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Church fined by SEC


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Posted (edited)
56 minutes ago, pogi said:

They seem to think that it is ok to manipulate perceptions in dishonest ways because they think that some members might stop paying tithing if they think the church didn't need their money.

Tangent warning! Who says that members will stop paying tithing? We might stop paying tithing to the church, but many of us continue to tithe, but we choose different charities to give our tithing dollars to. IMO, there's a conversation to be had about tithing and to what extent tithing must be paid to the church and to what extent someone can tithe in other ways.

I don't know how much this adds to the discussion, but I will echo something @pogi said earlier in the conversation. As much as anything, the parts that bother me are the parts where it seems obvious that the church's goal was to keep people from finding out how much of this money traced itself back to the church, as if we church members are incapable of handling the knowledge that the church has this much money. I don't know if the Pres. of EPA is correct as to the reasons why the church wanted to keep its connection to this money a secret (I have no reason to believe or disbelieve him), but it seems clear the church went to some length to keep it secret. Even if it had all come out and the final decision was that the church's methods of keeping it a secret were legal, I would still be bothered that the church didn't (doesn't) want us to know about the money. Not only does it infantilize us as members, but it also suggests that they know that there is not "common consent" in the church for a rainy day fund of this size. We don't practice common consent by voting on this sort of thing, but the secrecy around it suggests a motivation like, "we know that a substantial portion of our members would disapprove, so we will keep it a secret rather than persuade those who disapprove as to the appropriateness (or even revelatory command?) of their actions."

Even if everything had been legal and they had not been fined, there is something unsettling about the secrecy to me as a former full tithe payer (still a full tithe payer if you permit me to tithe to groups outside of the church).

Edited by MrShorty
Posted
2 hours ago, Teancum said:
Quote

Again, your lack of legal training and experience is really showing here.

you keep pointing this out to non attorneys.

Back when we were talking about mask mandates, pogi repeatedly pointed out others' lack of medical training/experience.  This was because that lack of relevant training/experience was having a materially adverse impact on the discussion.

The same issues arising here.

2 hours ago, Teancum said:

Of course the non attorneys don't have legal training. 

And yet folks like you are drawing all sorts of legal conclusions, despite that lack of training.

I am noting that your conclusions are flawed, at least in part, because you don't really know what you are talking about.  That is not intended as a slight or disparagement.  I have no training in software coding, or in medicine, or in ancient Greek.  But if I waded into a complex issue which is heavily dependent on an understanding of both basic and advanced principles associated with coding or medicine or Greek, and if I was drawing broad conclusions and making bold declarations about the issue, I think it would be appropriate for others to caution me about the reliability and accuracy of those conclusions and declarations.

2 hours ago, Teancum said:

But as an attorney who seems to be hanging his hat on his superior legal training your are not doing so well. 

Oh, I think I'm doing all right.  I'm actually biting my tongue far more than I am speaking out.  I'm going easy on you.

It's not very hard for an experienced lawyer to dunk on someone who lacks legal training and experience.  I'm trying to minimize that.

2 hours ago, Teancum said:

I am sure you know that settlements are reached all the time

Yes, I know that.

2 hours ago, Teancum said:

and language is accepted between the two parties that let them save face. 

Not just to "save face," but yes.

Here, though, I don't think that happened.  The language of the Order is exclusively from the perspective of the SEC.  There is little or no countervailing evidence or argument from the Church's perspective.  

More to the point, the document is not really a settlement agreement, but rather an "Order instituting cease-and-desist proceedings ... making findings, and imposing a cease-and-desist order."

By the looks of it, much of the Order is boilerplate.

2 hours ago, Teancum said:

If the Church could have fought this they would have. 

Again, your lack of legal training and experience is really showing through.

Parties settle lawsuits all the time, including those they "could have fought," and really especially involving charges from the SEC.

2 hours ago, Teancum said:

They knew they did likely would not succeed.

You are just making this up.  Freewheeling speculation, with nary a scintilla of evidence to support it.

The Church settled a dispute without admitting any wrongdoing.  And percentage-wise, the fine is fairly small.  Meanwhile, the SEC corrected what it deemed problematic reporting by EPA, and did not require that the settlement include an admission of wrongdoing.  This was a win-win.

