On Wednesday, MormonLeaks announced that they had connected the church to $32 billion in U.S. stock market investments. [KUTV story.] And how did it figure this out? Ingeniously, actually: it looked at the Form 13Fs for thirteen LLCs to see their stock holdings, and it discovered that domain names matching the LLCs’ names were registered to Intellectual Reserve, Inc., which holds the church’s intellectual property.
So, should you be outraged that the church has at least $32 billion in the stock market? I mean, sure, if you’re a fan of being outraged by stories of religions having money (though frankly, if that’s what you’re in the mood for, maybe this is a better source of outrage). But it’s probably worth taking a minute to figure out what we do and don’t know before going full-throated outraged.
FWIW, as a preliminary thing, I don’t understand why anybody would be surprised that the church has a lot of money invested. I mean, there’s a long history of pointing out how wealthy the church (allegedly) is. I’m skeptical of every number that gets thrown out, but it’s clearly possible that the church has net worth of tens of billions of dollars.[fn1] It’s equally possible that it has that kind of money in the stock market. But nothing about the information MormonLeaks released indicates that it does.
Essentially, we have two things: domain registration (which clearly points the the church) and Form 13Fs.
So just what is a Form 13F? Let me disclaim intimate knowledge here: I’m a tax attorney and professor, not a securities one, so I’ve never filed a 13F, and today was the first time I read one. What I did, though, was look at the SEC’s FAQ on Form 13F is and who files it (and also, I read several of the LLCs’ 13Fs).
In short, an institutional investment manager that manages more than $100 million has to file a Form 13F. And what does the Form 13F tell us? Four things, basically: the name of the securities the investment manager owns, the class of security, the number owned, and their fair market value as of the last day of the quarter. (It also lists a little bit of information about the LLC, including its name and address and the name of the person signing on behalf of it.)
What the Form 13F doesn’t tell us is who is invested in the LLC. It is 100% possible that the church is the sole owner of all of the LLCs. It’s also 100% possible that it’s not; the church may be just one of any number of investors.
Now, I don’t know any more than MormonLeaks (or, for that matter, you, unless you’re an investment manager for the church) about these investments. But frankly, I would hope the church and church-related entities had a significant presence in the stock market. Why?
A couple main reasons. For one thing, the church employs a bunch of people. (How many? No idea.) It boasts of its excellent pay and benefits; until recently, those benefits included a pension plan, and even today it administers a retirement fund. How do pension plans and retirement plans work? Well, largely, the involve a tax-advantaged investment in the stock market to ensure that the money put away today grows to be sufficient, upon retirement, to support the retiree.
I mean, maybe it’s nice to think of the church as an entity existing apart from the trivialities of the economic world. But it isn’t, and, to the degree it has employees, it has moral and legal obligations to those employees, ones I think it is critical that the church perform. Are these LLCs used to invest for retirement for employees? No idea, but it’s possible.
In the same vein, church insurance is self-funded. Though I’m not an insurance guy, I do know that insurers tend to invest the premiums they receive so that they have enough money to pay out claims. Again, I’m not saying that the church ensures that its insurance is actuarially sound by investing through these LLCs, but it certainly could.
There’s a discussion to be had about how the church—and we as members—can ethically function in the economic regime we find ourselves in. It’s one I hope to start later this summer when I have time.[fn2] Until then, it’s worth keeping in mind that, in spite of the assertion that the Mormon church has $32 billion invested in the stock market (an assertion that MormonLeaks doesn’t actually make), the information we have says a lot less than that. We don’t actually know who or how much. Or why.[fn3]
[fn1] Yeah, I know, financial transparency. We’ve been around that block—and the City Creek one—dozens of times. Neither is relevant to the question of being in the stock market for billions of dollars, so if that’s what you really, really need to discuss, how about find a forum discussing that? (It’s not hard to find.)
[fn2] If you want a reading assignment to prepare for that discussion, check out the Vatican’s magisterial on financial and economic issues.
[fn3] N.b.: I’ve written about the church and money before. Like here. And here. And I’ll continue to write them as long as I need to.