The Church of Jesus Christ of Latter-day Saints did not come off looking good Sunday night on “60 Minutes” but not entirely because of the whistleblower who alleges the Utah-based faith has been untruthful about its financial dealings.
As reported by correspondent Sharyn Alfonsi, the 13-minute segment, titled “The Church’s Firm,” included a seemingly impartial third party who cast doubt on the church’s version of events and a high-ranking church official who looked, at best, evasive.
David A. Nielsen, a former portfolio manager at Ensign Peak Advisors, the church’s investment arm, has alleged for nearly four years that the denomination has built a reserve fund worth north of $100 billion and that it has violated its tax-exempt status in doing so.
And, in his first on-camera interview, Nielsen sounded sincere when he said, “I thought I was going to work for a charity … and the funds were never used for that” — although, for the most part, Alfonsi didn’t press him hard on his allegations and largely ignored the part faith played in his actions.
The closest she came to asking him a tough question was in the final seconds of the segment, when she said it was possible he was “dead wrong.” Nielsen replied, “I know what I know. I saw what I saw.”
Before that, “60 Minutes” reported several numbers that were, no doubt, of interest to Latter-day Saints and outsiders. The newsmagazine show said the church brings in an estimated $7 billion annually in tithing and that it has $1 billion left over at year’s end, excess that presumably goes into the Ensign Peak Advisors account.
(Describing tithing as “about” 10% was weird, however, which the church describes as precisely 10%.)
Much was made of a document showing the church spent $1.4 billion from its Ensign Peak reserves on downtown Salt Lake City’s City Creek Center mall and $600 million to prop up a then-failing Beneficial Life Insurance.
“I’m not an expert on charities,” Nielsen told Alfonsi, “but I’ve been around the block enough to know that charitable organizations can’t bail out for-profit businesses and maintain their charitable status.”
W. Christopher Waddell, the first counselor in the church’s Presiding Bishopric, noted that the shopping center is bringing financial returns to the faith. Church leaders have also insisted that the money for the mall and the insurance firm came from “earnings on invested reserve funds,” rather than members’ actual tithing donations.
Waddell pointed out that the faith owns Beneficial Life and had to bail it out. According to Alfonsi, Waddell said Beneficial Life had paid back most of that money, “but the church would not disclose the details of that deal, or the mall investment.”
It certainly didn’t look good, however, that Ensign Peak created shell companies to hide billions in assets. Or that, according to Nielsen, a top Ensign Peak executive told him he feared the operation could lose its tax-exempt status if the full story came out.
The CBS newsmagazine let the church — through Waddell — have its say. According to him, Nielsen’s allegation “is not just incorrect, it’s flat-out wrong.” Redundant, but he was making a point. Waddell said the billions the church has in reserve are “for the continued operation” of the church “and for the future.”
On camera, Waddell looked and sounded evasive. Asked what the current value of Ensign Peak’s assets currently is, he said, “Yeah, that’s something I can’t, I can’t share with you right now.”
Alfonsi pressed him, saying that some have estimated the sum at $150 billion. “That’s an estimate that some have made,” Waddell said. Alfonsi asked again, and Waddell said, “We have significant resources.” He smiled when he said it; it was not a good look.
The nadir for Waddell came when Alfonsi asked about “the idea that secrecy builds mistrust?”
“Well, we don’t feel it’s being secret,” Waddell replied. “We feel it’s being confidential.”
“What’s the difference?” Alfonsi asked.
“The difference is, um … [long pause] … I guess is point of view,” Waddell said. “It’s confidential in order to maintain the focus on what our purpose is and what the mission of the church is, rather than the church has X amount of money.”
“But don’t you agree this would be a nonissue if there was more transparency?” Alfonsi asked.
“No, because then everyone would be telling us what they want us to do with the money,” Waddell replied.
The exchange came off poorly for him and, frankly, the church.
And it certainly didn’t reflect well on Utah’s predominant faith when Alfonsi reported that, according to the Securities and Exchange Commission, it went to “great lengths” to hide $32 billion in securities over 20 years, creating 13 shell companies. Or that the SEC fined the church and Ensign Peak a total of $5 million. And Waddell telling Alfonsi that the church’s lawyers advised creating the shell companies sounded, well, lame.
It didn’t help when Alfonsi went to Phil Hackney, “who worked in the office of chief counsel of the IRS and teaches tax law” — and who, seemingly, has no ax to grind. He said private foundations give 5% of their total assets to charity every year. (If the church has $100 billion in its reserve account, that would, of course, be $5 billion a year. The church says it gives $1 billion.)
“There’s no clarity when it comes to public charities, and certainly not with churches,” Hackney said. “But I would expect to see something like 2%, 3% of assets being spent out to justify that status.” But the church doesn’t reveal what its assets are.
Hackney also questioned the bailout of Beneficial Life, but he said the chance of the IRS investigating the church’s finances is “slim” because “the political risk is so great that it comes with real danger.”
Apparently, the staff at “60 Minutes” got the memo about how the church wants to be known. The report never once used the word “Mormon” to describe it, and the word itself only came up twice — when Alfonsi said Nielsen described himself as a “devout Mormon” when he went to work at Ensign Peak; and in reference to the MormonLeaks website.
Alfonsi did once refer to the “Church of Latter-day Saints,” which is not preferred by the faith these days, but may be better than using Mormons?
That is, perhaps, little comfort to the leaders of The Church of Jesus Christ of Latter-day Saints as they ponder whether or how to do any damage control.
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