Deseret News Opinion Piece: Perspective: I teach tax law. This is what I wish reporters understood about church finances

[smac97]

We've had a ton of threads about the Church's finances.  Here's another, based on an opinion piece published today by Deseret News: 

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Perspective: I teach tax law. This is what I wish reporters understood about church finances

This is a call for higher journalistic inquiry and thoroughness on complicated matters related to tax and religious organizations

By Eric Smith, Contributor | Sept 15, 2023, 11:00am MDT

About the author: 

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Eric Smith is associate dean and professor of taxation in the Goddard School of Business & Economics at Weber State University. He is also an adjunct professor of law at the University of Utah’s S.J. Quinney College of Law. The views expressed in this opinion article by the author are his alone and don’t necessarily reflect those of his employers or the Deseret News.

Here's the article:

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Recent news articles underscore a journalistic deficiency in reporting related to tax law and its implications for The Church of Jesus Christ of Latter-day Saints. There appears to be a disconnect between what the tax law is and what reporters think the tax law ought to be. 

Oh my, yes.  

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Let me explain.

Recent stories in The Washington Post and the The Wall Street Journal have focused on The Church of Jesus Christ of Latter-day Saints’ use of tithing funds. A recent article in the Post— ”He was Mormon royalty. Now his lawsuit against the church is a rallying cry” — and another in the Journal — “Inside the Mormon Church’s Globe-Spanning Real-Estate Empire” — restate David Nielsen’s “whistleblower” allegations that the church’s reserve funds represent tax malfeasance because the investment funds aren’t spent on charitable purposes.  

But, with some irony, the Journal article also goes on to suggest the church is now spending too much in building temples. Building temples, of course, is an explicit religious charitable purpose. 

The Church is bad because it doesn't spend money on charitable purposes and because it does spend money on charitable purposes.

The disconnect, I suppose, is that lookyloos think that the Church ought to spend more on particular types of charitable/religious purposes.

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The latest Post report focuses on James Huntsman’s lawsuit against the church, alleging fraud for its representation of how tithing funds are used. Nielsen’s whistleblower claim is what spurred Huntsman to file his lawsuit.

But, these stories fail to point readers to actual tax law. When journalists imply tax law violations based on their normative view of what the tax law should be, it spreads misinformation about what the tax law actually is and what the tax law actually requires. 

Yep.  Conflating A) what the law is with B) personal/subjective views on what the law should be is seldom a good idea.

And much of the Sturm und Drang vented against the Church in recent years has heavily relied on this conflation.

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I offer here an explanation on what the tax law provides in relation to tax exempt churches, using The Church of Jesus Christ of Latter-day Saints and the Huntsman and Nielsen claims as cases in point.

Cool!

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The Journal’s report details the church’s recently constructed and planned temples, not-so-subtly highlighting purported evidence of opulence: limestone flooring from Bethlehem and wood from the Congo River region.

I think this "opulence" is sometimes deliberately left vague, as it leaves room for passersby to confuse the "opulence" of temples (devoted solely to God, with nobody living in them) with the "opulence" of the profligate lifestyles of some religious leaders (Creflo Dolalr, Benny Hinn, etc.).

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While the article makes no mention of the church’s extensive education or other charitable spending, the article does at least acknowledge the church’s spending on humanitarian aid (self-reported at over $1 billion in 2022).

But in the next breath, seemingly to suggest it isn’t enough relative to its overall reserve funds, the article quotes a church member of some public notoriety who stopped tithing in order to donate to charities that “feed hungry children.” To get a range of perspectives, the report summoned both a defense from the church’s Presiding Bishopric and the opinion of a Brazilian film editor who left the church 10 years ago. 

But the report fails to address one simple question.

What does tax law actually state?

That's a very good question.

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Churches and other charities are tax exempt and capable of receiving tax deductible donations under section 501(c)(3) of the Internal Revenue Code. 

That provision provides for two different types of charities: public charities and private foundations, both of which must be organized and operated for a charitable purpose. 

A “religious” purpose is expressly a charitable purpose. 

Private foundations are generally funded with a single benefactor while public charities rely on broad-based public support. Tax rules differ and are more stringent for private foundations than for public charities. Most relevant here, private foundations must spend 5% of their endowment each year on activities that directly further their charitable purpose.  

Public charities are under no such obligation. Furthermore, a certain type of public charity, known as a “supporting organization,” operates for the benefit of another public charity. The supporting organization’s charitable purpose is fulfilled as it financially supports another (usually related) public charity’s charitable activities.

