Update on Huntsman Lawsuit: Ninth Circuit Reverses Trial Court

[Analytics]

24 minutes ago, smac97 said:

The Church has the right to {use most of its annual income to build up the size of its for-profit business empire}, but it also has the legal and ethical obligation to be honest with donors and potential donors that this is what they are doing and planning to do with the donations they are soliciting.

Since I’d already started a conversation with ChatGPT about this, I decided to offer a follow-up question that gets to the heart of the matter of this thread.

You may think the Church is "fundamentally and overwhelmingly good and decent and honest and benevolent.” Be that as it may, it isn’t an argument against ChatGPT’s response to the following question:

Question: Say a Church has zero debt and a reserve fund that is approximately worth 25 years of annual expenses. It has a large investment arm that aggressively invests the reserve fund in an investment portfolio, and the fund grows with this investment income. The fund also grows by the Church adding an additional 10% of tithing revenue to it, and uses the remaining 90% of revenue to operate the Church. It makes zero withdrawals from the fund and has no specific plans to ever use the money in the fund for anything. While the Church has disclosed to members the fact that it has a reserve fund, as a matter of policy it doesn’t disclose the magnitude of the fund, nor any other specific details about its budget.

What do you think about the Church’s transparency regarding this fund? If Church leaders decide to deploy Church resources this way, do they have a legal and and ethical obligation to be honest with donors and potential donors that this is what they are doing and planning to do with the donations they are soliciting?

ChatGPT: The scenario you describe raises important questions about financial transparency, ethics, and accountability, particularly in the context of a church or any organization that relies on donations. While the church has disclosed that it has a reserve fund, the lack of specific details about the size of the fund and how much is being diverted into it from donations creates potential ethical and legal concerns.

Financial Transparency Regarding the Fund:

1. Lack of Clarity on Fund Size: By withholding the magnitude of the reserve fund and its growth from the congregation, the church limits donors' understanding of how their contributions are being used. While a reserve fund is typically meant to ensure financial stability and security for future needs, having a reserve large enough to cover 25 years of annual expenses without any clear plan for its use raises concerns about whether the church's resources are being responsibly managed for its stated mission and current needs.

2. Perception of Misalignment with Mission: Donors generally contribute to a church expecting their money to support ongoing activities such as charitable work, community outreach, religious services, and facilities maintenance. If 10% of tithes are being added to a fund that has no clear purpose or intended use, donors may feel misled if they are unaware of this allocation. The lack of transparency could create distrust, especially if the fund is growing substantially and yet not being used to benefit the congregation or the community.

Legal and Ethical Obligations:

1. Ethical Obligation to Donors: Ethically, the church should be clear about how it is using donations. While there may be no explicit legal requirement to disclose every detail about the reserve fund, transparency is key to donor trust. Donors should be informed that a portion of their contributions is going into a fund that is being aggressively invested and that the church has no immediate plans to use the money. If people are donating with the belief that their money is directly supporting the church’s activities, withholding this information could be seen as a form of deception, even if it is not illegal.

2. Legal Considerations: From a legal perspective, churches in many countries are granted tax-exempt status, which often comes with a certain level of public accountability. If the church is soliciting donations without clearly stating how a portion is being allocated, it could potentially face legal challenges related to donor misrepresentation. In some jurisdictions, non-profits, including churches, are required to provide detailed financial reports to maintain their tax-exempt status. Failure to disclose the specifics of a large and growing reserve fund might attract regulatory scrutiny.

3. Fiduciary Responsibility: Church leaders have a fiduciary duty to manage the organization’s resources responsibly and in line with its mission. Building a massive reserve fund without a defined purpose or future plan may not align with this responsibility, particularly if the congregation's needs are being unmet or if there are opportunities to invest in programs that would advance the church’s religious or charitable goals.

Potential Risks and Consequences:

• Donor Backlash: If donors find out that a substantial portion of their tithes is being set aside into a fund that may never be used, they may feel misled, which could lead to reduced donations or even public outcry.

• Trust and Credibility: The lack of transparency could undermine the church’s credibility. Donors, particularly those who give generously, often expect clear communication about how their money is being used. Even if the church’s actions are legal, they could be perceived as lacking integrity or honesty.

• Missed Opportunities: A large and growing reserve fund could be seen as a missed opportunity to invest in the community or expand the church’s charitable work. If there is no pressing financial need or crisis on the horizon, the church might be better served by using some of those resources for immediate impact, rather than letting the fund grow indefinitely.

Conclusion:

While the church may have the legal right to manage its finances in this way, it seems ethically questionable to withhold the magnitude of the reserve fund and how donations are being allocated to it. Being transparent about this practice could help maintain donor trust and avoid potential issues of misrepresentation. Ultimately, if the church believes in this approach, it should communicate openly with its members and donors, providing a rationale for maintaining such a large fund and how it aligns with its mission and long-term goals.

[Analytics]

As a bonus, I asked the following question as my last followup. Be sure to see the last paragraph of the answer, @smac97, which I highlighted in purple.

Question: A whistleblower from the investment arm of the Church released some details of this, and some Church members felt betrayed. The Church had made some representations that “tithing funds would not be used” for some highly visible commercial projects it engaged in. However, the whistleblower report showed that funds from its reserve fund were in fact used. Some former members sued, arguing Common Law Breach of Fiduciary Duty, Fraudulent Inducement, Fraudulent Concealment, Fraudulent Misrepresentation, and Unjust Enrichment. The Church has filed several motions to dismiss, including a motion based on the Church Autonomy Doctrine. The basic argument is that since “tithing” is a religious concept, the courts can’t determine whether or not “tithing” was used for the commercial project without first defining “tithing”, which can’t be done without encroaching on the Church’s first amendment rights. What do you think? Based on what I’ve told you, is the Church Autonomy Doctrine a good defense?

ChatGPT:  The Church Autonomy Doctrine is a legal principle rooted in the First Amendment's guarantees of religious freedom and the separation of church and state. It generally shields religious organizations from excessive government interference in matters of doctrine, faith, and internal governance. However, its application to financial or legal disputes involving potential fraud or breach of fiduciary duty is more nuanced.

Church Autonomy Doctrine and Its Application:

The Church Autonomy Doctrine protects a church’s internal decisions on matters of faith, governance, and doctrine. In cases where courts are asked to resolve disputes involving purely religious doctrine, the courts often avoid making judgments, as they cannot weigh in on religious beliefs without violating the First Amendment.

In this case, the church is arguing that because "tithing" is a religious concept, determining whether tithing funds were used for commercial purposes would require courts to define tithing, which could violate religious autonomy. The church’s claim essentially centers on the idea that financial disputes involving religious terminology, like "tithing," cannot be litigated without infringing on the religious beliefs of the church.

Potential Weaknesses in the Church’s Argument:

While the Church Autonomy Doctrine is strong in protecting religious matters, it has limits, particularly when it comes to claims of fraud, misrepresentation, or breach of fiduciary duty—which are secular legal claims.

1. Fraud and Secular Legal Issues: Courts have historically been willing to intervene in religious cases when they involve purely secular legal claims, such as fraud or contractual breaches, especially where the issues do not require an interpretation of religious doctrine. For instance, if the church made a secular representation to donors (e.g., "tithing funds would not be used for commercial projects") and then acted contrary to that representation, courts may see this as a potential violation of fraud laws without needing to interpret religious doctrine.

   • Courts can determine whether the funds used were donations—irrespective of whether they are called "tithes" or not—based on accounting records, financial disclosures, and other factual evidence. This determination doesn't require delving into the religious significance of tithing, but rather focuses on the promises made to donors and whether the church violated those promises.

2. Commercial Activities: The fact that the whistleblower report involves the church’s engagement in commercial projects may weaken the church’s autonomy argument. Once a religious organization engages in secular, profit-making activities (such as commercial investments), courts may be more likely to treat it as any other secular organization when it comes to financial transparency and accountability. The question of whether funds were misused in a commercial setting is a secular issue that can be adjudicated without interpreting religious beliefs.

