuit is based - and apparently either A) never investigated, or else B) investigating and found no evidence of wrongdoing.

8 minutes ago, Ahab said:

When I donate money to build up our Lord's kingdom I don't care how those with that stewardship in our Lord's kingdom do it.

Well, I think we should care to an extent, while still working within the stewardship framework you reference.

Thanks,

-Smac

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12 minutes ago, ttribe said:

While you may feel as though the statements within scripture are sufficient notice to the general membership of the Church, the law and the courts are likely to take a far more comprehensive look which would go well beyond that.

I'm sure they would.  But unless someone could show that the tithing the Church asked members to contribute was specifically supposed to be limited to religious use and charitable aid I fail to see how any fraud was committed.
I don't believe the Church has ever taught those limitations.  Hard to perpetrate a fraud without misleading someone.  I'm no lawyer but isn't intention to defraud someone a requirement in a fraud lawsuit?

Edited by JLHPROF
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4 minutes ago, JLHPROF said:

I'm sure they would.  But unless someone could show that the tithing the Church asked members to contribute was specifically supposed to be limited to religious use and charitable aid I fail to see how any fraud was committed.
I don't believe the Church has ever taught those limitations.  Hard to perpetrate a fraud without misleading someone.  I'm no lawyer but isn't intention to defraud someone a requirement in a fraud lawsuit?

Yes, intent is a critical element.  As to teaching those limitations - that would be an issue of fact for evaluation by the court or a trier-of-fact.

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4 hours ago, Scott Lloyd said:

Do you really think this frivolous and vexatious lawsuit amounts to the onset of a storm?

My original prediction was predicated on a news making event that would blow up the internet boards.  This lawsuit easily meets that standard.  It even garnered your attention.

Edited by Fair Dinkum
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46 minutes ago, The Nehor said:

I think if he did have money and intended to use it he would have hired a better lawyer to prepare the case. Honestly I think the lawsuit is not intended for a judicial audience just like the original complaint to the IRS was not primarily written for the IRS.

All of that is entirely possible.

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7 minutes ago, smac97 said:

Pretty vague, that.  And since fraud requires particularity...

Touche.

7 minutes ago, smac97 said:

Are you sure?  It seems like that is the question, but that people have differing opinions about it.  Kathleen Flake called it:

Yep.

Nope. That quote doesn't contradict what I said.

7 minutes ago, smac97 said:

I recall reading a quote from D. Michael Quinn in which he felt that the Church's "rainy day fund" was pretty modest given the Church's significant operating expenses.

I admire Quinn's ability to compile source documents, but his financial sensibilities are extremely flawed. For example, in that book he insists that the proper way to estimate the Church's annual tithing revenue is to start with the $78 Million it reported receiving in 1960 and then increase it by 12.9% indefinitely. He estimated that in 2010 the church took in $33 Billion in tithing and continuing with his pattern, received $111 billion in tithing last year.

The numbers Nielsen leaked are plausible. In contrast, Quinn has no education, experience, or good judgment when it comes to corporate finance, and him thinking this extrapolation was likely shows how out of touch he is.

7 minutes ago, smac97 said:

Anyway, it's not really the place of a federal judge to adjudicate whether a private religious organization is, as you put it, "appropriately saving" or "improperly hoarding."  Rather, the judge will be concerned with whether the Church has complied with the law.

Of course. 

7 minutes ago, smac97 said:

Could you provide some references for this?

The more money you divert to reserves, the less you have to spend on your mission. To avoid oversaving and underspending, your policy should set a maximum limit on your reserves. The Foundation Center says six months of operating expenses is a rule of thumb for maximum reserves, and two years is an absolute maximum. The more your organization depends on annual fundraising events rather than a steady cash flow, the larger your maximum may need to be.

Reserve Fund Policy for Charitable Organizations (chron.com)

An operating reserve is an unrestricted fund balance set aside to stabilize a nonprofit's finances by providing a "rainy day savings account" for unexpected cash flow shortages, expense or losses. These might be caused by delayed payments, unexpected building repairs, or economic conditions.

Reserves should not be used to make up for income shortfalls, unless the organization has a plan to replace the income or reduce expenses in the near-term future. In short, reserves should be used to solve timing problems, not deficit problems.

A commonly used reserve goal is 3-6 months' expenses. At the high end, reserves should not exceed the amount of two years' budget. At the low end, reserves should be enough to cover at least one full payroll.

How much should my nonprofit have in its operating reserve? | Knowledge base | Candid Learning

A healthy reserve fund will give a nonprofit the flexibility to either develop new programs or quickly respond to sudden emergencies that constantly seem to appear in this arena. However, The National Charities Information Bureau suggests that charities should not have more than two years’ expenses in reserve.

