60 Minutes, Featuring Phil Hackney, on Ensign Peak

We have previously blogged on the Church of Latter Day Saint’s Ensign Peak here, and here.   Last Sunday, 60 Minutes ran a 13 minute segment featuring some nuanced thoughts by our own Phil Hackney.  Attaboy!  You can watch the segment below:

Phil’s conversation with 60 Minutes was a lot longer and detailed than the few soundbites broadcasted.  He, Sam Brunson and I kicked around the whole topic yesterday and not surprisingly we all had slightly different conclusions. We are egghead law professors after all.  Look for their separate commentaries in later posts.  Sam’s initial comments are posted on By Common Consent. 

Here is my take. Although the Church ran afoul of SEC laws by its own admission, I still don’t see much from a tax exemption standpoint.  Presumably the church lost money when it “bailed out” (we don’t know exactly what that means) its wholly own insurance company.  The Church might have fully recouped whatever it transferred to its insurance company.  The insurance company would be an unrelated business if operated by the Church itself, but hardly a substantial one.  Nothing prohibits the Church from losing money on an insubstantial unrelated business or even from passive investments.  Nor do I think the bailout created a private benefit problem if the Church owns the business all by itself.  There could be a private benefit problem if there were private minority owners who benefited from the bailout.  Sam stresses that the the Church may not be speaking precisely when it uses the term “bailout” so we can’t know for sure.  I don’t think it matters.    

The other issue is that Ensign Peak is sitting on a mountain of money estimated at $150 billion, some of which is invested in for-profit businesses (like a store in the mall).  That seems another “so what” fact for me.  Churches can do whatever they want with their tax exemption, I think I’ve mentioned that before.  I am in a distinct minority on that point but I still think its true.  Anyway, so I have one quibble with Phil’s suggestion that choppy political waters are what’s keeping TE/GE’s powder dry.  Those folks might be scared to death to do their jobs, we all know why, but in this case there is nothing they should even be concerned about.  The Church can horde all its wealth ’til Kingdom Come, as far as church tax exemption is concerned.  So can its integral part subsidiary, Ensign Peak.  Churches don’t have to spend money dispensing secular charity for tax exemption, they just need to be churchy.  

Still, it was 60 Minutes and so even in the absence of anything sinister, any Church would be concerned enough to defend itself.  Which is what the Church does in this article:

On Sunday night, the CBS news program “60 Minutes” aired a segment about the financial assets of The Church of Jesus Christ of Latter-day Saints. The story rehashed widely reported items about the church’s investments and spending and one man’s criticisms, a self-described “whistleblower” who once worked with church investments.

What the “60 Minutes” segment about the church’s finances and other reports often miss is the sweeping and at times poverty-ridden history that helps explain the church’s finances and decision-making today, including its modern-day record of self-sufficiency that sustains a global church.

The long article describes the Church’s history of poverty and deprivation leading to its frugal ways [insofar as what the whistleblower refers to as a “clandestine hedge fund”], its early and middle aged financial struggles, and it also sets forth some convincing arguments concerning its charitable efforts:

The church provides more than $1 billion in charitable contributions to an extensive multi-campus worldwide educational system (including its flagship university, BYU) and another $1 billion a year in humanitarian offerings. Meanwhile, it funds 30,000 congregations, a global missionary effort, as well as thousands of meeting houses, hundreds of temples and extensive free genealogical services — all part of the church’s religious mission to invite people to follow Jesus Christ.

That’s just for starters according to the article.  The Church coulda just said “none of your dadgum business, fella” and I might have even advised them to allow the story to die quietly rather than give it more legs by responding.  It can’t be faulted, though, for instead commissioning a full throated defense and explanation.

darryll jones