Scott Woodward:
Hi, this is Scott from Church History Matters. As we near the completion of this series, we want to hear your questions about church finances. Next week we will be pleased to have with us Dr. Elizabeth Kuen to help us respond to your questions. Dr. Kuen is the lead historian at the Joseph Smith Papers for the Financial Records series, and her specialty lends itself to answering any financial questions you might have about the Joseph Smith era. So please submit your questions for next week’s Q&R anytime before February 22, 2024 to podcasts@scripturecentral.org. Then, in two weeks from now, as an added bonus, we’ve invited Dr. Aaron Miller, who we quote extensively in today’s episode, to help us respond to any questions you have about current or modern church finances. Dr. Miller teaches nonprofit management and ethics in the Romney Institute at BYU, and he is the co-author of the Business Ethics Field Guide. So we’d also love to start taking your questions about modern church financial issues for that episode in two weeks. Please send in your thoughtful questions for that episode anytime before February 29, 2024 to podcasts@scripturecentral.org. As always, let us know your name, where you’re from, and try to keep each question as concise as possible when you email them in. That helps out a lot. Okay, now on to the episode. How does the church justify putting in over $1 billion to build a mall in downtown Salt Lake City? And did they use tithing money to do that? Also, is it true that the church has over $100 billion in reserve? Why won’t church leaders just disclose exactly how much they actually have? And if it’s anywhere near that number, is it ethical for the church to continue to ask its members, especially its poorer members, to tithe? Furthermore, what’s the deal with the church paying a $5 million fine to the SEC last year? What’d they do wrong? All of these questions and more coming your way on today’s episode of Church History Matters. I’m Scott Woodward, and my co-host is Casey Griffiths, and today we dive into our sixth episode of this series, dealing with consecration and church finance. Now, let’s get into it.

Casey Paul Griffiths:
Hello, Scott.

Scott Woodward:
Hello, Casey.

Casey Paul Griffiths:
How we doing? You ready for another day, another session on church finance?

Scott Woodward:
I don’t know if I can get enough sessions on church finance.

Casey Paul Griffiths:
This has been kind of weird, right? Where I felt like, yeah, we can have this wrapped up in two or three episodes, and just prior, before we started, you and I were saying we need a bunch more episodes to resolve all this. There’s just so much to talk about, but we’re going to try and at least introduce some principles that help you simplify some of the issues here.

Scott Woodward:
Yeah, and we’ve tried, right, with the history that we’ve covered so far to try to trace carefully the history of the church financially from, really, its beginning, from 1830, to—where did we get to last time? The church welfare system?

Casey Paul Griffiths:
I think we made it close to the present.

Scott Woodward:
Close to the present, yes.

Casey Paul Griffiths:
Because we introduced church welfare, and then we did a, hey, here’s how church welfare works today.

Scott Woodward:
Yes.

Casey Paul Griffiths:
So we’re into the 21st century, at least on one road that we’re talking about here.

Scott Woodward:
So maybe it would be helpful today before we kind of get into the meat of what we want to talk about is to kind of review some of the basic principles that we’ve been addressing and kind of unpacking from church history and kind of bring them up to the fore, talk about those, and then let’s watch how those apply to some of the difficult kind of questions that people have about church finance today. How does that sound?

Casey Paul Griffiths:
Context is everything, and I’ll just say that in dealing with some of the current issues that a lot of people have with the church, whew, does this context help so much to sort of understand why the church operates the way it operates, why it does some of the things that it does.

Scott Woodward:
Yes, 100%. So here’s a few principles. We’ll call these maybe theological contexts born out of the history of the church and the revelations in the Doctrine and Covenants. Number one, I think it would be helpful to talk about is with this law of consecration, the fundamental principle of church finance. We’ve been trying to emphasize throughout this series that the law of consecration can flexibly adapt to different systems. That’s a really important point, right? It was never established as a rigid system itself that was not subject to change and innovation. Throughout the history of the church the principles of consecration have remained consistent, and the aims of consecration have remained consistent, but the practical implementation and the systems of those principles has varied widely. For instance, we’ve covered in 1831 Doctrine and Covenants 42 commanded a system of consecration that was rather communal in its nature of legally deeding all of your property to the bishop as the church’s representative, who would then legally lease them back to you as your stewardship, and then you would use that for the needs and the wants of your family. And if you had surplus, then you would then give it back to the bishop to be put into the storehouse, to be used to care for the poor and to purchase land, even finance some of the business of the church, et cetera, right? And so that’s 1831. Then 1832 we see the beginning of church business, church business ventures. We have—actually, 1831 we have a printing establishment, a for-profit printing business that we talked about, the Literary Firm. And then in 1832, the Literary Firm was joined in the United Firm with Newell K. Whitney’s business properties in Kirtland, which was also connected with Sidney Gilbert’s store in Missouri, and that created the very first joint business venture of the church. That failed two years later. It was dissolved in 1834, but the principles that were laid out in the revelations about revenue generation through business was totally authorized, laid out there. All the principles are in place. We also talked about how, as the needs of the church changed after some serious business failure in Kirtland, of the Kirtland Bank, we make it to Missouri, and then Joseph pleads to the Lord to reveal how we’re supposed to finance the church. We’ve got debt that’s still carried over from Kirtland, we’ve got a new temple we’re supposed to build in Far West, and through Joseph’s plea, the Lord reveals section 119, which re-emphasizes consecration in verses one through three and then also adds a one tenth of all of our interest annually. We’ve talked about that. And so tithing becomes another iteration of consecration, right? It doesn’t replace consecration, but it is another iteration, another system, another way by which members of the church can financially consecrate. And so that was also important.

Casey Paul Griffiths:
So principle one: consecration was flexible. It was a set of principles rather than a set-in-stone, hard-and-fast system, and the leaders of the church have adapted the principles over time in many different situations.

Scott Woodward:
Yes.

Casey Paul Griffiths:
Principle number two: the revelations given to Joseph Smith effectively erased the line between the temporal and the spiritual. For instance, let me quote from section 29, verse 35. He says, “Behold, I gave unto him,” this is Adam and Eve, men and women, “that he should be an agent unto himself. I gave unto him commandment, but no temporal commandments gave I unto him, for my commandments are spiritual. They are not natural nor temporal, neither carnal nor sensual.” So the worldview of the early leaders of the church and the leaders of the church today is that there is no line between the temporal and the spiritual, that a person’s temporal welfare, if they have enough food to eat, can be linked to their spiritual well-being and vice versa. And partly because of this, the church has always seen what we would consider secular ventures to be a way of spiritually helping build the kingdom of God. This was in part because the church existed on the frontier, and often they were the only organization with enough capital and resources to launch major ventures. It was also partially because of the unique nature of the leadership of the church, where instead of most church leaders being guys like you and me, Scott, guys with backgrounds in history and theology, they could be guys like Brigham Young, who was a glazier. He built glass. Or guys like N. Eldon Tanner, who was a financier, who was really good at stuff like this. The leaders of the church, if you run down to the current leadership of the First Presidency and Quorum of the Twelve, doctor, Supreme Court lawyer—

Scott Woodward:
Utah Supreme Court, right?

Casey Paul Griffiths:
Yeah, Utah Supreme Court. You’ve got an airline pilot.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
These people come from all different walks of life. And the historical record shows that traditionally the church has been willing to invest in business ventures as a way of accomplishing its purposes. You can go all the way back to the Literary Firm. That’s one of the earliest examples. They’re going to pool their resources so they can publish the scriptures. The Kirtland Safety Society, which didn’t turn out too great but was a church-operated venture. In Nauvoo you have the Nauvoo House, which is going to be a hotel people can stay in, and the Maid of Iowa, which is a steamboat to bring people to Nauvoo. When you get to Utah you’ve got ZCMI, Zion’s Co-operative Mercantile Institute. Even stuff like, in Utah, almost every hospital is part of the Intermountain Healthcare Network. That was started by the church, sold in the 1980s. We talked about the Polynesian Cultural Center, the church has a theme park to help pay for its students that come from Oceania and Asia to finance their schooling. Deseret Book. Deseret Livestock. Real estate investing. All that stuff. Principle number two is the church and the revelations it’s based on don’t draw a fine line between temporal and spiritual things. In fact, the two are treated as the same. And if you can accomplish something that you need to do spiritually, like build a temple, using temporal tools, go for it. So much the better. The important thing here is we get the work done that we need to get done.