2 hours ago, Teancum said:

So they agreed to a fine and likely asked for face saving language which the SEC granted.

Sheer hostile guesswork on your part.  Nothing else.

Thanks,

-Smac

Posted
1 hour ago, Thinking said:
Quote

It is possible that the Church was never out of compliance.

I noticed that you used the word "possible" instead of "plausible." Do you think it's plausible that the Church was never out of compliance?

Yes.  See here.  I lay out my preliminary reasoning there.  I don't think there is much (if any) case law on this particular issue, largely because A) it's a pretty obscure point of law, B) the SEC has the option of pursuing administrative proceedings, the decisions of which I think are typically not included in most legal research databases, and C) the vast majority of SEC matters are dropped or settled, and so do not result in a published judicial decision.

That said, I think there are some legitimate points to make in questioning the legitimacy of the SEC's assessment of what the Church did, and whether the Church's actions were compliant with the relevant statute.

Thanks,

-Smac

Posted (edited)
36 minutes ago, Benjamin McGuire said:

I think that this thread deserves a little speculation -

1997: The LDS Church forms its LLCs to start this process of concealing investment funds.

1996: The Church is sued for its first large dollar amount in a child abuse case - $750,000,000.00

The lawsuit was settled in 2000 for an undisclosed amount. I think it is likely that the LDS Church was hiding its assets because of the risk those assets created in this sort of abuse litigation. In the many lawsuits since, the Church has made a number of settlements. At the same time, in the past two decades, I think that the Church has also made a lot of progress in helping local leaders handle these issues. And because of this, the risk is substantially diminished now. If this speculation has anything to do with reality, I think that the five million can be seen as a worthwhile investment ... I suspect that concealing these investments helped reduce the real costs of litigation and settlements.

But, I would further argue that the intent was only to hide the assets - not to do so illegally - and I am not sure that this is a honesty issue. I imagine that Ensign Peak Advisers just had a really hard time letting control go (which was the real heart of the SEC complaint). If they had allowed those running the LLCs to be fully autonomous, the SEC wouldn't have cared.

Again though, this is just speculation.

Interesting speculation, Ben.  Would not be surprised to hear there was a connection.  I didn’t remember the case, wasn’t news in Canada, so I looked it up.  For those who are curious what Ben is referring to….

https://www.deseret.com/1996/1/17/19219799/mom-and-girl-file-lawsuit-against-the-lds-church

https://www.newspapers.com/clip/16652796/perp-james-adams-wv-case-settled/

I wonder why the dad got full custody in the divorce.  And then the kids get a babysitter who cares more about money than in them being abused.  Poor kids.  I wonder how they are doing.  And how weird a coincidence the last name is Adams and the arrest came after the exposure of a video of the abuse.  

https://www.nytimes.com/1996/01/17/us/mormon-leaders-in-west-virginia-accused-in-suit-on-child-abuse.html

And the main issue in the lawsuit was over confidentiality…and possibly who knew what when given the number that were sued, but not a lot of info available on the case so far.

Quote

Watson said that the case doesn't change the Church's position, "There was no proof in this case that the church inappropriately dealt with abuse and that's why the case settled as it did. . . . The whole issue revolved around whether members of the clergy are obligated to keep confessions confidential." He says it is still clear that the Church must keep confessions confidential.

http://www.mormonstoday.com/000402/N1Adams01.shtml

Edited by Calm
Posted
33 minutes ago, Benjamin McGuire said:

I think that this thread deserves a little speculation -

1997: The LDS Church forms its LLCs to start this process of concealing investment funds.

1996: The Church is sued for its first large dollar amount in a child abuse case - $750,000,000.00

The lawsuit was settled in 2000 for an undisclosed amount. I think it is likely that the LDS Church was hiding its assets because of the risk those assets created in this sort of abuse litigation. In the many lawsuits since, the Church has made a number of settlements. At the same time, in the past two decades, I think that the Church has also made a lot of progress in helping local leaders handle these issues. And because of this, the risk is substantially diminished now. If this speculation has anything to do with reality, I think that the five million can be seen as a worthwhile investment ... I suspect that concealing these investments helped reduce the real costs of litigation and settlements.

