David Nielsen explains in his new document to the Senate Finance Committee that he was a lifelong member of The Church of Jesus Christ of Latter-day Saints, a person whose family was part of the church since the mid-1800s, who graduated from Brigham Young University and who served as a missionary for the church for two years in Brazil. In criminal conduct, EPA has engaged in a Klein conspiracy to defraud the IRS by pretending to be tax-exempt while concealing and falsifying the facts of its massive securities investment business, the document states. Ensign Peak held $349,000 in shares in Beyond Meat, maker of plant-based meat substitutes, at the end of 2019, but that was down to $5,000 in June, making it the smallest holding in the portfolio. The investment activity has been the subject of some curiosity as to how an otherwise low-profile religious organization can amass such a massive portfolio. Access your favorite topics in a personalized feed while you're on the go. Latter-day Saint officials acknowledged that it used Ensign funds to underwrite construction of City Creek Center mall in downtown Salt Lake City and rescue Beneficial Life, a church-owned insurance company, but said there was nothing illegal in that. For the original stories in December of 2019,ReligionUnplugged.comreceived awards from Religion News Association and TheSociety for Advancing Business Editing and Writing and was a finalist foran EPPY Award for best business reporting from Editor & Publisher. If you read the early patriarchal blessings, many early members were told they would see Jesus before they died, because they truly believed they were in the final years before his return. Neilsen's complaint claims Ensign president Roger Clarke has said the fund would be used should the second coming of Christ occur, while the Post reported that high-ranking cleric Bishop. Ensign Peak's investing strategy turns the $100 into $150 (Ensign Peak pays no tax on the gain because its passive . In several rounds of clashing court motions, the closely watched dispute led church attorneys to reveal innermost business details to a federal judge on some of Ensign Peaks biggest transactions including how it helped fund the City Creek Center mall in downtown Salt Lake City. Back to the article: "Here are some other takeaways from The Journal story: Ensign Peak Advisors. Clarke did not respond to an email . See all articles by Roger G Clarke Roger G Clarke. Read the Wall Street Journal story. [5] History [ edit] And as we're learning more and more each day, they are right to fear that, because if you're willing to approach their history and practices in the way you approach any other organization, product, or belief, you will realize that not only is the church demonstrably false, but it's actually not very good, either. He wrote that it avoided having a compliance officer between 1997 and 2015. Analytic Investors, Inc. Steven Thorley. And on to the article: "Latter-day Saint officials kept the size of the churchs $100 billion investment reserves secret for fear that public knowledge of the funds wealth might discourage members from paying tithing, according to the top executive who oversees the account. Unlike the Corporation, Mr. Huntsman is confident that these charities will actually use his donations for their intended purposes.. Again, the church refuses to be transparent with their members as they enjoy the benefits of being a tax exempt corporation. Aseries of storiesby ReligionUnplugged.com in December of 2019 revealed a whistleblower complaint filed with the Internal Revenue Service that alleged The Church of Jesus Christ of Latter-day Saints funneled member tithes into EPA, a nonprofit supporting organization controlled by the church, and amassed more than $100 billion in owned assets under management over 23 years. The head of EPA, Roger Clarke, indicated to the Journal that EPA is a rainy-day account to be used in difficult economic times. Some church leaders suggested the fund could be used in the event of an economic or financial crisis. Ensign Peak Advisors ( email) 60 East South Temple 4th Floor Salt Lake City, UT 84111 United States. And while we can point to a laundry list of items that show this church is not true, this is a big reason you know that the church is not good. The investment activity has been the subject of. In it, Clarke affirms the veracity of all business records submitted on Ensign Peaks role in the case, including its payments to City Creek Reserve. . We can prove that over and over again whether it's looking at DNA and the Book of Mormon, the Book of Abraham, or how Joseph Smith retrofitted the priesthood restoration or First Vision to establish authority. There is simply no statistical evidence that paying tithing brings people out of poverty (anecdotally I have been much better off in my career since I left as have thousands of others who leave the church), and tithing was not enforced to enter the temple until 1899, which is why Prophet Joseph F Smith assured members there would be the day that the church would have "sufficient" money to not require tithing money from members. . Financial Analysts Journal, Vol. Alongside that stream of new financial information, a few other cracks in the walls of secrecy around Ensign Peak are being widened in federal court. See all articles by Roger G Clarke Roger G Clarke. Ensign Peak has since made what amounts to a stunning series of quarterly reports to federal authorities on the portion of the Utah-based faiths overall holdings it manages, not least for the portfolios sheer size. It wouldnt completely shock me if the reporting kickstarted the disclosure, said Sam Brunson, a law professor specializing in tax law at Loyola University of Chicago and a practicing Latter-day Saint. As of mid-2021, it reported more than $2 billion each in companies specializing in software; internet services; semiconductors; other computer hardware; and biotechnologies behind new drug treatments. Ensign Peak Advisers, the non-profit that oversees the Church's portfolio, failed to comply with the regulator's disclosure rules by filing forms for shell companies that "obscured" the Church's investments, according to the SEC on Tuesday. To receive the