Marcus Larson/News-Register##The logo for The Falls Event Center is etched on the front doors of the log-style lodge, originally built as a chapel, on the Evergreen Museum campus. The building is the centerpiece of a suite of rentals offered by the company, which recently filed a $25 million lawsuit against two local businessmen .
Marcus Larson/News-Register##The logo for The Falls Event Center is etched on the front doors of the log-style lodge, originally built as a chapel, on the Evergreen Museum campus. The building is the centerpiece of a suite of rentals offered by the company, which recently filed a $25 million lawsuit against two local businessmen .
By Nicole Montesano • Staff Writer • 

Suit exposes tangle of museum intrigue

In the summer of 2016, Utah businessman Steve Down, founder of The Falls Event Center, bought three of the buildings housing the Evergreen Aviation and Space Museum from the bankrupt Michael King Smith Foundation. The $10.9 million purchase included tracts of surrounding land, nine vintage planes and a future hotel site.

Interim Museum Director Ann Witsell, since departed, praised the sale. She said she welcomed the ability to refocus on museum operations rather than the financial troubles of the museum’s past and present landlords.

But the sale didn’t sit well with everyone, at least not for long.

Down made lavish promises: He’d follow through with the hotel for which museum founder Del Smith had laid the foundation; he’d open a sandwich shop in downtown McMinnville that would share its profits with local food banks; he’d draw a multitude of new leisure and business travelers to the region.

[See Also: Down sees opportunity in museum ; Millegan pursues equestrian resort ; Peterson keeps chasing big score]

Museum officials say the event center portion has been successful, at least to their knowledge. However, the hotel and sandwich shop have yet to materialize — something Down blames on financial damage deliberately inflicted by two malicious detractors, whom he is now suing for $25 million in response.

On Monday, the suit defendents, Paul R. Peterson and J.W. Millegan, released the following statement to the News-Register:

“We are confident that this frivolous lawsuit will be dismissed for what it is, a baseless attempt at intimidating anyone who seeks the truth about what is happening at the Evergreen Museum. We welcome transparency, and our community and all who are involved in the Falls nationwide will be eager to see what comes out through the discovery process, the inevitable countersuits and class action suits, as well as the active SEC and FBI investigations.

“We welcome open discussion on all issues, plans and people that affect our community, including ourselves, and ideas on how to save the Evergreen Museum in the event that the Falls Event Center assets are placed in receivership.”

The trouble began in late spring and early summer, when Down sold two planes he’d acquired in the sale. That set off an angry buzz among museum devotees, who said those planes were particularly choice exhibits.

In July, the community learned the federal Securities and Exchange Commission, whose investigative activities are supposed to remain secret unless enforcement action is taken, was investigating one or more of Down’s companies. The principal focus is thought to be a Down company called CE Karma, which hosts continuing education seminars for dentists and uses them to solicit investments on the side.

In the lawsuit, Down blamed the leak on the two businessmen. He accused them of using surreptitiously obtained information to fan the flames, allegedly in hopes of gaining control of Down’s museum holdings for themselves.

Templar1307/Flickr Creative Commons##The North American P-51 Mustang at Evergreen was sold earlier this year by Steve Down, one of two exhibit transactions that irked some museum volunteers.

Millegan and Peterson had, in fact, been approaching news outlets in Oregon about sale of the planes, the legality of which they questioned, and subsequently the SEC investigation. First to confirm the details, The Oregonian broke the initial story and other news outlets followed, including The News-Register.

Millegan led a local campaign claiming the aircraft sale violated terms of a letter of intent The Falls Events Center had submitted to the bankruptcy court in connection with its purchase of museum assets.

However, the museum’s board chair, John Rasmussen, called Millegan’s legal interpretation faulty. He said the center agreed not to move the planes elsewhere while they remained under its ownership, but it was free to sell them and, in that event, the buyers were free to move them.

In conjunction with that, Millegan made a series of inflammatory statements about Down and the museum.

“Do not believe the man behind the curtain (Steve Down),” Millegan wrote in one of his many Facebook posts on the subject. “He is in my opinion a professional confidence man.”

He also criticized the museum staff, allegedly duped by Down, saying, “The museum director needs to be replaced with someone who has a background in museums and is an advocate for the museum.”

In another Facebook post, Millegan insinuated fraudulent activity by museum board members, alleging, “People are going to want to see the board’s financial statements to make sure nobody personally benefited from this transaction, because of its sheer ridiculousness.”

In September, The Falls Event Center responded with its lawsuit. Peterson fired back the following day with a letter accusing both the museum and The Falls Event Center of various nefarious actions, allegedly resembling a “criminal enterprise,” and copied it to the state’s congressional representatives and top elected officials.

Museum officials say they are keeping their heads low and continuing to focus on their mission, notwithstanding issues swirling about in connection with one of their landlords. The museum has, after all, weathered similar storms in the past, they note.

Comments

Stock

You didn't even interview either my father or Peterson for any of these articles, yet seem to have given Mr. Down full reign over his side of the issue. These articles are so plugged full of inaccuracies and misleading wording I don't know where to start. Do you even understand basic journalistic ethics?

sbagwell

Drew:
We did not interview Steve Down either. We compiled all three profiles from the public record. The treatment was 100 percent equal.
In the profiles, we included lots of comments from previous interviews, court filings and such from the record, allowing each of the subjects to make his case on key issues.
You will find lots of quotes from your dad in the profile we did on him. He got his say at all key junctures.
Steve Bagwell, Managing Editor

Stock

The information in these articles is misleading at best and outright false at worst. Jeb's previous editorial explicitly stated that Mr. Down sat down for an interview with editorial staff. As far as I can tell there was no real reason to even publish these articles except to slander my father and Mr. Peterson and raise Down up on a pedestal.

I also found it amusing that you equated a Ponzi scheme with a Pyramid scheme in the article on Down. A simple google search could have come up with the different definitions for those two totally different fraud schemes, which tells me that your paper did not even go as far as to do that. The newspaper continues to lose credibility when they print hitpieces like these.

Lulu

Whatever happened to integrity? Is it considered passe?

Rumpelstilzchen

From reading the articles, including this one, I fail to see what the complaining is about, other than that the complainers are unhappy that the News-Register did not take their side to a sufficient degree. "Stock's" two critical comments below are uncontaminated by a single item of substance related to the issue at hand other than wordy versions of "Waaahh ..!"
This whole sordid affair smells from both ends; so far, no side is looking good, and I do not foresee that changing. But unfortunately, it does affect our town, and I can only encourage the NR to keep up the good work of updating us on the ongoing shenaningans.

Lulu

Who would you least likely want to turn your back on?

Jeb Bladine

It’s important to remember that the Evergreen Aviation & Space Museum is an independent nonprofit institution that owns 82 aircraft, including the Spruce Goose … and which leases the air museum, space museum and theater buildings from 2 different landlords. From that perspective, the museum staff and Board of Directors are neutral bystanders to the legal drama playing out among the three men. Of course, that perspective has some interesting nuances because Mr. Millegan and Mr. Peterson have charged museum leaders with illegal activities in collusion with Mr. Down’s companies. We don’t believe those charges. As the story continues, we hope readers will support the local museum operations and remember that its mission is outside this high-stakes legal conflict.

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