Financial Whistleblower


Grunt
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It's funny.  I was invited to speak to the seminary class this morning where we talked about testimony and faith.  I was then sent a link to this from an atheist friend of mine that really dislikes that I've joined the Church.   https://www.sltrib.com/news/2019/12/17/whistleblower-claims-that/

Why do so many people which aren't affected AT ALL by this so upset by it?     I think it's funny that the spokesman just referred them to the website.

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It's always funny to me when people think we will be shocked when we find out how much money the church has.

1. I'm glad the church has a large stockpile of money. It means they are managing the funds they receive well and that there is plenty of money to help the work of God continue.

2. Why would the church's wealth affect my desire to pay tithing? I, and all faithful members, pay tithing to follow God's commandments. Nothing else matters in that regard. This article just shows that those without faith really don't understand what they criticize.

Edited by Midwest LDS
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Well, first of all, the initial report came out through the Washington Post.  I know that probably doesn't a much higher opinion in these parts. But the original story there isn't terribly written.

There are a few legitimate concerns in the report. There are a lot of less legitimate concerns as well. For example,

  • The Church takes in $7 billion dollars in donations annually, and spends $40 million dollars annually on humanitarian aid. That comes to 0.5% of its donations revenue is spent on humanitarian aid. That doesn't account for its other sources of revenue.  Conversely, about $6 billion of that is spent each year on operating expenses, which increases the percentage to 4% of the remaining billion is spent on humanitarian aid. One of the complaints raised is that 4% seems kind of low.
  • The complaint alleges that $2 billion were spent on bailing out for-profit ventures owned by the church, and that these transfers were in violation of laws governing how tax exempt funds can be used. That seems, to me, to be something worthy of investigation. But I'm also willing to reserve any judgment until such investigation is complete. If any laws or regulations were violated, justice should be served*.
  • Some are up in arms that the Church has holdings that exceed twice the amount in Harvard University's endowment.  It's a little eye raising for me, but one should also consider that the Church probably holds a lot more real estate and property than Harvard does. The purpose of these endowments is to offset operating costs when there are drops in revenue so that services can be provided while making adjustments to match costs to revenue streams. So, to me, not a major concern.

Some of the ways this gets frustrating to me personally are

  • Every year I have fights with ward members about getting people to the church each week to do the cleaning. Getting the cleaning schedule operating and the cleaning done is easily the most burdensome task I have faced in any of the callings I've served in the Church (and that's saying something). And yet, more and more of the cleaning responsibilities are being dumped on the members to reduce costs. Not a truly valid concern, but when you can't see the big picture, things like this are massively frustrating.
  • The Church has moved to a facilities management system that is "streamlined, integrated, and more efficient at delivering services" or some such buzz word soup. We can't even get paper towels on a regular basis any more.  Our fire alarm has been broken for six months. We submit requests to have it fixed, someone looks at it and says "this is what needs to be done to fix it" and then closes the ticket. So we're in this perpetual loop of not getting the stupid thing fixed because there's a higher priority on closing tickets than there is in fixing problems. But clearly the Church has the money to fix the fire alarm.  

So, at the end of the day, there may or may not be some things amiss in this report. Given that the whistleblower filed the affadavit under oath and penalty of perjury, I think it's appropriate to investigate. I don't know that much will come of it, because religious organizations have a lot of flexibility in this arena. On the more personal level, it irritates some because that is such a large pot of money (in just one set of holdings, by the way.  That isn't everything the Church has), but we still feel like we're being bled dry for our time. Those are feelings that can be dealt with, but we should be careful not to be dismissive of them.

Lastly, even if there are some mild shenanigans going on here, it's highly likely that the Church isn't the biggest perpetrator of these shenanigans. I imagine there are a lot of "religious organizations" that are using the flexibility given religious non profits to build egregious personal fortunes (ie, televangelists). It may be time to review the books of some of these religious organizations and institute some reforms.

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49 minutes ago, Grunt said:

It's funny.  I was invited to speak to the seminary class this morning where we talked about testimony and faith.  I was then sent a link to this from an atheist friend of mine that really dislikes that I've joined the Church.   https://www.sltrib.com/news/2019/12/17/whistleblower-claims-that/

Why do so many people which aren't affected AT ALL by this so upset by it?     I think it's funny that the spokesman just referred them to the website.

This is just another "LOOK AT THIS!!!" and you see a blank screen with the words "SOMETHING TERRIBLE" written on it.  I'm left wondering what the big deal is.

They make a big deal of the some facts:

1) These funds are tax exempt.
2) There's a lot of it.  Proof of hoarding.
3) They're supposed to be for humanitarian aid.

1) is true.  And?