But, I would further argue that the intent was only to hide the assets - not to do so illegally - and I am not sure that this is a honesty issue. I imagine that Ensign Peak Advisers just had a really hard time letting control go (which was the real heart of the SEC complaint). If they had allowed those running the LLCs to be fully autonomous, the SEC wouldn't have cared.

Again though, this is just speculation.

I'm not sure how any of that justifies many of the steps taken by EPA and the Church as outlined in the Order.

Posted
31 minutes ago, MrShorty said:

Tangent warning! Who says that members will stop paying tithing? We might stop paying tithing to the church, but many of us continue to tithe, but we choose different charities to give our tithing dollars to. IMO, there's a conversation to be had about tithing and to what extent tithing must be paid to the church and to what extent someone can tithe in other ways.

I don't know how much this adds to the discussion, but I will echo something @pogi said earlier in the conversation. As much as anything, the parts that bother me are the parts where it seems obvious that the church's goal was to keep people from finding out how much of this money traced itself back to the church, as if we church members are incapable of handling the knowledge that the church has this much money. I don't know if the Pres. of EPA is correct as to the reasons why the church wanted to keep its connection to this money a secret (I have no reason to believe or disbelieve him), but it seems clear the church went to some length to keep it secret. Even if it had all come out and the final decision was that the church's methods of keeping it a secret were legal, I would still be bothered that the church didn't (doesn't) want us to know about the money. Not only does it infantilize us as members, but it also suggests that they know that there is not "common consent" in the church for a rainy day fund of this size. We don't practice common consent by voting on this sort of thing, but the secrecy around it suggests a motivation like, "we know that a substantial portion of our members would disapprove, so we will keep it a secret rather than persuade those who disapprove as to the appropriateness (or even revelatory command?) of their actions."

Even if everything had been legal and they had not been fined, there is something unsettling about the secrecy to me as a former full tithe payer (still a full tithe payer if you permit me to tithe to groups outside of the church).

Bingo!

Posted (edited)
47 minutes ago, Benjamin McGuire said:

I think that this thread deserves a little speculation -

1997: The LDS Church forms its LLCs to start this process of concealing investment funds.

1996: The Church is sued for its first large dollar amount in a child abuse case - $750,000,000.00

The lawsuit was settled in 2000 for an undisclosed amount. I think it is likely that the LDS Church was hiding its assets because of the risk those assets created in this sort of abuse litigation. In the many lawsuits since, the Church has made a number of settlements. At the same time, in the past two decades, I think that the Church has also made a lot of progress in helping local leaders handle these issues. And because of this, the risk is substantially diminished now. If this speculation has anything to do with reality, I think that the five million can be seen as a worthwhile investment ... I suspect that concealing these investments helped reduce the real costs of litigation and settlements.

But, I would further argue that the intent was only to hide the assets - not to do so illegally - and I am not sure that this is a honesty issue. I imagine that Ensign Peak Advisers just had a really hard time letting control go (which was the real heart of the SEC complaint). If they had allowed those running the LLCs to be fully autonomous, the SEC wouldn't have cared.

Again though, this is just speculation.

This makes me sick if true.   If the church is liable for these abuses, THEN THEY SHOULD PAY UP and be held accountable in proportion to what they have.   To go to the extent of dishonest deception to prevent having to pay out to abuse victims makes me want to vomit.  It is another attempt of sticking it to the victims to protect their portfolio.  

I sooooo hope that this is not true, it would compound this issue for me to a near breaking point. 

Edited by pogi
Posted
42 minutes ago, Benjamin McGuire said:

But, I would further argue that the intent was only to hide the assets - not to do so illegally - and I am not sure that this is a honesty issue. I imagine that Ensign Peak Advisers just had a really hard time letting control go (which was the real heart of the SEC complaint). If they had allowed those running the LLCs to be fully autonomous, the SEC wouldn't have cared.

They put on the reports that the LLCs did indeed have full control when they knew that they didn't.  That is an honesty issue.  It wasn't a one time mistake.  It was every report for every LLC for 20 years.  That is dishonest. 

Posted
24 minutes ago, smac97 said:

Back when we were talking about mask mandates, pogi repeatedly pointed out others' lack of medical training/experience.  This was because that lack of relevant training/experience was having a materially adverse impact on the discussion.

