BACKERS TRIED IN VAIN TO RECOVER LOSSES

Published: Tuesday, July 26 1994 12:00 a.m. MDT

As the Meadeau View Institute and a nearby sister community of alternative-lifestyle conservatives drifted deeper into debt in 1993, investors fidgeted on the sidelines.

At stake was more than a million dollars in donations and loans, money that seemed to have disappeared.Contributors and lenders - most of them middle-income households - confronted, to no avail, the movement's founder and money manager, Bill Doughty.

"To this day, he doesn't think he's done anything wrong," said Kelly Christensen, who said he lost $40,000 to an effort that has yet to deliver on its promises.

Doughty, who said he contributed $1 million of his own money to the cause, encouraged Christensen and others to hang on until he could arrange refinancing.

Worried about their investments, some took legal, civil action. In addition to two Kane County lawsuits, four investors filed notices of interest with the Garfield County recorder to protect their stakes in Doughty's proposed developments.

Finally, some followers turned to W. Cleon Skousen, the well-known conservative Salt Lake author and activist associated with the Duck Creek-Mammoth Valley group of constitutionalists until he resigned last year, citing "irregularities" in management.

"Please help us if you can," Bonnie Cheney wrote to Skousen in a June 1993 letter, one of scores of private papers obtained by the Deseret News in an investigation of Doughty's land deals. Cheney and her husband, Art, were out nearly a quarter-million dollars to Doughty.

Skousen, who served largely as a figurehead and whose own family ponied up more than $100,000 to Doughty's efforts, could offer little comfort, he said, because he was outside the financial loop.

"I and my family decided to sorrowfully accept our losses and get out," Skousen reported. "We encouraged others to do the same."

Investors also discussed it with growing concern among themselves.

"I started wondering about it the day I got two phone calls from widows wanting to know where their money was," said Phillip Gleason, who served briefly as a Doughty adviser.

In fact, worried followers complained to just about everybody - except the authorities.

Going to the police was anathema to most Doughty backers because at the core of their political instincts was a fundamental distrust of government.

"This country is going to hell in a handbasket," said Marsha Nelson, who sank $78,000 in Mammoth Valley and Duck Creek. "We have the government we deserve, and it's going down."

Nonetheless, a trio of disgruntled Doughty followers quietly approached Iron County Attorney Scott Burns late last year.

Their move triggered an investigation by the state Division of Real Estate, which issued a cease-and-desist order in January barring Doughty from selling any more shares in the so-called Liberty Village at Duck Creek or his nearby 400-acre back-to-the-land colony at Mammoth Valley.

In the process of peddling his dream of a conservative southern Utah community that would exist beyond the pale of a larger society in decline, Doughty violated the Utah Land Sales Practices Act, according to the Division of Real Estate.

But nobody has pressed criminal charges.

That may be in part because of a jurisdictional question. Mammoth Valley is in Garfield County, Duck Creek is across the line in Kane County, and some of the land transactions probably occurred at Cedar City, in Iron County.

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