Intelligence Report

Montana Freemen Trial May Mark End of an Era

For years, the Montana Freemen issued 'common-law' edicts harassing local officials and others, but after a standoff with the FBI, a federal trial seems likely to topple their group.

They were the so-called Freemen. For years, they had buried local judges, sheriffs and county attorneys in a forest of paper. Treatises on the Magna Carta, phony court judgments and computer-generated financial instruments — all claimed the government had no jurisdiction over their persons or property.

Then a small army of FBI agents laid siege to the remote, 960-acre farm the Freemen occupied in Garfield County, Mont. Bristling with their own armed patrols, two dozen men, women and children with enough food and fuel for months of survival seemed poised to turn routine arrests for fraud and conspiracy into a Waco-style disaster.

For 81 days, they held out at the place they called Justus Township, ground zero on the white supremacist landscape. Local politicians and luminaries such as Colorado State Sen. Charles Duke and paramilitarist Bo Gritz tried to negotiate a surrender. Journalists broadcast the Freemen's message to every corner of the country.

Finally, on June 13, 1996, the Montana Freeman gave themselves up to the government.

In April, six angry Freemen became the first to go to trial on charges related to the siege and the phony documents they'd generated. Two others who had pleaded guilty to similar charges last September testified at the trial. Five of the six were convicted.

Now, 14 of the Montana Freemen — including the leading figures — face a May 26 trial in a Billings federal courtroom on conspiracy and fraud charges.

A Hall of Mirrors
The Freemen are unlikely to cooperate with the judge or their own court-appointed attorneys. If the judge allows it, they will introduce an Alice-in-Wonderland defense where the "state of Montana is not the State of Montana" and the "united States is not the United States of America."

They aren't mere "Fourteenth Amendment citizens" whose rights are granted by the federal government in Washington, D.C., the Freemen are expected to claim. They are "American nationals" — sovereigns like the kings of Olde England — whose rights come straight from God. They will attempt to turn the courtroom into a hall of mirrors.

Prosecutors will offer a plainer view.

Government attorneys are expected to present a blizzard of evidence to prove the defendants defrauded government agencies, banks, other businesses and even their own Montana neighbors. Prosecutors have reportedly gathered 200,000 documents, 5,000 audio tapes and 172 videotapes.

"The volume of paper and documentation in the Freeman case will make the McVeigh trial look like a parking ticket," says Ken Toole, director of the Montana Human Rights Network in Helena.

The Freemen trial may mark the end of the period of heightened Posse Comitatus-type activity (see Roots of Common Law) that followed the Randy Weaver and Waco debacles of 1992 and 1993. During this period, common-law courts and militias popped up from North Carolina to California. At the same time, the group now known as the Freemen established themselves in the central avenues of Montana community life.

Authorities shied away from making arrests for fear of provoking an armed conflict. Before the siege at Justus Township, the Freemen had come dangerously close to their goal of establishing themselves as a dual power, with authority rivaling that of local and federal governments. At one point, a local mayor actually became part of the Freemen.

Mass Resistance
The core leaders — particularly LeRoy Schweitzer, who had run a Montana crop dusting business until running afoul of the IRS in the mid-1980s — employed a strategy that might be called "mass resistance." Unlike members of terrorist cells who operate clandestinely, the Freemen propagandized publicly at well-attended community meetings and in court appearances.

Their mass resistance approach was similar to that of the racist Posse Comitatus, which recruited heavily in the 1970s and 1980s among farmers who were suffering through a severe agricultural crisis.

Mass public resistance to the federal government — attended by widespread resentment of gun control, land and environmental regulation and chronic rural dislocation — was greater in the early 1990s than during the Posse's heyday a decade earlier.

By 1994-95, the Freemen's Montana garrisons became the most important way stations in a network that stretched from the Northwest to the Midwest, and south to Oklahoma and Texas (see The Poison Spreads).

The Freemen's profile in the movement grew as businesses and government agencies accepted their phony bank drafts, reinforcing their spurious claims about the banking system. Schweitzer added his own, rapid-fire interpretation of the Uniform Commercial Code. An estimated 800 followers flocked to the Freemen's classes, and the group became a main stage event, not just another cranky sideshow.

Their white supremacist views and legal mumbo-jumbo spread through common-law courts, jural societies and related groups around the nation.

Now, the May trial, combined with other prosecutions (see Crackdown), could mark the end of this mass resistance trend. While common-law and militia activity is likely to continue, the strategy of mass resistance is unlikely to attract any new mass following.

