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The Church of Jesus Christ of Latter-day Saints built a $100 billion investment portfolio using tax-exempt funds "intended for charitable purposes," potentially in violation of federal laws, according to a whistleblower complaint filed to the Internal Revenue Service.
The 74-page complaint was lodged by David A. Nielsen, a 41-year-old former portfolio manager for the church's nonprofit investment arm, Ensign Peak Advisors, in Salt Lake City, where the church is based. He was aided by his twin brother, Lars Nielsen, who provided documents and spoke to The Washington Post Monday.
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The former member worked there until September when he filed a complaint to the Internal Revenue Service Nov. 21, accusing church leaders of "misleading members — and possibly breaching federal tax rules — by stockpiling their surplus donations instead of using them for charitable works. It also accuses church leaders of using the tax-exempt donations to prop up a pair of businesses," the Washington Post reported.
In this Sept. 14, 2016, file photo, a man walks past the Salt Lake Temple, a temple of The Church of Jesus Christ of Latter-day Saints, at Temple Square in Salt Lake City. David A. Nielsen filed a complaint with the IRS against the LDS Church in November. (AP)
“Having seen tens of billions in contributions and scores more in investment returns come in, and having seen nothing except two unlawful distributions to for-profit concerns go out, he was dejected beyond words, and so was I,” Lars Nielsen told The Post.
The LDS Church defended its use of member donations Tuesday after the report.
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The vast majority of member donations are used to fund church operations, temples, missions, education and humanitarian needs while another portion is “methodically safeguarded through wise financial management and the building of a prudent reserve for the future,” church spokesman Eric Hawkins said in a statement to the Associated Press.
Hawkins added the claims are “based on a narrow perspective and limited information.”
Nielsen is seeking a reward from the IRS, which offers whistleblowers a cut of unpaid taxes it recovers.
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Nielsen's complaint alleges the LDS Church collects $7 billion in member contributions each year, $6 billion of which is spent on operating costs while $1 billion is transferred to Ensign Peak Advisors and funneled into the church's investment portfolio, according to The Post. Nielsen claims the investment arm did not use the money for charitable purposes over the last 22 years, but twice used money to prop up businesses, first for an insurance company and the second time for a mall in Salt Lake City.
D. Michael Quinn, a historian familiar with LDS Church finances, told The Salt Lake Tribune the income figures Nielsen cites in the complaint are difficult to reconcile with his own research.
The Associated Press contributed to this report.
