Authored by Paul Glader, executive editor of ReligionUnplugged.com,

A whistleblower complaint filed at the Internal Revenue Service in November by a knowledgeable church member alleges that a non-profit supporting organization controlled by the Church of Jesus Christ of Latter-day Saints used member tithes to amass more than $100 billion in a set of investment funds and the Church misled members about uses of the money.

The complaint may be the most important look at LDS finances in decades, a window into one of the wealthiest religious organizations in the United States and the world. Details of the IRS filing reveal financial assets largely hidden from the church’s membership (often known as “Mormons”) and the public view.

The 74-page document filed with the IRS and obtained by Religion Unplugged shows that Ensign Peak Advisors, Inc. (EPA) owned assets under management grew to more than $100 billion from $10 billion in the past 22 years, fueled by a mix of investment strategy and tithe money from church members.

Religion Unplugged reached EPA’s managing director Roger Clark by phone on Monday, offering to explain key parts of this story and to ask questions for EPA to give a response. “We don’t really answer questions with the public press. So thanks,” he said, before hanging up the phone.

Ensign Peak Advisors' articles of incorporation confirm Ensign Peak is an arm of the Church of Jesus Christ of Latter-day Saints. As registered under section 509(a)3 of the Internal Revenue Code, Ensign Peak Advisors, Inc. EPA is a “supporting organization” of the Church under article 3 in its registration document. Upon dissolution, all Ensign Peak assets go the Church or affiliated organizations according to article 5 and that article cannot be changed without “the written consent of The First Presidency” of the Church. Because Ensign Peak Advisers is a support organization to a church it is not subject to disclosure requirements that other non-profit organizations are required to make.

A former Church member in Minnesota named Lars Nielsen published a 74-page document filed with the IRS that makes several allegations. The filing also included several internal EPA documents including an EPA Policy book, an EPA master plan, an EPA New Staff Orientation Guide, statements of financial condition and data downloads and analysis of the firm’s investment portfolio. One presentation slide in the document from March of 2013 is labeled “New Staff Orientation Deck” and shows a Church investment governance structure including a “Council on Disposition of Tithes” that allocates funds from tithes to holding organizations in the church such as EPA.

Nielsen learned of the allegations from an LDS church member, who prefers to be unnamed. The whistleblower worked with Nielsen on a two-month research project to research and explain the inner workings of EPA. The complaint (Form 211) was filed with the IRS whistleblower office on Nov. 15, 2019 and received by the IRS on Nov. 22, 2019. Nielsen has chosen to go public with the allegations by releasing the report online and explaining the allegations in videos.

“I started to suspect that EPA was not compliant with its 501c3 or acting in accordance with its Articles of Incorporation around 2013,” the whistleblower writes on a notarized cover letter to the IRS obtained by Religion Unplugged. “I raised several flags and concerns over the years.”

A Secret $100 Billion Stockpile

The document tallies assets in EPA using downloaded spreadsheets of assets from across its portfolio from March 22, 2018. The document indicates that the firm receives billions each year from tithe revenue - the donations church members make to the church - and estimates EPA assets from tithes and investment growth is more than $100 billion at present.

The organization’s IRS 990-t forms also show an opaque but growing organization. In 2007, the organization listed “investing” as its primary business activity, lists a $1 million book value of all assets at year end. In 2015, it listed a book value “over” $1 million. By 2017, EPA listed “investing in partnerships” as its primary business, did not disclose its book value, reported $17.6 million in capital gain net income and lists $1.25 million as tax overpayment. Meanwhile, a letter on EPA stationery from Jan. 9, 2017, signed by vice president Greg Tarbet offered credit information about the firm saying, “Ensign Peak does not distribute financial statements. Assets, however, are well in excess of $5 billion, and Ensign Peak is essentially without debt.”

An internal EPA slide presentation from 2013 states that during the financial crisis period of 2008 and 2009, the firm “experienced a temporary drawdown” of close to $13 billion, noting that amount was greater than 30 percent of its portfolio at the time.