3. Fiduciary Duty and Misrepresentation: The fiduciary duty argument is another potential weak point for the church. If donors gave money believing it would be used in certain ways (e.g., not for commercial purposes), and the church misrepresented or concealed how the funds were actually being used, this could be a breach of fiduciary duty. Courts are likely to intervene to protect the financial rights of donors, and the fraudulent inducement and misrepresentation claims could proceed based on secular legal standards.

4. Unjust Enrichment: The claim of unjust enrichment argues that the church improperly benefitted from donations by misleading donors about how their money would be used. Like the fraud claim, this doesn't necessarily involve religious doctrine but focuses on the fairness of the financial relationship between the church and its members.

Conclusion:

The Church Autonomy Doctrine may not be a strong defense in this case, as the claims involve secular legal issues—such as fraud, misrepresentation, and breach of fiduciary duty—rather than purely religious matters. Courts are typically hesitant to involve themselves in doctrinal disputes, but in this case, the focus is on the church’s use of funds for commercial projects and whether donors were misled, which are issues that courts can adjudicate without encroaching on religious beliefs.

The church’s argument that courts would need to define “tithing” to resolve the dispute may be seen as a distraction. Courts can avoid theological debates by focusing on whether the representations made to donors were truthful and whether the funds, regardless of whether they are labeled as tithing, were used in a manner consistent with those representations. Therefore, the church’s reliance on the Church Autonomy Doctrine is unlikely to provide a complete defense against the legal claims in this situation.

Edited September 25, 2024 by Analytics

[Analytics]

45 minutes ago, Calm said:

It is only as objective as the info fed to it, which means it’s not.  A lot of it was just restating what you said with a lot more words.

Below is the question I asked it. I’ll highlight in blue the statements that lead it to agree with me. I’ll highlight in red what I said that leads it to agree with Smac.

Some people claim that like other non-profits, it is important for churches to be financially transparent. Others claim that “financially transparency” is a hopelessly vague concept and the only thing it does is provide critics with more things to criticize about. What do you think? If a Church is trying to avoid criticism, is it worthwhile for it to be financially transparent? Is financially transparent even a well-defined concept? What does it mean?

I did my best to represent Smac’s concerns unbiasedly in the question. 

45 minutes ago, Calm said:

”common sense”?  A program can have common sense?  Not generally what I think of when I think of tech.

In this context, “common sense” is governed by the intelligence it's garnered from all the information it has been trained with. If the web was full of authoritative sources that said transparency is a bogus concept, isn’t well-defined, isn’t worth doing, and only provides fodder for haters, that is what it would have spitted back. But since my sensibilities on this topic are mainstream, it shouldn’t be surprising that ChatGPT agrees with me. 

ChatGPT isn’t perfect, but it is usually very good. If it said anything that is wrong here, feel free to demonstrate it. And I’d highly encourage you to play with it. Try to give it leading questions so that it generates arguments that others have said here.

 

Edited September 25, 2024 by Analytics

[Analytics]

42 minutes ago, smac97 said:

Again: Our critics are notably vague about what "transparency" means.

How is my answer “notably vague”?

In general, financial transparency refers to the open disclosure of financial activities, including income, expenses, salaries, donations, and investments.

For a church, this might include revealing:

• how much is collected in tithes or donations,
• how funds are spent on charitable activities or operations, and
• the compensation of clergy or staff

The concept itself can be well-defined if the organization adheres to established standards, such as:

• regular financial reports,
• audits, and
• public access to financial information

That isn’t vague. But continue to ignore what I say.

42 minutes ago, smac97 said:

And their endlessly faultfinding proclivities are solid evidence that they will never be satisfied with what the Church does.  Ever.

You are projecting again.

[juliann]

1 hour ago, Analytics said:

 Potential Risks and Consequences:

 

• Donor Backlash: If donors find out that a substantial portion of their tithes is being set aside into a fund that may never be used, they may feel misled, which could lead to reduced donations or even public outcry.

• Trust and Credibility: The lack of transparency could undermine the church’s credibility. Donors, particularly those who give generously, often expect clear communication about how their money is being used. Even if the church’s actions are legal, they could be perceived as lacking integrity or honesty.

• Missed Opportunities: A large and growing reserve fund could be seen as a missed opportunity to invest in the community or expand the church’s charitable work. If there is no pressing financial need or crisis on the horizon, the church might be better served by using some of those resources for immediate impact, rather than letting the fund grow indefinitely.

 

Hm, I don't think some of this is builds your position. The members paying tithing, at least a large, large majority of them, do it with the knowledge the church is not completely transparent. Maybe "large donors" expect clear communication, they are either getting it privately...or they are getting what everyone else does and still paying. I don't see a problem there.There is trust....especially when there has never been any embezzling type stuff despite repeated efforts to find it. I'll bet most were stunned to hear what the church is worth.... immediately followed by respect. 

The church has always taught wise money management, not going into debt is a huge part of that. So it strikes me as downright odd to try to find fault with the church having a huge fund...used or not. Remember you have a lot of tithe payers who think the "end times" are near so it makes a lot of sense to have a large reserve, especially for those who think they are going to be magically saved from death. We also know we are not seen in a positive light so having this much money seems even wiser. The church can always be in a position to protect religion for us and others. Money is power....which makes me wonder if that fear isn't at the bottom of a lot of the carping. 

I'm also very impressed with how they are buying land and farms. It seems far sighted where "immediate impact" doesn't. So I think you are barking up the wrong (secular tree) with this kind of stuff. Even those of us who have gripes with church policies aren't having a problem with this. That doesn't mean that more transparency wouldn't be a good idea, but good grief, what they have managed to do with my tithing is downright impressive and beyond brilliant. Maybe they just need to put a disclaimer at the bottom of all tithing slips to avoid having to give my tithing to people going after deep pockets after they change their minds about voluntary contributions. 

[Analytics]

1 hour ago, juliann said:

Hm, I don't think some of this is builds your position. The members paying tithing, at least a large, large majority of them, do it with the knowledge the church is not completely transparent. Maybe "large donors" expect clear communication, they are either getting it privately...or they are getting what everyone else does and still paying. I don't see a problem there.There is trust....especially when there has never been any embezzling type stuff despite repeated efforts to find it.

I generally agree with you here. If you are paying tithing because you have a personal religious conviction that it is what you ought to do, you just do it and let the Church worry about how the funds are utilized. But if you see yourself as having stewardship over your financial resources and want to ensure that they are being utilized properly, you go somewhere else.

1 hour ago, juliann said:

I'll bet most were stunned to hear what the church is worth.... immediately followed by respect. 

That's probably true, too. However, there is another issue: what is the correct balance between saving and spending? The way the vast majority of mainstream churches and charities do it, they set their reserves equal to a certain percentage of annual expenses--25% of annual expenses on the very low end, and 200% on the very high end. Otherwise they might save up for some specific capital expense. But according to mainstream sensibilities, having an exponentially increasing reserve fund that is 3000% of annual expenses and growing is just obscene and is actually a waste of money.

Ultimately the Church can do whatever it wants with its money, but it ought to disclose to its donors what it is doing with the money. That’s the issue that I think is most important: let people know the truth of what’s going on so they can make an informed decision of whether or not to donate. Most probably don’t care and just donate because of religious faith. But for those who do care, they can see how they funds are being put to use and can make their own decisions for themselves.

The Church doesn’t blindly donate to charities it partners with. Why does it expect other to blindly donate to it?

1 hour ago, juliann said:

The church has always taught wise money management, not going into debt is a huge part of that. So it strikes me as downright odd to try to find fault with the church having a huge fund...used or not.

Having a fund that is way more than ten times larger than it ought to be isn’t wise money management. There needs to be a proper balance between saving and spending. Of course that’s just my opinion, although it is an extremely reasonable and mainstream one. If the Church’s mission really is to have the largest investment portfolio on the planet, then it ought to disclose this mission to the donating members.

1 hour ago, juliann said:

Remember you have a lot of tithe payers who think the "end times" are near so it makes a lot of sense to have a large reserve, especially for those who think they are going to be magically saved from death.

I know many people see it this way, but this seems weird to me. If the world comes to an end and Jesus comes back or whatever, what good will owning 10,000,000 shares of Apple stock do? What good does that do anybody at the ends of time? I can see the tangible benefits of having 2-years of wheat and dried milk in your basement, but what’s the point of owning financial assets in a system that is coming to an end?

