Church and Investment Fund manager pay fine to SEC

The church’s official response is upsetting.

https://newsroom.churchofjesuschrist.org/article/church-issues-statement-on-sec-settlement

After reading that statement it would appear to me that the entire goal of creating LLCs was to hide the church’s wealth. One big portfolio with the church’s name on it? Bad. A bunch of LLCs with names that hopefully prevent people from tying the wealth back to the church? Good.

Blaming it on the lawyers? I envision a few scenarios.

One: Church leaders go to their lawyers with a problem. How do we hide our wealth? Lawyers retire to their cave.

Two: Unprompted, church lawyers go to the leaders with a plan on how to hide the church’s wealth. The church leaders don’t know the details but hiding that wealth sure does sound great!

The issue isn’t in the details of what the lawyers did, it’s that bit about the desire to hide wealth. From whom? The world? Maybe. The members? Maybe. Why? I have my thoughts. I’ll keep them to myself for now.

And again this raises the familiar doubt; if leaders hid the church’s wealth what else are they hiding? From whom? Why?

“now consider this matter closed” – Perhaps it’s just poor wording in the official release and I’m reading it in the wrong spirit. Perhaps they are only communicating that the SEC investigations are completely over (no pending fines, investigations, etc.), not that they are unwilling to discuss the issue with membership and others.

Following the principle of preparing for the future, both near- and long-term, the Church maintains diversified reserves, including stocks, bonds, commercial and residential real estate, and agricultural properties. All funds are invested solely to support the Church’s mission.

The funds that they’ve amassed go well beyond preparing for the future. Whatever happened to Jesus’, “For all these things do the nations of the world seek after: and your Father knoweth that ye have need of these things. But rather seek ye the kingdom of God; and all these things shall be added unto you.” and Nephi’s, “he shall prepare a way for them that they may accomplish the thing which he commandeth them.”

At some point it’s time to put those fears of the future aside and trust. Do we hoard another billion or ten to compensate for all the what-if scenarios that are swimming in our heads or do we try to trust the Lord a little?

From the SLtrib article:

In a settlement announced Tuesday with U.S. Securities and Exchange Commission, the Utah-based faith and its investment arm, Ensign Peak Advisors, have agreed to pay $5 million in penalties for failing to properly disclose past stock holdings and going to “great lengths” to deliberately “obscure” the church’s investment portfolio.

In its own news release posted soon after the SEC announcement, the church expressed its “regret” for what it termed as errors and that “investment returns” — not members’ tithes — would be used to cover the settlement.

I get that it may be important for some to know that member tithes are not being used for various things. Still, with a semi-liquid holdings of more than $50 Billion, I think it begs the question whether the church itself should be funded by investment returns at some point in the future.

The church is “naive” to think the settlement is the end of it, the law professor said. “The apparent hypocrisy is potentially harmful in its relationship with its members. The church needs to explain what it plans to do to prevent this in the future and to rebuild trust.”

Latter-day Saint leaders put “a rhetorical premium on honesty,” Brunson said, even asking in “worthiness interviews,” including for temple recommends, whether members “strive to be honest” in all they do.

By looking for loopholes rather than complying with the law, he said, church officials have made it uncomfortable for members who see the faith as “providing a moral compass and example of the way to live.”

This is “not the kind of thing,” Brunson said Tuesday, “they can put behind them easily.”

I know that SD particularly had struggles with the church promoting lofty ideals towards members but then acting more like a traditional organization/business in its own practices. This feels like another area where the church is as honest as legally required and not one iota further.

The church noted that Ensign Peak took care of all the SEC filings and that the faith’s “senior leadership never prepared or filed the specific reports at issue.”

This part made me literally laugh out loud. Of course the senior leadership of the church never personally prepared or filed these specific reports that ran afoul of regulators. It would not surprise me to learn that the current senior leadership has never personally prepared or filed ANY financial reports for the church. They have people for that! Why even point that out? Do people imagine Elder Oaks personally using a 10 key adding machine as he twists his handle bar mustache and comes up with new ways to cook the books? Ridiculous!

From the Deseret News:

The church said it wanted to maintain the privacy of its holdings. Some church officials said previously that they wanted to avoid church members following church investments as a roadmap for personal investing because they might not be appropriate to their circumstances.

Really? What church officials said this and when was it said? I’m trying to imagine a church official publicly saying that the church wants to hide its investments lest church members foolishly dump everything into Apple, Microsoft, and Google. What is the source for this reference?

I put forward a few assumptions:

1) Church leaders are trying to be “good stewards” of the “Lord’s funds.”

2) There is concern that if it were more widely known how much wealth the church has, people would be less likely to pay tithing.

3) Church leaders genuinely believe people need to pay tithing for their own eternal welfare and happiness.

4) There are probably valid additional reasons for the church to want to hide the size of its wealth but I think the biggest one goes back to tithing.

I put forward a few assumptions:

1) Church leaders are trying to be “good stewards” of the “Lord’s funds.”

2) There is concern that if it were more widely known how much wealth the church has, people would be less likely to pay tithing.

3) Church leaders genuinely believe people need to pay tithing for their own eternal welfare and happiness.

4) There are probably valid additional reasons for the church to want to hide the size of its wealth but I think the biggest one goes back to tithing.

Right. Perhaps the question to ask is whether there’s something better that could be done with the tithing that the church doesn’t need for operational expenses other than to inflate a rainy day fund.

Figure out what your yearly operating expense are, set aside money to cover some set number of years, then take the excess from that effort and do something.

I’ve commented before. I think leaders are actually afraid of being bad stewards of the lord’s funds so there’s only a limited number of things that they see as safe to spend money on. I think that’s why we’re seeing double-digit temples being announced with each conference. The lord surely won’t get upset with us if we use his money on temples. Boom, a policy to dot every corner with temples is born.

Everyone has their opinion but I think another thing the church should “purchase” with the excess is taking in less in tithing. Making up numbers time, if the church is accustomed to taking in $5 billion per year in tithing, “purchase” $1 billion worth of expected tithing revenue. “Purchase” being comfortable with only expecting $4 billion in tithing per year. How?

No more asking or implying that people should pay tithing on gross or even net. Tithing is 10% after living expenses are paid. I agree that I think leaders are concerned that members would be breaking a commandment by not paying tithing but tithing could be interpreted as considerably less. I don’t believe the lord would command a family to pay his over-wealthy church before the family has eaten food. I don’t believe the lord would command such a thing.

I know the official policy is that tithing is not defined. I don’t hear that during general conference but I have heard stories about paying tithing before buying food, which is expressly against current church policy.

I’ve slept on it. Several times. My attitude still hasn’t softened.

This year is the first year that wards are expected to purchase their own church manuals. I get that most people are using their phones anyway, maybe the charge is meant to encourage holdouts to go paperless, but when you’ve got enough money to invest tens of billions of dollars, why? Why do wards now have to use some of their already pathetic budget to purchase church manuals? If you can’t afford to provide manuals you can’t afford $35 billion in stocks.

I also hear there are plans to upend and redesign downtown SLC. Like several contiguous city blocks.

I can only speak for myself but the local ward experience is anemic. When it comes to the local experience, corporate church is pinching every penny as hard as they possibly that it’s left nothing but sun-bleached bones in the desert. There’s nothing to the church “community,” it’s been left derelict, they’ve stripped out all the copper wiring. It’s not dying, it’s dead. It’s unfunded.

We buy Florida, we buy businesses, we invest, we buy stocks, we buy malls, we buy a new back yard playground for church HQ, we buy palaces for the dead in areas where the living will struggle to staff them, and we go to extraordinary lengths to hide the wealth from starving ward communities.

For where your treasure is, there will your heart be also.

Congrats for coming out of the seven years of drought when the church was teetering on the edge of solvency. Sorry about the scars. Now you have all the trappings and problems of living the other extreme.

If it’s the lord’s money and how the money is managed reflects his will, the lord is really coming across as selfish and conniving.

I respect that view, nibbler, and don’t reject it. It is part of my both/and. I also would love to see a strict view of tithing de-emphasized – but I also know the leadership truly see it as both a command and a blessing.

My own middle ground is a vast expansion of welfare assistance, especially for those who pay tithing, but also in humanitarian aid. I am seeing areas where that is happening, but I would like to see much more.