Transcript of OA344: Did the Mormon Church Really Hide $100 Billion in Assets From the IRS? (Feat. Bryce Blakenagel)

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Topics of Discussion

[Show Intro]

Thomas:         Hello and welcome to Opening Arguments, this is episode 344, I’m Thomas, that’s Andrew.  How’re you doing, Andrew?

Andrew:         I am fantastic, Thomas!  How are you?

Thomas:         Doin’ great.  I am very excited to have our good friend, Bryce Blankenagel on the show from the various incendiary Mormon podcasts, ex-mormon podcasts, the Glass Box podcast and Naked Mormonism.  So excited to get to that because it’s possible that the Mormon church is hiding $100 billion in taxable assets?

Andrew:         I read this article in the Washington Post, I looked at it and I was like [Stammers] somebody – journalists are as bad with numbers as they are with the law.  It has to mean they’re hiding $100 million, right?

Thomas:         Which still would be insane, by the way.

Andrew:         Right, which if you have $100 million that you would like-

Thomas:!  [Laughs]  

Andrew:         Head on over to [Laughs]  We will not tell!  No, this story is amazing and I love the we have Bryce here to explain the facts, he knows some of the inner workings and I’m gonna get a chance to delve into arcane provisions in the tax law, which just – that’s like throwin’ a yule log on the fire over here at-

Thomas:         [Laughs]  

Andrew:         [Laughing] the Torrez residence, so there we go!

Thomas:         Well with that said, why don’t we hop on over, let’s get Bryce on the blower and talk about this absurd amount of money that Mormons are hiding.

Interview with Bryce re $100 Billion of LDS Church Assets

[Segment Intro]

Thomas:         And we are joined by favorite of the show, best friend of the show, Bryce Blakenagel, how’re you doin’ Bryce?

Bryce:             Oh, I’m so happy to be here, thank you guys so much for inviting me!  This is a really fun subject.

Thomas:         Well we’re so happy to have you and I can’t wait to learn this one weird trick for us to get ahold of our portion of the $100 billion the Mormon church has.  I assume that’s why you’re here, right?

Bryce:             [Laughs]  

Thomas:         Where do we sign up?  Here’s my email.

Bryce:             It’s a great question.  Do you guys remember that report that circulated, I think it was sometime last year that some economists at a university calculated that we could get $71 billion from churches if we decided to tax them?  Who would’ve thought that [Laughing] 30% of that was actually Mormonism!

Andrew:         [Laughs]  Yeah, turns out he just meant tax one church, not all of the churches.

Thomas:         Yeah! [Laughs]  

Bryce:             [Laughs]  

Andrew:         Yeah, we’ve got you here.  So I have been trying to dig through this story in the Washington Post and elsewhere that the top line is “Mormon church may have hid $100 billion in taxable assets,” I understand you’ve got some inside information, you’re also our go-to for things Mormon, so what’s the deal here?

Bryce:             This is obviously, when we’re talking anything Mormon-money related there’s a lot of nuance to the topic.  Honestly, it’s a huge subject and I think the WaPo article certainly has some limitations and some issues with it that a lot of people in the various Mormon-believing and non-believing communities have taken issue with, and I think those criticisms are well founded.  But by and large I feel like the WaPo article does a fairly good job. 

There is another article that was published by Religion Unplugged, a much smaller media outlet that I feel like really got more into the nuance of the believing side and the non-believing side of the Mormon communities, much more so than Washington Post did, but obviously the topic of Mormon money is such an interesting subject because this time of year people are doing their tithing settlements with their bishops, which is basically the year-end shakedown that every member meets with their bishop, their local congregational leader-

Thomas:         [Sighs]

Bryce:             -and the bishop sits down with them in the office and puts the tithing report in front of them for that individual and says “are you honest in your dealings with your fellow men and is this a full and honest tithe?”

Thomas:         Oh my god. 

Andrew:         So-

Bryce:             And you have to declare your tithing.

Thomas:         You know, it’s around this time of the year that I get out my wallet and I think, you know, Exxon Mobile deserves a donation from me-

Bryce:             [Laughs]  

Thomas:         -because they don’t have enough money.  $100 billion?  [Sighs] Sorry.  This is very-

Andrew:         So I did-

Bryce:             It’s so much worse than just that.

Andrew:         So I did some independent research on this, I talked to a friend of mine who needs to stay anonymous but who is a custodian of financial assets.

Bryce:             Okay.

Andrew:         She describes this process, and it says-

Thomas:         Sorry, custodian of financial assets within Mormonism or just in general?

Andrew:         No no no no no, with a lending institution.

Thomas:         Okay.

Andrew:         She says every year, exactly what Bryce says, these Mormon settlement audits are going through – by the way that is pre-tax, that’s on the gross.

Bryce:             Yeah, it’s on gross.

Andrew:         Not your net.

Thomas:         [Laughs]  

Bryce:             [Laughs]  

Andrew:         So folks come in and what they have to do is transfer out assets from their portfolios to the Mormon church in order to true up.  She says she personally, as one person in a rather large staff of a rather modestly sized financial institution, personally handles six-figures worth of transfers every single year.

Bryce:             At this time of year?  Yeah.

Andrew:         Yeah, at this time of year.

Bryce:             Yup.

Andrew:         So the numbers involved are staggering.  She also said that the weird thing that she noticed is that the moment it hits the account that is designated for the Mormon church that they liquidate those assets.

Bryce:             Immediately, absolutely.

Andrew:         Instantly shifted out.  So I thought that was some pretty interesting color.  Let me, before we kind of go through the rest of the story I did wanna hit a little bit on the legal background, including answering Thomas’ question as to how we can get a slice of this.

Thomas:         Hmm!

Bryce:             Yeah, right!  [Laughs]  I’m curious for it too!

Thomas:         This one weird trick!

Andrew:         [Laughs]  So as it turns out – and I wanna frame this because Bryce I know you have – I think you’ve spoken to the actual whistleblower here, but in IRS cases there is a whistleblower statute, it is 26 U.S.C. § 7623(b), and that 7623 allows the IRS to open up investigations and go collect delinquent tax payments.  Subsection (b) says if the Secretary of the Treasury proceeds with any judicial action to recover underpayment or to punish those guilty and does so upon contribution from a whistleblower, then the whistleblower can receive not less than 15, not more than 30 percent of any settlement or verdict.

Thomas:         Woah!  I’ve blown the whistle!  Hey!

Bryce:             Right? [Laughs]  Can we all be whistleblowers?

Thomas:         Hey, IRS!  Check out the Catholic church and the Mormon church!  I heard-

Bryce:             [Laughs]  

Andrew:         [Laughs]  

Thomas:         -there’s taxes stuff.  Where’s my cut?  Give me my check!

Andrew:         So I say that, number one because I think that’s a totally sensible- this was passed in 2006, this was a George W. Bush policy that passed with bipartisan support, makes total sense, but obviously following the lead of the Trump administration we’ve seen that attacking and discrediting whistleblowers is often the game plan when you are the subject of one, so-

Bryce:             Absolutely.