free newsletter in your inbox, subscribe here. We covered this above so we won't rehash this much here. This new memorandum to the U.S. Senate clarifies and follows up on his complaint about EPA. Before that, the reserves were managed by the churchs Investment Securities Department, a top church financial official disclosed. Not only is that statement simply untrue, it is beyond self serving for a man who knows the enormous amount of cash they are sitting on to tell those who do not have the means that they have to pay tithing in order to not just get out of poverty, but to enter the temple which they are told is essential to their salvation. Last, the church concedes the whistleblower was accurate when stating their yearly gains were about 7%, which is the benchmark rule of thumb for most investment plans. As he grew disillusioned with leadership, the document says he eventually resigned on Aug. 29, 2019, and filed a document to the IRS Whistleblower Office in November of 2019. as well as other partner offers and accept our, Church of Jesus Christ of Latter-Day Saints, Registration on or use of this site constitutes acceptance of our. He also served as president and chief investment officer of TSA Capital Management in Los Angeles, CA for ten years and as chairman of the board of Analytic Investors for twenty years. This big concession here is that the church admits they used this tax exempt fund to underwrite a for profit venture in the City Creek Mall and to rescue Beneficial Life, both of which were originally reported by the whistleblower. Software Updates. The firm had nearly $1 billion worth of shares in Amazon and Googles parent company, Alphabet, as well. [4] In 1997, the investment division of the LDS Church was spun off into a separate legal entity named after Ensign Peak, a hill that overlooks Salt Lake City. That the church implies that they created over a dozen shell corporations because they were afraid members would either stop paying tithing or try to replicate their investment scheme is abhorrent just as the church hiding their true history from members even in the year 2020. Companies Connections. The document states in several places that Nielsen became more disillusioned over time as he worked at the firm and believed EPA was not using its resources for charitable, educational or religious purposes. Roger Clarke, the head of Ensign Peak, told the Wall Street Journal that the fund was an emergency account to be used in difficult times. The complaint added that Roger Clarke, the president of Ensign, claimed that the investment branch collected the funds in preparation for "the second coming of Christ." Visit Insider's homepage for more stories. Downloads 496 (82,744) Its holdings dwarf those ofendowments at any university,such as Stanford, Harvard or Yale. With the 7% annual return they are getting, they could fund the entire church (approximately $5 billion a year) and still have well over $2 billion left over each year. Ensign Peak Advisors. We include specific empirical results that can be replicated as an exercise in data collection, programming, reporting, and analysis. The church literally created over a dozen shell companies to hide their finances, so please forgive me if I don't believe the church's prophets when they declare the church complies with all applicable law governing our donations, investments, taxes and reserves. Harindra de Silva. The stake bounced up again to $102,000 in June. As for the idea that the $124 billion is for the years leading up to Jesus' return, I also think that is a ridiculous notion. Doctor Thorleys publications have been presented at academic and professional seminars around the world. Children are starving to death every minute, millions upon millions of people have no access to clean water, and natural disasters impact poor countries around the world and yet the church has never once made a charitable donation from this $124 billion account according to the whistleblower account. In a complaint filed with the IRS, Nielsen accused Ensign of taking in billions from members tithes and other donations and not spending any of it over a 22-year period for charitable purposes. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future., The Wall Street Journal, which didnt cover the story until February 2020,made a unique contributionby visiting Salt Lake City and interviewing leaders of EPA and the church who confirmed the previous reporting ofReligionUnpluggedandthe Post. Donate to the newsroom now. It has shifted since mid-2020 into stocks in basic industries and capital goods that might expect to take off in an economic recovery. Suggested Citation, 60 East South Temple4th FloorSalt Lake City, UT 84111United States, 555 West 5th Street50th FloorLos Angeles, CA 90013United States213-688-3015 (Phone)213-688-8856 (Fax), 616 TNRBBrigham Young UniversityProvo, UT 84602United States801-378-6065 (Phone)801-378-5984 (Fax), Mutual Funds, Hedge Funds, & Investment Industry eJournal, Subscribe to this fee journal for more curated articles on this topic, Capital Markets: Market Efficiency eJournal, Econometric Modeling: Capital Markets - Portfolio Theory eJournal, We use cookies to help provide and enhance our service and tailor content. The financial records destroy Huntsmans fraud claim, its lawyers argued in Aug. 31 court filings. As we usually close out these posts, I want to mention how difficult it is to take in this new information and changes in policies, and we understand how painful it is to process. Available at SSRN: If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday. We have not seen the actual document in question; however, it appears they are dated allegations. The church here is saying they need the $124 billion for when the "next 2008" takes place so they "won't have to stop missionary work," yet when the 'Great Recession' actually did hit, the church never tapped into the fund nor did it halt missionary work. Isnt amassing wealth and then saving it the equivalent of burying talents, that Christ condemned in the biblical parable? Miner asked. The Journal reported that employees of the firm sign lifetime confidentiality agreements and most current employees were no longer told the assets under