GA Letter to Clayton C. Ruby (2) (February 17, 2004)

February 17, 2014

Clayton C. Ruby, Esquire
Ruby Shiller Chan Hasan

11 Prince Arthur Avenue
Toronto, Ontario M5R 1B2
By: Canada Post

Fax 416-964-8305
Email ruby@rubyshiller.com

Dear Mr. Ruby:

In April 1985, during the trial of Julie Christofferson v. Scientology in Portland, Oregon, cult attorney John Peterson stated to the court that you, Mr. Ruby, were responsible for the unlawful video recording you dishonestly call “a police authorized video” in your 1992 letter to Ms. Yingling.1

If a corrupt police officer signed an unlawful note authorizing you to murder someone you hated – like me for example – would you call that a police authorized murder?

Peterson said that you hired Eugene Ingram, the Scientologists’ most notorious private investigator, and you ordered the unlawful video recording, not Peterson and not the Scientology cultists. Your PI Ingram threatened to assassinate me, threatened to put a bullet between my eyes, as I’m sure you know.

At first I thought Peterson was lying in the Portland court, hiding his own and the Scientologists’ complicity in the unlawful Armstrong operation, and using the fact that you were in Canada and outside subpoena range for the Christofferson trial. Because of my discovery yesterday of your letter to Ms. Yingling, however, I have had to reconsider your involvement. I now believe that you conspired with Peterson and the Scientologists.

If attorney Peterson is to be believed at all, then you paid the corrupt LAPD officer for the unlawful “authorizations” to eaves drop on, wiretap and record my attorney Michael Flynn and me.2

Peterson also stated that you alone as of April 1985 possessed the unlawful video recordings. So I have to conclude that you are responsible for the dishonest editing of the videos, for the dishonest transcripts, and for the black propaganda the videos have been used for all these years.

I do not believe that your one letter to Ms. Yingling is your only communication about your video recordings, or your only communication lying about and black PRing me or Flynn. I think your one letter that surfaced is but the tip of a monstrous criminal black propaganda berg.

I believe that as willing as you have been to do what you have done in service of the Scientology cult, there is almost no limit to what you would do to a person you want to victimize like me. You are a criminal defense attorney with many connections into the criminal underworld, and into criminals like Ingram to do your dirty work. The Scientology cult has long had associations with dangerous criminals, and has a practice of hiring psychopaths. I believe I am in more danger from you and your clients and cohorts than ever.

Your Scientologist clients have physically assaulted me on multiple occasions, terrorized me on the freeway, broken into my car and stolen valuable property, framed me and tried to have me prosecuted on false criminal charges, obtained unlawful jail sentences against me, forced me into bankruptcy, black PRed me around the world up to the top of governments, run covert ops on me, forged my signature over racist Internet postings, and even hired prominent people like you to destroy me. You are the enemy of good people, and the world should know it for everyone’s safety.

I understand that even the most criminal even murderous people deserve legal representation. I have no problem with that concept. I have a serious problem, however, with the lawyers who lie for their criminal clients.

You also can correct all this. But you can’t correct it with more lies, or hiring more thugs. You have to tell the truth and remedy the lies and black PR you’ve spread about me, Flynn and your Scientologist clients’ other enemies or victims.

Yours genuinely,

Gerry Armstrong

Notes

  1. For videos, transcripts and related documents: http://armstrong-op.gerryarmstrong.ca/the-illegal-videos
  2. See Peterson’s trial testimony in Christofferson.

Mark Rathbun: The Juggernaut (May 28, 2013)

 

Chapter Twenty-One

THE JUGGERNAUT  1 2

Juggernaut:   in colloquial English usage is a literal or metaphorical force regarded as mercilessly destructive and unstoppable.   – Wikipedia

For all of his alleged faults, L. Ron Hubbard was a keen observer and writer on the human condition. He once noted that “the bank follows the line of attack.”   “Bank” is Scientologese for the reactive mind, the stimulus-response portion of the mind that seeks destruction of others for survival of self.   With the devastating strike upon Ron and Scientology delivered in Los Angeles, all roads to L. Ron Hubbard’s bunker led through Flynn and Armstrong. It seemed that anyone with a score to settle was drawn like a magnet to the duo. Those combined forces took on the appearance of an overwhelming juggernaut.

The DOJ duplicated Flynn’s latest legal tactic: ask courts in Scientology litigation to order the church to produce L. Ron Hubbard as the “managing agent” of the mother church. Flynn assisted the DOJ to procure sworn declarations from his growing stable of former high-level official witnesses in support of the move.

David Mayo, the expelled former auditor to L. Ron Hubbard and erstwhile top technical authority in Scientology, had created a thriving Scientology splinter operation in Santa Barbara, California. Former high-level messengers – including two former Commanding Officers of CMO Int (Commodore’s Messenger Organization International) served as executives of his operation.   Until the Armstrong affair, they had steered clear of the L. Ron Hubbard-bashing Flynn/ FAMCO circles. But by 1984 they were supplying declarations to the DOJ and Flynn in support of their motions to compel Hubbard into depositions in lawsuits across the country.

Breckenridge’s Armstrong case decision, bolstered by a dozen declarations by former Hubbard messengers and aides, made the allegation of Hubbard’s “managing agent” status virtually uncontestable. Miscavige and Broeker were clearly established as the last links to Hubbard, but they could not provide countering declarations because it would subject them to depositions – which would lead Hubbard’s enemies directly to him.

Worse, the Breckenridge decision destroyed any chance of winning, in courts across the U.S., our vast array of pending motions to dismiss Flynn’s lawsuits on the basis of First Amendment rights to freedom of religion. The twenty-one-page Breckenridge indictment was devastating to our three years of expensive efforts at positioning much of the Flynn litigation for pre-trial dismissal.

Worse still, the decision pumped new life into what we thought by then to be criminal investigations losing steam. The Internal Revenue Service’s Criminal Investigation Division (CID) had been actively investigating the church, as well as LRH, Pat and Ann Broeker, David Miscavige and other church officials as named targets for criminal charges. Until the Breckenridge decision we had kept the CID somewhat at bay through litigation combatting their summons power, and a team of lawyers attempting to negotiate with IRS counsel and DOJ officials. But our intelligence lines were reporting that the LA-based CID group was once again gearing up to indict Hubbard and his aides.

The Ontario Provincial Police had, after their March, 1983 raid, steered clear of targeting Hubbard. Now they were reconsidering, in light of the outcome of the Armstrong case.

Our intelligence network reported that Gerry Armstrong was feeling drunk with power, given the sudden attention he’d received and his new importance in the anti-Scientology community. It seemed Armstrong and Flynn had worked their way up to being the axle to which all anti-Scientology spokes were linked. Per reports, Armstrong was talking of bringing all Scientology’s enemies together in a concerted effort to take over the church. The man who had prevailed in his case because of his alleged “fear for his life” was beating his chest and promising to take the very life of our church, and convert all its assets to outside control.

Our only shot at staving off indictments against LRH across North America, and of keeping him out of the couple of dozen pending lawsuits was to take out the axle and so depower its spokes. It was this desperate state of affairs that drew me directly into the shadowy world of intelligence. Throughout his litigation Armstrong had remained in periodic communication with a Scientologist who knew a thing or two about intelligence. Dan Sherman had published a number of spy novels, and had struck up an acquaintance with Armstrong. Armstrong looked up to Sherman and envied his literary success and intelligence acumen. Armstrong believed that Sherman – like so many other Scientologists during the tumultuous early eighties – was disaffected with the church and no longer considered himself a member. In fact, Sherman was cultivating a friendship with Armstrong in order to glean intelligence from him about the enemy camp. Up through the trial their communications were infrequent and mundane.   All that changed when Armstrong became an overnight anti-Scientology sensation. Because of Armstrong’s newly won stardom, Sherman began giving him more face time. Armstrong began sharing some of the details of his activities as a coordination point for all camps inimical to the church, from the Ontario Provincial Police, to the IRS CID, to the DOJ, to the Mayo splinter movement. Armstrong asked Sherman to see whether he could locate some church insiders who might aid in a take-over coup inside the church.

Gene Ingram and I concocted a rather elaborate game plan.   Gene would tap one of his old LAPD comrades to obtain written permission to covertly video record conversations with Gerry Armstrong. Technically, it was a lawfully given permission since we had a witness attesting that Armstrong was suggesting taking over and destroying the church by questionable means.

Gene obtained a recreational vehicle which had a wide rear window with reflective coating, making it one-way vision. A high-powered camera could record what was going on outside without being seen. We planned to record meetings with Armstrong to obtain evidence showing that not only was he not afraid for his life, he in fact was a well-backed aggressor and an operative of government agencies out to get Scientology. After taking circuitous routes to lose any possible tails, Sherman and I met Ingram in the RV in Long Beach. We worked out every detail of Sherman’s cover. We would bring in a former GO operative and have Sherman introduce him to Armstrong as a church insider, plotting the overthrow of the Miscavige regime and willing to play ball with Armstrong, Flynn and their government allies. That would hopefully prompt Armstrong to repeat and elaborate on some of the provocative takeover and take-down ideas he had alluded to in earlier conversations.

The chosen venue for the meetings was Griffith Park, inside LAPD jurisdiction and with plenty of opportunities for positioning the RV to capture the action. Sherman met with Armstrong and whetted his appetite. He told him he had made contact with an ally who had a number of well-placed contacts, currently on staff in the church. He told Armstrong he could only be identified by his first name, Joey, for security purposes. Joey was formerly of the Guardian’s Office and was connected to a number of former GO people who were bitter about being ousted by Miscavige, and sympathetic to Armstrong and the Mayo splinter movement.   Armstrong was visibly overjoyed at this opportunity gratuitously falling into his lap.

Sherman arranged a meeting between Armstrong and Joey to take place on a park bench in Griffith Park. Joey wore an audio wire which transmitted the conversation back to the RV, parked a hundred yards away and video recording the event. Armstrong and Joey both wore sunglasses; both attempted to look as nonchalant as could be, as they introduced themselves.

Joey explained that there was serious disaffection within the church, and a forming cabal of veteran staff ready to take out Miscavige and the current management. He called this cell the Loyalists. Armstrong was clearly excited, and believed Joey’s cover – no doubt because of Sherman’s story-telling skills and credibility with Armstrong.

Armstrong shared with Joey the master plan, which he represented as his brainchild, along with Michael Flynn. He explained that the plan was backed by the Ontario Provincial Police, the DOJ and the IRS. Flynn would prepare a lawsuit on behalf of the Loyalists, asking the Attorney General of California to take the church into receivership on their behalf. The DOJ, FBI, and IRS would conduct a raid on church premises to get fresh evidence of illegalities, in support of the Loyalist action. The raid would be coordinated to coincide with the filing of the receivership action.   The public relations fallout and the possible arrests of leaders would all but cripple the church.

Joey played his role well, feigning fear and nervousness that Armstrong could make good on the government back-up. In order to prove his representations, Armstrong opened a notebook and started naming his government contacts, representing that each was briefed, coordinated and ready to roll with the plan. He cited the following agents as close personal friends and in constant contact and coordination with him and with Flynn:

Al Ristuccia – Los Angeles office of the IRS Criminal Investigation Division

Al Lipkin –  Los Angeles office of the IRS Criminal Investigation Division

Richard Greenberg – U.S. Department of Justice, lead counsel in defending civil litigation brought by the church against DOJ, FBI and IRS

Tom Doughty – DOJ associate of Greenberg

Al Ciampini – Ontario Provincial Police

Armstrong provided Joey with phone numbers for each, including home numbers for some – and urged Joey to get in touch with his team members from these agencies.