Andrew:         So it is worth pointing that out, that will be used, I presume, to try and discredit the motives of the person involved.

Thomas:         Sorry, let me-

Bryce:             Yeah, that’s already beginning, yes.

Thomas:         -reset a bit, because I know you guys are probably already deep in this and you know a bunch of the facts.  What happened?  So nobody knew that they had a gazillion dollars until someone blew a whistle?  I mean when did this happen?

Bryce:             So that’s kind of an interesting question to try and answer.  The thing is, people have known for a long time Mormonism’s really stupid wealthy, but the church is extremely guarded with its finances and that comes because in 1959 the church was running at a massive deficit.  It was somewhere to the tune of $32 million in debt, and they would report their financials in General Conference but because this guy who was a financial advisor for the church at the time, Henry Moyle, was running the church at a deficit, they decided to close the financial books.  I have a quote here from a Mormon reporter who works for Religion News Services and also recently wrote the book “The Next Mormons,” who I interviewed on Naked Mormonism

She talks about this quite poignantly.  Her name is Jana Riess, she said (quote) “the church was on the brink of financial disaster in 1959.  That year she suspects the nondisclosure policy continues not because the church is poor or indebted but because it has grown wealthy enough that exposing the extent of its holdings could cause embarrassment and prompt unwanted questions.”

Thomas:         A literal embarrassment of riches.

Andrew:         [Laughs]  

Bryce:             [Laughs]  But I think it’s important to kind of grasp how large this portfolio really is.  Honestly, in many ways, how little the whistleblower actually gave us.  I also wanna correct something that Andrew said earlier, I have not spoken to the whistleblower personally, I have spoken to the person who worked with the whistleblower, Lars Nielsen. 

Thomas:         Ah.

Bryce:             And he and I have worked – I have been able to contact him in answering some of my deeper questions about this subject, and he’s been very forthright and honest about the way that he is approaching this story.  But in order to understand the Mormon financial portfolio we need to understand the structure of the Church of Jesus Christ of Latter Day Saints.  At the very top – you know what?  Just for the sake of easy and understandability let’s just try and visualize Mormonism like a pyramid.

Andrew:         [Laughs]  

Bryce:             I’m just pulling that out of nowhere, just a pyramid is the easiest way to understand this, right?  So the very top of the pyramid is what is known as the Corporation of the President of the Church of Jesus Christ of Latter Day Saints, we’re gonna call it the “COP.”  Now this is a very unique entity called a corporate sole.  I’m hoping that Andrew can help us understand a little better what a corporate sole financial designation really is?

Andrew:         Yeah, so that’s a weird thing that’s really being phased out.  It was created and recognized at the State level, so the IRS still respects State designations of corporations sole – and that is S-O-L-E, not S-O-U-L.

Bryce:             [Laughs]  

Thomas:         Oh, okay!

Bryce:             Corporations of the soul of Jesus!

Andrew:         But it’s true that it was a special corporate classification that was designed to apply to religious institutions.  So here’s what it means.  A corporation sole enables a religious leader – and then I’m quoting from a case called Berry v. Society of Saint Pius X, but it doesn’t matter.  “Such as a bishop or other authorized church or religious official to incorporate under State law in his capacity as a religious official.”  What that means is then the corporation sole is in the name of that real person, but the assets belong to the religion and it is designed to allow the continuation of ownership to benefit that religious organization-

Thomas:         Oooh.

Andrew:         -even though the head might change.

Thomas:         Yeah.

Bryce:             Right.

Andrew:         So you get a new pope, you get a new chief bishop, you get a new… apostle?  Is what the Mormon leader is called?

Bryce:             Prophet.

Andrew:         Prophet, sorry.

Bryce:             Prophet, seer, and revelator, of course! [Laughs]  

Andrew:         [Laughs]  

Thomas:         I could see that setting up for a major debate over, well actually over here we’re the real Mormons so we’re the ones who should – you know, if we start our own sect and then argue that we’re actually the religion because we have a better relationship to the foundational texts or something could that open up a legal battle?

Bryce:             Well that’s one of the appeals of a corporate sole-

Andrew:         It certainly seems worth trying, yeah! [Laughs]  

Bryce:             It can help insulate against that, so whoever is named as the president of the Corporate, Salt Lake City, LDS, Inc., they are the owner and if anyone is claiming that “I’m actually the one true prophet” it’s like “ha ha, all the books are in my name so what are you talking about?”

Thomas:         I thought Andrew was saying the opposite of that, I thought he was saying it belongs to the religion even if the leader changes, did I misunderstand?

Andrew:         So you’re both saying the right things, which is that the assets belong to the religion, but for tax recordation purposes the IRS would look to the person who is designated.

Thomas:         Okay.

Bryce:             Right.  And it’s interesting too because corporate sole or corporation sole, they are typically only utilized by, like, Catholic diocese and for churches, but it doesn’t seem to fall under the category of non-profit or for profit entity.  It seems like it’s in kind of this weird squishy ground of classification in that regard, is that right as well?

Andrew:         So I can speak to that too, and let me give a tiny sidebar.  If you start googling “corporations sole,” you will immediately come upon sovereign citizen level-

Thomas:         Sovereign citizens!  I thought you were gonna say that!

Bryce:             [Laughs]  Imagine that!

Andrew:         Yup!  So there are all sorts of scams out there that say “you can register as a corporation sole and not pay any taxes,” such that [Sighs] as is always with sovereign citizen wackiness, it’s all hilarious until the IRS has to issue a circular and spend literally hundreds of thousands of dollars enforcing against scams. 

Bryce:             Right.

Andrew:         So put that one off to the side.  With respect to tax exempt status, what you do is you create the organization – again, some States permit tax-exempt LLCs, for purposes of 501(c)(3) status it’s generally best to incorporate and then you apply – I’ve actually helped clients do this, no churches, but-

Thomas:         Oh.

Andrew:         -you then apply for 501(c)(3) status, it’s a super long application, it’s really, really complicated, you’ve gotta meet all of these requirements in terms of who serves on the board and you have to have a conflicts policy and you have to produce three to five years of revenue projections-

Bryce:             Unless you’re a religion…

Andrew:         [Laughs]  Yeah, way to cut to my punchline, Bryce!

Bryce:             [Laughs]  

Andrew:         See if I invite you back on the show.

Bryce:             [Laughs]  

Andrew:         So in other words, you register the corporation first and then you tell the IRS, hey, this corporation meets the requirements of being tax-exempt under 26 U.S.C. 501(c)(3) and that’s where the common parlance of 501(c)(3) designation comes from.  But it’s not like you pick that, it’s not like you can go to a State website and do a dropdown box and be like, let’s see, do I wanna be a Limited Liability Company or a Corporation or a 501(c)(3)?  That’s not how it works.

Bryce:             Right, okay.  So that’s very helpful in contextualizing this.  So the corporation sole is kind of the cap of the pyramid and everything runs at the direction of the COP, the Corporation of the President.  This is, from what I can tell, this is the entity that owns all of the church, specifically religiously-functional, assets, which are the temples and the ward houses. 