Under the law, The Church of Jesus Christ of Latter-day Saints would be considered a public charity. Though it spends billions furthering its religious charitable purpose annually, it is under no affirmative spending mandate to do so under the tax law. In other words, the church is not obligated to make any specific annual expenditures relative to its total reserve funds.

I am curious as to whether anyone here disagrees with any of the above.

The next part is concise and to the point:

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Ensign Peak Advisors, the entity that invests the bulk of the church’s reserve funds, is a supporting organization of the church and is also a public charity. Supporting the church, its tax exemption would derive from the church’s charitable activities, and it would also have no affirmative spending mandate. Rather, the church does the spending. 

The church moves excess funds into supporting organizations where they can be invested until needed, and must then receive funds back when it desires to spend money on the church’s religious purposes. It is much easier to deal with the investment world in a separate legal entity — a “supporting organization” — than directly in the church’s name. 

There is a reason, then, that the IRS has taken no action over the past four years on Nielsen’s whistleblower complaint, a point acknowledged in both the Journal and the Post stories. Looking at the facts at face value, there doesn’t appear to have been any violation of tax law. 

And in the absence of any such violation, all the hue and cry ends up being not about legalities, but about subjective expectations from (often hostile) lookyloos about what the Church should do, how and where and how much it should spend of its resources, etc.

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The Journal report implies that as a charity spends, there is (ought to be?) a lavishness restriction. There is none under the law. Nor is there a hierarchy of charitable purposes with one (humanitarian) being more worthwhile than another (religious). The church, of course, does both, viewing the former as a natural extension of the latter.  

It’s also worth noting that “religious” is the first charitable purpose listed in section 501(c)(3) and it is the only charitable purpose with constitutional underpinnings in the Free Exercise Clause of the First Amendment. 

Again, I think the common criticism is that the Church is not doing enough "humanitarian" work.

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While the Post’s report generally refrains from conflating what the tax law is, relative to what the tax law ought to be, it leaves incomplete important tax aspects of Huntsman’s claim. When an individual makes a donation to charity, she makes a gift. In order to complete the gift, she relinquishes all dominion and control over the transferred property. That is, she retains no legal right or economic benefit in the transferred property. 

Part of Huntsman’s claim for relief in the lawsuit is a refund of his tithing. There is no legal basis for this claim under the tax law because in the eyes of the law, he indeed relinquished all control over those donations (and, in turn, almost certainly received tax deductions). This is the reason his argument is based on the much more difficult to prove claim of fraud, because under the tax law, he has no legal right to funds he willfully gifted to the church. 

We've had plenty of commentary on Huntsman's lawsuit as well.  I share the above critique, as I think the suit is very poor and almost certain to fail (the only lingering hope for it coming from Huntsman having "forum shopped" it to California).

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All this is a call for higher journalistic inquiry and thoroughness on complicated matters related to tax and religious organizations, including The Church of Jesus Christ of Latter-day Saints. 

A worthwhile and reasonable call.  

I won't hold my breath, though.  Today's cadre of "journalists" leave a lot to be desired.

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If journalists and concurring readers believe the tax law in this area should change, then they should lobby Congress. But they should bear in mind that any changes that impose greater restrictions and requirements on how churches spend the money donated to them will significantly impact donations to all churches and potentially other organizations, not just The Church of Jesus Christ of Latter-day Saints. 

I suspect this is why critics of the Church never actually get around to lobbying Congress.  Selective indignation has its perqs, I guess.

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Relatedly, future reports should bear a disclaiming tone that recognizes the nuance and complexity of the tax law. A more deferential tone to the tax law’s inherent complexity would go a long way toward helping readers form more informed and less rigid conclusions and hopefully establish more fertile ground for civic discussion between those who are members of the church, those who are not and those who once were.

Sage advice.

Thoughts?

Thanks,

-Smac

Edited September 15, 2023 by smac97

[The Nehor]

I think the usual response is often more along the lines of thinking maybe we should alter tax law.

I think this editorial is doing what a lot of the church’s defenders are doing. Pointing out that everything (except for some relatively minor issues the Church settled over) are legal seems like a kind of pleading that nothing wrong was done.

The Church though seeks to hide this information from the public because they know it would (rightly or wrongly) be bad publicity. So they played a bunch of mostly legal tricks to hide the information.

For members of the Church disheartened by these revelations it is less about laws being broken and more about why the Church is hoarding so much wealth. Some have answers, some find them unconvincing.

For those outside of the Church it is more likely they want to change the law because they find the Church’s purposes abusive to the intent of non-profit and religious exemptions even if they are legal.

