FLDS trust pursues Hildale's 'cash cow'

Western Precision: Questioned property sale lands polygamous town's largest employer in court

Salt Lake Tribune/April 26, 2006
By Brooke Adams

Hildale -- The 2002 Winter Olympics were months away when leaders of a Utah polygamous sect predicted the Games would bring cataclysmic destruction to the Salt Lake Valley.

To escape, faithful adherents of the Fundamentalist Church of Jesus Christ of Latter Day Saints were given 30 days to gather in Hildale and Colorado City, Ariz., the sect's stronghold in the Arizona Strip. Hundreds in the Salt Lake area packed up and moved as instructed.

Businesses relocated, too. Among them: Western Precision Inc., a high-tech machine shop that builds components for such products as bicycles, blood pumps and military aircraft. The firm, according to filings in a high-stakes court battle, once funneled as much as $100,000 a month to the FLDS church and its leaders.

The dispute, which is back in court on May 1, may tease apart the ties between the FLDS church, affiliated businesses and a property trust it once controlled - potentially setting a precedent that extends to hay farms, dairies, construction businesses and even new enclaves in other states.

Lawyers for Bruce R. Wisan, the court-appointed overseer now managing the trust, claim Western Precision was a "priesthood project business." Its multi-million dollar building, fixtures and the land it sits on, they argue, are assets of the United Effort Plan Trust, which holds virtually all property in the twin cities.

Wisan has supervised holdings in Utah, Arizona and British Columbia, valued at $111 million, since last May after the FLDS church, the trust and its leaders - among them fugitive leader Warren Jeffs - failed to answer two lawsuits that named them as defendants.

Wisan sued Western Precision a day after his appointment, alleging that months after the suits were filed former trustees wrongfully allowed the company to buy the property and building for $25,000 - a fraction of its real value, which he puts at $1.8 million to $5 million. The deal also didn't account for labor and materials contributed by FLDS members, he alleges.

Western Precision disputes Wisan's characterizations of the sale and the company's relationships with the FLDS church and the UEP trust.

The company claims it paid fairly for the land, owns the building that it paid for mostly with its own or borrowed funds and that members contributed willingly to the project. Wisan has overstepped his authority and does not have the right to challenge the sale, the company claims. In doing so, he has jeopardized the community's largest employer and inappropriately taken sides in what is, at heart, a religious battle.

Working together: The fundamentalist Mormons who settled here along the picturesque Vermillion Cliffs aspired to live in a "holy united order," pulling together in a communal effort to build church and community.

The United Effort Plan Trust was the centerpiece. Individuals worked to secure land and then put it to use for the good of all: housing, food, jobs provided based on the "just wants and needs" of faithful followers.

The FLDS, which counts 6,000 to 8,000 members today, used the same ethic to build its community in Bountiful, British Columbia. Beginning in late 2003, it is believed those precepts also guided creation of new locales in Texas, Colorado and South Dakota.

With no obvious means of generating revenue, it is speculated that funding for the new developments - such as a limestone temple in Eldorado, Texas, worth millions - has come from other FLDS-affiliated business, including, at least in the past, the first-rate machine shop now based in Hildale.

Attorneys for Western Precision told The Salt Lake Tribune the company made donations to the FLDS church and its leaders in the past but has not done so for two years. It denies taking pay from employees for the church, as some allege.

Based on court documents and interviews, that marks a sea change in Western Precision's previously instrumental role in supporting FLDS endeavors.

Funding the faith: Founded by Wendell Nielsen in 1981 in West Jordan, Western Precision is a lucrative enterprise with contracts spanning a range of fields: aerospace, military, automotive, mining, health and fitness and medical.

The firm merged in 1992 with another machining business, Utah Tool & Die. Then-FLDS leader Rulon Jeffs, who was president of Utah Tool, didn't see the need for two competing machine shops, according to John Nielsen, one of Wendell's sons.

Rulon Jeffs was put on Western Precision's payroll, said John Nielsen, who worked for Western Precision from 1981-1995. He also worked there 2002 to 2004, until he was ousted from the FLDS church.

John Nielsen said his father met regularly with Rulon Jeffs and quarterly gave him checks for $10,000 or more. It wasn't the only support the company gave the church.

Western Precision and several other FLDS-affiliated businesses jointly chartered a Lear jet to fly Rulon Jeffs to Canada and other places to tend church business, John Nielsen said. It also made contributions to Alta Academy, the now-defunct private FLDS school in Sandy that Warren Jeffs once led.

The move south: Then came the call to gather on the "consecrated and sacred lands" in southern Utah. Western Precision moved to Hildale at the same time, though its attorneys said the relocation was simply a business decision done with haste to prevent disruption of its operations.

According to others, Western Precision was following orders like everyone else.

"It was a major concern for Western Precision to be asked to move to Hildale when they did," said Winston Blackmore, a former UEP trustee who lives in British Columbia and is associated with a group that split from the FLDS.

"Wendell [Nielsen] spent quite a bit of time with his customers trying to explain the necessity of the move and worrying that he would lose a certain amount of them," Blackmore said. "He calculated freight costs and planned how he was going to offset the expense of being so far out of the way."

Western Precision got special dispensation to stretch the deadline, several sources said, because it was one of the church's "biggest cash cows." FLDS faithful rushed to ready a new 55,266-square-foot facility for the company on 3.3 acres on Hildale, which Western Precision agreed to lease for $200 a year.

"That building was built by this whole community like only a few projects I've seen in my life," said Merril Stubbs, an ex-FLDS member, in a February deposition taken in a separate court proceeding.

It was a "spectacular move," Blackmore said, with crews working around the clock.

'Largest work projects ever': James K. Tracy, one of Western Precision's attorneys, said the company poured "in excess of $1 million" of its own money into the new facility and paid some companies for their work.

