AND THE COURTS
Beginning in the
late 1960's, Scientology became heavily involved in litigation around
the world and particularly in the United States. The litigation fell
into three general categories: 1) lawsuits brought by the Scientologists
against private citizens who criticized them; 2) lawsuits brought by
private citizens against the Scientologists seeking damages for tortious
and criminal activity, and 3) litigation between the Scientologists and
various government agencies involving the enforcement of criminal and
tax laws. In all three categories, all around the world, the
Scientologists have lost virtually every case. There is a growing
body of written judicial opinion which castigates the Scientologists in
blistering language for their obstructive and unconscionable courtroom
tactics, which include the raising of frivolous defenses, various means
of obstruction of justice, and general abuse of the judicial process.
See Appendix VII and X.
The following is a
more detailed discussion of the three categories of litigation which the
Scientologists have been involved in.
Lawsuits by the Scientologists against private citizens
In the early
1960's Scientology became the subject of public discussion and
criticism. Hubbard and his henchmen realized that they would not be able
to continue to attract victims if it became known on a widespread basis
how Scientology treats its "members", and what the content of Hubbard's
teachings actually was. Accordingly, they conceived a plan to silence
public discussion of Scientology and to force defectors into remaining
silent about their experiences. This plan included aggressive criminal
action, including extortion through use of confidential auditing
information, which is described elsewhere in this Report. The plan also
involved resort to the courts. Hubbard realized that many people cannot
afford the financial burden of defending themselves in litigation. As
his own financial resources grew, he was able to afford lawyers in
cities all over the world to do his bidding. He launched a campaign of
legal terrorism against all who dared to say anything about Scientology.
His own writings set forth this policy very clearly. At one point he
of a lawsuit is to harass and discourage rather than to win."
At another point
defend. Always attack. Find or manufacture enough threat against
them to cause them to sue for peace. Originate a black PR campaign
to destroy the person's repute and to discredit them so thoroughly
they will be ostracized. Be alert to sue for slander at the
slightest chance so as to discourage the public presses from
In one of his
books, Hubbard gives even more explicit instructions about how lawsuits
should be filed against people even against the advice of counsel.
"The law can
be used very easily to harass, and enough harassment on somebody who
is simply on the thin edge anyway, well knowing that he is not
authorized, will generally be sufficient to cause his professional
decease. If possible, of course, ruin him utterly ..... "
ever be arrested for practising Scientology, treating people, make
very sure, long before the time comes, that you have never used
drugs or surgery, and that you have never prescribed a diet, or
vitamins, and when that time might come, make very sure that you
immediately and instantly, within two or three hours after your
receipt of the warrant, have signed upon the server of that warrant,
a personal civil suit for $100,000.00 damages for having caused the
arrest of a Man of God going about his business in his proper
profession, and for having brought about embarrassing publicity and
molestation...." "And if you are foolish enough to have an
attorney who tells you not to sue, immediately dismiss him and get
an attorney who will sue. Or, if no attorney will sue, simply
have an HASI suit form filled out and present yourself to the court
clerk in the court of the area in which your case has come up ..."
Pursuant to these
policies, which are carried out by Guardians' Office "Legal Officers",
at each local org, Scientology organizations have, over the years, filed
hundreds of lawsuits against private citizens and organizations. Most of
them are absurdly frivolous. Most have been dismissed. Generally, the
Scientologists have won cases only where they have so exhausted their
victims' resources that the victims were unable to defend themselves.
For example, in many instances the Scientologists have sued the same
person or publisher simultaneously in many different states and
countries, making it impossible for the person to defend himself. One of
their favorite tactics is to sue a person in a far away place, in hopes
that he will not go to the trouble to defend himself. For example,
they sued the Reader's Digest in Perth, Australia. They sued Paulette
Cooper, a resident of New York, in many parts of Canada. They sued
Michael J. Flynn, a resident of Boston, in Nevada and California, as
well as in Boston itself. They sued the St. Louis Post Dispatch in
California. Fortunately, the courts have become more and more aware of
these terrorist tactics. See Founding Church of Scientology v. Verlag
536 F 2d. 429 (1976).
The following are
illustrative examples of lawsuits by the Scientologists against private
citizens. They are given by illustration only. The total number of cases
is too lengthy to be included in this report.
(i) Hubbard v.
Vosper (1972) 1 All Eng. Rep. (decided by the highest judicial court
Hubbard sued Vosper, attempting to enjoin him from revealing the
contents of certain Scientology writings which he had taken with
him when he left Scientology. The Court held that Hubbard was
not entitled to relief because
the courses of the Church of Scientology contained such
dangerous material that it was in the public interest that
it should be made known, and
Hubbard had protected his secrets by such deplorable means
that he came into court with "unclean hands" and therefore
could not seek equitable relief.
(ii) Church of
Scientology v. Kaufman (1973)
627, A lower court decision involving a similar effort by the
Scientologists to enjoin publication of certain of its writings.
The court followed the Hubbard v. Vosper opinion, after
closely examining Scientology practises, including its habit of
viciously attacking its critics.
of Scientology v. Department of Health and Social Security (1979) 3
All Eng. Rep. 97.
case the Scientologists tried to get the names of people who had
written to the Department with complaints against Scientology.
The Court severely restricted their access to the names, after
finding that there was a "real risk" that the documents
requested would be used for "threats and blackmail". The Court
referred to "the strong arm of Mr. Hubbard" which could harass
and intimidate people in distant lands.
(iv) Church of
Scientology v. Cazares 638 F.2d 1272 (1981)
Scientologists sued former Mayor of Clearwater for defamation
and civil rights violations. The Federal District court
dismissed all the counts, and held further that the suit was so
frivolous that Cazares was entitled to be paid $38,000 for the
amount he had expended to defend himself. This very
extraordinary award was upheld by the Fifth Circuit Court of
(v) Church of
Scientology of California et al. v. James Siegelman et al., 475 F.
Supp. 950 (1979)
filed suit for defamation against publisher and authors. The
District Court judge ruled that various statements of several of
the defendants would not sustain a cause of action for
defamation and the case was properly dismissed. The Court left
standing a cause of action against one defendant.
Church of Scientology, Etc. v. Verlag, 536 F.2d 429 (1976)
magazine article described the terrorization of two women by
West German Scientologists and noted an investigation into the
activities of Scientologists by the West German Federal Criminal
Affairs Bureau. The Scientologists sued for libel. The Court
noted that this was one of many lawsuits which the
Scientologists had filed against the same publisher.
of Scientology of California v. James E. Adams 584 F.2d 893 (1978)
Scientology organization sued a Missouri newspaper publisher for
libel in California. The Court of Appeals upheld the District
Court's dismissal of suit based upon lack of personal
Founding Church of Scientology of Washington v. American Medical
American Medical Association's monthly magazine, Today's
Health, contained an article, "Scientology -- Menace to
Mental Health." The Scientologists sued for libel and
defamation. The trial judge dismissed the complaint with
prejudice. The Court of Appeals affirmed the dismissal and ruled
that third count, interference with contractual relations failed
to state a cause of action.
against Michael J. Flynn and Associates
in early 1980. the Scientologists have continually attempted to
disrupt Michael J. Flynn's law practice by filing frivolous
lawsuits against him and his associates. They began by filing a
lawsuit in Federal Court in Las Vegas, Nevada, against Kevin
Flynn and Attorney Thomas Hoffman alleging civil rights
violations. The suit was dismissed within three months. They
then filed a nearly identical lawsuit against Kevin Flynn in
State Court in Las Vegas. That suit was dismissed earlier this
year. They also filed a nearly identical suit against Michael J.
