SEC charges the Church of Jesus Christ of Latter-Day Saints
sec.gov- $5 million in fines, for
- 22 years of willful reporting violations
- using 13 shell companies
- to conceal ownership of a $32 billion portfolio
I'm sure they're gutted by this ~0.016% fine.
For context, 0.016% of 22 years is 1.25 days. They got fined effectively 1.25 days out of 22 years of profit.
They did not make $32 billion in profit over 22 years.
Well, they almost certainly made more. The only number we have is how much they reinvested, after depreciation.
Why would the fine be higher? Presumably it's proportionate to the harm caused, not by the size of the fund.
It's actually a settlement, not a fine, which is probably pinned closer to the "This is the amount we think we'd have to pay lawyers to argue the case" value than the "This is how much we would owe if we were found guilty of breaking the law" value.
Right, either way, I'm looking for an intuition about how much an infraction like this should cost. Presumably, the settlement also includes the LDS church's consent to start filing reliable 13F's.
I'm not saying I think 5MM is the right number; I'm just saying I have no intuition for what the number should be, and the rationale I see on the thread seems to be "they're big". If I get pulled over in a Bentley with an expired sticker, I pay the same price as someone in a Kia.
If the fine is less than the profit of committing the crime, then it is now de facto legal, taxed profit. There is no incentive not to continue committing the crime.
Perhaps $5mm is a valid fine on top of repaying the illegal profits. But on its own? It is an endorsement.
I don't know if they made additional profits from this. I think they hid their holdings to prevent bad press for the LDS church. Not to give them a market advantage. This appears to me to be a slap on the wrist saying "don't do that".
Fair enough, if they in fact didn't gain any money from their illegal actions then the fine is less problematic.
> If I get pulled over in a Bentley with an expired sticker, I pay the same price as someone in a Kia.
Depends entirely on where you live. If you do the equivalent crime in Finland, you will be fined 6-14 "day fines". Each day fine is calculated to be (your_monthly_gross_income - 255€)/60, minimum of 6€ and unbound from above.
I believe that this system is much more just than flat fines. A fine is not payment for a service, it is a punishment. It should hurt as much whether you are poor or rich.
> If I get pulled over in a Bentley with an expired sticker, I pay the same price as someone in a Kia.
That meets an intuitive definition of fairness, but the realpolitik story there is you don't have a lot of power to make trouble for the municipality by tying them up in court for a half-decade arguing how your Bentley was actually operated legally because the definitions of "sticker" and "driving" and "expired" are very flexible (on account of them being not very flexible).
The probability a case heads towards settlement hinges on the ambiguity of the charges and the plaintiff's ability to prove said charges. Securities is way murkier than traffic operation.
Yeah, that didn't happen. The SEC brought this enforcement action in 2019.
Yeah, the SEC arranged a settlement so they wouldn't spend a decade in court.
Switzerland actually DOES fine you more if you have the money and break the law. https://www.hotcars.com/heres-why-a-dude-in-sweden-received-...
Traffic fines are often considered regressive because a rich person can laugh at a few hundred dollars whereas a poor person suddenly can't afford rent.
So yeah, perhaps some fines should scale to ones means, otherwise it won't deter bad behavior.
> If I get pulled over in a Bentley with an expired sticker, I pay the same price as someone in a Kia.
The fine should scale with the size of the infraction. If you sticker expires on your car, the infraction is the same severity, no matter the car [0]. ~Hiding a few million vs. hiding a few billion in taxes is a whole different level.~ EDIT: They just hid it for information purposes. Not to avoid tax. Therefore, this does not apply in this case.
Also, the fine is intended to discourage the behavior. If the money obtained by breaking the law minus the fee is still positive, there's no incentive to stop breaking the law. $5MM on a fund worth a few billion is very likely to be well within the still profitable area.
[0] I'm not sure about the US, but at least in Germany, an expired sticker actually is a larger infraction for commercial vehicles, especially if you transport people. So even there it's correctly scaling with severity.
Right, I agree. But they didn't hide millions from taxes. They availed themselves of more privacy than the SEC allows for fund managers. If we can articulate the manner in which that inflicted more than 5MM in harm, I think we have a strong case for the fine being too low. But I have no intuition for how to work out the harm these bad filings caused. Do you?
As for deterrence: it appears as if the SEC successfully deterred Ensign Peak from doing this, right? They hadn't filed properly since 1997, but the enforcement action is just a couple years old.
Filing a 13F is essentially a tax upon all market participants, it provides zero benefit to the public. Filing has a financial cost. If the SEC settlement were less than the cost of filing over multiple years, then all rational actors would stop paying to file 13-Fs and simply pay off the SEC every couple years. The middlemen and the pretend regulators both benefit from busywork continuing, so the fee is slightly more than the cost of filing 13-Fs to encourage cooperation.
There's probably a joke in there somewhere about the 13-F process being "securities theater" as compared to the better known IT "security theater" phrase. 13-F is a classic example of "regulation can sometimes be wasteful and inconvenient" therefore anything wasteful or inconvenient can be hand waved away by appeals to "regulation" much like the classic analogy with computer security. See also security theater at airports, plenty of the governmental covid responses, etc.
You're right, I was missing that they were just hiding the funds for information purposes, not tax purposes. In that case the fine is probably more appropriate.
In Finland, traffic fines scale based on your income.
If the punishment changes based on who you are that kind of shits all over the concept of justice being blind.
>Also, the fine is intended to discourage the behavior. If the money obtained by breaking the law minus the fee is still positive
The money saved not renewing your registration on time is roughly the same regardless of what you're driving so that would seem to favor the fixed fine.
> If I get pulled over in a Bentley with an expired sticker, I pay the same price as someone in a Kia.
In the US, sure. The people advocating for a proportional fine in the LDS case presumably would argue for a proportional one in your example, too.
For personal tax returns the typical penalty is 20% of the underpayment + interest.
An expired sticker is not an SEC violation. SEC violations scale based on a number of factors.
https://corpgov.law.harvard.edu/2016/01/24/calculating-sec-c...
Not in Sweden tho, traffic tickets are proportional to income.
If you keep getting tickets in the US, you'll eventually get your license suspended.
Many countries have it: https://en.wikipedia.org/wiki/Day-fine
Not an expert on LDS but aren't there tons of lawyers that are members?
More accurately: "This is the amount we think we'd have to pay lawyers to scuttle the case"
I should properly have called it a settlement rather than a fine, but anyway:
The issue for me here is the willfulness and scale of the deception. I'm not so surprised to discover that the Church has a ~$37 billion portfolio; I'm not sufficiently interested to pay close attention to them, but but it was apparent to any but the mot casual observer that the Church was a very wealthy entity. As a religious organization, it's benefits from tax exemption; it seems to me that part of the price for that special treatment is greater transparency - notwithstanding that this isn't a tax liability case.
BTW I'm referring to 'the Church' throughout as Ensign Peak is a wholly owned entity of the Church and no management fees change hands. Further, Ensign Peak wasn't authorized to file 13Fs on its own initiative (per the order); it effectively has zero independence of its parent. I'm not sure why they set it up so that Ensign Peak pays $4m to the SEC and the Church itself $1m, but I'm going to guess because it looks better that way in press coverage and on their next form 990 filing.