The whistleblower complaint said EPA had 75 employees in 2019, up from 20 in 2010. They work in a building in Salt Lake City, Utah, (60 East South Temple, Suite 400) that does not have a sign on the building or in the downstairs lobby according to the complaint. The company does not have a public web site. A LinkedIn search of Ensign Peak Advisors lists 64 people who work there including people in typical finance roles such as compliance officer, investment manager, investment analyst, portfolio manager, equity trader, private equity associate and accountant.

“Supporting organizations raise funds. They invest funds. Depending on how the investment fund was set up, it could well be proper,” says Arthur Rieman, an attorney at The Law Firm for Non-Profits in Studio City, Calif. “If it’s set up as an investment fund and increased 1,000 percent in 20 years, that’s a pretty good return.”

The whistleblower document alleges that EPA has given away $0 to religious, educational or charitable purposes. Non-profit experts such as Rieman note that EPAs registration as a 509(a)3 supporting organization to the LDS Church could protect it from having to make charitable distributions because churches are not required to disclose finances to the public.

“The Church of Jesus Christ of Latter-day Saints pays all taxes that are required by law,” says an LDS Church statement about its tax status.

Nielsen says the Mormon “giga-church” needs “a place to park its cash” and has used EPA to do so. Nielsen alleges EPA grew from regular tithes by members of the LDS Church, most of whom had no idea of how their money was being spent or invested given the lack of public financial disclosure by the church since 1959.

Certainly, other religions and denominations - Islam, Hinduism, Judaism, Catholicism, Episcopalians, Orthodox Christians and protestants - have property and wealth. Calculating that wealth is often difficult because of varied organization structures. For example, Catholic News Service reported in June that the Institute for the Works of Religion - often referred to the Vatican bank - held assets worth $5.6 billion at the end of 2018. But that does not capture the vast real estate and financial profile of the Roman Catholic Church and its thousands of dioceses around the world according to experts who spoke with TheStreet.com in 2015 .

Historic Significance

If true as the whistleblower alleges, the size of the LDS Church holdings at EPA would represent a massive pool of capital of interest to the financial world, which pays close attention to the investment moves of large pension funds and major university endowments.

Religion Unplugged called the media relations office of the LDS Church on Monday and sent several questions by email. Church spokesman Eric D. Hawkins responded by email saying, “the Church does not provide information about specific transactions or financial decisions.” He sent language from the church’s web site such as its “Principles of Church Finances” section that includes, “Following sound financial principles over an extended period of time, the Church has grown from meager beginnings into a worldwide organization able to support its divine mission.”

Exhibits in the whistleblower complaint include internal documents, a masterplan and presentation slides from EPA where it describes the purposes of its reserves to support prophetic initiatives, church operating budgets, backstops to pension plans and collateral for church purposes.

“The corporation’s property is irrevocably dedicated to religious, educational and charitable purposes meeting the requirements for exemption provided by Section 501(c)3 of the Internal Revenue Code, and no part of the net income or assets of this corporation shall ever inure to the benefit of any trustee, officer or member thereof or to the benefit of any private person,” says one provision of the Articles of Incorporation.

The filing to the IRS alleges that EPA has made zero religious, educational or charitable distributions in 22 years. According to tax experts, that may not be a problem for a 509(a)3 organization, depending on more nuanced details of its registration which are not publicly available on the IRS web site or the organizations 990-t annual filings.

“EPA is the reserve of the reserves,” a whistleblower is quoted as saying in the document. It suggests tithing surplus flows to EPA where it is “merged, sliced and diced into portfolios and limited liability companies designed to fly under radars and reporting limits.” The document obtained by Religion Unplugged makes several additional allegations about EPA.

City Creek Center Mall

The complaint alleges a series of payments from EPA totaling $1.4 billion to help construct the City Creek Center mall in Temple Square in downtown Salt Lake City, Utah, which features a retractable roof, luxury storefronts and simulated creek with live trout. The LDS Church and its developers aimed to create a new urbanism in downtown Salt Lake City.

The mall was developed by Property Reserve, Inc., which is a commercial real estate division of the Corporation of the President of the Church of Jesus Christ of Latter-day Saints and retail manager Taubman Centers Inc. according to a press release from the LDS Church on Oct. 3, 2006 . These entities developed the mall during the financial crisis, which caused funding difficulties. The church and developers have not disclosed the entire cost of the mall according to an article in The New York Times on July 9, 2013 .