Flynn in January of this year. It is expected that the suit will
be dismissed shortly. They sued Michael J. Flynn in
Massachusetts Superior Court in early 1980, alleging that he was
a bailee of certain documents. Recently, after learning that
Michael J. Flynn had been retained by the City of Clearwater,
they filed a new suit against him in Federal Court in Los
Angeles, and complaints against him in Washington. They have
also filed four bar Complaints against Michael J. Flynn, and one
against Attorneys Thomas Greene and Thomas Hoffman, all of which
have been dismissed. After learning of the Clearwater situation,
they filed another bar Complaint against Mr. Flynn. All of those
suits and complaints are entirely frivolous.
Scientologists sued Lorna Levett and several other people in
Canada for libel. After the case had gone on for some time, the
judge ordered the Scientologists to post bond for defendant's
attorney's fees in the amount of $60,000, after concluding that
the action was probably frivolous. They also sued Levett and
others in California, where they could not afford to defend
and Adelle Hartwell
people are outspoken critics of Scientology in Las Vegas,
Nevada. After the Hartwells contacted Michael J. Flynn, the
Scientologists sued them for alleged civil rights violations.
The Hartwells counter sued. The court denied the Scientologist's
Motion to Dismiss.
Scientologists, over the years, have filed nearly twenty
lawsuits against Ms. Cooper, including three in the last few
weeks prior to the presentation of this report.
learning that four defecting members had contacted Michael J.
Flynn, the Scientologists attempted to get criminal complaints
against them in the Boston Municipal Court. Failing in this,
they sued them in Superior Court.
Scientologists sued the Readers Digest in connection with an
article 18 months ago and in connection with the article in the
present issue. The first suit was brought in Perth, Australia,
for the sum of $15,000, apparently in hopes that it would be
ignored or settled. The suit has not been successful.
Scientologists sued the St. Louis Post in several places in
connection with a series it did on Scientology. The suits were
Scientologists have often financed or provided legal counsel for
members seeking divorces or awards in divorce actions,
consistent with the policy of "disconnect" which encourages
Lawsuits by private citizens against the Scientologists
Over the years the
Scientologists have regularly engaged in tortious and criminal acts
against members, former members, and critics who have never been
members. Many of these plaintiffs have been horribly damaged and are
seeking large compensation. The following is an illustrative list:
(i). Allard v.
Church of Scientology of California, et al., 120 Cal. Rptr 797
plaintiff sued for abuse of process alleging that the
Scientologists had maliciously caused a criminal complaint to be
issued against him. The criminal complaint was filed pursuant to
the "Fair Game" doctrine but lacked any basis in fact. The jury
awarded damages against Scientology in the amount of $300,000
for abuse of process.
Christofferson v. Church of Scientology, Civil Action 7704-05-184,
awarded approximately 2 million dollars to [a] former member who
had only been in the organization for 7 months and only expended
$3,000. Jury awarded punitive damages for fraud, violation of
the Oregon Deceptive Trade Practices Act, and outrageous
conduct. Case is now on appeal.
v. Church of Scientology v. Tampa Federal District Court
member suing for fraud, intentional infliction of emotional
distress and other damages.
1980, a Florida physician received a $165,000 punitive damage
award against the Church of Scientology in a libel case.
(v) La Venda
Van Schaick v. Church of Scientology of California, Church of
Scientology of New York, Church of Scientology of Florida, L. Ron
Hubbard, Mary Sue Hubbard, United States District Court, Boston
Civil Action No. 792491-6
is a named party in a $200,000,000 class action filed on behalf
of thousands of class members nationwide who have been
victimized by a pattern of racketeering activities perpetrated
by the corporate defendants. Plaintiff alleges various
individual causes of action, to wit: fraud, intentional
infliction of emotional distress, breach of contract, violations
of Fair Labor Standards Act. She was kidnapped and imprisoned
for a period of time. She was forced to divorce her husband.
After she left Scientology, she was pursued and harassed, and
her confidential auditing information was disclosed to the
Burden v. Church of Scientology of California, et al., Civil Action
No. 80-501 T-K. United States District Court, Tampa
relied on various representations pertaining to the philosophy
and nature of the Scientology organization. Defendants promised
plaintiff an education, a salaried position, comfortable living
quarters, and that auditing benefits were scientifically
guaranteed. Plaintiff alleges damages for breach of contract,
fraud, emotional distress, conversion, false imprisonment,
violations of Fair Labor Standards Act and Racketeer Influenced
Corrupt Organizations Act. Tonja was subjected to the "R.P.F.",
a humiliating and degrading prison type environment at the Fort
Harrison where she saw one person "chained up", and others in
various stages of mental and emotional deterioration. Tonja,
from the age of 13 to 17, served as Hubbard's personal slave,
decoding telexes for criminal operations, received no education,
worked 80 hour weeks without pay, escaped, was kidnapped, given
a $60,000 "Freeloaders' Debt", subjected to "Fair Game", and has
had confidential information disclosed to the media.
Cooper v. Church of Scientology of Boston, et al., Civil Action No.
81-681-MC, United States District Court, Boston
Plaintiff's suit alleges damages for intentional infliction of
emotional distress and for invasion of privacy. Defendants
engaged in a nationwide conspiracy to attack, defame and destroy
the plaintiff. This conspiracy included burglarizing the office
of the Boston Globe; planting covert agents in the Attorney
General's Office and in the Better Business Bureau, and
burglarizing her psychiatrist's office.
plaintiff's motion for substituted service upon L. Ron Hubbard
was allowed by the court. This was the first court order
allowing service upon Hubbard. The court allowed plaintiff's
motion for a real estate attachment in the amount of $300,000.
The court ordered all discovery to be completed by December 31,
Cooper is also suing the Church of Scientology in California and
New York. These actions relate to a frame-up on federal charges
which the Scientologists carried out against Ms. Cooper after
she wrote a book critical of Scientology. They subjected Ms.
Cooper to years of burglary, harassment, anonymous smear
campaigns, and other vicious tactics specifically designed to
drive her insane, and at one point succeeded in having federal
indictments brought against her, which were subsequently
Lawrence Stifler v. Church of Scientology of Boston et al., Civil
Action No. 44706, Suffolk Superior Court
a 40 year old psychologist, specializes in physical exercise as
a therapy for emotional problems. As he returned from work one
evening, he was battered by an employee of the Church who had
been frustrated in his attempt to induce the plaintiff to return
for a "free personality test". Defendant jumped upon plaintiff's
back and began choking him. Plaintiff, a marathon runner, fell
to the ground and tore the medial meniscus in his knee.
