High court hears arguments on payment of FLDS trust
AG's office faces order to pay more than $5.5M to managers
SALT LAKE CITY — The issue of who will be paid what, when and by whom when it comes to management of the Fundamentalist LDS Church's United Effort Plan Trust went before the Utah Supreme Court Monday.
Third District Court Judge Denise Lindberg has ordered that the Utah Attorney General's Office pay more than $5.5 million owed to those appointed by the state to manage the communal land trust — valued at $114 million. The trust includes the land and homes of FLDS members in the twin towns of Hildale, Utah, and Colorado City, Ariz., and in Bountiful, British Columbia.
Utah seized control of the trust in 2005 amid allegations of mismanagement by Warren Jeffs and other FLDS leaders. Salt Lake City accountant Bruce Wisan, attorneys to represent Wisan and other firms were hired to assist in management of the trust, but they have gone largely unpaid since 2008.
"It is difficult to go forward without being paid, but we feel like we have a duty," Wisan's attorney, Jeff Shields, told the justices of the high court Monday. "It's really odd to be appointed by the court and then go four years without being paid."
But assistant attorney general Bridget Romano said the real issue before the court is Lindberg's implementation of a deadline that would force the attorney general's office to turn to the Legislature for funds.
"It became a concern that the court was crossing over from judicial authority to the legislative realm," Romano said. "As long as there is a looming deadline ... there is the specter of a separation of powers problem."
Justice Christine Durham, though, questioned whether a petition before the Utah Supreme Court was the proper venue for the matter to be discussed and questioned whether to dismiss it to allow for a full appeal of Lindberg's decision.
This is the route Lindberg's attorney, Brent Johnson, would prefer. "All issues can and should be handled on appeal," he said.
He also said the judge never told the Legislature to pay for anything, though Romano countered that with no budget appropriation for the payment, the Utah Attorney General's Office would be forced to turn to the Legislature for funds or somehow find money in its own budget.
"An adverse judgment against the attorney general means it must come from the budget or from the Legislature," Romano said. "Without legislative approval, we don't have an area in our budget to pay $5 million to the fiduciary today."
She said the attorney general's office did pay $272,000 in December in an effort to "get a finger in the dam." Most of these problems, she argued, are caused by other court issues. Wisan was to be paid from the sale of trust assets, but a string of pending lawsuits — including one currently before the 10th Circuit Court of Appeals — has blocked any sales for the time being.
Romano said the federal issue is "gumming up" the case and "until that answer is satisfied, everybody is in a state of legal limbo." Still, she said there are important constitutional questions that the high court needs to address.
Shields reiterated that Lindberg never specifically mentioned the Legislature and added that the work of Wisan and those he is working with has added $9 million to the trust. Still, it's becoming difficult to sustain.
"It's getting to the point that we can't do this anymore," he said.
After the hearing, Wisan said he agreed that a full appeal, with a complete review of the record, is the "right answer." Meantime, he'll continue to watch over the trust.
"I feel like there are hundreds of people down there relying on people to represent them," he said. "We want to continue as best we can."
Shields said there are talks of an agreement that would circumvent the appeals process.
"We want to get something resolved before a full appeal," he said. "That could take a year, two years — I don't think we can survive that."
Attorney Rod Parker and former FLDS spokesman Willie Jessop did not speak at the hearing, but said after that they have the same problem with the issue — its growing costs.
"Our concern has to do with the exorbitant amount of fees that someone's going to ask the FLDS to pay for sooner or later," Parker said. "It's outside the boundaries of protecting the assets. It's a small job that just went completely off the rails."
"By failing to control the expenses, the very thing set up to protect (the trust) is starting to consume it," Jessop added.
The Utah Supreme Court took the matter under advisement. A ruling is expected in the coming months.
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