Sep 10, 2023

He was Mormon royalty. Now his lawsuit against the church is a rallying cry.

Michelle Boorstein
The Washington Post
September 9, 2023

James Huntsman’s family is sometimes called the “Mormon Kennedys,” with members whose titles have included governor, ambassador, billionaire and apostle. For decades, he was a committed church member, tithing 10 percent of his income, as the faith expects.

But when another church member filed an IRS whistleblower complaint in 2019, Huntsman’s theological and spiritual doubts shifted to anger, and he demanded his money back. David Nielsen’s complaint alleged that the church had been hoarding $100 billion in tithes, and had used a few billion in tax-free dollars meant for charity to build an upscale mall.

Now Huntsman, a film distributor and father of five, has become an unlikely and high-profile critic of the Church of Jesus Christ of Latter-day Saints, at a time when members’ demands for transparency are rising and church growth rates are dramatically slowing. A lawsuit that Huntsman filed in 2021 accusing the church of fraud initially was rejected by a federal judge but was revived a few weeks ago. A federal appeals court panel voted 2-1 that jurors should hear Huntsman’s argument and his demand for a refund of $5 million minimum.

Huntsman — son of the late, famed philanthropist and billionaire industrialist Jon Huntsman Sr., and brother to former Utah governor and presidential candidate Jon Huntsman, Jr. — is becoming the face of internal LDS discussions about topics such as whether the finances of a religious denomination should be confidential and whether there should be tighter limits on what constitutes “religious activity” that’s tax-free.

A slew of Mormon podcasts and blogs in recent weeks have featured the new Huntsman ruling, delving into legal and theological debates and expressing varying levels of support for the suit. They’ve also reflected something experts on the church say feels new: Voices for reform in one of the country’s most loyal and deferential faith groups are getting louder.

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Huntsman’s suit and Nielsen’s complaint have been mentioned as a trigger by many recent exiters from the church, said John Dehlin, host of the long-running Mormon Stories podcast, popular with questioning and progressive members of Mormonism or other faith groups as well as those who have left the LDS church. Dehlin was excommunicated in 2015 for trying on his show to convince people that some church teachings are wrong. Two high-ranking church officials came on his show this year and expressed doubt about the church and pointed to the cases of Nielsen and Huntsman as fuel.

“Even the church’s most ardent defenders know there is some credibility to their concerns,” Dehlin said. “Money strikes people on a whole different, visceral level,” he said, than do questions about Mormon history or theology when it comes to social issues including race or sexuality.

“It’s such a sacrifice to pay 10 percent of your income; it’s so personal,” Dehlin said. “And when you find out the church doesn’t need your money and has been evading responsibility, that impacts people directly.”

Sam Brunson, a tax and religion expert at Loyola University Law School and church member who writes a popular blog about the LDS church, thinks Huntsman’s suit is frivolous and predicts no criminal charges will stem from Nielsen’s complaint. But he says he hears about the cases a “surprising amount.”

“Historically, active members of the church tended to not really brook criticism of the church … You assume best faith for the church. Sort of: ‘If the church is doing this, there must be a reason we just don’t know,'” Brunson said.

These two cases, he noted, build on several other very controversial church moves, including its leading the charge against legalizing same-sex marriage in California in 2008 and for enacting a policy in 2015 barring children of same-sex couples from being baptized before ending it a few years later in 2019.

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“Slowly, people aren’t giving the church the benefit of the doubt,” Brunson said.

LDS spokesman Doug Andersen declined to comment on Nielsen’s complaint or on the potential impact of the men’s allegations. About Huntsman and the new appeals court ruling, a brief church statement said money used for the mall was “invested earnings on reserve funds.”

“There was no fraud,” the statement says. “The Church looks forward to defending these facts in the next phase of the legal process.”

The church has until Sept. 20 to ask a larger panel of the 9th Circuit Appeals Court to rehear the Huntsman case. That panel could uphold the recent ruling in favor of Huntsman, which would move the dispute to the discovery process and a jury trial. It could reverse the recent ruling, meaning the suit would be over and the church would win. Or the two sides could settle.

The status of Nielsen’s complaint is not clear. The IRS hasn’t said anything publicly since he filed it in 2019, but that’s normal for the agency. In February of this year, the U.S. Securities and Exchange Commission charged the church’s investment arm — where Nielsen worked — with filing 22 years of misstatements about its investments and creating shell companies to keep those transactions secret. Intentionally misstating or omitting facts on certain SEC forms is a federal crime. The investment arm, called Ensign Peak Advisers, agreed to pay a $4 million fine, and the church agreed to pay $1 million, the SEC said in February.

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Nielsen’s attorney, Michael Sullivan, said they “have been contacted by authorities over the past several months and have had ongoing communications [in recent days] about the matters Dave has reported.”

Heroes and pariahs

While Huntsman and Nielsen come from different parts of the Latter-day Saint world, their names are now bound by the experience of becoming, for some, heroes and, for others, pariahs.

