LDS Church moves to quash James Huntsman’s lawsuit seeking to recover millions in tithing

Utah-based faith argues its leaders never misled members on funding for City Creek Center, says money came from commercial entities and earnings off the contributions.

(Leah Hogsten | The Salt Lake Tribune) The Salt Lake Temple of The Church of Jesus Christ of Latter-day Saints his under major ongoing renovations, Aug. 4, 2021.

Lawyers for The Church of Jesus Christ of Latter-day Saints have asked a California judge to dismiss fraud allegations brought in a federal lawsuit by prominent former Utahn James Huntsman over millions of dollars in tithing.

Huntsman left the Salt Lake City-headquartered religion in 2020 over a crisis of faith and has now sued for a refund on at least $5 million in tithing donations “by cloaking his claim in the garb of a fraud action,” church attorneys argued late Monday in seeking to have his March lawsuit tossed out.

The lawyers deny allegations made by the California businessman that church leaders misled members over spending of tithing funds on commercial projects, including the upscale City Creek Center shopping development in downtown Salt Lake City.

To that end, they’ve provided U.S. District Court Judge Stephen Wilson and Huntsman’s lawyers with confidential financial data — redacted in public court documents — that detail how money used for City Creek instead came from “commercial entities owned by the church” and “earnings on invested reserve funds,” rather than actual tithing donated by members.

That money went to the City Creek project via Property Reserve Inc., a for-profit real estate arm of the church, and from accounts set aside at Ensign Peak Advisors, an investment fund created in 1997 to manage and build the church’s financial reserves for a possible “rainy day,” its chief lawyer in the matter, Rick Richmond, contends.

“Huntsman’s claim is based on nothing more than an unproven document he read in a newspaper, which is an inadequate substitute for actual facts and cannot justify Huntsman’s attempt to claw back his voluntary, unrestricted contributions,” Los Angeles-based lawyers for the church argue in the motion for summary judgment.

Their lengthy filing, including excerpts from a July 16 deposition by Huntsman, is the first of a series of legal exchanges scheduled this month by Wilson, culminating in an Aug. 30 hearing on whether the case will proceed.

James Huntsman

Huntsman, a 50-year-old resident of Coronado Island, is accusing Latter-day Saint leaders of fraud, alleging they “repeatedly and publicly lied” about billions of dollars in member donations, including at least $5 million of his own tithing, money he contends was meant for missionary work, temple-building and charitable projects.

The founder and owner of Blue Fox Entertainment, a film distributor based in California, is promising to donate any funds he may recover to charities that support “LGBTQ, African American and women’s rights.”

His attorneys are scheduled to file counterarguments Aug. 16 on why the case should not be dismissed.

Huntsman’s chief Los Angeles-based attorney, David Jonelis, said Tuesday that, while his firm does not comment on pending litigation, “Mr. Huntsman looks forward to filing his opposition to the church’s motion.”

In supporting documents also filed late Monday, church lawyers aired details on Huntsman’s charitable contributions to the church in cash and stocks, noting that he paid tithing from 1993 until 2015.

The motion includes a sworn statement from Paul Rytting, a director within the church’s Finance and Records Department, detailing its history and reasons for tithing. Also, starting in 2003, the filing tallies dollar amounts ranging from $1,000 to $405,135 the businessman gave yearly, along with substantial donations of shares of stock in Huntsman Corp. and a company called Sigma Designs.

“When Huntsman made tithing contributions,” church attorneys declare in their motion, “he believed he was obeying one of God’s commandments and would receive blessings from God for doing so.”

Huntsman stopped making contributions in January 2015, church attorneys contend, “over a growing disillusionment with other doctrinal aspects” of the faith, which Huntsman acknowledged in his deposition had to do with church beliefs regarding a “polygamous heaven and polygamy, generally.”

Several key assertions in Huntsman’s lawsuit hinge on revelations included in a December 2019 whistleblower’s complaint to the IRS, filed by David Nielsen, a former portfolio manager with Ensign Peak Advisors, which oversees chunks of the church’s investment portfolios.

Nielsen, along with his twin brother, Lars, have told the tax agency that the worldwide church had nearly $100 billion in a reserve account meant for charitable work but not spent that way, with up to $2 billion allegedly used on City Creek and another church-owned firm, Beneficial Life Insurance.

In his deposition, Huntsman acknowledged “he does not know either of the Nielsen brothers,” the church said in its court filing. Nor does he know “whether the Nielsen brothers are honest men.”

Elsewhere, church lawyers point to statements by Huntsman — a brother of former Utah Gov. Jon Huntsman Jr. and a son of the late Utah industrialist-philanthropist Jon Huntsman Sr., who had served as an area Seventy in the church and died in 2018 — that “he wants publicity from the case” and is intent on “embarrassing his former church in whose doctrines and practices he no longer believes.”

They also contend Huntsman wants to use the case to “intrude” on the church’s rights to use “voluntary contributions it receives as it sees fit” — a violation, they maintain, of First Amendment protections for religion.

Editor’s noteJames Huntsman is a brother of Paul Huntsman, chairman of the nonprofit Salt Lake Tribune’s board of directors.