What the Church Told Members
The Church of Jesus Christ of Latter-day Saints expects its members to tithe. The doctrine is specific: ten percent of gross income, paid annually or more frequently, as a condition of full participation in the faith. Members who do not tithe in good standing cannot enter the church’s temples — the sites of its most sacred ordinances, including marriages and baptisms for the dead. Tithing is not merely encouraged. For temple-going members, it is effectively mandatory.
The church collects approximately $7 billion annually in contributions. In a 2019 press release, the church described how that money is used: “The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future.”
That statement was issued in response to a whistleblower complaint that had just been filed with the Internal Revenue Service. The whistleblower had worked inside the church’s investment arm for nine years. His name was David A. Nielsen. What he described — and what the SEC subsequently confirmed in part — was an operation that bore little resemblance to a prudent reserve.
Ensign Peak: The Fund That Wasn’t There
In 1997, the church spun off its investment operations into a separate legal entity called Ensign Peak Advisors, named after a hill overlooking Salt Lake City. The fund began with approximately $7 billion in assets. All employees were required to be active members in good standing with the church. According to reporting by the Wall Street Journal in 2020, employees were required to sign lifetime confidentiality agreements and, at some point, were no longer told the total assets under management figure for the firm. The Ensign Peak offices were located above a food court in Salt Lake City and did not appear in the lobby directory of the building.
Investment managers overseeing a portfolio of public equities above a certain threshold are required by federal law to file Forms 13F with the SEC quarterly. These forms publicly disclose the names of the securities held and their values. According to the SEC’s February 2023 enforcement order, Ensign Peak senior management was made aware of this requirement and communicated it to senior church leadership. For twenty-two years, from 1997 through 2019, neither Ensign Peak nor the church filed those forms.
Instead, they created 13 shell limited liability companies. Each shell company was given a name, a local phone number, and a mailing address. According to the SEC, the phone numbers were assigned specifically to “go directly to voicemail” in the event regulators attempted to verify the companies’ existence. The shell companies filed the required Forms 13F in their own names — not Ensign Peak’s — so that no single filing would reveal the true scale of the church’s portfolio.
The phrase “with the church’s knowledge and approval” is the load-bearing language in the SEC order. It forecloses the possibility that this was a rogue operation within the investment arm. When the SEC charged the church, it charged the church and Ensign Peak jointly. The SEC found the church knew. It approved the shell structure. The church’s subsequent statement acknowledged “mistakes were made” and blamed misguided legal advice — stating that “senior leadership received and relied upon legal counsel when it approved of the use of the external companies.”
Roger Clarke, head of Ensign Peak, told the Wall Street Journal in 2020 that the fund existed as a “rainy-day account.” He did not disclose its size. When CBS News’ 60 Minutes asked Bishop W. Christopher Waddell — one of three church bishops overseeing Ensign Peak — to disclose the total value of assets, he declined. “That’s something I can’t share with you right now,” he said.
The Whistleblower
David A. Nielsen was a senior portfolio manager who left a Wall Street career in 2009 to work at Ensign Peak. He was a devout member of the church. He believed he was joining an organization that would use its financial resources to address global problems. “I thought we were going to change the world,” he told CBS News’ 60 Minutes correspondent Sharyn Alfonsi in his first public interview in May 2023. “And we just grew the bank account.”
Nielsen worked at Ensign Peak for nine years. During that time, he said, he watched the fund balloon past $100 billion. He watched $1 billion per year flow in from tithing surpluses. He watched almost none flow out for charitable purposes. In 2013, a document shown at an internal meeting, he said, revealed that $1.4 billion from Ensign Peak had been directed to a mall being built on church-owned land in downtown Salt Lake City — the City Creek Center. A further $600 million was deployed to prop up Beneficial Life, a for-profit insurance company owned by the church.
Nielsen resigned in 2019 and filed a whistleblower complaint with the IRS, alleging that Ensign Peak had violated its tax-exempt status by accumulating wealth without deploying it for charitable purposes, and by transferring funds to for-profit businesses in violation of the Internal Revenue Code’s prohibition on private inurement. “Once the money went in, it didn’t go out,” he told 60 Minutes. “It was really a clandestine hedge fund.”