What I mean about willfulness and scale is that from the outset, these shell companies were created to conceal the fact of the Church's portfolio from the public, other investors, and to a large extent their own membership. As detailed in the order, this concealment stretched over nearly 2 decades and eventually grew to encompass 13 shell companies, with new ones being set up when managers determined that business intelligence/the press were becoming aware of the arrangements. Indeed, when a public website figured out the network of reporting entities and made the facts public in 2018, 2 of the business managers of the shell companies (who were based in Salt Lake City, though the entities were registered in Delaware) resigned, expressing concern about what they had been asked to do. Rather than the network of shell companies being shut down, the troubled managers were just replaced, and the arrangement continued until the SEC got involved.
All told, this involved about 100 different acts of deception (in terms of the misleading 13f filings; I have no idea how many private or public statements might have ensued). So the settlement here works out at about $50,000 per false filing. I doubt that that did much more than cover the SEC's legal and administrative costs on the investigation and preparation for trial. The number and long timescale of the deceptions in my view demonstrates impunity; this wasn't a single negligent or reckless decision, but a long-running practice that only unravelled because third party observers connected the dots independently.
You wrote elsewhere in the thread about how we don't arrest a Ferrari driver who makes a right turn at a red light just to deter other rich assholes, while also commenting that if you serially break the traffic laws, eventually your license will get suspended. Well, they serially broke the reporting laws, and every time outside observers or some of their own staff called foul, they escalated rather than abandoned their deceptive practices.
It seems, by the way, that this might be the tip of a larger iceberg. Two former Ensign Peak managers (who may be the ones who resigned previously) have alleged that the Church has around $100 billion in assets and and has violated its nonprofit status by not distributing any of it, but instead holding it in reserve for the 'second coming of Christ'. The link below includes a recent filing with the US Senate Finance Committee.
https://religionunplugged.com/news/2023/2/8/former-employee-...
It should be proportionate to the size of the fund, because one of the reasons fines exist is for the deterrence effect. Ideally you want other potential perpetrators to think twice. Do you think this small fine has that effect?
Can you support with evidence the idea that Ensign Peak is just going to blow off the fine and pay 5MM every few years instead of filing 13Fs? Because if they start reliably filing 13Fs, they've refuted this argument.
If there's a distinctive harm that we can draw out from the LDS Church failure to file 13Fs, I'm all ears about scaling up the penalties accordingly. But otherwise, the logic we're using applies to literally any offense Ensign Peak could have committed, no matter how marginal. I guess I'd like to start by working out whether this particular offense was marginal, or material.
From their statement: https://newsroom.churchofjesuschrist.org/article/church-issu...
"In June 2019, the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began filing a single aggregated report. Since that time, 13 quarterly reports have been filed in full accordance with SEC requirements."
> Can you support with evidence the idea that Ensign Peak is just going to blow off the fine and pay 5MM every few years instead of filing 13Fs?
The parent comment very clearly said “other perpetrators”.
I agree: Such a small fine is basically encouragement for other groups to commit the same violations. When the downsides are so negligible small, there is basically no risk for duplicating the bad behavior. If you get caught, pay a token fine and move on.
I understand. But if the offense is itself marginal, it doesn't make sense to inflict disproportionate punishment on one offender; the penalty still needs to bear some relationship to the offense! We don't, like, arrest Ferrari drivers for violating a no-turn-on-red sign so as to prevent other rich assholes from ignoring the sign. They get the same ticket everyone else does, and if they keep doing it, eventually we suspend their license.
A fine (or in this case settlement) has to be somewhat painful in order to deter. I remember a story about Steve Jobs never getting a license plate and always parking in spaces reserved for disabled people, and so on. He just ate the fines and continued the behavior because they were trivial to someone with his fortune.
If OP's numbers are correct, the fine in this case amounts to 0.015% of assets under management--far lower than what anyone would pay a money manager to manage their investments. I'm sure no other potential violator would feel it necessary to change their behavior if they knew their penalty was 0.015%.
These guys (at Ensign Peak) kept doing it for ~20 years, and when they were worried about discovery by third parties their response was not to clean up their act but to iterate upon it.
I don't understand why you are equating a single enforcement action with a single offense. We don't just suspect they did it more often, we know. And they knew that it was wrong. Settling for future compliance as sufficient just incentivizes others to lie in the future.
The risk is not that Ensign Peak will keep doing this, it's that other people who are committing the same violation as we speak will now continue to do it until they're caught because they know there will be no noticeable penalty.
If it's easier to understand, just consider how much the SEC had to spend litigating this for 4 years. Now every time they come across this particular crime they'll have to spend at least that much, because the perpetrators will know there is no risk in fighting them, and nobody will preemptively stop before an investigation.
so what? the SEC can easily fuck around and get their entire charter invalidated by Congress or the court if they go after the wrong organization, nearly every creature of the New Deal got the same fate and the SEC operates right at the edge of its authority and constitutional rationality already.
and its not even clear if 13F filings are that important, aside from "its mandated by the SEC", Ensign Peak didn't challenge this, they got a tap on the shoulders after their lawyer's solution was questioned, and they changed their tactics. Leave it up to someone else to actually challenge it.
A tiny settlement is best. Its a joke, I agree with that, but it is also rational.
I feel like if BP got deleted by fines after one oil spill this argument would hold.
As it stands it appears companies treat fines the expected way: just cost of doing business.
Right, so if failing to file 25 years worth of correct 13Fs for subsidiaries is equivalent to a BP oil spill, I'll agree with you that the fine should be much higher. Is it?
This is how things work in the world of big money. "I dare say, old chap, that was hardly sporting of you. Harumph, harumph. Well, I'll see you at the club on Tuesday."
It probably should be proportionate to both.
The SEC is, largely, a powerless bogeyman due to chronic underfunding and lack of staff. Another wonderful feature of corporate regulatory capture in the US.
But what kind of staff or funding does it take to say literally different words out of your mouth like, you are fined $5B instead of $5MM? I can do that for free, especially if they are already at the point where they are making the charge. Every fine should be devastating so that they either barely survive or die, and every other company shits themselves for life and we solve the problem.
Hence the phrase "regulatory capture" which describes a system in which unelected bureaucrats are not given life-and-death power over companies, but the people who set the rules are wholly captured by the regulated companies so the rules are made weak.
Thanks for the definition
Its a settlement, so its based on the church's assessment of the strength and resources of the SEC
>But what kind of staff or funding does it take to say literally different words out of your mouth like, you are fined $5B instead of $5MM?
Because we don't live in an autocracy, and government fines can (and are) successfully challenged in court. It takes an immensely greater effort, and immensely greater resources, to enforce a $5B fine vs a $5M fine.
How do you get away with defending tax fraud to the point where the fine is pointless? Does the SEC not get to keep the winnings to use for their future cases so they can hire a ton of lawyers? I guess the real problem is why are judges (presumably everywhere?) lettings companies and organizations get away with this or is there a specific set of judges that only handle SEC cases? Perhaps the first step to getting bigger fines is to just keep increasing fines across the board? Do they need to campaign to judges to remind them that financial crime is bad? How hard is it for anyone to understand that a fine is meaningless unless it hurts, no matter how big the number is? Do you really need more lawyers to prove that basic point? I guess you guys are stuck in a pretty crappy system, but then again I'm sure most places are :/
The piece you are missing is that the $5M figure is not what the SEC "decided," because this was a mutually-agreed settlement, not an SEC-dictated fine. A low figure is not a sign that the SEC is asleep at the wheel so much as a signal of their confidence about taking it to trial.
The lawyers to back it up. Fines and judgements are subject to judicial review.