I think this editorial is fighting the wrong battle.

[OGHoosier]

5 hours ago, smac97 said:

I share the above critique, as I think the suit is very poor and almost certain to fail (the only lingering hope for it coming from Huntsman having "forum shopped" it to California).

The Ninth Circus will have fun with it, I'm sure.

[Diamondhands69]

6 hours ago, The Nehor said:

For members of the Church disheartened by these revelations it is less about laws being broken and more about why the Church is hoarding so much wealth. Some have answers, some find them unconvincing.

Re the laws being broken; this is my concern. Not only were laws broken, but there was lots of lying going on. People like to refer to the lies as mistakes but let’s be real here. Intentionally putting info on a form you know is not true is not a mistake. 
 

the first presidency maintains that they relied on advice from their lawyers on how to handle the whole SEC form 13f thing. 
 

if that is the case, then the lawyers told them to lie and they said… “yea sounds good let’s do it!”  Or something to that effect. 
 

this reflects poorly on the character of the first presidency and the presiding bishopric. If at their station in life and experience in the church they don’t have the cajones  to tell the truth, then just shows they been like this all along. It is what they do when they feel they need to. They made a conscious choice to lie and they made that choice approx 20 times or more. 
 

im not bothered so much by the wealth as I am the lying and deception.

Edited September 16, 2023 by Diamondhands69

[The Nehor]

2 hours ago, Diamondhands69 said:

Re the laws being broken; this is my concern. Not only were laws broken, but there was lots of lying going on. People like to refer to the lies as mistakes but let’s be real here. Intentionally putting info on a form you know is not true is not a mistake. 
 

the first presidency maintains that they relied on advice from their lawyers on how to handle the whole SEC form 13f thing. 
 

if that is the case, then the lawyers told them to lie and they said… “yea sounds good let’s do it!”  Or something to that effect. 
 

this reflects poorly on the character of the first presidency and the presiding bishopric. If at their station in life and experience in the church they don’t have the cajones  to tell the truth, then just shows they been like this all along. It is what they do when they feel they need to. They made a conscious choice to lie and they made that choice approx 20 times or more. 
 

im not bothered so much by the wealth as I am the lying and deception.

I doubt that the leadership was that heavily involved in the decision. They may not have even been aware of it. I suspect this was just money managers and lawyers doing what they do after they got their marching orders to ‘keep this money hidden’. Rather unsurprisingly it backfired. The whole enterprise was always one discontented employee or one employee losing their faith in leadership away from exposure.

[Diamondhands69]

4 hours ago, The Nehor said:

I doubt that the leadership was that heavily involved in the decision. They may not have even been aware of it. I suspect this was just money managers and lawyers doing what they do after they got their marching orders to ‘keep this money hidden’. Rather unsurprisingly it backfired. The whole enterprise was always one discontented employee or one employee losing their faith in leadership away from exposure.

I take it you did not read the SEC order.

It is very clear the first presidency knew the plan and authorized it. The church agreed on the verbiage in the order so I doubt they would just take the fall to help a couple liars save face.

for your reference: https://www.sec.gov/files/litigation/admin/2023/34-96951.pdf

Edited September 16, 2023 by Diamondhands69

[The Nehor]

8 hours ago, Diamondhands69 said:

I take it you did not read the SEC order.

It is very clear the first presidency knew the plan and authorized it. The church agreed on the verbiage in the order so I doubt they would just take the fall to help a couple liars save face.

for your reference: https://www.sec.gov/files/litigation/admin/2023/34-96951.pdf

They knew the vague outline of actions recommended to them and approved them. This is the kind of line item that would probably get 15 to 30 seconds in a First Presidency meeting.

[Diamondhands69]

5 hours ago, The Nehor said:

They knew the vague outline of actions recommended to them and approved them. This is the kind of line item that would probably get 15 to 30 seconds in a First Presidency meeting.

How many of the meetings where they (1st pres) discuss where to hide $40 some odd billion have you sat in? 
 

you really believe the first presidency would take a hit with worldwide exposure for lying if they didn’t have to? 
 

if so you are crazy.. accepting blame for “mistakes” is one thing they never do; yet they did for this scam

Edited September 17, 2023 by Diamondhands69
Typo

[The Nehor]

52 minutes ago, Diamondhands69 said:

How many of the meetings where they (1st pres) discuss where to hide $40 some odd billion have you sat in? 
 

you really believe the first presidency would take a hit with worldwide exposure for lying if they didn’t have to? 
 

if so you are crazy.. accepting blame for “mistakes” is one thing they never do; yet they did for this scam

They didn’t accept blame. I think they probably justly could be blamed but they didn’t.