“For at least 22 years, [Ensign Peak] and certain senior executives have perpetrated an unlawful scheme that relies on willfully and materially false statements to the IRS and the SEC, so this for-profit, securities investment business that unfairly competes with large hedge funds can masquerade as a tax-exempt, charitable organization.”
Nielsen 90-page memorandum to U.S. Senate Finance Committee — cited by Religion Unplugged, Feb. 2023The IRS did not initially respond. The SEC did. It launched an investigation after reporting by the outlet MormonLeaks connected the church to the shell company structure. In February 2023, the SEC filed its enforcement order. The church and Ensign Peak were fined a combined $5 million — $4 million for Ensign Peak, $1 million for the church. The SEC’s Director of Enforcement, Gurbir S. Grewal, stated: “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”
Nielsen submitted a 90-page memorandum to the U.S. Senate Finance Committee and its subcommittee on taxation and IRS oversight. The memo, obtained by Religion Unplugged, alleged a “Klein conspiracy” — a federal legal concept describing a scheme to subvert the lawful functions of a government agency. Nielsen alleged the church and Ensign Peak had engaged in this conspiracy “through EPA’s false and fraudulent statements in SEC and IRS filings, and other corrupt actions intended to conceal EPA’s billions of dollars of income.”
The Admission That Changed Everything
When the 60 Minutes segment aired in May 2023, the most damaging moment was not David Nielsen’s allegations. It was a statement by Bishop Christopher Waddell, the church official who oversees Ensign Peak. Confronted with Nielsen’s allegation that $600 million from the nonprofit fund was used to bail out Beneficial Life, a for-profit insurance company, Waddell confirmed it. He framed it as an investment. He said the church “fortunately had the resources to bail out Beneficial Life during the financial crisis, 2008, 2009.”
Professor Philip Hackney, a tax law expert at the University of Pittsburgh who was interviewed by 60 Minutes, was direct about the legal significance: “It is a problem if they have moved money from a non-profit to a for-profit.” Hackney warned: “There’s a real risk to the rule of law if the IRS does not come in and enforce those rules.”
Nielsen’s attorneys noted at the time that the church had been asked by 60 Minutes to provide documents disproving the allegation that Ensign Peak funds had never been used for charitable purposes. According to the attorneys, the church declined to provide those documents.
Under U.S. law, a nonprofit organization that transfers money to a for-profit entity in which it has an ownership interest violates the prohibition on “private inurement” and, according to Professor Hackney and Nielsen’s legal team, loses its right to tax-exempt status — retroactively. The $600 million Beneficial Life admission by a church bishop on national television is, according to Nielsen’s attorneys, confirmation that Ensign Peak cannot legally be tax-exempt, and therefore owes billions in taxes on its investment returns over 22+ years. The IRS investigation, as of 2026, remains unresolved in the public record.
Stated Purpose vs. Documented Use
The church’s public position has been consistent: Ensign Peak is a prudent reserve fund, a rainy-day account for times of crisis or to support operations in poorer parts of the world. The documented record — SEC orders, sworn depositions, and admissions in media interviews — tells a more complicated story.
The Timeline the Church Didn’t Anticipate
The events that brought Ensign Peak into public view unfolded over four years, beginning with a whistleblower who expected the IRS to act and ended with a $5 million SEC fine that the church called “a mistake” and declared closed.
The Question Nobody Has Answered: Who Paid for the Settlements?
Part 1 of this series documented the West Virginia abuse settlement: the church agreed to pay $32 million to families of children abused by Michael Jensen, a church member who the court found the church had knowledge was actively abusing children. The church subsequently sued its own insurance carriers to recover that $32 million. In April 2025, a federal court ruled against the church — finding that once the church had knowledge Jensen was abusing children, its insurance coverage was voided.
