M O R M O N S


                         An Invisible Empire:

                                       Mormon Money in California

 By: Jeffrey Kaye



The Mormon church, this American Zion, wields more economic power more effectively than the state of Israel or the pope in Rome..


For eleven years. ever since physicians removed his pituitary gland. the 71-year- old former electronics assembler has collected welfare. The deep scar on his right temple is a constant reminder of his doctors’ admonition that he’d never work again. But he does work—as much as six hours a day—although he never receives a paycheck, and the government has no record of his being on the welfare rolls.


Mr. Hillam (he doesn’t give out his first name to strangers) is one of 20,000 Californians who are recipients of a welfare program the government has nothing to do with. Every day. Mr. Hillam sits filling out numbers in a book in an office in a huge warehouse located in Sylmar in the rural north end of the San Fernando Valley. The storage rooms are stocked with goods. from blankets and clothes to meat, canned fruit, fresh vegetables and flour. Some of this is packed in cardboard boxes waiting to be shipped out to others on the welfare program. There are no prices on any of the items, and most are marked with a brand name never seen on a supermarket shelf: Deseret.


It is Mr. Hiliam’s job to note down dutifully how long each volunteer spends on what task and when. “As far as I’m concerned, he observes. “I’m not on welfare. I work for what I get.” Mr. Hillam. paid in the commodities stored at Sylmar. is on the receiving end of an intricate, nationwide system--- independent. self-sustaining, and, for all its worldliness, operated according to religious principles—those of The Church of Jesus Christ of Latter-day Saints, the Mormons.


The warehouse in Sylmar is one of 90 such distribution centers across the country seven in California alone. But the centers are only small specks in the vast multibillion-dollar empire controlled by the Mormon church.


The Mormons are among the fastest growing religious sects in the world. Ask any Mormon about his or her beliefs and he’ll gladly talk your ear off: follow up with a question about the church’s business holdings and there’ll be an uncomfortable silence. It’s not that they don’t want to tell you; they just don’t know, and they don’t care.


The truth about Mormon holdings is hard to come by. The church has investments all over the world, kept in a variety of privately held corporate entities. Very, very private. There’s a holding company, a couple of trust companies, hotels, apartment buildings, industrial parks, a securities company, a development company. a real estate section, insurance companies. radio and TV stations, newspapers. books, farms, land and more


This American Zion hasn’t a coin for it’s realm, nor the military perquisites and territorial sovereignty enjoyed by in state of Israel or the pope in Rome. Such trappings are unneeded. The Moron church wields more economic power more effectively than any other organized religion in the world. The church-run welfare system that supports mormon needy like Mr. Hillam is only one facet of a complex American phenomenon an institution that is as much a corporate conglomerate as it is one of the nation’s healthiest religions.


The church discourages public welfare, and therefore operates an internal support agency for its own “worthy poor”—all of whom (including Mr Hillam) are certified by their local hishops as actual church members who are legitimately in need. It is all part of a huge, worldwide system, concentrated in the West. According to the church, 110,306 Mormons were assisted by the welfare program in 1976. The church also donated cornmodities and labor during the Teton flood disaster in Idaho, one of the few times church reserves have been used to aid non-Mormons in distress.


In addition to agricultural commodities, Mormon factories turn out other items: detergent boxes in Los Angeles furniture in Klamath Falls, Oregon, toothpaste in Chicago, shoe polish in New Jersey and hosiery in Fort Worth. Then there are the canneries. In California, there are four: in Redwood City (fruit). Los Angeles (orange juice). San Diego (tuna) and Sacramento (chili and fruit).


“Bishops’ storehouses.” such as the Svlmar warehouse, are linked by a church- owned fleet of trucks Deseret Transportation—to more than 700 production projects, consisting chiefly of farms. The production projects are most entirely staffed by volunteer laborers. many of them church-welfare recipients required by the church to work (if they can). The rest of the workers are dedicated Mormons putting in an occasional few hours as their brothers’ keepers and getting approval from their church and their God.


The indelible mark the church has made on the state of Utah, where it maintains its headquarters. is common knowledge. However, next to Utah, the state with the largest Mormon population is California; the church claims 400.000 members there Two of the church’s sixteen temples are located in Oakland and Los Angeles. In looking at the affairs of any corporate establish the influence of any one group, hut there is one area of activity that serves as a better guidepost than any other ----- acquisition and ownership of that most precious of California commodities, land.


