The video reveals the extensive financial holdings of the Church of Jesus Christ of Latter-day Saints, focusing on its investment arm, Ensign Peak Advisors, which reportedly amassed over $100 billion. David Nielsen, a former senior portfolio manager at Ensign Peak, alleges that the church's investment strategies were more akin to a clandestine hedge fund than a charity. Nielsen claims the funds were not appropriately used for charitable purposes, but rather stockpiled and invested, a move he believes violated tax-exempt statuses and misled church members.

Despite accusations, church representatives, like Bishop Christopher Waddell, argue that the funds are meant for the church's future needs, not just for charity. They faced inquiries from the SEC due to the creation of shell companies aimed at concealing substantial holdings, which led to fines and further scrutiny over their financial transparency. Nielsen remains steadfast in his stance, seeking accountability and urging the church to pay taxes on what he considers improperly managed wealth.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. clandestine [klænˈdɛstɪn] - (adjective) - Kept secret or done secretively, especially because illicit. - Synonyms: (secret, covert, furtive)

It was really a clandestine hedge fund.

2. masquerade [ˌmæskəˈreɪd] - (verb) - Pretend to be someone or something that you are not. - Synonyms: (disguise, pretend, impersonate)

He says the firm used false records and statements to masquerade as a charity.

3. portfolio [pɔːrtˈfoʊlioʊ] - (noun) - A range of investments held by a person or organization. - Synonyms: (collection, assortment, range)

David Nielsen was a senior portfolio manager for the investment arm of the church called Ensign Peak Advisors.

4. appropriated [əˈproʊpriˌeɪtɪd] - (adjective) - Taken or made use of without permission. - Synonyms: (allocated, earmarked, allotted)

Those funds weren't used the way they were appropriated to be used.

5. tithing [ˈtaɪðɪŋ] - (noun) - One-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. - Synonyms: (contribution, donation, offering)

The church expects members to contribute about 10% of their income, a practice known as tithing.

6. shell companies [ʃɛl ˈkʌmpəniz] - noun (plural) - Companies that exist only on paper and have no office and no employees but may have a bank account. - Synonyms: (phantom company, front company, dummy company)

Those shell companies held billions of dollars in stocks and bonds.

7. sanctuary [ˈsæŋktʃuˌɛri] - (noun) - A place of refuge or safety. - Synonyms: (refuge, haven, shelter)

How is this okay? David Nielsen says he hit his breaking point in 2018 after a website called Mormon Leaks linked church members to companies that existed only on paper.

8. tax exempt [tæks ɪɡˈzɛmpt] - (adjective) - Free from being taxed by the government. - Synonyms: (tax-free, untaxed, zero-rated)

I went and confronted him, what do you mean potentially damaging? And he said, Dave, we're going to lose our tax exempt status.

9. whistleblower [ˈwɪsəlˌbloʊər] - (noun) - A person who informs on a person or organization engaged in illicit activity. - Synonyms: (informant, accuser, informator)

He resigned in 2019 and filed a 74 page whistleblower complaint with the Internal Revenue Service.

10. transparency [trænsˈpɛrənsi] - (noun) - The condition of being easy to perceive or detect. - Synonyms: (openness, clarity, straightforwardness)

To protect market fairness and transparency, any firm with more than $100 million in securities must file accurate reports on its holdings with the SEC

Mormon whistleblower - Churchs investment firm masquerades as charity - 60 Minutes

Every religion has its mysteries. One of the closest guarded secrets of the Church of Jesus Christ of Latter day Saints has been its wealth. Tonight you will hear for the first time about its remarkable size from a former manager at the church's investment firm. David Nielsen says that during his nine years managing money at the church firm, the value of its investments ballooned past $100 billion. That would make it the largest treasure held by any religious fund in America. But instead of spending that money to do good, David Nielsen alleges it was used in ways that bent the law and broke his faith.

I thought I was going to work for a charity. I thought that's what my skills were going to do, was help build the charity and do good with things. And the funds were never used for that. It was really a clandestine hedge fund. A clandestine hedge fund? Yeah. How so? Those funds weren't used the way they were appropriated to be used. So how were they being used? Well, once the money went in, it didn't go out.

