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Does the Mormon Church have a $100 billion “clandestine hedge fund”?

A former manager of Ensign Peak Advisors, the investment arm of The Church of Jesus Christ of Latter-day Saints, has accused the church of using the money as a “clandestine hedge fund.”

Many of the world’s largest religious organizations hold hedge funds, including the Church of England and the Catholic Church.

David Nielsen left Wall Street in 2009 as a devout Mormon who wanted to use his skills for charity and work for the church. The estimated $100 billion fund used false statements to pose as a charity, bailed out businesses with ties to the church and misled churchgoers, he told the CBS show “60 Minutes.” Church leaders have denied the allegations.

The Securities and Exchange Commission said Ensign Peak failed to file 13F forms — quarterly documents money managers above a certain size are required to file that detail fund holdings — from 1997 to 2019. The church was subsequently fined.

“Those funds weren’t used the way they were appropriated to be used,” Nielsen said, noting that the church’s tax-exempt status helped it grow its investments and mask its holdings. “Well, once the money went in, it didn’t go out.”

He explained that the church takes in about $7 billion a year from tithing, and about $6 billion of that is used to pay for buildings and programs. The remaining $1 billion goes into Ensign Peak. “These funds are then used to build up the church and to further God’s work throughout the world. God promises great blessings to those who pay tithing,” according to the church’s website.

The government hasn’t taken any public action as a result of the claims. Phil Hackney, a tax law professor and former IRS staffer, told CBS that there’s a “slim” chance of anything else being done. “The political risk is so great that it comes with real danger,” he said. “At the same time, there’s a real risk to the rule of law if the IRS doesn’t come in and enforce those rules.”

When CBS asked Nielsen why he was speaking out now, even though he made his allegations public in 2019, he said, “this was too important to fall through the cracks.”

–Alan Goforth

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