Scott Woodward:
And that’s the only way you can build a temple, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
By having contractors come out and build it. We need architects to design it. We need people with skills, and we need to compensate them for those skills and the materials and all those things.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Absolutely. Perfect. And the third thing we should note is that throughout the history of the church we’ve had both financial successes and failures. And sometimes church leaders have erred in their management of church finances. The church has often come close to financial catastrophe, such as in the Kirtland Safety Society episode and the anti-polygamy battle with the U. S. government. But the church has also experienced major successes in its finance, and we want to talk about some of both of those today. It’s precisely because of our history that church leaders have adopted a cautious attitude toward church finances, counseling members, for instance, to avoid debt, keep a reserve in store for a possible rainy day. These are lessons that are hard-earned lessons that the church has experienced personally, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
On both sides of the coin. So, yes, there’s been some ups and downs financially in the church, Casey, and we want to talk about even more of those today. And we want to kind of talk about them in context of some of the modern financial controversies that are kind of swirling around still today. Really started back in, what, 2018, 2019, when there was a whistleblower named David Nielsen who was encouraged by his brother to publish his whistleblowing grievances against the church. I think David used to work with Ensign Peak Investors. You know, that article in the Washington Post and then an interview on 60 Minutes that he did really kind of put the spotlight on the church’s finance. So we want to kind of hit several of those head on and kind of think through how those principles we’ve just outlined might shed some light on making sense of these controversies.

Casey Paul Griffiths:
So let’s review. Principle one: consecration is flexible.

Scott Woodward:
Yes.

Casey Paul Griffiths:
It changes from time to time as to how we do it. Principle two: the temporal and the spiritual are seen as the same thing.

Scott Woodward:
Yes.

Casey Paul Griffiths:
Church has always been involved in temporal ventures.

Scott Woodward:
That’s right.

Casey Paul Griffiths:
And principle three: the church has had some major ups and downs in its financial history. I remember sitting at a church history symposium, and this guy was talking about Joseph Smith and Nauvoo and talked about how the church was deeply in debt when they purchased Nauvoo. And this guy, bless his heart, raised his hand and said, well, doesn’t the church counsel against going into debt? And the historian who was presenting, who I won’t name, looked at the guy like he was from Mars, and he was like, yeah, but if they burn down your house and issue an extermination order against you, you might have to go into debt, and that’s okay. And the guy was like, oh. Yeah. Okay. So we avoid that whenever possible, but there are some times when you just can’t. So what we’re going to do is take these three principles, and we’re going to apply them to three real-time story problems.

Scott Woodward:
Oh, story problems.

Casey Paul Griffiths:
Story problems. I liken this to a nice, little financial burger, okay? So . . .

Scott Woodward:
A finance burger.

Casey Paul Griffiths:
Yeah. Yeah. So the top bun is the City Creek Mall controversy, okay?

Scott Woodward:
Okay.

Casey Paul Griffiths:
And then the patty, the really meaty part, is the hundred billion dollar nest egg the church has.

Scott Woodward:
A hundred-billion-dollar burger.

Casey Paul Griffiths:
And then the bottom bun is the SEC fine against the church, which just happened really recently, which most of my students hadn’t heard of, but let’s talk about it anyway. I want to talk about it. It’s our podcast. Story problem one.

Scott Woodward:
So this is the City Creek Mall controversy. This is the top bun.

Casey Paul Griffiths:
City Creek Mall controversy. Yeah. And I’m going to credit Mormonr. They are a website sponsored by the B. H. Roberts Foundation. They have a great little Q-and-A about the City Creek Mall controversy. So here’s the deal: that this goes back earlier. This is maybe, the earliest, 2008. So 2008.

Scott Woodward:
Pre-whistleblower.

Casey Paul Griffiths:
Pre-whistleblower. Yeah. In the middle of the so-called Great Recession that happened in 2008, the church announced that they were going to tear down the Crossroads Mall in downtown Salt Lake City and build a new facility called the City Creek Mall, okay? The reasoning behind this was that the area around Temple Square had started to deteriorate. And by the way, Gordon B. Hinckley, who’s president of the church, announced this in General Conference and explained the reasons why in General Conference, too. The area around Temple Square had started to fall into disarray and disrepair, and the area was starting to be dangerous. So President Hinckley basically said, we have a vested interest in making sure that the area around Temple Square is safe, and so we’re going to invest some of the church’s funds into building a new mall called the City Creek Center. So is this a normal thing for churches to do? No, not really. Churches don’t do this very often.

Scott Woodward:
Most churches don’t invest in malls.

Casey Paul Griffiths:
Most churches don’t invest in malls, but our theology is a little bit different. Again, the temporal and the spiritual are the same. How much did the mall cost? We don’t know, but the estimates are that it cost around $1.5 billion to create.

Scott Woodward:
Well, that’s just what the church put in, right?

Casey Paul Griffiths:
Yeah. Other investment groups, local groups, raised $3.5 billion to improve more of downtown. So this was kind of a whole revitalize downtown Salt Lake. And it, again, is happening in the middle of the Great Recession, probably the worst economic crisis since the Great Depression, decades and decades earlier, okay? So a question people might ask is, well, did tithing pay for the mall? President Hinckley said no. This is from his talk where he announced it. He said, “I wish to give the entire church the assurance that tithing funds have not and will not be used to acquire this property, nor will they be used in developing it for commercial purposes. Funds for this have come, and will come, from those commercial entities owned by the church. These resources, together with the earnings of invested reserve funds, will accommodate this program.”

Scott Woodward:
So no tithing funds were used in the building of the City Creek Mall.

Casey Paul Griffiths:
Yeah, and people were mad about this. Somebody actually sued the church. In 2021 a federal court in California ruled that President Hinckley was telling the truth, partially because the people that were upset were saying, well, this might not come directly from tithing, but what if you tithing in your investments, and then you use the money from those investments to pay for City Creek? Isn’t that technically using tithing? The judge rules that there was a distinction between tithing and the gains used from investing tithing. So on the legal side of things, no tithing, but maybe funds used from investing tithing in other things. Does that make sense?

Scott Woodward:
So here are some numbers that aren’t verified, but they’re in that 60 Minutes interview:

Casey Paul Griffiths:
Yeah, okay.

Scott Woodward:
They say something like this, that annually the church receives about $7 billion in tithes and uses about $6 billion in operating the church and paying what it needs to pay in the various places and, you know, educational as well as ecclesiastical, ward-, stake-level-type stuff, right? And so that leaves about a billion dollars to invest. And so then they invest a billion every year. And, again, none of these numbers were verified. They never give any sources for these numbers, but they—let’s just assume that they’re true. So the issue here is, is the church using any tithing money to purchase City Creek? And if we say, all right, $1 billion is invested at 8 percent, and without touching the principal, let’s say that’s, what, like, $80 million? So could you use that $80 million toward investing in something like City Creek if you’re not touching the principle of a billion dollars that was given in tithing, right? And the judge in California said, yeah, there’s a very big distinction between touching the principle and using the gains from the invested tithing, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
And all of that’s really interesting, kind of nitpicky, but if we just back up, Casey, and look at the history of the church, wouldn’t we say it’s actually fine if they use tithing money for that? Am I off-base on that? Like, they could actually use tithing money because that is resonant with the revelations themselves, right? Tithing money could be used for anything, any of the purposes, because there is no distinction between the temporal and the spiritual.