I suspect they run over little things like how to keep the Church’s money hidden quickly so they can get to all the appeals to the First Presidency they have to process. I don’t know that they spend little time on this but I have a good idea of the things they have to do because no one else can do them and spending a lot of time reading over documents covering exactly how they are going to conceal some money is probably not high on their list of priorities. I suspect they grab whatever their version of the “approve” stamp is and  just give the financial and legal experts what they want.

I am not arguing they are blameless. I just doubt they are meticulously planning or reviewing all the details of what is going on like some would imply.

[Diamondhands69]

1 hour ago, The Nehor said:

They didn’t accept blame. I think they probably justly could be blamed but they didn’t.

I suspect they run over little things like how to keep the Church’s money hidden quickly so they can get to all the appeals to the First Presidency they have to process. I don’t know that they spend little time on this but I have a good idea of the things they have to do because no one else can do them and spending a lot of time reading over documents covering exactly how they are going to conceal some money is probably not high on their list of priorities. I suspect they grab whatever their version of the “approve” stamp is and  just give the financial and legal experts what they want.

I am not arguing they are blameless. I just doubt they are meticulously planning or reviewing all the details of what is going on like some would imply.

You obviously have not read the sec letter. This  scheme was much more elaborate than you appear to think it was. The first presidency and presiding bishopric set it up so they had to approve each iteration of this plan as it was expanded. also every year they had to approve continuation of it. 

Finally church auditors approached the first presidency twice and warned them they would likely get sideways of the sec over this. First presidency blew them off. 
 

you need to read it. The church agreed to the verbiage of the document so it’s not like it is dome smear campaign directed at them- they approved it. 
 

 

[The Nehor]

56 minutes ago, Diamondhands69 said:

You obviously have not read the sec letter. This  scheme was much more elaborate than you appear to think it was. The first presidency and presiding bishopric set it up so they had to approve each iteration of this plan as it was expanded. also every year they had to approve continuation of it. 

Finally church auditors approached the first presidency twice and warned them they would likely get sideways of the sec over this. First presidency blew them off. 
 

you need to read it. The church agreed to the verbiage of the document so it’s not like it is dome smear campaign directed at them- they approved it. 
 

 

I did read it. I just think your fan fiction as to how it came about is unlikely.

If you want me to wag my finger and say that the apostles screwed up then here:

”BAD APOSTLES!”

Hope that helps.

[Diamondhands69]

5 minutes ago, The Nehor said:

I did read it. I just think your fan fiction as to how it came about is unlikely.

If you want me to wag my finger and say that the apostles screwed up then here:

”BAD APOSTLES!”

Hope that helps.

Fan fiction lol…. I bet my bottom dollar the church wished it was. This is a millstone hung about the neck of the 1st presidency while not real heavy, will be there for decades. 

[The Nehor]

12 minutes ago, Diamondhands69 said:

Fan fiction lol…. I bet my bottom dollar the church wished it was. This is a millstone hung about the neck of the 1st presidency while not real heavy, will be there for decades. 

Yeah, it will. The reality is bad enough even without your guesswork.

[JustAnAustralian]

3 hours ago, Diamondhands69 said:

The first presidency and presiding bishopric set it up so they had to approve each iteration of this plan as it was expanded. also every year they had to approve continuation of it. 

From section 31 and 32 of the order

Quote

 

31. Throughout its history, at least once each year, Ensign Peak’s Managing Director met with the senior leadership of the Church to discuss Ensign Peak’s activities, including at times the LLC Structure. Unanimous approval from the senior leadership of the Church was required before Ensign Peak could deviate from the LLC Structure and file Forms 13F in Ensign Peak’s own name.

32. The Church and Ensign Peak continued to take the same approach to filing Forms 13F through the Clone LLCs despite two Church Audit Department (“CAD”) internal audits of Ensign Peak – one in 2014 and one in 2017—that reviewed the LLC Structure. In discussions with Ensign Peak’s senior management, although CAD did not recommend specific changes to the LLC Structure, CAD highlighted the risk that the SEC might disagree with the approach.

https://www.sec.gov/files/litigation/admin/2023/34-96951.pdf

The FP aren't financial law experts, they would take advice from people that would be. Unless we find out exactly what level of advice was given, the discussion won't go anywhere.  

