Val Southwick, the CEO of VesCor who is in prison for swindling investors out of more than $180 million. The scheme took in many people in Utah, and many of the victims and at least some of the perpetrators are members of the Mormon Church. Last week the Salt Lake Tribune reported that Southwick had paid over $200,000 to the LDS Church in tithing, and that the LDS Church was now returning that money to be part of the restitution to the victims.
U.S. District Court filings show Val Southwick paid The Church of Jesus Christ of Latter-day Saints $202,761.74 between 2001 and 2006.
In 2008, the LDS Church Corporation of the Presidency agreed to return the money as part of a Securities and Exchange Commission enforcement action.
I don’t imagine $200,000 will go very far when the total amount stolen is more than $180,000 million, but it’s better than nothing. I note that $200,000 in 10% tithing would indicate an income of about $2 million over the course of seven years. It seems very unlikely that Southwick only kept $2 million of the $180 million for himself, so it sounds like he was lying to his church as well as his investors. What a guy.
The Salt Lake Tribune article noted that LDS Church spokesperson Scott Trotter says the LDS Church has a policy of not profiting from alleged ill-gotten gains. I find it interesting that the Church rejects donations derived from allegedly ill-gotten gains. To some degree this policy delegates authority to law enforcement officers and prosecutors. In this case, the initial determination of wrong-doing was made by a prosecutor or SEC officer, not the LDS Church. But the policy seems like a prudent one to me, both in terms of practicality and perception.
Last week the federal District Court for the District of Arizona dismissed claims against the Corporation of the President of the Church of Jesus Christ of Latter-day Saints (Mormon Church) by a member of the Fundamentalist Church of Jesus Christ of Latter-Day Saints, a polygamist sect led by Warren Jeffs that broke away from the Mormon Church. (Whew! Got those long names out of the way.) Last year Roland Cooke brought a civil rights complaint under 42 U.S.C. § 1983 against the Mormon Church and the FBI. (This case already sounds like a conspiracy theorist’s dream.) The action was later dismissed and then refiled against the Corporation of the President and the Corporation of the Presiding Bishop of the LDS Church.
Late last year the defendant organizations within the LDS Church filed a 12(b)(6) Motion to Dismiss, and it was granted last Friday. The District Court actually rejected the Mormon Church’s res judicata arguments, but granted dismissal on grounds that Mr. Cooke failed to state a claim under § 1983 for which relief could be granted:
In his amended complaint, Plaintiff fails to plead any facts sufficient to allow the Court to reasonably infer that Defendants were either “engaging in a traditional and exclusive public function [or] responding to state compulsion …” Plaintiff’s conclusory allegations of collusion amongst Defendants and the States of Utah and Arizona, as well as the allegation that his “property was confiscated and put in the care of … a member of the Mormon Church[,]” are not sufficient to permit the Court to infer any sort of invidious discrimination or actionable “joint participation” between the States of Utah and Arizona and the LDS Church (citations omitted).
The outcome perhaps should not be surprising, given that Mr. Cooke was acting pro se. Fortunately for Mr. Cooke, the Arizona District Court granted him leave to file another amended complaint to try to cure his pleading deficiencies. Unfortunately for Mr. Cooke, it will be very difficult to prove state action in the current scenario under the standard in Ashcroft v. Iqbal.
The excellent Howard Friedman of Religion Clause writes today that the Census Bureau has decided that the upcoming 2010 Census will not count Mormon missionaries who are living overseas. This was a big issue for the State of Utah, which narrowly missed gaining an extra congressional seat in 2000. Instead, the seat went to North Carolina, which has several military bases. Military service members living in other countries are counted in the census, but missionaries and other U.S. citizens living abroad are not. There are an estimated 11,000 Mormon missionaries from Utah that are living overseas. Utah challenged the census methods in a 2002 Supreme Court case, Utah v. Evans, but was unsuccessful.