Plaintiff faces a prognosis of knee surgery, and has been unable
to engage in his regular activities. The defendant's motion to
dismiss was denied. The court allowed plaintiff's motions for
real estate attachments totalling $60,0000. On request of the
Plaintiff, the court set an early trial date for December, 1981
and Adelle Hartwell v. Church of Scientology of Nevada, Nevada
District Court No. A196800
Hartwells counterclaimed against the Scientologists, who
originally sued them for civil rights violations. The
Scientologists' motion to dismiss was denied by the court. The
Hartwells were induced by false promises to leave gainful
employment in Las Vegas, sell their belongings, and go to work
for Scientology. They were promised salaried positions with
luxurious accommodations in Clearwater at the Fort Harrison.
They were sent, instead, to a secret desert location and given a
vermin infested shack to live in. Hubbard was present at the
desert ranch, attempting to make films. After the Hartwells left
they were viciously attacked in an attempt to keep them quiet
about Hubbard. The Scientologists attempted to break up their
marriage, threatened to accuse them of crimes, libeled and
slandered them in the public media, and threatened them with
death. Ernest Hartwell was called a murderer and an
Gervais v. Church of Scientology of Boston, et al., Civil Action No.
40906, Suffolk Superior Court
counterclaimed against the Church for fraud, breach of contract,
emotional distress, invasion of privacy, and other causes of
action. Plaintiff purchased $12,000 of auditing and was promised
that auditing was scientifically guaranteed to confer miraculous
benefits. Plaintiff was recruited by the Guardian's Office to
engage in covert activities in Boston, to wit: investigation and
intelligence gathering on Mayor Revin White, Senator Joseph
Timilty and other individuals. Plaintiff seeks damages for
breach of contract, invasion of privacy, breach of fiduciary
duty, unfair and deceptive trade practices, fraud, intentional
infliction of emotional distress. The defendant's motion to
dismiss was denied by the court and the suit is proceeding
through the discovery stage.
Garritano v. Church of Scientology of Boston, et al., Civil Action
No. 40906, Suffolk Superior Court
counter-claimed against the Church for fraud, emotional
distress, breach of contract, violations of Fair Labor Standards
Act, and other causes of action. Plaintiff worked seven days
each week for approximately two years. Plaintiff became gravely
ill when he was instructed to cure his illness through auditing.
Plaintiff contracted hepatitis at the Fort Harrison which
required hospitalization and a protracted period of
convalescence, and was not allowed to see a doctor while he was
there. During his time in Scientology he was subjected to
intensive brainwashing routines.
Graves v. Church of Scientology of Boston, et al., Civil Action No.
40906, Suffolk Superior Court
counterclaimed against the Church for fraud, emotional distress,
violations of Fair Labor Standards Act, breach of contract and
other causes of action. Plaintiff rendered services for
approximately 4-1/2 years as a staff member. Plaintiff was
subjected to the "Disconnect" and "Fair Game" policies. The
defendants' motion to dismiss was denied.
Marjorie Hansen v. Church of Scientology, Inc., Church of
Scientology of California, Inc., Civil Action No. 41074, Suffolk
is a twenty-one year old woman who fell prey to a typical "bait
and switch" scheme on the street. Defendants fraudulently
represented the nature of various Scientology courses; made
fraudulent statements to the plaintiff's mother; subjected the
plaintiff to the "Fair Game" and "Disconnect" policies.
Plaintiff invested $3,000 in Scientology processing and
paraphernalia and provided services per contract agreement for
five weeks working sixty hours per week. Defendants disclosed
plaintiff's auditing materials and forced her to engage in
sexual activities with her auditor. The defendants' motion to
dismiss was denied by the court. The defendants refused to
produce requested documents asserting the First Amendment right.
The Supreme Judicial Court found no privilege and the defendants
were defaulted for failing to produce the documents.
Subsequently, the plaintiff stipulated for a removal of default.
Garritano v. Church of Scientology of Boston, et al., Civil Action
No. 40906, Suffolk Superior Court
counterclaimed against the Church for fraud, emotional distress,
violations of the Fair Labor Standards Act, breach of contract,
and other causes of action. Plaintiff rendered services for
approximately seven years. Plaintiff was subjected to Disconnect
policy and Fair Game doctrine. The defendants' motion to dismiss
was denied by the court, and the suit is proceeding
Troy v. Church of Scientology of Boston, et al., Civil Action No.
41073, Suffolk Superior Court
a professional woman, was induced to join Scientology at a time
when she was emotionally troubled. Defendant subjected the
plaintiff to Disconnect policy, and insisted she disconnect from
her therapist and family. Defendants told plaintiff that
auditing would cure her emotional problems. Defendants conspired
to defraud plaintiff's father. Defendants forced plaintiff to
quit her job and work on the Church staff. Plaintiff purchased
auditing for $4,100. Plaintiff sues for breach of contract,
invasion of privacy, violations of Fair Labor Standards Act,
intentional infliction of emotional distress, unfair and
deceptive trade practices, deceit, breach of fiduciary duty.
defendants' motion to dismiss was denied by the court and
the case is proceeding through discovery.
(xvi) Jane Lee
Peterson v. Church of Scientology of California et al., Civil Action
No. CV-81-3259 (CBM) (KX), United States District Court, Central
District of California
was induced to join the Scientology organization in reliance
upon numerous misrepresentations concerning the organization and
the benefits of auditing. The plaintiff has alleged numerous
tortious counts for which she has suffered severe emotional and
was recently filed and the court has not acted on the
defendants' motion to dismiss.
A. Garrity v. Church of Scientology of California, et al., Civil
Action No. CV-81-3260 (WMB) (MX), United States District Court,
Central District of California
plaintiff was defrauded of her time and money after relying on
numerous misrepresentations concerning the Scientology
organization and the benefits derived from the auditing process.
Richard J. Peterson v. Church of Scientology or California, et al.,
Civil Action No. CV-8103251 (CBM) (KX), United States District
Court, Central District of California
plaintiff sued for intentional infliction of emotional distress,
fraud, violation of Fair Labor Standards Act and numerous other
actionable wrongs. The case was recently filed and discovery has
just been initiated.
Garrity v. Church of Scientology of California, et al., Civil Action
No. CV-81-3260 (WMB) (MX), United States District Court, Central
District Court of California
plaintiff sued for damages after suffering severe emotional and
psychological distress. The plaintiff relied upon numerous false
representations concerning the nature of Scientology and the
benefits of auditing. The case was recently filed and the court
has not ruled on the defendants' motion to dismiss.
Jefferson v. Church of Scientology of California, et al., Civil
Action No. CV-81-3261 (RMT) (JRX), United States District Court,
Central District of California
plaintiff sued for breach of contract, fraud, intentional
infliction of emotional distress, invasion of privacy, breach of
fiduciary duty and additional actionable torts. The plaintiff
was defrauded in excess of $60,000. The case was recently filed.
