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


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2 hours ago, PacMan said:

I have it on good authority that the IRS laughed at the complaint. The IRS has gotten burned when challenging churches. There’s no way they want to take on the Church based on the publicized facts. It’s not even close. 

Legally, the Church can do almost anything with the tithing funds. Including saving them!

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4 hours ago, carbon dioxide said:

It is a good thing they do have a big reserve fund.  Any organization that spend everything that they take in will have a hard time surviving when hard times come.   That is true for business, churches, and families.  We should all build as much wealth as possible while helping others.  That is just good sound financial planning.  Perhaps the Church does not need a 100 billion reserve fund, but a reserve fund in the billions is good given the size of the church and what God has mandated what the Church needs to do.  Overall no individual is has benefit from the fund size. No evidence of any GA or anyone else buying 500 million dollar yachts or paying 25 million for homes with these funds.  Since no individual benefits based on the size of the fund, does it really matter how large the fund is? 

I think the church leaders are wise to have a large rainy day fund. Who knows what the future holds with all of the instability around the world. I take comfort in the fact that the church is financially prepared to weather any storm. 

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4 hours ago, carbon dioxide said:

It is a good thing they do have a big reserve fund.  Any organization that spend everything that they take in will have a hard time surviving when hard times come.   That is true for business, churches, and families.  We should all build as much wealth as possible while helping others.  That is just good sound financial planning.  Perhaps the Church does not need a 100 billion reserve fund, but a reserve fund in the billions is good given the size of the church and what God has mandated what the Church needs to do.  Overall no individual is has benefit from the fund size. No evidence of any GA or anyone else buying 500 million dollar yachts or paying 25 million for homes with these funds.  Since no individual benefits based on the size of the fund, does it really matter how large the fund is? 

I was not being critical of the churches rainy day fund only repeating Huntsman’s argument. But dang that’s gonna cover a lot of rainy days

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4 hours ago, Fair Dinkum said:

I was not being critical of the churches rainy day fund only repeating Huntsman’s argument. But dang that’s gonna cover a lot of rainy days

It could go really fast if it supports welfare as well as Church maintenance though in a time where Church members were unable to offer up much fast offerings to help cover the increase in welfare expenses. 

Edited by Calm
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As far as I know the church is technically following the law. In that light, could this is be publicity stunt that backfires? Maybe.

On the other hand, from many points of view, the context in which many churches collect tithing can seem very unjust. It can feel and be wrong. Is it morally wrong for a church to teach that it has the only correct way to live, to children? And solicit their membership, as children? And solicit their donations, as children? When a person has grown up from infancy in such an environment, how capable are they of making an independent choice at age 18? It's not just long-term financial costs to people that are incurred due to that level of habituation, conditioning built from infancy and through maturity. So the churches that do this might be legally in the clear, but still morally guilty. 

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5 hours ago, Fair Dinkum said:

I rest my case...

Your honor, I move for dismissal as learned counsel has rested without presenting a credible case. 

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20 minutes ago, JustAnAustralian said:

If the church believes that following certain commandments are necessary for salvation, then wouldn't it be morally wrong to NOT tell them?

Teaching them that they believe it is the best way is one thing. Leaving no room for doubt, admitting no possibility of error, allowing no other dignified or socially acceptable path, and then doing all that to secure commitments from children, is another thing.

Edited by Meadowchik
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33 minutes ago, Calm said:

Children are taught everything from infancy, how can they make an independent choice based on that premise? All behaviour would be determined. 
 

Is that only wrong when it comes to religion?  They are taught that school is good for them, are forced to go, pay school fees or get their parents to.  Can they make an independent choice whether or not they want to go to college at age 18?

Certainly not. 

College is a another--though much, much broader--example, when it is presented as the only correct way to proceed in life. In my own case, it was church and college--and not just any college but BYU Provo--which were presented as my only viable choices. 

Some parents and communities are more mindful that their children might better adapt in a path different from their own choices or ideals. Parents and communities can differ in how well they prepare their children to be autonomous. It starts in infancy.

 

 

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16 hours ago, The Nehor said:

......................

When you pay your electric bill did that money come from your wages? Your income tax refund? The money you pulled out of your portfolio? Was it from your current job or the job before it? Money is fungible and one dollar is the same as another so once you throw them into the pot it doesn’t much matter where it came from................................

Yes, the money is fungible, but that is not the true issue.  The only real question is How do we manage the money?  If, instead of simply putting all the money into a checking account from which all bills are paid, we put the money into an investment account and pay our bills from the interest or capital gains (thus keeping the principal), we are exercising wisdom in maximizing the value of the principal.  Jesus made the classic argument in his parable of the Talents (Matt 25:14-30).

In our personal lives, that means it is wise to put aside money for a rainy day, or to invest a small amount each payday for future retirement.  This is as true for private persons as it is for corporations.

