NEWS

From billionaire to inmate, Tim Blixseth remains defiant

Phil Drake
pdrake@greatfallstribune.com

Editor’s note: This is the first in an occasional series about Tim Blixseth, co-founder of the Yellowstone Club who is now in the Cascade County Detention Center for civil contempt of court.

GREAT FALLS – Tim Blixseth, the one-time billionaire who hosted parties in which famed chef Wolfgang Puck was flown in to prepare lavish meals for luminaries such as Bill and Melinda Gates, is living a much simpler life these days.

Now an inmate at the Cascade County Regional Detention Center, the embattled businessman, former lumber baron, real estate developer and songwriter spoke to the Great Falls Tribune in an exclusive interview about his incarceration since April 20 for civil contempt of court (he emphasized the “civil”), his battles with the justice system and a long list of wrongdoings that he says have been perpetrated against him.

Blixseth, 65, founder of the Yellowstone Club in Big Sky, entered the room in orange jail garb. He wore a long-sleeve, long-john top underneath his short-sleeved shirt. Rather than rubbing elbows with the rich and famous, he spends 23 hours a day in solitary confinement. in the county jail with one hour a day in which he said he can shower and make contact with the outside world via phone. He’s a high-profile inmate and kept away from others.

His cell, which he estimates to be 66 square feet, is a far cry from the 13,600-acre Yellowstone Club, where, according to some news reports, he reigned as a self-proclaimed “benevolent dictator.”

When asked how he’s doing, Blixseth said with a grin, “It’s a great day to be alive.”

Tim Blixseth arrives at the federal courthouse in Missoula, Montana, in April 2009.

“This is really a constitutional injustice,” he said about the saga, now in its eighth year, that brought him to Cascade County. “This is a homegrown story. This happened in Montana.”

The Yellowstone Club, founded in 1997, filed for bankruptcy in 2008. Blixseth was accused of pocketing much of a $375 million Credit Suisse loan to the resort and later gave up control of the enterprise to his ex-wife during their 2008 divorce.

Yellowstone Club’s creditors are seeking more than $250 million from Blixseth.

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According to its website, the Yellowstone Club is the world’s only private ski and golf community. About an hour from West Yellowstone, Montana, near the gates of Yellowstone National Park, it has 15 ski lifts, about 60 trails and more than 2,200 acres of powder. The golf course was designed by Tom Weiskopf, a former British Open and Senior Open champion.

It’s limited to 864 residential properties, ranging from one- to seven-acre homesites.

A residential membership deposit is $300,000 with annual club dues of $36,000. Condominiums have a price range of $4.9 million to $15.7 million, custom ranches range from $6.3 million to $19.5 million and ranches range from $18 million to $21 million, the website states.

The Yellowstone Club near Big Sky, Montana.

On Feb. 22, a judge ruled Blixseth will remain in jail for violating a bankruptcy judge’s order not to sell Tamarindo, a luxury property in Jalisco, Mexico, for $13.8 million in 2011, The Associated Press reported. U.S. District Judge Sam Haddon wants Blixseth to reveal what happened to the money.

“Literally hundreds of thousands of dollars in disbursements made to various Blixseth family members or to entities he owned or controlled have simply vanished without adequate or even plausible explanation,” Haddon wrote in a February order, according to The Associated Press.

Blixseth told the Tribune his legal team has submitted more than 22,000 pages of documents but says that whenever he complies with the judge’s order, the bar is moved higher.

Blixseth said Haddon issued a new order that greatly expanded the original order and gave him seven days to provide it. He says most of the documents were with third parties in Spain or Mexico.

“Every time I provide (the requested information) they change the requirement. It has nothing do with accounting.”

Blixseth remembers the first time the judge ordered him to jail in December 2014.

“When I arrived (in the courtroom) I saw two U.S. marshals in the front row,” he said. “Now it’s obvious where the hearing is heading.”

He said he was ordered into custody for civil contempt of court.

It was appealed to the 9th Circuit Court and he was soon released.

He was hauled back into court in April. He presented the accounting and again two U.S. marshals were in the courtroom. Blixseth was found in civil contempt again.

Tim Blixseth

Blixseth notes that civil contempt is intended for one thing: To compel someone to obey a judge’s order.

“It means ‘We’ll put you in jail, Blixseth, and when you provide the accounting, we’ll let you out,’” he said.

His attorney, Phil Stillman, calls Blixseth’s incarceration of about 11 months “an outrage.”

“He has literally fully complied with what this judge has asked him to do,” he said. “What is really disturbing to me as a lawyer is not getting someone to rule on the merits of his issues.”

As it stands now, Blixseth doesn’t have the right to a jury trial, arraignment or bail, Stillman said. He said there is an indefinite sentence on the suspicion that he has the keys to his own cell if he cooperates.