The plaintiff was a professional golfer, P.G.A. member, and a
family man prior to entering Scientology. As a result of his
involvement in Scientology, he lost his P.G.A. standing and his
marriage was intentionally destroyed. He was declared "Fair
(xxi) Smith v.
Church of Scientology of California et al., Suffolk Superior Court
sued for breach of contract, fraud, intentional infliction of
emotional distress, invasion of privacy, breach of fiduciary
duty, and deprivation of civil rights. The defendants motion to
dismiss has been denied by the court.
Varchal v. Church of Scientology of California et al., Civil No. __,
Suffolk Superior Court
sued for breach of contract, fraud, intentional infliction of
emotional distress, invasion of privacy, breach of fiduciary
duty, and deprivation of civil rights. The defendants' motion to
dismiss has been denied by the court.
Bear v. Church of Scientology of New York, et al., New York Federal
was fleeced of $35,000 in less than two weeks. She is suing for
return of her money, and for damages for fraud, infliction of
emotional distress, etc. The Scientologists intentionally
solicited her during a period of bereavement.
Lockwood v. Church of Scientology of California, et al., Civil
Action No. 81-4109-KN (JRX), United States District Court, Central
District of California
plaintiff filed suit alleging breach of contract, fraud, unfair
and deceptive trade practices, invasion of privacy, breach of
fiduciary duty, intentional infliction of emotional distress,
violations of Fair Labor Standards Act and violations of the
Racketeer Influenced Corrupt Organization's Act (for extortion
and mail fraud), The plaintiff suffered severe emotional
distress. The court has not acted on the defendants' motion to
Baptista v. Church of Scientology Mission In Cambridge, Civil Action
No. ___, Middlesex Superior Court
plaintiff sued for fraud, intentional infliction of emotional
distress, unlicensed practice of medicine, invasion of privacy
and other actionable wrongs. The court allowed the defendants'
motion to dismiss five of the six counts but failed to write an
opinion supporting its decision, which conflicts with written
opinions of four Massachusetts Superior Court judges in eight
other cases. The decision will be appealed.
3. Litigation between the Scientologists and Government agencies.
(a) Tax Litigation
History of Scientology
The Church of
Scientology is no stranger to state and federal taxing authorities. In
fact, the Church of Scientology's tax status has been challenged in more
courts than any other cult of similar vintage. Scientology has lost
In 1969, the
Church of Scientology of California became the "mother church" of
Scientology and has continued to hold said position. Prior to the
California corporation's ascendancy, the Founding Church of Washington,
D.C. held the titular position. In 1961, the Founding Church filed suit
in the United States court of Claims, seeking a refund. The primary
issue raised was the tax exempt status under section 501 (c) (3) of the
Internal Revenue Code for the years 1956, 1953 and 1959. On July 16,
1969 the Court of Claims rendered an opinion finding that the
Scientology Church did not qualify for the exempt status for the three
years in question because, "nothing we have found in the record dispels
the substantial doubts the Court entertains concerning the receipt (inurement)
of benefit by the (L. Ron) Hubbards from plaintiff's (the Founding
Church's) net earnings." Founding Church of Scientology v. United
States, 412 F.2d 1197, 1202, Cert. denied, 397 U.S. 1009
During July of
1967, while the Founding Church case was being litigated, the I.R.S.
notified the Church of Scientology of California that it was no longer
recognized as an exempt religious organization. The California
Scientology corporation failed to heed the I.R.S. notice, and did not
file corporate income tax returns. The I.R.S. attempted to audit the
California Church for tax liability for 1968 and 1969 but the Church
resisted claiming bad faith and harassment. The Scientologists filed
motions for production of I.R.S files pertaining to the Church and
attempted to notice depositions. The I.R.S. moved to quash discovery and
the Court of Appeals ordered "a limited evidentiary hearing to inquire
into the Service's purpose (i.e., harassment, Vel. none).
United States and Cuberton v. Church of Scientology of California,
520 F.2d 818, 825 (9th Cir. 1975).
conferred in Washington and the I.R.S. conducted a tax examination of
the California Church for the years 1971 through 1974. The Service
prepared a 131 page report and eight volumes of exhibits. The contested
issues are briefly summarized below:
accumulation of progressively increasing and substantial amounts of
income ($3,367,873.91, by December 31, 1974), not expended for
religious or other tax exempt purposes.
Inurement to a privately owned Panamanian corporation, OTC, via
currency exchange gains amounting to $879,615.63 for the years
1971-1974. This appeared to represent income to the California
Church but was not accounted for in the Church's income tax forms.
Approximately $470,000 paid by the United Kingdom and Danish
Scientology Churches directly to OTC during the years 1971-1974.
This appeared to represent income to the California Church but was
not accounted for in the Church's income tax forms.
California Church's failure to treat as income the advanced payments
of the following amounts:
1971 - $
1972 - 1,198,763.86
1973 - 1,635,786.00
1974 - 2,194,588.00
to L. Ron Hubbard and family, royalties, and salaries, in violation
of regulations of I.R.S.
California Church engaged in substantial commercial activity within
the meaning of Better Business Bureau v. United States, 326
U.S. 279 (1945) and Scriptures Press Foundation v. United States,
285 F.2d 800 (Ct. Cl. 1961).
California Church deducted payments to the Central Defense and
Dissemination Fund (U.S. Church of Scientology Trust).
Revenue's Audit raised additional questions pertaining to the following
a) The use by
the United States Churches of Scientology Trust of Swiss and
Luxembourg bank accounts as the depositories for millions of dollars
of trust funds;
application and control of the Trust's funds;
maintenance of large amounts of currency belonging to Scientology
aboard the ship Apollo for an extended period of time;
d) The degree
of control still effectively exercised by L. Ron Hubbard over the
California Church's affairs and policies.
Office of the Internal Revenue prepared a Technical Advice Memorandum
that concluded the California Church had failed to establish either
non-existence of a substantial commercial purpose; or
non-existence of inurement to private persons or organizations."
On February 14,
1977 statutory notice of deficiency for the years 1970-1974, inclusive,
were prepared. The deficiency notice was issued on December 28, 1977.
Recently, the LR.S. completed approximately three months of testimony
which overwhelmingly demonstrated the following:
California Church operates for a substantial non-exempt purpose,
i.e., the commercial profit-making activities.
California Church operates for a second, substantial, non-exempt
purpose; i.e., the commission of acts and attempts to commit acts
which are violative of public policy.
California Church committed acts so repugnant to public policy that
any tax exempt status would be vitiated.
California Church allowed its net earnings to inure to the benefit
of a private corporation, OTC.
Church is scheduled to present a rebuttal during the Fall of 1981 in
Missouri, a similar scenario developed. The Mission Church of
Scientology resisted a ruling of the state tax commission which
denied the "Church" tax exemption. In Missouri Church of Scientology
v. State Tax Commission, et. al. 560 S.W. 2d837 (1978) the Church
sought judicial review of the tax commission determination:
property of the appellant (Church) has not, therefore been shown to
be used exclusively for religious or charitable purposes and
therefore cannot be exempted from ad Valorem taxation."