Look instead for clandestine terrorist cells to emerge on one side of the movement (see Bombs, Bullets and Bodies) and renewed attempts to reach a mainstream constituency on the other — all aiming to establish the same white Christian republic (see White Nation).

Wire Fraud and Computers
The whites-only republic won't be the issue before the court in May, however. Old-fashioned wire fraud will be.

Schweitzer, Dale M. Jacobi, Rodney O. Skurdal, Daniel E. Petersen and 10 others are charged with "a scheme to generate hundreds of fraudulent and worthless documents," including many purporting to be financial instruments.

Further, Schweitzer and his confederates allegedly conspired to persuade others to use the instruments "to defraud federally insured financial institutions" and engaged in the interstate transfer of stolen goods. They are accused of then combining forces to avoid arrest.

Simply put, the Freeman sat down at their computers and created their own financial instruments. At weekend workshops, they distributed the documents to hundreds of would-be Freemen from across the country, who then used the checks to buy trucks and other goods and pay off bank loans or taxes. Often, the phony checks were written for twice the amount owed.

The IRS and others actually accepted some of the checks and paid back the "overage" in real dollars, in one case sending a check for $14,000 to a California woman who owed $8,000 in back taxes. The indictment also charges the Freemen with attempting to use more than $1 million in phony checks to buys guns and ammunition from a Montana arms dealer.

In another instance, they allegedly tried to buy six trucks in Wyoming. Both the weapons and truck deals fell through.

According to the indictment, Schweitzer took the first steps in the conspiracy in March 1990, when he filed a civil action against the state of Montana and convinced a judge to open a $100 account at Norwest Bank to receive any possible judgments in his favor. Although the account was closed in 1994, he used paperwork from the account throughout the scam.

In the critical next step, Schweitzer and the Freemen convened so-called common-law courts and issued "criminal" charges against individuals and government agencies. Garfield County Attorney Nick Murnion, for instance, was charged with "treason" and threatened with death.

When Schweitzer's targets didn't respond to the specious charges, he would issue financial "judgments" against them for fantastic sums. Then false commercial liens would be filed at the county courthouse to supposedly satisfy these judgments. Schweitzer also created a thicket of paper "transferring" the fictional value of the liens to the Norwest Bank account.

Then, in the scam's coup de grace, a computer-generated "certified banker's check" or some other fake instrument was written on the nonexistent funds. The fake financial instrument would then be used to try to pay real debts or buy goods.

Taking the Bait
Relatively early in this process, county clerks stopped accepting these bogus liens, and judges issued court orders against them. In those instances where the liens were successfully filed, the Freemen's targets had to take expensive legal action to have clear title to their property restored (see Common-Law Victims).

If the county clerk didn't accept the lien or the government agency refused to accept the paper, they, too, could be hit with a Freemen lien or a "summons" to the common-law court. The intention, according to Toole, was to "intimidate any opposition" to white supremacist activity in the region.

The main target of the funny money scheme, however, was the Federal Reserve banking system, which "Patriots" and white supremacists of every stripe claim is unconstitutional or even satanic.

The Freemen created their own particular blend of right-wing ideology by blending broad-based anti-Fed activism, Posse-derived common-law philosophy and the theology of Christian Identity, an anti-Semitic and racist belief system that has animated segments of the radical right for decades.

In so doing, they found a constituency for their scam that was willing to openly defy the authorities and defraud the unsuspecting at the same time.

Schweitzer and his Freemen followed directly behind another organized swindle run by an organization calling itself We the People. Roy Schwasinger's We the People roiled through farming communities in 1992 and 1993 with a scam pitched directly at financially distressed farmers.

Schwasinger, a Nebraskan who also operated out of Colorado, told his followers that he had successfully sued the Federal Reserve. He claimed to have struck a secret deal with the government to settle the lawsuit that would result in billions of dollars in damages being paid.

For a $300 fee, Schwasinger claimed, farmers could join the lawsuit and receive their portion of the dollars that would soon be distributed.

Over 2,000 people took the bait. Eventually, We the People operatives were indicted in Iowa, Texas and Colorado — leading the anti-Semitic Liberty Lobby's Spotlight tabloid to conclude that Schwasinger was a protester silenced for "objecting to heavy-handed government land grabs."