Good for POGI.  So?  Repeating your superior legal skill over andover looks like puffery to me. We all know you are an attorney.  We who are not know we are not. You don't need to keep pointing that out. I have not claimed to have legal/litigation skills.  I deal with tax law. Planning, researching, preparing forms and representing clients in IRS and other taxing jurisdiction audits. Dealing with tax law and such I think gives me some "legal" experience but I cannot litigate tax cases since I am not an attorney. I also have experience with compliance with security rules that FINRA requires of me.  And I have direct experience with an SEC issue that was quite complex, lengthy and costly.

 

24 minutes ago, smac97 said:

The same issues arising here.

And yet folks like you are drawing all sorts of legal conclusions, despite that lack of training.

Hmmm.  Not sure I agree with a I made a legal conclusion but maybe. My main issue is the lack off admission of guilt seems meaningless really.  And I thing the fact that @ttribe noted that the church cannot dispute the fact of the case, ever, is telling.

 

24 minutes ago, smac97 said:

I am noting that your conclusions are flawed, at least in part, because you don't really know what you are talking about.  That is not intended as a slight or disparagement. 

As a itagator that is correct. As someone who has advised on an SEC issue as well as other tax cases that could have resulted in lots of $$ and even criminal prosecution I do have some experience. So I have experience with the language is such settlements and how the give and take works.

 

24 minutes ago, smac97 said:

 

 

Oh, I think I'm doing all right.  I'm actually biting my tongue far more than I am speaking out.  I'm going easy on you.

It's not very hard for an experienced lawyer to dunk on someone who lacks legal training and experience.  I'm trying to minimize that.

I will refrain form snarky comments on this other than to say I find a number of your arguments less than convincing.  

 

24 minutes ago, smac97 said:

  

More to the point, the document is not really a settlement agreement, but rather an "Order instituting cease-and-desist proceedings ... making findings, and imposing a cease-and-desist order."

By the looks of it, much of the Order is boilerplate.

And you know this exactly how?

 

24 minutes ago, smac97 said:

Again, your lack of legal training and experience is really showing through.

God lord.  You have said that to me and others at least 20 times. I am sure you are a brilliant attorney.  Happy now?

 

24 minutes ago, smac97 said:

Parties settle lawsuits all the time, including those they "could have fought," and really especially involving charges from the SEC.

And you have dealt with exactly how many SEC cases?

24 minutes ago, smac97 said:

You are just making this up.  Freewheeling speculation, with nary a scintilla of evidence to support it.

The Church settled a dispute without admitting any wrongdoing.  And percentage-wise, the fine is fairly small.  Meanwhile, the SEC corrected what it deemed problematic reporting by EPA, and did not require that the settlement include an admission of wrongdoing.  This was a win-win.

Sheer hostile guesswork on your part.  Nothing else.

Thanks,

-Smac

And you are not engaging in guess work?  Like I said, discussing this further with you is pointless.

Posted
31 minutes ago, smac97 said:

And yet folks like you are drawing all sorts of legal conclusions, despite that lack of training.

This board is a discussion board, not a court of law. People may draw conclusions that might not pass in a court room. That the Church decided to settle instead of going to court should not give it a pass on responsibility simply because nothing was proven.

Posted (edited)

Man, it's nice to not believe in deontological ethics. 

Anyways, a note on Clarke's comments.

Look at how he actually said what he said. "We don't want people to feel like they shouldn't pay tithing." "Shouldn't" is different from "don't need to." "Shouldn't" implies a positive claim whereas "don't need to" merely suggests the absence of one. I don't think Clarke's comments should be interpreted as suggesting that the Church's leadership wanted to make it look like the Church needed tithing to survive (even though it does in the long-term) in order to coerce tithing payments. I think, on the contrary, he doesn't want Church members to be subjected to manipulative attempts to shame them for contributing to a visibly wealthy religious organization. 

I mean, Clarke himself says that tithing is done out of a sense of commitment and not out of a sense of necessity - which is exactly the opposite of what some commenters are imputing to him. 

I'm gonna withhold judgement on how Ensign Peak conducted itself until I know how the rest of the industry handles the creation of shell operations (to which I am not opposed in principle). I will also note that the precise specifics of how Ensign Peak dealt with its managers are unlikely to have come before the leadership of the Church.

Edited by OGHoosier
Posted
1 minute ago, OGHoosier said:

Man, it's nice to not believe in deontological ethics.