Upon review, the
Supreme Court of Missouri affirmed the Lower Court's decision. that
Scientology did not qualify as a religion for purposes of tax exemption.
The court subscribed to a strict definition of religion, belief in a
Supreme Being. The Court adopted the Commission's finding:
"We find the
testimony of the Reverend M. Rock (Scientology, witness) generally
not to be credible and worthy of belief in particular in respect to
his description and categorization of the activities of the
Organization, its alleged religious services, its financial
structure and the nature of the so-called donations which are made
to the organization." 560 SW2d at 843.
appellant (Scientology Church) has some of the trappings and
accoutrements of an organized religion, it appears to be more an
applied philosophy which has certain religious connotation, but
which falls short of being devoted to the worship of a Supreme
Being. 560 S.W. 2d at 843."
Supreme Court found that Scientology failed to qualify for exemption as
its property was not used exclusively for religious worship.
Florida Courts denied the Church of Scientology of California tax exempt
status for the year 1976. In Church of Scientology of California v.
Schultz, Fla. App., 371 So.2d 502 (1979), the Pinellas County
Property Appraiser's determination that the Scientology organization
failed to qualify for tax exempt status was upheld by the District Court
of Appeal of Florida for the Second District.
In R. v.
Registrar General (Lord Denning MR) 3 All ER 886 (1970), the
Registrar General determined that the Chapel at Scientology's English
location, Saint Hill Manor, in East Grinstead, Sussex, England failed to
qualify as "a place of meeting for religious worship". Consequently, the
Scientologists were denied certain privileges and were subjected to the
levying of rates (Taxes). On appeal, Lord Denning of the Court of Appeal
studied the creed of the Church of Scientology and opined:
"I must say
that it seems to me to be more a philosophy of the existence of man
or of life rather than a religion."
relied upon Scientology doctrine which stated:
Scientology Church Service we do not use prayers, attitudes of
piety, or threats of damnation. We use the facts, the truths, the
understandings that have been discovered in the science of
Scientologists' appeal was dismissed and leave to appeal to the House of
Lords was refused.
organization's criminal, tortious and commercial activities will
precipitate further governmental scrutiny which will result in
additional challenges to claims of religious exemption.
Enforcement of Criminal and Regulatory Laws
been involved in many criminal cases and quasi-criminal cases both in
the U.S. and in foreign countries involving violations of criminal law
and other regulatory laws. Some of the case areas are as follows:
States v. Mary Sue Hubbard, U.S. District Court for the District of
Columbia, Cr. No. 78-401.
defendant, Mary Sue Hubbard (Ron Hubbard's wife) and 10
defendants, all of whom were top officials of the Church of
Scientology, were indicted for conspiracy and criminal acts. All
the defendants were convicted and sentenced to jail terms. The
indictments were based on a massive campaign of criminal
activity to infiltrate and burglarize government agencies and
obstruct criminal investigations.
was convicted in absentia and sentenced to a jail term in France
for criminal activities by his employees there.
States v. Article or Device, 333 F. Supp. 357 (1971)
filed by the government seeking condemnation of the E- meter and
writings for misbranding in violation of the Federal Food, Drug
and Cosmetic Act. The court held that the literature of the
church contained false, unqualified scientific claims without
any religious content. The E-meter was misbranded as a result of
the misrepresentation, in failing to label with adequate
directions for use.
ordered that the E-meter could be used only in a religious
setting and only if explicit warning disclaimers were affixed
thereto. Scientology has never complied with this order.
opinion, Judge Gesell made the following pertinent findings:
of this was false -- in short, a fraud. Contrary to
representations made, there is absolutely no scientific, or
medical basis in fact for the claimed cures attributed to
bulk of the material is replete with false medical and
scientific claims devoid of any religious overlay or
"Viewed as a whole the threat of the writings is secular,
(iv) Church of
Scientology of California v. Elliot Richardson, 437 F.2d 214 (1971)
Scientologists filed suit alleging deprivation of constitutional
rights. The government had seized various E-meters and sought to
return them to the United Kingdom. The government alleged that
the E-meters were misbranded as they failed to display adequate
instructions concerning their use. The Scientologists argued
that the government's action constituted an infringement of the
Church's First Amendment rights. The court held that the
government's seizure was proper and reasoned the right to
religious freedom did not include the right to violate the
Federal Food, Drug and Cosmetic Act.
(v) Church of
Scientology of Minnesota v. Department of Health, Education and
Welfare, 341 F. Supp. 563
Scientologists' motion to dismiss a case brought by the
government was properly denied. The government alleged that the
Scientologists misbranded E-meters by failing to supply adequate
instructions concerning their use.
(vi) In Re
Possible Violation of 18 USC 371. 641, 1503, Appeal of Arthur Maren,
184 U.S. App. D.C. 82 (1977)
Scientologist minister, Arthur Maren, asserted a First Amendment
privilege and refused to answer questions before the grand jury.
Maren was found to be in contempt and sentenced. Maren appealed
and the Court of Appeals affirmed the lower court's ruling which
formed no valid privilege.
Operations in Clearwater
1. General description
Florida, and Los Angeles, California, represent the two largest
Scientology headquarters in the world. Scientologists refer to their
Clearwater operation as "FLAG". It is generally considered to be the
home of the "Sea Org", which is supposedly Hubbard's elite corps of
Scientologists complete with uniforms and paramilitary type training.
The foregoing discussions about Scientology sales, practices,
organizational structure, Guardian's Office activities, and enforcement
policies, uniformly apply to Scientology activities in Clearwater. In
fact, Clearwater and Los Angeles are the two central communications
links for all Scientology activities, whether legal, illegal, fraudulent
or criminal. The subtle brainwashing techniques of Scientology
heretofore discussed which are set forth at length in the Australian and
the English inquiries, are practiced daily in Clearwater. The deceptive
and fraudulent sales practices including the breach of confidentiality
of auditing information, and the "bait and switch" scheme which is a
fundamental part of Scientology operations, are all practiced daily in
Clearwater. The enforcement policies, including "Fair Game", "Attack the
Attacker", "Disconnect", "Freeloaders' Debt", and "Security Checks", are
practiced daily at the Clearwater facilities. The Guardian's Office
activities which have been well publicized in the Clearwater media,
including the incredible pattern of criminal burglaries, larcenies,
infiltrations, harassment, and frame ups were all either formulated or
implemented within the City of Clearwater, or Clearwater always remained
the central communications link for all such criminal activity. XII
2. Scientology Origins in
Florida occurred at Daytona Beach during October of 1975. Approximately
500 persons from Hubbard's primary ship, the Apollo, moved there and
rented several hotels. A covert search was conducted in Florida at this
time by the Guardian's Office to locate suitable headquarters for
Hubbard and Scientology. This operation was called "Operation Goldmine".
