$4 Million Dollar Man
A lawsuit brought by the state and Bhajan religious leaders challenges salaries at food company Golden Temple
By Sherri Buri McDonald, The Register-Guard
Posted: Friday, May 13, 2011 | 03:11 pm
Top executives at the Golden Temple food company in Oregon, controlled by followers of Yogi Harbhajan Singh Khalsa, drew excessive compensation in recent years — the CEO topped $4 million last year — while the company slashed its donations to its religious and educational nonprofit groups, according to records disclosed in an ongoing lawsuit against the company’s business leaders by state officials and the religious leaders.
The rapidly rising paychecks came after a group of Golden Temple executives largely gained control of the company through a reorganization in 2007, the filings allege.
The state is seeking to recover from the CEO — former Eugene resident Kartar Singh Khalsa — and other top executives any unjust gains and to put Golden Temple in control of an outside receiver.
Oregon Attorney General John Kroger and the religious leaders of the community founded by Yogi Bhajan sued Unto Infinity — the four-person board that oversees Golden Temple — and also the six Golden Temple executives in Golden Temple Management, an Oregon company.
Kroger and the Bhajan religious leaders allege that Unto Infinity, an Oregon nonprofit board, breached its duty to safeguard Golden Temple’s assets for the Bhajan religious community, and that the Golden Temple executives enjoyed excessive pay at the expense of the overall Bhajan community.
Attorneys for Unto Infinity and Golden Temple Management declined to comment on specifics in the court filings and said more facts would be presented at trial.
The lawsuits were merged in December and the case is set for trial in Multnomah County Circuit Court in Portland on May 23.
Kartar Khalsa is the only defendant who is both a member of the Unto Infinity board and of Golden Temple Management. He now lives in Portland, but for years was a Eugene resident, and in 2007 and 2008 held the high-profile volunteer post of board chairman of the Eugene Area Chamber of Commerce.
As CEO of Golden Temple, Kartar Khalsa estimated that last year he had a base salary of $900,000 plus an expected payout of more than $3.2 million from the sale of Golden Temple’s cereal division to an Illinois bakery company, he testified in a deposition recently excerpted in court filings.
John McGrory, the Bhajan ministers’ attorney, claims in court documents that Kartar Khalsa’s share from the cereal unit sale in 2010 was even greater, perhaps as much as $10 million to $20 million.
Many of the claims Kroger and the Bhajan ministers make in their lawsuits stem from a 2007 restructuring of Golden Temple, which, after certain payments, transferred 90 percent of Golden Temple’s profits from KIIT Co., a Nevada for-profit corporation controlled by Unto Infinity, to the six Golden Temple managers, according to court documents. The biggest profits for the Golden Temple executives flowed from the sale of the company’s cereal business, according to the filings.
Kartar Khalsa and other Golden Temple executives also received hefty raises in recent years. Kartar Khalsa’s base salary alone rose 84 percent from 2007 to 2010. It is unclear from the filings who authorized those raises. Their attorneys declined to answer that question.
Attorney Kenneth Davis, who represents Golden Temple Management, said Unto Infinity board members Siri Karm Kaur Khalsa and Sopurkh Kaur Khalsa approved the 2007 restructuring of Golden Temple. The board’s two other members, Kartar Khalsa and Peraim Kaur Khalsa, who are domestic partners, recused themselves from that vote, Davis said.
The corporate restructuring and big raises came three years after the death of Yogi Bhajan, who had brought his own brand of Sikhism to the United States in the late 1960s and attracted thousands of students. Those students built and donated to the Sikh Dharma religious community several successful businesses, including Golden Temple in Eugene and Akal Security, a security services firm in Espanola, New Mexico.
Golden Temple’s restructuring and the raises came as charitable contributions from these for-profit businesses to the Bhajan community’s nonprofit educational and religious organizations plunged, McGrory, the religious leaders’ attorney, said in court documents.