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SEC charges the Church of Jesus Christ of Latter-Day Saints

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Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#101
post #72

Earlier quoted context omitted.

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 lite…

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."

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#102
post #5

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.

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.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#103
post #5

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.

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.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#104
post #31

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?

The answer says they "regret mistakes made".

(Thoughtful comments appreciated with downvotes; thanks.)

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#105
post #72

Earlier quoted context omitted.

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 lite…

> 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.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#106
post #27

Earlier quoted context omitted.

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.

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

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#107
post #70

Earlier quoted context omitted.

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…

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.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#108
post #41

Earlier quoted context omitted.

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)

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.

I hear you, and suspect generalizing to not only one party or religious faction still works.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#109

- $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.

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.

Re: SEC charges the Church of Jesus Christ of Latter-Day Saints

#110
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.

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