The Church of Jesus Christ of Latter-Day Saints’ temple in Salt Lake City, Utah.
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Mormon church whistleblower David Nielsen called the group’s investment arm a “clandestine hedge fund” on 60 Minutes.
Nielsen left Wall Street to work for charity and managed the church’s funds for nine years.
The church’s investments have ballooned above $100 billion and it grows tax-free because the fund is registered as a non-profit.
David Nielsen left Wall Street in 2009 as a devout Mormon who wanted to use his skills for charity and work for The Church of Jesus Christ of Latter-day Saints.
But after spending nine years as a manager at the church’s investment arm, Ensign Peak Advisors, he said the estimated $100 billion fund used false statements to pose as a charity, bailed out businesses with ties to the church, and misled churchgoers, according to a 60 Minutes report on Sunday.
Rather than taking part in charitable work as he’d envisioned, Nielsen said he instead helped manage money for a “clandestine hedge fund.”
Church leaders have denied the allegations, per CBS.
Nielsen had reported the church to the IRS in 2019, and the investment arm was fined $5 million in February for using shell companies to obscure the size of its $32 billion equity portfolio.
The SEC had said that Ensign Peak failed to file 13F forms — quarterly documents money managers above a certain size are required to file that detail fund holdings — from 1997 to 2019.
“Those funds weren’t used the way they were appropriated to be used,” the whistleblower said, noting that the church’s tax-exempt status helped it grow its investments and mask its holdings. “Well, once the money went in, it didn’t go out.”
He explained that the church takes in about $7 billion a year from tithing — the expected 10% of annual income each member is expected to pay — and about $6 billion of that is used to pay for buildings and programs. The remaining $1 billion goes into Ensign Peak, according to Nielsen.
Here’s how the church’s website describes tithing:
“These funds are then used to build up the Church and to further God’s work throughout the world. God promises great blessings to those who pay tithing.”
Still, the government hasn’t taken any further public action as a result of the claims, and tax law professor and former IRS staffer Phil Hackney told CBS that there’s a “slim” chance of anything else being done.
“The political risk is so great that it comes with real danger,” Hackney said. “At the same time, there’s a real risk to the rule of law if the IRS doesn’t come in and enforce those rules.”
When CBS asked Nielsen why he was speaking out now, even though he made his allegations public in 2019, he said, “this was too important to fall through the cracks.”