And on the seventh day, God created billion-dollar malls.
How should the law confront religious institutions with shocking amounts of wealth and incalculable influence?
When I was 7 years old, I mistook the Church of Jesus Christ of Latter-day Saints’ (LDS) Salt Lake Temple for Disneyland when my (non-LDS) family first moved to Utah. The Gothic architecture and impressive scale immediately evoked images of Cinderella’s Castle. Though I was disappointed to learn that the Temple was not, in fact, a Disney resort, I spent my childhood oblivious to the influence of Mormonism in Salt Lake (apart from my parents’ occasional grumblings about their inability to pick up wine at a grocery store).
As I entered early adulthood, however, the Church’s presence became difficult to miss. In 2021, 100% of Utah’s congressional representatives identified as Mormon (a significant overrepresentation compared to the state’s demographic makeup as a whole). The Salt Lake Temple attracts three to five million tourists annually (more than all five of Utah’s national parks combined) and sits at both the physical and metaphorical center of the city thanks to our grid system laid around Temple Square. Arguably, no church anywhere else in the country possesses a comparable amount of influence—and wealth.
Last July, a collection of complaints filed by LDS members was consolidated into a class-action lawsuit that alleges fraud, unjust enrichment, and fiduciary misconduct by the Church and Ensign Peak, its wealth management arm. The plaintiffs’ allegedly misused donations ranged from several thousand dollars to well over $100,000. The suit is the first of its kind for the mammoth institution and raises a significant, yet difficult question: are LDS leaders using the Church’s tax-exempt status to exploit its most dedicated members for profit?
The suit comes nearly five years after David Nielsen, a former employee of Ensign Peak Advisors, resigned after filing a complaint to the IRS. The story gained national attention when 60 Minutes aired a segment on the investigation in March 2023. Shell companies, a recession bailout of a Church-affiliated insurance company, and perhaps most alarming—a $1.4 billion mall—were all made possible by dedicated members’ tithes (who contribute 10% of their income to the church each year). Nielsen corroborated reports that the Church’s current trajectory of growth would cause its fortune to balloon to $1 trillion by 2044. Days after the episode aired, the Church released an official statement that labeled Nielsen’s claims as baseless and attributed his complaint to a difference of opinion.
Some Utahns have publicly defended the Church. Tad Walch, representing Deseret News (which sits under indirect ownership of the Church), criticized 60 Minutes’ omission of the Church’s “poverty-ridden history” and prioritization of self-sufficiency, which, he argued, subsequently led to the Church’s prosperity today. Other members, however, denounced the Church’s reaction and raised concerns about the greater religious implications of possessing such wealth, as the Church’s financial situation is drastically different in 2024 than it was in the nineteenth century. This is not to say that the Church should halt the practice of tithing–it allows members to personally contribute to ensuring the perpetuity of the Church, its necessary infrastructure, and missionary education efforts. When LDS bishops have been calling for years for members to prioritize tithing over feeding one’s family, though, such funds must be placed under strict scrutiny without the potential for extraneous spending or investments.
The Mormon Church is far from the first religious institution to face financial scrutiny. Centuries earlier, Martin Luther’s Ninety-five Theses condemned the sale of plenary indulgences within the Catholic Church. Currently, the average evangelical megachurch (a congregation that attracts over 2,000 service attendees each week) rakes in over $6 million annually. The Church of Scientology, despite its laundry list of controversies and rapidly shrinking membership, continues to manage a $1 billion investment fund. Corporations abiding by profit-maximizing responsibilities for the sake of their shareholders is one thing. But the idea that church leaders, who preach messages of generosity from positions of unencumbered power, are using their own members’ good-faith donations to generate a slush fund, is morally egregious.
U.S. churches have always been tax exempt, and for decades, this proved warranted for the Church. Joseph Smith founded the LDS Relief Society, which continued to operate despite early members’ persecution and societal ostracization. In 1970, Walz v. Tax Commission of the City of New York ruled 8-1 in favor of upholding tax-exempt status as long as the religious organization in question continued operating financially as a nonprofit. However, to say that many churches haven’t evolved substantially in the last 50 years, especially in the realm of financial management practices, would be ignorant.
Few lawmakers push to end tax exemptions on religious institutions in a red state like Utah, where conservatism is highly correlated with LDS membership status. However, the thought of Utah’s most popular religious institution taking advantage of such a large swathe of the population should motivate lawmakers, especially those who belong to the Church, to act even more. Without action, Mormon lawmakers are not only condoning the defrauding of their loved ones and neighbors–worse, they are effectively defying their own faith-based principles. From Mosiah 4:16-26 to Helaman 13:13-26, the Book of Mormon continuously and explicitly warns that extreme wealth can lead followers away from God. Will these tenants finally apply to the Church itself once it reaches the $1 trillion mark in twenty years?
The LDS Church is far from the only religious organization to engage in obscene spending, but Utah is the only state that continues to enable such morally questionable spending patterns. Many residents have long-held suspicions about Utah’s unique treatment of the relationship between church and state, but former Utah House Representative Carl Wimmer has personally testified that, yes, the LDS Church does get what it wants in Utah politics. As worldwide LDS Church membership rates rise while general religiosity in American society declines, new regulations must reflect the shifting relationship between religion, business, and the state to operate effectively. I’m skeptical that these changes will occur in my lifetime, but maybe, given current projections of the Church’s unfettered financial growth, I’ll finally get a Utah Disneyland after all.
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Biography of Author
Ava Pecora is a second year MPP candidate at the University of Michigan’s Ford School of Public Policy.Prior to attending the University of Michigan, she led stakeholder engagement and strategic communications efforts for transportation and public works projects across the country.
Edited by: Michael Fuller, MPP/MBA ’25 // Milena Saakyan, MPP’26 // Beth Hartsog, MPP ’26
