Love Israel "cult" goes bankrupt

March 4, 2003
By Rick Ross

55 former flower children that once refused to touch dollar bills, will now grow and/or sell almost anything to save their group from going under. But it may be too late.

The Love Israel Family once ran a bistro and wood milling business, but the profits disappeared. And their crop of cucumbers was destroyed by blight.

Was this all providence?

Faced with such failures, Love Israel, the man the group is named after, apparently has chosen the worldly way of Chapter 11 bankruptcy. This week the group used declared bankruptcy to protect itself from two banks beginning foreclosure on their Snohomish County ranch in Washington State.

They've been unable to pay back $3.2 million in loans, borrowed to pay old debts, wage legal battles, launch failed cottage industries and pursue various development plans.

The bankruptcy filing is the latest twist in the story of a group often called a "cult," that got its start on Queen Anne Hill in the 1960s and then moved to Snohomish County after a breakup, which members still call "the divorce."

Now, this aging remnant of former hippies that remained loyal to their leader Love Israel are facing a financial implosion, which might ultimately set them free from "cult" control.

But "Ammishaddai Israel" says what Love Israel created "was a culture" not a "cult." And the devoted follower raised five children on the 300-acre ranch. Many children have spent their entire lives within this group.

The Love Israel Family members live in canvas yurts, cabins, homes and a renovated barn connected by gravel paths in the woods.

They have names like "Honesty," "Brotherhood," "Calm" and "Pure." But their last name is always the same as their leader--Love Israel.

Love Israel, was born in Germany as Paul Erdman and founded the group in the heyday of flower power on Queen Anne hill.

In the late 1970s, the group bought the Snohomish County ranch and members homesteaded it in Army tents, tepees and buses.

Many members walked out though in 1983, when allegations surfaced about Love Israel's cocaine use and spendthrift ways, indulging in luxuries after one member turned over a large inheritance.

In that split most of the group's 350 members left. A small remnant clung to Love Israel and continued on even after losing their homes, a cannery, a horse ranch and other properties to settle a lawsuit.

The remaining members still have celebrations and weekly meetings where everyone sits in a circle and listens faithfully to Love Israel.

Now the "cult" leader and his remaining devoted remnant are looking for developers and cash to enable them to hang on to what's left of their ranch, valued at $6.5 million.

Chapters 11 Bankruptcy will buy them time and stave off creditors.

In what sounds like a self-fulfilled prophecy Love Israel says, "It's almost like this was meant to happen to get us back to ourselves." The former salesman is now 62 and admits "the cash flow died."

For years, the group juggled old loans and borrowed money for new ventures, hoping something would pull them out of the red. But nothing worked.

Love Israel even tried the worldly endeavor of custom home building with an $850,000 home finished with maple floors, a gourmet kitchen, jetted tubs, exposed beams and a wraparound porch. It's still for sale.

A wood milling business also failed.

"Serious Israel" says they are "learning how to be more practical."

A bank owed $1.6 million successfully sued the group to keep them from logging the property, to raise quick cash. Apparently the bank didn't want its collateral decimated.

Love Israel is reportedly even considering turning the ranch into a spa or resort.

However, the group has a history of zoning and building-permit violations. And authorities may not allow them to do much more.

Family members have lived illegally in everything from renovated duck coops to one-room cabins to homes in various stages of construction. One member named "Rejoice Israel" raised five children in a 450-square-foot canvas yurt.

Love Israel claims, "I want to not be involved in all that red tape and all the things people can get stuck in."

After so many failures perhaps that's best.

But his faithful remnant still want to believe their aging leader can somehow find a way to keep them together. These days, that means Love Israel, who can reportedly "talk a mile a minute," stays busy pitching investors, bankers and lawyers on his latest ideas.

Robert Balch, a University of Montana sociologist who studied the Love Family said, "I always called them the Teflon cult, because nothing ever stuck to them. Somehow they always managed to skate through."

But it looks like this bankruptcy may stick.

Note: Largely based upon "Bankruptcy may be Love Israel family's salvation," Seattle Post-Intelligencer, March 1, 2003 By Jennifer Langston