"Do what is right, let the consequence follow..." isn't something you find useful in the Church's teachings?

Posted
1 hour ago, Teancum said:

I really see no reason to pursue this with you any longer.

As you like.  I think you and yours are gearing up to weaponize this story.  I'm laying the groundwork for when and if that happens.

If I end up being in error, I will apologize.

1 hour ago, Teancum said:

Especially with this continued argument that you repeat over and over

As long as you maintain erroneous suppositions about the law and what happened, I will continue to note the errors.

1 hour ago, Teancum said:

(along with how all your no attorney opponents fail in their legal analysis.

It's not intended as a personal dig.  Just a statement of reality.  By large measures, you do not know what you are talking about.

1 hour ago, Teancum said:

Oh and how hateful all the spiteful apostate critics are to the poor Church). 

Oh, I have little doubt of the antagonisms we face.  And now that you've said it, "spiteful" does see pretty apt.

1 hour ago, Teancum said:
Quote

Teancum does not want the public or his friends and relatives to know his SSN, his email and bank logins, the contents of his safety deposit box, and so on.  Why is that?  What is he afraid of?

Don't you see what you are doing here?  That you are fabricating expectations out of thin air, imputing them onto the Church, and then saying "Why is the Church not doing what I think it ought to do?  What is it afraid of?"

This argument simply fails for the numerous reasons I have stated.

Special pleading.  That's all you've offered.

1 hour ago, Teancum said:

Your superior legal training ought to make that obvious to you.

My legal training has, I think, allowed me to develop a more informed and reasoned and accurate assessment of what this story is about.

And unlike some of our critics, I have no ax to grind, no sense of gleeful schadenfreude, no pound of flesh to seek.  I have repeatedly affirmed that if the Church errs in complying with the law, then it "needs to take its legal lumps like anyone else."  

Here, I have some questions about whether the Church actually violated the governing statute.  If it did, then it needs to pay the piper.  But there is no indication that it did so with the nefarious motives you and yours are alleging.

Thanks,

-Smac

Posted (edited)
7 minutes ago, ttribe said:

"Do what is right, let the consequence follow..." isn't something you find useful in the Church's teachings?

I find it very useful. I just think that "what is right" is often situation-dependent, just like "what is rational" is often situation-dependent, a la ecological rationality. You cannot divorce the consequences of an action from whether or not it is right, as your interpretation of that Primary song would seem to suggest. You can only accept the bad consequences with the good. 

I don't find deontological ethics in the teachings of Jesus or Paul or Nephi. Nominalism and deontological ethics are uniquely prevalent in the Western mind. We like rules. Rules of the universe, rules-based order, rules of the road, rules this and rules that. And I don't think that's an eternal principle. 

We ought to follow the law. In this case, EPA did not - I think they relied on a tenuous interpretation which was not upheld. That's bad, they should pay the penalty and desist. Beyond that, I'm not too wound up.

I will note, as well, that it is a primarily nominalist view which believes that we are truly ruled by "the law". Nah, the law is a dead letter. "Rule by law" is rule by lawyers. We are ruled by the interpreters of the law - lawyers and judges and bureaucrats, the administrative state to which Smac refers - whose power is derived from and laundered through their ability to "sit in Moses' seat" and interpret the law. We should follow the law, but I don't blame the Church for trying to hedge against the idea that maybe, just maybe, the law is not an impartially just judge in all things?

Edited by OGHoosier
Posted (edited)
17 minutes ago, pogi said:

If the church is liable for these abuses

The liability was not demonstrated.  It looks like it was settled before anything but plaintiff’s claims were made public.  CPS…hardly under the control of the Church in NJ….had been called several times for physical abuse complaints and never acted to remove the children according to the Mormon alliance account and that was not explained, so my guess is the story may have been missing some important info.

 

Edited by Calm
Posted
7 minutes ago, OGHoosier said:

I find it very useful. I just think that "what is right" is often situation-dependent, just like "what is rational" is often situation-dependent, a la ecological rationality. You cannot divorce the consequences of an action from whether or not it is right, as your interpretation of that Primary song would seem to suggest. You can only accept the bad consequences with the good. 

I don't find deontological ethics in the teachings of Jesus or Paul or Nephi. Nominalism and deontological ethics are uniquely prevalent in the Western mind. We like rules. Rules of the universe, rules-based order, rules of the road, rules this and rules that. And I don't think that's an eternal principle. 