A History of Scams
Like the Montana Freemen, Schwasinger filed cartons of common-law court documents, liens and fake arrest warrants before he was finally indicted and sent to jail. The link between the two fraud conspiracies is also direct and personal. Schwasinger's operatives included Russell Landers, We the People's emissary to the Southeast, and his wife, Dana Dudley.

The couple, after being indicted with Schwasinger in Colorado, went on to hole up with the Freemen during the Jordan siege. Now, they will go to trial in Billings with the Freemen leaders. In addition, Schweitzer, the Freemen leader, reportedly met personally with Schwasinger in 1992.

Schwasinger's scam, in turn, echoed a similar ideologically tinged fraud perpetrated on farmers in the early 1980s by a Coloradan, Rick Elliott. Elliott told farmers that for a $300 fee they would be eligible for millions of dollars in interest-free loans provided by secret Arab donors.

Before going to jail, Elliott's Primrose and Cattlemen's Gazette routinely published anti-Semitic screeds and advertisements for the neo-Nazi Aryan Nations. Among Elliott's core group of sponsors was Eugene Schroder, who in later years would become a major player in the common-law movement.

What most differentiated Schweitzer from these earlier anti-Fed scams was the central role that white nationalism played for the Freemen. Schweitzer's Freemen argued that the unalienable rights of the Constitution belonged to "we the people," the population mentioned in its Preamble. This specifically excluded "the colored races and Jews."

Indeed, "we the people" translated for the Freemen as "the White race, Adamite People and Israel." Here the word Israel was Identity-speak for whites descended from northern Europeans — the only ones privileged by God to write phony bank drafts.

Seedlines and the Banks
To emphasize the point, classes at Justus Township near Jordan (and at Rodney Skurdal's place outside Roundup, Mont., where the Freemen holed up before moving in a mass convoy to Jordan) opened with an hour-long Bible lesson by Dale Jacobi on Identity's so-called "seedline" reading of Genesis: Eve had been impregnated with two seeds, one from Adam and one from Satan.

Jews and their banking system were descended from Satan through Cain. Whites — noble, made in the image of God and able, unlike blacks, to blush — were the progeny of Adam and Eve.

Christian Identity was the cornerstone of the Freemen edifice, even for farmers who may have first embraced the check-writing scheme out of economic distress.

"There is a difference between a bankrupt farmer who can't make land payments or pay taxes and someone who won't because of a deeply held, anti-Semitic ideology," explains the Rev. David Ostendorf of Chicago's Center for New Community, a farmer's advocacy group since the early 1980s.

The Freemen, according to Ostendorf, only brought more grief to those economically embattled farmers ensnared in their scheme.

The particular genius of the Freemen was to flesh out a mass-style movement on the bones of their hard-core, Identity-based ideology. Like We the People, the Freemen found constituents for its scheme among hard-pressed rural residents.

In Montana, lawmen sought to arrest the Freemen long before the Jordan standoff, while they were still ensconced near Roundup. But the Freemen's threats of creating a replay of the Waco disaster, in which some 75 Branch Davidians died, kept law enforcement officials at bay.

As Schweitzer said at one training session: "It's up to us to gather enough men in one place so that we can make it stick."

For a while, he did.

'The Sad Reality'
During the siege, the Freemen grabbed the attention of the most influential leaders of America's radical right. To Chris Temple, an Identity ideologue writing in June 1996, the Freemen were "at the center of the most significant clash between the ... federal government and its citizens since Waco."

Temple, an Identity strategist now working with Liberty Lobby, was friendly to the Freemen's goals and methods. He was also a key speaker at the 1992 Colorado meeting that launched the modern militia movement.

But in the end, even Temple couldn't support the Freemen. Their "odd brand" of credit scamming ripped off workaday whites, he complained, not just banks or government agencies. "Even local townspeople have been alienated deeply" by the Freemen's threats against some local officials, he worried.

In the final analysis, their own greed and contempt for their neighbors, not government repression, may have closed the door on the Freemen saga. With it, this most recent period of mass-style resistance may end also — a possibility that has not escaped Chris Temple. "Millions of people, after Ruby Ridge and Waco, started to seriously question their rulers for the first time in ages," he laments.

"The sad reality for the moment is that this conduct on the part of some of the Freeman has allowed the FBI to significantly rehabilitate itself in the eyes of the average American."

Whatever the verdict in the May trial, that part of Temple's assessment of the Montana Freemen is likely to stand.


Leonard Zeskind is president of the Institute for Research & Education on Human Rights, based in Kansas City, Mo., and author of a forthcoming book on white nationalism.