I guess it just seems strange that if their job is to essentially take wrong-doers to court and win loads of money, even if those winnings are relatively small compared to what they should be, they would still both have a lot of lawyers on staff and a lot of money coming in (regardless of funding from the government) to pay for those lawyers and the more they fine, the more money they'd have to hire more lawyers? And they have no shortage of cases with no competitors? I get they are probably bogged down in infinite politically and bureaucratic BS, but still, seems like they should have an easy path to winning without asking for funding from anyone.
So you need more staff to write down a larger fine on a piece of paper?
…yes? Because with larger fines comes larger court cases - and larger numbers of support staff.
Corporations have lobbied and purchased their way into these freedoms at the cost of our wallets and futures.
Don’t play thick. I too wish these assholes got prison time for this behavior.
You need the staff to enforce it...
fine = scale of crime x (number of ppl working at SEC/1000000)
How many bureaucrats does it take to type a zero on a fine?
In all seriousness, I'm a dyed-in-the-wool capitalist and I love the SEC.
I feel worse for the whistleblower that probably reported that
They thought they were going to get a much bigger payday by reporting the malfeasance of a 32 billion portfolio
I would guess that the whistleblower was employed by the church directly or via a subsidiary. Knowing many people who work for the Mormon church, it is likely the whistleblower lost their job and their pension.
You will lose your job and pension if you stop regularly attending church services or giving 10% of your paycheck back to the church ('tithing'). I can't imagine they don't take a harder approach to this. To be clear, it is wrong to retaliate against whistleblowers, but large organizations get away with it a lot.
I've been around the Church for a long time (and interacted a very little bit with senior leaders), and was a Church employee before health issues ended that. I very highly doubt that anyone "will lose your ... pension if you stop regularly attending church services or giving 10% of your paycheck back to the church".
But job, yes. They want people who are devoted, if they are going to pay them to further the work. To me that makes perfect sense.
(Thoughtful comments appreciated with downvotes; thanks.)
They "want people who are devoted" to helping skirt financial reporting laws?
you can whistleblow anonymously to the SEC
You can check on the SEC homepage if their is a corresponding whistleblower award. Could be as high as 1.5 million, which is not nothing but still less than one would have assumed.
I think we really should be looking at the tax-exempt status of religious organizations have that subsidiaries that are doing their taxes and setting up shell companies to hide where money is coming/going.
Better to just get rid of the tax exempt status for religious organizations altogether. They can operate like any other non-profit and be subject to that set of rules, or they can be a regular corporation and be subject to a different set of rules. The religious exemption is a big regulatory gap that doesn't need to exist.
The details vary from country to country, of course, but some of the tax exemptions which religious groups get are actually just standard exemptions available to all non-profits, or all charities. English law has long defined "advancing religion" as a "charitable purpose". The Charitable Uses Act of 1601 (aka the Statute of Elizabeth) included "the repair of... churches" as a charitable purpose, and later case law took inspiration from that clause to view "advancing religion" more broadly as a charitable purpose. All common law legal systems have inherited this, although the extent to which they still focus on it varies (the concept still exists in US law too, but my personal impression is the US legal system nowadays pays less attention to it than the legal systems of the Commonwealth.)
When people advocate ending religious tax-exemptions, do they mean to end tax-exemptions specific to religious groups – but not available to charities in general, or non-profits in general? Or do they also mean to deny religious groups their status as charities? Or even their status as non-profits?
> The details vary from country to country, of course, but some of the tax exemptions which religious groups get are actually just standard exemptions available to all non-profits, or all charities.
Right. Religious groups in the US get tax exemptions that non-religious 501(c)(3)s don't get. Churches can exempt themselves from FICA taxes. Churches are not required to withhold income taxes on wages paid to ministers. Churches can provide a housing allowance as compensation to ministers which is exempt from taxation
https://www.irs.gov/pub/irs-pdf/p1828.pdf
https://www.irs.gov/taxtopics/tc417
> When people advocate ending religious tax-exemptions, do they mean to end tax-exemptions specific to religious groups – but not available to charities in general, or non-profits in general? Or do they also mean to deny religious groups their status as charities? Or even their status as non-profits?
I can't speak for anyone else, but I think churches should not get special treatment relative to other charitable organizations.
> Churches can exempt themselves from FICA taxes. Churches are not required to withhold income taxes on wages paid to ministers.
Churches don’t pay FICA on clergy, but the clergy are supposed to pay SECA instead. This is because the IRS doesn’t consider the church-clergy relationship to be an employer-employee. It is possible to be exempt from SECA too, but only if one asserts a religious objection to Social Security and Medicare - which I understand is rather rare. Furthermore it is only available to religious groups that existed in 1950, so if you start a new religion tomorrow you aren’t eligible, no matter how successful it might become.
> They can operate like any other non-profit and be subject to that set of rules, or they can be a regular corporation and be subject to a different set of rules.
Its pretty clear that OP just wants them to register as 501c3's or similar not force them to pay taxes in general
If OP just wants religions “to register as 501c3’s”, then I believe they already have almost what they want. From what I understand, the principal tax exemption available to religious groups under US federal income tax law is 501(c)(3)
It is true that religious groups get their 501(c)(3) status automatically without having to apply for it to the IRS - but changing that rule wouldn’t lead to them paying any more tax, since if they do apply the IRS almost always just grants it anyway.
They are automatically treated like 501(c)(3)s however the application and annual filing process is waived ie your average 501(c)(3) has the IRS in its books a lot more actively than the average church. Its pretty plain that many churches are not playing by the rules even if most are. Why should they be special?
https://www.irs.gov/charities-non-profits/churches-integrate...
I'm a religious type and I agree; making churches tax-exempt corrupts the church.
Maybe you have faith and they're well, just religious.....
That exists so that the government can't just decide to tax one religion out of existence while favoring others.
Seems preemptive. There is already freedom of religion. If one is singled out and taxed unfairly then they can sue (and probably win).
That makes no sense. The government already decides what is and what is not a religion for tax purposes.
Sounds like the opposite. To qualify for religious tax exemption you need to actually prove to be, and practice as, a "real" religion. If there is no tax exception, it's more fair.
I can think of other ways to keep the government from taking sides in religions
As if governments were in the habit of arbitrarily handing out large scale tax exemptions. That idea might have been well-intended, but it's really a solution in search of a problem. And how would a religion be "taxed out of existence" anyways? Or the religion the belief or is the religion the org?
exactly
1. The power to tax is the power to destroy, and,
2. Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.
If you want to amend the Constitution that’s another matter.
It is neither respecting an establishment of religion, nor prohibiting the free exercise thereof, to require that they pay taxes to support the society which allows them, as of now absurdly for free, to function and exist in the very first place.
That seems like an extremely daft interpretation of what taxation is.
Tell that to Chief Justice John Marshall (McCulloch v Maryland, 1819.)
I would go one step further and say that donations to religious organizations should not be tax deductible. They are not charities in 99% of the cases.
Citation for that 99% figure? If it's anecdotal then I will give you my anecdote as a non Christian that I see 99% of churches doing charitable works.
As a member of the LDS church, the church absolutely does charitable work.
The problem is that it doesn't do $32B worth of charitable work. Or anything close to it. And that, I think, is the problem.
Yeah I didn't say anything about the LDS church specifically, just that OP is talking about 99% of churches not being charities
It was meant to be a hyperbole.
Cool, my hyperbole is 99% of churches are charities. Now what? What is the point of commenting a hyperbole?