The whistleblower complaint pointed to the LDS church-owned Ensign Magazine in 2006 that said “no tithing funds will be used in the redevelopment” of the area downtown. A year later, in 2007, the church-owned newspaper, The Deseret News, reported that “Money for the project is not coming from the LDS Church members’ tithing donations. City Creek Center is being developed by Property Reserve Inc., the church’s real-estate development arm, and its money comes from other real-estate ventures.” And local TV station KUTV on Oct. 3, 2006, also reported Presiding Bishop of the church H. David Burton saying no tax dollars or tithes will be used in construction.

The whistleblower complaint alleges that $1.4 billion of funding from EPA did go toward the mall project and came from a funding pool that included tithing dollars. A slide from an EPA internal presentation dated March 2013 and titled “Framework and Exposures” indicates $1.4 million was paid to the City Creek project over five years.

The mall opened in 2012 with 100 stores in more than 700,000 square feet of retail space and is part of downtown Salt Lake City revitalization plans that includes office space and residential towers. “No one will mistake it for the East Village, but downtown is starting to become a place people actually seek out to eat and play,” said Jason Mathis of the Downtown Alliance to the Times article in 2013 .

The City Creek Mall rose as a competitor to another similar-sized downtown retailer called Gateway mall, which opened in 2001 by The Boyer Co. ahead of the 2002 Winter Olympics in Salt Lake City and was later sold to Illinois-based Retail Properties of America Inc. The Salt Lake Tribune reported on Jan. 16, 2015, that Gateway saw its credit status, retailer occupancy and retail sales decline after City Creek opened.

New York-based Moody’s Investors Service noted that Gateway’s occupancy rate dropped from 96 percent in 2010 to 78 percent in 2015 as an Apple Store and others decamped from Gateway to City Creek. Moody’s noted the mall’s reported value dropped from $163 million in 2010 to $75 million in 2014. The Tribune reported Gateway’s annual sales fell from $210 million in 2011 $100 million in 2013, citing data from the Utah Tax Commission. At the same time, City Creek’s revenues grew from zero to $250 million. Local news outlets reported that Gateway Mall became a “ghost town” and saw an “uptick in crime, drug and homeless activity.” It was sold to a new owner, Vestar, in 2016 which reportedly invested $100 million into the property.

One member of the Corporation of the Presiding Bishopric and an executive in the LDS for-profit businesses, Keith McMullin, told Bloomberg BusinessWeek in 2012 that tithes do not go to the church’s for-profit endeavors and did not go to City Creek Center.

The whistleblower complaint to the IRS raises the question of whether church leaders such as McMullin made honest or false public statements about financing sources for the mall project both before and after construction of the mall.

When asked about tithe funds being used in the City Creek project contradicting what the church leaders said, LDS Church spokesman Eric D. Hawkins sent language from a church statement that said the City Creek development is a way “the Church enhanced the environs of Temple Square and underscored a commitment to Salt Lake City, Utah, where it is headquartered.”

Mormon, Inc.

The Church of Jesus Christ of Latter-day Saints is one of the most economically successful religious organizations in the United States, defying a history of persecution. Mormons settled in Utah after they were attacked by mobs at times during their nearly 200-year history and forced to flee previous locations in upstate New York, Ohio, Missouri and Illinois.

LDS members in the resulting nearly two centuries have founded companies, become elected to federal offices and written best-selling books. And, in the early days, LDS Church leaders set up hundreds of businesses in Utah to help build a functioning economy. Early efforts to force church members to patronize LDS-owned businesses led to the U.S. Congress passing the Edmunds-Tucker Act in 1887 to limit vertical integration and monopolies by the LDS Church.

The President of the LDS Church, currently Russell M. Nelson, presides over 18,000 churches , 217 temples, four universities, three media companies and dozens of other properties along with EPA.

Pew Research Center data shows 97 percent of LDS members consider themselves Christian but only 51 percent of U.S. adults consider Mormonism as a Christian religion. Pew data also shows that LDS members are more highly involved in their congregations than any sector of Christianity, surpassing Protestants, Catholics and Orthodox Christians alike. In the book “Passing the Plate,” Christian Smith writes that most Christians give away 2 percent or less of their income while Mormons averaged 5.2%.