The controversial nature of the organization, and worldwide
investigations by various nations required Hubbard to locate a quiet,
non-controversial location. XII
Under the guise of
"United Churches of Florida", Hubbard began purchasing buildings in
Clearwater, Florida, through the Southern Land Development Corporation,
a Scientology "straw" corporation. The purchase of these buildings in
Clearwater was discussed in a letter dated November 25, 1975, to L. Ron
Hubbard, by Henning Heldt, U.S. Guardian's Office chief. In that letter,
funds: I do not have all of the C of S of C (Church of
Scientology of California) figures up to date here, but will
shortly. Preliminarily, I have excellent news on covering the
indebtedness. PER lola, C of S of C Lux Account balance is:
$7,100,000.00 approximately. Defense Funds for C of S of C total
$2,535,563.33 as of 30 September, 75. Subtracting $3,100,000.00 for
Fort Harrison, Bank Building, cars and various costs, the remainder
is in excess of $6,500,000. This leaves funds for Purchase of
Building #3 and the covering of Marty's 14 November figure.
U.C.F. (United Churches of Florida) is a subsidiary of C of S of C,
it can be funded by C. of S. of C. as to its P.R. activities, and
since its a part of C. S. of C., it may lease, rent, and use C. of
S. of C. space for its religious purposes. Also personnel may
transfer freely back and forth, a factor which can prevent logistic
Yet, to the
outside world and Clearwater, U.C.F. may represent itself as the
user of Harrison and even that C. of S. of C. is a member. It can
keep doing what it's doing, which is from all reports quite
successful. From the outside, the whole operation can be made to
appear to be U.C.F., and its members. Yet corporate distinctions
that could make these appearances difficult to maintain, (personnel,
income), can be very loose.
phase out, or not, when C. of S. of C. is ready to surface ..... "
Once the purchase
of the first buildings in Clearwater, Florida, was accomplished, Hubbard
moved his base of operations to that area. This occurred in November and
December of 1975. Although the Scientologists moved into the Fort
Harrison Building, Hubbard established a secret headquarters for himself
in Dunedin. To prevent persons from finding Hubbard, and his secret base
at Dunedin, the Scientologist Guardian's Office maintained tight
security at Hubbard's base. Guardian Program Order #156, (G.P.g.m.O.
156), entitled, P.G.M. LR.H. Security: Code Name Power, explains
how this process was to take place, and what persons were responsible at
the "FLAG" base in Clearwater. Some of the following are persons
reviewed in that report:
Laura Wolf: "FLAG personnel with experience on PR lines. Laura,
former legal research U.S. Short mini-hatting -- internship, Dick
Jones at WW for training for over a year, not A/G PR calibre, per
"Randy Winmond and S.C. Covert Mission in CW (Clearwater). S.C. to
be replaced by Cindy, Randy's wife. Both are very experienced in
covert collection and ops. On Garrison M.O.S."
Scientologists' clandestine presence in Clearwater, was shortlived since
reporter Betty Orsini of the St. Petersburg Times initiated an
investigation of United Churches of Florida, and/or Southern Land
Development and Leasing Company on or about November 24, 1975. Later, in
a letter dated March 5, 1976, the Guardian's Office penetrated the St.
Petersburg Times and stole numerous notes and memoranda of her
investigation dated between November 24, 1975 and January 30, 1976.
After the Scientologist's presence in Clearwater had been discovered,
Hubbard fled Dunedin. The local media responded at the time with an
investigation into Scientology which prompted the Guardian's Office to
locate all persons both public and private "attacking" the organization.
In a Guardian's Office letter dated March 12, 1976, entitled "Prediction
in C.W." (Dick Weigand) wrote:
(Snider), you asked for a chart of enemy lines used up to this point
for C.W. (Clearwater) attack after research of the files was done.
Attached is this chart. It looks complete to me. From this I see the
areas of priority to infiltrate are: 1) S.P.T. 2) Mayor 3) Channel
13 T.V. 4) Snider 5) Florida Attorney General 6) Florida State
As things have
been quite hectic with me the last two days, I wanted to send this
to you to go over. Any changes or additions you want to make would
against the Mayor in the preceding paragraph were carefully orchestrated
by the Scientology Guardian's Office over a period of time. During this
period, the Mayor, Gabriel Cazares, had publicly responded to
Scientologists' presence in Clearwater. As a result, the Church of
Scientology's Guardian's Office ran a covert campaign to "ruin Mayor
Gabriel Cazares' political career by spreading a scandal about his sex
life broadly." To achieve this, the Scientologists Guardian's Office
wrote, "Get the C.W. Democratic political Machinery, the local press,
and some of the local Cazares supporters and Sen. dissidents to turn
against Cazares as a political candidate". The actual operations against
Cazares are found at the end of this report in Appendix XII.
The Church of
Scientology's Guardian's Office in Clearwater went to great lengths to
prevent Mayor Cazares from "attacking the church". Secret Guardian
operation "Keeler" set in motion a mailing to responsible public persons
in Clearwater by forging Washington Post news articles. The program
called for Scientologists to purchase a faunt, (a typeset like the
Washington Post), and produce a forged Washington Post newspaper
article. Additionally, the Guardian's Office prepared an operation to
send false and unsigned letters, false information using threats, to the
Clearwater City Commission regarding Cazares. The letters to be sent to
the attention of Karlene Deblaker. Apparently Ms. Deblaker was chosen by
the Guardian's Office since "an unsigned letter is to go to the City
Commission. Pick one person who would show it to the Mayor. A female
against "attacks" from the Florida Attorney General, and the Florida
State Attorney (Russell), mentioned in the above letter was accomplished
by placing Scientology FSMs (Scientology covert agents) in the State
Attorney's office and in the local District Attorney's Office in
Clearwater. Evidence of this infiltration is found in Guardian Program
Order #158 dated December 5, 1975, entitled: Project Early Warning
System: B-1. The purpose of the operation was to protect Hubbard. It
alerting EARLY WARNING SYSTEM throughout the G.O. Network so that
any situation concerning governments or courts by reason of suits is
known in adequate time to take defensive actions to suddenly raise
the level on LRH personal security very high."
Office infiltrated, with FSMs, the local U.S. Marshall's Office, the
State Attorney General's Office, the local District Attorney's Office,
and local I.R.S. District Office.
The increase in
investigations of Scientology at this time led to a massive program by
the Scientologists' Guardian's Office to silence its critics. A
Scientology Guardians' Office document entitled DGUS Outstanding Orders
into B-1 reveals a Log Entry #74, concerning "FSMs in the CW area. Debug
the area". Included in these operations were the Clearwater Sun, the
St. Petersburg Times, the Sertoma Club, the Clearwater Chamber of
Commerce, the Easter Seals of Pinellas County, representative Culbreath,
Dr. John Winter, Steve Advokat, the Executive Committee of the Pinellas
County Democratic Club, St. Petersburg Junior College, Ron Stewart, the
Clearwater City Departments of Health, Education, Sanitation, and the
Fire Department. Scientology Logs of these operations are found in
Appendix XII of this Report.