That ruling means the $32 million came from somewhere else. Given what the SEC order confirmed — that Ensign Peak is the church’s reserve fund, managed with the First Presidency’s knowledge and approval — the logical source is Ensign Peak. Which means it came from member tithing. Which means the people who paid to cover up a child rape cover-up were the same people whose 10% of gross income was being told was building meetinghouses and funding humanitarian missions.
The church has not disclosed whether abuse settlements are funded from Ensign Peak assets. It has not been asked to, because no regulatory body has required disclosure. But the architecture is documented: the same institution that built a system to keep abuse complaints away from law enforcement (Part 1) built a parallel system to keep its financial operations away from regulatory disclosure. Both systems relied on privilege — clerical privilege in one case, attorney-client and tax-exempt status in the other. Both were designed to prevent outside scrutiny. Both have now been partially penetrated by the public record.
“Why would an organization violate the law and ‘misstate’ — for almost 20 years — facts it was legally required to disclose? As Mr. Nielsen has reported and attested under oath, the organization’s Chief Investment Officer explained it: making these disclosures in Ensign Peak’s name would ‘risk the firm’ by endangering its tax-exempt status.”
Michael A. Sullivan, attorney for David Nielsen — Finch McCranie LLP, May 2023The Member Lawsuits
The SEC fine opened a door that had been sealed for decades. Multiple civil lawsuits followed, filed by members of the church seeking the return of tithing donations they argue were collected under false pretenses. James Huntsman, brother of former Utah Governor Jon Huntsman Jr., sued for the return of $5 million he donated to the church before leaving the faith. A Ninth Circuit panel reinstated that lawsuit in August 2023 after a lower court dismissed it. In January 2025, an en banc panel of the Ninth Circuit dismissed it again, finding no evidence of fraudulent misrepresentation.
A separate class action lawsuit, filed in late 2023 and initially involving three members who donated a combined $350,000, was granted class action status in August 2024, with courts in five states consolidating related suits. The plaintiffs sought the return of tithing paid, a judicial declaration that the church’s financial practices are illegal, and a halt to tithing collection “while accountants sort through the faith’s finances or the court appoints a special monitor.”
| Lawsuit | Plaintiff | Amount | Status |
|---|---|---|---|
| Huntsman v. LDS Church | James Huntsman | $5M | Dismissed Jan. 2025 — en banc 9th Circuit |
| Class action — five states | Multiple tithing donors | $350K+ seed | Class certification Aug. 2024 — active |
| California class action | Church members | Unspecified | Filed 2024 — active |
| IRS whistleblower action | David Nielsen | Up to $30M+ potential | Under IRS consideration — no public action as of 2026 |
What the Documents Show
The SEC’s 2023 enforcement order establishes the following with specificity: The Church of Jesus Christ of Latter-day Saints, with the knowledge and approval of its senior leadership including the First Presidency, operated a system for 22 years that deliberately concealed its investment portfolio from federal regulators. The concealment was achieved through 13 shell companies with phone numbers routed to voicemail. When the portfolio reached $32 billion, the church’s motivation, per the SEC, was concern that “disclosure would lead to negative consequences.”
The whistleblower’s sworn testimony adds the following: the fund grew to over $100 billion. It was never meaningfully deployed for charitable purposes. A portion was used to bail out a for-profit insurance company — confirmed on camera by a church official. Another portion funded a commercial mall. Employees were required to sign lifetime confidentiality agreements and, at some point, were no longer told how large the fund had grown.
The head of the fund admitted in a newspaper interview that the size was kept secret to avoid discouraging tithing. That sentence is the fulcrum of the entire operation: members were paying in the belief their donations funded missionary work and humanitarian aid. The church knew the true size of the reserve would change that calculation. So it hid it. For 22 years. Behind shell companies with voicemail numbers. With the knowledge and approval of its senior leadership.
Part 3 of this series examines the third layer: the legislative infrastructure the church built to protect the legal mechanisms that make both the financial secrecy and the abuse cover-up possible — and the sitting lawmaker who was simultaneously handling child abuse calls for the church’s law firm.