1 hour ago, juliann said:

We also know we are not seen in a positive light so having this much money seems even wiser. The church can always be in a position to protect religion for us and others. Money is power....which makes me wonder if that fear isn't at the bottom of a lot of the carping. 

David Nielsen tells the story of taking the job at Ensign Peaks because he wanted to do a whole bunch of good in the world with the money, and he didn’t get frustrated until he figured out that there was no plan for the money other than to grow the size of the fund for the sake of having a bigger fund.

I tend to take his word for it about why he is frustrated.

1 hour ago, juliann said:

I'm also very impressed with how they are buying land and farms. It seems far sighted where "immediate impact" doesn't.

I have mixed feelings about this one. Here is an article about how the church has bought 370,000 acres in Nebraska, so far ("How much land is 370,000 acres? It’s almost exactly the total amount of land in Douglas and Sarpy counties combined”). According to the article:

"The church sees its land buys as a force for good, an investment in agriculture “to generate long-term value to support the Church’s religious, charitable, and humanitarian good works,” said a Farmland Reserve spokesman... 

The Nebraska Farmers Union sees the church as another out-of-state corporation that arrives, drives up prices and makes buying harder for smaller farmers.

“All of the land that the Mormon church owns is land that individuals in Nebraska do not have the opportunity to own,” said John Hansen, president of the Nebraska Farmers Union.

1 hour ago, juliann said:

So I think you are barking up the wrong (secular tree) with this kind of stuff. Even those of us who have gripes with church policies aren't having a problem with this.

Some are. David Nielsen and James Huntsman being a couple of good examples.

1 hour ago, juliann said:

That doesn't mean that more transparency wouldn't be a good idea, but good grief, what they have managed to do with my tithing is downright impressive and beyond brilliant.

If success for the Church is defined by how much money it has stashed away then yes, it is doing great.

Edited September 25, 2024 by Analytics

[Calm]

3 hours ago, Analytics said:

. It makes zero withdrawals from the fund and has no specific plans to ever use the money in the fund for anything.

Big assumption.  We already know it made two withdrawals if we accept the whistleblower’s claim.  I find it very odd this claim gets repeated so often when there is little (no?) evidence to support the claim.  
 

Now assuming withdrawals are likely consistently small if there are some because of the Church’s conservative budget makes more sense as if one assumes the handouts are valid, then that is the statement made by the fund managers.

I think the “no specific plans” is a massive assumption as well.  They may have quite a few and may not be sharing them because they don’t want to get locked into commitments and instead want flexibility.

Pres Nelson seems like he would have lots of ideas on how to use it and would instruct experts to put together detailed plans on how to make them work…but he is also 100 and is likely respectful of his successor and his right to receive revelation on what the Church needs under his administration.  My guess is the next couple of presidents will be considering some of Pres Nelson’s ideas when they get the office.

Edited September 26, 2024 by Calm

[Stormin' Mormon]

49 minutes ago, Calm said:

Pres Nelson seems like he would have lots of ideas on how to use it

I'm just spitballing here, but how about a brand new medical school that would focus on the needs of the developing word? Pie in the sky idea, I know. I hear those things are rather expensive and carry with them operational costs beyond the initial startup investments.

[juliann]

35 minutes ago, Stormin' Mormon said:

I'm just spitballing here, but how about a brand new medical school that would focus on the needs of the developing word? Pie in the sky idea, I know. I hear those things are rather expensive and carry with them operational costs beyond the initial startup investments.

Gosh, that wouldn't happen would it? Just think, if it was at BYU it would even be affordable! 

 

2 hours ago, Analytics said:

 

If success for the Church is defined by how much money it has stashed away then yes, it is doing great.

A medical school at a time where we are facing doctor shortages strikes me as being....great. It is possible to disagree on how a church should spend its money...but I think you are going to have to find a lot more to convince the people who actually fund it. (And as for the end times, for those that buy into that, it isn't a flash event, it is a long event of deprivation so yes, the money would be useful, but even more so, the provisions they are now creating to be able to supply food and such.) You are just going to have to agree to disagree with active tithe payers as to what is proper or ethical, I'm afraid. 

[smac97]

On 9/22/2024 at 2:50 PM, smac97 said:

An update from the Tribune: Two big federal court hearings loom this week in LDS tithing lawsuits. Here’s what you need to know.

Quote

If livestreaming technology keeps its promise, interested Utahns will be able to watch the historic arguments scheduled this week remotely, with one session before the 10th U.S. Circuit Court of Appeals starting Monday at 9 a.m. MDT and the other, before the 9th U.S. Circuit, at 3:30 p.m MDT on Wednesday.

 

Here is the recording of the 9th Circuit hearing held earlier today:

A few notes:

1. Huntsman's attorney starts by arguing that "tithing" has a secular meaning (apparently distinct from its religious one).  He did this by quoting The Beatles' Let It Be, which references "Mother Mary."  He says that references to "Mother Mary" typically refer to the mother of Jesus, but that Paul McCartney was actually referring to his mother, Mary McCartney.  This seems a bit odd to me, since Mary McCartney is a numerically distinct person from Mary, mother of Jesus.  They share a name, but they are entirely distinct and separate from each other.  In fact, this is a dumb argument, as it positions Huntsman's legal argument as being based on equivocation.

So what is the "tithing" that is a numerically and definitionally distinct concept from "tithing" as that term is typically used in the Church?  He doesn't say, at least not yet.  But this seems to be a pretty clear effort - as I have been predicting for a while now - to re-define "tithing."  To ask secular judges sitting in federal courthouses to define or re-define it, and to then impose that definition on the Church.

As it happens, the argument seems to immediately fall on its face.  The attorney concludes the analogy by saying: "Here, in this narrow case, the implications {of the use of the word 'tithing'} are no more religious than the song, Let It Be."  One of the judges promptly, and fairly bluntly, cuts him off:

Quote

Counsel, how can you say that?  I understand the importance of avoid constitutional questions where we don't need to do that.  But, for example, the Supreme Court in Presbyterian Church v. Mary Elizabeth Blue Hull dealt with a trespass claim, Our Lady of Guadalupe {School v. Morrissey-Berru}, which dealt with an employment claim, and Kedroff v. Saint Nicholas Cathedral dealt with an incorrect incorporation of secular legal principles into church government.  Why in this case when we're dealing with tithing, which I think you would agree is a very common principle among many, many religious, you've seen some of the arguments from opposing counsel, from amicus counsel, talking about the many differences that there are among religious about the meaning of tithing.  But to my understanding, tithing - unlike your 'Mother Mary' example - is a quintessential religious issue.  In fact, I don't know of any use of the term 'tithing' that is not religious in context.  What am I missing?

The attorney responds by citing a case, U.S v. Rasheed, a 1981 case from the 9th Circuit.  Here's the synopsis:

Quote

Rasheed, the founder of a church, was indicted on six counts of mail fraud, 18 U.S.C. § 1341, one count of obstruction of justice, 18 U.S.C. § 1503, and one count of making a material false declaration to a grand jury, 18 U.S.C. § 1623. Phillips, his associate, was charged with five counts of aiding and abetting Rasheed in the conduct of his mail fraud scheme, two counts of obstruction of justice, and one count of making a material false declaration to a grand jury. They were tried together on all counts. The jury convicted Rasheed and Phillips on all the mail fraud counts. The jury also convicted Phillips, but acquitted Rasheed, on the obstruction of justice charges. The jury acquitted both on the false statement counts. Both raise several contentions on appeal, including charges that their First Amendment rights have been violated. We affirm the convictions.

Here's the part of the decision about the First Amendment in the context of "fraud" (here, the federal statutory "mail fraud,," as opposed to the state common law "fraud" being alleged by Huntsman) :

Quote

Rasheed and Phillips contend that the free exercise clause of the First Amendment bars their convictions for mail fraud. The premise of their argument is that the "Dare to be Rich" program is a religious tenet of the Church of Hakeem, and that the First Amendment prevents the government from proving the falsity of a religious United States v. Ballard, 322 U.S. 78, 86-87, 64 S.Ct. 882, 886, 88 L.Ed. 1148 (1944). They conclude that the government may not assert the falsity of the "Dare to be Rich" program, and that the government's mail fraud case must therefore fail.

