The text of the letter:
We would like to reiterate the policies first stated in 1995 concerning the submission of names for proxy temple ordinances:
Our preeminent obligation is to seek out and identify our own ancestors. Those whose names are submitted for proxy temple ordinances should be related to the submitter.
Without exception, Church members must not submit for proxy temple ordinances any names from unauthorized groups, such as celebrities and Jewish Holocaust victims. If members do so, they may forfeit their New FamilySearch privileges. Other corrective action may also be taken.
Members are encouraged to participate in FamilySearch indexing which is vital to family history and temple work.
Bishops are asked to post this letter on their meetinghouse bulletin boards. Church members may seek the assistance of the family history consultants in their area for additional information, if needed. Name submission policies are also clearly stated on New.FamilySearch.org.
We appreciate the faithful adherence to these policies by all members of the Church.
Thomas S. Monson
Henry B. Eyring
Dieter F. Uchtdorf
The First Presidency
A letter signed by the First Presidency carries more weight than an ordinary statement from LDS Public Affairs. When the First Presidency speaks, it resonates with prophetic authority.
LDS Church News offers more background. According to Dennis C. Brimhall, managing director of the Church's Family History Department, the conditions of use for the New.FamilySearch.org website are simple and straightforward; namely, that users should not submit the names of nonrelated persons for vicarious temple ordinances, including names of celebrities or famous people, or those gathered from unapproved extraction projects. Chapter 5.4 of the Church Handbook of Instructions Volume 2 is cited as an additional reference. In the final analysis, Church members are best advised to submit for temple ordinances only the names of those verified to be in their direct ancestral line.
Personally, I would have circled the wagons and told critics to shove off. Although Abe Foxman of the Anti-Defamation League welcomed the First Presidency statement, they still call upon the Church to abandon the practice altogether. Perhaps Foxman might want to quit trying to police Mormonism and turn his attention back towards his own faith -- and the practice of metzizah b’ peh by ultra-Orthodox rabbis. Metzizah b’ peh, which is the process of a rabbi placing his mouth on a baby's penis after circumcision to remove the blood, has been linked to the transmission of herpes to circumcised babies; the New York Daily News recently reported on a baby who died of this condition in September 2011.
Nevertheless, part and parcel of sustaining the First Presidency in their callings is assuming that they know how to direct the LDS Church best. And what the Church has done here is to take one step backwards now into a more defensible perimeter, in order to take a couple of steps forward down the road. The public reaction to proxy baptism shows that there were many people still unfamiliar with the practice, and because of their unfamiliarity, many reacted with fear or scorn. Some opined that it is "ghoulish". This means more education is necessary.
But the media fixation on proxy baptism has aided us immeasurably in educating people about the ordinance -- and the Church. The end result is that some who otherwise would have expressed no interest in the LDS Church were undoubtedly moved to find out more about it. They may eventually join us, in which case, the lemon becomes transformed into lemonade at that point.