David Nielsen was a senior portfolio manager for the investment arm of the church called Ensign Peak Advisors. In 2009, Nielsen, who says he was a devout Mormon, was recruited away from a lucrative job on Wall Street to work for the firm, a block from church headquarters in Salt Lake City. You know this Wall Street, you spend your skills working to make really rich people a little bit more rich. But there is something different about the prospect of putting your skills to work for something that you think is really going to build the kingdom. It's really going to make a difference.

But Nielsen says he grew troubled by what he saw at Ensign Peak. He says the firm used false records and statements to masquerade as a charity, stockpiling money and misleading church members. Every year, the church collects an estimated $7 billion in contributions from its 17 million members. The church expects members to contribute about 10% of their income, a practice known as tithing.

Explain how the tithe is supposed to be used. tithing is what's used to build buildings. It's what's used to pay light bills. tithing is what's used to operate some of the church's programs. Whatever's left over, about a billion dollars a year, is put into a reserve fund at Ensign Peak and invested. Because Ensign Peak is registered as a nonprofit, it all grows tax free. David Nielsen says.

Since it was created in 1997, the reserve fund has swelled beyond $100 billion, twice the size of Harvard's endowment or the Bill and Melinda Gates Foundation. You could solve big problems with $100 billion and is that the thing that bothers you about all this? I thought we were going to change the world and we just grew the bank account.

Did any of your former bosses explain how the money was going to be used one day? The answer was always the second coming. And it's a bit tongue in cheek, but deep down, I think a lot of the employees really did believe that. Publicly, church leaders called it a rainy day fund. But in 2013, Nielsen says one of his bosses shared this document at a meeting that showed $1.4 billion from the fund went to a mall being built on land owned by the church, and $600 million was used to prop up a for-profit, church-owned insurance company called Beneficial Life.

Look, I'm not an expert on charities, but I've been around the block enough to know that charitable organizations can't bail out for-profit businesses and maintain their charitable status. And so when they gave this money to bail out a for-profit venture, what was your reaction? What are we doing? How is this okay?

David Nielsen says he hit his breaking point in 2018 after a website called Mormon Leaks linked church members to companies that existed only on paper. Those shell companies held billions of dollars in stocks and bonds. What nobody knew outside church leadership was those assets were actually controlled by Ensign Peak. Nielsen says the firm called an emergency meeting. What was the explanation? These entities were to hide the assets from the members. The chief investment officer said that if we were to change and start reporting these securities in our own name, it would bring undue attention to the firm and that that attention would be potentially damaging.

And after the meeting, I went and confronted him, what do you mean potentially damaging? And he said, Dave, we're going to lose our tax exempt status. I knew in that moment that I was in the wrong place. He resigned in 2019 and filed a 74 page whistleblower complaint with the Internal Revenue Service, alleging that Ensign Peak violated its tax exempt status by moving money to for-profit businesses. That's not just incorrect, that's flat out wrong.

Christopher Waddell says David Nielsen didn't have a full picture of Ensign Peak. Waddell is one of three church bishops who oversees finances as a Christian church. We believe that someday Jesus Christ will return, but that's not why we have those resources. It's for the continuing operation and for the future.

David Nielsen alleged that Ensign Peak violated its tax exempt status by directing money to church businesses. How would you characterize how that money was used? The church actually owned beneficial life, and fortunately, the church had the resources to bail out beneficial life during the financial crisis 2008 2009 in the mall. The mall was not a bailout. The mall was an investment. And you are receiving returns on. Absolutely. Yeah, it was an investment.

Waddell says the insurance company has paid back most of the bailout money, but the church would not disclose the details of that deal or the mall investment. Unlike other nonprofits, religious organizations don't have to fully disclose all financial information to the IR's. What is the value right now of Ensign peaks assets? Yeah, that's something I can't share with you right now. I know there have been reports on approximates and that kind of thing, and that's as far as we can go right now. It's been estimated at $150 billion. Does that sound correct? That's an estimate that some have made. Are we in the ballpark or no, we have significant resources.