 "might disagree with the approach" is very different to "would say this is illegal"

Edited September 17, 2023 by JustAnAustralian

[Diamondhands69]

7 hours ago, JustAnAustralian said:

From section 31 and 32 of the order

The FP aren't financial law experts, they would take advice from people that would be. Unless we find out exactly what level of advice was given, the discussion won't go anywhere.  

 "might disagree with the approach" is very different to "would say this is illegal"

Very true…. That still does not justify falsifying (lying) paperwork being sent to a govt agency.  You don’t need to be an expert in anything to know that. In the category of honesty they failed miserably. Perhaps they felt they would not be held accountable because within the confines of the church they are accountable to no one. Outside- no one cares who they are. 
 

we have a primary song about choosing the right. They may want to sit in on primary a few times and get their integrity recalibrated. 

[Diamondhands69]

7 hours ago, JustAnAustralian said:

From section 31 and 32 of the order

The FP aren't financial law experts, they would take advice from people that would be. 

One of them currently is a lawyer, one has a Harvard mba and one is a heart surgeon. 
 

if those three together don’t have enough smarts to figure out that creating fake businesses and lying about their place in the portfolio, and then authorize fake business managers to falsify their endorsements on the paperwork then perhaps we need new leadership. expertise or smarts aside, where was the discernment and revelation for 20 yrs and three first presidencies??
 

Hint: there isn’t / wasnt any. You don’t get that when you are scamming the system and deceiving the membership.

I work in the securities industry. This 13f thing is very common knowledge even among the lowest level advisors. EP CEO Roger Clark made the first pres aware years ago they needed 13f filings and they balked because it would make the holdings public. This is where the scheme started years ago. 
 

it’s all in the sec letter. The first pres knew exact what was going on because they set it up for them to approve every single thing they did. They knew it was s lie and they authorized it. 
 

I must also add. It says a lot when a hedge fund the size if ensign peak didn’t even have a compliance officer. These are the folks who are the experts in regulation. My firm has a compliance TEAM and we are microscopic in AUM compared to ensign peak. It is the height of arrogance to think in that industry one can survive without a compliance program. People are just asking to go to jail. 

 

Edited September 17, 2023 by Diamondhands69
Added last paragraph

[smac97]

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

Re the laws being broken; this is my concern.

I share the concern.

I am not fully persuaded that laws were broken.  And if they were, it seems pretty clear that the violation(s) was/were unintentional.

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

Not only were laws broken,

Were there?  You're sure about that?

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

but there was lots of lying going on.

Well, no.

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

People like to refer to the lies as mistakes but let’s be real here. Intentionally putting info on a form you know is not true is not a mistake. 

Could you clarify what you are referencing here?

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

the first presidency maintains that they relied on advice from their lawyers on how to handle the whole SEC form 13f thing. 

Yes.  And do you have evidence to the contrary?  If so, what is it?

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

if that is the case, then the lawyers told them to lie and they said… “yea sounds good let’s do it!”  Or something to that effect. 

This is nonsense.

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

this reflects poorly on the character of the first presidency and the presiding bishopric.

Strawman.

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

If at their station in life and experience in the church they don’t have the cajones  to tell the truth, then just shows they been like this all along.  It is what they do when they feel they need to. They made a conscious choice to lie and they made that choice approx 20 times or more. 

Strawman and ad hominem.  And substantively inaccurate as well.

On 9/15/2023 at 11:36 PM, Diamondhands69 said:

im not bothered so much by the wealth as I am the lying and deception.

You will first need to establish the "lying and deception" thing.

Thanks,

-Smac

[smac97]

On 9/16/2023 at 6:11 AM, Diamondhands69 said:

Quote

I doubt that the leadership was that heavily involved in the decision. They may not have even been aware of it. I suspect this was just money managers and lawyers doing what they do after they got their marching orders to ‘keep this money hidden’. Rather unsurprisingly it backfired. The whole enterprise was always one discontented employee or one employee losing their faith in leadership away from exposure.

I take it you did not read the SEC order.

I question whether you have read it, or if so, whether you understand its contents.  

On 9/16/2023 at 6:11 AM, Diamondhands69 said:

It is very clear the first presidency knew the plan and authorized it.

It is markedly less clear that the First Presidency lied about it.

On 9/16/2023 at 6:11 AM, Diamondhands69 said:

The church agreed on the verbiage in the order

Yes, it did.  Including this part: 

Quote

Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over them and the subject matter of these proceedings, which are admitted, Respondents consent to the entry of this Order...

Elsewhere the Church publicly acknowledged the following:

Quote

We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.

I think it's quite a stretch - by a country mile, in fact - to take "regret mistakes made" and extrapolate from it "lying and deception."