In 2012 Bloomberg News they did “How the Mormons Make Their Money,” it was this groundbreaking article that came out in 2012 and they estimated the church, temple, and ward house assets to be $35 billion at the time.  [Sighs] So that’s grown … significantly.  If we look at the number of temples that were owned by the church at the time, that were dedicated, it was something like 140, somewhere in that ballpark – there’s some fluctuation with when they are announced to when the ground is broken to when they’re actually completed and dedicated.  Now the church has over 165 dedicated working temples and they have plans to build or construct over 217 right now, so those assets are insanely huge and they’ve grown since that 2012 estimate of $35 billion.

So that’s the top of the pyramid.  Going one level down in the pyramid we have a whole bunch of different entities.  First one is the Deseret Trust Company, which handles the church’s welfare system and many philanthropic efforts that they do like the Helping Hands during natural disasters.  So when you see natural disasters and there are people wearing yellow shirts with blue hands, those Helping Hands, the Deseret Trust Company handles all of those philanthropic and humanitarian aid efforts.

Then we have the Intellectual Reserve, which is the propaganda and the media arm of the church, they make all the videos, they handle all of the internet sites and everything that the church produces that is media related. 

Then we have the Polynesian Cultural Center, which is a non-profit amusement park in Oahu, Hawaii.  This is interesting because it was the subject of a major controversy back in 2018 when somebody compiled a 283-page exposé about the Polynesian Cultural Center and-

Andrew:         So I wanna be fully respectful of all of our listener’s religious beliefs here – you wanna explain how that one works for me?  The religious-themed Polynesian vacation resort?

Bryce:             Uh, it’s … kinda tough?  So the Mormon church made headway in the 1850s to the Sandwich Islands and made a very concerted effort of proselytizing to the Sandwich Islands before the American government bought it and it became Hawaii in the 1950s.  So for 100 year period the church was really, really gaining a lot of converts in Hawaii and they have a BYU-Hawaii campus down there in Oahu as well. 

The Polynesian Cultural Center works in conjunction with BYU-Hawaii and it basically works to educate people on the indigenous-people’s culture.  It’s basically a really nice amusement park without any roller coasters but they just host really, really cool luaus.  Does that answer your question? 

Andrew:         That sounds pretty cool, actually.

Bryce:             Yeah!

Andrew:         Yeah, I’m there.  Okay, so I get it, and the church sort of has all of these subsidiary octopus arms that are doing things-

Bryce:             Yes.

Andrew:         -that may or may not be what you think of.  Why don’t I go back to contextualize that and read out under 501(c)(3) what you have to do to qualify.

Bryce:             [Laughs]  Yes, okay.

Andrew:         So it applies to corporations organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes.

Bryce:             Yeah.

Andrew:         So under the clear and plain intent of the act, if you’re operating exclusively for religious purposes then you are tax-exempt and the special bonus, the reason it’s extra good to be a 501(c)(3) as we’ve talked about on this show is not only do you not pay taxes on your income that you receive, but donations to you in turn, to a 501(c)(3), are in turn tax deductible as well.

Bryce:             Tax exempt as well.  Yes.

Andrew:         So it’s a double bonus, but it seems pretty clear that it has to be – that if you do something that is outside that mandate that you have to open up another entity.  If you’re not operating exclusively for a religious purpose it doesn’t count.

Bryce:             Right, exactly.

Andrew:         And there that’s where we get into the gray area with the Mormon church operating a Polynesian resort which, other than the lack of Polynesian drinks which are a pretty good reason to go to Oahu-

Bryce:             [Laughs]  

Thomas:         [Laughs]  

Andrew:         But you know, other than that, hey, luau, roast pig, spam musubi, I’m down for all of that.  And as you point out there is sort of the connection between well we use that to proselytize.

Bryce:             Mm-hmm, certainly.

Andrew:         And that gets to – and maybe we’ll delve into some of the substance of this.  I’m gonna link it in the show notes for our fans who enjoy reading IRS regulations, which I know I’m not the only one.

Thomas:         Oh boy!

Bryce:             [Laughs]  

Thomas:         Christmas comes early this year!

Andrew:         [Laughs]  

Bryce:             Curl up next to the fire with your hot cocoa ‘cuz we’re Mormon, we don’t drink coffee.  Never mind.

Thomas:         I didn’t even know you were allowed anything hot.  I wasn’t sure.

Bryce:             [Laughs]  Can’t even cook your food!

Thomas:         No.

Andrew:         [Laughing]  But § 7611 of the Internal Revenue Code imposes requirements on how and when the IRS can conduct civil tax inquiries and examinations of churches.  So they can only begin an inquiry – this is not even an audit, this is thinking about having an audit – if an appropriate high level Treasury official reasonably believes on the basis of facts and circumstances recorded in writing, that an organization claiming to be a church or convention or association of churches may not qualify for that exemption – that is they’re not really a church – maybe carrying on an unrelated trade or business, or may otherwise be engaged in taxable activities.

Thomas:         Hmm.

Andrew:         So in other words, in addition to everything else there is a specific IRS provision of the code incorporated by regulations that strongly discourages the IRS from even looking into these things.

Bryce:             Right, and the IRS is famously not proactive with investigations, especially into religions like this.  So that really speaks to the ability, and I think we should give kudos to the whistleblower and to Lars Nielsen who worked with the whistleblower to compile this.  They sent it to the IRS before they went public with it, which means the IRS is gonna have this – maybe in 10 years it’ll get investigated and audited through all of this mess, but the IRS has what seems to be actionable resources to say there’s a problem with this.

Andrew:         So why don’t we move to kind of what the “this” is, so let’s start with the premise which I think is true that assets directly owned by the COP, by the apex of the Mormon empire, we don’t know what that is.

Bryce:             Yes.

Andrew:         We have no idea how large that number is.

Thomas:         Hmm.

Bryce:             That’s correct.

Andrew:         And that’s because churches don’t have to file tax returns.

Thomas:         Cool.

Andrew:         They have to file form 990s but by and large they don’t have to file reports on their assets or transactions in the way we do.  I know, my tax lawyer friends, I’m oversimplifying it but I think this is a fair oversimplification. 

Thomas:         ‘Cuz why would we wanna know?  Why would the country wanna know about the hordes of gold that the religions are sitting on?

Andrew:         [Laughs]  Yeah.

Bryce:             Why?

Andrew:         So what did they do and what do we know about?  

Bryce:             So this all comes down to one of the church’s entities that is called Ensign Peak Advisors, EPA.  Not the Environmental Protection Agency, this is the Mormon EPA.  And the EPA is controlled by the CPB, which is the Corporation of the Presiding Bishop.  The CPB is just one level down within this pyramid structure and the CPB controls the vast majority of the church’s actual assets including the EPA, Ensign Peak Advisors.  So the headlines that are talking about the church hoarding this $100 billion, that’s only a tiny facet of their entire financial and their business portfolio.