Casey Paul Griffiths:
Right. This is principle two, right? That it is consistent with the way the church is operated. In fact, the City Creek Mall was built on the actual location where ZCMI existed. In fact, part of the City Creek Mall retained the original storefront for ZCMI as a way of commemorating that ZCMI existed. So you might say, I don’t like this, but you can’t say it’s not consistent with how the church has operated throughout its history.

Scott Woodward:
And I guess I would push back and say, why don’t you like it? Like, what’s wrong with this? Bishop Waddell was interviewed in that 60 Minutes, and he was asked point blank about this City Creek, and they said, like, why did you do that? And he said, as an investment. And they said, have you made money off of that? And he said, Yes, we’ve made money off this investment. This is a real estate investment that we’ve made money off of, and that money is now used to continue to address the needs of the church and to fulfill the mission, right? All those funds are used to fulfill the mission. Nobody’s getting wealthy off of those funds. All the funds, commercial or otherwise, are used to fulfill the mission outlined in the earliest revelations, and we haven’t really varied from that.

Casey Paul Griffiths:
Yeah. It’s been a consistent thread throughout the history of the church. So you can’t say this isn’t consistent, is what we would say. Principle two all the way, and the church has been fairly transparent about that.

Scott Woodward:
So check me on that, Casey. Am I off in kind of challenging people as to why they’re bothered by the church investing funds that actually make us money to be able to continue the mission of the church? Like, am I not seeing something? Do I have a blind spot? What do you think?

Casey Paul Griffiths:
Just that I think among some people there’s this feeling of churches shouldn’t be involved in secular ventures. And again, from the early history of the church there’s been a feeling of we’re going to use all the tools at our disposal in order to build the kingdom, forward our purposes. So I don’t have any problem with it either, but I want to be sympathetic towards people that might say, why does the church own a mall? I would say, did you know the church owns a theme park? Did you know the church started a department store? Did you know the church used to own a hospital network? Did you know the church used to own the Utah Idaho Sugar Company? This goes back to not a financial purpose, but a theological purpose, which is they just didn’t draw a line between the temporal and the spiritual.

Scott Woodward:
And then all the money that they used from that was put back into the church for the accomplishment of the stated mission as outlined in the revelations, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
So, okay, so maybe that’s why it doesn’t bother me is because I’m totally on board with the erasing of the line between the temporal and the spiritual because I don’t know where to draw it. It’s one and the same, but . . .

Casey Paul Griffiths:
It doesn’t bother me either. If I can help somebody by giving them a blessing, great. If what they need is a meal, I’ll pay for a meal. Again, where do we draw that line between temporal and spiritual? And is that an artificial line that we’ve just adopted as a society that in practicality really doesn’t exist? Like, let’s get real here.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
That said, couple things about the City Creek Mall.

Scott Woodward:
Sorry, yeah, back to the City Creek Mall.

Casey Paul Griffiths:
Back to the City Creek Mall. Does the church enforce a dress code? No, they don’t, other than no shirt, no shoes, no service. Can you buy alcohol, coffee, tea, or tobacco?

Scott Woodward:
In the City Creek Mall?

Casey Paul Griffiths:
In the City Creek Mall. Yes, you can. Yes, there is a Cheesecake Factory, which I have eaten at, and if I had wanted to, but I did not because I’m a Latter-day Saint, I could have purchased an alcoholic beverage.

Scott Woodward:
Well, the church doesn’t own The Cheesecake Factory, right?

Casey Paul Griffiths:
They just rent space to it.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
Like, they rent space to the Disney Corporation, and they may or may not be a shady corporation. There’s also an Apple store, there’s a Rocky Mountain Candy Factory, there’s a Deseret Book—all this stuff. Is the mall closed on Sunday? Yes, yeah, it’s closed on Sunday. Is all this hypocritical? Is it hypocritical for the church to own a place where you can buy an alcoholic beverage? I would say they don’t own the place, they rent the place, and then it’s up to the proprietors of the establishment. Like, if the church was saying, hey, Cheesecake Factory, you can’t sell anything with coffee or alcohol, people would be crying foul the other direction. Like, at a certain point, they own the property, but they don’t tell people how to run their businesses other than within these general kind of rules that you would probably find in any sort of mall in the United States. So what do you think? Is this one okay? We used the three principles. Principle two, temporal and spiritual. I’m going to say I’m okay with the church owning the mall.

Scott Woodward:
Yeah. And this would be an example of a financial success in the history of the church. This was a wise investment. It’s paid off. We’ve, I think, if I understand correctly, made our initial investment back and are continuing to make money off of this. And that money then goes back into fulfilling the mission.

Casey Paul Griffiths:
Yeah. And even better, the area around Temple Square was revitalized in large measure by this. It’s much safer.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
There’s a lot of people that live and work there. Some of the City Creek Mall development is residential. People live there, too, and I remember going downtown prior to 2008 to see the lights on Temple Square and being a little bit frightened. Now I’d have no hesitancy going downtown in that part of downtown Salt Lake City, so it was successful, and the timing actually was good, too, because it did sort of deflect some of the worst effects of the Great Recession right at the moment it was happening. It kept Salt Lake from—or downtown Salt Lake, I should say—from really suffering more deeply than maybe it would have if otherwise, so . . .

Scott Woodward:
So multiple benefits all around on the City Creek Mall.

Casey Paul Griffiths:
Multiple benefits. That was story problem number one. Here’s story problem number two.

Scott Woodward:
Story problem number two.

Casey Paul Griffiths:
This is the meat patty in the financial burger.

Scott Woodward:
Oh, now we’re getting to the meaty issue. The meaty issue. Okay.

Casey Paul Griffiths:
This is the one you brought up, but in 2018, a self-described whistleblower came forward and said that the church had a reserve of—he said he couldn’t prove it for sure, but about $100 billion sitting aside.

Scott Woodward:
And nobody, by the way, has ever been able to pin that number down. Nobody who knows will say, and nobody who doesn’t know can be trusted. We just have David Nielsen saying it’s about that. And on 60 Minutes the reporter actually pushes Bishop Waddell and says, so how much do you actually have? And he says, we prefer not to say. She says, I’ve heard it’s upwards of $150 billion. She used that out of nowhere. Where she got that number, who knows? And he says, we have enough. And she said, but are we close? Are we in the ballpark? $150 billion, like . . . And he said, the church has enough for its needs. Like, he wouldn’t answer her. Anyway, so yeah, there’s this alleged $100 billion fund according to the whistleblower, which cannot be verified, but carry on. Let’s assume that’s true as we go through this.

Casey Paul Griffiths:
So let’s say there’s two issues here. Number one, should the church be more transparent about its finances?

Scott Woodward:
That is an issue.

Casey Paul Griffiths:
I can see pros and cons to both sides of the argument there, too. Number two, should the church have this large a reserve? And why does the church have this large of a reserve? This is a real issue. I went to dinner with a person, a colleague, and they had genuine issues, like, why am I paying tithing if the church has $100 billion in reserve? And, I mean, we could talk about the theological reasons for tithing, and we already have, and I would say the church doesn’t ask for tithing because of financial reasons. There’s spiritual blessings. Again, the temporal and spiritual intermix there, too, right?

Scott Woodward:
Yeah. It’s both, right?

Casey Paul Griffiths:
It’s both.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
But at the same time, is this okay? So in order to understand this, let’s review principle three. Principle three was the church has had an up-and-down history when it comes to finance. So we already talked about the Kirtland Safety Society. You could go back before the Kirtland Safety Society and say the trials in Missouri wipes out pretty much all the financial reserves the church has in Missouri. Church in Ohio has to bail them out. Church in Ohio builds the temple. The temple in Ohio is incredibly expensive. They try to set up the Kirtland Safety Society to offset that. The society fails. Then the Missouri persecutions. I mean, the early church is one financial disaster after another, some of which are the result of errors made by church leaders, most of which are the results of external persecution against the church. The bottom line is these failures made church leaders extremely cautious when it came to church finance and how they managed church finance. Now, you could extend that timeline out and say the battle with the federal government over plural marriage and consecration almost wipes out the church financially. Lorenzo Snow has to initiate tithing. He has to get some wealthier members of the church, like Jesse Knight, to help keep the church afloat until the church can become financially solvent. Other things, the Great Depression, which is the catalyst to launch the church welfare system, is hard on the church.