Over time, Armstrong told Joey that the IRS CID was the most active government participant, and served as the main coordination point between agencies. He told Joey the CID agents had been briefed about Joey and the Loyalists, and were excited and supportive. The CID would grant them informant status, offer immunity for any crimes they might commit in assisting the government, and had even talked of providing safe houses for insiders. Armstrong then asked   Joey to get his contacts to go into church files and find evidence of illegalities, so that the IRS and DOJ would know where to search. Joey then brought into the mix someone whom Gerry had known from his Sea Org days.   Mike Rinder was a Commodore’s Messenger who had once worked directly with Ron.   He was then heading up the U.S. branch of the Office of Special Affairs.   Joey introduced Mike to Gerry.   Mike reported to Gerry that the files were relatively clean – there were no big smoking-gun documents being created after the 1977 FBI raids. At this point Armstrong’s macho bravado provided what would be our greatest defense against the indictments being issued against Hubbard, Miscavige, et al.   Armstrong suggested that the Loyalists create evidence of illegalities and plant them in church files for the IRS and DOJ to find in a raid, and use against church officials.

All of Armstrong’s representations about government conspiracies to take down church leadership and close down the operation were duly recorded.

David Miscavige was ecstatic with the results. He had me make a presentation of the evidence to a team of criminal lawyers, assembled to represent L. Ron Hubbard, Miscavige, Pat Broker and Lyman Spurlock (Hubbard’s accountant at ASI) to prevent IRS CID indictments and convictions – the potential charges we took most seriously. These attorneys – most from white-shoe Washington, D.C. law firms – were scaring the hell out of Miscavige. They were suggesting the IRS CID case was so serious that they recommended working a deal with the IRS for Miscavige and Spurlock to do time in halfway houses, so as to prevent indictment of Hubbard.   At the root of the IRS CID case was the evidence of millions of dollars of church monies being funneled to Hubbard through fraudulent means. And at the heart of the case would be the infamous MCCS taped conference in which church attorneys and staff acknowledged the fraudulent nature of the transfers.

My presentation horrified the team of criminal attorneys. They were hired because of their conservative, Reagan administration contacts. They did not want anything to do with such an aggressive investigative move.   They were concerned about the propriety of the means Ingram and I had utilized to obtain the evidence, and thought it would reflect badly on their own reputations. One attorney who represented Miscavige personally took me aside, though. He said he did not know how to use it at the moment, but that the evidence I had obtained would ultimately save the day for Hubbard, Miscavige and the church.   Gerald Feffer was the former Assistant Deputy Attorney General for taxation during the Carter administration. He was becoming a dean of white-collar criminal case dismissal prior to indictment. He would become a senior partner in the venerable D.C. law firm Williams & Connally.   Gerry told me to work with some of our more aggressive civil counsel to figure out a way to make the information public, and he would use it to make the IRS criminal case go away.

Another disclosure from the Griffith Park meetings cut to the quick with both Miscavige and me. Armstrong had told Joey that another Department of Justice player was in on the grand plan to close down Scientology: Bracket Deniston III. Armstrong said that Deniston was not investigating to find out who attempted to pass Hubbard’s check, and he was not investigating the evidence we had provided to him.   Instead Deniston was out to nail our investigator, Gene Ingram. Deniston had represented to Armstrong that he was setting traps to nail Ingram and the church for attempting to frame Flynn with purchased evidence.

This was particularly disconcerting, given events in the check investigation while all this Armstrong business was going down.   After I had been ordered out of Boston by Deniston, I had been lured back in by a man being prosecuted by his office. Larry Reservitz had been charged in a case very similar to the one involving LRH’s check. One of Reservitz’s connections who had access to Bank of New England records had used his access to fraudulently transfer money from random accounts to Reservitz. While under indictment, Reservitz reached out to me for the $ 10,000 reward we had previously advertised in the New York Times, claiming he had inside information on the Hubbard case and could identify the inside man at BNE. We had a number of phone calls and several meetings attempting to negotiate the deal. The jockeying was due to my suspicion that Reservitz was shaking us down, and I was searching for facts that would indicate he knew what he was talking about. Reservitz was continually attempting to characterize my questioning as an attempt to make the deal an exchange of cash for handing us Flynn.

In the meantime, Robert Mueller, Denniston’s superior and head of the Boston U.S. DOJ office fraud division, had flown to Italy to visit Ala Tamimi. He bought Tamimi’s retraction of his original statement in exchange for dropping a number of outstanding indictments the DOJ had pending against Tamimi for a variety of fraudulent schemes he had previously executed. I attempted to confront Mueller with what we had learned, but he refused to meet with me. Deniston outright denied that any visit or deal had been carried out by Mueller. In either event, Tamimi’s retraction caused Miscavige to turn up the heat to get me to turn up fresh evidence of Flynn’s involvement in the crime.

I was caught between a rock and a hard spot. Miscavige wanted Flynn at any cost.   Yet I felt that Reservitz might be attempting to frame me for attempting to frame Flynn.   I walked a tight rope between pursuing the investigation to Miscavige’s required degree of aggressiveness, and not stepping over the line with Reservitz. I even visited the Boston FBI agent in charge of the Hubbard check investigation, Jim Burleigh.   I pointedly accused Burleigh of having covertly made a deal with Reservitz to attempt to sting me.   Burleigh brought in another FBI agent to witness his categorical denial that the FBI or DOJ had made a deal with Reservitz: “We would never cooperate with the likes of Larry Reservitz.” Deniston likewise denied that Reservitz was working for the DOJ.   Still, I had my suspicions, particularly when we learned Deniston had become pals with Armstrong and Flynn.

With the sharks circling in and our waning confidence in our civil lawyers (having their heads handed to them in the Armstrong case) and criminal lawyers (advising Miscavige that he resign himself to doing time, at least in a halfway house), Miscavige ordered I find a new breed of lawyer. He wanted someone tough as nails, not some nervous Nellie.   He wanted someone who could figuratively kick Flynn’s butt in court, and scare the hell out of his DOJ and IRS backers. After an exhaustive nationwide search and many candidates eliminated, I thought we had finally found our man – in, of all places, Boston.

Earle Cooley was bigger than life.   He was a big, red-haired knock-off of L. Ron Hubbard himself. His gravelly voice was commanding. His wit was sharp. He was perennially listed in The Best Trial Lawyers in America.   He could spin a yarn that charmed judges and juries and took easy, great pleasure in viciously destroying witnesses on cross examination.   After I had interviewed Earle and reported to Miscavige, I arranged for us to watch Earle in action.   Miscavige and I flew out to Boston to see Earle perform in a high-profile art theft trial. We saw him decimate a seasoned criminal government informant so thoroughly on cross examination that the fellow, in a trademark Cooley expression, “didn’t know whether to shit or wind his watch.” Earle’s client – whom the government had dead to rights, and who was as unsympathetic a defendant as could be – was acquitted by the jury.   We had found the horse for the course.

Earle was like a breath of fresh air to Miscavige.   He took a similar black-and-white view of matters – we are right and good, the enemy is wrong and bad. Miscavige had long since lost his patience and his tolerance for our teams of civil lawyers and the civil-rights-experienced civil-rights-experienced opinion leaders among them. He referred to them as the “pointy heads,” short for “pointy-headed intellectuals.”   To him, our only problem was our counsels’ timid, second-guessing, defensive frames of mind.   And Earle reinforced that view.   Cooley attended a few civil litigation conferences with our other counsel. He ruffled their feathers by readily agreeing with Miscavige’s simplistic sum-up of what was wrong and the solution to it, aggression. The existing lawyers’ nervous objections and eye-rolling reactions to Earle’s sermons only reinforced Miscavige’s view.   “They are nothing but a pack of pussies,” he regularly groused to me; “what we need is for Earle to sink his teeth into those Flynn witnesses and that’ll be the end of this nonsense.”

Miscavige was nothing if not resilient. While never giving a hint that the overridingly important goal was the attainment of All Clear, by late 1984 it was quite evident to all involved that we were fighting an entirely different battle now. It was a fight for survival. We were desperately staving off the barbarians storming the walls of whatever compound L. Ron Hubbard might reside behind. It was evident too that Hubbard himself might have quit fighting – we no longer received any dispatches from him about the legal front. He was only sporadically sending ASI advices concerning his personal business, and to the church about Scientology matters. Miscavige had a team feverishly marketing Hubbard’s new science fiction books, the Mission Earth series. He was putting just as much pressure on church marketing folks to market Dianetics: The Modern Science of Mental Health, the broad public re-release of the 1950 book that had launched the entire movement.   All titles were making it back onto the New York Times bestseller lists.   So the incongruity created another level of cognitive dissonance. How could government officials across the continent be so feverishly pursuing a man who was so wildly popular with the public at large?   It would be years before I would find out that the sales were given a mighty boost by teams of Scientologists sent out to bookstores to buy them in bulk.   In the meantime, Miscavige was adept at keeping me and the troops motivated, inferring that we were buying Ron time to bail out the church’s disastrous public image and to complete his final researches at the highest levels of Scientology.

With Miscavige’s solving of the “why” behind our failures to attain an All Clear – i.e., the outside lawyers’ blatant counter-intention to Hubbard’s advices on using the enemies’ tactics against them, only more cleverly and more aggressively – our defeat-battered hopes were rehabilitated. Earle Cooley, the great Scientology hope, would soon be unleashed.

Notes

  1. Rathbun, Mark (2013-05-28). Memoirs of a Scientology Warrior (pp. 255-64).
  2. GA: I mentioned Rathbun’s Chapter 21, which he titles “The Juggernaut,” in a recent letter to Dan Sherman. http://gerryarmstrong.ca/archives/1082 The whole chapter is Rathbun’s spin on the Armstrong Op, or more specifically the 1984 Griffith Park videotaping part of the op. The operation, which was clearly concocted to use or misuse the videos for nefarious purposes after the videotaping, still continues. Rathbun’s book shows the op continues by continuing it. Even though he calls it a memoir, and recounts different events or incidents in his Scientology career that appear unrelated to the op, the whole book is his spin on it. The book is also a fantastic late act, one more contemptuous fair game nastiness in the same old sick op.

    Most importantly at this time, Rathbun’s spin, and his facts propelling it, are virtually identical to the spin and facts the Miscavige Scientologists give to their description of these events in their black propaganda publications, in their filings in their legal proceedings, in their submissions to the IRS, or to governments and people around the world. The difference is that Rathbun says Miscavige ran and runs it all, and Miscavige and his corporate underlings either do not say or say the same thing.

Mark Rathbun: on Earle Cooley’s partner and protégé, Harry Manion (May 28, 2013)

We rented a number of units at a downtown condominium, walking distance from the [Multnomah County] courthouse. One unit was inhabited by Earle, his long-time mistress Jeannie and their fourteen-year-old son. Another one-bedroom unit was occupied by Miscavige and me. Another was reserved for a couple of Office of Special Affairs staff, and served as a document preparation area and repository. We had a dozen more staff working out of the offices of the mission, which were only a few blocks away. One more condo unit was occupied by Earle’s partner and protégé, Harry Manion.

