A federal judge dismissed a lawsuit on Thursday that accused The Church of Jesus Christ of Latter-day Saints of misusing donations by investing them instead of using them for charitable purposes. U.S. District Judge Robert Shelby ruled that the lawsuit was filed too late, as the three-year statute of limitations for fraud claims in Utah had expired before the case was brought in October 2023. He also noted that the plaintiffs did not provide sufficient evidence of any wrongdoing.
The lawsuit, initiated by a group of church donors, brought attention to the financial practices of the widely recognized faith, often referred to as the Mormon Church. Members traditionally contribute 10% of their income as tithing, which has significantly enhanced the church’s financial assets.
The suit specifically targeted the church’s business and investment entities, which keep their financial operations largely private. The plaintiffs had hoped for an independent review of the donated funds and sought to expand the case to include millions of other church members.
Church spokesperson Sam Penrod defended the handling of donations, describing them as an “expression of faith” that supports the church’s mission. He stated, “These donations are carefully used and wisely managed, under the direction of senior Church leaders.” He also remarked that the court’s dismissal of the claims was justified.
On the other hand, the plaintiffs’ attorney, Christopher Seeger, expressed concern that the dismissal would hinder transparency regarding how donations are utilized. He emphasized the longstanding expectation among church members to know the fate of their contributions.
A similar lawsuit was filed in California by James Huntsman, who sought the return of $5 million in tithes he donated before leaving the church. The 9th U.S. Circuit Court of Appeals, however, upheld a ruling favoring the church earlier this year.
The core issue raised in the lawsuits revolves around whether the church’s significant investments in various ventures align with the intentions of its donors. Earlier this year, the U.S. Securities and Exchange Commission fined the church and its investment subsidiary, Ensign Peak Advisors, for not accurately disclosing the size of their investment portfolio. The church agreed to pay $1 million, while Ensign Peak was fined $4 million.
The church has repeatedly defended its financial practices, claiming that member contributions support various religious activities, including missionary work, education, and humanitarian efforts. The church maintains that it uses donations wisely and responsibly for these purposes.
However, the Utah lawsuit alleged that the church concealed information about its financial practices, suggesting that some donations are permanently invested and not utilized for charitable work. This claim was notably supported by allegations from David Nielsen, a former investment manager for Ensign Peak, who called for increased oversight of the church’s financial operations.
Importantly, the judge highlighted that the plaintiffs should have been aware of the fraud accusations as early as 2020 but delayed their filing until it was too late. According to the lawsuits, Ensign Peak has only made two significant expenditures in its nearly three-decade existence, including a substantial investment to bail out a struggling church-owned insurance company and another in a downtown mall project.
In light of this ruling, the church continues to assert that it responsibly manages its finances while fulfilling its charitable obligations and mission.