“While that is all well and good, in this particular case, everything has gone off the rails,” Stillman said, adding the accounting requirement the judge keeps changing is very difficult.

“It undermines my faith in the judicial system,” Stillman said. “I can’t even get someone in the 9th Circuit to give this a review. I am aiming small.”

He said Blixseth has never said, “I will not cooperate. All he has said is, ‘Here it all is.’”

The Cascade County Regional Detention Center

Attorney Kevin Barrett of the West Virginia law firm of Bailey Glasser represents the Yellowstone Club Liquidation Trust, which is suing Blixseth over the club’s 2008 bankruptcy. He said they have a couple of judgments against him that total $260 million.

When asked how much of the money Blixseth still allegedly has, Barrett says, “That is the $64 million question. We don’t know if he has anything left.”

“He professes to have nothing, some believe he has assets that are hidden either in the U.S. or offshore,” Barrett said. “We don’t know of any assets at this point.

“I think it is pretty clear he is still hiding information.”

Barrett said attorneys now have litigation pending against two entities Blixseth transferred assets to and have filed legal action against Blixseth’s wife, Jessica, and mother-in-law, Cherrill Ferguson, who live in the Seattle area.

He said he has no sympathy for Blixseth over his incarceration at the Cascade County Regional Detention Center.

“He brought this upon himself and continues to bring this upon himself every day he sits there by failing to do what he needs to do by complying with the judge’s order and refusing to testify on the stand about what he did with the money ...” Barrett said.

Blixseth labeled Tamarindo as his biggest misstep.

“In hindsight, I should have done a motion to clarify the sale of Tamarindo,” he said.

Blixseth said he prides himself on his honesty.

“I do not lie. It’s the only thing I do not do,” he said.

Blixseth gave up control of the club to his ex-wife, Edra, as part of their divorce settlement in 2008, or, as Blixseth calls it, “the divorce from hell.”

The feeling is apparently mutual as in a 2009 New York Times article, Edra Blixseth said, “I would rather feel the cold steel of a revolver in the roof of my mouth and pull the trigger than to ever think about living a day with that man again.”

It’s been a revolving rags-to-riches story for Tim Blixseth, having made a fortune while young and then filing for bankruptcy in 1985.

He was born in 1950. “I grew up on welfare in Roseburg, Ore. ...,” he stated in a 2011 PRNewswire news release. In another, he says he ate “Spam five times a week.” In 2006, Forbes magazine asked him his high school nickname. “I was so poor they would not give me one,” he replied.

He discovered his knack for the art of the deal when he was 13. He bought three donkeys for $25 each and sold them a few weeks later, now touted as “pack mules,” for a profit of $150. After high school he worked in a sawmill, then moved into buying timber, the magazine reported. He was a multimillionaire, retired by 40, and living in Lake Tahoe.

In 2006, Tim Blixseth was ranked No. 322 out of the 400 richest Americans with a net worth of $1.2 billion.

He said he has no idea what that figure is today.

“My biggest problem in business is that I am not a cutthroat Wall Street guy,” he said. “Money means absolutely nothing to me. It’s just a way to get through life.

“I’ve had plenty and I’ve had none.”

In a Nov. 27 essay he provided to the Tribune, “A Prisoner in America Without Rights,” he said he wears earplugs most of the day to silence the screams that echo through the Cascade County jail.

He said he appreciates Cascade County Sheriff’s Commander Dan O’Fallon. “He’s got a great crew.” And he singles out Detention Officer Melissa Pottratz for her professionalism.

“While she may not stand 6-5 as some of her co-workers do, she is as tall as any person wearing the uniform,” he wrote.

What he finds most frustrating of his jail experience is his separation from the outside world.

“Communication,” he said, when asked what has been the toughest part of his incarceration, “not being able to call attorneys and other folks.

“I’ve never been arrested or charged with a crime in my entire life.”

He also mentioned his success in songwriting, having co-written the “Heart of America,” which he says was used by NBC’s “Today Show” and raised as much as $130 million to help Hurricane Katrina victims.

“I tell you this as an example of what I really enjoy doing,” he said in a letter to a reporter. “I grew up in poverty on welfare and know firsthand the feeling of despair. One thing as a kid I always believed was that even poor people like us could get the same justice the rich people could.

“As an adult I now know that money can play a big role in justice.”

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As far as the Yellowstone Club, that’s in the rear-view mirror.

“I am not interested in getting involved in the Yellowstone Club again,” he said.

Blixseth said if he wins millions in a civil lawsuit, he will set up a legal defense fund to provide lawyers in each state for people who lost their constitutional rights.

When asked if the American Civil Liberties Union already provides that service, he says, “Not like I am going to do it.”

He said they will take cases for free that “we deem to be a violation of our civil rights.”

“There is no worse opponent than a zealot.”

This story contains information from The Associated Press.