The current Census Bureau policy counts military service members, federal employees, and citizens on merchant vessels. Other groups of U.S. citizens living abroad are not counted. Representative Bob Bishop (R-Utah) has opposed the policy as unfair an inaccurate. The most recent challenge to Census policies does not contest the counting of military members or federal employees, but instead argued that other groups (such as Mormon missionaries) should also be counted. I actually think this argument has some merit, particularly since the Census Bureau currently counts people on merchant vessels. Military service members and federal employees are serving their country, and may therefore be entitled to special treatment. But how is a crew member on a merchant vessel different from a missionary or a businessperson or a Peace Corp volunteer living abroad? The Census Bureau responds to these criticisms that they have found no feasible way to accurately count every American overseas.
There was a brief attempt earlier this year to change Census policies through congressional act, but the bill (S.160) (PDF) failed in the House when members of Congress attempted to use the bill as a vehicle to invalidate D.C.’s firearm restrictions.
Today is Pioneer Day, a day that is a state holiday in Utah and more or less ignored in the rest of the world. I actually think Pioneer Day is interesting, even though I’ve never so much as been to a Pioneer Day parade. Most major religions have their own specific holidays, complete with historical traditions and costumes. Pioneer Day gives Mormons their chance to remember historical events, dress up in old-timey clothing, have parades, and shoot off fireworks. What more could you ask for in a holiday?
The Pew Forum on Religion and Public Life chose this Pioneer Day to issue a report entitled “A Portrait of Mormons in the U.S.” The report is chock-full of interesting statistics that compare American Mormons with other religious traditions. Look for other Mormon bloggers to delve into this date in the next few days — it’s a wealth of interesting information.
Last week two gay men were arrested in the Main Street Plaza portion of Mormon Temple Square. Derek Jones and Matthew Aune were walking through the Plaza when one kissed the other on the cheek. They were then approached by security personnel asked to cease their public display of affection or to leave the premises. Apparently the Mormon Church has a policy against PDA in the area. Jones and Aune reportedly refused the request, responded with profanity, and were arrested for trespassing.
The background of the Plaza has been contentious. The Mormon Church purchased the land from the city in 2003 in a land swap deal, but the exchange was plagued by lawsuits almost from the get-go. The ACLU sued along with other parties, challenging the deal as unconstitutional because the Church could then limit speech on the property that had formerly been a public forum. The LDS Church eventually won the lawsuit and prohibited a variety of activities in the plaza, including protesting, smoking, sunbathing, and offensive conduct of any sort. The prohibition against protesting didn’t stop a group on Sunday that participated in a “kiss-in, ” but they were promptly shooed off the property when police arrived. No citations were issued.
As a matter of legal rights, I think the Mormon Church or any other private or religious organization is free to set whatever silly rules it wants. My only concern in this case is the issue of notice. I have visited Salt Lake City, but I don’t know if any signs are posted in the area with a code of conduct. Particularly given that the Plaza was once public property, some signage seems appropriate. Nevertheless, even without signage, this restriction is probably safely on the side of legality, even though it’s terrible PR. It’s also worth noting that the PDA rule is apparently enforced on both heterosexual and homosexual couples, though that doesn’t enter into my analysis of the policy’s legality.
For a first-hand discussion of the Plaza and the enforcement of the PDA rule, I recommend Ryan’s post on the subject Right Juris.
We would be remiss if we didn’t mention the new Utah state alcohol laws that took effect last week. While none of the blog’s current contributors live in Utah, it’s impossible to ignore the role that the Mormon Church has played in alcohol control policy in the state where a majority of the residents are at least nominally adherents to the faith. The new Utah laws abandon the 40-year-old requirement that bar patrons fill out an application, pay a fee and become a member of a private club. The private club rules were a quintessentially Utah oddity for many years, but they were most noticed during the 2002 Salt Lake Olympics.
I’ve never quite understood the rationale of the private club rule. By most accounts, the rule was not much of a barrier to drinking, and in some parts of the state (such as Park City) it wasn’t even enforced. So the private club rule doesn’t appear to have restricted alcohol consumption. It seems to have had more of a social stigma function, requiring drinkers to be “on a list.” In that respect, the updated law hasn’t changed much. The Associated Press reports:
The [Mormon] Church has always helped shape alcohol policy here, and the change to the law this year was no different. Only after consultation with church leaders and an agreement that DUI penalties would be stiffened, did lawmakers make progress on the changes.