On 9/16/2023 at 6:11 AM, Diamondhands69 said:

so I doubt they would just take the fall to help a couple liars save face.

Ad hominem.  Straw man.  Begging the question.

On 9/16/2023 at 6:11 AM, Diamondhands69 said:

for your reference: https://www.sec.gov/files/litigation/admin/2023/34-96951.pdf

We've discussed this document on this board at some length.  

Thanks,

-Smac

[smac97]

13 hours ago, Diamondhands69 said:

You obviously have not read the sec letter.

You have only a few dozen posts so far, so perhaps you ought to do a bit of reading (past threads about the SEC order) before making assertions like this.

13 hours ago, Diamondhands69 said:

This scheme was much more elaborate than you appear to think it was. The first presidency and presiding bishopric set it up so they had to approve each iteration of this plan as it was expanded. also every year they had to approve continuation of it. 

Evidence, please.

13 hours ago, Diamondhands69 said:

Finally church auditors approached the first presidency twice and warned them they would likely get sideways of the sec over this. First presidency blew them off. 

Well, not quite:

Quote

The Church and Ensign Peak continued to take the same approach to filing Forms 13F through the Clone LLCs despite two Church Audit Department (“CAD”) internal audits of Ensign Peak – one in 2014 and one in 2017—that reviewed the LLC Structure. In discussions with Ensign Peak’s senior management, although CAD did not recommend specific changes to the LLC Structure, CAD highlighted the risk that the SEC might disagree with the approach.

No reference here to "church auditors approached the first presidency."  Instead, the CAD apparently had "discussions with Ensign Peak's senior management."

Also, the CAD didn't say "would likely get sideways of the SEC over this {approach}."  Instead, they "highlighted the risk that the SEC might disagree with the approach."

And the foregoing statements are the unsubstantiated and unadjudicated say-so of the SEC.  The Church has not admitted these allegations.

13 hours ago, Diamondhands69 said:

you need to read it.

With respect, so do you.  And perhaps with more care than you prior posts indicate.

13 hours ago, Diamondhands69 said:

The church agreed to the verbiage of the document

Nope:

Quote

In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the “Offers”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over them and the subject matter of these proceedings, which are admitted, Respondents consent to the entry of this Order...

The Church only admitted that the SEC has jurisdiction.  That's it.  Everything else in the Order was neither admitted nor denied.  Everything else, then, consisted of nothing but untested and unadjudicated  allegations by the SEC.

13 hours ago, Diamondhands69 said:

so it’s not like it is dome smear campaign directed at them- they approved it. 

They approved it "without admitting or denying the findings herein."

The SEC could have - as it sometimes does - require an admission of misconduct as a condition of an order of this type.  It did not require such an admission in this instance.

Thanks,

-Smac

Edited September 17, 2023 by smac97

[smac97]

2 hours ago, Diamondhands69 said:

Very true…. That still does not justify falsifying (lying) paperwork being sent to a govt agency.  

This is your embellishment / gloss / editorial slant / conjecture.

2 hours ago, Diamondhands69 said:

You don’t need to be an expert in anything to know that.

Strawman.  

2 hours ago, Diamondhands69 said:

In the category of honesty they failed miserably.

Out of curiosity, are you still skinning puppies for fun and profit?  You don't need to be an expert to know how immoral that is.

2 hours ago, Diamondhands69 said:

Perhaps they felt they would not be held accountable because within the confines of the church they are accountable to no one. Outside- no one cares who they are. 

A heaping pile of hostile speculation.  

2 hours ago, Diamondhands69 said:

we have a primary song about choosing the right.  They may want to sit in on primary a few times and get their integrity recalibrated. 

We also have songs and scriptures and counsel about not judging others, not speaking evil of the Lord's anointed, avoiding faultfinding and backbiting, not spreading falsehoods, and so on.

Thanks,

-Smac

[smac97]

2 hours ago, Diamondhands69 said:

One of them currently is a lawyer,

A former lawyer and law professor and state supreme court justice.  But, AFAIK, not one with any particularized knowledge of the complexities of compliance with the SEC.

Moreover, he has been in the First Presidency since January 2018.  Most of the events giving rise to the SEC investigation arose long before then.

2 hours ago, Diamondhands69 said:

one has a Harvard mba and one is a heart surgeon. 

Smart men, to be sure.  But compliance with SEC regulatory provisions is not likely part of the training or intellectual repertoire of "a Harvard mba" or "a heart surgeon."

2 hours ago, Diamondhands69 said:

if those three together don’t have enough smarts to figure out that creating fake businesses

There were not any "fake businesses."  You're just making this up.