2) may or may not be true.  While $100 Billion (who knows if it's true, and I don't really care anyway) is a big number in an average person's life, the Church is not a person.  It is a VERY LARGE entity.  Large entities have a lot more financial stuff to deal with.  We have no way of knowing whether this is simply "wise financial reserves" or if it is "hoarding".  More on that later.

3) is actually not true.  The purpose of the Church's funds is to run the Church.  And simply keeping up meetinghouses and temples cost a LOT of money.  We have huge record keeping needs.  Just the day-to-day upkeep of the Church is very expensive.

The IRS allows for charitable organizations to have savings.  Such savings can be investments in stocks and so forth.  Why is this a bad thing?

Without knowing the details of what was sent where, or what paperwork was done, I don't know if anything was actually violated or not.  The article is lacking in any sort of details.  It's all kinds of accusation without much in the way of substance.

Whistleblower David Nielsen complains that the funds were used for non-charitable purposes.  This may be a violation. But the devil is in the details. 

  • The urban renewal project that he alludes to is done by other charities.  So, simply mentioning that alone is not enough to say the Church violated any laws.  And this particular project was (as far as I know) to keep the area around Temple Square from falling into the crime - ridden ghettos we see in big cities today.  Sounds like cheap insurance to me.  But from a legal standpoint, they may have to classify it in specific ways.  I'm not at all bothered by simply "checking a box" that works for the intended purpose.
  • I haven't heard of the insurance company thing.  But I know the Church has "propped up" some businesses.  But they did so as a loan.  The businesses paid them back with interest.  So, it was just another investement that apparently paid off.  Again, paperwork.
  • Additionally, the companies I'm aware of were all associated with the Church.  If it's insurance arm goes down (I'm assuming that the insurance company mentioned was also associated with the Church) then they have to get insurance on the open market.  We're then beholden to other financial entities who may not have values that align with ours.  Simply making friends with the mammon of unrighteousness may not work any longer in this political environment.

All that said, I tend to believe that the Church does take the time to dot every "i" and cross every "t" when it comes to taxes.  We'll see what happens.

Quote

Q: How and when are Church reserve funds used?

Historically, when resources have been scarce or when there have been demands associated with growth, reserve funds have been available to assist in supporting the operations of the Church.

Reserve funds provide for the future. Church financial reserves assure resources will be available to sustain the Church’s future growth as prophecy is fulfilled that the gospel of Jesus Christ will be taught and the Church established in all nations of the earth until the Savior’s return. The Church anticipates building additional chapels and temples. Welfare and humanitarian efforts will continue to increase. Missionary work, education needs and other programs to benefit people around the world will require additional resources. Whether Church funds are from reserves or directly from the tithes of members, all are used for the singular purpose of supporting the mission of the Church. Reserve funds exist for no other reason.

Church Finances Q&A

If I were running things, I'd think that $100B is NOT ENOUGH.  I know how terrible things can go for any entity with large financial needs and with large financial reserves.  One piece of bad legislation, one class action lawsuit, and we're toast... unless we have large financial means to fight it.  With the entire world now seeking to sink its teeth into the flesh and blood of the Church, we need all the financial backing we can.

What would happen if everyone who adheres to conservative beliefs on marriage, family, and sex were prohibited from working.  Think about what Revelation says about the Mark of  the Beast.  We won't be allowed to engage in commerce in any normal way.  With no one making money at all, what funds can the Church rely on to run it?  It HAS to be reserves.  It is over the top scenarios like this that huge reserves like that are for. 

Additionally, it mentions the growth of the Church.  I believe there will come a time when members of the Church in third world countries will grow by leaps and bounds.  They will simply not have the funds to build churches to house them all and temples to perform their ordinances. They will be in dangerous parts of the world which will incur security costs.  Who's going to pay for that?  They can't.  But HQ can -- if they have enough money in reserves.

What happens when China's iron fist finally opens?  How many baptisms are we going to see then?  Explosions of growth are going to happen, if not in our lifetime, in our children's or their children's.  But it will happen.  How are we going to accommodate that?

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34 minutes ago, Mores said:

3) They're supposed to be for humanitarian aid.

3) is actually not true.  The purpose of the Church's funds is to run the Church.  And simply keeping up meetinghouses and temples cost a LOT of money.  We have huge record keeping needs.  Just the day-to-day upkeep of the Church is very expensive.

 

Your number three was going to be the point I was going to make.

Tithing might be marked on taxes as a donation for charity...  But for me the charity I am donating to with my Tithing is the keep the church going fund... Having reserves I find to be well in harmony with that.  So that does not bother me.

Given that the guy is giving sworn statements it should be investigated, because the church is not above the law.  But a sworn statement is not a proof of crime so.

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2 hours ago, Grunt said:

It's funny.  I was invited to speak to the seminary class this morning where we talked about testimony and faith.  I was then sent a link to this from an atheist friend of mine that really dislikes that I've joined the Church.   https://www.sltrib.com/news/2019/12/17/whistleblower-claims-that/

Why do so many people which aren't affected AT ALL by this so upset by it?     I think it's funny that the spokesman just referred them to the website.

