Yet another Reason I believe these mega businesses like these should be taxed.
Late last March the Mormon Church completed an ambitious project: a megamall. Built for roughly $2 billion, the City Creek Center
stands directly across the street from the church’s iconic neo-Gothic
temple in Salt Lake City. The mall includes a retractable glass roof,
5,000 underground parking spots, and nearly 100 stores and restaurants,
ranging from Tiffany’s to Forever 21. Walkways link the open-air emporium with the church’s perfectly manicured headquarters on Temple Square. Macy’s is a stone’s throw from the offices of the church’s president, Thomas S. Monson, whom Mormons believe to be a living prophet.
On the morning of its grand opening, thousands of shoppers thronged
downtown Salt Lake, eager to elbow their way into the stores. The
national anthem played, and Henry B. Eyring, one of Monson’s top
counselors, told the crowds, “Everything that we see around us is
evidence of the long-standing commitment of the Church of Jesus Christ
of Latter-day Saints to Salt Lake City.” When it came time to cut the
mall’s flouncy pink ribbon, Monson, flanked by Utah dignitaries,
cheered, “One, two, three—let’s go shopping!”
Watching a religious
leader celebrate a mall may seem surreal, but City Creek reflects the
spirit of enterprise that animates modern-day Mormonism. The mall is
part of a sprawling church-owned corporate empire that the Mormon
leadership says is helping spread its message, increasing economic
self-reliance, and building the Kingdom of God on earth. “The Church of
Jesus Christ of Latter-day Saints attends to the total needs of its
members,” says Keith B. McMullin, who for 37 years served within the
Mormon leadership and now heads a church-owned holding company, Deseret
Management Corp. (DMC), an umbrella organization for many of the
church’s for-profit businesses. “We look to not only the spiritual but
also the temporal, and we believe that a person who is impoverished
temporally cannot blossom spiritually.”
McMullin explains that City Creek exists to combat urban blight, not to
fill church coffers. “Will there be a return?” he asks rhetorically.
“Yes, but so modest that you would never have made such an
investment—the real return comes in folks moving back downtown and the
revitalization of businesses.” Pausing briefly, he adds with
deliberation, “It’s for furthering the aim of the church to make, if you
will, bad men good, and good men better.”
It’s perhaps unsurprising that Mormonism, an indigenous American
religion, would also adopt the country’s secular faith in money. What is
remarkable is how varied the church’s business interests are and that
so little is known about its financial interests. Although a former
Mormon bishop is about to receive the Republican Party’s presidential
nomination, and despite a recent public-relations campaign aimed at
combating the perception that it is “secretive,” the LDS Church remains
tight-lipped about its holdings. It offers little financial transparency
even to its members, who are required to tithe 10 percent of their
income to gain access to Mormon temples.
The Mormon Church is
hardly the only religious institution to be less than forthcoming about
its wealth; the Catholic Church has been equally opaque throughout
history. On the other hand, says historian D. Michael Quinn, who is
working on a book about the LDS Church’s finances and businesses, “The
Mormon Church is very different than any other church. … Traditional
Christianity and Judaism make a clear distinction between what is
spiritual and what is temporal, while Mormon theology specifically
denies that there is such a distinction.” To Latter-day Saints, opening
megamalls, operating a billion-dollar media and insurance conglomerate,
and running a Polynesian theme park are all part of doing God’s work.
Says Quinn: “In the Mormon [leadership’s] worldview, it’s as spiritual
to give alms to the poor, as the old phrase goes in the Biblical sense,
as it is to make a million dollars.”
Mormons make up only 1.4
percent of the U.S. population, but the church’s holdings are vast.
First among its for-profit enterprises is DMC, which reaps estimated
annual revenue of $1.2 billion from six subsidiaries, according to the
business information and analysis firm Hoover’s Company Records .
Those subsidiaries run a newspaper, 11 radio stations, a TV station, a
publishing and distribution company, a digital media company, a
hospitality business, and an insurance business with assets worth $3.3
billion.
AgReserves, another for-profit Mormon umbrella
company, together with other church-run agricultural affiliates,
reportedly owns about 1 million acres in the continental U.S., on which
the church has farms, hunting preserves, orchards, and ranches. These
include the $1 billion, 290,000-acre in Florida, which, in addition to keeping 44,000 cows and 1,300 bulls,
also has citrus, sod, and timber operations. Outside the U.S.,
AgReserves operates in Britain, Canada, Australia, Mexico, Argentina,
and Brazil. Its Australian property, valued at $61 million in 1997, has
estimated annual sales of $276 million, according to Dun &
Bradstreet.