Harry would prove pivotal to the case, though he did very little speaking in court. Harry was in his early thirties. A big, strapping man — if overweight, like Earle — with a boyish face and an infectious smile and personality. Harry was the archetypal hale fellow well met. He had a glib, friendly word for everyone he encountered, and a natural ability to make people feel comfortable and light. Harry had something else going for him. He was a former college and minor-league professional baseball player, and that really meant something to the judge.

Judge Don Londer was respected by many locally. But because he was Jewish, he was not really accepted into Portland’s traditionally WASP judicial circles. Londer consider himself an old jock, often reminiscing about his boxing career during his younger days in the Navy. He was also a decent, considerate man. However, he was not very bright. In the condo we used to joke that maybe he had his lights knocked out one too many times during his boxing career. But because Harry was a real professional athlete, in Londer’s eyes Harry could do no wrong. Harry struck up a relationship gradually by arriving a little early to court, and thus “bumping into” the judge regularly. The latter always wanted to hear jock war stories from Harry. Harry was the son Don Londer wished he had fathered. (pp. 266-7)

[…]

So dramatic were Earle Cooley’s cross examinations that we were all swept into the sweet oblivion of the drama of it all. We heard from Judge Londer, through Harry, and we heard from dozens of lawyers who attended as spectators and students: Earle Cooley was magnificent. (pp. 270-271).

[…]

When Cooley returned at the end of the weekend, he thought the motion 1 was brilliant. We filed it  early the following week. Harry Manion artfully used his weeks of informal credibility-and-sympathy-building with judge Londer to obtain his agreement to set a hearing for a few weeks down the road, to consider the motion. Londer would not and did not ever record the jury’s verdict. (pp. 272 )

[…]

We kept orchestrating Harry’s having “chance” encounters with Judge Londer, hoping to divine where he stood and hoping that he might begin to understand this case was not only important to the church and Earle, but to Harry’s future. Try as he might, Harry would come back from his meetings befuddled. His refrain was that Londer was as dumb as a sack of rocks, and he couldn’t tell whether anything we were presenting was getting through.

On the afternoon prior to the final hearing and the announcement of decision on the mistrial motion, Earle, Harry and I sat in Earle’s hotel room in Portland preparing our arguments. We had a last-minute brief to file, and had purposely waited until mid afternoon, when we knew Londer took a break. That way, when Harry was bringing the brief into the clerk, Londer might see him and invite him into his chambers for a chat. That went like clockwork. Earle and I beseeched Harry to call in any chips he might have with Londer. Earle told Harry to tell him outright that Londer needed to do this for Harry. Harry reported back that he had schmoozed with Londer, but that it wasn’t appropriate under the circumstances — open chambers doors — to make his ultimate personal pitch. However, Londer had invited Harry to come to his home that evening to meet his wife, since it might be the last time they would see one another. Harry had not committed, out of concern for doing something that would smell of impropriety and could come back to haunt us.

Earle and I discussed the matter in some detail. He explained the downsides of a visit — if it were ever found out it could raise the ugly specter of the decades of GO improprieties we were attempting to live down. “On balance,” Earle said, “this is up to the client. You need to brief the boss [Miscavige] and I’ll trust his instincts.” I called Miscavige and briefed him on all that had transpired. He said, “What is your hesitance? It’s a no brainer. Of course he sees Londer, and he does whatever he has to do to get the product.” I told Earle the verdict. Earle told me, “Okay, now it’s between me and Harry. I’m going to protect you and Dave. Leave it to me.”

Earle did report that Harry had gone to Londer’s home. He did not give particulars beyond saying that Londer was thrilled with the visit. He gave no guarantee of any particular outcome, “But,” Earle added, “tell Dave to relax.” And then Earle told me an anecdotal aphorism he would repeat several times to Dave and me over the next couple of years. He said, “Here is my only test of friendship. I know you are going to testify tomorrow in front a grand jury investigating me. Do I sleep tonight…or don’t I?” (pp. 275-6)

Rathbun, Mark (2013-05-28). Memoirs of a Scientology Warrior.

Notes

  1. Motion for mistrial in Christofferson.

Mark Rathbun: The Battle of Portland (May 28, 2013)

CHAPTER TWENTY-TWO
THE BATTLE OF PORTLAND

Men in general judge more from appearances than from reality. All men have eyes, but few have the gift of penetration. — Niccolo Machiavelli

Everything hung in the balance at the spring, 1985 trial of Julie Christofferson-Titchbourne vs Church of Scientology. This was the very case that my brother’s friend had tried to tell me about in 1977 in Portland, when he was making an effort to get me out of Scientology. Christofferson was a young woman who had taken a simple Communication Course. It was the very Communication Course that I had taken, at the same Portland mission I’d attended.

Christofferson had, however — according to her — an experience completely opposite to my own in taking the course. She and her Flynn-allied attorney Garry McMurry claimed that she was defrauded into taking the course in the first place, by false representations about L. Ron Hubbard’s credentials and Scientology’s scientific guarantees to bring her health, joy and happiness. According to the lawsuit, the course hypnotized Christofferson and the mission subsequently used that hypnotic state to turn her against her family. The case had originally gone to trial in 1977, and a Multnomah County jury had returned a verdict in her favor for more than two million dollars.

In 1982, the Oregon Court of Appeals reversed and remanded the case for new trial. The appeals court decision was one of our first major religious recognitions. While Miscavige took full credit for the victory with L. Ron Hubbard, in fact he had served as little more than a nuisance to its accomplishment. The case had already been argued and was pending decision when Miscavige’s Special Project came on the All Clear scene in 1981. His then-deputy Starkey had attempted to intervene in the matter, and wound up blowing off the attorney who would ultimately win the great precedent, Charles Merten.

Merten refused to re-try the case because of his disgust with the church’s new order. But he had already briefed and argued the appeal of the 1979 verdict, so there was no way for the Special Project to mess that up. Had it not been for the original Christofferson case appeals court decision, we likely would not have attained several of the more minor — but useful in their cumulative effect — religious recognition precedents we did wind up achieving through the perilous fight for an All Clear.

A new trial lawyer had been retained in Portland to try the case. Ted Runstein was a personable, seasoned and successful trial attorney. He was, however, demoted to ride shotgun to Earle Cooley and keep his mouth shut as local counsel after saying something for which Miscavige never forgave him. Runstein had suggested that “the jury needs to hear from some real Scientologists from the witness stand.” Miscavige replied that we have plenty of Scientologists on our witness list. Runstein countered, “Those are all Sea Org staff; I am talking about having them hear from Scientologist parishioners who live and work in the same community as the jurors — real Scientologists.” Miscavige snapped, “Sea Org members are real Scientologists, public Scientologists are dilettantes.” Miscavige ruminated on this affront by Runstein throughout the trial, calling him a “theetie-weetie, airy-fairy idiot” behind his back.

So when Earle Cooley rolled into town he had free rein.

David Miscavige, as the chairman of the board of Author Services, would spend the next several weeks in Portland supervising and dictating every last detail of the trial. He was going to show me, the dozens of other attorneys he categorized as “defensive losers,” and the entire OSA network how a trial was conducted, Scientology style. No more counter-intention from lawyers who knew best. He had a soul mate in Earle, so that in his view L. Ron Hubbard’s slash-and-burn policies with respect to detractors and attackers would run into no internal interference. David Miscavige would prove to Ron once again why he needed him to ramrod his intentions through. Hubbard himself was apparently incommunicado, as evidenced by little to no dispatch traffic arriving — which made Miscavige’s two-month, full-time battle of Portland stint possible.

We rented a number of units at a downtown condominium, walking distance from the courthouse. One unit was inhabited by Earle, his long-time mistress Jeannie and their fourteen-year-old son. Another one-bedroom unit was occupied by Miscavige and me. Another was reserved for a couple of Office of Special Affairs staff, and served as a document preparation area and repository. We had a dozen more staff working out of the offices of the mission, which were only a few blocks away. One more condo unit was occupied by Earle’s partner and protégé, Harry Manion.

Harry would prove pivotal to the case, though he did very little speaking in court. Harry was in his early thirties. A big, strapping man — if overweight, like Earle — with a boyish face and an infectious smile and personality. Harry was the archetypal hale fellow well met. He had a glib, friendly word for everyone he encountered, and a natural ability to make people feel comfortable and light. Harry had something else going for him. He was a former college and minor-league professional baseball player, and that really meant something to the judge.

Judge Don Londer was respected by many locally. But because he was Jewish, he was not really accepted into Portland’s traditionally WASP judicial circles. Londer consider himself an old jock, often reminiscing about his boxing career during his younger days in the Navy. He was also a decent, considerate man. However, he was not very bright. In the condo we used to joke that maybe he had his lights knocked out one too many times during his boxing career. But because Harry was a real professional athlete, in Londer’s eyes Harry could do no wrong. Harry struck up a relationship gradually by arriving a little early to court, and thus “bumping into” the judge regularly. The latter always wanted to hear jock war stories from Harry. Harry was the son Don Londer wished he had fathered.

In Miscavige’s view, the Christofferson case was the perfect test case. Christofferson had only ever had a few months engagement with Scientology. She had spent a total of $3,000 on auditing and courses. She had not been harassed by the Guardian’s Office. The court of appeals had already ruled that she could make no case for infliction of emotional distress/outrageous conduct.

Her only remaining cause of action was for fraud. The court of appeal had even narrowed the issue to whether the representations made to her were motivated by sincerely-held religious belief.

In retrospect, it was probably the stupidest move imaginable to not settle the case before trial, for those very reasons. Christofferson claimed fraud primarily based on alleged false representations about L. Ron Hubbard’s pre-Scientology credentials. These were the very issues aired in the Armstrong case, which had made an All Clear all but unattainable. By going to trial, we were affording a woman — who effectively had no damages to claim — a worldwide platform to replay the Armstrong inquisition all over again. Except this time Flynn’s stable of witnesses was bolstered by the former Executive Director of International Scientology, Bill Franks, and the former head of the organization Christofferson had interacted with — the Scientology Mission of Portland, Martin Samuels.

Samuels had been the owner of the Portland mission when both Christofferson and I were parishioners there. He was the owner of the Portland mission when the first Chistofferson trial played out. Samuels had joined the Flynn camp shortly after being expelled, during Miscavige’s mission holder purges of 1982. Samuels testified in the first Christofferson trial on behalf of the church. In the second trial we knew that he would testify that the mother church had not only run every single detail of the trial, but even forced Samuels to lie on the witness stand. And thus Christofferson II was rather a cinch for the Flynn camp to hit the mother church with a sizable judgment (something that had not occurred in the first trial).

But Miscavige — and thus we — looked at it in the simplistic, black-and-white, good-vs.-evil worldview of L. Ron Hubbard. This was our big opportunity to play it all over again. In our view, the 1979 Chistofferson verdict had been what motivated Flynn and FAMCO in the first place.