The commercial activities of the Mormon church have not escaped the attention of state and local authorities, who have increasingly denied the church its requests for exemptions from property A taxes. In California. 23 farms have applied for such exemptions in the last several years. but only two have received them--a 50-acre farm in Littlerock. near Palmdale. and one the same size in Santa Cruz County. In this state, a “welfare exemption” from property taxes may he granted if it is determined that the land is used for charitable purposes.


When the State Board of Equalization examined the church’s requests. it found that most of the land was not used exclusively for charity. Complains board attorney James M. Williams. “One can not take a normally secular activity [like farming ] and just because of the fact that the church does it, convert it into a religious tenet.”


The church has taken one board decision to court, and lost an exemption on 1.600 acres of orange orchards in Riverside County was denied. After lengthy pretrial proceedings and a three-day trial. Riverside Superior Court Judge Elwood M. Rich upheld the decision for the Board of Equalization. It was discovered that a large majority of the citrus produced at least 75 percent was not used in the welfare program at all, but was sold through a commercial 17 packing house to Sunkist Growers. Inc. The church decided not to appeal the decision, and is therefore paying full taxes on the $5.22 million operation.


A source knowledgeable about the church’s welfare program has told New West that “there is almost no project where they don’t sell 50 percent of what they produce on the open market. In many projects.” he added. “they sell as much as 80 or 90 percent.” The Riverside orchards are no exception.


In Stanislaus County. for example, the church runs the sprawling 2,305-acre   Patterson fa~m—with assets of almost $3 million. In one month last year. the farm sold nearly $360,000 worth of goods on the open market. The farm has had its application for a welfare exemption on property taxes turned down four

 years in a row.


The Mormon church operates farms throughout California’s rich agricultural belt,~stretching from Butte, Placer and Yuba counties in the north, down through the San Joaquin Valley to Riverside and San Diego counties in the south. Records on file with the Board of Equalization in Sacramento indicate that the combined assets of the 23 farms that have applied for property-tax exemptions over the last several years run to $12.3 million.


But those farms tell only a part of the story. New West surveyed the most populous areas of the state, incorporating nine of California’s 58 counties, and counted a staggering total of over $183- million worth of real property owned by the church. In addition to farms, the list includes schools, chapels, meeting halls. speculative property, canneries, factories, stores and a bank.


In Los Angeles County alone, The Church of Jesus Christ of Latter-day Saints .(LDS) owns land and property valued at $84.5 million.. Its holdings in other counties also run in the millions of dollars: San Diego ($18.1 million), Orange ($36.7 million), Santa Clara ($12.8 million), San Mateo/San Francisco ($4.4 million), Alameda ($14.3-million), and Sacramento/Yolo ($12.2-million).


Of all its holdings in those areas, the church is paying property taxes on less than one third. Exemptions on the remaining two thirds means $15 million in property taxes that might otherwise he collected never see the state coffers. Exemptions on temples and chapels are handled, on a county-by-county basis, and over all, the Mormons have had little or no difficulty in obtaining that standard kind of property-tax relief. The same is true for property used, according to the church, for educational and recreational activities, although these latter exemptions are now under new challenge.


Case in point: In a remote region of the Santa Cruz Mountains, there’s a 1,000 acre area owned by the church and known as Lehi Park—named after a prophet in the Book of Mormon. There are a few buildings on the property, and some roads, but most of it is rugged and mountainous. Mormon families from San Francisco use the land as a retreat; Boy Scout troops from San Jose camp there. The church has been paying property taxes on some of the land, but has only lately requested an exemption on all of it. Board of Equalization attorneys are skeptical--- especially following the Riverside orchard case—and after a field inspection, they requested from the church a batch of information concerning the use of the property. The board attorneys, stubborn and clearly sensitive to the pressure mounting from all sides to ease the tax burden, vow that they’ll do battle again in court, if it’s necessary to keep Lehi Park on the county’s active tax rolls.


Lehi Park is only one of numerous recreational sites the Mormon church owns throughout California, nearly all of which are exempt from property taxes. They range from 80-acre youth camps in Fresno, El Dorado and San Diego counties to ball parks. campsites and a recreational center in Sacramento. Combined land value: $3.6 million.