I doubt this matters beyond a lottery someone expects if anything is collected.   It is not unusual for charitable organizations (like the Clinton's) that use as much as 90% of collected funds for overhead (investments).  The question is not if some money is invested - the question is - how much the controlling principles personally benefit - which is less than the lawyers that will adjudicate the case - I would be most interested to see a response from @Just_A_Guy

 

The Traveler

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Guest MormonGator
1 hour ago, Traveler said:

It is not unusual for charitable organizations (like the Clinton's) that use as much as 90% of collected funds for overhead (investments).

Wrong. That's actually quite unusual. How charities spend their money is incredibly noisy and  incredibly complicated, but "90%" going to "overhead" would raise major red flags. 

Edited by MormonGator
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1 hour ago, Traveler said:

as much as 90% of collected funds for overhead (investments).

This makes it sound like "overhead = investments".  If that's not what you meant, why are you juxtaposing the two terms with one in parenthesis?  That is usually notation reserved for synonymous terms.

While in business, virtually any expenditure can be considered an investment, overhead is most certainly NOT an "investment" in the sense we normally think of. 

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Part of this would have easily been resolved with transparency of their finances.

If there actually is a problem (no idea if there is or isn't) then instead of it compounding itself over the years, someone in the IRS or otherwise could have caught it and the problem corrected promptly instead of accuring interest as it were...IF there is a problem at all.

They don't have open books, and I think that's their right.  I see this being a complaint from an angry individual who either

a.  Wants to force the Church to open it's books in regards to it's finances...

b.  Wants to hurt the church

c.  Wants to get a big windfall of money

or a combination of any of the above.

That said, as it seems to be legally done in complaint, it needs to be investigated.  It could be that shady things have happened.  That tends to be what many assume when non-profits do not have transparency in regards to their financials...or even for-profits or even famous individuals (for example...Trump).

I don't expect it will turn up anything against the Church (personal thoughts on the matter) but it might against Ensign Peak. 

I do find that 7 billion in tithing receipts fits with what I figured the Church probably got currently in tithing, though whether it is just his hearsay or actual I don't know.  It appears that Quinn thought it would be more but 7 Billion sounds more accurate to me.

100 Billion in holdings seems reasonable, though would not be surprised if the actual amounts the Church has is even more than that.

However, what the church receives in tithing is for the support of the church, it's foundation and building up of it.  Tithing is not really meant for humanitarian purposes...though it can be spent on that.

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Oh and FYI it seems that Nielsen, the whistleblower, is seeking a percentage of these supposed back taxes as a whistleblowers award. I'm sure everything he is doing is totally above the board and in no way is he thinking of trying to line his own pockets and blacken the church's reputation at the same time /s. For anyone who is curious, here is the church's response https://www.deseret.com/utah/2019/12/17/21026182/mormon-lds-church-washington-post-whistleblower-irs-complaint-taxes-ensign-peak

Edited by Midwest LDS
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4 minutes ago, Midwest LDS said:

the whistleblower, is seeking a percentage of these supposed back taxes as a whistleblowers award.

I think most whistleblowers do it for selfish reasons. Even ones I admire and agree with, like Edward Snowden, do it for glory. At least partially. 

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1 minute ago, MormonGator said:

I think most whistleblowers do it for selfish reasons. Even ones I admire and agree with, like Edward Snowden, do it for glory. At least partially. 

Fair enough, which I'm sure is why the government offers it to encourage people to turn state's evidence. But it does tend to reduce someone's credibility, especially since the church is so scrupulous about following the law of the land.

Edited by Midwest LDS
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Guest MormonGator
Just now, Midwest LDS said:

Fair enough, which I'm sure is why the government offers it to encourage people to turn state's evidence. But it does tend to reduce someone's credibility, especially since the church is so scrupulous about following the law of the land.

 I don't disagree with you.

How we feel about whistleblowers depends strictly on the institution they are blowing the whistle on. Right wingers loved Bernie Goldberg, because he blew the whistle on CBS news and their liberal bias in the 90's. He was correct of course-but if a reporter from Fox News "blew the whistle" and showed inner documents about their right wing bias, then the same people who praised Goldberg would crucify him. So whistleblowers are either heroic individuals who sacrificed their own liberty and freedom to educate the people-or traitors and threats to democracy at large. 

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33 minutes ago, MormonGator said:

How we feel about whistleblowers depends strictly on the institution they are blowing the whistle on.

This is simply not so, MG. It's a highly cynical take on things, and though doubtless true for some soulless folks, is not a fair representation of people in general.

