SALT LAKE CITY (ABC4) — The Church of Jesus Christ of Latter-day Saints and its investment firm, Ensign Peak Advisors, are back in the limelight after a lawsuit was filed alleging their misuse of members’ tithes and donations.
A lawsuit tells one side of a story. ABC4.com has reached out to the Church for comment but has not received a reply by the time of publication. Church officials did not immediately respond to the Associated Press for comment on the lawsuit, either. This story will be updated if and when that happens.
The suit was filed on Tuesday, Oct. 31, in the United States District Court of Utah, about six months after a whistleblower alleged the Church had misused $100 billion in tithes in a 74-page letter to the IRS. The Associated Press confirms the new lawsuit is similar to one filed in 2019 in federal court in California by James Huntsman, the brother of former Utah Gov. Jon Huntsman, Jr. James Huntsman is seeking the return of $5 million he donated before he left the Church.
In the latest filing, plaintiffs Daniel Chappell of Virginia, and Masen Christensen and John Oaks, both of Utah, say they donated a total of about $350,000 over the years directly to the Corporation of the President of the Church of Jesus Christ of Latter-day Saints (COP) and in donor-advised funds. The plaintiffs said they were led to believe their donations would be used only for charitable purposes, including humanitarian relief.
In their lawsuit, the plaintiffs allege that despite the Church saying direct donations to the COP would be used for humanitarian relief, a portion of those donations, “if not all,” were instead invested into accounts held by Ensign.
“Plaintiffs did not believe and had no reason to ever suspect that COP would take any portion of their donations and invest it into Ensign, where it would sit and accumulate interest in perpetuity and otherwise be used in manners antithetical to the purported mission of COP and Ensign,” the lawsuit reads in part. “Even if the plaintiffs had any suspicions that COP was engaging in any such practice, they never could have discovered it.”
According to the claims, COP went to “extreme lengths” to hide the alleged diversion of donations and understated the value of its holdings in public filings with the IRS and the Securities and Exchange Commission (SEC). These claims were only brought to light in May 2023 after the whistleblower, Daniel Nielsen, shared his allegations on CBS’s 60 Minutes.
According to the Associated Press, Ensign Peak has spent funds only twice since its founding in 1997. In 2009, Ensign Peak spent $600 million to bail out a failing church-owned, for-profit life insurance company and between 2010 and 2014, it put forth $1.4 billion to build the City Creek Mall near Temple Square.
Chappell, Christensen, and Oaks are looking to recollect their donated funds for not only themselves but potentially millions of others also affected by the misuse of tithes and donations. The lawsuit also seeks regular public accounting by the Church on its use of donations and investments.
The Church has previously responded that allowing Huntsman’s case to continue through court represents a “profound threat to religious liberty.” In Huntsman’s case, the Church also responded it has repeatedly stated since 2003 that it did not use tithing funds for those projects, but rather the interest from investments.
The Church has previously defended how it handles member contributions, claiming contributions go to a variety of religious purposes including missionary work, education, humanitarian causes, and construction of churches, temples, and other buildings important to church work.
A judge originally ruled in favor of the Church in Huntsman’s case. However, the U.S. Ninth Circuit Court of Appeals later awarded Huntsman a victory, sending the case back to the district court for further proceedings.
In February 2023, the Church of Jesus Christ of Latter-day Saints agreed to pay $5 million to the U.S. Treasury — $1 million from the Church and $4 million from Ensign Peak Advisors — for using shell companies to obscure the size of its investment portfolio under Church control.
The Associated Press reported the issue in both the Huntsman and Chappell et. al. lawsuits is whether the Church’s investments in stocks, bonds, real estate, and agriculture reflect the wishes of its donors.
The Associated Press contributed to this article.