A former investment manager for the Church of Jesus Christ of Latter-day Saints says that the organization stockpiled more than $100bn in funding intended for charity work but never spent it on such projects.
“It was really a clandestine hedge fund,” David A Nielsen said during an interview with CBS’s 60 Minutes. “Once the money went in, it didn’t go out.” Nielsen, who submitted a complaint to the Internal Revenue Service in 2019, previously managed the church’s investment arm, Ensign Peak Advisors, for nine years.
A report on the complaint to the top US tax authority was published by the Washington Post in 2019 after Nielsen’s brother provided a copy. Nielsen, a devout Mormon himself, was first recruited to work for Ensign Peak while working on Wall Street.
Nielsen said that during his time with Ensign Peak, he observed the church’s investment firm “[masquerading] as a charity”, dodging what would be billions of dollars in taxes by falsifying records, and generally misleading other believers of the Mormon faith.
Every year, the Church of Jesus Christ of Latter-day Saints collected an estimated $7bn from its 17 million members through a practice known as tithing, in which members give about 10% of their income to the religious organization.
About $1bn of the collected money was placed into a reserve fund at Ensign Peak – which is registered as a non-profit – and invested, with profits growing tax-free.
Created in 1997, the reserve fund has ballooned to more than $100bn, which is nearly twice the size of Harvard’s endowment, Nielsen said. “I thought we were going to change the world,” Nielsen remarked. “We just grew the bank account.”
Records show that money from the church’s reserve fund was used to support for-profit initiatives, including a Salt Lake City mall built on church land and a church-owned insurance company.
Nielsen resigned in 2019 after a website named Mormon Leaks linked church members to shell companies that held billions of dollars in stocks and bonds, assets that were actually controlled by Ensign Peak.
After his resignation, Nielsen filed a 74-page whistleblower complaint to the IRS that accused Ensign Peak of violating its tax-exempt status by directing money to for-profit businesses.
Nielsen’s complaint was later forwarded to the Securities and Exchange Commission, which said the church took great lengths to hide the size of its investments through shell companies and fake office addresses, the Washington Post reported. The church paid $5m to resolve its SEC case in February.
The Mormon church official W Christopher Waddell, who oversees the organization’s financial, real estate, investment and charitable operations as the first counselor in the presiding bishopric, vehemently denied Nielsen’s accusations. “Flat-out wrong,” said Waddell, who added that Ensign Peak acted as “the church’s treasury” and provided resources for its operation.
Nielsen’s interview with 60 Minutes is one of the first times he has given public comment on the report. “We gave the IRS and the SEC all the professional courtesy,” Nielsen said. “This is just too important to fall through the cracks.”
But experts say that the likelihood of the IRS investigating Nielsen’s claims is low. “The political risk is so great that it comes with real danger,” former IRS official Phil Hackney said during the 60 Minutes segment. “At the same time, there’s a real risk to the rule of law if the IRS doesn’t come in and enforce those rules.”
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