management figures for the firm. The SEC alleges that from 1997 through 2019 Ensign Peak failed to file 13F forms, which are documents that certain investment managers must disclose quarterly, listing the securities that they manage. Nielsens document says that If EPA is not held accountable, this case will undermine confidence among ordinary citizens that our tax laws are enforced even-handedly when wealthy, influential organizations are involved. Wait, what? As we've pointed out in countless pages on this site and others, the church will never be true. (In Conference Report, Apr. And any organization that threatens to take away your exaltation for helping local causes instead of their investment portfolio isn't worth your time, money, or worship. If the church truly believed what they were doing was true and good, they would be open and honest and tell every member to research their claims and hold them accountable. Of course the church (and church apologists) would reply that Joseph F Smith was speaking as a man in that instance, and that $124 billion in liquid assets is not "sufficient" for the church's needs. About $3 billion of that came from combined shares of Apple and Microsoft, accounting for 7% of the funds total value. Latter-day Saints, like many Christians, believe there will be a period of war, hardship and natural disasters before Jesus comes back. According to its first 2020 report to the U.S. Securities and Exchange Commission, filed months after allegations by whistleblower David Nielsen and his twin brother, Lars, made headlines, Ensign Peaks value was reported at $37.8 billion in stocks and mutual funds. The regulator says the Church's investment manager "went to great lengths" to avoid disclosures. So, yes, it is a remarkable trust in church leadership. The very idea that you you need to give 10% of your income in order to enter an LDS temple for the chance at exaltation is also a big red flag to the church's truth and goodness claims. It has significantly upped those holdings since. And while that might not be against the law (there are questions of whether it's lawful to be tax exempt when you are not actively using the fund for charitable purposes), it is absolutely against their own definition of honesty. What member is going to be harmed by seeing that the church has a professionally run investment fund and then attempt to replicate it? And he suggested Congress and regulators have a duty to act upon the disclosures. That case, brought by prominent former Utahn James Huntsman, sought at least $5 million in donations, interest and penalties, alleging the faiths top authorities fraudulently misled members about spending donations meant for spiritual endeavors on commercial projects instead. Staff members at EPA needed to be in good standing with the church to work at the investment firm in downtown Salt Lake City. Analytic Investors, Inc. Steven Thorley. The SEC's order said that. Ensign Peak Advisors. No organization that truly exists to help every child of God would create over a dozen shell companies to make sure the world can never find out what they have, and no organization that tells you that you will be eternally separated from your family unless you keep giving 10% to them is worth your devotion. In contrast, a long-only portfolio of individual securities, using the same risk model and return forecasts, captures most (e.g., 80%) of the potential improvement. Whether you're a believing member or have left the church, the only thing I can say is that if you want to continue tithing, follow the Bible and use the money to help those around you whether it's a children's program, a local animal shelter (always a favorite of mine), or a food pantry. The Mormon Church and its investment adviser will pay millions to settle charges with the SEC. A recent Tribune/Suffolk University poll revealed that while a majority of Utahns, from across the religious spectrum, support the idea of requiring tax-exempt religious organizations to publicly report their finances, barely a third of very active Latter-day Saints do. The Not-So-Well-Known Three-and-One-Half Factor Model. Editors note James Huntsman is a brother of Paul Huntsman, chairman of the nonprofit Salt Lake Tribunes board of directors. Back to the article: Debates about Mormon finances and the question of transparency have persisted for decades but were triggered again in December by a whistleblower complaint filed by David Nielsen, a former portfolio manager with Ensign Peak, and reported by The Washington Post. The final section of the article: Clarke also told The Journal he was misunderstood by Nielsen, who asserted that Clarke had said the church had mustered the money for Christs Second Coming. Or how about the many active members who not only give 10% to the church, but contribute fast offerings each month (or more) only to find out that the church earns a million dollars on the gain alone every single hour, and yet instead of using it to help those in need, they ask you to contribute more instead of being selfish and using it for worldly things such as a family day out or a weekend trip with the kids. We believe at some point the Savior will return. A federal judge recently tossed out the lawsuit, but Huntsmans lawyers plan to appeal. Ensign Peak Advisors, the investment firm connected to the Church of Jesus Christ and Latter-Day Saints, started filing a quarterly 13F form on Feb. 14, 2010, with the Securities and Exchange Commission, which regulates publicly traded companies and other financial firms. sltrib.com 1996-2023 The Salt Lake Tribune. The fund holds immense stakes of $400 million or more in household stocks like Home Depot, Disney and Johnson & Johnson while at times making lucrative quick trades in meme stocks such as GameStop and Tesla. When you look at the details of the story along with the church's rationale for deceiving members, it quickly goes from dishonest to reprehensible. Ensign Peak Advisors ( email) 60 East South Temple 4th Floor Salt Lake City, UT 84111 United States. The document says Nielsen left a financially lucrative career to work for EPA because he believed it was a worthy cause and organization. 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