THE RELIGIOUS TECHNOLOGY
“Safeguarding man’s only route to total freedom — The Scientology Religion.”
28 April 1985
Internal Revenue Service
1111 Constitution Avenue N. W.
Washington, D. C. 20224
Attn: Mr. Richard Darling
OP:E:EO:T:R:3-RHD, Room 6047
This responds to your letters dated July 30, 1984, October 5, 1984 and January 18, 1985, regarding the application of the above named organization for recognition of its status as an organization described in section 501(c)(3) of the Internal Revenue Code.
The Advanced Technology which you ask about in paragraph 2 on page one of your letter dated July 30, 1984, consists of purely religious material relating to advanced levels of spiritual attainment. Religious tenets of Scientology preclude the disclosure of this material to anyone other than bona fide Scientologists who are in good standing with the Mother Church and who have already reached a high level of spiritual attainment through participation in Scientology religious services. Disclosure of these materials would therefore violate our religious
doctrines, which we are unwilling to do, and we decline your request.
The following responds to paragraph 3 on pages one and two of the July 30 letter:
This organization owns the religious trademarks and advanced materials which were assigned to it by Mr. Hubbard, by the instruments which we have furnished to you. The fee arrangements in respect of these materials are as set forth in those instruments — no fees are required to be paid, have been paid or will be paid to Mr. Hubbard an account of the transfers — and in the agreements by which this organization has licensed other churches to use the marks and materials — there are no fees with respect to the marks, but are with respect to the advanced materials.
This organization has no ownership interest in Mr. Hubbard’s copyrights or patents, and has no arrangements with him with respect to them or the copyrighted works and patented items. This organization pays no royalties with respect to such property. It is our understanding that Mr. Hubbard has licensed New Era Publications and that it has sub-licensed Bridge Publications. This organization purchases copyrighted and patented materials from Bridge, and pays for them. Further:
a. We purchase E-Meters from Bridge Publications. The E-Meter is patented by Mr. Hubbard.
b. The Advanced Technology is not copyrighted.
c. Items of commerce such as a Class II Auditor’s Badge and other jewelry, insofar as we are aware, are manufactured under licenses from New Era Publications. This is pursuant to the reservation by Mr. Hubbard of commercial rights with respect to the marks, as set forth in the assignment by him to us. We neither pay nor receive royalties with respect to such goods.
In paragraph 4 on pages two, three and four of the July letter, you quote two portions from the agreements respecting the Advanced Technology. One is a recital to the effect that revelation of the Advanced Technology to one who has not achieved the prerequisite spiritual levels may harm him or her. The other is a provision of the agreement as to steps to be taken to safeguard the material from improper disclosure. You assert that these suggest that we would condone acts of
violence and non-compliance with civil authority, — ask whether we would be compelled to refuse to comply with a valid court order to produce the materials. The harm referred to in the recital is the harm resulting to the unqualified person who studies these materials, by reason of studying and attempting to apply the material when he or she has not been spiritually prepared in accordance with the tenets of the religion. We do not condone the use of violence. This organization has no intention of defying any court order to produce anything, does not construe the agreement as requiring us to do so and has no expectation that any court will order us to disclose these religious materials in violation of our sincerely held religious beliefs.
In paragraph 5 on page four, you ask about the provision of our Bylaws respecting “a proven Scientology executive, as evidenced by statistics.” Scientologists believe that the job performance of an individual should be measured by his production rather than by the opinions of his superiors, and that the production associated with any particular job can and should be quantified as a measureable statistic. This organization follows that precept, and that is what is intended by the quoted provision.
In paragraph 6 on page four of your July 30 letter you state that there was a “major reorganization of the hierarchy of Scientology organizations” and ask a number of related questions. You refer to 1982, but most of the changes occurred in 1981 and so we include them. The changes were these:
(1) The incorporation of church of Scientology International, church of Scientology of Los Angeles, Church of Scientology of San Francisco and Church of Scientology Flag Service org, Inc., and transfers of property by Church of Scientology of California to them. Those organizations thereafter carried on activities which had formerly been
conducted by the California Church:
The Los Angeles and San Francisco Churches are Class IV churches and conduct the normal activities of such churches.
