Utah AG ordered to pay for takeover of FLDS sect’s property trust

The state of Utah must help pay more than $5.5 million in past-due bills owed to an accountant appointed to run a polygamous sect’s property trust after it was taken over by the state, the Utah Supreme Court decided Friday.

The Salt Lake Tribune reports

The high court unanimously upheld a lower court ruling ordering Utah Attorney General Mark Shurtleff to kick in money to help pay the four years of debts, which are primarily owed to attorneys for accountant Bruce Wisan.

“Under the highly unusual circumstances surrounding the UEP trust … both the award of fees and the amount of the award were just and equitable,” according to the high court. Shurtleff initiated the takeover of the $110 million United Effort Plan trust in 2005 amid allegations of mismanagement by Warren Jeffs and other Fundamentalist Church of Jesus Christ of Latter-Day Saints trustees.

The justices came down firmly in favor Wisan, who argued it was unfair to expect private citizens to go years without being paid for court-appointed work. He was supposed to be paid from the trust itself, but has been legally barred from selling its property to pay himself since 2008.

Wisan’s “expenses were incurred for the benefit of the state because they were in the administration of a charitable trust,” the justices wrote, saying he has increased the value of the trust by more than his fees by seizing property that FLDS leaders tried to transfer out. […]

The Utah Supreme Court justices in Monday’s opinion faulted the attorney general who, they said, “undercut” Wisan’s efforts to collect money for his fees over the years, including Shurtleff’s 2009 offering of aproposed settlement that would have given almost all the trust back to the sect.

United Effort Plan

The United Effort Plan (UEP) property trust was created by the Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS) in 1942 on the concept of a “united order,” allowing followers to share in its assets.

This is a scene from the documentary film, Sons of Perdition. The documentary deals with the so-called ‘Lost Boys’ — young men kicked out of the FLDS by cult leader Warren Jeffs. This segment talks about Warren Jeff’s control over the FLDS community via the United Effort Plan trust.

Ex-members claim that FLDS cult leader Warren Jeffs has used the UEP to control the sect’s members.

Utah courts seized control of the trust in 2005 amid allegations by state attorneys that Jeffs and other faith leaders had mismanaged its assets.

Ever since, the trust has been the subject of ongoing legal battles.

Deseret News explains

Valued at more than $110 million, the trust holds most of the property and homes in the twin border towns of Hildale, Utah, and Colorado City, Ariz. The church also holds property in Bountiful, British Columbia, and Eldorado, Texas.

Members consider sharing its assets a religious principle and see state intervention in the trust as a violation of their religious rights. They have long been challenging the state takeover of the trust in both state and federal courts, where there have been different, conflicting rulings, leading the 10th Circuit Court of Appeals to take the case and issue an injunction to freeze all assets until the matter is resolved.

Meantime, the court-appointed special fiduciary, Bruce Wisan, and those working for and with him to manage the trust have gone unpaid, accruing bills totaling $5.7 million for the period of May 2008 to September 2011 alone. […]

When the state took control of the trust, Wisan and other managers were to be paid from funds generated by the trust itself, but that option has stalled due to the ongoing litigation.

The Salt Lake Tribune says

‘Interim Payment’

In its opinion, the Supreme Court of Utah says it does not disagree with Shurtleff’s argument that the fees incurred in administering the trust should ultimately be paid from the trust assets if at all possible.

As Deseret News points out, in theory the Utah Attorney General’s Office payment would be an interim payment until the trust itself can repay the fees.

Despite the now-epic and expensive court battle, Shurtleff said the takeover was still the right move.

“I don’t regret having gone and asked the court to remove Warren Jeffs,” he said Friday, though he added that more FLDS involvement from the beginning would have made things go more smoothly.

Jeffs, 56, is now serving a life prison sentence in Texas for sexually assaulting two underage girls he took as polygamous wives but is said to still control the sect and orchestrate the increasingly frequent excommunications of members.

‘Taxpayers shouldn’t have to pay this’

[Update, August 4, 2012] KSL TV says

As it stands, Shurtleff said his office will have to go to the Utah Legislature and ask for an appropriation of funds to pay what is owed. Shurtleff said he’s contacted the presidents of both the Utah House and Senate. But whether a special session will be needed is unclear.

“I’m disappointed, obviously,” he said Friday. “Because we obviously felt very strongly that taxpayers shouldn’t have to pay this or loan this money temporarily when the fiduciary understood it was to be paid out of the trust itself. But we lost and I respect the process.”

Shields said Wisan is “delighted” to have a unanimous decision on their side. He said those involved continued to work on the case out of a sense of duty to see the job through and echoed Shurtleff that the ultimate goal is to return the trust and its assets to the FLDS people.

“Our goal is to distribute the property to the people who built that property,” Shields said. “It’s going to be in the control of the people who built the property and they can do with it what they want.”

He said they are “optimistic” payment will come quickly.

Read the Supreme Court’s Opinion, 2012 UT 47 PDF file
More about the United Effort Plan
Research resources on the Warren Jeffs and other Fundamentalist Church of Jesus Christ of Latter-Day Saints


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Religion News Blog posted this on Saturday August 4, 2012.
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