I. Donald Gibb to John Stahl, Minister, Starland
Hutterian Brethren, 6/5/92
File I
NOTE: EXHIBITS refer to appended documents the
correspondent included, but are not included here.
Dear Reverend Stahl:
My relationship with the Hutterites goes back to my
days as a youth on our farm at Rosebank, Manitoba, when
one night two strange men with beards appeared at our
door wanting to speak to my father to request his
signature on a petition to permit their new Miami Colony
to establish a school on the Colony for its children. There
was a lot of emotion and acrimony circulating in the
community at the time related to the Colony purchasing
farmland in the area, fearing it would drive up land prices
and ruin the small towns. Following a long and wide-
ranging philosophical discussion, my father was pleased to
sign the petition. As one of the more respected members
of the community, this seemed to turn the tide of local
public opinion in the Colony's favor.
Subsequently, our family became good friends with
the Hutterite people on this and neighboring Colonies.
When I joined The Royal Bank of Canada as Manager of its
Agriculture Services Department for the Manitoba region, I
proceeded to work with the Manitoba Colonies as best I
could to assist with financing of land purchases for new
Colonies and the expansion of existing units, in addition to
providing funds for machinery and equipment purchases
and operating expenses. I continued to work with the
Canadian Colonies when I moved on to head Bank of
Montreal's National Agricultural Services Department.
When I ran for political office in Manitoba, several
members of the Miami and Darlingford Colonies purchased
memberships in the Manitoba Conservative Party in order
to vote for me at the nomination meeting held in Miami,
Manitoba. Fortunately there was not enough support at
the meeting to get me elected! During this period in my
life, a number of Ministers and Secretary-Treasurers of the
Manitoba Colonies became, and continue to be, among my
best friends.
In 1981, when I joined the First National Bank of
Chicago ("First Chicago") in Chicago, I had the opportunity
to visit the Colonies in South and North Dakota. I realized
their banking services were far inferior to the services
offered to their Brothers in Canada through the Canadian
banks. To remedy this, I set up a lending program for
approximately 40 U.S. Colonies at First Chicago, but realized
what was needed in the U.S., because of the very different
nature of its banking systems, was a Bank controlled by
the Hutterites, for Hutterites. When I left First Chicago for
Rabobank Nederland in New York, I again was working
with the Hutterites through Jacob Kleinsasser to accomplish
this goal. The rest is history recorded below and in the
narrative attached.
The purpose in bringing the attached information to
your attention relates to my complete repugnance and
dismay at recently learning that in 1991, Bishop
Kleinsasser, through Barney Martin of H.B. Credit,
compromised the Rosedale loan at Rabobank for
$651,640.98 plus unpaid legal costs related to these loans
(I had left Rabobank in 1988). In attendance at the legal
mediation from the Hutterite Community, besides Barney
Martin, were two Senior Elders from the Canadian Colonies
and three representatives from Rosedale.
When you read the background details leading up to
this act, you will agree this action was not characteristic of
the traditional values of the Hutterites. Such actions
indicate several senior members of the Hutterite Church
have lost their way to personal greed and the desire for
more power.
Attached is a lengthy analysis and factual background
narrative on the various misadventures incurred over
approximately the past decade by, generally, the Rosedale,
Millbrook and Crystal Spring Colonies and involving
especially Mike Waldner and Bishop Jacob Kleinsasser,
amongst others.
What follows is a sad story of incompetence,
inexperience, and ineptitude, all compounded by lying,
deceit, misrepresentation and outright theft of Hutterite
Brethren Colony resources. My calculations indicate a loss
to the Colonies of at least $8 million but this figure may be
too low due to the lack of audited figures and a general
shortage of "hard" financial data available to me.
From dozens of ill-conceived and even some illegal
actions it is difficult to choose even a cross-section of these
malefactions. However I offer the following ten examples
with confidence they are a fair sample of these many
wrongdoings.