Rasheed and Phillips are correct that the First Amendment protects absolutely the freedom of belief. Cantwell v. Connecticut, 310 U.S. 296, 303, 60 S.Ct. 900, 903, 84 L.Ed. 1213 (1940). The government is foreclosed from interference with one's faith. The First Amendment protects all religious beliefs, no matter how preposterous they may seem to the majority of the population. United States v. Ballard, supra, 322 U.S. at 87, 64 S.Ct. at 886. What one does with one's faith, however, may not necessarily enjoy the same absolute protection. The First Amendment protects religiously grounded conduct, but such conduct is subject, in some situations, to the police power of the government. Wisconsin v. Yoder, 406 U.S. 205, 220, 92 S.Ct. 1526, 1535, 32 L.Ed.2d 15 (1972); Cantwell v. Connecticut, supra, 310 U.S. at 303-04, 60 S.Ct. at 903. Therefore, inquiry into the conduct of Rasheed and Phillips in the operation of the "Dare to be Rich" program is not absolutely barred by the First Amendment. Recognizing this, Rasheed and Phillips still contend that the government's case necessarily requires inquiry into the truth or falsity of the doctrine underlying the "Dare to be Rich" program, and is therefore improper.

The nature of the Church of Hakeem, and its teachings as a whole, are not issues in this case. The government has conceded that the Church is a bona fide religious organization. Rather, the government contends that Rasheed and Phillips engaged in conduct based on knowingly false representations to induce others to donate money to the Church through the "Dare to be Rich" program. So analyzed, the issue in this case becomes whether Rasheed and Phillips held sincere religious beliefs in the allegedly fraudulent aspects of the "Dare to be Rich" program. If they made assertions with knowledge of the falsity of those assertions, then they could not have been acting pursuant to sincere religious belief. It, therefore, is not a question of whether the "Dare to be Rich" tenet is true or false. The focus is on the intent of Rasheed and Phillips in carrying out the program. It is this distinction that is critical in our First Amendment analysis.

Thus, the Court has held that although the validity of religious beliefs cannot be questioned, the sincerity of the person claiming to hold such beliefs can be examined. United States v. Seeger, 380 U.S. 163, 185, 85 S.Ct. 850, 863, 13 L.Ed.2d 733 (1965). The First Amendment does not protect fraudulent activity performed in the name of religion. Cantwell v. Connecticut, supra, 310 U.S. at 306, 60 S.Ct. at 904. The district judge properly instructed the jury that specific intent to defraud is an element of the crime of mail fraud. Williams v. United States, 278 F.2d 535, 537 (9th Cir. 1960). To convict Rasheed and Phillips of mail fraud, the jury must have found that they knew of the falsity of their  statements pertaining to particular aspects of the "Dare to be Rich" program. It follows, of course, that the jury could not have believed that they had a sincere religious belief in those aspects of the program.

Because the jury necessarily found that Rasheed and Phillips lacked a sincere religious belief in certain aspects of the "Dare to be Rich" program, the only analysis left in the First Amendment claim is whether there was sufficient evidence to support this conclusion. In determining the sufficiency of the evidence of a criminal conviction, we must view the evidence in the light most favorable to the government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed.2d 680 (1942). Fraudulent intent may be, and often must be, proven by circumstantial evidence. United States v. Piepgrass, 425 F.2d 194, 199 (9th Cir. 1970).

This case seems pretty far afield. 

• Rasheed is about a criminal conviction for mail fraud, whereas Huntsman is about civil liability for the tort of fraud. 
• Rasheed did not address "tithing" at all, and instead pertained to a "Dare to be Rich" program, about some aspects of which the jury found the defendants to lack "a sincere religious belief."  Rasheed, then, seems to primarily deal with "sincerity" issues which seem to be pretty much absent from Huntsman. 
• In his "Dare to Be Rich" program, Mr. Rasheed "taught that if one donated money to the Church, one would receive an 'increase of God' of four times that amount within a particular period of time<" and that "{t]he time period of the increase of God varied depending on the amount of the donation" (the more money donated, the longer the interval).  In contrast, Huntsman has not alleged that the Church has taught any sort of corollary quid pro quo or empirically testable promise akin to what Mr. Rasheed said.
• It appears that the crux of the "mail fraud" claims against Mr. Rasheed was that he told his followers that "the increases of God were from profits that the Church made on investments," and that "the increases of God were gifts from the Church to ministers derived from profits that the Church made from its foreign investments in gold, diamonds, and oil."  As it turns out, though, that there was "no evidence that any such foreign investments ever existed."  This is pretty far from the weak-tea fraud claims Huntsman is trying to assert against the Church.
• Mail fraud has two elements, whereas civil fraud has nine. Mail fraud presupposes "fraud," whereas civil fraud does not.  
• My understanding is that the Ecclesiastical Abstention Doctrine began to coalesce as such around July 1979 in Jones v. Wolf (see, e.g., here).  Rasheed came out in April 1981.  I think the doctrine has been refined and clarified quite a bit in the ensuing 43 years.

And so on.

2. The attorney goes on to recite his three main points: A) the "secular nature of this dispute," B) "inferences that must be drawn in Mr. Huntsman's favor," and C) the "slippery slope."  I think he is trying to set the stage to argue that "tithing" has a "secular" definition that is distinct and separate from the Church's religious definition of that term.  Again, I have been predicting that Huntsman  et al will need to ask the courts to re-define tithing, and it looks like I was correct in that prediction.

3 One of the judges (the same one who interrupted the attorney above), asked about "justifiable reliance."  He asks whether the jury would need to determine "justifiable reliance," and whether that jury issue would require the jury members to "understand what a 'reasonable' church member would know," which would take the jury's inquiry into "the religious context" that is prohibited by the First Amendment.  The attorney points to Huntsman's affidavit stating that he relies on the Church's statements that the money for City Creek "was coming from somewhere other than tithing."  Another judge then interjected that regardless of what Huntsman believed, the jury will still need to assess whether his belief was "reasonable," and that such an inquiry appears to require the jury to weigh Huntsman's beliefs against the Church's view that tithing is a commandment.  The attorney responded that the issue is "one of accounting," which is a secular issue, and that the Church has "misframed" by the Church. 

4. The attorney acknowledges that tithing is "doctrine, a commandment from God," but that the courts should, when addressing "tithing" in the context of Huntsman's lawsuit, look at "the church's own secular definition of 'tithing.'"  A judge interjects and asks how a church can have a "secular definition of a religious obligation."  Again, I have been predicting that Huntsman would attempt to re-define tithing.  And here his attorney is trying to say that the Church (!) has a "secular" definition of "tithing" that is, it seems, independent from any religious definition.  I think the attorney stepped in in here.

5. The attorney tries to answer the above question about the Church's supposed "secular definition of tithing," but he is cut off by another judge, who says she is "struggling to understand how this case would be tried without delving not only into the Church's view of what its doctrines dictate, but Mr. Huntsman's own understanding of tithing, and of how tithing would be utilized.  I thought that he had testified at numerous points in his Declaration, talking about how he, when he gave the tithing money, there were no conditions put on it, and the reason was that as a long-time church member, he had a very firm understanding of what 'tithing' really meant.  And all of that understanding really stemmed from church doctrine, or his understanding of church doctrine.  So I take it that your argument really tries to narrow the trial on {down to} the few statements that were at issue in this case.  But if this case were to go to trial, wouldn't the Church be entitled to pull the lens back and talk about tithing, the purposes of tithing in general, they would be able to talk about Pres. Hinckley's statements, not just as narrowly defined by you, but much broader than that.  And in response, Mr. Huntsman would also potentially testify about his own understanding of religious doctrine.  So I just don't see how this case can be tried as narrowly as you are contemplating."  All this talk about definitions and Huntsman's "understanding of what 'tithing' really meant" and "narrowing" the scope of the trial seems to bear out my prediction that Huntsman's case relies heavily on defining, or re-defining, "tithing."