Huntsman grew up with nine siblings in a very prominent and church-involved family. His mother’s father was an apostle, which to Mormons are akin to biblical apostles, and many other relatives held — and hold — senior leadership positions in the church.

Huntsman himself held leadership posts in the church and, he said, “gave my heart and soul to this organization.”

In the mid-2010s, he said, he had become deeply disillusioned with the church, including what he sees as a blurry line around polygamy: still part of church doctrine and accepted in the church’s vision of the afterlife, but banned in practice. “Polygamy was a gateway for me to question other doctrines,” he says. He moved further from the faith with the church’s rejection of LGBT couples and families.

Huntsman tithed from 1993 to 2017, he says, but started to transition out of the church around then and stopped paying.

His father died in 2018.

When Nielsen’s twin brother, Lars, leaked the 2019 complaint to several news organizations, including The Washington Post, Huntsman said he was disgusted by what it alleged.

The complaint alleged that Ensign Peak assets grew from $12 billion at its start, in 1997, to $100 billion in 2019. It said Ensign had not directly funded any religious, educational or charitable activities in 22 years but had paid $2 billion to bail out a church-run insurance company and build the high-end shopping mall, City Creek.

Huntsman said he asked the church for millions back in tithes, initially keeping the dispute from his family to keep them out of it. When the church declined, he filed his lawsuit.

Since then, Huntsman said most relatives have been very supportive, “with some exceptions. And those exceptions aren’t surprising.”

Huntsman recently moved back to Salt Lake City from California and lives near Nielsen, who grew up in California.

Like Huntsman, Nielsen has strong LDS bona fides. Some of his ancestors have been in the church for more than 125 years, and he is one of 10 children.

Nielsen got an MBA from UCLA and worked on Wall Street for years before moving to Utah in 2010 to work for Ensign Peak.

In a 2020 interview with The Post, Lars Nielsen said his twin saw the job of helping guide church finances as both a professional opportunity and a spiritual service.

“He was excited to see how much the financial reserves of the church were growing,” Lars said.

But eventually he became alarmed with the lack of transparency as billions accumulated from tithes but weren’t spent, he alleges, on charitable, missionary or educational causes.

A key in both men’s legal complaints is their assertion that church leaders lied about how tithes are used. Huntsman’s suit cites five times in the 2000s that church officials repeated that members’ tithing would not be used for City Creek.

Since the men came forward, the church has argued that it used earnings from investments, not the initial tithes, and should have the freedom to collect and spend money as it wishes. In its original motion for summary judgment, it argued that Huntsman’s suit encroaches on “church autonomy” protected by the First Amendment. In other words, the government shouldn’t interfere in religious matters.

Both the judge in that case and the three-judge panel from the appeals court disagreed with the church that the First Amendment protects it from Huntsman’s suit, saying the issues at hand are secular.

The appeals court agreed with the church that there was no fraud claim in regard to the church’s bailout of a church-owned insurance company, because church officials hadn’t spoken to members about the bailout or how it would be paid for.

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Nielsen told The Post he has suffered financial and personal costs from becoming a whistleblower. Since his complaint, he hasn’t been able to find new work in finance in Salt Lake City, where he says most firms are closely connected with the Mormon Church. He’s also had painful breaks with some relatives.

“It’s an awkward Thanksgiving all the time,” Nielsen said. “My immediate family had to step back [from the church]. The community has been tough. Half of my wife’s business disappeared [after the IRS complaint] because she has a business based on relationships. She had to redraw her business, and that brought a lot of stress. Some neighbors have been amazing; some have not. We’re in Salt Lake City, and we tattled on the church and lost a lot of friends. The silver lining is our friends are better friends.”

And the cases have taken on symbolic meaning outside the men’s two families.

Becket Law, which focuses on protecting religious rights and exemptions, filed a brief in the Huntsman case in support of the church. The project to renovate a downtown property into a high-end shopping area, Becket argued, was a “religious decision made for religious reasons” — to protect the neighborhood of the temple.

Eric Baxter, who wrote the brief for Becket, told The Post it would put charities in a precarious position if any donor can have direct say about spending decisions. And that faith-based groups in particular make spending decisions “guided by inspiration, revelation and religious principles.”

Tithing is inherently a religious practice, Baxter said.

“Courts getting entangled in how members would understand the history of a church’s financial practices — those kinds of questions deeply entangle courts in issues of religious affairs,” he said.

Baxter is a regional LDS church leader, called an “area seventy.”

Paul Huntsman, James’s brother, was quoted in the Wall Street Journal earlier this summer in an article about a temple building spree abroad. He said the church needs to start being transparent about its holdings. “They’re in the business of morality. They have to take the moral high ground on this,” he said.

James Huntsman, for his part, says his suit is meant for the many people he knows who remain in the church.

“My community is mostly Mormon. Now, everywhere you look it’s people leaving. When I was growing up — never,” he says. “A lot of people want church to be more transparent. This case is a catalyst for them. Not for me. I have a life and I want to get back to it.”


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