2 hours ago, Diamondhands69 said:

and lying about their place in the portfolio, and then authorize fake business managers to falsify their endorsements on the paperwork then perhaps we need new leadership.

Same here.  Again, this is your embellishment / gloss / editorial slant / conjecture.

2 hours ago, Diamondhands69 said:

expertise or smarts aside, where was the discernment and revelation for 20 yrs and three first presidencies??

Oh, brother.

2 hours ago, Diamondhands69 said:

Hint: there isn’t / wasnt any.

I think there has been all sorts of "discernment and revelation."

2 hours ago, Diamondhands69 said:

You don’t get that when you are scamming the system and deceiving the membership.

Again, this is your embellishment / gloss / editorial slant / conjecture.

2 hours ago, Diamondhands69 said:

I work in the securities industry. This 13f thing is very common knowledge even among the lowest level advisors. EP CEO Roger Clark made the first pres aware years ago they needed 13f filings and they balked because it would make the holdings public. This is where the scheme started years ago. 

"Scheme."  Again, this is your embellishment / gloss / editorial slant / conjecture.

You are posting here under a pseudonym.  You have not posted your IRL information.  Is that a "scheme" too?

2 hours ago, Diamondhands69 said:

it’s all in the sec letter.

Nope.  Most of what you are saying is your embellishment / gloss / editorial slant / conjecture.

2 hours ago, Diamondhands69 said:

The first pres knew exact what was going on because they set it up for them to approve every single thing they did. They knew it was s lie and they authorized it. 

Meh.  You're just making this stuff up.

2 hours ago, Diamondhands69 said:

I must also add. It says a lot when a hedge fund the size if ensign peak didn’t even have a compliance officer. These are the folks who are the experts in regulation. My firm has a compliance TEAM and we are microscopic in AUM compared to ensign peak. It is the height of arrogance to think in that industry one can survive without a compliance program. People are just asking to go to jail. 

Yawn.

Thanks,

-Smac

[Diamondhands69]

1 hour ago, smac97 said:

A former lawyer and law professor and state supreme court justice.  But, AFAIK, not one with any particularized knowledge of the complexities of compliance with the SEC.

Moreover, he has been in the First Presidency since January 2018.  Most of the events giving rise to the SEC investigation arose long before then.

Smart men, to be sure.  But compliance with SEC regulatory provisions is not likely part of the training or intellectual repertoire of "a Harvard mba" or "a heart surgeon."

There were not any "fake businesses."  You're just making this up.

Same here.  Again, this is your embellishment / gloss / editorial slant / conjecture.

Oh, brother.

I think there has been all sorts of "discernment and revelation."

Again, this is your embellishment / gloss / editorial slant / conjecture.

"Scheme."  Again, this is your embellishment / gloss / editorial slant / conjecture.

You are posting here under a pseudonym.  You have not posted your IRL information.  Is that a "scheme" too?

Nope.  Most of what you are saying is your embellishment / gloss / editorial slant / conjecture.

Meh.  You're just making this stuff up.

Yawn.

Thanks,

-Smac

I’m not going to spend all day responding to multiple walls of text: 

during the course of this investigation you and I both know each person from the church or EP interviewed had probably a KM attorney ( or their own) with them and each interview was recorded by both sides. 
 

at the end of the day likely the KM attorneys were sitting there with the 1st pres and saying if this goes to trial all these statements won’t look good to include your own. We will lose this trial. 
 

SEC had offered an out for $5mm in exchange for your integrity and they took it. 
 

I have zero doubt the church would have spent any amount necessary If they knew they could win. They didn’t have a win so they took the deal. 

Edited September 17, 2023 by Diamondhands69

[Stormin' Mormon]

47 minutes ago, Diamondhands69 said:

I have zero doubt the church would have spent any amount necessary If they knew they could win. They didn’t have a win so they took the deal. 

Almost no organizations at all do that, and it's silly to think that the Church would be any different. A court case--even a slam dunk, sure-fire win--still carries costs and risks that a settlement deal does not.

[Diamondhands69]

1 hour ago, Stormin' Mormon said:

Almost no organizations at all do that, and it's silly to think that the Church would be any different. A court case--even a slam dunk, sure-fire win--still carries costs and risks that a settlement deal does not.