As part of the agreement, Utah also became the only state in the country to require bars to scan the ID of anyone who appears to be 35 or younger to ensure their ID is valid. Bars store the information for a week so law enforcement can inspect it.
Anyone who has an ID that doesn’t properly scan is required to fill out a form logging their presence at the bar.
Utah alcohol laws still have quite a few quirks. That same AP article notes that flavored malt beverages may not be sold at grocery or convenience stores, the percentage of alcohol in beer is capped at 3.2%, happy hours are illegal, and cocktails must be mixed out of the sight of customers.
As a policy matter, I think the new law is at least a step in the right direction, particularly the harsher DUI penalties. I would rather see some more creative solutions, such as those that I discussed earlier this year involving alcohol tax equal to the average marginal social cost of each drink.
I’ve heard several people cite the statistic that Utah has one of the highest bankruptcy law in the nation as evidence that members of the Mormon Church are falling into the consumerist trap and “living outside their means.” I’ve always thought that was a strange assertion; I don’t live in Utah, but I’ve traveled there on occasion and I never saw anything that indicated that Utah residents spent more or less of their incomes than residents of other states. Apparently I wasn’t the only one suspicious of this oft-quoted statistic — two Brigham Young University professors of economics have an article in The Journal of Law & Economics that at least in part dispels that myth.
In their article entitled “Explaining the Puzzle of Cross‐State Differences in Bankruptcy Rates,” Lars Lefgren and Frank McIntyre make the argument that the variation in bankruptcy rates is due primarily to differences in state laws. Specifically, they found that laws governing the garnishment of wages significantly impacted bankruptcy rates. This actually makes a lot of sense — if your state’s laws prevent your creditors from garnishing your wages, you are less likely to need the the protections afforded by filing bankruptcy. On the other hand, if your creditors can get at your paycheck, you have a strong incentive to file for bankruptcy as soon as possible. Lefgren and McIntyre also found, somewhat unsurprisingly, that rates of bankruptcy were highest in areas where the median household income was between $30,000 and $60,000.
So it appears that Utah’s relatively high rate of bankruptcy (7.05 per thousand households) has more to do with its laws allowing creditors to garnish the wages of debtors than it does a particular trend among Utah residents or a Mormon subset of that population. Utah allows up to the federal limit of 25% of wages to be garnished, although it does impose a 6-month limit. In the Southeastern United States where I live, many states use the federal garnishment limit and have similarly high bankruptcy rates. Tennessee leads the pack with 8.12 bankruptcies per thousand households, with Alabama (7.42) and Georgia (7.38) not far behind.
The article is a bit dense, but it does a good job at dispelling some of the myth that Utah residents are spending like there’s no tomorrow. The bankruptcy data doesn’t support that assertion, and in fact, it turns out that the state-by-state data isn’t very useful to map trends, due to the differences in state laws.
Lefgren and McIntyre’s article is currently available for free on the J.L. & Econ website in both HTML and PDF.
Last month we posted about Utah Governor Jon Huntsman’s veto of an ineffectual bill that purported to prevent the sale of M-rated video games to minors. The driving force behind that bill was Jack Thompson, a now disbarred lawyer from Florida who is controversial for the tactics he uses in his campaign against violence and sex in video games. The Salt Lake Tribune is now reporting that Thompson is being threatened with legal action under the federal CAN-SPAM Act for unwanted emails sent to Utah State Senate President Michael Waddoups. Apparently Waddoups was on Thompson’s mailing list and asked to be removed, but Thompson refused. The Senate Site blog, which calls itself “The Unofficial Voice of the Utah Senate Majority,” provides some clarification with an email exchange between Thompson and Waddoups. Apparently Thompson sent an email out that highlighted certain images that were not particularly safe for work, which was the impetus for Waddoups’ removal request.