The church also runs several for-profit real estate arms that own,
develop, and manage malls, parking lots, office parks, residential
buildings, and more. Hawaii Reserves,
for example, owns or manages more than 7,000 acres on Oahu, where it
maintains commercial and residential buildings, parks, water and sewage
infrastructure, and two cemeteries. Utah Property Management Associates,
a real estate arm of the church, manages portions of City Creek Center.
According to Spencer P. Eccles from the Utah Governor’s Office of
Economic Development, the mall cost the church an estimated $2 billion.
It is only one part of a $5 billion church-funded revamping of downtown
Salt Lake City, according to the Mormon-owned news site KSL. “They run
their businesses like businesses, no bones about it,” says Eccles.
In addition, the church owns several nonprofit organizations, some of which appear to be lucrative. Take, for example, the Polynesian Cultural Center, a 42-acre tropical theme park on Oahu’s north shore that hosts
luaus, canoe rides, and tours through seven simulated Polynesian
villages. General-admission adult tickets cost $49.95; VIP tickets cost
up to $228.95. In 2010 the PCC had net assets worth $70 million and
collected $23 million in ticket sales alone, as well as $36 million in
tax-free donations. The PCC’s president, meanwhile, received a salary of
$296,000. At the local level, the PCC, opened in 1963, began paying
commercial property taxes in 1992, when the Land and Tax Appeal Court of
Hawaii ruled that the theme park “is not for charitable purposes” and
is, in fact, a “commercial enterprise and business undertaking.”
Nevertheless, the tourist destination remains exempt from federal taxes
because the PCC claims to be a “living museum” and an education-oriented
charity that employs students who work at the center to pay their way
through church-run Brigham Young University-Hawaii.
“There are
religious groups that own radio stations, but they don’t also own cattle
ranches. There are religious groups that own retreats, but they don’t
also own insurance companies,” says Ryan Cragun, a sociology professor
at the University of Tampa and co-author of the recently published book Could I Vote for a Mormon for President?
“Given their array of corporate interests, it would probably make more
sense to refer to them as The Church of Jesus Christ of Latter-day
Saints Holdings Inc.”
As a religious organization, the LDS Church enjoys several tax
advantages. Like other churches, it is often exempt from paying taxes on
the real estate properties it leases out, even to commercial entities,
says tax lawyer David Miller, who is not Mormon. The church also doesn’t
pay taxes on donated funds and holdings. Mitt Romney and others at Bain
Capital, the private equity firm he co-founded in 1984, gave the Mormon
Church millions’ worth of stock holdings obtained through Bain deals,
according to Reuters. Between 1997 and 2009, these included $2 million
in Burger King and $1 million in Domino’s Pizza
shares. Under U.S. law, churches can legally turn around and sell
donated stock without paying capital-gains taxes, a clear advantage for
both donor and receiver. The church also makes money through various
investment vehicles, including a trust company and an investment fund
called Ensign Peak Advisors, which employs managers who specialize in
international equities, cash management, fixed income, quantitative
investment, and emerging markets, according to profiles on LinkedIn. Public information on Ensign Peak is sparse. In 2006 one of the fund’s vice presidents, Laurence R. Stay, told the Mormon-run Deseret News,
“As we trade securities, all of the trading happens essentially with a
handshake. … There’s lots of protections around it, but billions of
dollars change hands every day just based on the ethics of the
group—that people know that they can trust each other.”
According
to U.S. law, religions have no obligation to open their books to the
public, and the LDS Church officially stopped reporting any finances in
the early 1960s. In 1997 an investigation by Time used
cross-religious comparisons and internal information to estimate the
church’s total value at $30 billion. The magazine also produced an
estimate that $5 billion worth of tithing flows into the church
annually, and that it owned at least $6 billion in stocks and bonds. The
Mormon Church at the time said the estimates were grossly exaggerated,
but a recent investigation by Reuters in collaboration with sociology
professor Cragun estimates that the LDS Church is likely worth $40
billion today and collects up to $8 billion in tithing each year.
Quinn,
a faithful Mormon who spent 12 years on the faculty at the LDS Church’s
Brigham Young University in Provo, Utah, before being excommunicated
for apostasy related to research he published on Mormons, has been
gathering financial information for years. Several high-ranking church
insiders told him that the church’s finances are so compartmentalized
that no single person, not even the president, knows the entirety of its
holdings.
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