SALT LAKE CITY — A federal lawsuit in Utah is challenging the financial practices of The Church of Jesus Christ of Latter-day Saints, causing a stir among former members who claim the church has misused billions of dollars in donations meant for charitable purposes. At the heart of the dispute is the assertion by the plaintiffs that church leaders and the associated investment firm, Ensign Peak Advisors, diverted tithing funds into a substantial investment reserve rather than using them solely for charitable work as stated.
The class-action suit, representing nine individuals from five different states, demands the church provide refunds and seeks a judicial declaration that its financial practices are illegal. The suit also requests a cease to the collection of tithes pending a thorough external financial examination or the appointment of a special court monitor.
Legal arguments surfaced when church attorneys recently motioned to pause evidence collection in the case pending a dismissal decision, expected later this fall by U.S. District Judge Robert Shelby. The church’s lawyers have cited religious autonomy as a basis for exemption from such legal probes, stressing that church doctrines should shield it from fraud accusations tied to tithing.
In response, attorneys for the plaintiffs argued on August 23 that Ensign Peak, the church’s investment arm, operates as a secular entity and should not enjoy any religious protections that might obstruct the lawsuit. They maintain that the nature of Ensign Peak’s activities is primarily financial and should be openly scrutinized.
The controversy extends to other forms of church donations, including fast offerings and charity-driven contributions, which the plaintiffs also believe have been misapplied. They urge that the substantive amounts, like those used for the City Creek Center development and to rescue the failing Beneficial Life Insurance, be closely examined.
The ecclesiastical group counters by suggesting that allowing the legal challenge would infringe on its religious freedoms, portraying the lawsuit as an attack by disenchanted former adherents devoid of sufficient grounds to represent the interests of active church members.
The plaintiffs, undeterred, have decried what they describe as diversionary tactics by the church’s legal team, meant to delay proceedings and avoid transparency regarding the church’s use and management of donated funds.
The case has consolidated several related lawsuits from across multiple states, including Utah, Illinois, Washington, Tennessee, and California, bringing them all under the jurisdiction of the federal court in Salt Lake City, mere blocks from the church’s headquarters.
This legal battle underscores a broader debate over the accountability of religious organizations in financial matters and the tension between respecting religious beliefs and ensuring transparency in how religiously-affiliated entities manage funds.
As the lawsuit progresses, both sides are gearing up for a potentially landmark decision that could redefine the boundaries between religious practice and legal oversight. With millions of church members watching closely, the outcome of this case could have far-reaching implications for religious entities and their financial operations nationwide.