The church has a lot more at stake than just some corp. 

prophets, tithing, salvation, we talk to god, revelation, discernment, articles of faith etc. you know- prophets who can see around corners but can’t see a pr nightmare coming when they are trying to run a scheme that has a paper trail. 

kinda hard to sell a product which you don’t apply to your own conduct in some instances- or at least in some peoples opinions. 
 

paul h Dunn got canned over lying so yea it is a big deal

Edited September 17, 2023 by Diamondhands69

[smac97]

19 hours ago, Diamondhands69 said:

I’m not going to spend all day responding to multiple walls of text: 

With respect, this seems like a copout.  You are making all sorts of claims, but are now declining to back them up.

Again, we have had a *lot* of discussion about the SEC matter.  I suspect there isn't anything you know about it that we (or I) do not.  I am happy to parse out the issues, but it seems you are not.  You'd rather just make broad conclusory denunciations and then call it a day.  That won't do much here.

19 hours ago, Diamondhands69 said:

during the course of this investigation you and I both know each person from the church or EP interviewed had probably a KM attorney ( or their own) with them and each interview was recorded by both sides. 

Maybe.  So what?

19 hours ago, Diamondhands69 said:

at the end of the day

"at the end of the day" = "I don't really want to defend my previous conclusory statements, so I'll just skip to the end."

19 hours ago, Diamondhands69 said:

likely the KM attorneys were sitting there with the 1st pres and saying if this goes to trial all these statements won’t look good to include your own. We will lose this trial. 

I don't find that likely at all.

I have previously laid out my surmise here.  A few excerpts:

Quote

I think the problems with the Adminstrative State are difficult for even many attorneys to understand and appreciate, let alone the general public.  As a result, this regulatory stuff - though important to us as a society - is not really "sexy" or newsworthy, so it doesn't get much attention.  But for the news item published by NCLA (which I had never heard of before, and whose press release I only found through happenstance), I would not have know about the two "control deficiency" statements from the SEC.  This is a big part of my concern.  The general public is generally unaware of just how much power we have ceded to the State, particularly in the context of federal regulatory agencies - the "Administrative State."  Gadzooks, even the label sounds boring.  But the topic is pretty important.

This YouTube video, though somewhat hokey (and self-promoting), does a pretty good job of summing up my generalized concerns about the Administrative State:

Same with this video.  Admittedly, these are likely going to be boring to most people.  Boring, that is, until the individual ends up in the crosshairs of an unaccountable regulatory agency.

It is in this context that the Church - more specifically, the Church's attorneys - were operating during the SEC investigation.  There is a "my way or the highway" aura about investigations by administrative/regulatory agencies.  There is also something of a "Let's just settle this and call it a day" (as noted above, 98% of SEC investigations are settled) that often ends up as the means of resolving the investigation, which has a tendency to make evaluation and application of the actual substantive law a decidedly secondary consideration.

As noted above, I love America, and I am grateful for the government.  But I do not reflexively or axiomatically trust the government.  And this is not a "special pleading"-style position that I take only because the Church was investigated.  I think too many Americans have acquiesced to giving too much power to the State, even to the point where we defer and acquiesce to its say-so.

I decline to take the untested, unproven, unadjudicated, unadmitted-to say-so of the SEC as the unfiltered truth.  And not because the Church is in its crosshairs.  I have all sorts of reasons for not giving the Administrative State the benefit of the doubt. 

19 hours ago, Diamondhands69 said:

SEC had offered an out for $5mm in exchange for your integrity and they took it. 

For some folks, the Church is perennially in a darned if it does, darned if it doesn't conundrum.  There are people who, for whatever reason, are really mad at the Church, and so want to find fault with it.

For those of a more fairminded bent, though, there is something to be said about having some circumspection, some measure of patience, some willingness to grant the benefit of the doubt (maybe even a little grace).  And most of all, perhaps evaluating the byzantine complexities of federal and administrative regulatory compliance, particularly the stuff coming out of the SEC, might be apropos.

We've done that quite a bit on this board, months before you came here with your bull-in-a-china-shop routine.  Here is, I think, the main thread on this topic: Church fined by SEC

I participated heavily in that thread.  I did a fair amount of reading and research on this story, and on the substantive law pertaining to it.  Here is the preliminary assessment I laid out.  If you are interested in hashing out the particulars of the SEC order, I'm willing to go through it again.  But if all you've got is a lot of anger and conclusory condemnations, then I'll leave you to it.  

19 hours ago, Diamondhands69 said:

I have zero doubt the church would have spent any amount necessary If they knew they could win.  They didn’t have a win so they took the deal. 

I think the above statement demonstrates a lack of familiarity with how large institutions interact with federal administrative and regulatory agencies.

Thanks,

-Smac

Edited September 18, 2023 by smac97