Clearwater, Communications Link for Criminal Activities
overwhelming evidence, particularly in the form of internal Scientology
documents, to support the conclusion that Clearwater is a central
communications link throughout the world for the many criminal
activities in which Scientology is involved.
documents and others primarily came from the documents seized by the
Federal Bureau of Investigation at the Washington and Los Angeles,
Guardians' Office in 1977. There may be many thousands of documents
still on file in Washington relating to Scientology operations in
Clearwater which have not yet been released or procured by the media or
operations which were conducted in the United States using Clearwater as
a base of operations are absolutely staggering. These crimes include
infiltration and theft of documents from many prominent private,
national, and international organizations, law firms, newspapers; the
execution of smear campaigns and baseless law suits to destroy private
individuals who had attempted to exercise their First Amendment rights
to freedom of expression; the framing of private citizens who had been
critical of Scientology including the forging of documents which led to
the indictment of at least one innocent person; violation of the civil
rights of prominent private figures and public officials, and the
overall criminal activity against the United States and other nations
code-named "Operation Snow White".
Prior to the sale
of the Apollo and Scientologists' purchase of buildings in Clearwater,
Operation Snow White was conducted primarily between the Apollo, the
Worldwide Guardians' Office in England, and Los Angeles. Flag
headquarters was on the Apollo before it was located in Clearwater.
One former defector from Scientology who worked for Hubbard for a period
of years, described the actual "Snow White Room", next to Hubbard's
bedroom on the Apollo as being a continual source of coded
communications concerning their criminal operations throughout the
world. Later when Scientology purchased Fort Harrison, this defector
personally observed Hubbard control the operation of Scientology
worldwide through the use of coded messages both sent to and transmitted
by him. At this time Hubbard used approximately 15 codes to conceal
his operations, programs and policies. This particular defector
personally delivered, in Clearwater, coded communications concerning
Operation Snow White, Operation Freakout, Operation Goldmine and other
Scientology secret and illegal activities.
seized by the F.B.I. contain thousands of papers pertaining to the
aforementioned criminal activities of the organization, most of which
were routed through Clearwater, and many of which went through Mitchell
Hermann, whose code name was Mike Cooper, who was in charge of the
Guardian's Office, for "SEVS-SEC" (Clearwater) after Hubbard left the
area in early 1976.
"Operation Freakout", dated April 1, 1976, which was "To get P.C.
incarcerated in a mental institution or jail, or at least to hit her so
hard that she drop her attack," was routed through Clearwater. "Project
Owl", which was an operation to steal documents either by burglary or
infiltration from private individuals in Boston, private law firms in
Boston, the Suffolk County District Attorney's office in Boston, and the
Massachusetts Attorney General's office originated in Clearwater by
Mitchell Hermann. Hermann was one of the 11 Scientologists who has been
convicted in Washington, D.C. for a whole panorama of crimes including
the massive conspiracy against the United States government.
In addition to
the larcenies and burglaries which took place in Boston cited above, the
Guardians' Office, using Clearwater as a communications link,
implemented burglaries of the American Medical Association, the American
Psychiatric Association, various psychiatrists' offices throughout the
United States, the apartment of Paulette Cooper in New York, a law firm
in Vancouver, Canada, law firms in Washington and Chicago, and numerous
government agencies including the I.R.S., the Justice Department, the
Attorney General, the Food and Drug Administration, the Coast Guard, and
various newspapers including the Washington Post, The Washington
Informer, The Boston Globe, St. Petersburg Times, the Clearwater Chamber
of Commerce, the American Telephone and Telegraph Company, the
organization known as EST, and many other government agencies throughout
the United States.
Since Hubbard has
maintained a small secret base with the use of telexes to control
Scientology, he has relied on Clearwater as the central communications
link with it. For example, two individuals who were deceived into
joining Scientology through a number of false representations, were told
that they were going to be involved in film making with Hubbard, and
that they were going to live in Clearwater where the filming was taking
place. All of their contacts and routing information came through
Clearwater, but they actually ended up being blindfolded and taken to a
base in Indio, California. At the present time, it is fair to conclude
that most of the Guardian's activities are cleared through the
Guardian's Office in Clearwater, before being implemented. These
activities currently include operations against attorney Michael J.
Flynn, Gene Methvin of the Reader's Digest, James Calderbank, Martin
Cohen, the Internal Revenue Service, Raymond Banoun, and many private
individuals who have sought legal redress against Scientology.
Clearwater is also
a major mailing center for Flag and Scientology publications. Virtually
every one of these mailings constitutes mail fraud, because the
organization has never complied with the decree in the case of United
States v. Article or Device, requiring the Scientologists to warn in
each and every one of its publications, that Dianetics, Auditing, and
Scientology, are not capable of improving the health of anyone.
Therefore, any Scientology activities in Clearwater which are designed
to sell courses and material without complying with the decree in the
Article or Device case constitute a fraud on the public not only in
Clearwater but on those outside Clearwater who receive the materials.
4. "Clearwater RPF" -- Physical and Mental Abuse of Individuals
The history of
Scientology's abuse of private individuals in Clearwater, primarily at
the Fort Harrison, is equally staggering. One Scientology defector who
was in the "Rehabilitation Project Force", (RPF), at the Fort Harrison
in 1976 and in 1977, has described many individuals on the verge of
insanity, some of which were "chained to pipes in the boiler room" for
long periods of time. This individual, although a minor, did not receive
any education while at the Fort Harrison in violation of Florida law,
and her living conditions were both deplorable and in violation of the
fire and health laws of Florida. She slept on floors, hallways and
storage areas which were concealed when the Scientologists learned,
somehow, that officials were going to inspect the premises. Another
Scientology defector described the RPF and security checks (r/s
handling) as follows:
have run dozens of these evil purposes, then we turned to my r/s
handling. By now it's somewhere around the beginning of 1978, I
think. I really have very little sense of time here -- for one
thing, one day was just like the next. There was no variation
weekends were the same as weekdays. It is all sort of one big lump
to me -- especially after I started on my expanded dianetics
and my brain really started to come apart. I was in sort of a cloud
or daze most of the time, that's the only way I can describe it.
handling I think to the point where my brain wasn't just falling
apart, but it started to get fried. I was running out all these evil
purposes connected to the rs's and I started spouting out and
running out the weirdest things like, "to be somebody else", "to
blow up a planet", "commit suicide", "to never grow up", "to kill
myself", "to destroy bodies". The list was endless. My brain was
just getting fried in all of this. I mean I had to have been the
most evil and crazyiest that ever existed. I don't know how to
describe what happens other than my brain was frying right up. I
felt like I was in a daze half of the time."
later escaped, was brought back and placed under guard. She was finally
released after her luggage and personal belongings were thoroughly
checked and searched and she was made to execute affidavits and
documents without reading them. Shortly after she left Fort Harrison,
Jonestown occurred and she states that" I realized that if at any point
LRH (Hubbard) had handed me a glass of poison and told me to drink it, I
would have, with no questions asked, and no second thoughts. At that
point, I think I got "shocked" out of Scientology." The authors of this
Report have encountered numerous individuals who have come back from
Clearwater after receiving extended periods of Scientology processing in
extremely crippled states emotionally, and sometimes physically
debilitated. One former member became gravely ill when a hepatitis
epidemic broke out in the childrens' area of the Fort Harrison in 1979.