Church of Scientology Flag Service Org exists in Florida and engages in the activities of a high level church — the conduct of advanced religious services for upper level Scientologists. That church also conducts religious services at lower levels.
Church of Scientology International conducts the activities of the Mother Church.
The property transferred to each corporation was the property used in the conduct of the activities which the corporation would engage in. This included real property in Florida (conveyed to Church of Scientology Flag Service Org) and San Francisco (conveyed to the San Francisco church). The transfers were sales at fair market value.
(2) The incorporation of this corporation, and the assignment to it by Mr. Hubbard of the religious marks and advanced religious materials.
The primary effects and purposes of the changes mentioned in (1) were:
(a) To separately incorporate the two Class IV churches (San Franciso and Los Angeles) and the Flag Service Org Church. The functions of these churches within the hierarchy were and are the delivery to their individual parishioners of religious services at specific locations — in Los Angeles, San Francisco and Clearwater, Florida, respectively. This had the purpose and effect of placing the activities and property of each in a separate corporation formed under the laws of the, appropriate state, with separate governing boards and corporate officers.
(b) To remove the higher level ecclesiastical functions of the Mother church from Church of Scientology of California to a separate corporation (the Mother Church) which did not (and does not) include any of the lower churches of the hierarchy. Church of Scientology of California retained the Advanced Organization Los Angeles and the American Saint Hill Organization, which are intermediate level churches.
The basic intent of these changes was to align corporate organization
with ecclesiastical function and geographical location, under separate corporations.
The primary effects and purposes of the change in category (2) were:
(a) The creation of an organization to which Mr. Hubbard would transfer the marks and the advanced materials, in order that the purity of the religion would be perpetually maintained.
(b) To place the marks and advanced materials in a separate corporation under its own directors and officers, and with its own staff, to the end that it would be in a position to enforce compliance through contractual relationships with the corporations housing the other churches of the hierarchy as an aid to its ecclesiastical authority.
(c) To be able to carry out its function of protecting the purity of the religion with the assistance of enforceable contracts with separate corporations, under the auspices of a corporation which did not also house a church with the same primary activities and functions as those it would supervise. I.e., to avoid the possibility of any conflict within one corporation between the duty to supervise the purity of the religion (on the one hand) and the functions of the delivery of religious services to parishioners and the dissemination and expansion of the church (on the other).
In short, and generally speaking, the purpose, intent and effect of the changes described above were to align corporate organizations with the functions, activities and particular purposes of the several elements of the hierarchical church (and geographically to the extent possible); to transfer the marks and advanced materials to a church (this church) in order to assure purity perpetually; and to place distinct ecclesiastical functions in separate corporations.
These changes were initiated and overseen by church officials and by attorneys consulted by them. Additionally, representatives of Mr. Hubbard and his attorneys were involved in respect of matters relating to the religious marks.
In this paragraph 6 you also ask generally how the ecclesiastical structure works, and about the chain of command. We have enclosed as Exhibit A a recent church publication which describes the present hierarchical structure with specific reference to the chain of command. Please note that this describes the ecclesiastical structure and chain of command, rather than corporate structure and control (which is held and exercised by the governing bodies of the many separate corporations, each in accordance with its articles of organization).
In paragraph 7 on pages four and five, you ask about our payments to Church of Spiritual Technology. This organization has contributed to Church of Spiritual Technology to provide to it the funds it will need to accomplish its purpose of’ the preservation and protection of the scriptures of the religion. These contributions satisfied an obligation of this organization to expend part of its receipts for religious purposes which are specified in the instrument by which Mr. Hubbard assigned the advanced materials to us.