Scott Woodward:
And that was really the second Great Depression in our country, really, wasn’t it?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
I mean, wasn’t the 1890s also, didn’t they call that the Great Depression until the next Great Depression came along?

Casey Paul Griffiths:
Oh, yeah. And, I mean, earlier than that there’s the panic of 183—. I mean, it’s not a problem with the Church. It’s the environment the Church exists in. It’s that the country which the Church was founded in has ups and downs, and there’s no economic system that doesn’t have ups and downs.

Scott Woodward:
Sure.

Casey Paul Griffiths:
And the Church exists in this environment, right? It’s a context problem.

Scott Woodward:
Yeah. Yeah.

Casey Paul Griffiths:
Here’s a financial crisis that most people haven’t heard about. This is in 1962, okay? So in 1962 the church had another financial crisis. We ran a $32 million spending deficit.

Scott Woodward:
So we’re $32 million in debt.

Casey Paul Griffiths:
We’re $32 million in debt. In fact, by 1963, the financial officers of the church were worried they weren’t going to be able to pay the employees of the church, and at this point, David O. McKay is the leader of the church. President McKay was a generous soul. A lot of my research has been in church education, and I’ll just say from my—from that angle, President McKay was incredibly generous. He just said yes to everybody. So he goes to New Zealand, there’s a bunch of devoted Maori saints there. He’s like, let’s build you a school and a temple. Bam, bam. Has a counselor, Marion G. Romney, who’s from Mexico. Let’s get those guys to school. For a while there was a huge church school system that existed in Mexico. Pretty much everywhere President McKay went, and he’s the first prophet to really travel worldwide—let’s go to Holland. You guys need meetinghouses. Let’s go to Southeast Asia. You guys need meetinghouses. Let’s go to the Pacific. You guys need meetinghouses. Everywhere he goes they are building. And there’s also some behind-the-scenes things happening with some people within the church who are just really excited to build the kingdom and are building all over the place.

Scott Woodward:
Isn’t his counselor, Henry D. Moyle, a big driving force behind a lot of that?

Casey Paul Griffiths:
Yeah. Henry D. Moyle could really be summed up as an, if you build it, they will come. And so Henry D. Moyle’s thing was like, hey, if we don’t have a lot of Church members in a particular area, maybe it’s because we’re meeting in the International of Oddfellows Hall, and there’s beer and cigarette butts. If we had a nice building, we’d be attracting people. So if you build something nice, we’ll see missionary work shoot up. And so he kind of goes into deficit spending to build all these buildings. Now the church was going to be okay, they just needed to kind of make up the difference, but for a while they put in a five-year moratorium. For instance, this happened right when the church was building the church office building. There was five years where they halted construction just because they didn’t have the money.

Scott Woodward:
And this all comes because there’s a new counselor in the First Presidency named N. Eldon Tanner, right?

Casey Paul Griffiths:
That is correct.

Scott Woodward:
Who was a Canadian business executive prior to coming into the First Presidency, and he is going to really help the church get on solid financial standing, isn’t he? Wasn’t that his idea to say, hey, let’s—if we don’t have money, let’s not build the church office building. Let’s hold on until we have money.

Casey Paul Griffiths:
Yeah. N. Eldon Tanner is a sterling example of what we talked about where some church leaders had the expertise to be both great at leading in spiritual matters and leading in temporal matters. They’re the perfect mix of this spiritual-temporal thing. And by the way, the minutes of these meetings are all at the University of Utah. President McKay’s secretary, Claire Middlemiss, kept copies of all the minutes. I’ve seen this stuff when I was doing research on church education. N. Eldon Tanner basically went in and said, guys, this isn’t going to work. We’ve got to be more responsible financially. And he thought he was going to get fired from the First Presidency, right? Instead, after a little bit of, you know, hesitance, they’re like, you’re right. We’ve got to be more responsible. And so N. Eldon Tanner reorganizes church finances, slows down our spending, and then gets us back to where we’re—we’re not bleeding red ink, I guess you’d say.

Scott Woodward:
His biographer said that until he arrived, the church budget had been, “A halfway thing.”

Casey Paul Griffiths:
Yeah.

Scott Woodward:
With many activities not even included in the budget. And so now when he comes onto the scene he basically enforces a strict, comprehensive budget that requires each individual department of the church and the organization as a whole to live within its income. No compromises. Which, that’s going to be huge.

Casey Paul Griffiths:
Right. And the other thing that N. Eldon Tanner kind of initiates is this idea of, well, why don’t we use the principles of business to increase the resources that we have? So part of the church’s income is going to be invested, and we’re going to use those investments to help us do the things we need to do. Build buildings, pay for schools. Carry out welfare and humanitarian projects.

Scott Woodward:
Well, that’s not a novel idea. That is an 1831-1832 idea, right? I mean, that’s—

Casey Paul Griffiths:
Right, right.

Scott Woodward:
But he’s just really stinking gifted at business, and he says, let’s apply some of these principles of investing that I understand very well. What a gift.

Casey Paul Griffiths:
Yeah. So this is principle one, two, and three, right? Let’s—principles of consecration are flexible. Let’s use them. Church sees temporal and spiritual as the same thing. Let’s go for it. And principle three, church is up and down. While we’re down, let’s tighten the belt. Let’s use business principles to allow the church to survive. While we’re up and we’re doing okay, let’s invest some of the funds that we have so that we can have more resources if a lean period comes along. This is the whole book of Genesis, seven years of plenty and seven years of famine. So while we’ve got seven years of plenty, let’s put aside a little bit of that, and let’s invest it. And basically in the 1960s the principles of consecration were reorganized to create the situation we’re dealing with now. But, I mean, as late as the 1960s in the last half century, the church was in trouble financially, and they had to reorganize to fix it. So the default setting today is that everybody, including members of the church, just assumes that the church has always been rich, and we’ve always been doing okay, and that’s just not the case. It was really N. Eldon Tanner. We’re giving him primary credit, but there’s a bunch of people involved in this. Gordon B. Hinckley’s involved in this. A ton of people that follow this.

Scott Woodward:
Yeah. As one scholar has said, who studied this really carefully, he said the basic answer to the story of how the church went from financial difficulty to this world today, where it has enormous surpluses, is N. Eldon Tanner.

Casey Paul Griffiths:
Right.

Scott Woodward:
But you mentioned Gordon B. Hinckley. Well, Gordon B. Hinckley happened to sit in on the disposition of the Council of Tithes with N. Eldon Tanner. N. Eldon Tanner is going to be in the First Presidency for, like, 20 years, and he’s going to influence people like Gordon B. Hinckley, Thomas S. Monson, those who are going to guide the church into the 21st century, these young apostles who will become seasoned and continue those really wise financial practices instituted by N. Eldon Tanner. So it’s not just him, but he is kind of the impetus that really gets things focused to where we’re at today.

Casey Paul Griffiths:
Yeah, and you can see this. This is an open thing. President Hinckley gets up and gives an address in General Conference where he says, hey, the church will not spend more than it takes in. That’s principle one. And then he actually says, number two, the church will set aside a portion of its income against protection for a possible rainy day. So the leaders of the church have been public about this. And by the way, this is from an article that appeared in the Deseret News. This is from Nathan Oman. He was a historian professor of law at William Mary Law School in Williamsburg, Virginia. He said, “As far as I know, the program,” and he means that program established in the 1960s of setting aside a reserve and investing some of it, he says this program “has been relentlessly and consistently followed for half a century.” And if you do that for half a century, you take a portion of the tithing revenue every single year, and you just set it aside and invest it, between savings and then the exponential growth that you get from compounding interest on investments, the church gets this enormous pool of reserves. So where did the $100 billion come from?

