Morning Star ranch moves assets before abuse trial

Leaders of the Morning Star Boys' Ranch have moved millions of dollars worth of assets to a nonprofit foundation before the first trial on sexual abuse allegations against the home for troubled youth.

Federal tax documents show the ranch in 2007 transferred more than $12 million in securities and other assets to the Morning Star Boys' Ranch Foundation, an organization that supports youth sports and other charities.

That happened after former residents of the Spokane facility filed 18 lawsuits against Morning Star Boys' Ranch and some of its employees alleging beatings and sexual abuse.

Morning Star and its supporters denied the allegations.

In April, the ranch deeded to the foundation 25 parcels of Spokane County real estate with a total assessed value of nearly $3.5 million. The signature appearing on those deed transfers as both grantor and grantee was that of Joe Pickert, a foundation board member who at the time was executive director of both the foundation and the ranch.

Attorneys for 15 of the 18 plaintiffs against the ranch are seeking to delay trials in Spokane County Superior Court so that they can depose board members about the asset transfers.

In an e-mail Wednesday, Seattle attorney Tim Kosnoff accused "Morning Star insiders" of trying to protect the ranch's assets from upcoming litigation and "conspiring to commit a fraud of massive proportions."

Richard I. Petersen, the ranch's executive director, denied that and said forming a foundation is a common practice among charitable organizations.

"It was transparent and done with the advice of legal counsel," Petersen said.

Pickert said the foundation, established in 2006 "to support causes that help young people grow into successful citizens," raises funds through charitable donations. Most of the foundation's assets are a result of the transfer from the ranch.

The foundation's federal tax filing for 2008 shows it began the year with $12.5 million and ended with $9.1 million. It raised $137,000 through contributions and grants and reported total revenue of $321,000. It paid out $1.4 million in grants, most of that to support the operations of the ranch, according to the tax documents.

The lawsuits against Morning Star have been separated into individual trials.

The first is scheduled to begin Jan. 4 and will center on allegations brought by Kenneth Putnam, who said he was molested by the ranch's former director, the Rev. Joseph Weitensteiner, in the 1980s. Weitensteiner, who retired as director in 2005, has denied the allegations. He is on the board of the Morning Star Foundation.

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Information from: The Spokesman-Review, http://www.spokesman.com