You said 99% of the churches do charitable work. I highly doubt that’s 99% of budget. I am sure most of it is used for operations. Just because I make donations every year, doesn’t make me a charity organization.
(Not an American)...I don't see any need for donations (religious or non-religious) being tax-deductible. In my country, it's very simple: here's your income and here's your tax rate (no deductions). What you do with the rest is up to you.
Many countries find it useful to encourage some behaviors and discourage others by means of tax policy. Not just the US, although the US seems to do it quite a bit.
So we have, or have had, tax policies in the US that encourage home ownership, marriage, donations to charity, long-term investment, purchasing electric vehicles or electrifying your house, and more. The results of each of these is mixed, and sometimes contentious, but they're all there because congress decided at one point or another that a thing was worth encouraging or discouraging.
(an American) - our tax code encourages behavior society deems virtuous. We "want" people to give money to homeless shelters, outreach programs, overseas disaster relief, etc - so we "push" then to do that by making it relatively less expensive.
I can easily argue that citizenry being directly involved in directing their funds to causes that matter is more democratic than the government doing that on their behalf.
Do you want to hear something really fucked up? The extensive protections we've granted to churches is now being abused by dark-money groups and lobbying firms so they no longer have to file 990s or disclose donors. The Family Research Counsel (partially famous for supporting the death penalty for homosexual activity in Uganda) is now a registered Church - and their lobbyist leader, David Perkins is the head of this supposed religion according to what they filed with the IRS:
https://www.propublica.org/article/family-research-council-i...
If you're asking how they do political activities when that's still (on paper) illegal for churches -- they have a separate organization with the same employees, board, leadership, and address called FRC Action that handles their political activity with "different" dollars.
Simpler : if churches get tax-exempt status, then they are bound to the state in receiving that status, and violate separation of church and state?
I haven't been able to find where tax exempt status for churches is established, and I've looked, but not my area of expertise at all.
What if the goverment were to just stop giving churches tax exempt status?
(edit: clearer)
The separation of church and state is not about preventing any kind of relationship between religious institutions and the government. Rather, it is about ensuring that the government does not establish an official state religion, and that it remains neutral towards different religious beliefs and practices.
I mean, you could just set up equal taxation rather than no taxation at all.
This - but one could argue that the state having to make determinations of what constitutes a religious belief and practice _could_ go against the separation of church and state.
The state's role in determining whether a religious organization qualifies for tax-exempt status is not to evaluate the content or validity of the organization's religious beliefs or practices. The state's role is to ensure that the organization meets certain objective criteria for tax-exempt status, a necessary function.
yes
If you decree your belief system is "God is DNA", can you set up a corp with different tax status to further investigate, buy property, and so on? I
You sure can if you follow the IRS's strict rules and requirements for granting tax-exempt status to religious organizations. I suspect you would have difficulty in demonstrating that the organization has a legitimate religious purpose and is organized and operated exclusively for that purpose. Creating a fake religion is likely to be viewed as fraud and could result in legal consequences.
This seems to be a reasonable overview of the history, though I haven't done much vetting of it: https://churchesandtaxes.procon.org/history-of-churches-and-...
Its basis is that taxation is a form of coercion, and government having the ability to coerce or even persecute religious organizations through taxation would violate the separation of church and state.
I personally think the incestuous menage-a-trois between corporate interests, the Republican party and Conservative Christianity is a bigger threat to liberty, but whatever.
Somehow I don't think abolishment of the Johnson Amendment would result in less religious involvement in politics.
It's a very large interconnected system.
The main effect of eliminating the tax free status for religious institutions would be a push toward charity involvement where instead of the charity work being part of the church, the church would be a part of the charity (think basement soup kitchens and the like). Instead of having "St Mary's church and Soup Kitchen" you'd have a big legal shuffle that accomplishes nothing resulting in org titles like "St Mary's Soup Kitchen and Related Worship Services"
Unless they're proposing complete elimination of all tax-exempt status for all orgs including charities and similar orgs. Which would be interesting to think about but probably impractical?
I hear you, and suspect generalizing to not only one party or religious faction still works.
It does, they both have to pander to the same interests and win the South, but between the two the Republicans more openly integrate religion into their core identity.
Which in a way makes them more sincere than the Democrats, whose embrace of secularism and leftism so often seems like half-measures compared to what the other party is willing to commit to.
The shell company scenario certainly is bad, although it's not inherently limited to religious orgs. We see this a lot with the broad definition used for 501c3's. The dog I just picked up from the breeder has her business as a 501c3 because they occasionally contract with a veterans org to supply service dogs. 75%+ of her dogs don't fit that criteria and are just pets.
Another thing to note is that religious orgs, by-in-large, run off donations through tithes and offerings. I know we're all thinking of the O'Steens, TD Jakes and the other charlatans on TBN. The types that charter private planes, and have subsidiaries.
Truthfully, they're really the minority when we consider that they fall under the same umbrella as the countless sub-100 person congregations like 1st Baptist on MLK Jr Blvd in lower San Fransisco or Iglesia de Christo on San Mateo Blvd in Albuquerque.
Here's a related random fact: Fidelity, the well-known investment firm, runs donor-advised charitable funds for rich clients that in aggregate constitute America's charity [1]. The three largest recipients from those funds? Harvard University, Stanford University, and the Mormon Church...organizations that aren't in any way hurting for money. I guess people fund what they are familiar with and for prestige.
1- https://www.bloomberg.com/news/features/2022-11-21/how-fidel...
I get what you're trying to say but this comment made it seem like Fidelity (or Fidelity Charitable) was somehow funneling money to those organizations. To clarify for others reading: that's not the case. Fidelity's customers are using Donor Advised Funds because they're an efficient way to tax plan around charitable donations and those same customers are choosing where the funds go (hence: Donor Advised) and they're choosing Harvard, Stanford, and LDS.
It's not that mysterious. The Church has "paying a full tithe" as a basic practice of "full membership". Members can use a DAF to pay tithes in stock and save on taxes by not incurring a sale. I know this because I'm an active, tithe-paying member and this was advice that I received from other members. Anyone can set up their own DAF and donate money or securities to it then have the DAF submit the donation to the Church.
Sure, never said it was mysterious, was just giving an interesting observation. As an aside, the first time I heard much about Mormons was reading the biography of Jon Huntsman, the late billionaire industrialist, whom I really liked. After that, I checked up on some other well-known Mormon entrepreneurs, luminaries, et al., and had some interesting observations.
1) You guys do have a lot of kids. One founder of a well-known fintech startup has 10 kids! Josh James of Domo fame got over 7 if I remember...seems to be common.
2) Ensign Peak has $100 billion+ from member contributions...what do they even use it for because as far as I'm aware, the fund just keeps accumulating?
3) I'm no fan of organized religion (I grew up attending a silly megachurch). But then, I think you guys have your things in order for a large religious organization...most people I know would get corrupt and power-drunk if they were in the position of Russell Nelson and the other leaders.
4) Utah has a problem with MLM schemes, which I assume is because of strong familial ties that preys seek to exploit...anything being done about this?
I hope I'm not intrusive with my questions. Just trying to understand how you guys run despite being a diehard atheist.
2) The common opinion is that it's a rainy day fund. The church has a lot of expenses, including lots of real estate and fancy buildings worldwide. If there was a drop in tithing or a major economic recession, they want to be able to weather it for an indefinite period.