Scott Woodward:
Sound financial practices.

Casey Paul Griffiths:
Yeah. Smart investing, and I’m not mad about that. Like, I sort of think that’s amazing. Good job, guys.

Scott Woodward:
Yeah, we’ve finally done it, Casey. I’m thinking back to 1832 March, where he said when he was setting up the United Firm to begin with, like, this very first joint venture business of the church, he said, “that through my providence, notwithstanding the tribulation which shall descend upon you, that the church may stand independent above all other creatures beneath the celestial world.” And so what we see now is, yes, through the practice of sound financial principles of investing and being frugal and doing everything that the church is doing today, we’ve finally done it, Casey. We’re there.

Casey Paul Griffiths:
We’re there.

Scott Woodward:
The church stands independent above all other creatures beneath the heavenly world. Like, this is something to rejoice in, right?

Casey Paul Griffiths:
Right. Now, let me address those two concerns we brought up earlier. Should the church be more transparent about its finances?

Scott Woodward:
Good question.

Casey Paul Griffiths:
I don’t know. The church did used to publish its finances. In fact, it did until 1957. And transparency is good. I totally agree. And the church does do a ton of audits. I have sat through many church audits, and I’m not a finance person, and they were painful, but I can tell you right now, as a former ecclesiastical leader of a ward, you get audited a lot. And they try to account for every penny, and they’re very sound financially. At the same time, too, if the church was more transparent with its finances, would that be helpful? What’s the positive other than painting a huge target on the church’s back by everybody that’s out there? I just—like I said, I’m back and forth in saying transparency is good, but in this particular case, as a church officer, I saw so much internal transparency and auditing that I feel pretty good that there’s nothing shady going on. Does that make sense?

Scott Woodward:
Yeah, a hundred percent. And in that 60 Minutes interview, you have Bishop Waddell, who’s being pushed on that point and saying, why not just disclose the number? Two of the things he says are, number one, we want to stay focused on the mission, not distract with the money. The mission more than the money. You start, you know, throwing the number of the money around, and he says, then church members want to tell you how to spend the money. We don’t want to just really flaunt the number about the money. And he doesn’t want people, you know, who are not called to the council of the disposition of tithes to think that they can just tell church leaders what to do with the money, right?

Casey Paul Griffiths:
Right.

Scott Woodward:
This is just one member of the presiding bishopric speaking here, but he’s saying, I think, what a lot of people are thinking, which is you start talking about the number, you’re going to get a lot of cooks in the kitchen who want to tell you exactly how to do it, but . . .

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Aaron Miller teaches nonprofit management and ethics in the Romney Institute at BYU. He also helps direct the Ballard Center for Social Impact, co-author of Business Ethics. I mean, this guy swims in these waters. He wrote this awesome article on Public Square Magazine which addresses this very question about transparency. I thought this was insightful: he said, in response to the question, should a church have the freedom to avoid transparency into its finances? And should it avoid opening its books? Here’s what he says, “Criticisms over transparency have dogged the church for decades, particularly over its fiscal resources. Keeping these figures private from the public is entirely legal, a privilege Congress affords to churches in the spirit of the First Amendment. Disclosing this information would be a voluntary step. There are, of course, reasons for Congress affording this privilege. Religions want the primary public focus to be its message rather than its money. If people want to focus on money, that’s their prerogative, but churches, understandably, may like to keep the focus elsewhere. Of course, as human nature dictates, the more something is kept secret, the more people and the press want to focus on it. There are also legal considerations. Many organizations believe that if you’re known to have money you might become subject to frivolous lawsuits or solicitations of bribes by bad foreign actors in order to operate overseas. There are even fears, not unfounded, that missionaries in foreign countries could be kidnapped for ransom if church finances are detailed. Of course, now that this information has been leaked, many of these concerns can’t be put back into the bag,” he says, “since the numbers and the scope of holdings are now understood to be large. But that doesn’t mean the church would want to assist in publishing its holdings to exacerbate such risks or provide exact figures that could create a certain kind of exposure.” And then he concludes, “No matter these other considerations, it’s also the case that some simply don’t believe that it’s right for so much financial power to be shielded from public accountability, and many feel that transparency, when appropriately applied, is important and comes with many benefits, like the aforementioned factors of reducing fraud and engendering public trust. There are many American churches that voluntarily disclose annual financial reports to their parishioners. For reasons the church indirectly explains, it chooses to keep its finances confidential. This is surely a trade-off they have repeatedly considered and will continue to weigh.” Lots of goodness in there. Thank you, Aaron Miller.

Casey Paul Griffiths:
Lots of goodness in there. Well done.

Scott Woodward:
And we’ll post this entire article on the show notes.

Casey Paul Griffiths:
That is such a good quote. And I hadn’t even thought about missionaries. Missionaries get kidnapped and held for ransom. I mean, ugh. Again, I go back and forth on the transparency issue, but this makes me lean towards saying, why do people need to know if they know that there’s internal audits and that it’s being cautiously dealt with, why paint a big target on the missionaries like that? That just feels like an unnecessary risk.

Scott Woodward:
Yeah, I mean, if the church wanted to voluntarily say how much money they’ve got, great. But if they choose to not do that, that’s also legally protected. They don’t have to do that. And if they want to sort of, you know, deflect attention away from the bottom line, I guess that’s okay, but maybe we could say that hasn’t worked very well since 2018, 2019. People keep asking. We’re doing a whole podcast series on it because it continues to come up. This is an issue people want to know about. Church leaders don’t seem to want to be very forthcoming about the specific number, but I think it’s safe to say that it’s large.

Casey Paul Griffiths:
Yeah. And let me just say that 30 seconds when the church auditor gets up in general conference, which is the most boring part of general conference—I don’t even—I’m not sure we do it anymore.

Scott Woodward:
They cut it out. Yeah.

Casey Paul Griffiths:
I think they cut it because it was so boring. But that little 30 seconds where the guy gets up and says, “everything’s in accordance with the”—it’s the result of thousands, tens of thousands of audits that happened in the church. So when I was serving as bishop, me and the finance clerk every six months would go to the church, and sometimes we were there ’til, like, 11:30, 11:45, going through all receipts, making sure everything was square with the church auditors. I begged to get out of this place, because pretty much all the bishop does is sit in the office and every, you know, hour or so, they come in and ask questions, and you’re like, “Yeah, um, I think so,” and “I don’t know,” and at one point I was like, “I will pay you if I can go home.” But God bless the auditors and the finance clerks in the church who are so careful with this money and genuinely see it as sacred. I’m just really grateful for them. So transparency. Okay. Issue two, should the church have this much money? I don’t know.

Scott Woodward:
According to what standard, right? According to what standard? Should they or should they not have this much money?

Casey Paul Griffiths:
Yeah. I will say this season of plenty has coincided with the greatest season of temple building in the history of the church. And the church has been transparent, at least in a general sense, that its number one expenses is finances. So, you’re going to build a temple in Thailand. You’re going to build a temple in Vanuatu. You’re going to build a temple in Kiribati or Peru or Ivory Coast. That costs money, and it doesn’t generate revenue, either. It costs money to build the temple. It costs money to maintain the temple. It costs money to operate the temple.

Scott Woodward:
It’s a sunk cost.

Casey Paul Griffiths:
Yeah. So I’ll give you an example here: When I was studying church schools, I’d said I wanted to go to every church school in the world. So the most remote one is in Kiribati, which formerly known as the Gilbert Islands.

Scott Woodward:
Where is Kiribati? By saying it’s in the Gilbert Islands, or the islands formerly known as the Gilbert Islands, that’s not helpful for people like me, Casey. Where is that?