All of the testimony in the Armstrong trial (including that of Armstrong and Laurel Sullivan) came pouring into the record. More horror stories were added by Samuels and Franks, and by a host of other witnesses. Miscavige and I directed a couple dozen staff, frenetically working through each and every night to provide Earle with material to discredit each witness on cross examination. While direct examination was still in progress, I, Miscavige and several other staff would pore over the real-time transcripts being relayed from court, marking them up for every bit of discrediting documentation we had available in a massive file room at the mission. When the court day ended, we would huddle with Cooley and outline the preps required for the cross exam the next morning. The crews stayed up until 1 or 2 every night, putting the material together and getting final ok from me and Miscavige. Then we would sleep for two to three hours, wake up at 4 a.m. and prepare to meet Earle in his condo at 5 a.m. We would spend the next three hours briefing him on details about how each witness had lied, exaggerated, and twisted the truth or was somehow morally reprehensible. We liberally used material from the ethics records from their days in the church, even copying internal reports to use on cross. This went on for weeks. We continually engaged in echo-chamber, confidence-reinforcing sessions, reviewing how Earle had so thoroughly destroyed each witness’ credibility.

There were external indicia to support our overconfidence. Earle Cooley brutalized the plaintiff’s witnesses on cross examination. So dramatic were his cross exams, that each day Earle was up, the courtroom was packed with local lawyers. They had no interest in the case itself, but Earle’s cross examinations were so dramatic that word had spread through the legal community that Cooley was the best show in town. They were there only to watch a master of their own trade at work. What we were blind to was the cumulative impression that so much manhandling conveyed.

We received a wake-up call of sorts in the middle of the plaintiff’s case, but collectively chose not to heed it. We had planned to enter the covert Armstrong-Griffith-Park surveillance tapes into evidence during the cross examination of Armstrong. Earle set up Armstrong masterfully, leading him to deny that he had ever talked to anyone about taking over the church, orchestrating federal raids, and least of all manufacturing and planting documents in church files. Then Earle started quoting Armstrong from transcripts of the surveillance tapes, clearly demonstrating he was lying from the witness stand. The warning we did not heed came in the form of Judge Londer’s reaction to the courtroom spectacle. In chambers he loudly chastised the church’s behavior in being involved in such cloak-and-dagger activity to begin with. Londer, who clearly did not think much of Chistofferson’s case based on comments he had made up to that point in the trial, was more disgusted with the secret video-taping than the lies they revealed. Had we not been so thoroughly in the throes of a thought-stopping, alternate-reality creation, we might have given thought to how the jury felt about the aggressive, “gotcha” manner we were using with all the plaintiffs witnesses.

Even though it backfired in the case at hand, getting the Armstrong surveillance videos on the public record would serve as a major step in dealing with the more serious government threats of criminal indictments then still extant. The stakes were far higher than merely the Chistofferson case, and there was a great deal of tension in getting the tapes put on the record. We did not want to submit the producer, private eye Gene Ingram, to cross-examination, for fear that he would be forced to disclose anything about the increasing number of operations he was privy to. In the course of coordinating the transportation of the tapes to Portland and into the hands of church coordination attorney John Peterson, Miscavige insisted upon bypassing me and speaking directly to Ingram — something he had not done up to that point in time. I advised him that was a bad idea, should Ingram or he ever be subject to deposition.

I picked up the phone to make the call to Ingram, and Miscavige came flying at me — tackling me into a sofa and attempting to wrestle the phone from my hand. I would not relinquish my grip even though he was strangling me. I threw my chest out to buck Miscavige from me. He violently stabbed his fist into my chest and said menacingly, “Don’t you ever cross me,
motherfucker! I’ll have you declared [excommunicated] in a heartbeat if you ever fuck with me again.” I looked Miscavige in the eye for a moment and considered the weight of that statement. For four years no one on planet earth could communicate to L. Ron Hubbard but through Miscavige — not even his wife. Miscavige was the recipient of personal communications on a weekly basis from Hubbard — but for the extended periods the latter went incommunicado entirely. He was right, he could have me declared in a heartbeat, and all I’d fought for to date would have been for naught. I handed him the phone. He had established himself — much as he had done with Mary Sue Hubbard — as boss buffalo.

So dramatic were Earle Cooley’s cross examinations that we were all swept into the sweet oblivion of the drama of it all. We heard from Judge Londer, through Harry, and we heard from dozens of lawyers who attended as spectators and students: Earle Cooley was magnificent. Earle huddled us up in the condo one evening over beers.

“Have you guys ever heard of Percy Foreman?” Earle asked us.

We all replied that we had not.

“Foreman was one of the premier trial lawyers in American history. He once defended a woman who was up for a murder rap in Miami. The government brought a bunch of scumbag convicts in to bolster their case against her. Foreman demonstrated on cross examination that the testimony was obviously paid for. When he saw the jury understood that, he surprised everyone. After the case in chief, he rested the defense without calling a single witness. He wanted those cross examinations fresh on their minds when they went to deliberate.”

“Brilliant!” exclaimed Miscavige. “We don’t want to serve up our people to McMurry anyway.”

“Exactly,” Earle replied, “sending in Runstein and his ‘real Scientologists’ would be like sending sheep to slaughter.”

“You’re fucking-A right, Earle!” Miscavige proclaimed, as final authorization of the strategy.

And so Earle Cooley shocked the judge, the plaintiff’s team, and all who were watching when he announced the next morning in open court that the defense would call no witnesses, and rested. Judge Londer thought it was a great idea. He didn’t want to sit for another several weeks on this case. And he agreed with Earle that the plaintiff had never made a case worth a hill of beans. It was judge Londer’s nonchalant manner of dealing with jury instructions that helped set us up for the shock of our lives. Londer told Earle and Harry to relax on their stressed arguments to attempt strict control of the jury before their deliberations began. He said, “Hey, what has she got, three grand in damages? The jury isn’t stupid.” And so, with the judge’s assessment of the merits, we were optimistic — albeit nervous — as we awaited the verdict.

Nobody was prepared for the result. On a Friday afternoon the jury awarded Christofferson $39 million. That not only buried any idea of an All Clear, it put the church’s very future at risk. Earle Cooley wasn’t sure why he did it, but he asked the judge to hold off on recording the verdict for a few days. The judge wasn’t sure why either, but he granted Earle’s request.

Miscavige had flown back to Los Angeles after closing arguments. Cooley left that night for Las Vegas to blow off steam and to try to deaden the devastating loss with a weekend of amnesiainducing recreation. In a way, I was left alone holding the bag at the scene of the crime. Early Saturday morning I met with two associates of our local counsel in their Portland office. We frantically traded ideas for challenging the verdict before the case went up to the court of appeals for the two-to-three-year appellate process. One of the associates was a cheery, bright British woman. She came up with a wild idea. Since the verdict had not yet been recorded, we could still make a motion concerning the case before the lower court. That court retained jurisdiction until such time as the verdict was recorded.

We reckoned that since there were motions brought by our side continuously, against prejudicial matter being entered into evidence throughout the trial, and since those motions had been consistently denied, there was no way to challenge rulings already made along the way. However, what if we brought a motion for mistrial based on what was put before the jury during closing arguments? That was the one small window of trial history we had not already brought legal challenges to. With Cooley incommunicado, we got busy dissecting the transcript of the closing arguments to find something, anything we could hang our mistrial motion on. We noted some particularly prejudicial statements that plaintiff’s counsel had made, and drafted a motion for mistrial on the basis that the statements were so outrageous and prejudicial as to have potentially caused the jury to act on passion and prejudice, rather than on the evidence presented over several weeks of trial.

When Cooley returned at the end of the weekend, he thought the motion was brilliant. We filed it early the following week. Harry Manion artfully used his weeks of informal credibility-and-sympathy- building with judge Londer to obtain his agreement to set a hearing for a few weeks down the road, to consider the motion. Londer would not and did not ever record the jury’s verdict.

Miscavige returned to Portland and we had a conference in Cooley’s condo with a couple of legal staff. Miscavige was distraught and desperate. He talked of moving L. Ron Hubbard and Scientology management to a South American country in order to assure the church’s future survival. We discussed how with a 39-million-dollar judgment being publicized internationally, the three dozen similar FAMCO suits heading toward trial, and the DOJ and IRS champing at the bit to clean up anything remaining after the damage was done, the United States was about the least safe territory in the world for Scientology.

Miscavige railed about the stupidity of Judge Londer, how he continued to allow the trial to go out of control while reassuring us that the worst-case scenario was a few thousand dollars in damages. He ruminated how a mighty institution like Scientology could be brought to its knees by a group of degraded “wogs” (non-Scientologists) from a cow town. His own characterization prompted a lightning bolt from the blue.

“I got it!” he exclaimed. “We’ll take over this shit-hole town. I’ll bring in one hundred thousand Scientologists from around the world and we’ll surround that courthouse and make this town comply. We’ll overwhelm them. We’ll overwhelm not only the judge but every other criminal judge he talks to in his town.”

The battle of Portland had only just begun. We called in every Public Relations officer assigned to every church of Scientology in the world (several dozen) and gave them orders to call every person who had ever taken a service at each local church and order them to get to Portland for the biggest, most important event and contribution they would ever make to Scientology. Ken Hoden was pulled out of mothballs and put in charge of the “religious freedom crusade.” Hoden had been the Guardian’s Office person in charge of external affairs in Portland during the original Christofferson case appeal. Miscavige and Starkey had busted him and relegated him to backlines PR work in Los Angeles back in 1981, when they decided he had screwed up the appeal of the original case (the result of which was ultimately the vacating of the original two million-dollar judgment, and Scientology’s strongest religious recognition to date). But now Hoden was integral — he was the only one who knew the ropes in Portland, as well as all allies of the church and public officials in the Portland area. Hoden was instructed to wear a religious “dog collar” shirt and coat at all times in public. He would be the spokesman and he would position all utterances along the line that the Christofferson judgment was the worst assault on religious freedom in the United States in modern times.

Within days, several hundred Scientologists had shown up in Portland. Hoden organized them up, made signs and began regular marches around the courthouse. The trademark chant of the crusade echoed down the streets of Portland:

Hoden: “What do we want?”
The crowd: “Religious freedom!”
Hoden: “When do we want it?”
The crowd: “Now!”

Initially, the protesters came across as angry, in compliance with Miscavige’s orders to intimidate the city into compliance. As Miscavige was back in LA, and there was no allowance
for discussion of mitigation of his ideas, instead Hoden discussed with me the need to tone it down and create a far less threatening and far more dignified presentation. I told Ken he was right, and told him follow his instincts, just learn to report to Starkey and Miscavige in the language they liked to hear. That was to emphasize, in briefing them, how loud you were, how numerous you were, and how shocked and awed the public watching was — while taking a slightly different approach in conducting affairs on the ground. It was an art I had come to learn out of necessity, to avert many church catastrophes over the years.

Ken got the knack of how to play shock absorber to the brass — and did a masterful job in controlling the masses in a fashion that had maximum impact. Over the next week, thousands of Scientologists showed up and the regular protest marches easily surrounded the entire block the courthouse occupied, with parishioners marching in ranks of several abreast. Hoden took care to brief each arriving Scientologist on the importance of being polite and friendly, cleaning up after themselves and generally creating a good impression of “regular Scientologists.”