Give us a sense of what percentage is going out the door of the money under management. To be honest, we never looked at it as a percentage. We looked at it based on needs to make sure that we're comfortable with how many years worth we have in case of financial difficulties, in case of financial crisis, to make sure that we can continue church operations. We just want to make sure that that is sufficient.

David Nielsen says he did not intend for his complaint to the IR's to become public, but in 2019, his brother shared it with the Washington Post. Nielsen, who in his free time races motorcycles, says he was shunned by some of his friends and neighbors in Salt Lake City. It wasn't until 2021, two years later, that David Nielsen heard from investigators, not from the IR's, but the Securities and Exchange Commission, which launched its own probe into Ensign Peak after that website story linked the church to shell companies. What information did you give to the SEC? Everything. I helped them see the big picture.

To protect market fairness and transparency, any firm with more than $100 million in securities must file accurate reports on its holdings with the SEC. But in February, the SEC announced the Church of Latter day Saints and Ensign Peak failed to do that. SEC investigators found the church went to great lengths to hide $32 billion in securities over nearly 20 years. It created 13 shell companies that were assigned a local phone number that would go directly to voicemail in case regulators checked in. Here they had these back office accountants who had never bought a bond or sold a stock a day in their life, signing signatory pages for a portfolio that didn't exist.

The SEC fined the church and Ensign peak a total of $5 million. Bishop Christopher Waddell told us it was the church's lawyers who advised them to create the shell companies. What about, you know, the idea that secrecy builds mistrust? Well, we don't feel it's being secret. We feel it's being confidential. What's the difference? The difference is, I guess it's a point of view that's confidential in order to maintain the focus on what our purpose is and what the mission of the church is rather than the church has x amount of money.

But don't you agree this would be a non issue if there was more transparency? No, because then everyone would be telling us what they wanted us to do with the money. Last year, the church says it spent over a billion dollars on humanitarian aid, including food production. In any given month, you may have an average of nine transfers that going from Ensign Peak back to the church to fund all church operations, all humanitarian work, education work, all the work of the church they fund. Money is going in and out of the cash accounts all the time.

But Ensign Peak's funds were never used for any charitable purpose. As to my knowledge, the whole time I was there. So there's a bit of a distinction here that's important. Explain that to me. Well, it's the difference between your checking account and maybe your retirement account. They're used for different purposes and you don't get to pretend that one is affecting the other. The fundamental claim to me is that Ensign Peak brings money in and it's the Hotel California. It never comes out.

Phil Hackney worked in the office of chief counsel of the IR's and teaches tax law. He concedes it's complex and the case falls into a gray area. The church would say, we give millions of dollars out every year in humanitarian work. How much is enough by the standards of the IR's? We know within private foundations it's 5% of assets. There's no clarity when it comes to public charities, and certainly not with churches. But I would expect to see something like two 3% of assets being spent out to justify that status. But how do you know if they're spending two or 3% of assets if we don't know what the assets are?

We have to rely on them behaving well, they said they bailed out this insurance company. That's the words they used. Is that a problem? It is a problem, in my opinion, if they have moved money from the nonprofit to a for profit. So how likely do you think it would be that the IR's would ever investigate this? Slim. The political risk is so great that it comes with real danger. At the same time, there's a real risk to the rule of law if the IR's doesn't come in and enforce those rules.

David Nielsen says honesty is a tenet of the faith. He wants Ensign Peak Advisors to pay the taxes he says it owes on the $100 billion fortune built from tithing. If the IR's decides Nielsen is right, he could be rewarded with up to 30% of what's collected. The IR's does not comment on whistleblower complaints.

Why are you speaking now? It's time, Sharon. We gave the IR's and the SEC all the professional courtesy. This is just too important to fall through the cracks.

It's possible that you were dead wrong. No, I know what I saw. I know what I know.

Finance, Religion, Whistleblower, Leadership, Transparency, Ethics, 60 Minutes