Yes, it's settled. God saw no iniquity in Israel. That's why he spent ABOUT HALF THE OLD TESTAMENT REBUKING THEM FOR THEIR SINS AND WARNING THEM OF JUDGEMENT!
The reference is to Numbers 23:21. "He has not beheld iniquity in Jacob, neither has he seen perverseness in Israel." Commentators agree that this is reference to forgiveness, not blindness to sin.
Thus in the worst possible way the LCM indulges in the "free ticket to heaven/fire insurance with no responsibility" view for which they so long and mockingly excoriated the rest of Christianity!!
You just can't make this stuff up, folks. You cannot make it up.