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1 hour ago, Midwest LDS said:

Oh and FYI it seems that Nielsen, the whistleblower, is seeking a percentage of these supposed back taxes as a whistleblowers award.

The article mentioned that.

Quote

I'm sure everything he is doing is totally above the board and in no way is he thinking of trying to line his own pockets and blacken the church's reputation at the same time /s.

This is difficult to fault him for.  If he worked for a financial company, then he's probably well aware of the laws providing for such compensation.  He would be a fool to simply say,"No, thank you.  I don't need it."

Basically he'd be getting anywhere from $500 Million to $9 Billion (a lot of estimating even to come up with those limits).  Yup, some people see that kind of money and they just can't help themselves.

Quote

Yup.  It was just as I figured.  They've dotted every "i" and crossed every "t".  So, it looks like these twins have sold their birthright for a mess of pottage.  Really sad.  I sure hope they can find it within themselves to repent.

Edited by Mores
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1 hour ago, MormonGator said:

Wrong. That's actually quite unusual. How charities spend their money is incredibly noisy and  incredibly complicated, but "90%" going to "overhead" would raise major red flags. 

What we are talking about are tax deductible donations.  I do not intend to negotiate English words for meaning.   Lets take an example - like the Winter Olympics.  It can be quite interesting what is "charity" and what is an investment.  So @Mores - is money spent on Olympic venues overhead or investments?  (Since you are the expert and absolutely sure that there is not and never can be an intersection between the two sets of overhead and investment)

But lets talk about the church.  Are meeting houses "charity" or real estate investments or overhead for church operations? - How about temples, tabernacles and other church buildings?  And let us not forget investments or overhead in obtaining farmland, historical sites and other properties - It is not unusual for the church to procure property without designating its purpose.  Often temples are built on property already owned by the church.  Now for the favorite for many anti-LDS - Downtown SLC redevelopment.  Can helping develop business and safe environments for families be "Charity"?  Is using church funds to invest in businesses close to the SLC temple grounds for use by the community - never to be considered charity?  What a novel idea - letting inner city places rot and become over run with crime to be excluded from charity.   

Here is another novel idea - is money spent on equipment for communications, or creating movies - is it overhead or investment?  Is the owning of manufacturing facilities to manufacture temple cloths to be sold to members holding temple recommends - are such things tax deductible charities?  What if one year because of an accounting type mistake or change in the tax code and the church made a profit on any investment - what then?

Sometimes I am amazed at what lengths some are willing to go to; to contrive a complaint. 

 

The Traveler

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5 minutes ago, Traveler said:

So @Mores - is money spent on Olympic venues overhead or investments?  (Since you are the expert and absolutely sure that there is not and never can be an intersection between the two sets of overhead and investment)

You think I said that?

2 hours ago, Mores said:

While in business, virtually any expenditure can be considered an investment, overhead is most certainly NOT an "investment" in the sense we normally think of. 

Not following you.

But it is apparent from the remainder of your post that you're not really interested in a discussion about it.

Edited by Mores
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I likewise find it hard to fault the guy for requesting the reward that is legally available and designed to encourage people to report wrong doing.  It really isn't any different that rewards given for tips that lead to arrests. 

I'm also pretty underwhelmed by the "he's got an axe to grind so he reported the Church."  It's just as likely that observing what he perceived to be improper use of tithing funds contributed to his disaffection. 

At the end of the day, the guy took the risk to file a legal affadavit with his allegations. He isn't just mouthing off whatever he wants on TV...he's believes his allegations enough that he's willing to face serious legal consequences if its determined that he's lying.

That being said, my understanding is that the corporate culture of the place he worked at was pretty strong on only giving people access to the information necessary to do their jobs. This is an important information security principle, and so those that aren't managing across multiple groups don't always see the whole picture. That kind of information security can be used to hide wrong doing (I'm not saying that is the case here). But when you're talking about financial portfolios that can turn extra millions based on a few tenths of a percentage point, your trading secrets are very carefully guarded.

I'm not convinced that the Church did anything wrong. But I also wouldn't be surprised if some of their investments operated in legally ambiguous spaces. Welcome to reality. But I also am not* ready to question the motives of a whistleblower just because he is making allegations against an organization I hold in high esteem.+

 

* I accidentally left out the word "not" in my original post.  Sorry for the confusion.

Edited by MarginOfError
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59 minutes ago, MormonGator said:
1 hour ago, Vort said:

This is simply not so

1 hour ago, Vort said:

though doubtless true for some soulless folks,

Ok.....

Note the wording of your post to which I was responding, MG:

1 hour ago, MormonGator said:

How we feel about whistleblowers depends strictly on the institution they are blowing the whistle on.

That is not a factual statement about how "we" feel. I would opine that it's not a factual statement about many groups of people, not just "us". I admit that it may well accurately describe a pretty large chunk, but that chunk does not include "us" (or at least me).

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