LDS Church is in a new era of whistleblowers, with $100B fund just the latest revelation

Madeline MacDonald’s bishop told her to stop speaking about sexual assaults and the Honor Code at Brigham Young University, and her roommates ceased talking to her.

But MacDonald found support from other members of The Church of Jesus Christ of Latter-day Saints, including ones in her congregation in Washington.

“It doesn’t feel like much of a betrayal of the church to blow the whistle,” MacDonald said, “because there is still a church community that will support you.”

When David A. Nielsen alleged recently in a complaint to the IRS that the church was violating tax laws by sitting on a $100 billion investment fund for which he used to work, it was another signal that an era of whistleblowing is dawning upon the 16 million-member faith.

[READ MORE: Excerpts show how the LDS Church tried to keep a lid on its $100B account, even freezing out apostle Boyd K. Parker]

Nielsen said in a statement late Friday that the public disclosures have come against his wishes by his twin brother, Lars Nielsen. Still, David has become the latest in a series of people who have complained — either publicly or to a governing agency — about a policy or practice within the church.

Because David Nielsen alleges laws were broken when he worked for the church’s investment arm, Ensign Peak Advisors, he may fall under the legal classification of a whistleblower.

Others — like MacDonald, former bishop Sam Young and leakers who supply documents to The Truth & Transparency Foundation, once known as “Mormon Leaks” — fit more into the wider definition of “whistleblower.” They don’t qualify for any legal protections or possible monetary awards, but they spoke up about something they saw as wrong.

Those willing to go public have had some recent successes in affecting change.

• Church-owned BYU created an amnesty policy several years ago for students who report sexual assaults, shielding them from Honor Code violations they may have committed when the alleged attacks occurred. MacDonald and other assault survivors at the university went public with their stories and called for change.

• In 2018, the church updated its policies on the bishops interviewing children to determine their worthiness. In some cases, the bishops asked children sexually explicit questions. The new policies encourage inviting a parent or another adult into the interviews.

• BYU students rallied hundreds of classmates, alumni, athletes and donors this spring to spur changes in how the school enforces its Honor Code. For instance, accused students now have a presumption of innocence and can know the name of their accuser unless that person’s safety might be at risk.

• BYU’s Idaho campus reversed an earlier policy last month and said it would allow students to use Medicaid. Less than two weeks earlier, the Rexburg school had sparked a firestorm when it announced that students could not use the government program to meet a health insurance requirement.

All four cases relied on the internet and social media to spread their concerns. Nielsen appears to have turned to digital documents to obtain evidence for his IRS complaint.

Exposure vs. loyalty

“It appears to me,” said Ryan McKnight, co-founder of The Truth & Transparency Foundation, “that [church leaders] don’t appreciate or understand the actual exposure they have to these types of whistleblowers or leaks.”

McKnight takes some credit for people feeling comfortable speaking out. Since its founding in 2017, his organization has published videos, documents, even apostle pay stubs from within the church. His website used some of that information in 2018 to compile a list of church investments totaling $32 billion.

McKnight said he doesn’t speak with everyone who supplies his organization with materials, but the ones he does talk to are typically bothered by the church being unwilling to disclose the information on its own — whether the documents are about money, policies or internal operations.

“It’s very rare that someone calls me with a claim that the church is doing something illegal,” McKnight said. “It’s usually more something that the tithe payers deserve to know about.”

A church spokesman declined to comment on whether it perceives an increase in whistleblowers or the denomination’s position toward them.

James Dungan, a postdoctoral researcher at the University of Chicago who studies moral psychology, said whistleblowers typically feel comfortable going against group norms.

“The primary characteristic of whistleblowers,” Dungan said, “is that concerns for fairness trump loyalty to a group.”

Lars Nielsen said he and his brother wrote a 74-page synopsis of the IRS complaint. The letter makes multiple references to the church having “violated the public trust” in its management of the investment fund. Calls for action include making church finances more transparent.

In a research paper earlier this year based on a survey of federal employees, Dungan and his colleagues found the institution plays a role in how an employee blows a whistle. If the business has internal avenues for reporting concerns — such as employee hotlines, ethics committees and open-door policies to report problems to supervisors — the worker may be satisfied keeping the matter in-house.

Without those internal options, Dungan said, the whistleblower may look for external venues to complain, such as a regulatory agency or the news media.

“The more fair that people perceive their company to be,” Dungan said, “the more likely they are going to stay with their company and the less likely we are to hear about some big scandal.”

Where’s the complaint box?

Latter-day Saints are typically advised to express concerns to their local lay leaders, who then can advance issues up through the church hierarchy.

McKnight said that fosters an internal complaint system that’s ambiguous at best. If members want the church to disclose its finances, for example, do they complain to their bishop? In the case of church employees, do they turn to a supervisor or their bishop?

“In a lot of these cases,” McKnight said, “there is no remedy even if [the whistleblower] would want one.”

Some who have challenged the church did not fare well.

In 1946, the church excommunicated historian Fawn Brodie after she wrote a biography of Mormon founder Joseph Smith called “No Man Knows My History” that painted him differently than official church accounts.

Helen Radkey was already an excommunicated Latter-day Saint when she began alerting Jewish groups that members were posthumously baptizing Holocaust victims, angering Jewish groups. Mormonism embraces baptisms for the dead. Members find the names of departed ancestors and perform proxy baptisms for them in their temples. Those souls, the doctrine holds, then can either accept or reject the ordinance.

For his part, Sam Young did see the church begin to let kids have another adult with them in bishop interviews, but he didn’t secure all the changes he wanted.

He was excommunicated for his “persistent, aggressive” protests and his verbal attacks on church leaders. In a phone interview Friday, Young said one reason he continued with his complaints — despite threats of discipline — was because there had been previous wrongs committed within the church, including Joseph Smith’s plural marriage to a 14-year-old girl in the 1840s.

Young said that past persuaded him to act in the present. And he believes whistleblowers beget whistleblowers.

“Once people start talking about things out in the open,” Young said, “everybody realizes it’s safe.”

MacDonald said she originally wanted the people responsible for handling her Honor Code case fired from their jobs at BYU. That didn’t happen, the 23-year-old said.

In fact, some of those employees have since been promoted. But she believes she helped bring about change and improve the culture at BYU and in the church.

“I don’t know if I’ve fixed something for every woman at BYU,” MacDonald said, “but I’ve heard from many women that I’ve helped them and their friends, and that’s how I measure my success.”

MacDonald said she has asked the church to remove her from its membership rolls.