4) Nothing major has been done. Last year, there was a church policy update that states
> ...using friendship or a position of trust to take financial advantage of another is “a shameful betrayal of trust and confidence. Its perpetrators may be subject to criminal prosecution. Church members who commit affinity fraud may also face membership restrictions or withdrawal. … Members may not state or imply that their business dealings are sponsored by, endorsed by, or represent the Church or its leaders.”
(https://www.thechurchnews.com/2021/3/31/23216752/updates-gen...)
But that's the whole of it. No recent major sermons call out MLMs and their ilk.
1. Large families definitely are common, although getting smaller. Decreasing family size is trailing the general populace by a couple generations. In my experience 3-4 kids is probably the modal family size now.
2. The church was in a very bad financial position until the early 1900s because of persecution by several states and the federal government. There's a strong, strong cultural sense of preparedness and self determination to make sure that we're never in that position again. Apple in the modern era is a good comparison - better to save and have the resources on hand rather than need them and not have them.
3. Thank you, we work hard at it :)
4. There's also a strong entrepreneurial culture, both out of necessity from starting new settlements several times in the early church history, and intentionally cultivated starting after the relocation to Utah, so that the community would be more independent (see also #2).
The organization running the DAFs is Fidelity Charitable, which is not quite the same organization as the well-known investment firm. They are related, but distinct.
I’m confused. Does this mean my retirement savings somehow benefits or is related to the LDS?
GP is talking about Fidelity Charitable, a somewhat distinct organization from Fidelity (which administers your 401(k)).
https://www.fidelity.com/building-savings/charitable-giving#....
No, these are Fidelity clients that specifically direct sums from their investment accounts to be donated to charity. The donations come from clients that choose to, not Fidelity itself.
Only if you choose to do so, otherwise, no.
JS-free archive link for the Bloomberg reference:
The Church's statement:
https://newsroom.churchofjesuschrist.org/article/church-issu...
> Q: Did Ensign Peak fail to comply with SEC regulations?
> A: We reached resolution with the SEC. We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.
Why would they ask themselves a question that they refuse to answer? Did they have to negotiate these FAQs with the SEC too?
Printing the non-answer lets them answer any future questions with "see the details that are [not] in the FAQ document."
The answer says they "regret mistakes made".
(Thoughtful comments appreciated with downvotes; thanks.)
(Thoughtful comments appreciated with downvotes; thanks.)
OK, I'll bite.
The response doesn't answer the question. What "mistakes" are being referenced? Who made them?
This is a yes/no question. Don't get fooled by grammar tricks, like the ambiguous voice of made or the ambiguous reference to mistakes.
The full statement (linked above) covers it better than the short quote.
It does not, but I'm not sure if that matters as your downvoted comment didn't suggest that you were referring to anything besides the bit you quoted.
Devout member of this church my entire life. 2 years ago during covid I finally read most of the history of Joseph Smith. Found out it’s a fraud and left.
For having Jesus Christ in its name, I have a hard time believing Jesus is running the board of this corporation and is suggesting billions be spent in investments instead of billions feeding, clothing, housing, and providing healthcare for those in need.
And don’t tell me about their humanitarian efforts. A fraction of their wealth is used on such endeavors.
End of the day, all their leadership cares about is wanting the whole world to volunteer their free time to the local congregation, pay tithing, and do temple ceremonies. Next time you meet a Mormon, ask them to clearly draw a line to what they do in the temple regularly and why that’s what Jesus wants them to do. You’ll see them hit the cognitive dissonance wall.
One question I had while reading this:
- Should non-profits be allowed to "invest" their tax-exempt donations?
It seems that non-profits should obtain their funding through grants or donations. Investing, on the other hand, seems like the opposite of "non-profit"
As a personal aside, I've recently been introduced to a few folks who seem to be doing extraordinarily well financially. It turns out that they all run "non-profits." And not just any non-profit, but firms that were started by their parents.
Question for everyone: I'm not nearly as aggressive about finding tax deductions as I could be. Am I just a suck here?
Two things to consider: it seems reasonable for any organization - including a non-profit - to save some for a rainy day, and anything that doesn't get used immediately and doesn't get invested loses value just by sitting there (due to inflation).
IMO neither of those is enough to warrant a blanket "sure, why not?" answer to your first question and for there not to be any restrictions at all, but off the cuff it doesn't seem terrible.
As to your 2nd question: assuming you live in the U.S., it follows the laws of diminishing returns. It might be worth it to sit down with a non-sleazy tax adviser one time (and again each time you have a major life event) to make sure you're not missing anything big and/or easy, but pursuing every possible honest deduction is exhausting and time-consuming and so you eventually reach a point where chasing that next deduction is not worth your time.
A church where I grew up has a large endowment from a previous family in the area. If they didn't invest their money, the endowment wouldn't last. Just an example. Not to say I'm in favor of church's non profit status or this particular point, but inflation could hurt for them if investing weren't allowed
> Should non-profits be allowed to "invest" their tax-exempt donations?
Almost definitely yes because so many uses of funds are also investments. Ex: a church buys valuable real estate to use as their main site of worship.
However maybe the returns on investment should not be tax-exempt in perpetuity!
Not to take a side, because you're right that there are a lot of ways people exploit this, but there are reasons why a charity may legitimately want to invest.
> Investing, on the other hand, seems like the opposite of "non-profit"
There's two ways to look at this. You can consider investing in the capitalist sense where you're trying to make money and profit, and maybe the managers exploit the system, but you can consider it in a different perspective: wealth preservation and time-deferral of resources to reduce economic dependency of donations.
For example, universities often have large endowments. Universities take in small streams of money which may fluctuate with the economy and occasional massive donations, and then once a decade build a very expensive building. They probably want to protect the monies in that constant stream from inflation and economic cycles until they need to build a new building. Beyond time-deferral of resources, sometimes universities (or alum) establish a fund that should pay out continuously for eg. scholarships. By donating $1M, you can provide a 50k payout (5%) to a student, forever, and see modest growth of the fund above that (eg. ~2%) to cover inflation. This ensures that a one-time act of charity can last more than a few years.
> I've recently been introduced to a few folks who seem to be doing extraordinarily well financially. It turns out that they all run "non-profits.
Yea, maybe we need to consider the exploitation of non-profit exemptions and how it can be "self serving". But consider an alternative story: rich parents give their kids a lot of money, so they don't need to work to pay bills. This frees them to work low-pay charitable jobs because they have a separate trust fund to cover cost of living.
There's a section in Bloomberg's Matt Levine column about this. That's useful to understand what they were doing with the shell companies.
https://www.bloomberg.com/opinion/articles/2023-02-21/amc-ap...
Paywall, not resolved by archive.org
> The rule in the US is roughly that if you are an institution — a pension fund, an endowment, an investment firm, a bank, etc. — and you own more than $100 million worth of stocks, you have to disclose your stock holdings every quarter. You file Form 13F with the US Securities and Exchange Commission, and it is publicly available and everyone can see what stocks you own.
> If you don’t like this, there are reasonably standard solutions. The rule is actually that you have to file Form 13F if you “exercise investment discretion” over your stocks — meaning basically that you decide what stocks to buy and sell — so the trick is not to do that. If you have $1 billion to invest in the stock market, you go to a big institutional investment manager and say “hi, here’s $1 billion, please buy some stocks for me.” You agree on some investment criteria — the mandate for your investment — and you pay the manager some fees, and the manager buys the stocks for you. This saves you all sorts of aggravation — picking the stocks, doing the trading, setting up custody arrangements, etc. — but it also probably saves you from filing a Form 13F, if that’s your goal. Instead, the investment management firm files a Form 13F showing all of the stocks that it owns — that it “exercises investment discretion” over — for its various clients, including you. You are just an anonymous client; your data is aggregated with the rest of the clients.