Casey Paul Griffiths:
You go to Guam, and you take a left and it’s about a thousand miles. It’s in the middle of the Pacific Ocean, and the people there are so beautiful and so friendly, but it takes forever to get there. Like, when I went to Kiribati, I had to plan a week because there’s only flights in and out on Monday, so whatever I did, I was there for a full week. I went there. There’s a school that the church operates. Kiribati, or at least the main island of Kiribati, is on an atoll that at its widest point is 800 meters. So most places you can stand in the ocean, throw a rock, it’ll land on the other side of the ocean. How do you maintain buildings when there’s salt water spraying it from both sides at all times? Church spends a ton of money just maintaining that building.

Scott Woodward:
Wait, so how big is Kiribati?

Casey Paul Griffiths:
Kiribati is, I mean, if you count water, it’s bigger than the United States.

Scott Woodward:
I’m not counting water, yeah.

Casey Paul Griffiths:
If you count land, it’s smaller than the average county in Utah.

Scott Woodward:
Okay, okay.

Casey Paul Griffiths:
Mostly water. Church operates a school there. The school has to be made—you have to put this thick oil paint on everything so the salt just doesn’t corrode it. The church has little church houses all over the island. The land is threatened because of rising sea levels. The highest point in Kiribati is eight meters high. So if the sea levels go up at all, these people are in danger of literally losing the land that they’re on.

Scott Woodward:
Holy cow.

Casey Paul Griffiths:
I went there. The people took great care of me. They were so kind and generous. But I thought to myself, this is so remote. They’ll never get a temple. Like, I had several people say, yeah, we’re saving to go to the temple. I had other people say, a temple is—a temple trip is a once-in-a-lifetime thing.

Scott Woodward:
Wow.

Casey Paul Griffiths:
You save up enough money to go to Fiji.

Scott Woodward:
Wow.

Casey Paul Griffiths:
Couple years after I got home they announced a temple in Kiribati. And I don’t know if people understand how expensive and how resource-consuming it’s going to be to build a temple—

Scott Woodward:
Yeah.

Casey Paul Griffiths:
—in this little, tiny island where, honestly, if there’s a bad storm, they don’t have sugar for two months. So how do you get everything there to build the temple? How do you maintain the temple? And why would you do that? Because a lot of people from Kiribati, by one estimate about 16 percent, are Latter-day Saints. We’re building a temple because we believe the temple helps them gain eternal life. So, I mean, that’s where the church spends its money: temples, buildings, education.

Scott Woodward:
That’s the mission. That’s the mission.

Casey Paul Griffiths:
If nobody’s getting rich—and that’s another point I would say, is nobody’s accusing Russell M. Nelson of, you know, living in a gold-plated mansion, and the money’s being spent on stuff like this that Latter-day Saints see theologically, economically, and educationally as necessary for the welfare of these people’s lives and souls, that’s great. If they have more money to do that, I’m okay with it. I saw. I saw where the money went to in this little, tiny island nation, and I’m good.

Scott Woodward:
Let’s do the follow-up question on this, which you mentioned you had a friend that you went to dinner with that had an issue with paying tithing.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Because the church has so much money. Let’s think about that for just a second, because this is an important concern. Like, should the church continue to ask its members to tithe when it has a $100 billion reserve?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Now, we don’t know for sure that it has a $100 billion reserve, but let’s assume that it does. Should the church continue to ask its members to tithe? Or let me phrase it a little differently: is the church taking advantage of its poor members by asking them to tithe? I think that’s really the rub, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
One way critics want to frame it is that this wealthy church doesn’t actually need the tithing of its members, and so those that pay their tithing are suckers, right? They’re just playing into the church’s clutches, whatever, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Our very own Stephen Jones from Scripture Central interviewed Aaron Miller. It’s an excellent interview. Highly recommend. We will link in the show notes. It was actually from that interview where I heard Aaron say the following about this very point. What would happen, he asked, if church members stopped paying tithing today? And let’s assume that church expenses continued as they are. They don’t go up at all. The question is, how long would the church be able to continue to cover its costs? And he put together a rough calculation given how much expense the church has, given let’s say a little more, he said, than $100 billion. And he said if members stop paying tithing today, and the church expenses continued as they are today, and they don’t go up at all, then the church could cover its costs for the next sixteen or so years. That’s it. He said if there’s an economic downturn, then of course, all the invested money would also shrink, and so then you’d have about eight years, he said, somewhere between eight and sixteen years until all church funds dried up. That’s it. Casey, from what I understand, the Lord intends for this church to last longer than the next sixteen years, right? And so I guess this just pushes against that kind of flawed thinking that the church has so much money that church members don’t need to tithe. It’s like, well, actually the church continues to grow. The expenses continue to go up. We’re building temples like we’ve never built temples before.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
There’s so much expansion in missionary work, seminaries, institutes, everything that the church is doing that’s very much on mission needs to be funded, and honestly, like, we’re only a decade or so out in terms of being able to be financially solvent without any additional income.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
One more interesting statistic he threw out: he said, if you look at the Harvard endowment, which is about $50 billion, and then you divide that number by the number of students that their endowment serves, that’s equal to about $2.3 million per student. That’s students in any given time that are active at Harvard. So that’s like saying, basically, if you divide it up among the students, each student has $2.3 million in their bank account attached to them, as it were, right? Just for this thought experiment.

Casey Paul Griffiths:
Right.

Scott Woodward:
He then used the University of Utah, since it’s a public institution that also has an endowment, of a little over $1 billion. If you divide that endowment by the number of active students at the U, then they have around $38,000 per student. Now, if you take the church’s endowment, and let’s assume it’s a little over $100 billion, and divide it by the number of church members, okay, he said, if you do that, then each church member has around $6,000. That’s it. So, looking at the, you know, constituency that they’re serving, right, and thinking about, okay, this is a nonprofit that has purposes to serve this group of people, you know, Harvard is serving its people with $2.3 million per student. The church, $6,000 per member. Now, Harvard spends its money on primarily education. The church spends its money also on education, oh, and welfare, and building temples, and missionary work, and seminary and institutes, and on and on and on, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
There’s all these ongoing activities that the church is a part of here that has, you know, so many needs for its money, right? This isn’t just a philanthropic organization that’s waiting around to see a cause that it can donate its money to. Like, that’s not what the church is. It’s an active organization that continues to need money day after day, week after week, year after year for the ongoing expenses of the church. So.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Some fun thought experiments from Aaron Miller. Super interesting. I’ll post links in the show notes to both his article and this great interview.

Casey Paul Griffiths:
Let me back that up, too, especially the idea that the church is stealing from poor people by making them pay tithing.

Scott Woodward:
Right.

Casey Paul Griffiths:
When I was in Kiribati, I went to the Institute of Religion that was there. Kiribati is an incredibly poor nation, not for any fault of their own, they just don’t have a ton of resources. I interviewed the Institute director. Out in the lobby was a young lady sitting there on her laptop. She had a laptop, and I went over and talked to her and said, “What are you doing?” She goes, “I’m taking an accounting class.” And I go, “Really?” and, “Who through?” “BYU Pathways. I come to the Institute because they have Wi-Fi here, and I can use that to take those classes.” So she was benefiting. I don’t know what she paid in tithing. I didn’t ask, but she was benefiting from it. Second thing: a couple years ago a church historian named D. Michael Quinn, who has an interesting past to say the least—we won’t get into it. Mike Quinn’s passed away now, but he was excommunicated from the church but still a church historian, wrote a book on church finance, and one of the things that Mike Quinn did was, in a country like the United States, the church doesn’t have to publish its finances, but in other countries, like Great Britain, the church does have to publish its finances. He found that in a country like the UK 95 percent of the operating budget for the church there was coming from outside the country, and so this seven years of plenty that exists in the United States, where there’s members who pay tithing and where there’s investments, actually goes to fund the church in developing nations like Kiribati.

Scott Woodward:
Internationally.