We object to the inclusion in the administrative record of the newspaper article to which you refer in paragraph 8 on page five of your letter. We nevertheless respond to your specific factual inquiries, as follows:
a. We have and have had no connection with Mr. Litt.
b. There is no validity whatever to the statement attributed to Laurel Sullivan that this organization was a part of a plan to pay Mr. Hubbard $85,000,000 for trademark and copyright interests. Mr. Hubbard gave the trademarks to us and retained his copyrights, and has been paid and will be paid nothing by this organization with respect to either.
c. There is no validity whatever to the statement attributed to former Church officials that Mr. Hubbard
still controls the Church and has turned over daily operations to David Miscavige and Pat and Ann Broeker, two of whom are trustees of this corporation. Only one of them is such a trustee, and the function of the trustees is in respect of the election and removal of Directors — they have no authority with respect to governance of the organization, which is entrusted to its Board of Directors.
Our Form 990 for 1983, prepared by Alexander Grant & Company, is enclosed as Exhibit B.
In paragraph 10 on page five you ask about ‘Fair Game.’ Exhibit C enclosed herewith includes issues respecting this matter. The matter is discussed further below in response to your letter of October 5, 1984.
We turn now to your letter dated October 5, 1985.
The first page and the first paragraph on page two include no request for information of this organization.
The remainder of page two is devoted to your interpretations and statements about cases which are pending in court. The cases to which you refer are:
A. Founding Church of Scientology of Washington, D.C., et. al. v. Director, Federal Bureau of Investigation, et. al., Civil No. 78-0107 in the District Court for the District of Columbia.
B. Church of Scientology of California v. Commissioner of Internal Revenue, 83 T.C. No. 25 (September 24, 1984),
C. Church of Scientology of California v. Gerald Armstrong , No. C 420153 (California Superior Court, July 20, 1984).
In the second paragraph on page two you state that the Tax Court found that L. Ron Hubbard controlled the Church of Scientology of California during the years 1970 through 1972, those being the years in
issue in the case referred to in paragraph b above. We note, and call to your attention, that the last year in issue in that case preceded the incorporation of this corporation by nine years. Assuming arguendo that the findings of the Tax Court were correct, they clearly are irrelevant to this corporation. In any event, the relevant facts have changed since those years. See the declarations which are enclosed herewith as Exhibits D, E, F and G.
In the second paragraph on page two of your letter, you assert that “[D]ocuments contained in the District Court case [i.e., the case referred to in paragraph B above) are replete with information that the applicants (the reorganized Scientology hierarchical organizations) including you, are part of a plan to develop corporate integrity for each but to retain overall control by L. Ron Hubbard . . . “. This organization is not and never was part of any such alleged plan; it was not formed as a part of any such alleged plan; it is operated and contolled by its officers, directors and staff members; and it is not, controlled by Mr. Hubbard.
In the last paragraph on page two of your letter, you ask for our comments upon specific documents, all of which are included in the record of the District Court case referred to in paragraph A above. These are the documents, followed by our comments:
1. Memorandum In Support of Defendant’s Motion to Dismiss.
This memorandum was filed by the defendants (including your organization) in the District Court case referred to in paragraph A above. In the first paragraph on page 3 of your letter (following the list of referenced documents), you characterize the arguments in the memorandum and draw conclusions of fact based thereon. The gist of what you say is that Mr. Hubbard controls the “Church” through Mr. Miscavige, Author Services, Inc., the Commodore’s
Messengers and Sea Organization. Please refer to the declarations enclosed herewith as Exhibits E, F, G and H which, as you will note, are declarations by individuals who were and are in positions which make them competent to assert the facts they have asserted.
2. Declaration of Laurel Sullivan.
As you note in the last paragraph on page three of your letter, this declaration relates to matters prior to 1982. It in fact relates to matters prior to the organization of this applicant, and does not mention this applicant.
3. Declaration of Kima Douglas.
As you note in the first full paragraph an page four of your letter, this declaration asserts matters prior to the end of 1950, and therefore prior to the incorporation of this organization. It does not mention this organization.