We wound up having two hearings before judge Londer, separated by several weeks. As much as the crusaders were creating the impression we wished they would, Londer could not wrap his wits around the constitutional arguments we were making. In one chambers meeting with counsel, he uttered something which, despite the public relations gains we were making with the “religious freedom campaign,” flagged our hopes of success. Earle Cooley had made a lengthy presentation, backed by citations to court case precedents. Londer had seized on one particular case that Cooley cited, buoying our attorneys’ hopes that he might understand and adopt our position. After a back-and-forth conversation about its parallels to the case at hand, Londer shocked them all by saying, “Wait a second. That was a court of appeals decision; this isn’t a court of appeals.” Of course, all legal precedent is created by opinions rendered by courts of appeal, and these are binding law for the lower courts to apply and follow. Londer’s statement belied a challenged cognitive capacity. As Earle Cooley put it, “Oh my God, we’re in the hands of the Philistines!”

We kept orchestrating Harry’s having “chance” encounters with Judge Londer, hoping to divine where he stood and hoping that he might begin to understand this case was not only important to the church and Earle, but to Harry’s future. Try as he might, Harry would come back from his meetings befuddled. His refrain was that Londer was as dumb as a sack of rocks, and he couldn’t tell whether anything we were presenting was getting through.

On the afternoon prior to the final hearing and the announcement of decision on the mistrial motion, Earle, Harry and I sat in Earle’s hotel room in Portland preparing our arguments. We had a last-minute brief to file, and had purposely waited until mid afternoon, when we knew Londer took a break. That way, when Harry was bringing the brief into the clerk, Londer might see him and invite him into his chambers for a chat. That went like clockwork. Earle and I beseeched Harry to call in any chips he might have with Londer. Earle told Harry to tell him outright that Londer needed to do this for Harry. Harry reported back that he had schmoozed with Londer, but that it wasn’t appropriate under the circumstances — open chambers doors — to make his ultimate personal pitch. However, Londer had invited Harry to come to his home that evening to meet his wife, since it might be the last time they would see one another. Harry had not committed, out of concern for doing something that would smell of impropriety and could come back to haunt us.

Earle and I discussed the matter in some detail. He explained the downsides of a visit — if it were ever found out it could raise the ugly specter of the decades of GO improprieties we were attempting to live down. “On balance,” Earle said, “this is up to the client. You need to brief the boss [Miscavige] and I’ll trust his instincts.” I called Miscavige and briefed him on all that had transpired. He said, “What is your hesitance? It’s a no brainer. Of course he sees Londer, and he does whatever he has to do to get the product.” I told Earle the verdict. Earle told me, “Okay, now it’s between me and Harry. I’m going to protect you and Dave. Leave it to me.”

Earle did report that Harry had gone to Londer’s home. He did not give particulars beyond saying that Londer was thrilled with the visit. He gave no guarantee of any particular outcome, “But,” Earle added, “tell Dave to relax.” And then Earle told me an anecdotal aphorism he would repeat several times to Dave and me over the next couple of years. He said, “Here is my only test of friendship. I know you are going to testify tomorrow in front a grand jury investigating me.

Do I sleep tonight…or don’t I?”

Even though Earle said he would sleep well that night, I did not. Of secondary importance was my own life. I was so thoroughly invested in the crusade to protect LRH and Scientology that the possible impact on them loomed larger than my own spiritual death — which would be a virtual certainty if we did not win. As I had learned by then on Hubbard’s lines of operation, there had to be a head on a pike after a catastrophe of this magnitude. And I had been around Miscavige long enough to know that regardless of his having micro-managed every move in the trial, down to strangling me the first time I attempted to counter him, it would not be Miscavige’s head on this particular pike.

The next morning, the Multnomah County Courthouse was surrounded by Scientologists. The hallways and wide stairways inside were packed with Scientologists, from the front door,
through the lobby, up to the third-floor courtroom of Judge Londer. Londer gave a touching soliloquy about how well the “real Scientologists” who had descended upon Portland had
conducted themselves. He said he might not have been so gracious and polite had his own religion been compared to botulism soup, as plaintiff’s counsel had done to the jury. He found
such conduct to be extremely prejudicial, and in violation of his own orders — having already determined that Scientology was a religion. The judge granted the mistrial motion, wiping out in one breath the $39,000,000 judgment.

After having survived a nuclear explosion by, among other things, successfully defrauding the court as to L. Ron Hubbard’s inaccessibility (Ron had been a named defendant, but we managed to get through the entire trial without the issue of his personal liability ever being adjudicated), Ron had two handwritten messages relayed to Miscavige. The first was a short note to the “real Scientologists,” the crusaders, commending them for having pulled off a feat of historical proportions by influencing the winning of the mistrial motion. The second consisted of two words and a single letter, sprawled across a full page in Ron’s signature style. It read, “Earle, congratulations! — R” The “R” stood for Ron, a signatory he had used for years on internal church dispatches.

Two months later, at our annual Sea Org Day celebration, Miscavige and I would be awarded special medals of honor, of a type never before issued by Ron. We had slipped on a banana peel and somehow managed to fall on a fur rug.

Notes

Be Glad You Lost, Julie (November 9, 2003)

By Dan Garvin
9 November 2003

Source: http://groups.google.com/group/alt.religion.scientology/msg/71f514f4e97f24231


In the summer of 1985, I had been in OSA Int for less than a year. I was in charge of external computerization for OSA, which meant I got to go all over the place setting up and taking care of anything that had a CPU and wasn’t inside OSA Int. Up in Portland, Oregon, the “Christo Trial” was getting going. There was already a Trial Unit of OSA Int, OSA US, local DSA and other staff and some volunteers. Some attorneys were also in Portland Earle Cooley was the main one I dealt with. Miscavige was there, as were Marty Rathbun, Mike Sutter, Lynn Farny, Ken Long, Karen Hollander, and many other names you’d recognize. Many famous SPs were there too. Somebody got a nice picture once of Gerry Armstrong flipping the bird at the camera as he was leaving the courtroom.

The Christo Trial was a damages suit by Julie Christofferson against the Church in Portland for, IIRC, fraud and emotional distress and a number of related torts. By that time she was Julie Titchbourne, but we still called the case Christo in OSA. After a while, I was called up from LA. There were two or three condominiums in the same building in downtown Portland, near the courthouse. One was Earle Cooley’s; one was the work and research area for the OSA Int execs and senior Legal personnel; I think there was a third one for the ASI/RTC personnel (at that time, Miscavige was still calling himself ED ASI, although he was just as much the boss of everything as he is now, at least as far as OSA was concerned). These condos were fairly luxurious. The lesser beings worked in the Trial Unit at the Celebrity Centre. I got to work in the OSA Int Condo, although I slept in a hotel some distance away.

The reason I was brought up is that they wanted transcripts of the proceedings loaded into computers on a daily basis so they could be searched by Cooley, Farny, Long, et al. At first, so I was told by one of the attorneys (probably Tim Bowles), we were not even supposed to have been given the transcripts. Only the attorneys were allowed to have them, for some reason. So our attorneys of course violated this order and gave the transcripts to me and to other personnel. But I got pretty crappy copies. I had miniature duplicates of the INCOMM computers set up in the condo. They were made by a company called WICAT, and they had a Unix-like proprietary operating system. We had one or two OCR – optical character recognition – machines set up. In those days, OCRing was pretty primitive (or prohibitively expensive), and these could only handle certain fonts, which had to be in very good condition. So the crappy and illicit copies we were getting had to be mostly typed in by hand, and for that there were about a half dozen personnel who had been doing that type of thing in LA.

Later they got permission to let us have copies of the transcripts, and the quality improved vastly. The other typists were sent home and I was pretty much running the whole computer show. I could OCR and correct everything by myself. We had huge rack-mount tape drives with twelve- or fourteen-inch reels, each holding 10 MB of data. I used these for backups and to transfer the data up to the computer in Earle Cooley’s condo. The information was loaded into a database that INCOMM called FAST, which was like SIR, or Source Information Retrieval, which is all the LRH issues (of all kinds, and advices too for those authorized) in a searchable database. FAST was the same system exactly, but for non-LRH material. OSA was inputting all the documents in all legal cases, and later added just about everything else as well. When a case was going on, everybody would rush to get it into FAST as soon as possible so the legal vultures could pick it over for anything they could use to win points the next day in court.

The Christofferson case is a fascinating story, but one I don’t know very well. What’s relevant to this post is, we lost. The jury awarded Julie Titchbourne something like $30 million. Nothing like this had ever happened before (so I was told and believed). The loss would set a precedent and all the other “frivolous” deep-pocket lawsuits against Scientology churches would fall like dominoes in favor of the enemy. We were crushed. I had not been in the courtroom once the whole time I was there, but I came down to hear the decision – and share in the victory. When I heard the award against us, I literally did not know what to do. I thought it was the end of the world, or pretty close. It was impossible and unthinkable. Our religion could be shut down by ambulance-chasing attorneys and professional victims. I wandered out of the courtroom in a daze. I went down to a park in town and just walked around. Everything seemed surreal. But I realized we would not just cave in. We would appeal. We would fight with every ounce of our strength, and when that was gone, we would still fight on. I started to feel a little better. All the same, it was unbelievable. After all, RTC and ASI were running things directly, and if anybody would make sure LRH legal tech was standardly applied, they would and still we lost. Man, there must be some heavy-duty corruption going on behind the scenes, to create such a miscarriage of justice! Well, we’d find that, too, and somehow we’d win. We had to. The survival of the world depended on it.

So I got tired of moping and headed back to the condo. The execs and OSA guys were there; I don’t remember which ones but probably most of the ones who normally worked or attended conferences there. Nobody was saying much; it looked like everybody else hadn’t finished moping yet. So I took a hint and resumed moping. Every once in a while somebody would wonder what the hell we were going to do, or what went wrong, and speculate about how bad it was going to be. After a while, the CO OSA Int, Mike Sutter, spoke up. He said  (paraphrasing), “I don’t care if she thinks she won. That bitch is never going to see one single cent. I’ll kill her first. I don’t care if I get the chair it’s worth it. It’s just one lifetime.

I froze. I wasn’t moving much to begin with, but I froze solid. I didn’t want to breathe. I forgot all about our immediate problems. My CO had just said he was going to murder Julie Titchbourne. He was absolutely serious. I was in shock. Sure, she deserved to die all SPs did. But you can’t actually do that that sort of thing. My thoughts raced. Please, I thought, please, somebody say something that will make this stop. I was trying to think what I could say. If I said the wrong thing, or said it the wrong way, I’d be out of there that night and getting sec checked the next day. But this was madness!

There was not a sound in the room. It seemed like ten minutes but was probably only one. Finally Miscavige spoke up. Here’s what he didn’t say: He didn’t say, “Sutter, you’re fucking crazy, we don’t kill people!” He didn’t say, “You’re joking, right?” He didn’t explain that Julie’s estate would still get the money or that killing a plaintiff would be a hundred times worse for the Church than paying her even the whole $30 million. He just said, “No, this is what we’re going to do.” And then launched what within a day or two became the Portland Crusade.

The Crusade, along with a lot of flanking actions and, according to Cooley, his own research in the database I’d put together for him, worked, and the Judge, Londer, eventually threw out the decision. Julie would have had to start from scratch, with much tighter restrictions on what was admissible as evidence. I guess they just gave up.

