Beneficial Life: The bailout members don’t know about, but should (the 600 million dollar scandal)

This is Beneficial Life[1].

They make money by selling insurance[2] and then investing the money while waiting to pay out for policies, like most insurance companies.

The company is run by the board of directors, who happen to be the prophets and apostles[3].

In 2009, Beneficial Life fired/laid off most of its employees[4] and decided it would no longer service new life insurance policies[5].

So what happened? Well, when the insurance company received the money for policies, it invested it in an area it thought was very very safe, but still making good returns. Namely, mortgage-backed securities[6].

So it was very similar to Lehman Brothers, Bear Sterns, Goldman Sachs, and Bank of America. It was also “too big to fail,” if you will, so the Deseret Management Corp gave it a cash infusion (more on this later).

So what gave the church the idea that they should invest in sub-prime mortgages:

“The deal has left local real-estate professionals shaking their heads. They say the land isn’t worth anything close to what the church paid.”

“Now the orphaned land of Avalea belongs to the church, and some local analysts say Shea and Fulton got off lucky.”

“It’s a phenomenal deal for the home builders, because very few buyers, I think, would be willing to pay that kind of money,”

Matt Baldwin, spokesman for Salt Lake City-based Property Reserve, did not return phone calls left last week, and neither did church officials.

http://www.rickross.com/reference/mormon/mormon568.html[7]

“Fulton Homes founder Ira Fulton is a high-profile Mormon and philanthropist who has donated more than $250 million combined to Arizona State University, the church-owned Brigham Young University and the University of Utah.”

Ah, so they gave the sub-prime builder money, and he then re-invested it into the church via tithing. This is known in other areas as “money laundering.” 10% return by investing your life insurance money in a member’s business makes perfect sense, unless the member is dealing with people who can never pay.

So why haven’t you heard about this by members? I don’t know, it was published in the Wall Street Journal[8]…

But I’d guess the reason that members think it is no big deal is that Deseret Management provided the $600 million. No tithing was used, we were assured over and over.

Except I have a co-worker who interviewed with a former VP of Beneficial Life. During the interview, this subject came up and the VP admitted that it was all tithing dollars.

“Even though tithing dollars were used, Beneficial Life will pay it all back” (paraphrase of the direct quote because memories are not precise). In fact, that is exactly why they continue to service the policies. It wasn’t just being nice to all the members who bought policies (because when the GAs die, they will need to pay out… this is a losing proposition), but because as the people who still have policies pay, the church gets a payback on the tithing dollars infused.

This is a pretty clear case of lying to membership on where tithing dollars go and how they are used. Giving loans that will be paid back can be considered “not tithing” when talking to the press. Well all those General Authority loans mentioned here[9] in a post yesterday become very suspicious.

As well as, “no tithing money was used in the building of the mall.”

Additional documentation:

http://www.insurance.utah.gov/docs/BLIC_Fin12-31-07.pdf[10]

http://www.rickross.com/reference/mormon/mormon568.html[11]

http://askville.amazon.com/Beneficial-Life-Insurance-stop-selling-life-insurance-policies/AnswerViewer.do?requestId=53969947[12]

http://askville.amazon.com/future-fore-Beneficial-Life-Insurance/AnswerViewer.do?requestId=53971739[13]

TL;DR: Church’s life insurance company went belly up in 2009 due to something akin to money laundering. The members were told tithing was not used in bailout, but my contact spoke to eye witness who admitted that not only was tithing used, but the slow-death is the cover up so they could claim no tithing money was used in financial numbers game.