6. The attorney responds to the above by stating that "the issue here is how the Church told Mr. Huntsman, under its definition of 'tithing,' which again is not secular.  The Church has used general accounting principles to describe the 'tithing' here.  if we look at page 682 of the record, the Church has stated that "tithing," as President Hinckley apparently understood it in 2003 during his general address, was the 'principal.'  The money that my client, Mr. Huntsman, took and gave to the Church before it was invested anywhere else."  Here he gets cut off again (see next item).

This is a little weird.  The attorney just above (item 4) spoke of the Church having a "secular definition of tithing" (his own words), yet here he says that the Church's "definition of 'tithing'" is "not secular" (also his words).  So which is it?

7. A judge cuts him off: "Does it matter that the April 2003 speech came from President Hinckley in this religious context?  In other words, this wasn't just any old speech.  It was given in a broader sense of describing the Church's activities and religious mission.  Isn't there a concern that if you're asking courts to start parsing these speeches, whether it's going to chill something within religious doctrine or internal church governance.  That a church leader might have to run a speech by legal before he can deliver a sermon?"  This is a solid point.  @Analytics endlessly faults the Church for not being sufficiently "transparent."  Huntsman's lawsuit, though, would seem to justify the Church's reluctance to speak publicly about matters of church governance (because, as this judge is pointing out, doing so exposes the church to lawsuits in which secular judges are asked to "parse" what is said).

8. The attorney says that all these questions center on purely secular inquiries.  He again cites Mr. Rasheed's "quadruple" promise noted above: "In that case, just as we would submit in this case, Pastor Rasheed knew, at the time he made that statement, that it was not actually going to be quadrupled under the will of God.  It was going to be quadrupled by all of the other donations that were taken in by what this Circuit characterized as a 'pure Ponzi scheme.'  In this case likewise, there is, as a bare minimum, a triable issue of fact as to when President Hinckley and Bishop Burton and the Church's official magazine, and the Church's statement to Deseret News, and Keith B. McMullin's statement to the Salt Lake Tribune, at the time all of those statements were made..."  And he gets cut off here.  I assume he was going to accuse these various church representatives of knowingly lying about the use of funds for City Creek.  The problem with this line of reasoning, though, is that the only way Huntsman can advance this narrative is by re-defining tithing.

9. One of the judges asked: "Don't we have to decide whether McMullin can speak for the Church?  And isn't that a religious question?"  As we know, McMullin is an official with Deseret Management Corp.  The attorney responds by asserting that McMullin was speaking on behalf of the Church.  The judge asks "How do we know that he was speaking on behalf of the Church?"  The attorney says that question can be answered in discovery.  The judge responds: "Isn't that precisely the problem?  We're supposed to ask who can speak on behalf of the Church?  So what if the Church says 'No, he wasn't speaking on behalf of us?'  Are we going to decide that, as a religious matter, he was speaking on behalf of the Church?"   The attorney goes on to say that the Church has already had a chance to disavow McMullin's statement, but the judge continues with the hypothetical anyway: "But what would happen in that case, though?  We would have to say 'The Church is wrong,' and that Keith McMcullin actually was speaking on behalf of the Church."  The attorney ultimately states that yes, the courts could say that.  The judge then responds: "But how is that not deeply intertwined with religious matters, then?"  This line of questioning, and the others above, are I think illustrative of the Circuit's substantial reluctance to allow the case to proceed because doing to seems to run smack into the Church Autonomy Doctrine. 

10. The attorney then tries to change the subject by saying "These are accounting issues...," but he is cut off by another judge: "Counsel, with respect, and if I understand the record correctly, President Hinckley never said these were 'accounting issues.'  Mr. Huntsman was a member of the Church for many years, and continued to pay {tithing} well after President Hinckley said what he said.  He {Hunstman} says that he understood President Hinckley to say that tithing was treated in two parts: the principal was given, and then the reserve, and the Church later showed that just the reserve was being used.  You've got four statements after the original statement that he didn't break it down that way.  But Mr. Huntsman knows, and the record shows, that unless you want to get into LDS doctrine, which you can't do, President Hinckley person is the only person, the only person, who is authorized to speak authoritatively on behalf of the Church.  You say that's not true, but then you get into church doctrine to say otherwise, do you not?"  The attorney says no, because Bishop Burton made a statement.  The judge responds: "The presiding bishop of the Church is an inferior officer of the Church.  There's only one prophet and president of the Church.  Mr. Huntsman's record indicates that.  He {Pres. Hinckley} speaks for the Church, nobody else.  Now, you say that's not true.  But then we would be required to get into the LDS doctrine, and for you to show that he wasn't the only person, right?"  The attorney says we should apply common law to the question.  The judge responds: "Unless the Constitution says otherwise, right?"  The attorney says that the courts could apply "neutral principles of common agency law."  The judge responds: "In this case, if you are looking at LDS doctrine, the answer is 'Absolutely yes, he {Pres. Hinckley} is the only person.  And it's not agency law, it's religious law.  And I don't understand how you can determine, by applying common agency law, to what LDS doctrine is.  And if you're trying to get into LDS doctrine, it seems to me that the First Amendment bars us from considering it."  I'll have to give this some thought, but at first blush I think the attorney may have the better argument here, in which case the judges might be overstating the scope of what is prohibited by the First Amendment.  I am sort of surprised that this is such a significant point of focus by the judges.  I have previously given some thought to agency law on this point, but my conclusions were pretty much what the attorney is saying.  So I did not anticipate this line of inquiry.

11. The next part gets pretty interesting.  The attorney says that Pres. Hinckley's comments about tithing "may have been qualified."  The judge cuts him off: "It was qualified.  And your client apparently recognized that.  He understood it.  He heard it.  He saw that Pres. Hinckley was saying 'You've got tihing {over here (gesturing)}, and you've got reserve earnings {over there (gesturing)}.  And from the earnings of entities owned by the Church.  The Church has shown, by the record as I understand it, that that's all that was being used to do the City Creek development."  This is, in my view, a pretty devastating line of questioning.

12. The attorney responds that the judge's recitation of "the record" is actually just "the Church's position," and not "what the record shows."  He then says that Huntsman "doesn't differentiate," and that he "took President Hinckley at his word."  I think the attorney is stepping in it here.  He is disputing what "the record" of the case states, which really isn't going to be in dispute.  And he says Huntsman didn't "differentiate" between principal and earnings in the way that President Hinckley differentiating these sources of funds, but then he says Huntsman took President Hinckley "at his word."  So this is pretty incoherent stuff.  The judge apparently picked up on this right away: "Okay, if you take him at his word, then you take the first statement that he would understand what President Hinckley was talking about, right?"  Oi.  The judge is cornering him here.

13. The next part gets even more interesting:

• Attorney: {If} we just look at his {President Hinckley's statement, and we look at how his statement has been explained in the record, as he was referring purely to principal.  That does not change the ultimate disposition...
• Judge: Who said that he was just referring to principal in the first talk?  Who says that President Hinckley in his first remarks was just referring to principal?
• Attorney: The Church, your honor.
• Judge: The Church says that?
• Attorney: The Church has differentiated in their papers between the 'principal' donations made by members and the interest generated by the investment...
• Judge: And that's exactly what I'm saying.  President Hinckley made that clear.

The attorney really stepped in it here, I think.  He tried to claim that President Hinckley "was referring purely to principal," but the judge - who has clearly worked to familiarize himself with the facts of the case - calls the attorney out and says that President Hinckley was not "referring {only} to principal," but was instead differentiating principal from earnings, and that he "made that clear."

14. Another judge interjects and asks the attorney for his "best case" that can be cited "that there was a misrepresentation here ... especially given that the Church told its members that it would fund the mall with earnings on invested reserves.  It appears that is what occurred."  The attorney disagrees that this is what occurred, and states that there is sworn testimony from David Nielsen that "principal tithing funds were used to fund City Creek Mall," and also that tithing was "commingled with earnings."  This line of inquiry is then cut off, which is too bad, because whether or not there is a "genuine issue of material fact" about whether "tithing funds were used to fund City Creek" seems like a pretty important issue.  That the Circuit did not address it in depth may suggest that they do not believe there is such a factual issue in play.

