When a Mormon city official voted to annex land for the city’s
Mormon Church, he likely abided by the letter of the law.
When a Mormon city official voted to annex land for the city’s Mormon Church, he likely abided by the letter of the law.
The spirit of the law is a bit more confusing, though.
Three years ago Planning Commissioner Tim Day – a candidate for City Council – voted to annex a piece of land in southwest Gilroy for the Church of Jesus Christ of Latter-day Saints. He said he voted on the matter because he had no direct financial interest: the condition set by the state’s Fair Political Practices Commission to determine whether city officials must recuse themselves from a vote.
It does not matter that Day works indirectly for the church, however, because the church is technically a nonprofit organization. This means Day was technically correct in his assertion that he did not stand to benefit financially from the land deal.
If the Mormon Church were a corporation, though, it would rank somewhere in the middle of the Fortune 500 due to its indeterminate billions in annual gross income from tithes and the sundry for-profit subsidiaries it owns.
From peanut farms to cattle ranches, soap manufacturers to radio stations, the Mormon Church has its hand in dozens of lucrative businesses. Aside from building churches and taking care of its staff, the church uses its annual income to reinvest in these businesses via its for-profit subsidiary, Deseret Management Corporation.
Deseret, in turn, owns Beneficial Financial Group, which is the insurance company Day works for.
But Day likened his situation to that of a Sierra Club member voting on an open space issue. It does not matter, he said, because there is no financial gain.
Regardless, when the church’s land annexation came before the planning commission Oct. 4, 2004, many people knew of Day’s personal involvement with the church: He oversees nine congregations in the South County area along with other unpaid, high-ranking church volunteers. But his professional financial connections were not discussed publicly.
Nor did they need to be, according to the FPPC bylaws and government reform advocate Bob Stern, president of the Center for Governmental Studies in Los Angeles.
The rules on the book, which the FPPC changes continually, generally forbid government officials from voting on an issue that could affect them financially, for better or worse. But since the Mormon Church is a nonprofit body it does not qualify as a “business entity” as defined by the FPPC.
Qualifying as a business is important because the commission’s code says “an official has an economic interest in a business entity which is a parent or subsidiary of, or is otherwise related to, a business entity in which the official has an interest.”
The Mormon Church is the parent of Deseret, which in turn is the parent of Beneficial Life Insurance Company.
“Thus while (Day) has an interest in the insurance company and could not vote on something affecting the interest of the insurance company,” Stern cautioned, “he can vote on something affecting the Mormon Church because it’s not a business entity.”
While Day apparently abided by the letter of the law, he questioned the spirit of it when it came to one of his colleagues earlier this year.
Day leveled criticism against fellow Commissioner Joan Spencer in February when he maintained that she had a conflict of interest in voting for a residential project that her boyfriend was developing. While the FPPC cleared her to vote, she ultimately decided to abstain. Day thought that was the right decision at the time.
“If I’m dating somebody, then I guess I’d have to say there is a potential down the line that I’m going to hold interest. But again, that’s something (Spencer) has to decide,” he said at the time. “There’s the letter of the law and then the spirit of the law.”
Spencer could not be reached for comment.
Another FPPC law prohibits officials from voting on a business that they also invest in.
Day is one of more than 13 million Mormons who pay 10 percent of their annual income to the church in compulsory tithes, but again since the church is a nonprofit, it is not technically a business, so this rule does not apply.
Either way, Day does not see tithing as a financial investment, only a spiritual one.
“We don’t see tithing as investment,” he said. “We see it as an obligation.”
All legal language aside, Day said his financial ties to the church are not arranged in a way that could help him. Plus, local church officials like himself receive no monetary compensation for their religious services, he said.
“The wealth that is held by the church has nothing to do with Beneficial,” he said. “Funds only flow one direction.”
Day was referring to the fact that Beneficial ultimately sends money to Salt Lake City, not the other way around.
Any potential gain the local church may reap from the land deal, then, might benefit the church (of which Beneficial is a part), but that cash certainly does not trickle back down to Deseret-owned companies such as Beneficial, Day said.
“I’m never going to get a financial gain from the church,” said Day, adding that he also consulted with the city’s Assistant Attorney, Jolie Houston, before the planning commission vote.
FPPC spokesman Roman Porter declined to comment on Day’s specific situation and said the commission handles all complaints and potential conflicts of interest on a case-by-case basis.