How much money can a nonprofit have or carry over from year to year? | Nonprofit Expert

CharityWatch believes it is reasonable for a charity to set aside less than three years' worth its annual budget for financial stability and possible future needs. When a charity's available assets in reserve exceeds three years' worth its annual budget, CharityWatch downgrades its final letter grade rating. 

Charity Rating Process | Charity Ratings | Donating Tips | Best Charities | CharityWatch

There is a broad spectrum of church cash reserves philosophies. On one end of the spectrum, some say churches should have few reserves because “God will provide.” On the other end of the scale, some take the position that 12 months of operating reserves should be maintained. Most churches find neither extreme to be ideal for them. 

Church_Cash_Reserves_(TCN Insight)_CHURCH.pdf (ecfa.org)

7 minutes ago, smac97 said:

In other words, Kathleen Flake was right: "{I}t’s about competing views of what should be done with Church money and who gets to say so."  It's about James Huntsman wanting to tell the Church what it "should" do, and what it "should ... tell its donors," and so on.

So . . . not about fraud, then.

It's about the alleged discrepancy about what the Church represented it was doing and what it actually did. Granted, the Church has been so secretive and vague with its money that it will be hard to prove "particularity." But if I were on the jury, I'd be sympathetic to an argument that "particularity" would include a proven material difference between what an informed person who understands finance would reasonably infer from the Church's statements and the actual truth.

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7 minutes ago, Fair Dinkum said:

My original prediction was predicated on a news making event that would blow up the internet boards.  This lawsuit easily meets that standard.  It even garnered your attention.

Did it blow up the boards? I wouldn’t have known about it had I not seen it here. 

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2 hours ago, The Nehor said:

setting that standard in a criminal trial would mean almost no one would be able to find a defense attorney

True.  But the ones you did find would be highly motivated.

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1 minute ago, Analytics said:

It's about the alleged discrepancy about what the Church represented it was doing and what it actually did.

Did I miss where that discrepancy occurred?

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23 minutes ago, smac97 said:

I meant that the IRS not investigating the Church merits attention.  The IRS reviewed Nielsen's complaint - the same one on which James Huntsman's federal lawsuit is based - and apparently either A) never investigated, or else B) investigating and found no evidence of wrongdoing.

Hmm. Okay.

23 minutes ago, smac97 said:

Well, I think we should care to an extent, while still working within the stewardship framework you reference.

Thanks,

-Smac

Well if I cared I would probably want to see some kind of report, so by not caring I can just get on with my life without wondering how those in that stewardship role are using that money.

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1 hour ago, Analytics said:

Yes, but if it represented itself as needing tithing in order to fund its charitable purposes but was really intending to use most of the tithing to increase its corporate empire, it might be committing fraud. 

I don't have a huge problem with the Church doing whatever it wants to with its money, but I do think it ought to meet best practices in financial transparency so that there aren't misunderstandings with the donors regarding what it is doing with the money.

"Most of the tithing" being used "to increase its corporate empire"?

Is this a joke post?

52 minutes ago, Analytics said:

There are multiple things that could be going on regarding the IRS. Maybe the IRS investigated and cleared the church. Maybe they are quietly working on it. Maybe it is on their backlog. Maybe they decided to ignore it because it was too politically sensitive.

I would encourage you to read the original complaint to the IRS. It should clear up the confusion. Seriously the stupid thing was quoting scripture and church manuals to make the church look bad. The entire complaint was a whine-fest about the church not being good. Whether you agree with it the whimpers over the church allegedly not being perfectly in line with its own scriptures is meaningless to an IRS investigation. It was pathetic and was clearly intended for an audience other than the IRS. I would be genuinely shocked if there ever was an investigation.

Edited by The Nehor
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7 hours ago, Analytics said:

The numbers Nielsen leaked are plausible.

No.  The income and expenses from Nielsen are just leaker recalling what he remembers another person guessed, and that person had no access to the actual numbers.  Nothing more.  Nothing less.  At least Quinn had a methodology based on evidence.  Nielsen's numbers have none.

Quote

The Foundation Center

 

The National Charities Information Bureau

CharityWatch

These same groups would consider Joseph of Egypt's 7 year savings plan as grossly excessive. 

 

Edited by helix
Fixed a misplaced word.
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3 hours ago, 2BizE said:

I agree with Huntsman on this case.  We know from statements from our French Presiding Bishop that tithing dollars were used to fund the City Creek Mall.  Our church has been receiving money donated for charitable services and either hoarding it or using it to support businesses not allowed per IRS regulations (ie bailing out DMBA).  

CFR that 

A) DMBA needed bailing out, and 

B) the Church used tithing money to do it. 
 

Added later: I think I’ll add to the above another CFR: Please quote or at least document the specific statement from Bishop Caussé that “tithing dollars were used to fund the City Creek mall.” 
 