Casey Paul Griffiths:
Yeah. Or in developed nations like Great Britain, where there’s not a huge amount of members, and so I would say it’s the complete opposite, that the central control the Church has over its finances allows a more equitable distribution of funds to where I’m certain that the members of the Church in Kiribati don’t pay enough tithing to pay for their own temple, but because we’re managing it centrally, we’re going to build a temple there, and this seven years of plenty is what’s allowing us to do that, because when you started saying, if the church continued to operate as it is with no growth, I was like, oh my gosh, we’ve announced over 300 temples in various places around the world. That’s just going to increase, and setting all that aside, I’ve got to go back to I don’t think tithing is something we do to make the church rich. I think it’s something the Lord commanded us to do because it makes us less concerned with material wealth. That’s all I’m going to say.

Scott Woodward:
Just to add to that, you mentioned that Nathan Oman article, and he talked about this very thing, about the international growth of the church, and I thought he shared a really interesting thought: He proposes that the church’s assets now, this abundance that we have, may be increasingly important during a time when most of its membership expansion is happening more in Africa and Latin America. Here’s a direct quote from Nathan. He said, “The per capita wealth of Latter-day Saints today is likely higher than the per capita wealth of Latter-day Saints in the future. What savings does is move money from the high per capita wealth of Latter-day Saints now and transfers it to the lower per capita wealth of future Latter-day Saints.

Casey Paul Griffiths:
And what does that look like? Consecration, right?

Scott Woodward:
Yes.

Casey Paul Griffiths:
We’re no poor among them. In this case, it’s national consecration where the members of the church in developed countries are helping the members of the church in less-developed countries, and that’s seen through temples, buildings, the perpetual education fund—all kinds of things that can assist and are important in assisting in doing these things. So, honestly, $100 billion, yeah, it’s a season of plenty.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
In fact, one more thing: the whistleblower guy published this, and the Wall Street Journal published a major article, and when church leaders were asked, why do you have this big reserve? They generally said, for a rainy day. And when the Wall Street Journal said, what kind of rainy day could you be talking about? This article was published in the winter of 2020, okay? The next month was when the COVID-19 pandemic swept the world and threw everything into upheaval. And so, it was kind of, like, to ask the question, what kind of rainy day are you talking about, and then less than a few weeks later—

Scott Woodward:
There’s an example.

Casey Paul Griffiths:
There’s an example of how volatile the world that we live in is right now. So, it’s just a good idea to have something set aside that you can use for a possible rainy day.

Scott Woodward:
Bam.

Casey Paul Griffiths:
Let’s move on to the last part of the financial sandwich. Bottom bun.

Scott Woodward:
Bottom bun, Casey. So this is the SEC charges against the church, where the church actually paid a $5 million fine.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Uh, whoa. Tell us about that. What happened?

Casey Paul Griffiths:
This was from 2023. February 21, 2023.

Scott Woodward:
Okay, so pretty recent.

Casey Paul Griffiths:
Yeah, the SEC released a statement where they said they announced charges against Ensign Peak Advisors, a nonprofit entity operated by The Church of Jesus Christ of Latter-day Saints. Ensign Peak Advisors were fined for, “Failing to file forms that would have disclosed the church’s equity investments and for instead filing forms for shell companies that obscured the church’s portfolio and misstated Ensign Peaks’ control over the church investment decisions. The SEC also announced charges against the church for causing these violations. To settle the charges Ensign Peak agreed to pay a $4 million penalty, and the church agreed to pay a $1 million penalty.

Scott Woodward:
Okay, so let’s unpack that. So the church owns this investment company called Ensign Peak . . .

Casey Paul Griffiths:
Advisors. Ensign Peak Advisors.

Scott Woodward:
Ensign Peak Advisors.

Casey Paul Griffiths:
Inc.

Scott Woodward:
Inc.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
And they are considered a—not an independent entity, but an appendage?

Casey Paul Griffiths:
The language in the SEC statement is “a nonprofit entity operated by The Church of Jesus Christ of Latter-day Saints to manage the Church’s investments.

Scott Woodward:
Okay, so the Church owns Ensign Peak Advisors, which is basically its investment arm. It’s considered, if I understand right, for tax purposes, an integrated auxiliary, is what they call it. And the investment arm, in order to obscure Church financial numbers, created thirteen different shell companies to independently report to the IRS. And that was called out as a—as what? Like, why was that—why was that wrong?

Casey Paul Griffiths:
Okay, so this is from the SEC statement: it said, “to obscure the amount of the church’s portfolio, and with the church’s knowledge and approval, Ensign Peak created thirteen shell LLCs, ostensibly with locations throughout the U. S., and filed forms 13F in the names of these LLCs rather than in Ensign Peak’s name. This order finds that Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee business managers, most of whom were employed by the church, to sign the commission’s filings. The Shell LLC’s Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds Ensign Peak retained control over all investment and voting decisions.” That’s the wording from the SEC’s statement.

Scott Woodward:
So the concern is there was some misdirection here. Deliberate misdirection, pretending like there’s thirteen independent companies, but really Ensign Peak was pulling the strings on all thirteen.

Casey Paul Griffiths:
And I should mention, the church issued a statement the same day that the SEC made its statement, too.

Scott Woodward:
Okay. What’s the church say?

Casey Paul Griffiths:
Here’s the church’s side of things: the church side said, “Since 2000 Ensign Peak received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. As a result, Ensign Peak established separate companies, LLCs, that each filed Forms 13F instead of a single, aggregated filing.”

Scott Woodward:
OK.

Casey Paul Griffiths:
“Ensign Peak and the Church believe that all securities required to be reported were included in the filings by separate companies. In June 2019 the SEC first expressed concern about Ensign Peak’s reporting approach. Ensign Peak adjusted its approach and began to file a single, aggregated report. Since that time thirteen quarterly reports have been filed in full accordance with SEC requirements. This settlement relates to how the forms were filed previously. Ensign Peak and the Church have cooperated with the government over a period of time as we have sought resolution.” So let me explain. No, no, no, there is too much. Let me sum up. Ensign Peak created thirteen companies so that it could report its income, which was in the billions of dollars, in these separate, smaller company filings.

Scott Woodward:
So that they could deliberately obscure the amount that the church actually holds, right? This is a deliberate move to obscure the number.

Casey Paul Griffiths:
Yeah. So the SEC, the Securities and Exchange Commission, this is the U. S. government, basically said they should have been filing an aggregated report that put all those together instead of being thirteen separate reports. The church said they did this based on legal counsel. See, that’s part of the SEC filing that’s disputed, is the SEC filing says they did this with full knowledge of the leaders of the church. The leaders of the church are saying, we did this on counsel of our legal advisors for the church.

Scott Woodward:
They’ve hired lawyers to counsel them about these kind of complex financial legal issues.

Casey Paul Griffiths:
Yeah. So they weren’t accused of under-reporting. They weren’t accused of over-reporting. They were just accused of basically reporting in this, shall we say, financially creative way that basically helped obscure how much money Ensign Peak Advisors was bringing in, if that makes sense.

Scott Woodward:
Totally. And so that was why they needed to pay the fine. The church pays $5 million: Ensign Peak $4 million, the church proper $1 million. I think that’s an acknowledgment of wrongdoing. I think we can say that straight up, right?

Casey Paul Griffiths:
Yeah.

Scott Woodward:
And in the church’s statement that you were just reading from, they go on to say, “We affirm our commitment to comply with the law, regret mistakes made, and now consider this matter closed.” Boom. So, yeah, we made some mistakes. We followed legal counsel, which turned out to be bad legal counsel, we have paid the fine, we now affirm our commitment to continue to comply with the law as we now understand it, and this matter is closed. Boom. Done. So the end of that controversy, essentially, right?

Casey Paul Griffiths:
Yeah, so they basically announced that by the time the SEC made the announcement, the church had been in compliance, was filing an aggregated report for several years, but they were announcing that they were accused of this, they dealt with it, they paid the fine, they’re moving on. So how does this apply to the three principles we introduced at the first?

Scott Woodward:
I don’t know, how does it, Casey?

Casey Paul Griffiths:
I would say this fits in with principle three, where we’d say there’s ups and downs, and church leaders admittedly have not ever been perfect in the way that they’ve operated the church.

