Polygamist sect's finances are murky

Associated Press/May 16, 2008

Eldorado, Texas - In just five years, the West Texas polygamist sect transformed 1,700 acres of scrubland purchased for $700,000 into a bustling ranch with a blazing-white limestone temple, sprawling three-story log cabins, woodworking shops and a dairy.

Assessed value of the property now: $20.5 million.

How did members of the Fundamentalist Church of Jesus Christ of Latter Day Saints do it?

Sweat equity was clearly one factor. The men quarried limestone themselves from the hard ground and built the enormous homes with their own hands, using skills learned at construction companies close to the sect's main base of operations, on the Arizona-Utah line.

But as for where they got the money for building materials, dump trucks, rock-cutting equipment and other supplies, that is still something of a mystery.

"Who funded it? We're investigating. That's for dang sure," said Jeff Shields, a court-appointed lawyer studying the sect's finances.

Some suspect the FLDS supplied money to Eldorado from a $114 million trust fund that once included all the homes and land in the side-by-side FLDS towns of Hildale, Utah, and Colorado City, Ariz. Money may also have come from construction businesses and other ventures run by sect members, including an aircraft wheel and brake manufacturer in Nevada that holds a $1.2 million Pentagon contract, and an engineering firm that landed $11.3 million in work from Las Vegas water authorities.

Questions about the source of the sect's money have been swirling around the FLDS since Texas authorities raided their Yearning for Zion ranch last month and seized more than 460 youngsters because of evidence that the sect has been marrying off underage girls to older men.

The renegade Mormon splinter group bought the property for $412 an acre in 2003 and rapidly turned it into a self-contained home for roughly 700 people, with rows of planted vegetables and other farming enterprises, a dairy that produces milk and cheese, and shops for cabinetmaking and other woodworking — all to supply the ranch, not to turn a profit on the outside.

Enormous homes went up in a matter of weeks, and when the temple was built, at least 200 men swarmed to the property to cut rock from the soil and assemble the gleaming 80-foot house of worship, said J.D. Doyle, a pilot who has taken hundreds of photos of the ranch's development from his small plane. With the natural clay soil useless for farming, sect members brought in black dirt to grow vegetables.

"They worked around the clock. They can put up a 21,000-square-foot house in 2 1/2 weeks. Move in and have it perfect," Doyle said. "It was amazing to us to watch them do this."

The sect paid $424,000 in property taxes last year, or about 18 percent of Schleicher County's annual revenue. It is the third-biggest taxpayer in the county, behind two pieces of land that produce oil. Although FLDS is a church, it never sought tax-exempt status in Texas or in other Southwest states in which it operates.

Judge Johnny Griffin, the county's chief executive, said that as far as he knows, ranch residents paid their tax bill on time and without complaint.

FLDS spokesman and attorney Rod Parker said he doesn't know how the ranch and equipment were purchased or why the insular group never sought tax-exempt status.

The four men listed on Yearning for Zion corporate documents have no listed phone numbers in Texas, and the numbers for the Utah businesses controlled by David S. Allred, the member who scoped out the property first, have been disconnected.

Court-appointed accountants are trying to figure out if some of the money came from a trust fund now under government control.

The trust, set up in the 1940s, covered essentially everything in Hildale and Colorado City. In 2005, however, a Utah judge appointed an accountant to dissolve the trust after state attorneys argued that the sect's prophet, Warren Jeffs, and other leaders were using the assets for their own benefit.

Jeffs was arrested in 2006 and is serving up to life in prison after being convicted in Utah as an accomplice to rape for arranging the marriage of a 14-year-old girl to an older man.

Shields, an attorney on the trust case, said there has never been a full accounting of the trust assets because church leaders refused to turn over documents or answer questions. Even the identities of the trustees are a mystery; more than half are listed as "unnamed" in court documents.

The court-appointed lawyers overseeing the trust have subpoenaed any financial records state troopers may have seized in the April 3 raid on the Texas ranch.

"We have good cause to believe there's something relevant to what we're doing up here," Shields said.

Parker called such links "fantasies" and denied any trust money was used to fund the ranch.

The sect has other sources of money beyond the trust. Former members and experts on the sect say it encourages members to sign over any earnings from outside jobs to church leaders. In return, the church gives followers housing, clothes and food.

Within FLDS, "nobody owns anything. Everything is owned by the prophet, even your dress. You don't own the dress. You're allowed that article of clothing based on his mercy," said former member Carolyn Jessop, who lived in Hildale.

The outside ventures include New Era Manufacturing, an aircraft parts maker and defense contractor whose chief executive has been identified as an FLDS leader and close associate of Jeffs.

Associated Press Researcher Judith Ausuebel contributed to this report.

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