4. Declaration of Gerald Armstrong
The matters in this declaration to which you refer in the paragraph of your letter which begins on page four and ends on page five all relate to organizations other than this organization, and to events occurring prior to the incorporation of this organization. The declaration does not mention this organization or any of its activities, directly or indirectly.
5. Church of Scientology of California v. Gerald Armstrong.
Our comments follow:
The trial court decision in this case (which you furnished to us with your letter) refers to the plaintiff (Church of Scientology of California) and to other organizations of the hierarchical Church. This organization was not a party to the case. Neither your comments nor the evidence cited by you relate specifically to this church. However, we wish to comment as follows:
You cite the issuance of a suppressive person declare “. . . designed to make Defendant Armstrong an appropriate subject of the Scientology ‘Fair Game Doctrine.’ Said Doctrine allows any suppressive person to be ‘tricked, cheated, lied to, sued or destroyed.'”
You cite matters relating to the assertion that Mr. Hubbard controls the church through the Sea Org and the Commodore’s Messengers Organization.
The issuance of a suppressive person declare by a Church of
Scientology reflects and documents a Decision by which officials that the declared individual falls within the class of individuals known in Scientology terminology as “suppressive persons.” These are anti-social individuals bent upon actions which suppress others and society, and who especially seek to suppress individuals who and organizations which attempt to better the lot of mankind. Mr. Armstrong was found to be clearly and certainly in this category and so was declared. The consequences of this are that he may no longer participate in the religious services of Scientology or the affairs of any church of the religion. The declare of Mr. Armstrong is attached hereto as Exhibit I.
The assertion that a Scientologist is free to injure a suppressive person is utterly false, as is the allegation that there is or ever was any “Fair Game Doctrine” such as you have described. The violation of another’s civil rights is itself a suppressive act, violates fundamental doctrines of the religion and would result in disciplinary action by the Church — and this is so whether or not the injured person is or has been declared a suppressive person.
As to the second matter — control by Mr. Hubbard — see the declarations which are referred to above.
The matters you discuss beginning with the last paragraph on page three of your October 5 letter and continuing through page six all relate to allegations about matters prior to the incorporation of this applicant, and to organizations other than this applicant. You have based this discussion upon statements and testimony of individuals who were once Scientologists and who have been expelled from the Church.
Your discussion, insofar as it bears any remote relevance to the exempt status of this organization, centers around the Mission Corporate
Category Sort or MCCS, which you describe (generally speaking) as a plan to develop corporate integrity while retaining control by Mr. Hubbard. You assert that this and other newly formed Scientology corporations were the product of such a plan. We suggest that your position in this is mistaken in light of the fact, which you apparently do not dispute or deny, that this corporation is legally organized consistent with section 501(c)(3), has not since its incorporation engaged in any activities other than those which accomplish its religious purposes, has not operated for Mr. Hubbard’s private benefit and has paid nothing to or for the benefit of Mr. Hubbard or any other private person.
We thus perceive no relevance to the allegations respecting the MCCS. However, we do point out to you that in fact the MCCS was considered within the Church of Scientology of California to have been a complete failure, and that it and the personnel involved in it had nothing to do with the restructuring of the Church which occurred during 1981 and 1982. Indeed, the MCCS planning and work were ignored by those involved in the restructuring which we have described above. See Exhibit J enclosed herewith.
In point of fact, the witnesses upon whom you and the court in the Armstrong case relied are embittered and vengeful individuals, bent upon the destruction of the Church. See Exhibit J. Furthermore, their credibility as witnesses has been destroyed by their documented perjury:
Howard Schomer. See Exhibit K, paragraphs 7 and 9, pages 4, 5 and 6.
Laurel Sullivan. See Exhibit K, paragraph 6, page 4.
Eddie Walters. See Exhibit K, paragraph 5, pages 2 and 3.
Gerald Armstrong. See Exhibit L.
