(RNS) — On Sunday (May 14), former Church of Jesus Christ of Latter-day Saints portfolio manager David Nielsen broke his long silence, granting an interview about his 2019 whistleblower complaint to the IRS about LDS finances. The church had employed him for nearly a decade at its investment arm, Ensign Peak Advisors.
In an interview on “60 Minutes,” Nielsen recounted a culture of secrecy at the highest levels — a charge disputed by a member of the church’s presiding bishopric, who also granted an interview.
Here’s a recap of five points about the wealth of the LDS church, drawn both from the “60 Minutes” interview and from other reporting. As this is an opinion column, I’ll also be sharing my own perspective. I’m a church member whose faith in the institution was damaged when I learned the extent of the church’s wealth. As I’ve chronicled in previous columns, I now pay my 10% tithing to other charitable organizations that are transparent about where their money is going and are committed to alleviating poverty.
EPA funds, seeded with tithing donations, shored up two for-profit ventures.
The “60 Minutes” segment repeats the original complaint’s assertion that the church’s investments aren’t being used for charitable purposes. In fact, Nielsen claimed they are not used for much at all, other than to multiply the nest egg.
“I thought we were going to change the world,” Nielsen said about why he took the job working for EPA and the church. “And we just grew the bank account.”
In the interview, the church’s point of view on this is represented by Christopher Waddell of the presiding bishopric.
“It’s not just incorrect; it’s flat-out wrong,” Waddell told “60 Minutes.” Given that strong rebuttal, I expected him to counter the evidence that Nielsen presented in his original claim. Instead, Waddell merely said that Nielsen didn’t have “a full picture” of Ensign Peak Advisors (which, given the church’s secrecy about its finances, is scarcely surprising; how could he?).
Waddell then tacitly conceded that some of the accusations were correct. He seemed to regard the fact that the church had bailed out a for-profit insurance company with funds intended for charitable use as an entirely unproblematic — even providential — allocation of the money.
“Fortunately, the church had the financial resources to bail out Beneficial Life during the financial crisis (of) 2008–2009,” he said, emphasizing that the insurance company had already repaid most of that money. And the City Creek Mall “was not a bailout; the mall was an investment” that had produced financial returns.
The church claims that some of EPA’s money is used for charitable purposes.
Where Waddell pushed back was on the accusation that EPA’s vast reserves were never used for charitable purposes. He said money was transferred from the EPA to the church nine times a month, on average, to fund various operations, including some of its charitable outreach.
Nielsen, though, said this was a drop in the bucket, comparing it to the difference between having a checking account to dip into for day-to-day expenses versus a much larger retirement account that is intended to be untouchable, geared only for long-term growth.
An IRS chief counsel representative who was interviewed in the segment seemed to side with Nielsen, saying EPA’s funds were like “the Hotel California,” meaning that once the money checked in, it never checked out.
But he also said it’s unlikely that the church would ever be punished for this or lose its tax-exempt status, because prosecuting it would be such an enormous political risk.
The SEC charged the church with creating shell companies to “obscure” how wealthy it was and how it had centralized control of that wealth.
The Securities and Exchange Commission did fine the church and EPA $5 million in February of this year, according to an SEC press release, for their failure to report EPA’s holdings from 1997 to 2019. The church acknowledged that it regretted “mistakes made,” faulted its lawyers and considered the matter closed.
The SEC suggested that the church intentionally deflected attention from the size of its holdings by creating 13 “shell companies” to make it look as though EPA’s holdings were more modest. In this way the church hid its assets for nearly a quarter century.
That’s not a mistake; that’s a decision. And I’m not the only one to be troubled by it.
The EPA’s wealth may now be in the realm of $150 billion.
In 2019, when Nielsen’s twin brother (apparently without his permission) sent the IRS whistleblower complaint to the media, it claimed that EPA controlled more than $100 billion in investments (not including much of its real estate portfolio or some other investments, apparently). Other employees confirmed to The Wall Street Journal that this was largely accurate, placing assets between $80 billion and $100 billion.
The “60 Minutes” reporter asked the church’s representative to comment on how much money EPA has in its portfolio.
Waddell: Yeah, that’s something I can’t share with you right now. I know there’ve been reports on approximates, and that kind of thing, and that’s as far as we can go right now.
“60 Minutes”: It’s been estimated at 150 billion dollars. Does that sound correct?
Waddell: I’m . . . that’s an estimate that some have made.
“60 Minutes”: Are we in the ballpark, or no?
Waddell: Um, we have significant resources.
What would constitute “significant resources”? Now that the church has been complying with the SEC’s quarterly reporting requirements (without the use of shell companies this time), that part of its portfolio is more out in the open. The Deseret News, drawing from information from SEC reports on the website 13F, says the portion of the portfolio in U.S. stocks has fluctuated “from a low of $29.8 billion at the end of the first quarter of 2020 to a high of $52.3 billion at the end of 2021.” The most recent filing from the first quarter of 2023 declared the figure to be $46.2 billion.