While this drama goes on, I think it’s important to note that you almost never see the CAN-SPAM Act enforced on a single spammer. The CAN-SPAM Act of 2003 governs commercial emails and prohibits false or misleading header information (To: and From: fields, etc.) and deceptive subject lines. There are also specific requirements that email advertisements be identified as such. Most relevant to this situation is the requirement that email recipients be given an opt-out method. Thompson apparently is refusing to let Waddoups opt out of the emails, thus violating that part of the Act.*
If you are a competent Internet user and have an email account, you have likely noticed that your junk mail folder regularly receives emails that violate these rules. This is due in large part to the fact that the CAN-SPAM Act provides no private cause of action against spammers. It can only be enforced by parties such as the Federal Trade Commission, the Department of Justice, or specific internet service providers. People like you and me can’t sue for the email spam we receive. I don’t know if this is a good thing or a bad thing, but that’s how the Act is written.
For the most part, only flagrant or notorious spammers are sued or prosecuted under the CAN-SPAM Act. However, a defiant and disreputable character like Jack Thompson going up against the head of a state senate seems like one of the few situations in which an individual case of spamming might be enforced, either through FTC fines or by criminal prosecution by the DoJ. However, the email must first be considered commercial in order to fall under the CAN-SPAM Act. I doubt CAN-SPAM applies to an email sent to a legislator advocating a particular issue or viewpoint, as this email seems to have done. We’ll wait and see what happens next. __________________________________________ * The CAN-SPAM Act also has specific provisions applying to sexually explicit commercial emails, but I don’t think that applies here because accroding to The Senate Site blog, the communication at issue is probably not sexually explicit.
This weekend is the LDS Annual General Conference, and there will be various events for just about everyone to participate in. The J. Reuben Clark Law Society is hosting a reception in between the morning and afternoon sessions of conference on Saturday, April 4, in the Joseph Smith Memorial Building. All JRCLS members are invited to attend, and you can register here.
If you aren’t a JRCLS member or can’t attend, you can still see some exciting legal events throughout the weekend on the sidewalks surrounding Temple Square. Every year dozens of protesters turn out to condemn Mormons as they attend the conference, so you’ll have a front row seat to the clash of prescient legal issues like free speech, property law, defamation, and separation of church and state.
However, if you’re like most of us, you won’t be anywhere near Salt Lake City this weekend. I’ll be watching General Conference online, and maybe on TV if I can find it on satellite somewhere. The Mormon blogging scene (sometimes known as the “Bloggernacle,” a term I dislike) always goes into overdrive over Conference Weekend. Some of the well-known Mormon blogs like Times & Seasons and By Common Consent usually carry open comment threads for communal live-blogging. They’ve been pretty entertaining in years past, so check them out.
As far as the actual conference itself, the lawyer-types can look forward to addresses by Elders Dallin Oaks, Todd Christopherson, and Quentin Cook. Their addresses are always interesting to me because of the occasional use of legal language or metaphors that add an additional subtext. And if you’ve ever seen a transcript of one of Elder Oaks’ talks, you know that they almost resemble law journal articles, complete with Roman numeral headings and extensive footnotes. One of the highlights of this conference will inevitably be the announcement of a new Mormon Apostle to replace Joseph B. Wirthlin who died late last year. Last time there were vacancies in the Quorum of the Twelve they were replaced by two attorneys. That probably won’t happen again, however. Some might say that there aren’t any good attorneys left. Photo credit: Geoff Belknap
Various tech blogs are reporting that Utah Governor Jon Huntsman has vetoed a bill that purported to impose harsh penalties on retailers that sold M-rated video games to underage buyers. Among other penalties, the bill would have provided for seller liability in a civil suit. However, as critics of the bill have pointed out all through the legislative process, the proposed provision had a gaping loophole that would have allowed retailers to opt out of the ratings system altogether. In addition to ineffective problems, the bill likely would not have passed constitutional muster because the language was so imprecise and was not content-neutral. That was the reason cited by Governor Huntsman when he vetoed the bill yesterday. In his accompanying letter (PDF), Huntsman specifically stated his opinion that the bill violated the Dormant Commerce Clause and/or the First Amendment.
The video game bill, HB353, had very broad support in both the Utah House and Senate, so there is still a chance of a legislative override. However, I hope that isn’t the case. Legislation like this is often popular in conservative jurisdictions like Utah, but there’s no point in passing an unconstitutional law that won’t accomplish anything. Additionally, this bill has a strange pedigree, as it was purportedly drafted by Jack Thompson, a controversial disbarred Florida lawyer who has campaigned in several states for laws against video games.