The Fate Of Galt's Gulch Chile

[The following post is by TDV Contributor, Wendy McElroy]

Many have wondered about the status of Galt’s Gulch Chile (GGC), the libertarian community that was planned and sold in lots as a liberty oasis for those who wished to live freedom before they died. My husband and I purchased an option on 1.25 acres in July 2013. Others bought 10- or 25-acre lots and some invested in the agricultural side of the venture; extremely savvy investors committed small fortunes. GGC has been an unexpectedly wild ride since then.

Shortly after purchasing, I received an unsigned email through the webform of a site I maintain. It informed me that GGC was a fraud. One reason: GGC lacked water rights. In Chile, purchasing surface land and water rights are two separate processes. GGC is desert terrain, rather like California, and water rights are absolutely necessary for a community to be established. I responded to the email but the message bounced back to me. I did a search on the email’s IP address and it became apparent that the sender had used an anonymizer.

I forwarded the email to the two joint owners of GGC: Jeff Berwick and Ken Johnson. Jeff was and is still a trusted friend; I did not know Ken. My inquiry was not hostile but it stirred quite a reaction from Ken. They immediately recognized the source as a former employee who had threatened to tell people “like me” about the problem if they did not pay him hush money. (The emailer was also an old movement acquaintance of mine.)

Fast forward through many unpleasant details… The man was paid off. GGC acquired more land, which had water rights that were both attached and transferable.

A GGC celebration was held in November 2013. The alleged purpose was for people to finalize the selection of lots and other paperwork. No selection took place because no zoning permits had been obtained. A GGC celebration was held this April, with my husband and me in attendance. Indeed, I was the opening speaker. (BTW, I have made no money from the project other than the speaking fee.) The alleged purpose was for people to finalize the selection of lots and other paperwork. No selection took place because no zoning permits had been obtained.

Unbeknown to most purchasers, dramatic changes had occurred behind the scenes. Through maze-like transfers of cash and authority, Jeff Berwick was shoved out of the project and Ken Johnson was in control. I have sorted out most of the obfuscating tangle and I may soon be writing a history of the labyrinthine matter. For the moment, suffice it to say there is basis for various lawsuits; some are being pursued.

There will be no zoning for the 1.25-acre lots or other arrangements of less than 10 acres.  GGC is an environmentally protected area and it would take the political movement of heaven and earth to allow a community based on small lots to be officially approved. I had the opportunity to ask a question of the salesman who showed my husband and me “our property.” I claimed it because I fell head over heels for the most beautiful tree I’ve ever seen. I felt an instant connection as though the two of us were old souls who had found each other. I could believe it, I could see it… waking up each morning and having coffee under that tree, telling it about my plans for the day. Months later, in a Skype conference, I asked the then-GGC-alienated salesman, “When you ‘sold’ us the property, when you printed out a photo from your phone that read ‘Wendy’s tree,’ did you know you could not legally sell us the lot you were offering?” He said, “That is correct.”

I suppose there is some comfort in being fleeced in good company, in being in the company of some of the smartest businessmen in the movement. I am not reassured. Perhaps it is because I am an Irish peasant and what reassures me is owning the land under my feet.

But something reassuring is happening. For a few months now, what I call “the founding fathers” have been trying to purchase all rights to GGC and to reboot. It is not just a financial investment to them. They want to live in a community with like-minded people; they want the promise of freedom. I don’t know if they can succeed but I support them.

There are genuine problems that should discourage all and any from currently investing in GGC. For example – and just one of many, many examples – GGC owes immense debts to vendors in the closest town of Curacavi. Brad and I spent two weeks there and fell in love with the people, the town, the experience. But GGC owes hundreds and hundreds of thousands of dollars to hardware stores, service providers… ordinary Chileans who are acutely harmed by the project’s malfeasance. They will be and should be first in line for repayment from any legal actions. GGC is heavily encumbered with no good outcome in the near future.

I remain a friend of Jeff Berwick. I continue to admire the founding fathers of GGC and I do nothing but wish them success. I hope to be part of the resolution. But no one, no one should invest their hard-earned money in this venture before a resolution is clear. I don’t want to have you on my conscience.

A note from Jeff Berwick:

I will be making a public statement about what has happened in GGC in the last year in the next few days and I thank Wendy for valiantly coming forward with the truth in a public forum. As Wendy pointed out, many are working to rectify the issues but I have been shut out of anything to do with GGC for the last year and asked by the major investors not to come forward until there was a resolution… A resolution I am committed to seeing come to fruition as are the founding investors.  In the meantime comments on the article originally posted at The Dailly Bell can be seen here: http://www.thedailybell.com/editorials/35591/Wendy-McElroy-The-Fate-of-Galts-Gulch-Chile/.  Also, a Facebook page for anyone involved in past and present to trade information has been started and can be found here: https://www.facebook.com/ggcrehab.