Thomas:         What?

Bryce:             So this one entity, EPA, it only comprises a percentage of the church’s wealth.  Like you said, Andrew, what that wealth is we just don’t know.  We may never know.  So if we look at the actual exposé itself, Exhibit E includes the Articles of Incorporation for Ensign Peak Advisors, Incorporated. 

This was received on September 29, 1997 which was, coincidentally, one month after Time Magazine published their ground-breaking exposé, Mormons, Inc., which was the first real hard modern look at Mormon finances.  So this seems, if we can look at the correlation of one month apart as causation, it seems like EPA was created as this separate investment entity to basically remove the church away from their billions, to say well this is all EPA money that is controlled by the CPB that is controlled by the COP, it’s not actually the Corporation of the President that runs the Ensign Peak Advisors.

Notably in the Articles of Incorporation for EPA, it is a nonprofit organization.  Article III states (quote) “The (EPA)’s property is irrevocably dedicated to religious, educational, charitable purposes meeting the requirements for exemption provided by 501(c)(3) of the IRS Code, and no part of the net income or assets of this corporation shall ever inure to the benefit of any trustee, officer or member thereof or to the benefit of any private person.” (End quote). 

Andrew:         Okay, but let me jump in and let me steel man the Mormon church here, and that is, okay, this is a reserve fund, and yeah, okay, it’s $100 billion that seems like a pretty large reserve fund, but religious and educational institutions have to have reserves, right?  America’s only worthwhile educational institution, Harvard University, has a $40 billion endowment and the reason why schools and churches have reserves is because when there is an economic downturn then the first thing that people stop doing is discretionary giving.

Bryce:             Right.

Andrew:         So what you don’t wanna have is, hey, we’re running – have you seen these giant gold-topped temples that we have?

Bryce:             [Laughs]  

Andrew:         We’ve got buildings, we’re-

Thomas:         Gotta clean ‘em, maintenance, polish our gold.

Andrew:         We’ve got staff, we’ve got infrastructure.   

Bryce:             They don’t anybody, but…

Andrew:         Hey!  You’re interrupting my steel manning here, this is not fair!

Bryce:             [Laughs]  

Thomas:         Those candlesticks don’t polish themselves!

Bryce:             [Laughs]  

Andrew:         We need – it is perfectly reasonable to maintain reserves to supplement the church so that it can continue its lawful activities as a church during times of economic downturn.

Bryce:             Certainly, right, absolutely.

Andrew:         That’s the counterargument, why is this not that?

Bryce:             Because there have been documented, in the exposé, two disbursements from EPA that violate the Articles of Incorporation and indeed the tax code for a not-for-profit entity.  The whistleblower complaint alleges that there have been two illegal disbursements from EPA to for-profit entities controlled by the church.  The very first one, and this is the crux of the complaint and the alleged violations, the first one was during the economic recession of 2008. 

The church’s for-profit life insurance company, Beneficial Financial Group, suffered a major hit during the financial crisis just like a lot of large insurance companies did.  One of the disbursements from the EPA in the documents is alleged to be $600 million to Beneficial Financial Group.  Internal EPA documents also included in this exposé show that the EPA lost about $13 billion during the recession, or roughly 30% of its portfolio at the time. 

That really goes to your argument, Andrew, of like, hey, during an economic recession everybody’s tightening their belts, they’re not gonna give as much tithing to the church, we gotta have a nest egg, we gotta have a trust that we can operate the church on in case it needs to withstand a deficit for a decade or so.  That’s reasonable, but this disbursement was to a for-profit entity that does not fall under any classification of a charitable or a religious or an educational institution that would otherwise exempt if from these disbursements.  The second alleged – oh, go ahead.

Andrew:         Oh yeah, I’m sorry, go to the second.

Bryce:             The second alleged disbursement from the EPA was for City Creek Center, which is the church-owned mall straight across the street from Temple Square in downtown Salt Lake City.  This was apparently constructed somewhere to the tune of $2 billion, so the alleged disbursement to fund the construction for City Creek Center was $1.4 billion from the EPA and the rest of that construction cost was supplemented by outside investors and State tax funds.  That is to a for-profit entity that is controlled by the Corporation of the Presiding Bishop. 

So the two major disbursements totaling [Laughing] $2 billion have been to for-profit entities from EPA according to the exposé.  That violates the 501(c)(3) status of EPA.

Andrew:         And have there been any other disbursements?

Bryce:             The person who compiled the whistleblower complaints said that they have found no evidence that there have been any disbursements from EPA that would fall under the classification of nonprofit.

Andrew:         So if I understand this correctly, what you’re saying is this $100 billion slush fund has paid out 2%, has paid out $2 billion to activities that are plainly for-profit activities.

Bryce:             That’s correct.

Andrew:         And in fact, I think the evidence is even stronger because doesn’t the COP have, own an interest in a mall development corporation, right?  I wanna be clear, that’s totally appropriate.

Bryce:             Right.

Andrew:         A nonprofit can own an interest in a for-profit entity so long as the disbursements to and from the for-profit entity are properly recorded and you pay all your taxes on the for-profit entity.

Bryce:             Exactly.

Andrew:         You know, selling clothes and building malls and all of the other stuff, there’s nothing wrong with that but this seems to indicate the level of corrupt intent that if you know mall development is handled by the mall development corporation and then you’re secretly transferring funds over from the church reserves, that seems to be more than just an oopsie. 

Bryce:             That’s correct.  Where the fraud comes in is there have been multiple statements by church leaders, including the prophet at the time of the construction of the City Creek center when it was conceived, Gordon B. Hinckley, stating that no tithing dollars were used for the construction of the City Creek Center.  To be fair, City Creek Center is controlled by one of the entities that the CPB runs that is Property Reserves, Inc., which is a for-profit commercial entity, so the church owning a for-profit entity isn’t the issue here, it’s that they used the EPA to fund the construction of that for-profit entity and then repeatedly said on record that they did not use tithing funds for that money.

Let’s also be clear, where EPA gets its massive transfers, it’s all from tithing income.  So it makes who knows how much money each year, but all of the nest egg that was used to build EPA up to the $100 billion status that it has now, that was all made from tithing income.

Thomas:         Yeah.  I mean it’s like-

Andrew:         Okay.

Thomas:         -if you use the tithing income to make interest and make a zillion dollars on it and then I guess, are they not calling the interest “tithing income” or something?  The resulting income from all the tithing, is that one step removed so it’s fine somehow?

Bryce:             I don’t understand the logic behind it, the amount of money is so vast and at the end of the day all of the income that the church has made initially to even begin all of the for-profit investments that have grown it to this well over $100 billion empire, at some point down the line that all came from tithing donations, so I have a hard time at the abstract level considering that anything the church does is not with tithing money even if they are using it from accounts that were filled or replenished by their for-profit entities, because without the tithing money that went into initially these for-profit endeavors, the church wouldn’t have those for-profit endeavors.

