A former employee of a $100 billion investment fund owned by The Church of Jesus Christ of Latter-day Saints gave an interview on national TV about his experience working at the Salt Lake City-based Ensign Peak Advisors Inc. and what drove him to file a whistleblower complaint with the IRS and other government entities.
“I thought I was going to work for a charity. I thought that’s what my skills were gonna do… The funds were never used for that. It was really a clandestine hedge fund,” said David A. Nielsen, a former senior portfolio manager at EPA in the interview with Sharyn Alfonsi on the CBS network’s flagship news magazine program, “60 Minutes.”
David Nielsen is blowing the whistle on the Mormon church’s investment firm, Ensign Peak Advisors.
“I thought I was going to work for a charity… The funds were never used for that,” said the former manager, who is accusing the church of stockpiling funds. pic.twitter.com/hspaqf46Mu
— 60 Minutes (@60Minutes) May 14, 2023
ReligionUnplugged.com and The Washington Post broke the original stories about Nielsen’s complaint to the IRS Whistleblower Office in 2019 as the document was leaked to ReligionUnplugged.com and other outlets by Nielsen’s twin brother, Lars Nielsen, in the fall of 2019.
ReligionUnplugged.com has continued to follow the story ever since as the Securities and Exchange Commission required EPA to start making more transparent filings each quarter and imposed $5 million in penalties on EPA in February. The SEC had found that the church and EPA “went to great lengths” to hide $32 billion in securities – even creating shell companies to do so.
ReligionUnplugged.com also broke a story in February about Nielsen and his attorneys submitting a memorandum to the U.S. Senate Finance Committee and its subcommittee on taxation and IRS oversight.
The report on 60 Minutes noted the LDS investment firm, EPA, held more than $100 billion which made it “twice the size of Harvard’s endowment or the Bill and Melinda Gates Foundation.”
The Church of Jesus Christ of Latter-day Saints’ investment firm has over $100 billion, twice the size of Harvard’s endowment or the Bill and Melinda Gates Foundation, according to a whistleblower. He said he was told the fund was for “the second coming.” https://t.co/DpVMXCxJ2O pic.twitter.com/PczaZgLJzc
— 60 Minutes (@60Minutes) May 14, 2023
Nielsen told Alfonsi that he started realizing the LDS Church was creating shell companies to hide billions of dollars. On the program, he cited instances and conversations of deception or unethical behavior by the firm. He said those experiences led him to resign and notify the IRS.
Nielsen said he was told the fund was for “the second coming.”
“Just incorrect,” said Bishop Christopher Waddell about Nielsen’s complaint. Waddell said the fund is “for the continuing operation and of 4th future” of the church. LDS authorities told 60 Minutes that Nielsen didn’t have a full picture of EPA when he worked there.
“I’d been around the block enough to know the charitable organizations can’t bail out for-profit businesses and maintain their charitable status,” Nielsen told 60 Minutes. Nielsen was referring to Beneficial Life, a for-profit insurance company that the non-profit EPA spent $600 million to rescue over a decade ago.
Waddell told Alfonsi “fortunately the church had the resources to bail out Beneficial Life during the Financial Crisis, 2008, 2009.”
The LDS Church also issued a statement after the segment aired:
The Church believes in being financially responsible by carefully ensuring it has adequate resources available to fulfill its divinely appointed responsibilities. To Church members who support the work of salvation through living the gospel of Jesus Christ, caring for those in need, inviting all to receive the gospel and uniting families for eternity, we’ll continue to move forward consistent with the gospel of Jesus Christ which makes this world a better place.
It’s unfortunate ‘60 Minutes’ sought to elevate a story based on unfounded allegations by a former employee who has a different view on how the Church should manage its resources.
One of Nielsen’s lawyers, Michael A. Sullivan, of Finch McCranie, LLP in Atlanta said in a statement late Tuesday that the LDS Church made a “bombshell admission when Waddell said the church bailed out the for-profit business, showing that Ensign Peak “cannot be tax exempt.” Sullivan said such an admission proves Ensign Peak disregarded tax laws and owes billions in taxes.
“Since ordinary citizens must obey the law, should the IRS and Department of Justice permit politically powerful Church organizations to flout the law?” Sullivan asked. His statement then recounted some of the arguments, evidence and testimony he and Nielsen’s legal team have developed in their whistleblower actions. Nielsen could receive up to 30% of any taxes collected if the IRS decides to fine or recoup taxes from EPA.
Benjamin J. Hayford, an LDS church member and tithe-payer, wrote a post on LinkedIn, this week saying his church’s response to questions about EPA “deeply disappointing and inconsistent with the gospel of Jesus Christ.”
Hayford recounted the regulatory pressure and bad publicity picking up on the LDS Church and on EPA. And he criticized the church for having Waddell, the first counselor in the president bishopric, as a spokesperson to 60 Minutes. “He failed,” Hayford said. “Miserably.”
Hayford called for more transparency and financial responsibility by the church. “To be clear: the “undue attention” is not potentially damaging at this point — this due attention is and will be damaging to The Church of Jesus Christ of Latter-day Saints,” he wrote. “This attention and damage could have been largely avoided had the Church acted transparently.”
The IRS does not comment on such whistleblower complaints and experts are not sure if the IRS has the courage to tackle this kind of complaint.
“It is a problem in my opinion if they have moved money from the non-profit to a for-profit,” said Phil Hackney, who worked in the Office of Chief Counsel of the IRS and now teaches tax law on the 60 Minutes program. Hackney said he thinks the chances are slim that the IRS will investigate EPA because “the political risk is so great that it comes with real danger. At the same time, there’s a real risk to the rule of law if the IRS does not come in and enforce those rules.”
Sullivan said in his statement that the SEC’s $5 million in penalties on Ensign Peak are “but the first of many steps in essential government scrutiny, and next are the IRS and the Department of Justice.”
At the end of the 60 Minutes program, Alfonsi asked Nielsen if “it’s possible that you were dead wrong?”
Nielsen responded: “No. I know what I saw. I know what I know.”
by Paul Glader, executive editor of ReligionUnplugged.com and a professor of journalism at The King’s College NYC. He’s reported from dozens of countries for outlets ranging from The Wall Street Journal, The Washington Post, Der Spiegel Online and others. He’s on Twitter @PaulGlader.