When we pay a mortgage on a house, we are slowly gaining equity.  When we pay monthly rent, it is money down the drain.  The difference is stark.  Those who don't understand the difference will naturally find fault with the LDS Church.

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I understand why everyone is talking about money here.  That is not the real issue.  The real issue is power.  I am on the Church side on this, but some do not want the Church to have the power that billions bring or they do not want to belong to a powerful church. It is the last time the Church will be renewed on the earth. It is not to be destroyed again.  Part of this assurance is the getting of power (money).   

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1 hour ago, Robert F. Smith said:

Yes, the money is fungible, but that is not the true issue.  The only real question is How do we manage the money?  If, instead of simply putting all the money into a checking account from which all bills are paid, we put the money into an investment account and pay our bills from the interest or capital gains (thus keeping the principal), we are exercising wisdom in maximizing the value of the principal.  Jesus made the classic argument in his parable of the Talents (Matt 25:14-30).

In our personal lives, that means it is wise to put aside money for a rainy day, or to invest a small amount each payday for future retirement.  This is as true for private persons as it is for corporations.

When we pay a mortgage on a house, we are slowly gaining equity.  When we pay monthly rent, it is money down the drain.  The difference is stark.  Those who don't understand the difference will naturally find fault with the LDS Church.

I think the reasonable expectation is that tithing funds will go to the fulfillment of the missions of the church and the covenants of helping others. 

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19 hours ago, Ahab said:

Ttribe is wrong.  Keeping track of money, where it came from and what it is or was used for, is a very simply a matter of accounting.  And if you don't believe me you can ask an auditor who knows how to review accounting records.

I am a CPA. Things can become quite complex. I also know the ttribe knows what he is speaking of based on his professional expertise.

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37 minutes ago, Meadowchik said:

I think the reasonable expectation is that tithing funds will go to the fulfillment of the missions of the church and the covenants of helping others. 

What are your thoughts about Quinn's assessment here?

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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.

What do you think he means by "turning {the funds} back to the benefit of the rank and file?"

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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.”

What do you think he means by "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?"

Do you agree or disagree with Quinn's assessment?

Does Quinn's assessment comport with what you say above, that the Church's funds should "go to the fulfillment of the missions of the church and the covenants of helping others?"

Thanks,

-Smac

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45 minutes ago, Meadowchik said:

I think the reasonable expectation is that tithing funds will go to the fulfillment of the missions of the church and the covenants of helping others. 

Then it comes down to a matter of perspective.  Because from my perspective, that's exactly what the church is doing with the money.  Other people obviously disagree.  Are all people's perspectives equally valid?  I don't believe so.  

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So this story has received a fair amount of coverage.  However, there is a very generic sameness to the story in each outlet's coverage of it:

The foregoing news items include some combination of A) quotations from the lawsuit, B) quotations from the response by the Church's spokesman, Eric Hawkins, C) some explanation as to the 2019 Nielsen story that precipitated Huntsman's lawsuit, and/or D) a wee bit of background on James Huntsman.  Many of these news outlets are merely quoting other outlets.

AFAICS Mr. Huntsman has not publicly commented on the suit.

Thanks,

-Smac

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15 hours ago, bluebell said:

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.

The basis of Huntsman's lawsuit isn't that it is illegal for the Church to save billions. Rather, it is that the Church lied to the members from which it solicited the funds about what the money would be used for. 

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13 hours ago, Danzo said:

I don't think you have much of an idea of funds based accounting.  In funds based accounting (the accounting used by governments and non profits)  money is not fungible.  The government can't used the street maintainence funds to pay for the library.  The funds are segregated and restricted to specific uses, based on their source. 

Gas tax can only be used for highway improvements, for example.  

Most non profits use a funds based accounting system, rather than a profit and loss based accounting system.

 

The issue is whether the Church was sufficiently honest with the membership about what it does with tithing money. Fund-based accounting really doesn't solve the issue.

If the Church uses fund-based accounting, then every year it gives each of its major programs a budget--$1.5 billion goes to BYU, $1.2 billion goes to buildings, $800 million goes to the missionary efforts, etc. 

If the Church puts, say, $1 billion of tithing money into a slush fund every year, is it 100% honest for it to say, "We didn't use any tithing money to bail out the mall and the insurance company. We used money from the slush fund!"

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10 minutes ago, bluebell said:

Then it comes down to a matter of perspective.  Because from my perspective, that's exactly what the church is doing with the money.  Other people obviously disagree.  Are all people's perspectives equally valid?  I don't believe so.  

I can see how that's possible.

But I was commenting on how Robert was perceiving peoples' perspectives. I don't think it is simply a matter of understanding financial equity versus money "down the drain." One could argue that "building the kingdom" and building up lives now is an investment much more spiritually profitable than portfolio gains. In other words, that there are other kinds of equity though perhaps less tangible which can be cultivated with careful spending choices. 