Andrew:         Yeah, I mean I don’t want to – [Laughs]  The Mormon church has its own private law firm in Utah that you’ve mentioned on your show on multiple occasions, so I don’t need to give them free advice, but I do feel like it is a defensible argument to say it’s not a fraudulent statement that what we did with your tithing money was we turned your tithing money over to a church-owned investment firm-

Thomas:         [Sighs]

Andrew:         -that invested it in various assets.  As far as I can tell, EPA, Ensign – sorry all the Mormon vocabulary is tripping me up.

Bryce:             [Laughs]  

Andrew:         So Ensign Peak Advisors just looks to me kind of like a hedge fund, they’re an advisory – hedge fund is the wrong word.  They look like an investment advisory group.

Bryce:             Certainly, yeah.

Andrew:         They manage the assets, they buy whatever – securities – when you have $100 billion it’s not hard to diversify your portfolio.

Bryce:             Yeah, we can talk about that too.

Andrew:         Yeah, and I think the complaint says something like they’ve earned 7% over the lifetime which, you know, that’s pretty good return-

Bryce:             That’s comfortable.

Andrew:         But it’s also – yeah, it’s not hard to earn 7% when you have $100 billion.

Bryce:             Right.

Thomas:         Yeah.

Andrew:         You can really properly diversify.

Bryce:             And you’re also making multiple transfers probably per year of who knows how much from-

Andrew:         Right.

Bryce:             -straight tithing money, right?

Andrew:         Right, yup.  So I would certainly feel comfortable arguing on behalf of my client that saying “we didn’t use tithing money,” yeah we used interest generated by your tithing money, but we didn’t use your tithing money to do X, I dunno.  I just wanna throw a little cold water that to me that’s not a slam dunk that that statement is provably false-

Thomas:         Yeah.

Andrew:         -by tracing the origin.

Bryce:             That’s fair.  That is absolutely fair, but one issue that we’ll hopefully discuss as well is the optics of this is very troubling for the church and they don’t have the damage control resources to stop this story from growing into what it is. 

Andrew:         [Laughs]  Well they have $100 billion dollars!

Bryce:             Members may not understand the legally defensible argument that, well, they were using interest from tithing therefore they weren’t directly using tithing to fund the City Creek Center.  They will say, well, the EPA is funded by my tithing dollars and the EPA gave $1.4 billion to build the City Creek Center, the church’s for-profit mall, that’s tithing money.  So legally defensible is different from how people deal with the information inside of their mind.  I think there’s a bit of nuance to the topic as well, but I think both of us have a defensible point to go with here.

Andrew:         Let me ask kind of the topline question, which is – and by the way, we should clarify.  I think you made this clear, but these are – I’m gonna link the 74 page whistleblower letter to the IRS in our show notes, folks can read it for themselves.  It’s 74 pages, but really the narrative portion is 28 pages and then there are footnotes and exhibits.  So it’s not, you know – if you like curling up with documents you can curl up with this one, it’s not terribly long.

These are allegations. 

Bryce:             Exactly.

Andrew:         The way in which the IRS process works is a little different than, for example, the ICIG process that kicked of the Trump impeachment.  In that case there was an actual complaint filed.  Here the way the process works is you write a letter to the IRS and you say hey, I think you should investigate X, here’s my reasons for thinking you should investigate X, and if they investigate X you can maybe trigger that bounty hunter provision that we talked about at the top of the show.

Bryce:             Mm-hmm.  Right.

Andrew:         So these are allegations being made by somebody who was formerly connected to EPA.  It’s not a complaint, the IRS has not yet announced that it has begun an investigation, there has been no due process, we don’t know, they are allegations at this point.

Bryce:             Exactly.  The hardest part about this is there is no possible way for private citizens or for journalists or for anybody to corroborate any of this documentation because all we have is the whistleblower complaint.  We don’t have access to the books to verify this information, so we have to say allegedly with all of this and everything that we’re able to discuss here is based on what was compiled by this whistleblower.  That makes it kinda tough to work with this story.

Andrew:         It does, and this is, to me, the biggest headscratcher and what I can’t figure out, which is why segregate out these funds at all?  I mean let’s talk about the practical aspect.  I already mentioned that there’s nothing wrong with a nonprofit entity creating a subsidiary organization to serve as its reserves.  In fact, there’s a specific provision that applies only to 501(C)(3) corporations, it’s § 509(a)(3) of the tax code, that says “oh and also you’re included under this umbrella if you are an organization that is organized and at all times operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more specified organizations which include churches.

So in other words, the tax code allows mandatory exemptions for churches, their auxiliaries, these supporting organizations, so the argument is going to be the argument you laid out which is this isn’t supporting the nonprofit religious operations of the church, this is supporting the for-profit operations of subsidiary taxable entities.  I get that.

I’m thinking of this, I’m the prophet seer and revelator of the Mormon church – this is a hypothetical-

Bryce:             [Laughs]  

Andrew:         [Laughs]  And why not just keep the assets in house? 

Bryce:             Yeah, that’s a great question.

Andrew:         Why create this separate entity?  And look, yeah you’re treading on a little bit of thin ice every time you bail out the mall or whatever but the reality is the last major public fight that the IRS waged against a church was against the Church of Scientology and they lost!

Bryce:             Right.

Andrew:         So I doubt they’re bristling for a fight, I doubt given Mormon representation in Congress that if it were a public spat the Mormon church would certainly have allies.

Bryce:             Uh-huh!

Andrew:         To fight it in any kind of IRS investigation.  What’s the benefit here of the segregation?

Bryce:             I wish I could answer that.

Andrew:         [Laughs]  

Bryce:             So I can’t transplant my mind into a dead prophet in 1997 when they made the top-level decision of “we’re going to form this EPA” in order to do… blank.  I don’t know and I’m sure that they had good rationale to do it at the time, and in some ways it does separate out maybe for ease of understandability it separates out the investment – the stocks and bonds portfolio of the church – from all of their other assets, some of which are real estate, some are business, some are insurance, some are media conglomerates. 

It does separate all of their actual stocks and bond assets into its own separate entity, maybe that makes it easier to administrate as opposed to being just under the larger umbrella of the Corporation of the President?  Honestly I can’t begin to wrap my mind around it, why they did it this way. 

All that we can look to is there was a lot of media coverage of Mormon money when the Times article broke in 1997 and this was formulated just a month after that story broke.  There may be causation to that, maybe they were thinking if we can build this EPA to be our investment portfolio that gives us in the public mind a degree of separation from the amount of money that we have been able to acquire through these investment portfolios.  I don’t know!  I’m dumbfounded by it as well.

Andrew:         Alright, well I guess I have two more broad areas of questions and those are, number one, what should we look for as the next development?  This complaint’s been referred internally but the IRS doesn’t, to my knowledge, publicly acknowledge whether they’ve opened an inquiry or an audit into an individual or an organization.

Bryce:             Right.

Andrew:         So what are we looking for next?  Then also, the question I love to ask on OA, how’s the press getting this wrong? 

Bryce:             [Laughing] Right!

Andrew:         What misconceptions do we need to clear up?

