Since 1959, when the LDS Church decided that its members no longer needed to know how their tithing money was being spent, the Church has asserted that it has a constitutional right to keep its finances secret from the courts and other branches of government.
There is no legal basis for this assertion. There is no constitutional doctrine that allows a church to refuse to disclose its finances when required by court order, valid discovery requests, or other legal processes. While there is generally no legal requirement in the United States for churches to disclose their finances, that lack of an affirmative duty is not equivalent to a constitutionally-protected privilege from disclosing financial records in legal proceedings.
See: Lynda L. Hinkle, "Tithing to the Vortex: The Secrecy of Financial Records in the Church of Jesus Christ of Latter Day Saints [sic] and the Case of D.I. v. Corp. of the Bishops of the Church of Jesus Christ of Latter Day Saints [sic]," 10 Rutgers J. of L. & Relig. 5 (2008)Churches are liable for their secular conduct that harms other people. An example of this can be found in a 2007 Washington Court of Appeals case,
Doe v. Corp. of the President of the Church of Jesus Christ of Latter-day Saints. In
Doe, the Washington court upheld a jury verdict against the LDS Church for outrage when two teenage girls told their bishop that their stepfather was molesting them, and in response, the bishop told the girls not to tell anyone about it because it would break up their family and cause gossip in the ward.
Since churches are liable for tortious, non-religious harm to other people, and can be compelled to pay money damages for such harm, it is a non sequitur that the First Amendment is violated by requiring churches to disclose their finances in court proceedings. In fact, such a privilege would violate the Establishment Clause because it would
favor religious organizations over non-religious civil defendants, who can be compelled to disclose their finances when the law allows such discovery.
One circumstance in which civil defendants may be compelled to disclose their finances is when there is a claim for punitive damages. The law on punitive damages varies by state, but generally punitive damages can be awarded as a deterrent to punish defendants who have harmed others through deliberate or reckless (i.e., knowingly disregarding a danger of harm) conduct. Typically, a jury may consider a defendant's relative wealth in order to asses what amount of punitive damages will adequately deter the defendant from such harmful conduct in the future.
In 2007, the Supreme Court of Oregon upheld a ruling by a trial court in which the LDS Church was ordered to disclose its finances to a plaintiff who was seeking punitive damages.
http://archive.sltrib.com/printfriendly ... ype=NGPSID (The order itself is not online). The plaintiff's claims against the Church involved allegations that he was sexually abused as a child by a home teacher.
Although the Oregon Supreme Court did not articulate its reasoning for upholding the trial court's order of disclosure, this is another victory in the ongoing battle to prevent entities from inventing constitutional rights for themselves out of thin air---rights that the inspired Founders of this sacred charter never intended (protecting churches from liability for child sex abuse). And we have our divinely-inspired Constitution to thank for it.