But that’s only what it has in publicly traded companies in the United States — the church’s top five holdings in Apple, Microsoft, Alphabet (the parent company of Google), United Health and Amazon. The SEC only requires information about “U.S. exchange-traded stocks (e.g., NYSE, AMEX, NASDAQ), shares of closed-end investment companies, and shares of exchange-traded funds (ETFs).” The church has stated that its overall investments are well diversified, “including stocks, bonds, commercial and residential real estate, and agricultural properties.” (The Wall Street Journal says there are prominent hedge funds as well.)
If U.S.-traded stocks in the portfolio alone are currently valued at $46 billion, an estimate of $150 billion doesn’t seem impossible.
The church appears to have significantly increased the amount it is donating to charity. Or maybe not.
In a report two years ago, the church wrote that “since 1985, Latter-day Saint Charities and its affiliates have provided over US$2.5 billion worth of assistance in 199 countries and territories. This amount does not include the value of volunteer labor, worth many millions of dollars.”
But in 2021, by its own reporting, the church gave $906 million to charity. In 2022, again by its own reporting, it gave $1.02 billion.
This means that in the past two years the church gave nearly $2 billion to charitable projects, whereas it reported giving $2.5 billion over the previous 35 years put together.
That’s either a) an astonishing and welcome increase over a short period of time; b) an apples-to-oranges comparison because one entity is LDS Charities and the other is the church itself; or c) an indication that the church has recently changed the way it counts charitable contributions.
I think it is likely a combination of these factors, but with emphasis on the lattermost.
In the 2022 report, I’m not seeing a repeat of that earlier language about how the amount “does not include the value of volunteer labor.” Rather, it appears that volunteer labor might indeed be quantified in some way to reach that $1.02 billion figure.
For example, the report touts more than 6.3 million hours of service by church members around the world, including donating blood to the Red Cross, serving humanitarian missions, facilitating addiction recovery groups, helping people displaced by natural disasters and teaching language classes to refugees.
It also appears that the church is quantifying its own in-house assistance programs that help members only, such as fast offerings (which members contribute in addition to their tithing), bishops’ storehouses, Family Services counseling and church food programs.
All of these are worthy and wonderful things. But the only monetary donations to outside charities that I see mentioned in the report add up to $63.9 million:
- $32 million to World Food Program USA
- $5 million to UNICEF
- $5.1 million to the American Red Cross
- $16.8 million to Ukrainian relief efforts
- $5 million for temporary housing for displaced persons in North America
That’s not to say there weren’t other donations that aren’t mentioned in the report, which is all we have to go on. (Once again, a commitment to complete and regular financial transparency would go a long way here.) But from the report’s own information it seems that $63.9 million may be the real number, or closer to the real number, of what the church donated in cash to charity.
Donating nearly $64 million to alleviate suffering is fantastic, a step in the right direction. And as the church announced elsewhere, that particular line item of $32 million to combat hunger around the world was its largest-ever one-time donation for humanitarian relief. But it is a very far cry from a billion dollars in charitable expenditures.
The church is defending itself by looking forward but also looking back.
The church seems to have weathered the initial storm of criticism from 2019 and 2020. It cooperated with that 2020 Wall Street Journal article and lived to tell the tale. It moved away from old explanations for why it needs such vast wealth in reserve — to prepare for the Second Coming, David Nielsen was told while at EPA — to fresh rationales.
“We are a model minority” seems to be one of the newer narratives. “We are a Horatio Alger story worth celebrating” seems to be another. Yesterday, the Deseret News ran a well-written and historically informed article offering those perspectives on the church’s wealth. Like Waddell in the “60 Minutes” interview, it did not confirm or deny the reports of how much money the church has in its stores, but it did attempt to provide historical context.
The article is worth reading. It’s intriguing that it spends so much time crying poor:
“What the ’60 Minutes’ segment about the church’s finances and other reports often miss is the sweeping and at times poverty-ridden history that helps explain the church’s finances and decision-making today, including its modern-day record of self-sufficiency that sustains a global church.”
It draws from the late historian Michael Quinn’s research about how the church teetered at the edge of bankruptcy in the early 1960s and could barely even make its payroll.
Then, too, there is an even longer history of the church not being able to trust the government to protect its interests in the 19th century, starting with successive U.S. presidents’ refusals to recompense the Mormons for their losses in the Missouri War to the federal government freezing the church’s assets during the height of the anti-polygamy crusade.
Mormons have a long memory for mistreatment. Reading the Deseret News piece, I was reminded of something Jana Spangler said recently on the “At Last She Said It” podcast, when she noted that the church’s deep and consistent commitments to food storage and financial preparedness are a form of trauma response.
By extension, we might understand the obscene wealth hoarded by the EPA as an extreme form of trauma response, a valorization of our ability to care for ourselves and rise above the challenging circumstances of our past.
However, I think it’s safe to say we’re not an oppressed, powerless minority anymore. Our situation has changed, so our thinking needs to change as well.
Instead of “how can we protect ourselves?” — the first question of a traumatized people — we are now in a position to ask instead, “How can we bless the world?”
On Mormon tithing and a $100 billion investment fund
Why I stopped tithing to the LDS Church