Cover Up: Mormon Church Reveals $190k in Previously Unreported Prop 8 Expenditures

In a classic Friday night news dump, the Mormon Church released a report late yesterday that reveals at least $190,000 in previously unreported expenditures in the Proposition 8 campaign to repeal gays’ right to marry in California. Failure to disclose campaign expenses is illegal, and these expenditures were not reported in an earlier filing.

The report included a $96,849 charge for “compensated staff time” for church employees who worked on Prop 8.

The report was released in response to a complaint filed in November by Fred Karger of Californians Against Hate. In the sworn complaint, Karger contended that “the Mormon Church organized phone banks from Utah and Idaho, sent direct mail to voters, transported people to California over several weekends, used the LDS NewsRoom to send out news releases to promote their activities, walked precincts, ran a speakers bureau, distributed thousands of lawn signs and other campaign material, organized a ‘surge to election day,’ had church leaders travel to California, set up very elaborate web sites, produced at least nine commercials and four other video broadcasts and conducted at least two satellite simulcasts over five Western states.”

Karger’s complaint underscored that these activities were targeted, not at church members, but at the general public, which classifies the communications as political propaganda. Churches risk losing their nonprofit status if they engage in partisan politicking.

The document filed late on Friday appeared to bolster Karger’s allegations:

The report … listed a variety of California travel expenses for high-ranking members of the Church of Jesus Christ of Latter-day Saints and included $20,575 for use of facilities and equipment at the church’s Salt Lake City headquarters and a $96,849 charge for “compensated staff time” for church employees who worked on matters pertaining to Prop 8.

“This is exactly what we were talking about when we filed the suit,” said [Karger].

“They said they reported all their travel … now, when there is a [complaint filed] they disclose 25 Southwest tickets just in October,” Karger said, in a Los Angeles Times report. “They were required to report this,” he said.

Church spokesmen have not yet responded to reporters’ questions about the report, which has prompted speculation that the church has something to hide.

Mormon leaders in Utah and elsewhere have been accused of politicking during the campaign when they urged church members to contribute to the fight to strip the right to marry from California gays. Judging by the results, the accusations appear to be correct. At their leaders’ behest, Mormon contributions made up about half Prop 8’s budget of $40 million.

Here’s the pertinent section (PDF) of the IRS law regulating non-profit corporations:

In general, no organization, including a church, may qualify for IRC section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). An IRC section 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.

If the church were to lose its 501(c)(3) status, it would have to start paying taxes on holdings said to be worth at least $13 billion, including the world’s largest beef ranch, near Orlando, Fla., and Bonneville International, a wholly owned radio network with stations that broadcast mainstream rock ‘n roll, country music and right-wing talk radio in Los Angeles, Chicago, Washington and other markets.

12 Comments

  • nikolai
    January 31, 2009 - 10:10 am | Permalink

    In an old Fabulous Furry Freak Brothers comic the CIA sprays a chemical called “Yoo-Hoo” which turns you gay, high over the City of San Francisco. VIOLA! It works and the whole city is gay.

    Wouldn’t it be a hoot to spray “Yoo-Hoo” over Utah?!

  • kd5jos
    January 31, 2009 - 11:23 am | Permalink

    “if a substantial part of its activities is attempting to influence legislation”

    “holdings said to be worth at least $13 billion”

    “$20,575 for use of facilities and equipment at the church’s Salt Lake City headquarters and a $96,849 charge for “compensated staff time”

    117,000/13,000,000,000 = .0009%

    “An IRC section 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.”

    I have a hard time believing this qualifies as anybodies definition of substantial. They probably broke the law by not reporting it. That was stupid on their part. They’ll probably be fined as that’s the easy way to deal with a first time minor infraction. If there is more to this though, this opinion will change based on the magnitude of the infraction.

  • nikolai
    January 31, 2009 - 12:00 pm | Permalink

    GASP! You mean these good Mormons didn’t work GRATIS???

    May their thro*ts be slit from e*r to e*r!

  • Madison
    January 31, 2009 - 12:15 pm | Permalink

    kd5jos, Expenditures do not qualify as anybody’s definition of “activities.”

    Bush tried to yank the nonprofit status of a church in Pasadena in 2004 because a pastor gave one (1) antiwar sermon. The Mormons planned and executed part of a $40 million political campaign in their Salt Lake City headquarters.

    However, you are right that nothing whatsoever will come from this.

  • allthetime
    January 31, 2009 - 1:35 pm | Permalink

    In reply to kd5jos,

    You didn’t read it correctly. The amount you mention is only the UNREPORTED amount recently disclosed. THAT simply adds to the strengh of the lawsuit against the Mormons.

    Later it reads:

    “At their leaders’ behest, Mormon contributions made up about half Prop 8’s budget of $40 million.” So they spent $20 MILLION!

    That brings it to .0015% Still doesn’t seem like much, but is substantially larger. And no where does anything state that to calculate substantial activity, you have to compare the amount donated to a single issue to the organizations total net worth.

    The court would have to consider that in this case, they donated a full 50% of a very large budget. Making their activities VERY substantial for this highly charged issue. It should be enough to knock them around a bit, if laws were fairly enforced. But I’m sure that the Reich-Wing will jump to the defense of the ones responsible for beating down one of their favorite whipping posts.

  • January 31, 2009 - 4:56 pm | Permalink

    Mormons spend 20 million fighting gay marriage and NOTHING to stop polygamy in Utah.

    Shame on the Mormons!!!

  • January 31, 2009 - 4:58 pm | Permalink

    Watch this clip if you want to see how shameless Mormons ignore slavery in Utah.

    http://www.bankingonheaven.com/

  • Garryinnola
    February 2, 2009 - 11:43 am | Permalink

    In my opinion no church or religious organization should be allowed to lobby at all. They may influence their members or have whatever rules and regulations they choose internally but when they start trying to change the law in a given political juristiction or nationwide, they should be prohibited from doing that or lose their tax-exempt status. Ditto for campaigning for candidates or political parties. In my opinion, the IRS code is far too lenient.

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  • Jeff Phillips
    December 10, 2009 - 12:07 am | Permalink

    The $20 million (half of $40 million of proposal 8’s budget) came from individual members of the church contributing — albiet muchly in response to the church’s own campaign. However the church certainly in no way gave a $20 million check to the proposal 8 budget.

    $190,000 was initially unreported, probably because the break down of those sorts of expenses fell into categories that the church leaders in those various rolls commonly incur anyway — travel expenses, etc. etc. for activities typically unrelated to Proposal 8. Where does the $190,000 figure come from, the accusator or the defendant organization? Once the church had been pointed out that various expenses hadn’t been counted in their report, they responded with a corrected report.

    I would guess that the reported expenses are more substantial than the omitted expenses, but I doubt the church’s direct contribution in terms of its own campaigning would be over $1 million… Probably short of half a million more likely. But even if it were a full million in direct expenses the church incurred, that would still only be 1million/13billion = .0000769 % of their total bottom line. I am quite certain the IRS would not consider this to be a substantial concern.

    But even if they did, the church’s position on gay marriage is so important to its core beliefs that I believe the church would be willing to give up its tax exempt status and actually be willing to pay taxes if it absolutely had to in order to continue its fight on gay marriage.

    And for the record, I’m gay, and I’m mormon… and I see nothing wrong with the church for its position on proposal 8, although it may not be the same as my own. It has a purpose in what it is, just as I have a purpose in who I am.

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