Bryce:             Right.  So the church is already beginning to mount its defense, so what we can expect to see is more of the claim that we are using church assets to further the mission of the church, and maybe this goes as a question back to you, Andrew, but is the defense of “we are hoarding this money for the second coming of Jesus,” a legally defensible argument for growing a fund this massive all under the guise of not-for-profit institute?

Thomas:         Look, Jesus is not cheap.

Andrew:         [Laughs]  

Bryce:             No.

Thomas:         When he comes he’s gonna be like “pull out your checkbooks, I’m going to anoint the one true religion, uhhhh, the highest bidder!  Whoever it is!”

Bryce:             [Laughs]  In many ways that’s really important to note here, this whistleblower complaint reveals to us that Mormonism is the wealthiest religion in America and it rivals the Catholic church in worldwide assets.  This-

Andrew:         Really? 

Bryce:             Yes.

Andrew:         Wow.

Bryce:             So let me give you just-

Thomas:         Aren’t there like a billion Catholics?

Bryce:             Yes.

Thomas:         But they don’t all pay as much money maybe?  Is that what it is?

Bryce:             That’s the biggest part of it, Mormonism has the iron-fisted tithing settlement at the end of every year that pushes members to give 10% of their income, which means that the average Mormon member is contributing a higher percentage than members of many other denominations. 

The EPA – here’s a very brief breakdown – it has about $35 billion in U.S. equity alone, these are all in stocks and bonds.  It has just under $10 billion in foreign equity, about $5 billion in private equity, $7.6 billion in hybrid portfolios, $21 billion in credit and duration portfolios, $2.4 in cash accounts, and roughly $7.3 billion in currently non-allocated capital.  In additional to all of that there’s somewhere around $4.5 billion in just liquid cash that can be moved around at a moment’s notice. 

That is a ton of money and this is only the stock portfolio of the church, that speaks not at all to their tithing income, to all of the assets they have that are for-profit entities, to the fact that they have the largest cattle ranch in the world that is currently 2% of Florida’s landmass.  That doesn’t speak to all of their media and their insurance conglomerates.  It doesn’t speak to the broader sense of this portfolio, and that’s quite troubling too because back in 2012 the Bloomberg article estimated based on where the church has to report its tithing income financials, in Australia and Canada, that the church is taking in about $7 billion of tithing every year, which is an insane amount of money, and the church claims that its operating costs are about $6 billion.  What’s even more insane about this-

Thomas:         Six billion in operating costs? 

Bryce:             Yeah.

Thomas:         Wow.  Costs – that’s all in communications to the Lord I guess.  Costs a lot, satellite dishes, I dunno how they talk to God, but-

Bryce:             That $6 billion is really, really hard to substantiate and once again we can’t verify it, there’s no access to their books to verify that.

Thomas:         Are they like paying rent to themselves kind of thing maybe?

Bryce:             [Laughs]  

Thomas:         Oh, all these temples!  Gotta pay the mortgage or whatever to us?  What could that possibly be, $6 billion?

Bryce:             Great question.  Um… great, great question.  There’s a lot of Mormons in politics, right?  They spend a lot of time moving and shaking the political sphere in Utah and at the federal level. 

Even more troubling about this is recently a historian, one of the most respected historians of Mormonism, D. Michael Quinn, put out the third book in his series “Mormon Hierarchy.”  It is subtitled “Wealth and Corporate Power,” and he did an interview when the book was released, for the Salt Lake Tribune.  I’m gonna pull directly from the Trib article.  (Quote):

“Quinn estimates — and estimating is about the best even a top-notch researcher can do — the church took in about $33 billion in tithing in 2010, based on a model of projected growth rates that followed a consistent pattern starting in the 1950s. It earns another $15 billion annually, he says, in returns on its for profit-making investments.”

So the $7 billion estimate that we’ve been going off of on the Bloomberg article from 2012 seems like it probably isn’t all of that accurate to begin with and the claim that the church is using $6 billion per year in [Laughs]  operating costs cannot be substantiated either?  But what it does amount to is it is not only the most wealthy in its asset holdings and in all of its stocks and bonds holdings of American religions, but it is also making the most money year over year based on its for-profit investments.

If we think about the for-profit investments of other religions, there really aren’t that many.  You’ve got Catholic hospitals, right?  But by and large most churches are not as diversified as Mormonism is and therefore they just can’t match the income that the church makes every year, which is fill-in-the-blank billions of dollars.  It is the single wealthiest religion in America.

Andrew:         Wow.  Okay, so then let’s work back to the first question.  What do we look for next in the story?

Bryce:             I guess maybe there will be an announcement of an investigation in a few years or in 10 years when the audit is completed?  We have seen already the church mounting its defense, that we are using this for building the Kingdom of God we are holding this money for the Second Coming, and that’s about all because… well?  What do we expect.  Maybe more people will see this leak, come forward, and say well, okay, if this person got out, they were able to do it, maybe I can leave my post at EPA or at the CPB or at any of these other entities and also leak and I can be safeguarded by the whistleblower provisions in the IRS statutes, but as it stands right now the story just is what it is.  There’s not much more to it.

Andrew:         Well in my view – and this is yes, it’s easy, the three of us are atheists on this line, but we have folks of all sorts of religious beliefs who listen to the show and we try and be respectful and take that seriously.  In my view, this is part of the argument for taking seriously that maybe we shouldn’t throw everything into the bundle of “religion,” and craft a specific provision that makes it extra special hard for the IRS to look into fraud if you call it religion.

Bryce:             Right.

Andrew:         That’s just my bit of a soapbox, but I can see mainstream folks, I know we have Mormons who listen to the show, I’m not trying to argue with them about their religion, you do that on your show Bryce! [Laughs]  

Bryce:             Right.

Andrew:         But I think the average person, taking a step back, would feel – I know for example, we just wrapped up Vulgarity for Charity, if I learned that we raised a third of a million dollars for Modest Needs, we’re super proud of that, they tell us that’s a sizeable chunk of their operating budget.  If I learned that they had a hundred-billion-dollar reserve, even if it was a perfectly legal reserve, I probably would feel a little differently about-

Thomas:         Yeeah.

Bryce:             Right.

Andrew:         -the status of my gift to them.

Bryce:             Right, right.

Andrew:         I’d be like, you know, seems like a couple other folks could use a little-

Thomas:         Talk about a “modest” need! 

Andrew:         [Laughs]  

Bryce:             Yeah, right.  And that is notable, too.  That kinda goes back to the question of optics, because there are the Mormon communities of tens of thousands of readers who are gonna read this and they’re gonna come down on one side or the other of this issue.  They’re gonna say how dare the church hoard this money when there are people starving all over the globe?  There are gonna be the believers saying “I’m glad that the church has built this nest egg because you never know when we’re gonna need it and the second coming is probably gonna be super expensive, so it’s a good thing that our church is run by such intelligent businessmen.”  Men.  Men, all men of course. 