15. Another judge interjects and asks about Huntsman's domicile, which pertains to whether the case was properly filed in California.  I'm not really interested in this issue.

16. Another judge asks about whether the Church Autonomy Doctrine "is jurisdictional or not."  This isn't explored much.

17. Another judge asks about whether this lawsuit, if it is allowed, will facilitate "a flood of lawsuits by people who become disillusioned with their religion."  The attorney says no, because the scope of the lawsuit is very narrow.

The foregoing takes us through about 28:20 of the video.  More later.  Maybe.

I will say this: I am far more impressed by the scrutiny given to Huntsman's arguments by the Ninth Circuit than the scrutiny given by the Tenth Circuit to Gaddy's.

Thanks,

-Smac

Edited August 26, 2025 by smac97

[smac97]

I just listened to the oral argument from the Church's attorney.  I think he did a good job.  And I think the judges were, in the main, considerably more receptive to, and less skeptical of, his arguments as compared to their treatment of Huntsman's attorney.

Thanks,

-Smac

[Analytics]

11 hours ago, Calm said:

Big assumption.  We already know it made two withdrawals if we accept the whistleblower’s claim.  I find it very odd this claim gets repeated so often when there is little (no?) evidence to support the claim.  

I could have gone into more detail that there really were two other withdrawals, both for commercial purposes, but that wouldn’t change the basic fact that no withdrawals have been made for religious or charitable purposes.

In addition to having David Nielsen’s testimony as evidence for this claim, we also have the documents he’s produced, including the one you showed earlier on this thread. Nielsen called the EPA fund “the reserves on the reserves.” The Church has billions of dollars stashed away in reserves that aren’t part of EPA.

We can see this in the sheet you provided: “Proliferation of temples: $0; funded out of budget” means the church didn’t need to tap into this fund to pay for new temples, it just paid for that in its normal budget. Likewise “Conference Center: $0; funded out of budget” means that was paid for out of the normal budget and EPA funds won’t be needed.

The other two lines on that report are interesting. Apparently the Church needed $200 million in collateral for something, and the fund serves as that collateral. Also, the Church is eventually going to need to bail out a pension plan, and while that hasn’t happened, it might come out of EPA, too. 

11 hours ago, Calm said:

I think the “no specific plans” is a massive assumption as well.  They may have quite a few and may not be sharing them because they don’t want to get locked into commitments and instead want flexibility.

In order to invest the money in EPA properly, the investment managers need to know what it is for. How long until cash is needed; is a certain amount hoped to be liquid at a certain date? Will cash be needed in certain economic environments, such as a high interest rate environment, a low interest rate environment? This is basic risk management, and the Church always told the EPA that they didn’t have any specific plans. That is how the speculation developed that it was being saved for Jesus’ return. 

11 hours ago, Calm said:

Pres Nelson seems like he would have lots of ideas on how to use it and would instruct experts to put together detailed plans on how to make them work…but he is also 100 and is likely respectful of his successor and his right to receive revelation on what the Church needs under his administration.  My guess is the next couple of presidents will be considering some of Pres Nelson’s ideas when they get the office.

President Nelson became prophet at age 94. Before then, he was aware that there were some “reserves” being saved “for a rainy day”, but he had no authority to know how much money was there nor how much interest it generated. Maybe once he was shown the books 6 years ago he immediately realized that the Church had way too much money and needed to start doing stuff with it, and maybe he had a lot of bold and innovative ideas. Or maybe he continued to go with the flow.

[Analytics]

10 hours ago, juliann said:

Gosh, that wouldn't happen would it? Just think, if it was at BYU it would even be affordable! 

A medical school at a time where we are facing doctor shortages strikes me as being....great.

I totally agree. Remember that the Church spending much more money is exactly what I’ve been arguing for. I’m glad they are finally starting to listen to me.

10 hours ago, juliann said:

It is possible to disagree on how a church should spend its money...

Let's keep a few things in mind.

The Church has had more than enough money to fund a medical school for decades. To give a reference for the cost of this, the largest medical school in the country is Indiana University School of Medicine. It has five basic science departments and 20 clinical departments. In addition to teaching and patient care, it does a ton of biomedical research. 

From what I’ve seen, the vision for BYU medical is a lot smaller and cheaper than recreating the Indiana University school of medicine, but let’s assume BYU wanted to go all out and be as big as I.U. and do everything they are doing. We’re talking 2,100 medical students, 5,549 full time faculty and staff, and an additional 1,088 part-time faculty and staff.

And let’s further assume that they want to make the school 100% free for all medical students, and that the Church itself would fund 100% of the research, so the thousands of researchers it hires could all focus on research rather than writing grants.

How much would that bold vision cost? A mere $2.2 billion per year. If the Church divided EPA and its commercial holdings into two pieces, one piece that was a very conservative but appropriately sized reserve fund, and another one that was an endowment for medical schools, it has about enough money to fully endow four Indiana-University sized medical schools, that are all completely free.

So I think the medical school is great; it’s a step in the right direction. But it is only a step. There are miles left to go.

So again. If you look at the numbers, a medical school is something they’ve been able to easily afford for decades.

So why are they doing this now?

A couple of things have changed.

First, thanks to the whistleblower David Nielsen, the apostles and lower-level general authorities have some information about EPA that they didn’t have before. Now, the Presiding Bishopric feels pressure to explain to the rest of the Council on the Deposition of tithes why they are only weighing in on deposing a minority of their total income and why  they automatically invest the majority of their total income into for-profit endeavors?

The second thing that’s changed is that again, thanks to David Nielsen, outsiders are now starting to pay attention to this, including members of the Church (some of whom are suing and others of whom quietly stopped paying), the general public, and the IRS. The unwanted transparency is doing the good things that transparency always does and is pressuring them to do more with the resources they have.

President Nelson deserves a lot of credit for the medical school. But David Nielsen deserves a lot of credit for it, too.

 

[Analytics]

10 hours ago, smac97 said:

Here is the recording of the 9th Circuit hearing held earlier today:

Thanks for posting this. I enjoyed watching it.

10 hours ago, smac97 said:

A few notes:

1. Huntsman's attorney starts by arguing that "tithing" has a secular meaning (apparently distinct from its religious one).  He did this by quoting The Beatles' Let It Be, which references "Mother Mary."  He says that references to "Mother Mary" typically refer to the mother of Jesus, but that Paul McCartney was actually referring to his mother, Mary McCartney.  This seems a bit odd to me, since Mary McCartney is a numerically distinct person from Mary, mother of Jesus.  They share a name, but they are entirely distinct and separate from each other.

So what is the "tithing" that is a numerically and definitionally distinct concept from "tithing" as that term is typically used in the Church? 

There are three numerically and definitionally distinct concepts of “tithing” in play here. All three are already well defined. One of the definitions is religious, and the other two are secular:

Tithing [tahy-thing], (noun):

1. The commandment to give 10% of your increase to God (religious)
2. The amounts of money stated on the Church’s secular income statements that represent the donations that were given to the Church that were categorized by the donor on the donation slips as “tithing” (secular)
3. One of three “buckets of money” on the Church’s balance sheet that can be spent on different projects (contrasted with the “interest on reserves” bucket and the “profit from businesses the Church owns” bucket) (secular)

The last two definitions are accounting definitions and are already established by the Church. A CPA can audit its financial records and can objectively verify that the way “tithing” is represented in the financial statements conforms to GAAP. Likewise, a trier of fact can secularly evaluate whether the church really has an “interest on reserves” bucket of money that is distinct from the “tithing” bucket, and that the money for the mall really came out of the “interest on reserves” bucket. All of these things can be done secularly using already accepted and used definitions of tithing, without any concern about what “tithing” means in a religious context.

Edited September 26, 2024 by Analytics

[webbles]

4 hours ago, Analytics said:

President Nelson became prophet at age 94. Before then, he was aware that there were some “reserves” being saved “for a rainy day”, but he had no authority to know how much money was there nor how much interest it generated. Maybe once he was shown the books 6 years ago he immediately realized that the Church had way too much money and needed to start doing stuff with it, and maybe he had a lot of bold and innovative ideas. Or maybe he continued to go with the flow.

