Catholic and Mormon Churches face new financial and legal charges
Pope Francis and Vatican face new clergy abuse lawsuit; Ex-Mormon Church investor alleges possible tax evasion
Within hours of each other, two major religious organizations found themselves facing new controversies one that could find the lawyers trying to drag the Catholic Church’s Pope into court and the other which could see the President of the Mormon Church possibly hauled off to jail.
In New York, seven sex abuse victims filed a class-action lawsuit against Pope Francis and the Vatican. In the filing, the plaintiff’s claim “seeks money damages for the negligence of the HOLY SEE in mandating a policy for its Bishops and Dioceses of secrecy and concealment in response to allegations and reports of child sexual abuse by Catholic clergy.”
The “Holy See” is the body that administers the operations of the Catholic Church through the Roman Curia which is the central government of the Catholic Church.
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The hierarchy of the Church of Jesus Christ of Latter-day Saints (LDS Church) is facing charges of tax avoidance with a former investment manager for the church claiming some $100 billion intended for charitable purposes, were used to stockpile wealth and fund a faltering insurance company, Beneficial Life, a subsidiary of Deseret Management Corporation, the for-profit arm of the LDS Church according to The Washington Post.
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The information came as the result of a complaint filed by David Nielsen, who worked until September as a senior portfolio manager for Ensign Peak Advisors, part of the church’s investment division.
Nonprofit organizations – which includes religious groups and organizations -- are exempt from paying taxes to the Internal Revenue Service (IRS) on income such as Sunday service donations from church members.
Ensign is registered with the IRS as a supporting organization/auxiliary of the Mormon Church. This ensures that Ensign operates exclusively for “religious, educational or other charitable purposes” which according to the Post is a condition that Nielsen says Ensign Peak Advisors has not met.
The LDS Church, if these charges are true, could be in violation of U.S. Tax Code, Title 26 section 7201 which makes it a crime to willfully attempt to evade assessment or payment of taxes. Penalties for those convicted of tax-related crimes under Title 26 of the U.S. Code include up to five years of imprisonment.
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Meanwhile, the lawsuit against the Pontiff and the Vatican is not a new attempt to have the larger Catholic Church held responsible for the years of sexual abuse by priests. Just this year alone, to date 26 separate cases have been reported by The New York Times involving individual Dioceses.
But one case similar to the today’s class action was filed in 2005 against the Vatican and then Pope Benedict XVI. The Justice Department told Federal District Court in Houston to dismiss a lawsuit accusing Pope Benedict of conspiring to cover up the sexual molestation because the pontiff has immunity as head of state of the Vatican City State. A similar 1994 lawsuit against Pope John Paul II, also filed in Texas, was dismissed
The costs of these legal cases have been mounting for the Catholic Church. A report from the U.S. Conference of Catholic Bishops released earlier this year stated that between June 2017 and June 2018 the Catholic Church in the United States spent a staggering $301.6 million on costs related to clergy sexual abuse. Settlements totaled $194 million and attorney fees tallied $30 million.
The 74-page document also noted a 132 percent increase in allegations and a 133 percent increase in victims reported over the previous 12 months.
This latest lawsuit in New York comes after the survivors had sued and settled with the Diocese of New York. The legal filing claims this case against the Vatican “are for money damages against the HOLY SEE, which, upon information and belief, were not released in the settlements of claims against the Dioceses.”
The Holy See – according to Time magazine – is estimated to be worth $15 billion with holdings in real estate and stocks.
Ironically on the day this suit was filed, Pope Francis abolished the Vatican’s secrecy rules. This move now gives legal authorities access to documents about sex abuse cases previously kept under wraps by the powers of the church.
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