On Tuesday, Nov. 2, a federal lawsuit was filed against The Church of Jesus Christ of Latter-day Saints. The suit is based on claims that the investment branch of the church has “misused hundreds of thousands of dollars” by investing it rather than putting it to charitable purposes as they reportedly promised, according to The Salt Lake Tribune.
This lawsuit was filed by Utahns Masen Christensen, John Oaks, and Dave Chappell of Virginia. The three men argue that within the last decade, they have donated a combined amount of approximately $350,000 to the church. As the Salt Lake Tribune explains, “Their lawsuit seeks class-action certification, potentially involving millions of church members, and an independent entity to oversee collection and use of church donations.”
The same report also details that the three plaintiffs claim the church “allegedly hid the fact that some if not all donations are permanently invested in accounts never used for charitable work.” Such funds include the members’ regular and expected 10% allocation of their income to the church in the form of tithing.
The Nov. 2 case has similarities to a prior legal dispute the church was involved in with James Huntsman in September 2021. Huntsman, who is the younger brother of former Utah Gov. Jon Huntsman Jr., filed a lawsuit against the church based on claims the $5 million donation he gave to the church before he left was mishandled. Huntsman requested the church return his entire donation but a 2-1 ruling sent him out of the courtroom with only part of his initial contribution.
The church publicly upheld and defended its stance in the Huntsman case. Huntsman’s claims were labeled “baseless” and members were reassured that their funds were being handled appropriately and honestly by their entrusted investment firm, Ensign Peak Advisors.
Under U.S. law, the church is not required to disclose its finances to the public; however, the Huntsman case is not the only time the church’s use of its funds came under scrutiny. In February 2023, the U.S. Securities and Exchange Commission announced its decision to fine the church for its handling of funds. CBS News reports that allegedly, “The Church of Jesus Christ of Latter-day Saints and its investment arm have been fined $5 million for using shell companies to obscure the size of its $32 billion portfolio.”
In an official statement the church released to the public in response to February’s incident, it was explained that the SEC first expressed concerns regarding Ensign Peak’s “reporting approach” in June 2019. It was also stated that this settlement refers to previously filed forms and the church has been cooperative with the government as a resolution was sought. “We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed,” closes the prelude to the frequently asked questions section of the statement.
Furthermore, the church provides additional resources and information on the finances and audits of the institution, including how funds are to be distributed, who is in charge of funds on lower levels of church leadership, and why members are asked to pay to tithe.