Scott Woodward:
This is a very recent mistake. I mean . . .

Casey Paul Griffiths:
A very recent mistake, and I’d file it under Kirtland Safety Society category of things, where I don’t think there were any ill intentions. It seems like they were worried about a target being on the church if people knew how successful the investments of the church were, so their legal counsel advised them to spread it out so that they wouldn’t have quite a target painted on their backs. When the SEC approached them and said, that’s not okay, they changed their practice, they paid the fee, and they admitted that they made a mistake, and the word mistake appears in the church’s statement.

Scott Woodward:
Yeah. They said, “We . . . regret [the] mistakes made.” Yeah.

Casey Paul Griffiths:
So I would say they made a mistake, they corrected the mistake, they paid the fine, and they moved on.

Scott Woodward:
So the SEC fine is not some sort of gotcha moment where they discovered some shady financial dealings of the church and, you know, somehow exposed what all the critics believe to be true about the big, bad, evil church, right, that’s just hoarding poor people’s money, right? Like, the worst possible way you can paint it.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
When you actually shine a light on this, it’s just lawyers advised them to split up their reporting into thirteen different shell companies. That shouldn’t have happened. They got a $5 million fine. They’ve paid it. They are now in compliance. Everybody’s good. The end, right? “Now we consider this matter closed,” they said.

Casey Paul Griffiths:
Yeah. So I would say this fits into principle three, where there’s ups and downs, and sometimes church leaders make mistakes, and I think that’s been a consistent thread through almost all of our podcasts, right, is that sometimes members of the church—and actually I’ve seen it more prominently with critics of the church—try to set up this straw man that the leaders of the church are perfect and they never make mistakes, and that’s just not something that’s true or that we’ve ever claimed was true. If somebody makes a mistake and they correct it and make it right, okay, we’ll move on.

Scott Woodward:
Yeah, and that’s the most recent example. That’s February of 2023, almost exactly a year ago, right?

Casey Paul Griffiths:
Mm-hmm. Yeah. So, yeah, I think that this is consistent with the history of the church, too, to say that times like the Kirtland Safety Society, or the financial crisis of the early 1960s, church leaders made mistakes.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
Again, the thing that I keep coming back to is this is a mistake in reporting. It’s not a mistake when it comes to, they weren’t accused of any malfeasance as to how they spent the money, how they earned the money. Nobody is saying that the members of the Quorum of the Twelve are multi-millionaires who are living large and going on Caribbean vacations off of this money that was earned. In fact, all this money that the SEC was concerned with is still going towards those charitable causes, education, missionary work, temples, meetinghouses, and all those things. So to me this is not a big deal. I mean, I can accept that church leaders made a mistake, but they were acting on the advice of legal counsel and were probably doing what they thought would protect the church, but they messed up, and so they corrected it. I’m good.

Scott Woodward:
Boom. The end.

Casey Paul Griffiths:
So that’s the last part of the burger.

Scott Woodward:
Okay, so the top bun was the City Creek Mall.

Casey Paul Griffiths:
City Creek Mall. Yep.

Scott Woodward:
The middle, meaty piece was the $100 billion.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
And the bottom bun was the SEC fine that was recently paid.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
And all that together equals the financial controversies burger of the last few decades.

Casey Paul Griffiths:
Yup, that’s pretty much it. That’s pretty much it.

Scott Woodward:
And are we saying, Casey, are we saying that collectively that’s just one big nothing burger?

Casey Paul Griffiths:
Boom! I set you right up to say that.

Scott Woodward:
Bump. Set.

Casey Paul Griffiths:
Bam. The whole burger analogy came out naturally in our conversation, but I knew—at some point, I was like, Scott’s going to say this is a nothing burger. I didn’t do that intentionally, it was just a nice bit of serendipity that all came together for us.

Scott Woodward:
A little serendipity for you.

Casey Paul Griffiths:
I mean, basically, if we pull back, and we look at all three of these story problems, we’ll see that a. What the church has done financially the last few years has been completely consistent with its history. It’s consistent with its theology. It’s consistent with its practice, and it’s also morally ethical. I mean, they made mistakes. When they made mistakes, they corrected them. That’s what an ethical person does, and we all make mistakes. So unless you’re ascribing absolute perfection to the church and its leaders in every realm of life, this doesn’t feel like anything that’s too big a deal to me. And in some ways, like you said, parts of the story are really, really inspiring. Like, this is a good model for how a person should lead their life financially: be careful, be cautious in what you spend, and keep aside a reserve just in case something bad happens that’s beyond your control.

Scott Woodward:
Yeah. In fact, this reminds me of a great quote from President Hinckley, where he compares the church to our own personal finances. He says this: “In the financial operations of the church, we have observed two basic and fixed principles: one, the church will live within its means. It will not spend more than it receives.” And this all grows out of the N. Eldon Tanner era, by the way. Church hasn’t always lived this way, but—

Casey Paul Griffiths:
Yeah.

Scott Woodward:
“Two: a fixed percentage of the income will be set aside to build reserves against what might be called a possible rainy day.” And then he says, “For years the church has taught its membership the principle of setting aside a reserve of food as well as money to take care of emergency needs that might arise. We are only trying to follow the same principle for the church as a whole.” So I think that’s awesome. Some practical takeaways from all of this is, hey, let’s be smart like the church in our own personal finances, right? Let’s not spend more than we have, and let’s maybe even invest some of that money for a possible rainy day.

Casey Paul Griffiths:
Yeah.

Scott Woodward:
Wise counsel, and you can see that it actually works when you look at the church as a whole. Like, it’s working marvelously well for them. It will work for us, too.

Casey Paul Griffiths:
So keep a financial reserve. If you mess up, fess up. Admit mistakes, pick yourself up, and move on.

Scott Woodward:
Yeah.

Casey Paul Griffiths:
The financial controversies of the church make sense in the context of the financial history of the church. That’s why we hope that this has been helpful to you, our listeners, to understand this doesn’t come out of the blue, and it’s not abnormal. It actually is totally consistent with the financial principles that the Lord laid down in the revelations given to the early church and what they look like when applied in the 21st-century Church. So we’re probably not at the end of the Church’s financial controversies, but as long as the Church exists and the Church continues to be true to the principles it was given in its early history, we probably will run into some of this stuff, but we’ll also be able to accomplish and do wonderful things. I mean, there’s a temple coming to Kiribati. I’m over the moon for those people. Scott, you served your mission in Thailand. There is a temple in Bangkok.

Scott Woodward:
Yes, temple was just dedicated last October.

Casey Paul Griffiths:
That’s outstanding. That’s awesome. President Nelson announced a temple in Moscow, Russia. How the heck are we going to get that done? I don’t know, but I have faith that we have a way to get it done and the Lord’s going to bless us with the means to accomplish His works.

Scott Woodward:
Beautiful. Thank you for listening to this episode of Church History Matters. Next week, we’re excited to be joined by Dr. Elizabeth Kuen to help us respond to your financial questions about the Joseph Smith era. So, again, please send those questions in by February 22, 2024 to podcasts@scripturecentral.org. We look forward to hearing from you. If you’re enjoying Church History Matters, we’d appreciate it if you could take a moment to subscribe, rate, review, and comment on the podcast. That makes us easier to find. Today’s episode was produced by Scott Woodward and edited by Nick Galieti and Scott Woodward, with show notes and transcript by Gabe Davis. Church History Matters is a podcast of Scripture Central, a nonprofit which exists to help build enduring faith in Jesus Christ by making Latter-day Saint scripture and church history accessible, comprehensible, and defensible to people everywhere. For more resources to enhance your gospel study, go to scripturecentral.org, where everything is available for free because of the generous donations of people like you. And while we try very hard to be historically and doctrinally accurate in what we say on this podcast, please remember that all views expressed in this and every episode are our views alone, and do not necessarily reflect the views of Scripture Central or The Church of Jesus Christ of Latter-day Saints. Thank you so much for being a part of this with us.