Boy Scouts use vast ranch as collateral
The Boy Scouts of America has mortgaged one of the most spectacular properties it owns, the vast Philmont Scout Ranch in New Mexico, to help secure a line of credit as the financially strapped organisation faces a growing wave of new sex-abuse lawsuits.
It said yesterday that it has no plans to sell the property, and that the land is being used as collateral to help meet financial needs that include rising insurance costs related to sex-abuse litigation.
However, the move dismayed a member of Philmont’s oversight committee who says it violates agreements made when the land was donated in 1938. The BSA disputed his assertion.
Top BSA officials signed the document in March, but members of the Philmont Ranch Committee only recently learned of the development, according to committee member Mark Stinnett.
In a memo sent to fellow members, Stinnett – a Colorado-based lawyer – decried the financial manoeuvre and the lack of consultation with the committee.
‘‘I cannot begin to tell you how sorry I am to be the one to break this news to you,’’ Stinnett wrote. ‘‘The first point of the Scout Law is ‘A Scout is trustworthy’. I am distressed beyond words at learning that our leaders apparently have not been. But I am even more distressed to learn that Waite Phillips’ magnificent gift has now been put at risk.’’
Phillips was a successful oilman who used some of his fortune to develop a huge ranch in northeastern New Mexico. In 1938, and again in 1941, he donated two large tracts of the ranch to the Boy Scouts of America.
Since the first scout camp opened there in 1939, more than a million scouts and other adventurers have camped and hiked on the property, which now covers more than 56,650 hectares. The BSA said programming and operations at Philmont ‘‘continue uninterrupted, and we are committed to ensuring that the property will continue to serve and benefit the scouting community for years to come.
‘‘In the face of rising insurance costs, it was necessary for the BSA to take some actions earlier this year to address our current financial situation,’’ it said.
‘‘This included identifying certain properties, including Philmont Scout Ranch, that could be used as collateral . . . in order to keep in place an existing line of credit for insurance.’’
Disclosure of the mortgage comes at a challenging time for the BSA, which for years has been entangled in costly litigation with plaintiffs who said they were abused by scout leaders in their youth. Hundreds of lawsuits loom after New York, New Jersey, Arizona and California enacted laws making it easier for victims of long-ago abuse to seek damages.
The BSA, headquartered in Irving, Texas, said it was exploring ‘‘all available options’’ to maintain its programmes and has not ruled out the possibility of filing for bankruptcy.
According to Stinnett the BSA mortgaged its legal right and title to Philmont Scout Ranch to the JP Morgan Chase Bank to secure US$446 million ($NZ696m) of debt incurred over the past decade.
Stinnett wrote that ranch committee member Julie Puckett – a granddaughter of Waite Phillips – had urged BSA officials in recent weeks to recognise Philmont as a restricted asset based on the understandings of all parties when Phillips donated the land.
‘‘BSA management has instead stated its position that Philmont and its endowment are free and clear of restrictions and are thus theirs to take or encumber as they wish,’’ he wrote, depicting that stance as a betrayal of agreements made with the Phillips family.
The BSA disputed his assertion, saying nothing in the agreements with the Phillips family prevented the ranch from being used as collateral.