I preface these with the observation that while
Michael Waldner is frequently seen with the "smoking
gun," he could not have done these things without the
knowledge and approval of Bishop Jacob Kleinsasser.
1. These problems begin with a Power of Attorney
dated March 24, 1982, granted by Jacob Kleinsasser to
one Alfred L. DeLeo and Harold E. Cornell, originally of
Long Island, New York. Ostensibly retired school
teachers, both were practicing homosexuals with little or
no financial or business experience. These two
individuals and their company Dell-Cornell, squandered
millions of Colony dollars on unwise, unsupervised, and
highly dubious investments. Both went to jail for crimes
against the Colonies; DeLeo was jailed a second time on
other fraud-related charges. Such people were given
extraordinary powers by the Bishop to literally do
anything for the Colonies, and with the Colony's money
at that. (EXHIBIT 3)
2. On November 14, 1983, Mike Waldner, Minister
of Millbrook Colony (months after he had resigned as
President of Rosedale Colony) gave an unbelievable
Commitment and Power of Attorney to DeLeo, Cornell
and Dell-Cornell which:
A) Committed Rosedale to guarantee financially
anything they did.
B) Waived Rosedale's unusual legal rights.
C) On behalf of The Hutterian Brethren
Church and other Colonies, as well as
Rosedale, gave to the above trio 100% ownership of
anything they negotiated on behalf of the
Church and the Colonies!
D) Reconfirmed twice more than anything this trio
"touched" on behalf of the Church, Rosedale or
other Colonies, nationally or internationally,
would 100% become their property!
N.B. The document specifically commits ALL
Hutterite Colonies as well as the entire Hutterian
Brethren Church, in a clear violation of the Hutterian
Brethren Church's Constitution of 1954. This is
patently illegal to say nothing of being totally
immoral. (EXHIBIT 25)
3. On June 18, 1982, Mike Waldner resigned as
President and Minister of the Rosedale Colony. Yet later
throughout 1983, when he was no longer associated with
Rosedale, he continued to sign documents as its
President. For example see EXHIBITS 12-14. As late as
May 3, 1984, Waldner was still signing documents as
President and Minister of Rosedale Colony (EXHIBITS 72-
73). In fact, as late as 1990, EXHIBIT 85 bears the
signature blocks for Michael Waldner as President and
Minister of both Millbrook and Rosedale Colonies, a clear
violation of Hutterian Brethren Canons.
4. Jacob Kleinsasser has fostered a major problem
amongst the Colonies concerning the patent rights to a
wet and dry hog feeder. This device was apparently
invented at Lakeside Colony although the resolution has
been left up to the Canadian Supreme Court. Jacob
Kleinsasser allowed his brothers, Danny and Jonathan, to
register a patent on this feeder who then assigned the
patent rights in Canada to the firm C & J Jones (1985)
Manitoba Ltd.
The Jones-Crystal Spring deal on this feeder allows
them to sue for patent infringement protection and after
legal costs, share 50:50 the proceeds from such lawsuits.
Most of the patent infringement lawsuit
payments to date have come from other
Colonies, and at May, 1989, Crystal Spring is reported
to have received as much as $500,000 from patent
settlements from other Colonies.
(EXHIBIT 110)
The concept of one Colony suing another and receiving
monetary gain (if through the Jones front) seems strikingly
un-Hutterite and wrong by any standard.
