William Ballantine pleads guilty to tax evasion

U.S. judge to hand down sentence July 2

William Ballantine Enlarge photo

William Ballantine

DENVER – William Ballantine, a former board member of the company that owns The Durango Herald, pleaded guilty Tuesday to one count of tax evasion.

In exchange, prosecutors agreed to drop 15 other counts stemming from his attempt to use a Durango church to get access to $395,000 from a charitable foundation his mother had set up in his name.

He faces possible prison time when he is sentenced July 2 in U.S. District Court in Denver.

“I feel very ashamed. I feel very embarrassed. I have not respected what my mother laid out for me,” Ballantine said.

He didn’t need the money, he told U.S. Chief District Judge Wiley Daniel on Tuesday.

He executed the scheme in 2008 and 2009. A year later, he inherited about $9 million from his mother’s estate.

Before her death, his mother, the late Durango Herald chairman and editor Morley Ballantine, set up charitable foundations for her children at the National Philanthropic Trust.

According to court documents, William Ballantine, 62, of Kirkland, Wash., took $395,000 from the William Ballantine Fund at the National Philanthropic Trust. He arranged for St. Mark’s Episcopal Church in Durango to receive the money and funnel it into Ballantine’s personal bank account, after telling the pastor he was setting up a charity for poor children in Antigua.

Instead, he used the money mostly for personal expenses, such as remodeling a house for his brother-in-law and upgrading his own cabin in Washington, he said in court Tuesday. He let the church keep $35,000.

The Rev. Andrew Cooley, the church’s former rector, reported the transactions to federal authorities. Neither Cooley nor the church did anything wrong, Ballantine said.

“I am solely responsible,” Ballantine said. “The minister trusted me when I approached him.”

Ballantine even invented a phony accountant named Theodore Campbell and sent a letter to Cooley saying the transactions were legal. He sent the letter so Cooley would have proof of innocence if Ballantine’s scheme were ever revealed.

But Cooley became suspicious after he could not locate any accountant named Theodore Campbell, according to court documents.

“I am relieved to see that a resolution to this troubling matter has been reached,” Cooley said in a statement issued by the Episcopal Diocese of Colorado. “I am deeply grateful to have had the support of the bishop and chancellor of the Diocese of Colorado, and the senior warden and treasurer of St. Mark’s Episcopal Church upon learning the details of this episode. I continue to remember Mr. Ballantine and his family in my prayers.”

Lawrence R. Hitt II, chancellor of the diocese, said he was relieved the matter has been resolved.

“We hope everyone involved can now move forward. We pray for reconciliation and peace of mind for all involved,” Hitt said in an emailed statement.

As part of his plea agreement, Ballantine will make restitution payments to the diocese and Cooley, as well as to the National Philanthropic Trust.

The judge said he found the whole scheme “bizarre.”

“Why’d you do that?” Daniel asked.

Ballantine paused and sighed deeply.

“All I can say is I have such a complicated relationship with my mother. Your honor, I’m just not measuring up as my other siblings have,” Ballantine said.

Ballantine said he requested that his siblings, including Herald Publisher Richard Ballantine, not attend his hearing Tuesday.

Daniel was not satisfied with the answer and repeatedly pressed Ballantine to elaborate on his state of mind. Ballantine said he would take up Daniel on his offer to write a letter explaining himself.

Ballantine later said he felt at the time that the charitable money belonged to him.

By law, it did not.

The William Ballantine Fund is a donor-advised fund, meaning the money belongs to the National Philanthropic Trust, but Ballantine can designate nonprofit groups to receive the money. Ballantine told the trust that the $395,000 was all for St. Mark’s.

A grand jury had indicted Ballantine on 16 counts including money laundering, mail fraud and aiding and abetting, but prosecutors agreed to drop most charges in return for his guilty plea to tax evasion. He did not pay taxes on the money he got from the fund and owed $110,000 for 2008 and 2009, according to court documents.

Sentencing guidelines call for a prison term of 18 to 51 months, plus fines and restitution. The final sentence will be up to Daniel.

Richard Ballantine expressed support for his brother.

“His siblings continue to stand behind our brother in this difficult time,” he said.

William Ballantine resigned as a board member of Ballantine Communications Inc., which owns the Herald, after his indictment.

jhanel@durangoherald.com

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