Indeed, Gerald Armstrong, the principal witness upon whom you have relied, has carried his vendetta against the Church to the extremes of planning the forgery and planting in church files of incriminating documents in order to justify a takeover of the church through court process, and the subornation of perjury and blackmail to the same end, i.e., as part of a plan to gain control of the Church and its resources — not for the benefit of the Church or the religion but for the private enrichment of himself and other disaffected individuals who are clients of attorney Michael Flynn. See Exhibit L.
These, then are our comments, in short — the matters to which you have referred relate almost entirely to other times and other organizations, and they stem from embittered individuals who were expelled from the church, who are perjurers and who seek either to destroy the Church or to take control of it for their private enrichment.
We turn now to your letter of January 18, 1985, which refers to sections I and IV of your letter of the same date to Church of Spiritual Technology. Section I of that letter in turn refers to the two letters to which we have responded above. The following responds to section: IV, which is premised upon the material in the Armstrong case to which we have responded above. We respond further, as follows:
1. You request a description of past and present associations of each of our officers, directors and trustees with numerous corporations and ecclesiastical units. We object and decline to comply until you first inform us of all uses to which you intend to put such information and of the relevance thereof to this organization’s exempt status. This is based upon constitutional rights of association and upon the fact that the Internal Revenue Service has allied itself with
individuals who seek to destroy the Church and has encouraged them to do so (as discussed below).
2. The materials referred to in this sub-paragraph on page six of your letter are not in the possession of, under the control of or available to this corporation, except for Flag Order 3729 (see Exhibit M) and the order declaring Mr. Armstrong a suppressive person (see Exhibit I H).
You assert in this sub-paragraph that an official of this corporation who also serves on the governing board of a different corporation would have the ability to control these materials were they in the possession of that corporation. Your premise is not true — none of the personnel of this corporation is on the governing board of any such corporation. Additionally, your reasoning is flawed, because any such individual would of course hold his or her position on the governing board of the other corporation as a position of trust and with a fiduciary duty to the other corporation.
We point this out only as a theoretical matter under the circumstances, i.e., because none of our personnel is in such a position in any event.
Section III of your letter of January 18, 1985 to Church of Spiritual Technology is devoted to arguments in support of your position that the Internal Revenue Service cannot rule upon the exemption application of any Scientology organization until all of them have furnished all of the information you have requested of them. You base this upon what you perceive to be “connections” among the applicants, such as their having retained the same attorneys (Hamel & Park of Washington, D.C., and LeSourd & Patten of Seattle) and accountants (Alexander Grant & Co. and Laventhal and Horwath). Although you have not asked us to comment upon your arguments, we volunteer the observation that they appear to us to be flimsy and unsupported by any authority, considering the fact that each applicant is a separate corporation or trust, maintains and accounts for its own assets and engages in its own activities. Each is therefore either exempt or not, and, as we understand it, it is your duty to make a
determination upon such complete application which the applicant has responded to all reasonable requests for information.
However, we request that you refrain from making any determination as to our exempt status until we have had an opportunity to supplement the administrative record. This request is based upon information we have received from Church of Scientology of California to the effect that material relating to the credibility of Mr. Armstrong and other witnesses in the Armstrong case is being prepared for submission to the court which decided that case. We want an opportunity to place any new material relevant to your reliance upon that case in this record.
It had been our hope that the long standing institutional prejudice of the Internal Revenue Service against our religion and its churches would be set aside, and that this application would be acted upon in good faith. The evidence that that is not your intention is now overwhelming and cannot be ignored — Gerald Armstrong, upon whose word you rely and who you assert is a reliable and credible witness, has made it clear that his and his associates plan to destroy the Church was not only initiated and furthered with your knowledge and approval but as your agent. We therefore now also deem it necessary to supplement the record with the materials which document your long standing institutional prejudice against Scientology and Scientologists, and will do so in the near future.
Very truly yours,
RELIGIOUS TECHNOLOGY CENTER
By [signed Vicki Aznaran]