> Presumably if you’re a big enough account, and interested enough in the markets, you might end up doing some kibbitzing about what your investment manager is buying. The manager’s mandate for your account might be narrow and customized for your interests; if you are, for instance, a fund that invests money for a religious group, you might tell the manager to avoid certain sorts of sin stocks. You might chat periodically with the manager about what they’re up to, and you might give them some input, without quite “exercising investment discretion” over the account. The manager makes the investing decisions, but with your preferences in mind.
> You could push this further. Hire an “investment manager” to buy and sell stocks for you, but just tell them exactly what to buy and sell. They’re not really in the business of making the investment decisions; they’re just in the business of sitting between you and the public Form 13F requirement. This way you get exactly the stocks you want, and presumably a fake investment manager is cheaper than a real one.
> This is illegal, though you can see how you might feel justified in doing it. “Why should random strangers get to know what stocks I own,” you might think. That seems to have been what the Mormon Church thought.
[..]
> “The Church was concerned that disclosure of the assets in the name of Ensign Peak, a known Church affiliate, would lead to negative consequences in light of the size of the Church’s portfolio,” says the complaint, and you can see their point. The effect of the 13F rules here is mostly to make public that the church has a lot of money. But the rules are the rules, and setting up 13 shell LLCs to pretend to manage your money for you doesn’t really work to get around them.
Thank you. That was very interesting and answered all my questions.
$5M penalty seems very small.
I would guess there’s some reticence to be seen coming down hard on a church, not that it is going to help to levy only a small fine.
Yes, and I think this Church has an oversized influence on US Politicians.
But I agree, the fine should be large enough to send a clear message to other orgs like them.
Right, but I meant it’s likely to be portrayed as an out-of-control regulatory apparatus going after religious conservatives even though they used the kid gloves.
The fundies only care about their sect. As far as they're concerned LDS is a bunch of apostates.
Heretics more like but I think you underestimate the capacity for cynical alliances of convenience.
It's a settlement, not a fine; the SEC took what they could get, which was apparently...not much.
Usually this would mean that they didn't think they had a very strong case.
It's about average for SEC fines.
Because it is.
Some info about how the Church of Jesus Christ of Latter-day Saints uses its donations:
https://newsroom.churchofjesuschrist.org/article/humanitaria...
I suspect most of its investments are targeted towards the same ends.
The part about welfare for those not of their faith was just in the news due to the way we do block grants to states to fund welfare services.. the state of Utah largely hands off their program work to the LDS Church which is pretty unfortunate when they make support contingent on joining their church, going so far to tell people they won't be provided with support that's Federally required unless they get baptized into the church.
https://www.sltrib.com/news/2021/12/02/utah-makes-welfare-so...
Actually, the church's policy is to help everyone regardless of their religious affiliation, and anyone can get food and other help from the storehouses mentioned in the article. The help sometimes includes even cash, but it's far from just a spend-this-however-you-want blank check. That money typically comes from local donations, so the people administering the relief have an obligation to be careful about it.
No doubt there are some inconsistencies in how it gets handed out, and it's unfortunate that apparently some people had some experiences that included deviations from the church's policy, but for every person in that article with a bad experience you can easily find 1000 people who were blown away that the church helped them without any sort of pressure to join that church.
(fwiw, the Salt Lake Tribune has been writing stuff like this for 150 years - sometimes it adds value, but often it's disingenuous)
The Tribune went bankrupt and was bought by a prominent LDS member in 2016 - not sure you can discount their stories from 2021 based on the bias the originally owners clearly had in the 1800’s. It’s a nonprofit these days but Huntsman is still chairman of the board.
The fund in question has never in 22 years been tapped for any charitable purpose
Due to the extent of Church operations and the ongoing costs, they feel it is wise to save for a rainy day (as they also advise others). More details in my comment elsewhere on this page.
Having lived through the dot-com bust, my wife and I around the same time (20+ years ago), began to set some funds aside for the "rainy day" of not if, but _when_ I might lose my job in tech, given the often volatile nature of the industry. We've been fortunate not to have to need to dip into those funds for that purpose over that time, but I think it's a wise practice, one that the church teaches, and follows.
At this point regulatory fines are just a cost of doing business, same as the break room coffee maker or printer paper.
Fines need to be 150% of the maximum benefit of the infringement.
For context every 6 months there’s a report on the first day of what’s called the General Conference where church leaders address the wider Church and the in house auditor says that all things are fine and proper with respect to accepted accounting principles. :shrug:
My friends and I that meet weekly (on Sunday) for a potluck that has been going on for over a decade were joking about starting our own religion (turns out we meet a number of the IRS requirements already and the remaining things would be easy to create). Clearly the enforcement of corruption (which we would have no intention of doing) is next to zero and having a real "religion" is a joke so maybe we should go ahead and do it...
A "religion" primarily assumes standard Christianity, Judaism, Islam, Buddhism, Sikhism, etc: all of which have buildings, assets, collections, and such.
For those of us who either have a solitary practice or meet with a small group (coven), none of our costs for our practices are tax exempt. If we are large enough, we usually cannot be "acknowledged by the state" to get tax exempt status. When we do get enough people in our group, it's an uphill slog to even get acknowledged as 'real', although there are few and far between covens which have won what the Christians get already.
https://lawprofessors.typepad.com/nonprofit/2011/03/witches-...
https://nonprofitquarterly.org/pagans-weigh-in-on-the-laws-o...
https://www.timesunion.com/local/article/Court-considers-neo...
Basically, the Christians get away with using tax exempt status, and then populate things like "megachurches" (aka: church-based tax fraud). Those of us with less common beliefs are given the short shrift, and default treat our beliefs as "not worthy of federal and state tax exemption".
When the IRS and state tax entities start playing games of discerning which belief is real and not, is a grave concern for 1FA. The state should never be in the business of saying whose beliefs are real or not.
Providing tax exempt status to only churches you have "proven" to be churches should be seen as legislating religion. The only ACTUAL fair way to handle it is allow any organization to vie for charity style tax exempt status, with a high bar of charity required to succeed, and churches are otherwise no more an organization than your company's softball team.
Alternatively, nobody gets ANY tax exempt status, and we should stop using tax deductions as subsidies, because they are only really available to those with ample money to play with and can afford more experienced tax professionals
Your links explain how in the USA any belief does get non-profit status.
Then you grossly misread the articles.
For the majority religions, its still a paperwork game. However it's also rather standard filing and granting said non-profit status.
The minority religions are told time and again, that "we're not really religions and not worthy of non-profit status". And when we're able to do so, we fight for state recognition of our religion. Most of the times, this fails for us.
And naturally, there's some severe problems with "state recognition of religion leading to non-profit status" and "Congress shall make no law respecting an establishment of religion".
$5M is probably less than what it cost SEC to investigate the church.
Wow, sounds like they must be pretty guilty if the SEC managed to get them to settle for a whole five million dollars!
> According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences.
If you don't report your trades or positions, you can insider trade all day to your hearts desire, or in this case by the hand of God Almighty
Makes it more difficult to get their members to keep paying a mandatory 10% of their income, to be considered a member in good standing, when you're already sitting on a dragon's horde
Curious. At $32B, the LDS church controls more than virtually all US university endowments -- with the only exception being Harvard.