TIME Magazine published a cover story ( “Mormons Inc.”) expose by David Van Biema in 1997 titled “Kingdom Come” that showed the growing financial power of the LDS church. It said “Salt Lake City was just for starters – The Mormons’ true great trek has been to social acceptance and a $30 billion church empire.” The story examined the extensive agricultural holdings, radio station chains, life insurance companies and other assets. “There is no major church in the U.S. as active as the Latter-day Saints in economic life, nor, per capita, as successful at it.” The piece argued that Roman Catholics have more wealth than Mormons but the Catholic Church had 45 times as many members in 1997.

“The Mormon Church is by far the most numerically successful creed born on American soil and one of the fastest growing anywhere,” Van Biema and colleagues wrote. “Its U.S. membership of 4.8 million is the seventh largest in the country, while its hefty 4.7% annual American growth rate is nearly doubled abroad, where there are already 4.9 million adherents.”

Now, 22 years later, the church is up to 16.3 million members by Dec. 31, 2018, according to its communication and public relations department . The report states 102,102 new births in 2018 and 234,332 new converts to the church which reports 65,000 full-time missionaries around the world. Meanwhile, some Utah news outlets and researchers suggest church membership growth is sputtering.

Newsweek published a story on June 5, 2011, by novelist Walter Kirn titled “The Mormon Moment” noting that the LDS Church, “resembles a sanctified multinational corporation – the General Electric of American religion, with global ambitions and an estimated net worth of $30 billion.” It noted that then presidential candidate Mitt Romney was a wealthy and powerful member of the Mormon church as was fellow presidential candidate Jon Huntsman Jr. Senate majority leader Harry Reid was Mormon at the time as well.

Bloomberg News estimated the net worth of LDS church assets at around $40 billion in 2012. The whistleblower estimates a closer net-worth figure of the church could be $200 billion or more when you include EPA along with vast agricultural and property holdings.

A church-managed investment portfolio represents a newer area for the church. When asked to confirm or deny the whistleblower allegation that the Church has amassed more than $100 billion in owned assets under management, the LDS Church spokesman pointed again to online statements from the church such as:

“The Church’s reserves are overseen by Church leaders and managed by professional advisers, consistent with wise and prudent stewardship and modern investment management principles. Ultimately, all funds earned by the Church’s investments go back to supporting its mission to invite souls to come unto Christ."

Tithing Culture

The Church’s auditing department publishes a short statement every year without giving more financial disclosure. “Church Auditing is of the opinion that, in all material respects, contributions received, expenditures made, and assets of the Church for the year 2017 have been recorded and administered in accordance with approved Church budgets, policies, and accounting practices. The Church follows the practices taught to its members of living within a budget, avoiding debt, and saving against a time of need,” said the statement for 2017 , read aloud every April in the Saturday afternoon session of its General Conference.

Author Jana Riess wrote a piece at Religion News Service in December of 2019 titled, “I just paid my Mormon tithing. Why don’t I feel better about it?” She notes that December is a time when Mormons are supposed to sit down with their bishops to “declare” themselves. That means “Are you a full tithe-payer (10%), a partial tithe-payer (something less than 10%) or a non-tithe payer?”

Riess noted that the LDS church stopped making disclosures to its members about its use of money in 1959 because the church “was on the brink of financial disaster” that year. She suspects the non-disclosure policy continues “not because the church is poor or indebted, but because it has grown wealthy enough that exposing the extent of its holdings could cause embarrassment and prompt unwanted questions.”

Samuel D. Brunson, the Georgia Reithal Professor of Law at Loyola University in Chicago , writes that this practice dates back to at least 1906 and, today, “provides the sole window into the global finances of the LDS Church.” In the Spring 2015 issue of Dialogue: A Journal of Mormon Thought, Brunson wrote an article on “LDS Financial Transparency” that shows finances were once “open for the inspection of the Saints” according to church records from 1905 and 1906. Brunson writes the Church was more financially accountable to its members between 1915 and 1959. He writes that the LDS Church lost $1 million on municipal bonds in 1956 and spent $8 million more than its income during 1959.

