Rajneeshees to Pay $5 Million to Settle Oregon Claims

The state on Friday reached a settlement that will establish a fund of up to $5 million to compensate victims of criminal acts by organizations set up by followers of Indian guru Bhagwan Shree Rajneesh.

Oregon Atty. Gen. Dave Frohnmayer said the settlement of the state’s racketeering lawsuit was reached with attorneys for Rajneeshee organizations.

“This is the conclusion of one of the most startling and alarming and dismaying episodes in Oregon history,” he said.

Signed by Judge

The settlement was signed Friday by Wasco County Circuit Judge John V. Kelly, Frohnmayer said.

The agreement calls for the state to receive up to $750,000 to pay for law enforcement costs in its investigation of criminal acts at the Rajneeshpuram commune. The rest of the fund will compensate victims, including about 700 victims of a food-poisoning outbreak caused by Rajneeshees in The Dalles.

The attorney general said his office had also reached an agreement with Rajneeshee attorneys settling the state’s lawsuit challenging the constitutionality of Rajneeshpuram, the commune-city established by the guru and his followers in 1981.

Needs U.S. Court OK

The settlement, which said the commune violated the constitutional requirement for separation of church and state, still must be approved by the U.S. 9th Circuit Court of Appeals.

The commune was abandoned, except for a handful of caretakers, after the departure of Rajneesh from the United States last year following his guilty plea to U.S. immigration violations.