The Church runs many institutions of higher ed, including one that is open globally over the internet with vastly cheaper tuition depending on the student's country's economy (also accredited), as well as extensive humanitarian aid and other ongoing construction projects, building maintenance, publishing, etc that continually consume $. They want to be able to sustain those operations by saving for "a rainy day", which they also counsel others to do.
(Thoughtful comments appreciated with downvotes; thanks.)
Ensign had well over $100 billion by 2020;
https://www.washingtonpost.com/investigations/mormon-church-...
$32B in 2018 -- much higher by now ...
Any idea what specific investments the church was trying to distance themselves from?
One article I saw quoted somebody, saying they thought they wanted to prevent members from mimicking the Church's investments, as it would not necessarily fit their personal situations. That is just one idea.
I'm sure discussion will rapidly turn into only the most correct opinions about religion or capitalism in general.
However, specifically, a form 13-F is a mandatory report for (mostly) mutual funds and similar institutional investors to report in public whatever strategy they're using for investment by dumping a quarterly balance sheet (gross simplification please don't shoot the mostly accurate messenger). Only mutual funds are not permitted privacy when investing, because I donno. You and I do not have to publish our stock ownership (unless you or I are mutual funds)
There's a lot of static about the 13F because the reporting interval is too long for short term investment and too short for long term investment so as a regulatory tool it's quite useless and eliminating the entire thing wouldn't really change anything in the market for anyone. Its one of those bureaucracy tax things that we can't get rid of because it makes the middlemen money and provides a barrier to entry for smaller operators while not actually providing any useful service to anyone other than some jobs.
Hilariously I can't recall any 13F related stock scams over the past couple decades. Every ponzi or fraud in the last couple decades has been accompanied by completely useless 13F filings. My understanding is this form of busywork is very handy to publicize aggressive regulatory activity while not actually regulating anything. Great job SEC, at making sure Madoff and FTX filed their completely useless 13F forms. Thank God the SEC was busy enforcing 13F filings while ignoring what was going on at FTX.
Part of the justification for the fines being miniscule is there's not really much point to the entire process. Not filing a 13F is right up there with smoking weed WRT being a victimless crime.
I don't understand the point of the 13 shell companies because if they were actually trying to conceal information they'd have created somewhat over 330 shell companies to stay under the $100M reporting limit as I understand the entire portfolio is worth $32B. So clearly they're not "up to no good" or if they are, they're unimaginably incompetent. The press is doing the usual propaganda spin on the shell companies which is pretty funny to the people of some financial sophistication (which is probably approx none of the general public). My guess is the "shell" companies are some kind of legit strategy that failed. If you reorg to try to get outside investment using tighter categories, but your sales team is crap, resulting in minimal new investments, technically that reorg can make you a financial criminal under some weird circumstances. Thanks SEC, doin a great job keeping us safe!
I agree. Overall it seems like the fine was small for a couple of reasons, including:
(a) The SEC raised a concern about how stuff was being reported in 2019, so in 2019 the church changed how stuff was being reported.
(b) It appears that all of the money was being reported to the SEC, just not in under the same entity.
So maybe not a nothingburger, but kinda on that end of the scandal spectrum.
A Mormon leader, L. Tom Perry said this years ago (https://www.churchofjesuschrist.org/study/general-conference...) in a religious address:
"My mother was a great delegator. Each Saturday morning as my brothers and sisters and I were growing up, we received housecleaning assignments from her. Her instructions to us had been learned from her mother: “Be certain you clean thoroughly in the corners and along the mopboards. If you are going to miss anything, let it be in the center of the room.”
She knew very well if we cleaned the corners, she would never have a problem with what was left in the center of the room. That which is visible to the eye would never be left unclean.
Over the years, my mother’s counsel has had enormous application to me in many different ways. It is especially applicable to the task of spiritual housecleaning. The aspects of our lives that are on public display usually take care of themselves because we want to leave the best impression possible. But it is in the hidden corners of our lives where there are things that only we know about that we must be particularly thorough to ensure that we are clean."
---
It seems like they took the exact opposite approach. Secret, backroom dealing to hide how much money the faith had to avoid scrutiny over what they are doing with this money. It is to avoid accountability to their own members and the world at large. And it's not surprising that they do this, when they demonstrate almost no accountability to their members when it comes to transparency because members have been lulled into a "god is at the helm, don't worry about it" mentality.
The tax exempt status of religious organizations is an enormous investment that the United States created. I could see at some point that being a worthwhile investment. There are many organizations that do a lot of good. But is that the current dynamic? Is that investment of the USA getting a good return if you consider how many religious organizations hoard the wealth they accumulate, enrich their leaders, and the community they operate in gets very little in return. I helped a member of the LDS faith with some bills last year. These people have paid 10% of their income to their faith for years. I asked them why they asked me for help and not their faith. They said their local leader said they were unwilling to help them with certain bills.
So society is subsidizing the LDS faith with tax benefits in the hope that they do tremendous good, but instead we get hidden finances to avoid scrutiny, and members (not always, but often) not being able to rely on them as a safety net in tough times. There are, of course, times they can rely on them. But overall, does the tax exempt status of religions make sense? Are we getting the return on investment that we hope from this decision to not tax them?
I do not believe we are.
Watching the Tabernacle choir sing at Trump's inauguration was the act that broke my faith in the church. Since then, I've come to see the church as just another corporation. Too bad the corporation isn't governed by their own scripture, what with the "render unto Caesar that which is Cesar's" thing and whatnot.
From the articles of faith (canonized LDS scripture):
12 We believe in being subject to kings, presidents, rulers, and magistrates, in obeying, honoring, and sustaining the law.
13 We believe in being honest, true, chaste, benevolent, virtuous, and in doing good to all men; indeed, we may say that we follow the admonition of Paul—We believe all things, we hope all things, we have endured many things, and hope to be able to endure all things. If there is anything virtuous, lovely, or of good report or praiseworthy, we seek after these things.
Everyone is playing the game of power. Some people are really good at it.
And the years after years of being told in General Conference that the church is being run according to best accounting practices and that everything is healthy and above board.
Another perspective: https://www.thetabernaclechoir.org/about/choir/history/histo...
So, they sing for morally bankrupt presidents who are looking for religious legitimacy.
"The Choir’s participation in these events is not an implied support of party affiliations or politics, but rather a demonstration of its support for freedom, civility and the peaceful transition of power."
Dude, I live in Springville. We had a regional conference in which a GA explicitly told people that not getting what you wanted in an election was not grounds for insurrection. You'll forgive me for believing that my neighbors strongly believe otherwise.
> Dude, I live in Springville.
Hey, neighbor, me too!
> You'll forgive me for believing that my neighbors strongly believe otherwise.
Oh, I know exactly what you mean, but how come what they think trumps (see what I did there, haha) what I think - why does their wacky opinion count for more than mine? Or even better, doesn't the organization's official stance count for something? I mean, the church also told people to get vaccinated, but the fact that some number of them didn't doesn't lead us to conclude that the church is anti-vaccine, does it?
Having a stance and taking a stand are, as we were both probably taught taught, probably from the same Aaronic Priesthood manuals, very different things. Vaccines were painfully, tragically, massively politicized from the getgo. I was guilty of being partisan on the issue. When Trump announced that he was responsible for developing the best vaccine, I was vocal about how there was no way in hell that something he was in charge of was getting injected into my veins. My tune changed when the current administration came to office. That was super inconsistent of me. It illustrates a thing though, because I don't think that everyone's an idiot or that people are fundamentally stupid. It illustrates that we take signals from our tribes and in turn propagate the signal.