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21 minutes ago, smac97 said:

What do you think he means by "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?"

Do you agree or disagree with Quinn's assessment?

Based upon the information Nielsen leaked, I'm not sure how true this is. We know that of the funds stored in Ensign Peaks Advisors, which is now probably worth something like $110 billion, not a penny has gone to support the international church. Not one cent. Ever.

We know less about what happens with the profits of the corporations and assets outside of EPA. Those corporations probably have a market value of something like $30 billion, and probably spin off something like $1.5 billion of profit a year (note that my estimates here are more conservative than Quinn's). Does the Church use any of those profits to support the international church? Maybe.

But my interpretation of what the presiding bishop has said about the Church is that it lives within its means, plus it saves a little. I interpret that to mean that it continues to do now what N. Elden Tanner put into place 60 years ago: the Church estimates what next year's tithing revenue is going to be, and sets a budget equal to 90% of that. Invariably the budgets and estimates prove to be conservative, and it ends up spending about 85% of tithing on church stuff. Whatever money is left over is then invested. I don't think there has ever been a crossover when the Church decided to stop investing its surplus and instead use it to support the religious institution.

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13 hours ago, ttribe said:

Actually, the more I think about it, the less likely it seems to me that they would be using fund accounting.  Fund accounting is typically only used when there are statutory or contractual (e.g. grants) restrictions. Otherwise, a non-profit that simply receives donations just issues a typical Balance Sheet and P&L with a slightly different "equity" roll-forward.  Yeah, I audited a few of those back in the day, too.

Would it also depend upon the background of the accountants who set up the system? My understanding is that the people who really run things--the presiding bishopric, the controller, the treasurer, etc., typically come from for-profit corporations, not non-profits. And the people they report to--the first presidency, and to a lesser extent the Quorum of the Twelve*, generally come from for-profit backgrounds too. Would that culture affect how they set up the accounting?

____________________________

*I say they report their financials to the Quorum of the Twelve "to a lesser extent," because the apostles aren't authorized to see the Church's balance sheet. I'll refrain from speculating as to why this information is kept even from them.

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34 minutes ago, Teancum said:

I am a CPA. Things can become quite complex. I also know the ttribe knows what he is speaking of based on his professional expertise.

I'm inclined to agree with you on this. 

My primary area of expertise is real property law.  I find that the average joe, and even many attorneys, are largely unfamiliar with the intricacies of how the law works.  For example, I am currently involved in a lawsuit against a city in Utah that has held an easement against my client's property since 1978.  As it turns out, the land was owned by three brothers in 1978, only one of whom signed the document creating the easement.  So we have filed a lawsuit about this.  The legal issues involved include A) quiet title, B) statute of limitations, C) conveyance instruments, D) easements (generally), E) prescriptive easements, F) adverse v. permissive use, G) inverse condemnation, H) takings (constitutional law), and a few other items.

Fortunately, my client is a patient fellow.  He has moved beyond questions like "Are we going to win?" and "Is the easement valid?"  While those questions are certainly pertinent, they are also difficult to answer definitively and succinctly, and overly reductive.  My client is also willing to work with me to understand these issues, such that he understands that short questions like these often necessarily entail long, complex answers.  Not because I am trying to obfuscate or be evasive, but because a simplistic "yes or no" answer to a complex question can often be misleading.

Having long familiarized myself in the intricacies and complexities of real estate law, I can sort of appreciate the facile nature of Huntsman's lawsuit.  It is, in my view, defective because it is overly reductive in terms of how it characterizes the Church's finances. 

First and foremost, he repeatedly insists that the Church has always taught that 100% of tithing funds are used "solely" for "charitable" purposes.  This is not so.

Second, the meaning of "charitable" as asserted by Huntsman is exceedingly vague, to the point that it undermines Huntsman's legal argument.

Third, there is no evidence that the Brethren are enriching themselves using tithed donations.  To the contrary, there is substantial evidence that they are doing nothing like this at all.

Fourth, there is no evidence that the Church has been profligate or wasteful or foolish in managing the Church's resources.  To the contrary, all evidence points to them being excellent stewards.

Fifth, there is substantial evidence (such as the Quinn quotes I have posted a few times now) that the Church's "commercial investments and for-profit businesses" are crucial to the Church supporting the Church and its members in areas where those members are not self-sufficient.

Sixth, Huntsman's lawsuit seems to expose a rather vast ignorance of the complexities of finance and accounting.  

Seventh, the lawsuit seems to be, as Kathleen Flake put it, not about financial malfeasance, but rather “it’s about competing views of what should be done with Church money and who gets to say so.”

Thanks,

-Smac 

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