I'll just say that is an interesting response, and leave it at that.

Posted
4 minutes ago, Thinking said:
Quote

And yet folks like you are drawing all sorts of legal conclusions, despite that lack of training.

This board is a discussion board, not a court of law.

True, but irrelevant.  We are discussing a legal issue.  

4 minutes ago, Thinking said:

People may draw conclusions that might not pass in a court room.

Certainly.  The accuracy and legitimacy of those conclusions, however, is imperiled by things like, well, a lack of legal training and experience.

4 minutes ago, Thinking said:

That the Church decided to settle instead of going to court should not give it a pass on responsibility simply because nothing was proven.

I don't understand what you mean by "give it a pass on responsibility."  Responsibility for what?  

The Church hasn't been given a pass at all.  As I see it, the the Church, at worst, acted on poor or insufficient legal advice, made some errors in how it sought to comply with SEC reporting requirements, such errors have been investigated by the SEC, corrective measures have been taking, the Church is now fully compliant with SEC guidelines and expectations, the Church has agreed to pay a fine, and has expressed regret for its "mistakes."

Some of our critics and dissidents will want to, proverbially speaking, use this as justification for disparaging the Church, trying to carve out a pound of flesh, and so on.  C'est la vie.  I think we'll manage.  This thread has been helpful in contextualizing the story, and providing something of an analytical framework for those not trained or experienced in the law.  And if, down the road, there are assertions made about how the Church "violated securities laws" or was "found guilty" of some such, I think this thread will be a useful resource for rebutting and correcting and clarifying what happened.

Anti-Mormons have essentially no opposition.  They get to say whatever they want, with no accountability, no need to correct or retract.  This thread has demonstrated that.  The Church has been repeatedly accused of all sorts of terrible things, when the best evidence indicates that the Church - if it erred at all - did so only in terms of technical compliance with reporting requirements from the SEC, and it did so based on legal advice it had received.

I value this board because the critics don't rule the roost.  The Latter-day Saints get to have a voice, they get to speak for themselves rather than let our critics and dissidents presume to speak for us.  And we also get the opportunity to the defend the Church when such defense is warranted, as I think it is here.

Thanks,

-Smac

Posted
8 minutes ago, Calm said:

It looks like it was settled before anything 

I don't know the full story so I can't make any judgments about it.  But I have to say that after this SEC case, I can no longer give the church the benefit of the doubt when they choose to "settle" cases anymore.  That is meaningless to me as to their innocence.  They have demonstrated that it is just another way to save face for them - keep things under the covers - create room for potential doubt - pretend like the case is closed.   While I will withhold judgment on this particular case, it seems so icky to hide funds for that reason, because in doing so they are also sticking it to potential true victims.   If they would take accountability, maybe I would have reason to trust them more when they settle.  They certainly don't seem to trust us members either.  That is the kind of relationship they want I guess. 

Posted (edited)
19 minutes ago, smac97 said:

True, but irrelevant.  We are discussing a legal issue.  

The church denied their right to a fair legal trial and chose the court of public opinion over the legal courts.  That is what they will get. 

Edited by pogi
Posted
41 minutes ago, ttribe said:

The manipulation of the employee 'business managers' is especially troublesome, in my opinion.

That was required to cover up other lying.  That's how webs begin, with one lie. 

Posted
3 minutes ago, pogi said:

That was required to cover up other lying.  That's how webs begin, with one lie. 

IMO, it is demonstrative of intent to engage in dishonest acts, at the very least.

Posted (edited)
9 minutes ago, ttribe said:

IMO, it is demonstrative of intent to engage in dishonest acts, at the very least.

Absolutely, but I think it goes deeper than that - it shows the intent to engage in dishonest acts but also the intent to cover-up dishonest acts by engaging in more dishonest acts. 

Edited by pogi
Posted
1 minute ago, pogi said:

Absolutely, but I think it goes deeper than that - it shows the intent to engage in dishonest acts but also the intent to cover-up dishonest acts by more dishonest acts.  It shows the level that they were willing to stoop to keep it all hidden. 

You are correct. I am treading lightly lest I get, once again, labelled as a "spiteful apostate critic."

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