He was also aware of how much was being reserved each year.  He saw billions of dollars go in the reserve each year.  He'd have a really good guess on how much money is in the reserve.  The third hand story about President Packer is our only source that apostles weren't aware of the size of the reserve and there are several things suspect in the story.

[Analytics]

43 minutes ago, webbles said:

He was also aware of how much was being reserved each year.  He saw billions of dollars go in the reserve each year.  He'd have a really good guess on how much money is in the reserve.  The third hand story about President Packer is our only source that apostles weren't aware of the size of the reserve and there are several things suspect in the story.

I’m not sure he would have been able to accurately guess how much the money had accumulated to. The human brain doesn’t have a very good ability to extrapolate exponentially, and that is one of the reasons that people who had enough information to know better thought the Church didn’t have the opportunity to accumulate big reserves.

Regarding evidence, in addition to the second-hand story about Packer, we also have “Financial Standard 6230: Accessing and Securing Financial Information,” which was signed by the Church’s controller on June 3, 2013.

It was published on the Mormon Leaks website before the IRS report. According to Exhibit A of this document, the apostles are not allowed to see:

• Cash
• Investment Securities
• Investment Properties
• Other Assets
• Liabilities
• Net assets

There are seven people with unfettered access to these reports: the three members of the First Presidency, the three members of the Presiding Bishopric, and the Controller. 

Please see:

https://www.docdroid.net/T9SCXQA/6230-accessing-and-securing-financial-information-pdf#page=4

Edited September 26, 2024 by Analytics

[smac97]

3 hours ago, Analytics said:

Thanks for posting this. I enjoyed watching it.

There are three numerically and definitionally distinct concepts of “tithing” in play here.

I'm not sure about that.  The judges seemed pretty skeptical of Huntsman's "secular definition" play.  The more Huntsman tried to pound a square peg ("tithing" as a religious concept and term as deployed by President Hinckley in 2003) into a round hole (a fraud lawsuit where "tithing" might mean different things to different people at different times), the more he pushed the Ninth Circuit toward the Church Autonomy Doctrine.

Moreover, this is a pretty massive pivot for you, as you have long disputed the notion that the definition of tithing has any relevance to Huntsman's lawsuit.  Are you now conceding that it is relevant?  Even centrally so?

3 hours ago, Analytics said:

All three are already well defined.

Well, no.  If they were "well defined," you would be able to cite authoritative sources for 2 and 3.  As it is, I think you can't.

3 hours ago, Analytics said:

One of the definitions is religious, and the other two are secular:

Tithing [tahy-thing], (noun):

1. The commandment to give 10% of your increase to God (religious)
2. The amounts of money stated on the Church’s secular income statements that represent the donations that were given to the Church that were categorized by the donor on the donation slips as “tithing” (secular)
3. One of three “buckets of money” on the Church’s balance sheet that can be spent on different projects (contrasted with the “interest on reserves” bucket and the “profit from businesses the Church owns” bucket) (secular)

Respectfully, it appears that you are just making this up.  It has no basis in the law.  

"Tithing" is a religious term.  I'm not really inclined to do a deep dive, but my understanding is that neither the IRS nor any other branch of government has a formal, codified definition of "tithing."  Take a look:

 

Instead, the IRS uses terminology like "charitable contribution."  And notably, "charitable contribution" does not, I think, include earnings on investments.  I think the technical term for this is "unrelated business investment income."

The Church's income from charitable contributions is not taxed.  Tithing is, in the secular/IRS vernacular, "charitable contributions."  (While all tithes are charitable contributions, not all charitable contributions are tithes.)

The Church's income from trade or business activities that are regularly carried on and are not substantially related to the organization’s exempt purpose is "unrelated business investment income."  Unrelated business Investment income is taxed.  Tithing is not, in the secular/IRS vernacular, "unrelated business investment income."

Unless you can cite some sort of legal authority which cites to and accepts your 2nd and 3rd "definitions" above, I am going to assume you just made them up out of thin air.  Moreover, these don't "define" tithing, but instead are extrapolated applications of the the Church's use of the term, supposedly in an accounting context.

Your 2nd definition, "the amounts of money stated on the Church’s secular income statements that represent the donations that were given to the Church" doesn't work.  It is just a wordy restatement of the religious definition (not unlike "charitable contribution"). An amount listed on some IRS form does not "define" tithing.  If you dispute this, then please produce these supposed "secular income statements" and point us to where these documents define the term "tithing."

Your 3rd definition, "One of three 'buckets of money' on the Church’s balance sheet that can be spent on different projects," also doesn't work.  You appear to have culled it from the Church's attorney's oral argument at yesterday's hearing.  But he was merely speaking metaphorically.  Nobody in or out of the Church defines "tithing" as "one of 'three buckets of money.'"  Moreover, this phrase does not "define" tithing.   If you dispute this, then please produce the source of this supposed definition and point us to where this source defines the term "tithing."

So I guess I'm issuing a CFR.  Chapter and verse, please, as to where you found these "secular" definitions of "tithing."

Moreover, don't you think that advancing the notion of "three numerically and definitionally distinct concepts of 'tithing'" is going to eviscerate Huntsman's fraud claims?  If Pres. Hinckley was relying on Definition 1, and if Huntsman was relying on Definition 2 or 3, then where is the fraud?

Moreover, Huntsman has said that he had a firm understanding of Pres. Hinckley's usage, which is the religious one.  So the religious one governs.  And since nobody is seriously suggesting that the religious definition conflates "tithing" with "earnings on invested reserves," Huntsman's fraud claim fails on its face.

3 hours ago, Analytics said:

The last two definitions are accounting definitions and are already established by the Church.

Really?  Where?  Again, chapter and verse, please.

3 hours ago, Analytics said:

A CPA can audit its financial records and can objectively verify that the way “tithing” is represented in the financial statements conforms to GAAP.

The Ninth Circuit Court of Appeals couldn't care less how a CPA may choose to define "tithing."

It sure looks like "tithing" will need to be defined in order for the Huntsman lawsuit to proceed.  And the author and originator of that definition cannot be an Article III court, because that would violate the Church Autonomy Doctrine.

3 hours ago, Analytics said:

Likewise, a trier of fact can secularly evaluate whether the church really has an “interest on reserves” bucket of money that is distinct from the “tithing” bucket, and that the money for the mall really came out of the “interest on reserves” bucket. All of these things can be done secularly using already accepted and used definitions of tithing, without any concern about what “tithing” means in a religious context.

Okay.  CFR.  Please point us to these "already accepted and used definitions {!} of thing."  Chapter and verse, please.  Where will Judge Shelby find these definitions?

The notion that secular courts can define tithing in a secular context, "without any concern about what 'tithing' means in a religious context" is, to me, legally nonsensical.  Pres. Hinckley was speaking in his capacity as the leader of a religious organization.  He was speaking to the adherents of that organization.  He was using religious terminology in his comments.  I do not see how a federal judge could possibly "secularize" tithing without running afoul of the First Amendment.  And based on the questions posed yesterday by the Ninth Circuit, I think they harbor similar doubts.

Thanks,

-Smac

Edited September 26, 2024 by smac97

[Calm]

6 hours ago, Analytics said:

the Church always told the EPA that they didn’t have any specific plans.

According to who?  The whistleblower?  He wasn’t that high up as far as I recall, a couple of steps removed from top manager.

Did he get this first or secondhand?  And how many times does the “always” cover?

Edited September 26, 2024 by Calm

[Calm]

5 hours ago, Analytics said:

Maybe once he was shown the books 6 years ago he immediately realized that the Church had way too much money and needed to start doing stuff with it, and maybe he had a lot of bold and innovative ideas. Or maybe he continued to go with the flow.

He certainly moved immediately to do something that had to cost…buying the domain “Church of Jesus Christ” and then shifting everything over to that as well as removing “Mormon” from the name of many Church operations (cost money to change the brand).