Then there are the 71 urban institutes in California run by the LDS church near or adjacent to colleges, universities and junior colleges—all tax exempt. As with any proselytizing organization, the Mormon church recognizes the recruitment potential of college students—accessible. open to new ideas, often looking for a cause. The institutes are important but expensive enterprises for the church. Balance sheets indicate that the combined assets of the California institutes are $14.07 million.


 It might seem strange, almost slightly blasphemous, to refer to a church as a corporation, but the analogy here is simply inescapable. The church is undeniable

corporate. At the top is the First Presidency, composed of the head of the church and his two counselors (vice-presidents). Current church head (akin to chief executive officer) is Spencer W. Kirriball, 83, a former insurance executive who, by virtue of his position, is believed by Mormons to be a prophet, seer and “revelator” with a hot line to God. His counselors are Nathan Eldon Tanner, 79, a one-time Canadian politician and utility-company executive, and Marion G. Romney. 80, a former Salt Lake City prosecutor and Utah legislator, and a cousin of former Michigan governor George Romney. In most church-owned establishments, somber portraits of the ruling triumvirate adorn the walls.


Below the First Presidency there’s a twelve-man board of directors (known as the Apostles, or the Council of the Twelve), and below them, there’s a complex

 strictly hierarchical structure. Although church literature and spokes-people

make much of thrift, frugality and the donation of surplus income to the cause (we will discuss tithing later), and despite claims that the few paid officials are given mere “living allowances,” records show that past church leaders were not exactly just “getting by” at the time of their deaths.


For instance, Harold B. Lee, the head of the church before Spencer Kimball, left an estate worth almost $711,000 when he died in December, 1973. At the time of his death, he was drawing payroll checks from the church, a church-owned insurance

company and a church-controlled department-store chain. According to Salt Lake County probate files, Lee’s predecessor, Joseph Fielding Smith, left a Utah estate valued at just short of $l million when he died in 1972.


But property and probate records tell only a part (though an important part) of the story. For devout Mormons, commitment to the cause is paramount measured out not only in time and energy but also in dollars. A Mormon pamphlet entitled The Law of Tithing asks: “Is it to be thought that we are to gain salvation without a price, without giving a paying for it.... After all, is not money myself? ....When a man gives his money, he is giving himself.”


According to a church spokesperson. 30 to 40 percent of the approximately 4- million people the church considers members apparently agree with those sentiments; they donate 10 percent of their gross income to the church. Some others in stocks, bonds and real estate. Church officials keep close tabs on who’s paying what. For members, the most immediate rewards are the “recommends” handed out by the local bishops— in effect, tickets certifying that members church’s temples, where the sacred rituals are performed.


In addition to the tithes, the church makes other financial demands on its members ----missionary funds, welfare assessments, contributions for buildings and other local operating costs. In the glimmering, 28-story church office building in Salt Lake City, almost seven floors are taken up with real estate, management.


Every year, the church completes 400 buildings worldwide—all of them on a cash basis. The church never takes out loans. One California city wanted a bond for a church improvement and asked for a a letter of credit from the Zions First National Bank—where the church is the largest depositor (the bank was once owned by the LDS church). Jokingly, the city attorney and the church representative agreed that a letter from the church would be better.


In the U.S., the church owns property in all 50 states; abroad, on every continent . At the churches’s real estate division in Salt Lake City, a dozen full-time agents supervise the buying and selling of property around the globe. Although the church will not publicly discuss such specifics, an interview with one knowledgeable inside source suggests that a total of 100 property transactions per week is probably very conservative.


The money that the church makes from selling real estate may be ploughed back into more property, or may be used for investments, welfare, or for any other  purposes designated by the church. In Caifornia, if a welfare exemption is granted

on property, no real estate taxes are paid. But any money accruing from the sale of that property must—by law— be earmarked for charitable purposes. This charitable purpose requirement is a law disregarded by the church and not policed

by the state. For instance, one source involved in Mormon real estate dealings told New West of exempt land sold by the church for $1 million, which went straight into the investment kitty.


 As with any privately held corporation, financial information about the church is closely guarded; only those at the top have the complete picture—and they’re not talking. The man most generally regarded as being the Mormon church’s financial wizard is N. Eldon Tanner. Because of his exalted position within the church, members speak in hushed tones in his presence and regard him with awe.