But numerous FLDS businesses and craftsmen in the community - General Rock & Sand, L&M Equipment, Amerock, electricians, plumbers, stucco crews - also donated labor and equipment to finish the building, court documents said.

"It was a church-sponsored project and I worked, like others did, for the church without pay, to build up the UEP. That's what we were told we were doing," said Ezra Draper, who left the twin cities in 2003.

Richard Holm, asked to help by then-FLDS Bishop Fred Jessop, said his tractor-trailers hauled 10 to 12 loads of construction material and equipment.

Hundreds of people donated their time, resources and labor at Jessop's request, said Holm, who was ousted from the church in November 2003.

Jethro Barlow, a former FLDS member and once trusted accountant for the church, said the relocation of Western Precision to Hildale in a matter of weeks was "one of the largest work projects ever undertaken by the FLDS community."

Work continued over the next two years, with volunteer crews spending Saturdays finishing up and modifying the facility.

And employees donated pay to help the company and the church, which drew praise from FLDS leaders who held Western Precision out as a model for others, Holm and others said in court documents.

"There was a time when Wendell [Nielsen, Western Precision's founder] was starving his employees so that he could give their money to the church," Blackmore agreed in an e-mail. "He would tell his employees that they couldn't make payroll" because of the company's contributions to church leaders.

Some employees, Blackmore said, went for months "without a hundred dollars."

During at least one Saturday work project meeting - during which residents received voluntary community improvement assignments - a church leader announced Western Precision was contributing $50,000 a month, Holm said in a court document.

The company generated another $50,000 a month by getting employees to work for free on Saturdays, John Nielsen said. Stubbs makes similar claims in his deposition, describing wage cuts and donations Western Precision's employees made.

"Our position is that to the extent there was labor, energy, time and talent consecrated to the project, the trust should get the benefit of that, not Western Precision," said Jeffrey Shields, Wisan's attorney. "It was a UEP project, not a Western Precision project. They were using leverage and control of UEP members on what was designated a UEP project."

'Nothing unusual or improper': But that is not the way Western Precision sees it.

The company provides jobs for some 100 people who fill round-the-clock shifts. It is widely regarded for its quality work, in recent years garnering two awards as a defense contractor for its innovative business practices.

Western Precision said it sought to purchase its property, beginning in 2003, to calm vendors' concerns about its facility being on trust-owned land; it also wanted to be able to use the real estate as collateral for a $1 million loan. It wrapped up the deal in October 2004, receiving deeds to the land.

The price it paid per acre is more than the $2 million Wisan got for 436 acres of UEP land he sold in nearby Apple Valley last year, the company argues.

"There is simply nothing unusual or improper in this," the company said in legal documents. "The numerous conspiracy theories advanced and relied on by the special fiduciary . . . are incorrect."

Wisan notes that the lawsuits against the church, the trust and its leaders were filed months before the property sale.

Western Precision claims it knew nothing about the lawsuits, and acted in "good faith and for value" in its dealings with the trust.

If the former trustees acted negligently in selling the property, that does not make Western Precision liable, the company's attorneys said.

'Irony and injustice': The attorneys also refute claims in court documents that employees were called on to help support the church.

"As far as we have been able to determine, Western Precision did not take any portion of employees' paychecks and donate it to the church," said Steven J. McCardell, adding that if donations were made privately "that's their business."

Contributions made by FLDS members became Western Precision's property, intended to help it operate and finance its business, the company asserts in legal documents, and those who donated labor and resources did so of their own free will.

"The intention was always that it was to be Western Precision's building," McCardell said.

The company provides residents with jobs, income and benefits, which strengthens the community and the trust - benefits that routinely lead communities to dangle incentives such as tax breaks and favorable land deals to businesses, the attorneys point out.

John C. Wayman, who is general manager of Western Precision and acquired all its stock in January 2005, said neither the trust nor the Colorado City Improvement Association (an entity set up to manage trust leases) provided funds for its new facility.

While trust documents state improvements made to UEP property "become the property of the Trust and are consecrations to the Trust" and do not entitle an ownership claim, Western Precision maintains that language applies only to people "living on" the land.

But Barlow and others said that while some businesses were given long-term property leases, the UEP never sold property to a tenant - which would have been contrary to living in a "Holy United Order."

Western Precision believes Wisan has adopted an erroneous and "far-reaching view" that sees no separation between a church member's beliefs and business activities.

The "irony and injustice" is that Western Precision poured its own money and resources into its business - just like residents who were driven out of homes they built on UEP land by FLDS church leaders, Tracy said.

"That is exactly what Mr. Wisan is asking Western Precision to do," Tracy said. "They operate a legitimate business with a lot of clients and do really good work. Mr. Wisan sees assets there that somebody else paid for and wants to get them."

In short . . .

The history: Western Precision is located in Hildale, a polygamous community in southern Utah. It makes components for military, medical, fitness and other types of companies.

It moved onto community-held property in Hildale in early 2002 - just as the polygamous sect's leaders predicted the 2002 Winter Olympics would bring destruction to the Salt Lake Valley and ordered followers to move south.

The claims: Court-appointed fiduciary Bruce R. Wisan alleges Western Precision moved to buy its property from the church trust after it was targeted by two lawsuits. Wisan says the $25,000 Western Precision paid is a fraction of its real worth, which he pegs at somewhere between $1.8 million and $5 million. Western Precision argues it acted in good faith, paid fair value for the land and that Wisan has improperly brought his suit.

What's at stake: The case may set a precedent for determining the relationship between FLDS-affiliated businesses and the trust, which is now under Wisan's supervision.

What's next: Western Precision has asked 3rd District Judge Denise Lindberg to dismiss the lawsuit. She will consider that motion on May 1.