“As a result of its silence about the details of its finances, members, critics, and the interested public have been left to guess at the Church’s wealth and the scope of its charitable spending, among other things,” Brunson writes. “The Church’s lack of public financial disclosure bothers some—apologists and critics alike—who have requested, in various ways, that the Church return to its former practice of publicly disclosing detailed financial information.”

Brunson told TheStreet.com that England and Canada have disclosure requirements for religious non-profits but that churches in the U.S. can “disclose whatever they want” and “whatever they want can vary.”

Experts on the LDS Church note that in Mormonism, the church hierarchy uses tithing as a principal metric to judge the faithfulness of its members. Only tithing members can witness temple marriages of other members, including one’s children and participate in other central rites of the faith. Only “tithing faithful” males can move up in rank of church leadership according to Richard Ostling, a ReligionUnplugged columnist who co-authored the 2007 book “Mormon America: The Power and the Promise.”

Aaron L. West wrote in Ensign Magazine in 2012 quoting a Mormon bishop in El Salvador who said, “If paying tithing means that you can’t pay for water or electricity, pay tithing. If paying tithing means that you can’t pay your rent, pay tithing. Even if paying tithing means that you don’t have enough money to feed your family, pay tithing.” (The church’s Ensign Magazine and the EPA fund take their name from Isaiah 5:26 that says, “He will lift up an ensign to the nations.”)

TIME reported in 1997 that $5.2 billion flowed into the LDS Church in 1996, dwarfing the pace of contributions received by other denominations. It noted that the LDS Church sees tithes not just as tools for paying church staff and expenses but, rather, as venture capital to build new temples (normal activity for religious organizations) and also to invest in stocks and bonds as well as for-profit companies in agriculture, travel and real estate. TIME estimated LDS Church investments to be $6 billion in 1997, a figure that may have been under-reported.

By comparison, the Southern Baptist Convention, the largest protestant denomination in the U.S., discloses on its web site that it received $9.6 billion in giving from the estimated 14.8 million members in its 47,456 cooperating churches in 2017-2018.

Brunson notes that some other churches are trying to improve financial disclosure. The Evangelical Council for Financial Accountability (ECFA) accredits churches that prepare accurate financial statements to be reviewed by an independent certified public accountant and which make their financial statements available upon written request.

“The LDS Church similarly has the option to make financial disclosure, whether or not the law demands it. Even without a secular obligation to disclose, the Church might view itself as subject to a divine disclosure mandate,” Brunson writes . “But such a mandate does not explicitly exist in canonized Mormon scripture, and the evidence is strong that Church leaders have never believed they were under such a divine mandate, even at the beginning of the Church.”

A Cloak of Secrecy

The whistleblower complaint alleges that the EPA universe of assets grew by $90 billion between 2009 and 2019 and a large part of that growth came as run-off from tithing income to the church.

Religion Unplugged reached out to several former employees of EPA to hear their perspective on the firm and their response to allegations raised in the whistleblower complaint. One former employee, speaking on background, said he greatly respected EPA staff and leadership and didn’t believe the firm needed to practice more transparency. Transparency, he said, is “usually for accountability to those who you have a fiduciary duty to. In this case, they are responsible to themselves. They don’t have investors. I understand if it is a mutual fund where people give their own money to manage. They [EPA] don’t have shareholders.”

The whistleblower complaint noted that a former Head of Fixed Income at EPA, Richard B. Willes, in 2011 advocated for transparency. “The longer we wait to disclose the more difficult it will be to defend,” the document quotes him as saying. It quotes another member of the asset allocation team saying, “We’ve got an optics problem here. The lack of distributions sure doesn’t look good.”

An ex-Mormon thread on the message board Reddit names powerful Utah institutions and calls Ensign Peak Advisors “the big kahuna of them all” and identifies it as “the super secretive investment arm of the church.” The author of the Reddit post describes a meeting he had at EPA in which he was asking for a $100 million investment and said the firm saw that amount as a “drop in the bucket” to them. Religion Unplugged tried to reach the person to learn more.

Other websites online such as Salamander Society has discussion threads asked LDS tithe payers to contact church headquarters and request financial disclosure of church assets and to obtain any response other than “Sorry, that information is not available.”