But then there’s the millions of readers of the Washington Post and of the media outlets that are consuming this story that are going to see the guys riding down the street in the white t-shirts and say “[Sighs] That church is really, really wealthy, why would I wanna join it and then give 10% of everything I have to it?”  The optics at the international level because of this story I think are a lot more damage than the church can really withstand. 

More importantly with the millennial generation beginning to get jobs and come into more of their own personal, expendable income that is being stretched thinner and thinner and thinner and thinner with everything that the current economy – all of the barriers of entry that millennials have to buying a house even.  I mean I’m a millennial living in Seattle, it’s pretty unreasonable to even begin shopping for a house right now. 

People who are millennials are not as orthodox believers in the church and I would like to think that millennials who are struggling to pay rent and to pay off their $70,000 student loan to get the tech job and to buy a car, a payment they can’t really afford but they need it to commute the hour and a half to work every day and they see all of these issues that they are struggling to pay every bill and then the church is sitting on $100 billion? I’d like to think that they might have to think a little bit harder about actually signing that tithing check.

This has much deeper ramifications than just believers.

Thomas:         So what you’re saying is in, you know, like 10 years maybe the Mormons will only have like $90 billion in tax fraud?

Andrew:         [Laughs]

Bryce:             [Laughs]

Thomas:         Really put a dent in their tax-free hoards of gold.

Bryce:             What it does mean though-

Andrew:         Once you have $100 billion it’s hard to have less than $100 billion.

Thomas:         [Laughs] Yeah.

Bryce:             Exactly, right?  Every member stops giving tithing this thing can run in perpetuity, this church can run forever.

Thomas:         It really could, it seems like.

Bryce:             Yeah, forever.  Forever.  So very, very briefly to your second question, there are three things that I’ve found that the media has completely missed.  The very first of these is the liquidity with which the Mormon church can move this money.  So Exhibit R in the exposé illustrates the investment strategy and it says (quote) “the vast majority of the portfolio” (that’s EPA) “is in liquid instruments.  Within 3 months we could potentially liquidate close to 85% of the portfolio by selling into a normal market without substantial disruption.” 

At a moment’s notice they can pull something like $70 to $80 billion out of these funds and have that liquid money to throw around.  That’s an insane amount of money. 

Andrew:         Wow.

Bryce:             The second item, and this is probably the most crucial.  The whistleblower came to know information that may point to some shady business practices.  This is from the IRS complaint beginning on page 362, (quote):

“The whistleblower did, however, see evidence of shady EPA activity multiple times from 2011 to 2016.  One such example, Exhibit O, shows how a missing accounting control, segregation of duties, and a (quote, unquote) ‘worst practice,’ deleting receivables, together constituted a potential mechanism for dark money.  The mechanism was identified by the whistleblower and corrected by top management only to be intentionally reintroduced by top management once the attention had died down.  The whistleblower rediscovered the worst practice and missing control by accident years later and immediately raised the potential fraud flag.  Top management did respond immediately, however the person responsible for investigation were also the persons who had reinstated the worst practice in the first place.  To make a long story short, deleting receivables can constitute an effective way to make untraceable payments.”  (End quote)

Andrew:         Yeah, well combined – that was sort of where my mind went with respect to being able to churn out eight figures of liquid assets on sort of a moment’s notice.  That’s … yeah, that’s a little, uh… that would be worrisome if we were talking about Microsoft having access to this, right?

Bryce:             Yeah, right.

Andrew:         We compared the size of these assets to corporations that are in the top half of the Fortune 500, which is true, but most corporations do not have anything resembling that level of assets, let alone that level of liquid assets.

Bryce:             Right.

Andrew:         We’ve talked about the largest nonprofit endowment I know of is the one I cheekily referenced at the start, the Harvard endowment which was on the close order of $40 billion.  But the differences are, number one, much of that is in illiquid form.

Bryce:             Mm-hmm.

Andrew:         Number two, schools build buildings – which, not saying the Mormon church also builds buildings, the difference between building a research laboratory and building a temple is pretty significant.

Bryce:             Yeah.

Andrew:         So… alright. [Laughs]

Bryce:             Also, in addition to that, it all is benefiting from the shield of nonprofit religious entity, too, so they’re able to take in (quote, unquote) “donations” from anybody in the world, regardless of their financial ties, regardless of their business ties, regardless of anything they can take that money into the cogs of the Salt Lake City machine which then in turn influences, extensively, State politics and to some degree national politics. 

The Mormon church just announced that they’re building a temple in Russia, so that’s super cool.

Andrew:         [Laughs]

Bryce:             The third and final issue that the media completely missed, this is from Exhibit J, this is a letter that [Laughs] This is a letter that is written by Ensign Peak Advisors that they send to investment agencies looking to extend lines of credit to the EPA.  However, because the EPA books are absolutely closed to the public, [Laughs] apparently even to possible investors, the EPA has to ensure credit via other means.  So the letter says, (quote) “Ensign Peak does not distribute financial statements.  Assets, however, are well in excess of $5.0 billion, and Ensign Peak is essentially without debt” (end quote).

So the letter then refers possible investors into EPA to two banks that they can call to check the credit status of EPA.  One of them is the Bank of New York Mellon, the other is Zions First National Bank, which is the bank that the church owns.  Then at the bottom of the letter it says (quote) “EPA does not undertake obligations that it cannot fulfill.  I am sure that you will find that EPA has the highest credit rating in all respects” (end quote). 

Thomas:         Hmm.

Bryce:             And that is so godfather-esque, isn’t it? 

Andrew:         [Laughs]

Bryce:             You just call our buddies and they will tell you that we’re good for it.  That is their legitimate financial strategy.

Andrew:         And part of that is because – I wanna go back to the Harvard point.  Part of that is because when an educational institution needs to finance construction of new buildings, for example-

Bryce:             Right.

Andrew:         They typically will issue bonds.  To do that, to issue the bonds, they make public disclosures and disclosures to rating agencies like Standard and Poor’s, Moody’s, Fitch, and those disclosures are regulated by law, they’re independently audited and verified, so you have even in the world of nonprofits you have far more transparency when you’re talking about evaluating an educational institution as to opposed evaluating a church.

Bryce:             Yeah, and that’s kinda the highlight of everything we’ve discussed.  There needs to be transparency and maybe-

Thomas:         Well I’m sure Trump’s IRS will get right on this, right?

Bryce:             Yeah, right, and isn’t that the big question.

Thomas:         The one person and a bunch of spiderwebs that are in the top of it because he probably hasn’t staffed it or something.

Bryce:             Yeah.  But I mean in many ways there are positive ways to look at this.  Like I said earlier, there are a lot of people who are struggling to pay the electricity bill as it’s getting colder and colder and colder this time of year and they have to go and meet with their bishop and say “I’m a full and honest tithe payer” who are gonna see this story and say maybe the church can go for a few years without me giving tithing, because I’ve kinda gotta feed my kids.  It’s really, really bad optics.  At the top level this is just a really negative story about the church and it’s gonna take a while for them to kinda recover and this to slip away from the consciousness of people and millions of WaPo readers.