Taking time between meetings of the church’s expenditures committee and the Salt Lake City Rotary Club (Tanner has also been honored by the Salt Lake Area Chamber of Commerce this year as the “giant of our city”), Tanner playfully refused to answer questions about the church’s holdings.


New West. There was a story done by the Associated Press in which they estimated

the income of the church to be $3-million a day. They put the church in the top 50 corporations in the country. Were those estimates correct? Tanner. We just smiled when they did that. Leaning back in the desk chair of his austere office in the church’s four-story, granite administ-tration building in Salt Lake City, Tanner smiled faintly. Bespectacled, with a full head of slicked-back, graying hair, Tanner wore a rumpled brown suit that sported a Boy Scout pin in the lapel. “They’re guessing—big guesses,” he continued. “We just don’t disclose that. . . . There’s no reason for doing it.”


Mormons place great significance in ambition, striving and hard work, and are often found, out of proportion to their numbers, in prominent positions in all areas of society. But walk into any Mormon bookstore, and you’ll find that the most prominently displayed biographies, next to those of present and past church officials, are those of two of the church’s largest individual contributors: J. Willard Marriott and the Osmond family. Marriott is the owner of a $1-billion empire spanning 31 hotels and over 1,200 restaurants, including the Big Boy Coffee Shop, the Roy Rogers Family Restaurant, and the Farrell’s Ice Cream Parlor chains.


And the Osmonds . .. well, everybody knows about the Osmonds and their multimillion-dollar dynasty. Every week, American televisions are filled with the images of those glittering Osmond teeth belonging to those quintessential Mormons, Donny and Marie. The cherubic pair is the very embodiment of the Mormon ideal ---- wealthy, American, devout, white, patriotic, self-reliant, family-oriented, hard- working and overwhelmingly nice.


Purpose and hard work are the stuff of Mormonism. “Work is to be re- enthroned as the ruling principle of the lives of our church membership,” is a quotation often reprinted in church literature. Organization and industriousness permeate the Mormon society.


Five times a year. more than 5,000 devout Mormons pour into 33 Hartfield-Zodys department stores around California. Their mission is, as they see it, a religious one—to take inventory. The privately held department-store chain pays the wages directly to the church.


Two church officials in charge of the program were asked about the fact that Los Angeles County assessor’s records show that the Zodys store in Norwalk is actually owned by the Corporation of the President of The Church of Jesus Christ of Latter-day Saints (and valued at $1.35 million). One official replied flatly that that was not the case. The other a bishop, suggested, “I would investigate that. That would be highly suspect.” (A store spokesperson confirmed the fact that Hartfield-Zodys does lease the store from the church through an intermediary.)


The confusion among church members about the financial empire the Mormon church controls is a reflection, in part, of the way the leadership exercises its central control, particularly outside the state of Utah. Inside Utah, and in other areas where there is a large concentration of Mormons, the church dominates although not necessarily with a heavy hand. Recently. a speech on equal rights scheduled to be delivered by liberal television commentator Shana Alexander to Goodwill Industries in Nevada was canceled by Goodwill officials lest generous Mormon financial backing dry up.


As with any gigantic corporation, the church has accumulated some very real power, but the way it uses this power seems restrained, in keeping with its business outlook. The $188 million invested in stocks and bonds by the four church-owned insurance companies offers a clue as to the kind of church investments that are made on the whole. The investment portfolios span a wide range of companies throughout the country and appear much like any other corporate investment portfolio. Asked about the church’s criteria for investments, N. Fldon Tanner responded just like any other executive: “[We look] at the soundness of it, the revenue produced and the operating problems that it has. . . . We try very conscientiously not to invest in risk properties that haven’t been proven or established.”


A look at the way the church uses its power in the broadcast media is probably illustrative of the way it sees itself and exercises its influence. The radio stations owned by church-controlled Bonneville international generally play middle-of- the-road “beautiful music”—Muzak with commercials. The programming—at stations such as KBIG-FM in Los Angeles—is bland, uninspiring, noncontrover-

sial mediocrity. In the ratings battles, this format is proving to be a winner. That says as much about the church as it does about the radio stations.


And in the worldwide ratings-books constantly being revised by The Church of Jesus Christ of Latter-day Saints, its audience is growing. daily.—


SOURCE:

 NEW/WEST MAGAZINE. May 8, 1987, pgs. 32-41.


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