Julie deserved that money, or at least some compensation for being screwed over by Scientology. I’m sorry for my part in stopping her from getting paid. But, then again, if the Crusade and everything had failed and she had won in the end, I wonder if Sutter would ultimately have made good on his promise to murder her. Even if the estate still collected Julie’s money, it sure would have made other plaintiffs think twice about their own cases. It may be that Julie’s loss is the only reason she is alive today.

One thing I am absolutely certain of: When Mike Sutter said he would kill her, he meant it, absolutely and literally. He certainly was not reprimanded or corrected at the time by anyone for suggesting this, and if any action was taken against him later, it was nothing I ever heard about – nor did anybody ever pull me aside and say, “You know we would never actually do that, right?” or some such. In fact, a few months later he was promoted to RTC. He was still in RTC as late as 1995 or so. I don’t know if he has been seen in the last few years. That could mean a number of things. He could just have a post that never requires him to leave the Gold Base, or he could have gone to the RPF, or he could have been transferred somewhere else on some secret post or mission. Or, for all I know, he could have gone off to do the Hit Man Full Hat and Apprenticeship.

Hubbard’s Code of Honor says, near as I can recall, “Your honor and integrity are more important than your physical body.” Also, the third and fourth dynamics (the group Scientology, and all mankind) are more important than anyone’s first dynamic (self an SP’s life or the life of whatever hero murdered the SP). To the average Scientologist and perhaps the average SO member, this interpretation of those ideals may sound extreme, even beyond extreme. As one nears the top of the ladder, though, I think they’re pretty typical. What may not be typical is the willingness to actually go through with it, mainly because the repercussions on Scientology would be far worse than the consequences of not committing the murder.

Lurkers, those of you still in the COS this is a glimpse at a side of RTC that you don’t hear about at the International Events. Next time you’re watching David Miscavige spewing his glib, formulaic PR at you, try remembering that this is a man to whom murdering a plaintiff was apparently just another option, one that he ultimately rejected in favor of a better one, but one he seemed to have no fundamental objections to.

Dan Garvin

Notes

Declaration of Jesse Prince (June, 1999)

Daniel A. Leipold, State Bar No. 77159
LEIPOLD, DONOHUE & SHIPE, LLP
960-A West Seventeenth Street
Santa Ana, CA 92706
Telephone: (714) 796-1555
Facsimile: (714) 796-1550

Attorney for Plaintiff, LAWRENCE DOMINICK WOLLERSHEIM

SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES

LAWRENCE DOMINICK WOLLERSHEIM
Plaintiff,

vs.

CHURCH OF SCIENTOLOGY OF CALIFORNIA
Defendant

Case No.: C 332 027

DECLARATION OF JESSE PRINCE1

I, Jesse Prince declare as follows:

1. I am over 18 years of age and currently reside in the State of Colorado, County of Boulder. This declaration is of my own personal knowledge and if called upon to testify to the facts herein I could and would be competently able to testify thereto.

MY PARTICIPATION IN SCIENTOLOGY

2. I am intimately familiar with the Scientology organization, movement and beliefs because I was in Scientology for 16 years (1976-92) and served in the highest ranks, including as the second in command of the Religious Technology Center (RTC). At that time, my position was “Deputy Inspector General, External” which meant being in charge of all activities outside the body of Scientology. This included being in charge of all litigation by or against any Scientology organization, intelligence (spying, covert operations) brought against perceived or imagined “enemies” (which ranged from critics to media to the courts), trademark registrations, and the licensing of trademarks to other Scientology organizations, which was how we tightly controlled all Scientology corporations while creating the false impression of “corporate integrity.”

3. From the time RTC was created in the early 80’s until the time I left RTC, RTC was the most senior, most powerful and most influential organization in all of Scientology. All RTC employees were Sea Org members.

4. In March 1983, I became the Deputy Inspector General, External, and a member of the Board of Directors RTC, as its Treasurer. (The only other board members were Warren McShane as Secretary and Vicki Aznaran as President, during this time.) At the time I was appointed a member of the Board of Directors of RTC I was forced to sign an undated letter of resignation. This is standard practice with all Scientology board members and is another means by which the Scientology corporations are controlled while giving the appearance of corporate integrity.

ACTIVITIES CONDUCTED UNDER THE GUISE OF RTC MANAGEMENT

5 . During my tenure with RTC, I have been privy to the destruction and alteration of documents to protect the group. For example, on or about April of 1983 I was present at a meeting, which took place in Los Angeles, California at a Scientology office called Author Services, Inc. (ASI). ASI presented itself as the “literary agency” for Scientology founder L. Ron Hubbard. In reality it was actually where the Scientology empire was being run from at that time. All of Scientology was being directed from ASI in 1983. ASI was where various Scientology corporations went to receive orders.

6 . Present at this particular meeting was David Miscavige, then acting under the title of chairman of the board of ASI, Vicki Aznaran then the Deputy Inspector General of Religious Technology Center, (RTC) and Lymon Spurlock, who was “Director of Client Affairs” for ASI. Mr. Miscavige expressed concern at this meeting that there might possibly be a raid on Scientology by the IRS. At that time, none of the churches of Scientology had received tax exempt status.

7 . One principle reason why tax exempt status had not been granted was the IRS’s position that Scientology founder L. Ron Hubbard (LRH) was actually the managing agent of Scientology in complete disregard of the corporate structure of Scientology. We knew this to be a fact but also knew that it violated IRS rules and thus had to be hidden.

8 . There was concern that the IRS would obtain the hundreds of daily, weekly and monthly LRH orders written by Mr. Hubbard and distributed throughout Scientology. These orders were commonly referred to in Scientology as “advices” to avoid the appearance that LRH was actually running Scientology. In fact, LRH was running Scientology. The principle concern expressed at this meeting was that the LRH orders or “advices” would be used to name L. Ron Hubbard as the managing agent of Scientology.

9 . Because of an already existing fear that an LRH “advice” might fall into the wrong hands, these orders from him were written in a way that we could deny it was from him. His name was not on them. He was never cited in the dispatch except in the third person. There was no signature and a salutation in reply was never more than “Dear Sir.” The routing at the top referred to him merely as “*,” an asterisk. However if a person (or an agency) got enough of these, there would be little doubt that we were in touch with Hubbard (via ASI) and he was telling us and each corporation what to do to make him more money.

10. David Miscavige specifically stated that ASI was “already dealing with the problem”, ridding ASI of any documents that would implicate L. Ron Hubbard as managing agent of Scientology. He stated that under his directive the LRH orders, or “advices”, were being collected and transferred by truck to a Riverside County recycling plant where the documents were to be “pulped”. This method of destruction was considered to be better than shredding. I was also given instructions that I was in charge of purging the remainder of the Scientology organization of LRH orders. This was to include Church of Scientology of California (CSC); Church of Scientology International (CSI); and, RTC.

DESTRUCTION OF WOLLERSHEIM DOCUMENTS

11. Several weeks after this first meeting, I attended second meeting at the ASI offices concerning the continuing destruction of Scientology corporate documentation. In attendance at the second meeting were David Miscavige, Lymon Spurlock, Vicki Aznaran, Norman Starkey of ASI and Marty Rathburn of ASI. At this meeting, David Miscavige for the first time, stated that Scientology had been ordered by a court to produce various documents concerning a former Scientology member named Lawrence Wollersheim who had a lawsuit pending in Los Angeles against the Church of Scientology of California. The court had ordered Scientology to produce Mr. Wollersheim’s entire ‘preclear” (PC) file.

12. A “PC” file is one of several files kept on members. The PC file is the file that includes all written records of all “confessionals” done by the member. This means that it includes not only the most self-damaging material, but it also reflects every problem the person might have had with the organization, including complaints. This PC file grows with the person’s tenure in Scientology.

13. Mr. Wollersheim’s PC file was several thousand pages in length and stood as high as a six-foot tall man. Initially at this meeting, it was decided that Mr. Wollersheim’s PC file would be redacted and culled of any evidence or documentation which might assist Mr. Wollersheim in his lawsuit against CSC. There was also concern that the materials known as Clear, OT I, OT II, OT III and NED for OTS (NOTS) would be open to public inspection if Mr.Wollersheim’s files were produced as ordered. Scientologists are taught that a person could catch pneumonia and die if that person is prematurely exposed to these ‘upper level” materials without first having taken many hours of preparatory auditing.

14. Ultimately, approximately 50 pages were produced pursuant to the court order. Mr. Wollersheim’s PC file was culled based on a direct order from David Miscavige.

15. Later, I was informed that a second court order was issued to produce Mr. Wollersheim’s entire file. Faced with the prospect of having to produce the entire file David Miscavige gave orders that the entire file simply be destroyed by being pulped.

16. Pursuant to Mr. Miscavige’s orders, I ordered Rick Aznaran to take Mr. Wollersheim’s PC files to the recycling plant in Riverside to be pulped. Several hours after I gave the order to have Mr. Wollersheim’s PC files destroyed, Mr. Aznaran returned and confirmed that the records had been pulped and even showed me a small bottle of pulped material, saying ‘Here’s what’s left.”

17. The material that David Miscavige ordered destroyed and which Rick Aznaran had pulped was the same material that the court had ordered produced in Mr. Wollersheim’s Los Angeles court case against CSC.

COMMON SCIENTOLOGY PRACTICE OF DECEPTION AND LIES IN THE WOLLERSHEIM CASE AND IN GENERAL

18. During the time I was on the Board of Directors of RTC, (1983 to 1987) I attended numerous legal strategy sessions that dealt with the Wollersheim v. Church of Scientology case. Most of these legal strategy sessions took place in the boardroom at Author’s Services, Inc. The general legal strategy of Scientology both before and after the Wollersheim judgment was rendered against the Church of Scientology of California was to make the case so complex and expensive that it would go on forever and Mr. Wollersheim would never be able to collect “One Thin Dime”.

19. This general legal strategy as pursued in the Wollersheim case is consistent with Scientology’s overall legal strategy as set forth by L. Ron Hubbard, the “source” of all of Scientology’s policies as follows:

The purpose of the suit is to harass and discourage rather than to win… the law can be used very easily to harass, and… will generally be sufficient to cause [the enemy’s] professional decease. If possible, of course ruin him utterly.

The DEFENSE of anything is UNTENABLE. The only way to defend anything is to ATTACK, and if you ever forget that, then you will lose every battle you are ever engaged in… NEVER BE INTERESTED IN CHARGES. DO, yourself, much MORE CHARGING and you will WIN.

L. Ron Hubbard, Magazine articles on Level 0 Checksheet

20. During the same period of time, I was also present at legal strategy sessions that dealt with the Christofferson case in Oregon and the David Mayo case in the USDC for the Central District of California also known as RTC, et al. v. Robin Scott 85-711-JMI (Bx). The identical legal strategy was employed in those actions.

21. The various legal strategy sessions involving the Wollersheim case were attended by the following Scientology representatives:
Lyman Spurlock of Author’s Services, Inc. (ASI);
Norman Starkey of ASI;
Marty Rathburn of ASI;
David Miscavige of AS1
Vicki Aznaran of RTC;
Warren McShane of RTC;
Marc Yeager of CSI; and,
Myself of RTC.