Andrew:         Alright!

Thomas:         Alright well Bryce, thanks so much as usual for coming on and Mormon-splaining to us.

Bryce:             [Laughs] Blakensplaining? 

Thomas:         [Laughs] I look forward to – I’m sure you gotta get your hands on that 15% of the additional tax.

Bryce:             Hey, I’m down with that!  Yes, yes please.

Thomas:         How cool would it be if the whistleblower got – what would that be, so whatever the tax of $100 billion would be and then up to 15% of that?  That’s a nice payday.  I wonder if that’ll happen.  We’ll have to see.

Bryce:             Yeah, oh yeah.  It would be really quite interesting.

Thomas:         Alright, well thank you so much Bryce.  Hey, where can people find you if they’d like to hear more of you Blankenagelsplaining?

Bryce:             Oh, I appreciate that!  So obviously this is such a huge topic, I do the serialized Mormon history, Naked Mormonism, but I also do a Mormon headlines show that’s Glassbox Podcast, so we’re doing a four-part series on Mormon money over on Glassbox Podcast right now, we’re talking all of the history of all of Mormon finances and we’re also going to be discussing a story that is not discussed at all and that’s how abuse that’s occurring within the church’s welfare program as well, so I’d refer everybody over to the Glassbox Podcast.  As always, thanks for having me on, guys!  This was really fun!

Thomas:         Hey thanks for comin’ on!  Definitely everybody go check that out!

[Segment Outro]

Thomas:         Okay, it’s time for Top Patron Tuesday, Andrew, and I believe it’s your turn first so why don’t you thank our amazing Hall of Famers, all time greats over at

[Patron Shoutouts]

Thomas:         Alright, thank you so much top patrons and now it’s time for the thrilling conclusion of T3BE!

T3BE – Answer

[Segment Intro]

Andrew:         Alright Thomas, so this was a question about what kind of instructions you can require the court to give in a criminal defense case.  So underlying facts, a defendant being tried for murder, woman who disappeared 10 years ago, no body.  Prosecutor has requested that the judge give the following instruction: a person missing and not heard from in the last seven years shall be presumed to be deceased.  Is that proper? 

You immediately narrowed it down to one no answer, no because mandatory presumptions are not allowed against a criminal defendant on an element of the charged crime, which was B.

Thomas:         Jeez, really loose use of the word “immediately,” but okay.

Andrew:         [Laughs]

Thomas:         It took like ten minute probably, yeah.

Andrew:         And D, a yes answer, yes because the defendant has a chance to rebut the presumption by offering evidence that the woman is alive or has been heard from in the last seven years before settling with B and I’m gonna cut through the pretense, Thomas you were exactly right!

Thomas:         Alright!

Andrew:         The answer is B.

Thomas:         Nice!  Wow!

Andrew:         This is one of those that I think you can make sense as you work backwards through the answers.  If you think about when you are charged with a crime you are under our core constitutional provisions of law, you are innocent until proven guilty beyond a reasonable doubt.

Thomas:         Mm-hmm.

Andrew:         So the Supreme Court has said key to that presumption of innocence is the idea that the judge can’t say oh by the way this element of the crime was definitely met so jury you’ve got to find in that favor.  Now you can move, when all of the factual elements of a crim are not in dispute you can move for a directed verdict, I don’t mean to suggest that, but here there’s an answer where there is reasonable wiggle room within the confines of a jury to go yeah, well, okay, she hasn’t been heard of in seven years, maybe she’s in the Himalayas? 

Thomas:         Hmm.

Andrew:         Who knows, you don’t want the court to usurp the role of the jury.

Thomas:         Yeah, yeah.

Andrew:         Even if you think the jury’s probably being stupid.

Thomas:         Mm-hmm.

Andrew:         That’s what innocent until proven guilty and the right to require-

Thomas:         But – I agree with all that but I think answer A could’ve maybe been that but I still needed to differentiate between the two no answers.

Andrew:         Yeah, so here’s what it says about answer option A, it says answer option A is incorrect.  It is true that the conclusion does not necessarily follow, but to be constitutional a presumption or inference does not have to be certain-

Thomas:         Hmm.

Andrew:         It only needs to be rational and follow more likely than not.  The presumption in the requested instruction meets the standard-

Thomas:         Oooh.

Andrew:         Of a judicial presumption, but it violates your due process rights.

Thomas:         Is it just because – gotcha, gotcha.  So there could be a similar presumption that’s just as certain in terms of it’s not 100% but it’s a presumption, however it would have to not be related to or on an element of the charged crime?

Andrew:         Exactly.

Thomas:         Okay, cool!  Nailed it!  I win! [Laughs]

Andrew:         Yeah, there you go!

Thomas:         It feels good to get that one, that was hard.

Andrew:         Nothing more that need be said, you won, you nailed it-

Thomas:         [Sighs] Ah!  Feels good!

Andrew:         -and you got it for the right reasons by working it out.

Thomas:         I’m gonna be a lawyer after all!  No.  [Laughs] Alright well let’s hop in that limited use time machine, find out who our big winner is this week!

[Segment Intro]

Andrew:         Alright Happy Holidays and this week’s winner is @the_brevity on Twitter who writes “I agree with Thomas on (B).  It flies in the face of the Confrontation Clause to presume an element of the crime.”  I think that’s a really, really interesting take and I do not know if the underlying cases site to the confrontation clause. 

The confrontation clause is the constitutional right to confront your accuser and if you have what is effectively a directed instruction on an element of a crime for which you have a presumption of innocence, and the State bears the burden of proof beyond a reasonable doubt, whether that’s also found in the penumbra of the confrontation clause I don’t know but I thought this interpretation was super interesting so congratulations to the_brevity, that’s why I picked you to win.  Everyone give @the_brevity, give them a follow on Twitter and congratulations on being this week’s holiday-themed winner!

[Segment Outro]

Thomas:         Alright, thanks so much for listening, thanks again to Bryce Blakenagel for coming on, check out his shows.  Bryce is such a great guy, can’t wait to see him again.  We got to see him in L.A., right?

Andrew:         Yeah.

Thomas:         That was fun.

Andrew:         He came down to L.A. and obviously if we got to Seattle Bryce’ll be there.

Thomas:         Well, pshh! Definitely!  Cool, I can’t wait!  Then we’ll have to do that.  I mean [Laughs] we can’t give anything away!  But we’ll definitely maybe have to do that live show.  Alright, we’ll see you folks, well I guess the day after Christmas!  Happy Holidays, Merry Christmas, Happy Kwanza-

Andrew:         All of it!

Thomas:         Happy, yeah!  Everything!  Hanukah, any holidays.  I guess happy holidays is a nice, convenient way to say, to wish everybody-

Andrew:         I love how that works!

Thomas:         Yeah!

Andrew:         Yeah!

Thomas:         And it doesn’t discriminate, it just wishes everybody, generically, a happy holiday, so there you go!  What a great thing to say, happy holidays everyone!  See you next time!

Andrew:         [Laughs] See you then!

[Show Outro]

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