[webbles]

49 minutes ago, Analytics said:

I’m not sure he would have been able to accurately guess how much the money had accumulated to. The human brain doesn’t have a very good ability to extrapolate exponentially, and that is one of the reasons that people who had enough information to know better thought the Church didn’t have the opportunity to accumulate big reserves.

Regarding evidence, in addition to the second-hand story about Packer, we also have “Financial Standard 6230: Accessing and Securing Financial Information,” which was signed by the Church’s controller on June 3, 2013.

It was published on the Mormon Leaks website before the IRS report. According to Exhibit A of this document, the apostles are not allowed to see:

• Cash
• Investment Securities
• Investment Properties
• Other Assets
• Liabilities
• Net assets

There are seven people with unfettered access to these reports: the three members of the First Presidency, the three members of the Presiding Bishopric, and the Controller. 

Please see:

https://www.docdroid.net/T9SCXQA/6230-accessing-and-securing-financial-information-pdf#page=4

I agree he wouldn't know the exact size.  But he would be within a magnitude of the amount.  The others you mentioned wouldn't have known how much was being saved every year.

And I know that only 7 people had unfettered access to those reports, but that doesn't mean the others never saw it.

[Calm]

1 hour ago, Analytics said:

Regarding evidence, in addition to the second-hand story about Packer, we also have “Financial Standard 6230: Accessing and Securing Financial Information,” which was signed by the Church’s controller on June 3, 2013.

I would love to know if this has been vetted by a handwriting expert. Of all the leaks, this is the one that has surprised me the most that they managed to get it…if it is for real.  Given what tech can do, I do not exclude the possibility that there is someone practicing forgery and the Church leadership decided to let it stand unchallenged as that would confirm as for real anything they left unchallenged in the future.  But I see no reason not to treat it as a possibility in these casual discussions.  I would just think if ever used in a court of law for evidence, they would have to demonstrate it was for reals.

I really wonder how the leaker got it as well as the paystubs of Elder Erying iirc that had his tithing calculations on the back of it (not saying it was the same person, who knows). That one was just how odd…perhaps the person picked it up from Eyring’s desk or trash can as a keepsake or had been instructed to shred old documents and picked out stuff they thought might be useful, but what a nerve to take someone’s personal financial info (it had Elder Eyring’s social security number on it).  I hope the one who took it was fired as that is just wrong imo. lol, apparently my anger on behalf of Elder Eyring has not diminished over the years, maybe it has gotten even stronger.

Edited September 26, 2024 by Calm

[Danzo]

43 minutes ago, smac97 said:

Instead, the IRS uses terminology like "charitable contribution."  And notably, "charitable contribution" does not, I think, include earnings on investments.  I think the technical term for this is "unrelated business income."

Actually, earnings on investments would be catagorized as "investment income" On IRS form 990, page 1 line 10

Unrelated business income would be its farming income, publishing income or other directly commercial activities. This would be reported on IRS form 990-T

[Danzo]

Also note that on page 9 of the 990 Program service revenue, as well as miscellaneous income (line 2, a-f) and line 11 (a-d) have business codes attached, but line 3 "Investment income" does not have a business code attached to it. 

[smac97]

58 minutes ago, Calm said:

Quote

the Church always told the EPA that they didn’t have any specific plans.

According to who?  The whistleblower?  He wasn’t that high up as far as I recall, a couple of steps removed from top manager.

Did he get this first or secondhand?

This gives rise to an interesting evidentiary issue: hearsay.

We have (1) Nielsen saying (2) what someone at EPA said (3) what someone else in "the Church" said.  That's at least three levels of hearsay. 

Broadly speaking, hearsay is by default inadmissible as evidence.  But the Federal Rules of Evidence allow definitional and other exclusions/exemptions from the default inadmissibility rule.  

Can Nielsen present as hearsay statement about something that someone at EPA said?  I am not sure.  Rule 801(d)(2)(A) allows for statements by the opposing party to be excluded from the definition of hearsay, but the statement has to meet several criteria:

Quote

A statement that meets the following conditions is not hearsay:
...

(2) An Opposing Party’s Statement. The statement is offered against an opposing party and:

(A) was made by the party in an individual or representative capacity;

(B) is one the party manifested that it adopted or believed to be true;

(C) was made by a person whom the party authorized to make a statement on the subject;

(D) was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed; or

(E) was made by the party’s coconspirator during and in furtherance of the conspiracy.

As I read this, Nielsen's statement would only be admissible if Huntsman can establish either (A) and (B) and (C) and (D), or else establish just (E) (because EPA is an "integrated auxiliary" of the Church, and because an entity cannot "conspire" with itself, I don't think (E) has any application here).

I assume that EPA, being an "integrated auxiliary" of the Church, is part of the Church for hearsay purposes.  So Huntsman can probably go ahead and attempt to "offer" Nielsen's statement "against an opposing party," which here would be both the Church and EPA. 

Can Huntsman also show that this statement "was made by the party in an individual or representative capacity"?  Perhaps so.  Let's say yes.

Can Huntsman also show that the Church/EPA "manifested that it adopted or believe {the statement} to be true"?  Here, i think Huntsman will likely fail.  I don't think he has any evidence to support this requirement, and I don't think he would be able to find any because the statement is absolute (something along the lines of the Church not having any "specific plans" for EPA $), yet we know that EPA did, in fact, spend money at least twice.  So it looks like it did have "specific plans," such that the Nielsen's contrary statement does not meet this requirement (since it posits that the Church "believed to be true" the statement attributed to it, namely, that it did not have any "specific plans" for EPA funds.

Can Huntsman also show that the EPA person who supposedly said this was "authorized to make a statement on the subject?"  Perhaps so.  One EPA employee talking to another about the Church's plans for EPA funds was likely to be an authorized communication.    Let's say yes.

Can Huntsman also show that the EPA person who supposedly said this was speaking "the party’s agent or employee on a matter within the scope of that relationship and while it existed"?  This one is sort of iffy, but let's say yes.

That's quite a gauntlet.  And unfortunately for Huntsman, it's a gauntlet he will likely have to run through several times, one for each level of what appears to be multiple hearsay: (1) Nielsen, (2) the EPA person who made the statement to Nielsen, (3) the person at the Church who made the statement to the EPA person, and so on.

And Huntsman would have to do all of this without running afoul of the First Amendment.

And even then, Nielsen's statement may be too nebulous or uncredbile.  It sure seems weak on its face.

Thanks,

-Smac

Edited September 26, 2024 by smac97

[Calm]

1 hour ago, smac97 said:

The Church's income from charitable contributions is not taxed.  Tithing is, in the secular/IRS vernacular, "charitable contributions."  (While all tithes are charitable contributions, not all charitable contributions are tithes.)

The Church's income from trade or business activities that are regularly carried on and are not substantially related to the organization’s exempt purpose is "unrelated business income."  Unrelated business income is taxed.  Tithing is not, in the secular/IRS vernacular, "unrelated business income."

[Turns out this is wrong, I would delete it so as not to confuse the discussion, but it’s been quoted, so it stands as an example of why no one should rely on me to do their taxes]

Just to clarify for myself…

The tithing donation that gets placed into the reserve fund is never taxed.  The earned investment income from that tithing always is.  The part of the fund that came from tithing donations isn’t taxed just because it got placed into a reserve fund investing in for profit businesses?

If correct, this seems to me to create a very clear distinction between the two as taxable and nontaxable funds.

I get that the lawsuit according to the plaintiffs is about perceptions of reasonable members and not how the two categories are actually treated, but doesn’t it also depend on intent to mislead?  If the leaders understood the difference that seems to me so clear between what can be taxed and what can’t be, what would be the benefit to them to misrepresent this and present the two categories as if they were one?  More likely they would just wouldn’t think about it as relevant or would assume others would understand the difference. 

Without the intent to mislead, there is no fraud, correct, even if members got the wrong idea?

Did the plaintiffs provide any reason why the Church leadership or anyone for that matter would want members to confuse the earned investment income with the funds that came from tithing donations?  Given the amount of these funds weren’t even publicly shared, what possible purpose would there be for misleading?  I could see if they wanted to make it look like more tithing was being paid than there was, but without giving amounts, that wouldn’t happen. 

Edited September 26, 2024 by Calm