CORPORATE NAMES AND BOUNDARIES WERE MEANINGLESS

22. It is incumbent on this and every court, as well as the authorities, to realize the amount of deception, chicanery, lying, manipulation and outright criminality that Scientology will employ to hide the truth about their criminal activities. They will spend any amount of money to do this. I know because I was part of it for years. I received orders to break the law, and then I helped to hide these criminal activities just as they are hiding them now.

23. Scientology developed a daunting corporate structure. This structure was designed to confuse those outside of the organization. In reality, corporate names and boundaries were meaningless. Control was centralized in one person. During his lifetime until his death in 1986 that person was L. Ron Hubbard. After his death, all control of Scientology vested and remains in David Miscavige.

24. The one thing that all of us had in common is that we were all members of the Sea Organization. The Sea Organization, or ‘Sea Org” is a paramilitary type organization that virtually governs all of Scientology under guidance of David Miscavige.

25. Our corporate positions were so much window dressing. It was our Scientology positions and our membership in the Sea Organization that gave us the power to control things within Scientology, including setting legal strategy for a corporation that we were not officers or directors of, such as defendant Church of Scientology of California.

SCIENTOLOGY HAD A CORE OF LAWYERS USED FOR ALL PURPOSES

26. The attorneys present when the legal strategy for the Wollersheim case was discussed included:
Sherman Lenske;
Earl Cooley;
Chris Cobb;
John Peterson;
Lawrence Heller; and,
Joe Yanny

27. Not everyone listed above was present for every meeting. However, I am positive that at sessions at which the legal strategy to be employed in the Wollersheim case was discussed, the lawyers involved in the Wollersheim case freely discussed that case and took directions from persons who were not officers, directors or employees of the defendant Church of Scientology of California, including me.

DAVID MISCAVIGE CONTROLLED THE WOLLERSHEIM LAWYERS

28. David Miscavige routinely gave orders to attorneys representing Scientology corporations, regardless of which Scientology Corporation the attorneys ostensibly represented. This was true in every legal strategy session and in every legal case including Wollersheim.

29. I recall one legal strategy session after the judgment was rendered specifically. The attorneys representing CSC in the Wollersheim case were present. Marty Rathburn gave a general briefing on the case mentioning that the judge hated Scientology and that Scientology was not going to pay. David Miscavige said that Scientology was not going to pay even if it cost Scientology more than the thirty nillion-dollar judgment because we don’t want to open the doors to others doing this.

WARREN McSHANE DECLARATION

30. I have read the Declaration of Warren McShane dated June 11, 1999. Mr. McShane’s Declaration is false.

31. For example, Mr. McShane states that: RTC never purchased, acquired, assumed, or otherwise obtained any assets of defendant Church of Scientology of California (‘CSP) as part of any corporate reorganization of the Church of Scientology or otherwise.

In fact, RTC obtained trademarks that were registered in the name of CSC.

32. Mr. McShane’s statement that: “RTC played no role of any kind in the trial of this action” is also a fiction. Nothing could be farther from the truth. Warren McShane, Vickie Aznaran and I constituted all of the officers and members of the board of directors of RTC from 1983 through the end of 1986. Further, Lyman D. Spurlock and David Miscavige were trustees of RTC from 1983 to 1986. All of us were present during legal strategy sessions with the attorneys representing CSC during and after the trial and at those meetings we formulated the strategy that the lawyers were to employ at trial and to frustrate collection of the judgment after it was rendered.

MANAGEMENT OF WOLLERSHEIM CASE BY CSI

33. For example, at these legal strategy sessions it was determined to organize a unit within CSI known as the Wolly Unit. The Wolly Unit was to supervise and coordinate various aspects of the Wollersheim case such as intelligence gathering; public relations, including the “Not One Thin Dime For Wollersheim” Campaign; explaining to Church members Scientology’s version of the case and day to day supervision of the outside attorneys handling the CSC case.

34. Another unit was also organized within CSI. This unit was called MFTC for Mission Find The Crimes. The MFTC’s unit was literally what the title implies. MFTC members worked full time investigating any judge sitting on the Wollersheim case, the judges’ family and friends; the lawyers for Wollersheim; their family and friends; any witnesses that the Wollersheim attorneys might call at trial; and their families and friends. The job of MFTC unit was to find any crimes, unethical behavior or embarrassing information that might be used to Scientology’s advantage. Mr. Wollersheim’s attorneys, Charlie O’Rielly and Lita Schlosser were followed on an almost constant basis.

35. It was irrelevant to us if a legal strategy was pointless or had no ultimate chance for success. As long as we could argue that the legal strategy had a scintilla of colorable basis, we would demand that it be pursued with the utmost vigor. We ordered the attorneys to tie up Mr. Wollersheim’s attorneys; tie up the court; delay the case; make the pursuit of Mr. Wollersheim’s claim as difficult as conceivably possible; force the plaintiff to spend as much money as possible and make an example of Mr. Wollersheim to show that no one can ever prevail against Scientology.

MISSION CORPORATE CATEGORY SORT OUT SHAM

36. In 1981, in response to the Wollersheim case, and the IRS, Scientology created “Mission Corporate Category Sort Out” (“MCCS”). On its face, to the outside world, MCCS was designed to appear to separate corporate business functions from ecclesiastic functions. Prior to this, all of Scientology was under a hierarchy where defendant CSC was designated as the “Mother Church” and all functions of Scientology came under the umbrella of the “Mother Church.”

37. The Mission Corporate Category Sort Out was a sham. It was a smoke screen designed to put a phony corporate front on the Scientology management structure to fool the IRS and to frustrate litigants so that they would never be able to collect a judgment.

38. Scientology has no respect for the “Wog” or non-Scientology legal system. It is merely a tool we could manipulate to destroy our enemies. During the time I was an officer and director of RTC, we often destroyed evidence. I have personal knowledge that this occurred in the Wollersheim case because I participated in it. As far as Scientology was concerned, we were above the law and we were perfectly free to use any means legal or illegal, to manipulate and frustrate the legal system to our purposes.

39. Scientology always enjoyed a number of great advantages in any litigation we were involved in including the Wollersheim case. These advantages included:

a . Scientology’s opponents generally took their legal duties seriously, Scientology did not. For example, Scientology never felt obligated to produce documents it had in its possession even if a court ordered it to do so. The only way Scientology would produce documents was if the documents were worthless or damaging to Scientology’s opponent.

b. Scientology set up a maze of phony corporate structures that Scientology opponents had to negotiate. Scientology did not take these corporate structures seriously, but demanded that it’s opponents do so.

c. Scientology had virtually unlimited funds to spend on litigation and was willing to spend the money to drive any opponent into bankruptcy.

d . Scientology would “play the religious card” as often as possible screaming at the top of its lungs that any lawsuit represented a threat to all religions and was based on religious discrimination against Scientology as a misunderstood and maligned new religion.

e . If Scientology did not like what was going on in a particular court, we would just order the lawyer to file a lawsuit in another court to tie up the plaintiff and his lawyers on trumped up charges. This policy carried out L. Ron Hubbard’s admonition: “NEVER BE INTERESTED IN CHARGES. DO, yourself, much MORE CHARGING and you will WIN.” Further, these new lawsuits could be used as intelligence gathering operations to conduct discovery that the court that we did not like, would never let us conduct.

40. Both before and after the Wollersheim judgment, Scientology’s Mission Corporate Sort Out was designed to drain all the assets out of CSC and place them in other corporations where they could not be touched by anyone who had a judgment against CSC.

41. When the judgment was rendered in the Wollersheim case, I remember that a shock wave went through the Scientology organization. Although many of the assets had been drained off from CSC, there were still some attachable assets that remained within CSC and were thus reachable by Wollersheim’s lawyers. CSC was quickly reduced to one room. Even furniture was removed to other Scientology organizations. FREEDOM MAGAZINE, which had always been housed in CSC, was transferred to CSI.

42. The Essential Strategy to make it impossible for the Wollersheim judgment to be collected was formulated by CSC’s attorney Earl Cooley and CSI attorney Chris Cobb. David Miscavige and Lyman Spurlock then implanted a specific plan to carry out the lawyers’ scheme to make it impossible for Wollersheim to collect his judgment.

43. CSC was stripped of all revenue streams, which were given to other Scientology corporations and entities, including CSI. Any cash that was left in CSC was used to pay bills, debts and settlements for all the other Scientology corporations and entities. I specifically remember one meeting at which we discussed the fact that despite our efforts to strip CSC of attachable assets there was still 2.5 million dollars in cash left that might be seized. It was determined that we had to find bills or debts in other corporations that needed to be paid in order to relieve CSC of this cash. This was done. Mark Ingber of WDC (Watch Dog Committee) reserves in CSI was in charge of stripping CSC of its assets.

THE CSI AND RTC MOTION TO DISMISS

44. I have been informed that RTC and CSI have recently moved to dismiss the Wollersheim case against them on the basis of lathes. My understanding is that lathes is the legal doctrine that is applied to bar someone’s claim when they waited too long to pursue the claim. A huge part of Scientology’s legal strategy in the Wollersheim case was to hide the fact that RTC and CSI were intimately involved in the day-by-day direction of CSC’s defense and to make the case so complex, obtuse and expensive that no one would conceivably be able to get past all the phony legal issues that Scientology was raising to peal away the corporate layers and actually collect on the judgment.

45. If this case is dismissed on the basis of lathes, this cynical strategy will indeed have defeated both Mr. Wollersheim and the entire non-Scientology legal system.

46. I have not received any compensation in any form for giving this declaration. I recognize that by giving this declaration, I make myself a target for further attack by Scientology, however, I am giving this declaration because it is the truth and the right thing to do.

47. Attached hereto as Exhibit “A,” is a true and correct copy of a “Release” I entered into in 1992. The “Release” gags me from ever speaking out regarding my knowledge of the activities of Scientology. I signed Exhibit “A” under duress. I knew that neither I nor my wife would ever be allowed to leave Scientology if I did not sign this “Release.” The contents of the “Release” are simply false.

I declare under penalty of perjury under the laws of the State of Colorado that the foregoing is true and correct.

Executed this day of June, 1999, at Boulder, Colorado

______________
JESSE PRINCE

Notes

Declaration of Gerry Armstrong (February 20, 1994)

Find a Better Basket

I, Gerald Armstrong, declare:

1. I am making this declaration in response to allegations made by Scientology organization leaders, attorneys and agents in court proceedings and public media around the world concerning a 1984 organization intelligence operation targeting me, which has been called the “Armstrong Operation.” I am copyrighting this document prior to its use in court because it will, in addition to putting the organization’s allegations into a proper context, form an outline for a screenplay I am writing. It is my story.

2. After I left the organization at the end of 1981, the organization intelligence bureau assigned Dan Sherman, a Los Angeles spy story writer and intel operative, to get close to me and become my friend, which he did. I had been the intelligence officer on board the “Apollo” with the organization’s founder and supreme leader L. Ron Hubbard, had studied his intelligence policies and Guardian’s Office 1 intelligence materials, had an

1

appreciation for that literary genre, and I was myself a writer, so Sherman and I had a real basis for a real friendship.