Regarding the alleged bailing out of DMBA, as a retired employee of a Church-owned business, I know something about DMBA, which stands for Deseret Mutual Benefit Administrators. It administers my family’s health insurance, the pension I receive from my former employer, and the accumulated savings and growth in my 401(k). So you see, if DMBA had been in such dire straits that it needed bailing out with the use of Church tithing funds, I would have a vested interest in knowing about it. How is it I’ve never heard of such a thing? 
 

Is it because it happened too long ago? I’ve been a DMBA beneficiary since 1985. That’s 36 years. 

Edited by Scott Lloyd
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16 minutes ago, The Nehor said:

"Most of the tithing" being used "to increase its corporate empire"?

Is this a joke post?

I'd guess that about 45% of its income, including both tithing income and investment income/profit, goes towards its actual non-profit work. The remaining 55% goes to growing its investment portfolio. The numbers might be different than that, but in either case, I think it is safe to say that "most," meaning greater than 50%, of its total income goes towards growing the investment portfolio.

16 minutes ago, The Nehor said:

I would encourage you to read the original complaint to the IRS. It should clear up the confusion. Seriously the stupid thing was quoting scripture and church manuals to make the church look bad. The entire complaint was a whine-fest about the church not being good. Whether you agree with it the whimpers over the church allegedly not being perfectly in line with its own scriptures is meaningless to an IRS investigation. It was pathetic and was clearly intended for an audience other than the IRS. I would be genuinely shocked if there ever was an investigation.

It also included some serious arguments about the tax law. Whatever extraneous things it includes for various audiences doesn't have any bearing on the serious elements of the complaint.

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5 minutes ago, Analytics said:

I'd guess that about 45% of its income, including both tithing income and investment income/profit, goes towards its actual non-profit work. The remaining 55% goes to growing its investment portfolio. The numbers might be different than that, but in either case, I think it is safe to say that "most," meaning greater than 50%, of its total income goes towards growing the investment portfolio.

It also included some serious arguments about the tax law. Whatever extraneous things it includes for various audiences doesn't have any bearing on the serious elements of the complaint.

My hope is that the Church is going to a least quintuple its paltry 100 billion dollars in assets before too long because it’s going to require an awful lot of capital to successfully build Zion.. My prediction? The complainers and naysayers are going to look like uninspired, shortsighted fools one day.

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19 minutes ago, teddyaware said:

My hope is that the Church is going to a least quintuple its paltry 100 billion dollars in assets before too long because it’s going to require an awful lot of capital to successfully build Zion.. My prediction? The complainers and naysayers are going to look like uninspired, shortsighted fools one day.

What does "building Zion" look like, since it has such a high cost? Is it literally building something? Honest question here -- no criticism.

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3 hours ago, 2BizE said:

I agree with Huntsman on this case.  

Okay.

3 hours ago, 2BizE said:

We know from statements from our French Presiding Bishop that tithing dollars were used to fund the City Creek Mall.

No, we don't know that.

3 hours ago, 2BizE said:

Our church has been receiving money donated for charitable services and either hoarding it or using it to support businesses not allowed per IRS regulations (ie bailing out DMBA).  

"Donated for charitable services?"  Exclusively?  Are you sure?  

Also, what are "charitable services" in your mind?

Also, what are your thoughts about D. Michael Quinn's assessment?  See here:

Quote

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.”
...
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.

And here:

Quote

Among the distinctions the LDS Church is known for are its missionaries in white shirts, its towering temples and saying next to nothing about its money.

After all, the Utah-based faith doesn’t have to reveal much about its wealth in the United States and many other locales around the globe.

But, in a few countries, The Church of Jesus Christ of Latter-day Saints must make public at least some basic information about the revenue it collects, the money it spends and the assets it owns.
...
For his new book, “The Mormon Hierarchy: Wealth & Corporate Power,” noted historian D. Michael Quinn obtained the LDS Church’s financial disclosures for 2010 in six countries that require churches or charities to make such filings: Australia, Canada, New Zealand, the Philippines, Tonga and the U.K.
...
The combined assets in those six countries added to $1.8 billion in 2010. They include cash, investments and real estate like a stake center (regional meetinghouse) in view of Australia’s Gold Coast, the Mormon temple south of London and hundreds of chapels across the six countries.
...
The historian, who was excommunicated from the LDS Church in 1993 for his writings about early Mormon polygamy, says he was most struck by the money church leaders in Utah directed overseas. Of the six countries, only Australia did not report a supplement from headquarters in 2010.

The church in Canada received $166,728, while the Philippines got $63.8 million — 85 percent of its revenue.

Even in a developed country like the United Kingdom — home to almost as many Mormons as in Canada — headquarters sent $1.8 million in 2010, indicating that the church infrastructure exceeds what the locals can support. That and the other subsidies lead Quinn to assume the U.S.-born church is subsidizing its work and wards in Africa and Latin America, too.

