The Washington Post

Suit alleging money missteps by Mormons is dismissed

Member of Huntsman clan said charitable gifts funded business activity

- BY MICHELLE BOORSTEIN michelle.boorstein@washpost.com

A federal judge has tossed a lawsuit against the Mormon Church filed by a prominent former member who said it spent members’ tithes meant for charity on commercial purposes. His suit demanded millions of his tithes back.

U.S. District Judge Stephen Wilson of California in his Tuesday decision said James Huntsman, brother of a former Utah governor and part of an influentia­l Church of Latter-day Saints family, would fail to convince a likely jury of his claims.

Huntsman said church officials misled church members about how their tithes would be used and whether they’d be spent to buy, develop or support a Salt Lake City shopping mall. His lawsuit, filed in March, followed an explosive whistleblo­wer complaint by a former high-level investment manager for the church, who in December 2019 alleged that the church has amassed about $100 billion — possibly breaching federal tax rules — intended for charitable purposes and misled members by using the tax-exempt donations to prop up businesses.

The complaint was a rare window into the finances of one of the nation’s smaller but most visible religious organizati­ons, based in Salt Lake City. Its estimates placed the Mormon investment organizati­on among some of the country’s wealthiest companies and charities.

But Wilson said in his ruling that church officials had on at least one occasion been clear that money for the City Creek Mall project would come not only from the church’s commercial entities but from earnings on invested reserve funds.

“The Church of Jesus Christ of Latter-day Saints is grateful that the court has granted its motion for summary judgment. We are further grateful that the court agreed that the statements made by President Gordon B. Hinckley and other Church leaders are accurate as to the source of funding for the City Creek project,” church spokesman Eric Hawkins said in a statement Wednesday.

Huntsman argued in his suit that church officials had on many occasions portrayed tithing money as going in its entirety to charitable works.

The former investment manager, David Nielsen, made his first public comments since his complaint in a sworn statement for Huntsman’s suit. Nielsen said the church deliberate­ly mingled tithes and principal earned on the tithes. Invested tithes are now worth billions, Nielsen said. Church investors said privately that the path of the money should be kept secret from church members, Nielsen said in his declaratio­n last month.

“While we are obviously disappoint­ed with Judge Wilson’s order, we look forward to vindicatin­g Mr. Huntsman’s position in the Ninth Circuit Court of Appeals,” Huntsman lawyer Dave Jonelis said in a statement.

Huntsman runs a film distributi­on company in Southern California. His late father, Jon Huntsman Sr., was a billionair­e industrial­ist and philanthro­pist in Utah. His brother Jon Huntsman Jr. was a Utah governor, presidenti­al candidate and ambassador.

In his suit, Huntsman said he would take money returned to him from the church and give it to “organizati­ons and communitie­s whose members have been marginaliz­ed by the Church’s teachings and doctrines, including by donating to charities supporting LGBTQ, African-american, and women’s rights.”

A church spokesman said in March that Huntsman resigned his membership last year and that his claims are “baseless.”

The church had also argued that Huntsman’s suit violated its First Amendment rights not to have the government meddle in church issues, such as how money should be spent. But Wilson disagreed on that point, saying at issue is a “secular” matter.

 ?? RICK BOWMER/ASSOCIATED PRESS ?? “The Church of Jesus Christ of Latter-day Saints is grateful . . . that the court agreed that the statements made by President Gordon B. Hinckley and other Church leaders are accurate as to the source of funding for the City Creek project,” spokesman Eric Hawkins said.
RICK BOWMER/ASSOCIATED PRESS “The Church of Jesus Christ of Latter-day Saints is grateful . . . that the court agreed that the statements made by President Gordon B. Hinckley and other Church leaders are accurate as to the source of funding for the City Creek project,” spokesman Eric Hawkins said.

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