When a church sings at a president's inauguration, there's a signal that's being given, regardless of statements that the church might be making to the contratry. When you are celebrating, you pull your allies to celebrate with you. Politicians don't take pictures with babies because the babies are super into policy. They take pictures with babies because a picture of your baby with the politician is a social bond. When your church's musical ambassadors sing for and are on the photographic record with a politician, that's a social bond.
I dunno... that choir has sung at inaugurations and similar events for both parties. It's always had elements of being a victory lap, sure, but for a long time it really was a celebration of things like the peaceful transition of power, and that really is something to be celebrated. Also, if you have a precedent for accepting the invitation when it's given, and then you decline because a certain person was elected, that seems equally partisan, but just in another direction. Maybe the solution is to go back in time and not accept any invitation at all, I dunno.
I actually agree with a lot of your point, but I'm uncomfortable with the extent to which you're suggesting our actions have to be governed by what others think, especially when we go on record as to saying why we are doing something. I might be hypersensitive to it now, but one of the things in our political environment that really gets under my skin is the mentality of "you say you think X, but I [somehow] know you really think Y, and Y is bad, and I'm gonna judge you the same as if you had said you think Y". So, apologies as I've probably misinterpreted what you were saying. IMO it's good to be sensitive to perception, but only to a point. If there are naysayers who will pick at whatever you do, and won't believe what you tell them anyway, letting them overly influence what you end up doing seems like a bad idea.
Nearly every Baptist church/preacher I have seen explicitly endorsed Donald Trump in 2020, and calls Joe Biden an election thief (or one of a dozen other conspiracies).
My understanding is that this is in direct violation of their tax-free status [1]. Maybe we should actually start enforcing this.
[1] https://www.irs.gov/newsroom/charities-churches-and-politics
EDIT:
I couldn't remember the name of the thing that states this, but here it is: https://en.wikipedia.org/wiki/Johnson_Amendment
Are you suggesting that they used church funds or facilities to provide that endorsement, or that they arranged a specific service for the sole purpose of providing that endorsement?
There's a massive difference between an individual putting forth an opinion, and them using an organization to specifically promote that opinion.
I don't know much about the inner personal finances of Kenneth Copeland and his church, but at least during the sermons he very explicitly endorsed Trump and opposed Biden.
If Kenneth Copeland just had a "Trump 2020" sign on his front yard, then of course that shouldn't affect their 501c3 filing, but this was during sermons, during church hours.
That may be the law, but I'm aware of plenty of church leaders publicly saying a whole bunch of "vote for X candidate" (lets be fair; trump), with absolutely no repercussions.
I also found no evidence of any church losing its non-profit status for electioneering in this manner.
I assume this also applies to the churches who had Raphel Warnock on stage and told the congregants to vote for him. FYI, he is a democrat.
I would be giddy if everyone who did something bad regardless of political affiliation would get justice.
I think it's bad when any church specifically endorses or opposes any candidate, Democrat, Republican, Communist, or anything in between.
This is also what the law says if they want to keep their tax-free filing: https://en.wikipedia.org/wiki/Johnson_Amendment
It would be impossible to draw the line at "politics", because of course basically everything can be considered "political". If they want to endorse a specific candidate, that's fine, but then they should pay taxes like the rest of us.
I live in a deep blue area much of the local churches, synagogues, and mosques, support Joe Biden. I've got no problem with that, or the reverse - some of these views just reflect their interpretation of their holy faith through their own perception.
I'd rather we not go after religious organizations unless they are actually doing something criminal, sex crimes, financial crimes, etc.
https://en.wikipedia.org/wiki/Johnson_Amendment
It is explicitly against the rules to have the tax-free 5013c and endorse a political candidate.
If the churches explicitly endorse or oppose specific candidates, whether it's Joe Biden, Donald Trump, or Ross Perot, they are in violation of their tax-free status.
Now, you are of course free to disagree with the rules, but that's what the rules are as of right now.
Personally, I think it's a reasonable place to draw a line.
I find it interesting that they can "agree" to "pay a penalty" to make criminal charges go away.
anti-Church pitchforks come out pretty fast here? it shows that some people simply want to eliminate Church itself, and use bad news to propel that point of view.
why not address the actions themselves, specifically; plenty of crooks in the investment game, some of them use Church money it seems.
That's not what the SEC alleged.
The SEC alleged that with the direction of the LDS leadership (i.e. "with the Church’s knowledge and approval"), Ensign Peak shell-companied the Church's funds.
Best-case scenario is that this was an attempt to hide information for the simple sake of hiding information (as nonprofits, churches are pretty heavily scrutinized relative to other institutions). Worse case, it was an attempt to hide the use of the money for political ends, which is a violation of the tax-exempt agreement of the church. And it's not a small amount of money.
This behavior is every bit as sus as any major non-profit with tens of billions of dollars under its control trying to intentionally dodge public scrutiny.
While I support religious faiths in general, religious leaders shouldn't be in the game of hiding financial data from the civil authorities.
Yeah, a lot of it seems to e a bit of an overreaction. Not sure if the sentiment is HN specific or not, but after reading the article that was on the front page yesterday about ancient people being "stupid with their religious superstitions" I'm not really surprised to see it here.
I personally wouldn't mind eliminating every religious organization, since religion is not any specific organization, but rather a personal belief system and a way to live your own life. Large groups of people (the execs that run the orgs) deriving income and wealth from that personal experience is demented. Christians and others shouldn't be afraid of their religion being destroyed, just the corrupt organizations that prey on their personal beliefs in order to further their own agendas.
I agree, but I also think Christians have precedence to be afraid of government persecution. So, it's a fine line that our forefathers tried to draw.
Christian and many other individuals have been persecuted in the past, but it isn't persecuting an organization by punishing them for breaking the law or acting in contravention to it unless that law is specifically targeted towards them. In this case, it seems there was a "slap on the wrist" punishment, but no true accountability for their actions.
It is pointless to even argue for the straw-man that "Christians in America need to fear persecution" since that is not the case, even the tiniest bit, in today's America.
It's the same principle applied to any entity fighting for freedom. I never posited that Christians in America are under imminent threat of being persecuted by the government. I'm just reinforcing that Christians should scrutinize Church/state interactions and be leery of overreach (on either side for that matter). I should clarify that when I say 'government' I mean all forms of it, just not in America.
In this case, I would agree the punishment wasn't severe enough.
I'm not the OP, but the slap on the wrist punishment seems appropriate for the violation. See VLM's comment about the form in question, for example, but the summary of events is basically:
SEC: Hey, the way you're filing those forms looks sneaky, don't do that.
church: k
There should no longer be tax-exempt status for religious organizations that have committed so many violations for so many years. In fact I think there should be stipulations if you want to be tax exempt, like you have to have all of your finances be public so the people who give to your organization know exactly where the money is going.
I like how you just reinvented the current regulatory regime
If you must profiteer and extract all the funds from blissful ignorance, why not a church.
"Get caught with that, that's just a slap on the wrist"
Revoke the tax-exempt status of religious organizations that engage in political speech.
remove "that engage in political speech" even!
Yeah, it's weird to me that some churches are essentially companies that aren't taxed.
There are rules against election specific speech, but more broadly shouldn’t charities be able to engage in political speech with respect to policy efforts? I would think it strange that a charity could not promote its mission in the political arena.