Based on some general statements Mormon apostles have made through the decades about the church’s income from profit-making corporations and members’ tithing, Quinn says, the source of those subsidies must be offerings from Americans and the businesses the faith owns.
...
Every time a meatpacker buys cattle from a church-owned ranch in, say, Florida, a retailer leases space at downtown Salt Lake City’s City Creek Center, or a Mormon purchases a novel at Deseret Book, Quinn explains, they are helping the nearly 16 million-member faith expand overseas.

“My conclusion,” he adds, “is the international church could not exist to the extent that it does with buildings and services were it not for the commercial investments and for-profit businesses of the LDS Church.”

Again: "My conclusion ... is the international church could not exist to the extent that it does with buildings and services were it not for the commercial investments and for-profit businesses of the LDS Church.

So to sum things up a bit:

1. We know the Church has, for a long time now, lived within its means, saved money, and invested wisely.

2. We know that the Church has, as a result, a sizable portofolio of assets obtained, in large part, through these investments.

3. We know that the leaders of the Church are not enriching themselves.

4. We know that the Church has a substantial system of committees and checks and balances to manage the Church's assets and funds.  We also have no indication from the IRS or any other regulatory/administrative agency that the Church's financial practices are problematic or unlawful.

5. We know that the Church expends substantial amounts of time, effort, money and resources on various charitable / philanthropic / humanitarian efforts throughout the world.

6. We know that the Church in some, perhaps many, countries are not self sufficient, and therefore rely on subsidization from the Church.

7. We have good reason to believe that, as Quinn put it, "the international church could not exist to the extent that it does with buildings and services were it not for the commercial investments and for-profit businesses of the LDS Church."  Put another way, it seems inappropriate for you to juxtapose the Church using donations to fund "charitable services" with the Church "either hoarding {donations} or using {them} to support businesses" since those businesses generate revenue that are then used to fund charitable services.

Thanks,

-Smac

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Just saw this article and a statement from the church is included. https://kutv.com/news/local/huntsman-lds-church-lawsuit?fbclid=IwAR2zVQVfIn2puES7QHXgzYuW6YNZR-we7sNtQzYMvAgnGm-Fch3NGWl2rz8

I don't think Huntsman will win, if he did, the church would have plenty of people trying to get their tithing back. 

Edited by Tacenda
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15 minutes ago, MiserereNobis said:

What does "building Zion" look like, since it has such a high cost? Is it literally building something? Honest question here -- no criticism.

That's a fair question.

To an extent, yes, there is literal building involved.  A lot, actually.  Temples, for sure, but also church buildings, seminaries and institutes, camp facilities, and so on.  Not only does the Church need to purchase the land, it also needs to pay for the construction, as well as maintenance, repairs, utilities, and so on.

And then there is the missionary program.  We have 67,000 full-time missionaries.  That's a pretty big number.  And for the vast majority of them the Church handles/manages their transportation, lodging, etc.  

Also consider the amount of work and resources involved in the Church's family history work.  And operating the church schools.  

Also consider the Church's welfare and humanitarian programs.  If you ever get a chance to tour a bishop's storehouse, give it a looksee.

To be sure, "building Zion" is perhaps primarily a spiritual effort.  We need to improve ourselves.  Individually.  From within.  Voluntarily.  But a big part of that is serving others.  And a big part of that is cohering together as a community.  I think we've seen from the last year of COVID restrictions that communities have a hard time fully thriving in an only abstract cyberspace.  We need to be able to come together, to work together.  

Thanks,

-Smac

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37 minutes ago, MiserereNobis said:

What does "building Zion" look like, since it has such a high cost? Is it literally building something? Honest question here -- no criticism.

Depends on your understanding of Christ's Millennial reign.

Zion today may be focused on things religious, but the Zion society we anticipate during Christ's Millennial reign, that we are hopefully preparing for today, includes all aspects of society.  Everything from economics to education, from infrastructure to government.

We may have separation of Church and State today but that is a temporary situation.  At some point they will be combined.  And that society that is prepared for the Savior's return we refer to as Zion.

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3 hours ago, Analytics said:

If he then figured out that the Church's savings wasn't 100% of its budget as would be appropriate but was closer to 2000%, and that even with this exorbitant amount saved about 60% of its annual revenue was going to increase the savings even more, he could quite justifiably come to the conclusion that the Church was being misleading when it referred to its hoarding as prudently saving for a rainy day.

 

Who can legally say what is justifiable for a church who believes itself to be the kingdom of God on the earth and is preparing for what it believes to be incredibly dark times before the second coming of it's resurrected God to consider a 'rainy day'?

Is it legal for a judge to determine whether or not the church's religious beliefs are a valid reason for such saving?  Because from my perspective that would seem to be overstepping a bit.

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