An Oregon man who claims he was sexually molested as often as twice a week by his Mormon home teacher 20 years ago is seeking the net worth of the LDS Church so that he can ask a jury for an appropriate level of punitive damages. He thinks the church should pay $45 million.
Church finances are a closely guarded secret, withheld even from its own members. "It's the secret of secrets," said an attorney who represented another man against the church in 2001.
In the current case, the plaintiff alleges that a home teacher, Kenneth I. Johnson Jr., was acting in an official capacity. If that can be proved, it might be possible to get into the church's presumably deep pocket. The church counters that Johnson's visits were in the capacity of a family friend, not as a church officer.
We don't believe a word of the sex abuse allegation. Everybody knows that Mormon men don't do their home teaching -- certainly not twice a week.
But of course we jest. The serious question is whether the LDS Church should be required to disclose its bottom line. It clearly doesn't want to. In the 2001 case, for example, it avoided disclosure by settling with the plaintiff for $3 million.
On Monday, the Oregon Supreme Court rejected the church's argument that it should not have to reveal its private finances in the sex abuse case.
Civil litigation always comes down to money damages, generally in three classes. First come compensatory damages for actual out-of-pocket costs caused by a defendant's misdeeds -- damaged property, medical expenses, lost wages, etc. General damages are more vague but sometimes sought for pain and suffering or emotional distress. Finally come punitive damages, which are designed to make the wrongdoer suffer.
Establishing the amount of punitive damages can be a slippery proposition. Various formulas are employed depending upon a state's laws. In some cases, a multiplier of actual damages may be used. And it's quite common to weigh the wealth of the defendant. Ten dollars may be a lot for a poor person, while millions might be chump change for a huge corporation.
Remember the 79-year-old woman who spilled hot coffee into her lap at a McDonald's restaurant in 1992fi She got $160,000 in compensatory damages and $2.7 million in punitive damages, which was equal to two-days-worth of McDonald's total coffee sales. That was later reduced to three times compensatory damages, or $480,000. Ultimately, McDonald's settled in secret. No one knows for how much.
In Oregon, the LDS Church apparently did not argue the constitutional merits of the case. It may do so later. According to Stephen F. English, its attorney, "The church respects the rule of law but has profound constitutional concerns based on its constitutional right to protect the free expression of its religion."
It is not opening the books just yet.
But why shouldn't itfi What do church finances have to do with the free expression of religionfi
Some find it strange that rank-and-file Mormons are not privy to the financial workings of the church even though they may donate large sums of money through tithing and other offerings. They are called members, but membership has no privileges. Church members, unlike stockholders in a corporation, have no vote. The reward for their faith is generally intangible.
Many other churches have full disclosure.
Everybody knows the annual cash flow of the LDS Church is substantial. We've seen estimates ranging from $4 billion to $8 billion. It carries virtually no debt. There are plenty of people who are curious just how rich the church is and exactly how it spends its money.
Yet curiosity is not a good reason to expose private records to public scrutiny. That's one reason the Internal Revenue Service guards the proprietary information of companies and individuals.
At the very least, the timing of the request in Oregon seems poor. Juries can be prejudiced by receiving certain information too early. If disclosure of LDS finances is going to be required, why not at least wait to see if the man wins his casefi Disclosure in the pretrial phase seems unwarranted.
This may be nothing but a pressure tactic to get the church to settle early. Whether the church has constitutional grounds based on the exercise of religion remains to be seen.
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What do you thinkfi
Should the LDS Church be required to disclose its net worthfi Send your comments to dhpolls@heraldextra.com or call 344-2942. Please leave your name, hometown and phone number with your comments. E-mail comments should not exceed 100 words; voice-mail comments should be no longer than 30 seconds. Anonymous and unverifiable responses will not be published.
The Daily Herald will publish comments on July 22.
This story appeared in The Daily Herald on page A6.
Posted in Editorial on Thursday, July 12, 2007 11:00 pm
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