Unqualified Scientology officials distributed drugs and gave shots to
persons to prevent the epidemic from spreading. The person designated
the "medical officer", who had no qualifications as medical doctor was
placed in charge, of this problem. This individual returned from
Clearwater and underwent a complete physical and blood analysis. It was
discovered that he had liver damage and evidence of mononucleosis.
have reported instances where Scientology courses in Clearwater promised
miraculous results for cure of headaches, anxiety attacks, cerebral
palsy, heart trouble, and other illnesses. Shortly after a Scientologist
committed suicide in Clearwater by throwing herself into the bay, the
Guardian's Office conducted a program to "guard" all individuals who
were under psychological strain as a result of Scientology processing.
In fact, some individuals were removed to other states, under the
company of a guard, because of local media attention to the suicide.
The Fort Harrison
also serves as a sanctuary for Scientologists involved in civil
proceedings. Scientology considers Clearwater to be free of effective
government monitoring at this time, and therefore uses it to hide
witnesses who have been involved in simlar criminal activity on behalf
of Scientology. For example in 1980, a Scientologist from Boston
attacked and assaulted a psychologist on the streets of Boston. The
Scientology agent was hidden for a period of time and then flown to
Clearwater were he remained for a short period. This operation is
typical of Scientology attempts to conceal witnesses pursuant to an
operation code name "Project Quaker". This policy states,
"It may be
deemed necessary for all the DC staff who could be pulled in for
questioning to suddenly leave. US B-1 sec. is to insure that
all concerned are ready to leave at any time and that all
cycles-finance, 2D, bills, are completely up to P.T. and there no
PTPS or stops to immediate departure." "US B-1 seussec (Clearwater)
is to immediately do up a confidential s-w for finances for this
project. This is for seven or eight people so the amount should be
about $10,000.00 for staffers." ...seusec US B-1 is to set up "early
The notations in
the foregoing project Seus sec US B-1 refer to Clearwater. As previously
stated, there are literally thousands of documents involving the
commission of crimes such as the foregoing attempt to obstruct justice
with the use of Clearwater as a sanctuary.
Commercial Activities of Scientology in Clearwater
The Church of
Scientology in Clearwater, Flag, provides the most expensive Scientology
processing in the world. Prices range from hundreds of dollars for many
courses, to tens of thousands of dollars for high level processing,
Rooms at the Fort Harrison cost up to $650.00 per week in 1980. Master
Charge and Visa credit cards are accepted at Flag. Customers are
solicited throughout the world by "Missionaries". Missionaries are the
sales force sent to the local "organization" throughout the world to
solicit customers. Scientology salespersons operating at the local level
in cities throughout the world, solicit persons off the street to take
Scientology processing. As stated throughout this Report, grandiose
promises are made to cure physical or mental ailments through
Scientology processing. VI
Once the sale is
closed, Scientologists at the local level methodically review the
person's financial history. Information on wealthy customers is
immediately sent up "lines" to Scientology operations at Flag. If the
customer has sufficient wealth, "Flag representatives" from Clearwater
fly to the local "org" to close the sale, and send the person to Flag
"processing" at "Flag" emphasizes the most expensive courses including
expanded dianetics and OT III. Expanded dianetics involves "auditing" of
past lives and OT III involves a description of the supposed origins of
Hubbard and Scientology. For example, an individual at Flag taking OT
III, for which he has paid thousands of dollars to reach over a period
of time, is presented with "secret" materials which state that he is a
specially chosen person with superhuman powers who came to earth after
surviving a galactic explosion engineered by Xemu, the evil ruler of
Helatrobus, 40 trillion years ago. The price for this course at Flag is
$9,021.78. The price for seven (7) levels of "OT" processing is
$26,614.32, which according to some medical doctors, causes the mind to
undergo a process of "dissociation", eventually leading to permanent
degenerative mental illness.
one individual undergoing a divorce had turned to "EST", (a self-
improvement type technique) to help him through this traumatic period.
Scientology had infiltrated EST and this person ended up buying
Scientology processing after being "guaranteed" a host of cures for his
problems, and having been told extravagant representations about
Hubbard's background. He expended approximately $75,000.00 in
Scientology processing after being enticed by "Flag reps" to "come to
Flag" and take the OT III course. His mind and personality gradually
became so "dissociated" that he gave up his job as a CPA and spent three
(3) years of his life taking Scientology "processing". He is now in the
process of initiating suit against Hubbard and Scientology.
from Boston, the beneficiary of an inheritance, was approached one day
by the regular street soliciters of the Boston "org". After numerous
promises were made to this person to lure him back to the org, a
complete financial "rundown" was performed. After discovering the
person's financial status, Flag representatives flew to Boston and
extracted over $14,000.00 from him within one week. Shortly thereafter,
this person met with the authors of this Report and the monies were
eventually returned to him.
Another victim was
not as lucky. This person was recently the beneficiary of an inheritance
when her husband died. Since Scientology's primary marketing "targets"
are the emotionally distraught, the loss of her husband left this woman
particularly vulnerable. Flag reps from Clearwater met with her and
defrauded her of $33,000.00 in the course of a few weeks.
representative salesmen move as rapidly as possible to drain all funds
from their victims. When all available funds are drained, some are
allowed to "join staff" in order to continue in Scientology. The normal
period for these individuals is 12 to 18 hours per day, 7 days per week.
Their pay, if any, is generally under $15.00 per week. There are many
individuals working in Clearwater today in violation of the minimum wage
There are many
instances where individuals have paid tens of thousands of dollars to
Flag under the deceptive sales techniques engineered by Hubbard and his
"Flag reps". Many of these individuals frequently realize they have been
defrauded and seek their money back.
Prior to the media
exposure of Scientology practices, it was virtually impossible for
someone to get his money back because Scientology would first
cajole, then subtly frighten, then overtly threaten the person. Since
many of Scientology's fraudulent practices have come to light, more and
more persons are gaining the courage to stand up to Scientology and
demand refunds. Moreover, in the past, most lawyers were reluctant to
take on Scientology clients because of First Amendment problems, the
expectancy of harassive litigation, and the knowledge that Scientology
might expose in the courtroom some of the hidden details of the client's
life. The cases heretofore set forth suggest that this may be changing.
method of channeling funds from churches throughout the world to
Clearwater is through the use of management fees. The "Flag"
representative at each local "org" ensures that these managements fees
are allocated and sent to Clearwater. These fees range between 10 and
20% of the gross income of each local "org". Between the "management
fees" and the courses and material sold in Clearwater, one former
Scientologist who worked close to Hubbard as Material Marketing
Secretary, reported gross income from Flag to $1,000,000.00 per week in
All of the
commercial activities of Scientology previously discussed are practiced
on a daily basis in Clearwater.
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