Church comments on SEC settlement

[Moksha]

This is a very interesting podcast from the Widows Mite Project. It is from Mormon Stories featuring RFM and an accounting professor from Illinois who specializes in financial reporting. This is an ongoing project.

https://www.youtube.com/watch?v=Flbp_V9Euas

[Doctor CamNC4Me]

https://drive.google.com/file/d/1lvjGkM ... p=drivesdk

David Nielsen memo submitted to Senate Finance committee. It’s long, so there’s no way to parse it down to a few sentences.

- Doc

[Res Ipsa]

https://drive.google.com/file/d/1lvjGkM ... p=drivesdk

David Nielsen memo submitted to Senate Finance committee. It’s long, so there’s no way to parse it down to a few sentences.

- Doc

It’s interesting, but I question the assertion that profits from the investments were taxable income. The church can legally accumulate wealth through investing without without paying income tax on the profit from those investments. If it retains a fund manager, who invests the church’s money, the church’s profits on investments aren’t taxable even though the funds are being managed by a taxable entity. The manager would have to pay taxes on its profits from fees and commissions, but not on the church profits.

So, why should the profits on the church’s investments be treated differently simply because the church owns the investment company? Certainly, Ensign Peak is a private business that is required to pay taxes on profits it earns for charging commissions and fees. But profits earned on the church’s investments belong to the church, not Ensign Peak. So, while I think there’s no dispute that Ensign Peak is not itself non profit, that doesn’t affect the tax free status of the church’s income. I’d need to hear from a tax lawyer with no skin in this game before jumping on the “not tax free” bandwagon.

I wonder if this is why the SEC prosecuted only the reporting violations resulting from the clone LLC scheme and didn’t challenge the tax-exempt status of the investment profits. I noticed that the whistle blower asserts that Ensign Peak was lying to protect the church’s tax free status, while the SEC order identifies the motive as concealing the size of the funds from the membership?

[Doctor CamNC4Me]

https://drive.google.com/file/d/1lvjGkM ... p=drivesdk

David Nielsen memo submitted to Senate Finance committee. It’s long, so there’s no way to parse it down to a few sentences.

- Doc

It’s interesting, but I question the assertion that profits from the investments were taxable income. The church can legally accumulate wealth through investing without without paying income tax on the profit from those investments. If it retains a fund manager, who invests the church’s money, the church’s profits on investments aren’t taxable even though the funds are being managed by a taxable entity. The manager would have to pay taxes on its profits from fees and commissions, but not on the church profits.

So, why should the profits on the church’s investments be treated differently simply because the church owns the investment company? Certainly, Ensign Peak is a private business that is required to pay taxes on profits it earns for charging commissions and fees. But profits earned on the church’s investments belong to the church, not Ensign Peak. So, while I think there’s no dispute that Ensign Peak is not itself non profit, that doesn’t affect the tax free status of the church’s income. I’d need to hear from a tax lawyer with no skin in this game before jumping on the “not tax free” bandwagon.

I wonder if this is why the SEC prosecuted only the reporting violations resulting from the clone LLC scheme and didn’t challenge the tax-exempt status of the investment profits. I noticed that the whistle blower asserts that Ensign Peak was lying to protect the church’s tax free status, while the SEC order identifies the motive as concealing the size of the funds from the membership?

For anyone interested, Nielsen makes his case on page 37 and 38 as to why the EPA should pay taxes. He has a real zinger ref point #2. Heh.

- Doc

[Dr Moore]

https://newsroom.churchofjesuschrist.or ... settlement

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.

This slippery bit of calculated deception hasn't been mentioned yet.

Here is the timeline.

• June 2019: SEC comes knocking. "Ahem, we don't like what you're doing here. It violates the law."
• Aug 2019: Ensign Peak continues to use shell companies to illegally file 13F disclosures, for period ended June 30, 2019.
• Nov 2019: Ensign Peak continues to use shell companies to illegally file 13F disclosures, for period ended Sept 30, 2019.
• Nov 2019, Lars Neilson drops the "$124 billion" whistleblower bomb on the world.
• Feb 2020, Ensign Peak files its first ever proper 13F disclosure, for period ended Dec 31, 2019.

Now read the the two sentences above again. See what they did? Deliberate, calculated effort not to tell the whole truth. If not for Lars' whistleblower videos, maybe the church would have waited all the way until the Feb. 2023 SEC settlement to finally vote unanimously on following the law.

How does anyone trust an organization whose leaders profess to be in the truth business, when they can't be relied upon to tell the truth?

I have to add an important addendum to this timeline. It should read as follows.

• June 2019: SEC comes knocking. "Ahem, we don't like what you're doing here. It violates the law."
• Aug 2019: Ensign Peak continues to use shell companies to illegally file 13F disclosures, for period ended June 30, 2019.
• Nov 2019: Ensign Peak continues to use shell companies to illegally file 13F disclosures, for period ended Sept 30, 2019.
• Nov 2019, Lars Neilson drops the "$124 billion" whistleblower bomb on the world.
• Nov 2019, First Presidency, responding to the whistleblower documents, releases a statement about church finances. Critically, their statement contains the following language. Text in red is mine.

  The Church complies with all applicable law governing our donations, investments, taxes, and reserves.
  
  This is a lie. The church was NOT complying with “all applicable” law governing “investments” and was, at the time, under SEC investigation for 22 years of violations of institutional investor disclosure laws.

• Feb 2020, Ensign Peak files its first ever proper 13F disclosure, for period ended Dec 31, 2019.

[Dwight]

and also important from the SEC order:

32. The Church and Ensign Peak continued to take the same approach to filing Forms 13F through the Clone LLCs despite two Church Audit Department (“CAD”) internal audits of Ensign Peak – one in 2014 and one in 2017—that reviewed the LLC Structure. In discussions with Ensign Peak’s senior management, although CAD did not recommend specific changes to the LLC Structure, CAD highlighted the risk that the SEC might disagree with the approach.

The LLC Structure Was Made Public

33. In May 2018, a public website reported that various entities that appeared to have ties to the Church had filed Forms 13F revealing holdings of approximately $32 billion. The website referenced evidence indicating that these entities’ domain names were all registered to an entity tasked with overseeing and protecting the intellectual property of the Church, and that each of the LLCs identified listed a Business Manager whose name matched that of a Church employee.

34. After the website reported this information, two Business Managers resigned their roles, voicing concerns about what they had been asked to do. Rather than changing the LLC Structure, two new Business Managers were assigned to replace the two who resigned.

[Doctor CamNC4Me]

Good site for sharing with the cultists:

https://secletter.org/

It has lots of pictures so it may hold their attention for ~5-10 seconds.

- Doc

[Moksha]

The SEC was probably thrown off by this behavior coming from a Church. They probably expected a bunch of pious do-gooders with scrupulous adherence to principles of honesty.

[Moksha]

The upcoming Mormonism Live podcast featuring David Bokovoy promises a discussion on how the Church worships wealth.

https://www.youtube.com/watch?v=4DBwMIYPs-o

[Everybody Wang Chung]

Rumor has it that Elder Brad Wilcox will be speaking at this upcoming General Conference to directly address the SEC fine. Here is a preview of what he is expected to say: