Monday, April 15, 2024

When Should the State Intervene in the Spending Practices of a Religious Organization?

James Huntsman, a wealthy businessman and former Mormon, used to dedicate 10% of his annual income to the LDS practice of tithing (the gifting of donations to the church). Known by some within his church as the "Mormon Kennedy", Huntsman's influence was notable within the religious community, yet he felt wronged by the church when a whistleblower exposed the reality of where the tithing funds were being allocated. Huntsman donated to the church with the understanding that his money would not be used to fund for-profit entities, however, in 2019 when a whistleblower within the church's finance office revealed that 1.4 billion dollars worth of tithing funds were being used to build a mall in Salt Lake City, Utah, Huntsman was furious. While this act demonstrated that tithing funds were not being used for strict religious purposes, it also exposed the church's deliberate attempt to hide their financial transactions. As a result of this newfound information, Huntsman privately approached the Church of Jesus Christ of Latter-Day Saints and asked for his 5 million dollars worth of tithing funds returned, plus additional penalties and fees. The LDS Church refused Huntsman's demands, and as such, in 2021, he sued the church for fraud. 

The LDS Church maintained that they were not deceptive and that the tithes were never used, nor solicited, for the construction of the mall. As such, when the case reached the District Court, the judge held that the LDS Church was not committing fraudulent acts with tithes, and that they were entitled to keep Huntsman's donations. On appeal in the Ninth Circuit, the court overturned the initial decision, ruling in Huntsman's favor. Following this decision, an amicus curiae brief was filed on behalf of the Church and a request to rehear the case in front of a full judicial panel in September of 2024 was granted. The courts were coaxed into rehearing the case in September, as a result of the brief's assertion that the courts should not be involved in determining the validity of a church's religious motivations, in this case, the practice of tithing. The separation of church and state that the LDS Church requested is one that is frequently upheld within the court's history, predominately beginning with United States v. Ballard in 1944. 

Thus, is the Church of Church of Jesus Christ of Latter-Day Saints entitled to retain full control over their religious practice of tithing, under the First Amendment's guarantee that the government will not prohibit the exercise of religion? Further, does the government have the power to determine the legitimacy of religious practices? 

Considering these questions, there are numerous precedents which speak to the court's historic stance on this subject. As mentioned, United States v. Ballard stands as a noteworthy starting point in formulating an argument with regard to the actions of the LDS Church. In Ballard, Guy Ballard, a member of the I Am Movement who believed he possessed healing powers, was charged with mail fraud under a regulation which states you may not use mail services with the intent to defraud the citizenry. In court, it was determined that neither a court nor jury can determine "the truth or verity of respondents' religious doctrines or beliefs" (Ballard). As such, regardless of how outlandish a religious practice may seem, all a court can determine is if a religious belief is sincerely held. After a long legal dispute, it was determined that Ballard did not commit fraud, which in the context of Huntsman, bolsters the claim that the LDS Church did not behave fraudulently in their use of tithing money, particularly considering that the LDS Church holds sincere religious values and has existed since the 1830s. 

In addition, this case raises the question as to if the courts should interfere with the religious motives of the LDS Church. As previously stated, the court does not seek to interfere with the practices of religious groups, and more recently, Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission (2012) demonstrates this initiative. In this case, which was predominately concerned with employment policies, Cheryl Perich was fired by the Lutheran Church and School after she became sick in 2004. Under a "ministerial exception" in the law, religious groups are entitled to hire and terminate employees without any repercussions from the legal system. The courts ruled in favor of the Lutheran Church, claiming that it is essential that the lines of church and state are not blurred. The court determined that the Free Exercise and Establishment Clauses of the First Amendment "bar the government from interfacing with the decision of a religious group to fire one of its ministers" (575), since the "church must be free to choose those who will guide it on its way" (578, Muñoz). Just as the Hosanna-Tabor case saw the courts rule in favor of the church's ability to run its organization without interference, when applying this precedent to Huntsman, it is clear that the courts will desire to enable the LDS Church to retain complete control of their entity. 

In considering the precedents and the specific facts of Huntsman v. Corporation of the President of the Church of Jesus Christ Latter-day Saints, I believe that the courts should rule in favor of the LDS Church. According to the attorneys defending the LDS church, "Virtually any person who has fallen away from their faith may view their donations to the church during their faithful years as a waste...but that cannot mean that each of them has a fraud claim that allows them to try and convince a secular jury that they were swindled." I agree with this sentiment, as the church, not the state, must retain the power in determining how the tithing donations are applied. While Mormons are encouraged to contribute a tithing as part of their religious doctrine, it is not the responsibility of the court to determine how the church uses these funds. Additionally, one always retains the option to exit a religious group, should one determine that their values no longer align with the organization. 

Sources:

https://becketnewsite.s3.amazonaws.com/20231002221815/2023-10-02-85-Becket-En-Banc-Amicus-Brief.pdf 

https://www.au.org/how-we-protect-religious-freedom/legal-cases/cases/huntsman-v-corporation-of-the-president-of-the-church-of-jesus-christ-of-latter-day-saints/# 

https://www.au.org/wp-content/uploads/2023/11/Huntsmans-Complaint.pdf 

https://www.sltrib.com/news/2023/09/21/lds-church-appeals-says-james/

https://www.sltrib.com/religion/2021/03/23/update-james-huntsman/

https://www.deseret.com/opinion/2023/8/21/23840063/church-tithing-funds-reserve-funds-james-huntsman/


3 comments:

Sarah D. said...

Great post Kim! I agree that the government should not interfere with where a Church decides to allocate its funds. That would be excessive entanglement. I think there might be a slight distinction between this case and Ballard that wouldn't cause a court to inquire into the legitimacy of religious beliefs. I think Ballard was difficult to make this distinction because Ballard promised healing to the people who donated -- to say he didn't would be to say his religious beliefs were false. Here, the church claimed the funds were going toward religion, not towards the construction of a mall. To rule that the church was dishonest about the allocation would not say any of their beliefs are false. If the church said the mall had a religious purpose, there wouldn't be a good argument. But, assuming the mall is a secular place, and if the evidence suggests Huntsman's money funded it, I don't think this would be about the legitimacy of religious belief.

Thomas W said...

This is a really interesting situation, and I agree with your outcome, even though logically/politically I don't like it. The precedent does seem to suggest that if the LDS claims tithing is their religious practice, then they can determine where those funds go do to their faith. My questions that arise are if Ballard should apply to a church, since it is not exactly an individuals religious beliefs like in Ballard. In addition, I would be scared of the government entaglements that may arise from a situation like this. Imagine if the man filed that this was all religious donations on his taxes, and received write offs for it, but it went towards the construction of a mall? What should and even would happen. So based of the Courts decisions I agree that they would probably side with LDS, but I would be worried of the ramifications.

Danielle O'Sullivan said...

Kim, your post prompts crucial questions regarding the limits of governmental intervention in religious practices, particularly concerning the use of tithing funds by religious institutions. Your reference to United States v. Ballard reminds me of the judiciary's reluctance to delve into matters of religious doctrine and sincerity. The principle that courts cannot adjudicate the truth or validity of religious beliefs aligns with respecting the autonomy of religious organizations in matters of faith and practice (spending).

I am inclined to agree with your conclusion that the LDS Church should be entitled to maintain control over its practice of tithing. The autonomy of religious institutions in managing their financial affairs is fundamental to the protection of religious liberty. While concerns may arise regarding the use of donated funds, it is ultimately the prerogative of the church, not the courts, to determine the allocation of tithing contributions.

I am interested to know how the doctrine of ecclesiastical abstention, which typically bars courts from adjudicating disputes over religious doctrine and practice, interacts with legal claims of fraud or financial mismanagement brought against religious organizations, as seen in Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-day Saints? This is most definitely a complex legal and ethical dilemma, great post!