5. In 1985, Atlanta attorney J. Stuart Youngblood
was retained by Jacob Kleinsasser to be his "eyes and
ears" at WELK. Youngblood wrote to myself at Rabobank
on December 13, 1984, with a copy to Jacob Kleinsasser,
that it was his opinion that the ill-fated Consumers Bank
equipment leasing matter could be settled for about $1
million. (EXHIBIT 99)
This leads to the interesting question as to why Bishop
Kleinsasser promptly agreed to settle the Consumers Bank
lawsuit at literally their then-asking price of $2,040,000,
plus an estimated $1 million in associated legal costs. This
"quick fix settlement" strongly implies that the Bishop did
not want the known fraudulent elements of this
transaction to surface. (EXHIBIT 27)
The consumers Bank settlement later saddled Rosedale
and Crystal Spring Colonies with an unjustified $750,000
each, in debt. While attorney Youngblood's opinion on a $1
million settlement with Consumers Bank was ignored, it is
interesting that he was respected enough to be retained for
an opinion about possible dishonesty in the Hutterites' oil
and gas leasing matter. He found poor business judgment,
but no dishonesty. (EXHIBIT 39)
6. One of the clearer examples of "sticky fingers"
on Colony monies is the utterly unbelievable sum of
$44,372 to register three semi-trailer trucks which even
today is only a few hundred dollars. Nobody was
"watching-the-far-away-store" in Florida, so people helped
themselves, inevitably. (EXHIBIT 114)
7. Mike Waldner, again with what had to be Bishop
Kleinsasser's knowledge, had personal ownership
of 2000 shares of RIDON, the general partner in the ill-
fated WELK partnership. Later Don Edel transferred to
Mike Waldner an additional 3000 RIDON shares so that
Mike became the sole and personal owner of that
entity.
(EXHIBIT 44 and 111)
Further, Don Edel later transferred to Mike Waldner's
personal ownership his 12% interest in the output of
the Alexander oil wells.
Mike Waldner's personal ownership of both the
above properties is another clear violation of Hutterite
Canons.
8. Another of Mike Waldner's dubious practices
was to give and/or allow DeLeo and Cornell to have or use
titles such as "Chief Financial Investment Officers" and
"Secretary-At-Large" of Rosedale. (EXHIBITS 12, 13 and
113)
9. A critical failure of Bishop Kleinsasser and Mike
Waldner was to allow DeLeo, Cornell and others to make
remote and grossly-unfamiliar-to-the-Hutterites
investments in such things as a clock factory, a plastics
plant, oil and gas properties, oil well servicing
equipment, gold mining equipment and other matters
totally unfamiliar to a basically agrarian people.
10. One of the most inexplicable events in this
whole unsavory mess was the decision of Jacob
Kleinsasser, through Barney Martin of H.B. Credit, to
compromise Rabobank for $651,640.98 plus legal fees in
1991 related to the repayment of the Millbrook and
Rosedale loans. This was done in spite of Jacob
Kleinsasser's personal word to Hugo Steensma, General
Manager of Rabobank, and I that he would personally
see to it that any loans the Bank granted to the Colonies
would receive his personal supervision to ensure their
terms and conditions were scrupulously met. This
compromise was made in spite of Rabobank's financial
support to Millbrook and Rosedale to "bail out" Crystal
Spring from the flawed and fraudulent Consumers Bank
lawsuit. Without Rabobank's financial support at that
time, Rosedale and, in all likelihood Crystal Spring, would
have both failed due to a lack of liquidity when forced
by the courts to provide the funds required to settle the
Consumers lawsuit.
This chain of unfortunate, costly and dangerous events,
only ten of which are highlighted above, was set in motion
by Bishop Kleinsasser when he issued the March 24, 1983,
Power of Attorney to DeLeo and Cornell. These two could
have been little more than strangers to the Bishop, yet he
gave them vast powers to commit Crystal Spring and the
entire Hutterian Brethren Church, and claiming falsely that
the Church Board had concurred with, and approved of,
this empowerment.
The end result was lies were told; several elements of
fraud were committed; at least one Colony was severely
deceived; fundamental Hutterite beliefs and canons were
violated; friendship and reputations were damaged or
destroyed; DeLeo and Cornell went to jail; and the Colonies'
capital depleted by at least $8 million.
(Appendix II)
This sad litany is a sober indictment of Bishop
Kleinsasser and his badly flawed judgment, and an even
worse indictment of Mike Waldner, his lieutenant. Surely
this is no way for a Bishop to treat his Brothers.
Signed, I. Donald Gibb
I. Donald Gibb
12 Pin Oak Lane
Cos Cob, CT 06807
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