3. Sherman told me he was no longer involved in Scientology, wanted nothing to do with it, saw it as a personal waste of time, and also saw that its leaders were ruthless and dangerous, and claimed to be afraid of them finding out that he was friends with me. Sometime in 1982 or 1983 he told me that he was still in communication in a limited way with some of his old friends still in the organization. He described these friends as smart, reasonable and not fanatics. They were still Scientologists and worked on staff, but felt that organization leaders were criminals. Having no allegiance to these leaders, Sherman’s friends would occasionally tell him about conditions inside and their desire to end the organization’s criminal activities. They said the conditions inside were oppressive and chaotic and they were at risk even talking to him because sec checks2 were rampant.

4. During the 1984 trial of the organization’s case against me, Church of Scientology of California and Mary Sue Hubbard v. Gerald Armstrong, Los Angles Superior Court no. C 420153 (“Armstrong I“), Sherman told me that one of these friends, whom he called “Joey,” had told him that there was an

2

actual group inside the organization who were dedicated to reforming it because management had become suppressive. They called themselves the “Loyalists,” claiming to be ” loyal” to the preservation of the ideals of Scientology, “what worked.” They also recognized that its leaders were criminal, crazy, dangerous, and not dedicated to those ideals but were acting to destroy them. The “Loyalists” wanted to take control in a well-planned, effective and peaceful action before some tragedy happened. They claimed to know of criminal activities and a key part of their plan was the documenting of these activities.

5. Sherman said they were 35 in number, or at least there were 35 who knew they were “Loyalists,” all smart, reasonable and not fanatics. Some of them were his old friends from B-1. Such persons tended to be smart, reasonable and often were not fanatics. The people whom I knew to be, including Hubbard, the organization leaders, prided themselves on their recognition of unreasonableness as a virtue, and maintained an abiding fanaticism to justify their abuses and keep their positions of power. Sherman was smart and gave every appearance of being reasonable and unfanatical. He said the Loyalists knew he was in communication with me and wanted to talk with me but were afraid for their lives. This was not surprising to me because I knew from my own experiences that the organization had a brutal side and its leaders were dangerous, armed and desperate. Thus the first communications with the Loyalists were a few messages relayed by Sherman. They said that I had a proven record against

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the organization, that my integrity had been unshakable and they wanted my help.

6. A few days after the Armstrong I trial ended, Joey, who, I later learned, was actually one David Kluge, made the first direct contact with me, a phone call to my home in Costa Mesa, California. He said the Loyalists knew I wanted my pc folders,3 was the head of the Guardian Office for years and among other things, authored the infamous order ‘GO 121669’ which directed culling of supposedly confidential P.C. files/folders for the purposes of internal security.” “The practice of culling supposedly confidential ‘P.C. folders or files’ to obtain information for purposes of intimidation and/or harassment is repugnant and outrageous. The Guardian’s Office, which plaintiff [Mary Sue Hubbard] headed, was no respector of anyone’s civil rights, particularly that of privacy.”]4 that my folders were being moved on a certain day and that I could get them if I wanted. I told Kluge that even though the folders were mine the organization would claim, if it was discovered I had them, that I was accepting stolen property, so I had to decline his offer. I was also already booked, on the same day the Loyalists said they would get me my pc folders, to fly to London to testify in a child custody case5 involving

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Scientology, and I told Kluge that I couldn’t change my plans.

7. When I returned from the UK, where, incidentally, I had been harassed by a pack of English private investigators working for the organization, Kluge reestablished contact, and I communicated with him or Sherman several times over the next few months. I was happy to be in communication with them, because I’m happy to be in communication with anyone, and my relationship with the Loyalists, who were admitted Scientologists, seemed a spark of hope in the seemingly hopeless and threatening Scientology situation.

8. I have believed and stated that when Scientologists have the freedom to communicate to the people their leaders label “enemies,” Scientology will cease to have enemies. The organization’s leaders prohibit their minions from communicating with me, thus I am their enemy. This prohibition is enforced with severe “ethics” punishment, which could easily include “declaring” the person who dared to communicate with me a “suppressive” person, thus making him the target of the organization’s philosophy and practice of opportunistic hatred Hubbard called “fair game.”

9. I had lost my law office job because of the Armstrong I trial, which really ran from April into June, 1984, and I did not get another job for some months, so had considerable time on my

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hands in the fall of 1984 to meet with Sherman and the Loyalists and do some of the things they wanted. I had begun to draw and write seriously during this period, and some of my writings concerned the Scientology battle and the Loyalists. My situation with the organization and the Loyalists was bizarre and psychologically traumatic, and this is reflected in my writings of the period. Thanks to, I believe, my growing faith in God I was given the gift of a healthy sense of humor and that too is a facet of my communications and writings during the period.

10. In late July, 1984 the organization fed to the media the story, and filed papers in various court cases, including Armstrong I, charging, that Michael Flynn, who had fought the organization’s fair game tactics for five years, who had been my friend and attorney for two years and had just successfully defended me in the Armstrong I trial, was behind a plot to cash a forged check for $2,000,000.00 on one of Hubbard’s accounts at the Bank of New England. Sherman and Kluge communicated that the Loyalists knew Flynn was not involved, and that the organization leaders knew Flynn was uninvolved but were framing him with the forgery. The Loyalists said that they were working inside the organization to acquire the proof of the frame-up, and that when they proved Flynn’s innocence they would be in a position to effectuate the reforms they sought. This was fine with me, because I fully believed that Flynn was innocent, and that the organization was framing him just to be able to attack him to eliminate the threat he represented to its antisocial practices

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and nature.

11. Over the next few months Sherman and Kluge communicated with me regularly about the Loyalists’ progress in documenting the truth about the Flynn frame-up. They claimed that all staff were searched before they could leave OSA or management offices, so it was hard to get any documents out. Nevertheless, on a couple of occasions Sherman and Joey gave me a page or two that had been smuggled out. I learned that a US Attorney in Boston had become involved in the investigation of the frame-up, and I passed whatever I got from the Loyalists to him through Flynn.

12. One of the ideas which developed with the Loyalists in the early fall of 1984 was the possible filing of a lawsuit to take control of the organization from the “criminals.” I saw this as an idea with merit, and could be the effective action the Loyalists said they were looking for to avert a major organization tragedy. I told Flynn what they wanted and he drafted a “bare bones” complaint which I passed to them. Sherman, Kluge and I discussed the lawsuit concept on several occasions, both of them asking me for my ideas and I helped as I could within the limits of my knowledge, ability and imagination.

13. The Loyalists then began discussing with me finding a financial “backer” for their lawsuit, basing this need on the likelihood that the bringing of the suit would freeze organization accounts, and the Loyalists would need operating capital. They claimed that the leaders had lots of money they had skimmed from the organization and squirreled away in their

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own bank accounts, and the Loyalists were all staff members and thus broke. I couldn’t help them with money, and knew of no one who might finance whatever they did, so they said that, because I understood the situation so well, and had a proven record, they wanted me to talk to and encourage some prospective backers with whom they were in touch. One day I got a call from Kluge, asking me to fly to Las Vegas to meet with such a person, a “rich Scientologist” who had been mistreated by the organization and was aligned with the Loyalists on their goal of reformation.

Although on Kluge’s instructions I purchased a plane ticket, I called off the trip before leaving because my lawyers warned me that I could be walking into a trap.

14. There were many times during this period when I considered the possibility that I was walking into a trap. The thought arose in all my meetings with Kluge, and later with Mike Rinder, the second Loyalist I would meet. Their communications often didn’t jibe with what they or Sherman had said on earlier occasions, and sometimes they said things which were downright stupid. I had no way of originating a communication to them, had no telephone numbers, no locations, no names, and no idea what any of them did. They had my address, phone number, knew exactly what I did, and could call me any time they wanted. They told me almost nothing, and wanted to know everything I knew. They claimed I had to be kept in the dark because of their fear for their lives, and for that reason I went along with their, even to me, strange behavior.

8

15. Because of their fear for their lives they depended on secrecy, duplicity and intelligence procedures and goals. Although I had been in intelligence in the organization and had the essential quality for the field; i.e., native intelligence, I had, after leaving the organization, come to the conclusion that Scientology’s brand of intelligence; i.e., the secret world of data, duplicity, stealth, hidden intentions and hidden identities, was ineffective, unhealthy, unholy, and not my choice for how I would make my way through life and deal with my problems. Even inside the organization, which is an intelligence-based group, I had urged those who were in positions to do something about it to open up, stop lying, disclose its leaders, divulge its secrets; because I felt that its lies, secrets, and secret orders from its secret leaders would only bring upon it more problems. After leaving the organization, a factor in my life which led to my faith in openness and freedom as opposed to secrecy and leverage, was all the testifying I did, in trial in Armstrong I and in B & G Wards, and in many days of depositions in several more Scientology-related cases. Also I knew that the organization’s leaders, who had an undeniable determination to harm me, possessed my pc folders which contained every embarrassing incident or thought in my life, and my lives back umpteen impossibillion years. These facts had resulted in a tendency in me at times during this period to not care what happened to me and to act a little wild and silly.

16. Sometime during 1984 it came to me that what I was

9

following, and what was a far superior technology and faith than intelligence, or perhaps perfect intelligence, was guidance. I had been given, before and after my asking, a desire to know my Creator, and I believe I received during this period some of His communications to me. Hubbard in his writings put no faith in his Creator, but put it in something of his own making, an intelligence apparatus in which he was the secret leader with secret bank accounts, secret communication lines, secret codes, secret intentions, and secret lawyers to keep them all secret. I had come to know God a little, and understood that no matter how scary things got I was in hands in which I was in no real danger. I could be shot, my body could be destroyed, I could be defamed and ruined, and I would still be in no real danger. And things did get scary for me in my dealings with Sherman and the Loyalists during this period. I picked up surveillance on a number of occasions, and there was the nagging strangeness of the Loyalists’ communications and the movie-like quality of this play in which I was being played with. I still retained my intellect and acted with good sense most of the time, but a shift was occurring in my mind and soul. I began to walk deliberately into danger, but I was also new at this approach to life, and as yet a little foolhardy and undisciplined, and these facts too are reflected in my writings and actions of the period.

17. Sherman’s and Kluge’s interest was intelligence and they didn’t want to hear much of my philosophy of guidance, courage and openness, so I turned my mind to the intelligence

10

game, and as always happens when I turn my mind to any subject, I had ideas. Some of these ideas I communicated to the Loyalists, some I wrote down, some were only funny. Our meetings had a secretive, spy story feel to them, partly because of the danger the Loyalists said they were in and the danger I was in anyone would say, partly because of the subject matter we discussed, and partly because of the settings in which we met. Sherman insisted that I couldn’t come to his home, so we met on many occasions in the bird sanctuary in Griffith Park. My first meeting with Kluge was in a cemetery in Glendale. I met him two more times in early November at different locations in Griffith Park, and then met with Rinder two times in late November at two more locations in the park.

18. Sherman told me around October, 1984 that the Loyalists had found a potential backer, a woman named Rene, another “rich Scientologist,” who he said had been horribly hurt by the organization. He said he knew her personally and considered her a good and trusted friend. He said that she owned a publishing company which printed calendars, that he had told her about my artwork and writing, and that she wanted to see some of my materials for possible publication. Following our first meeting in Griffith Park Kluge took me to the Sheraton Grand Hotel in downtown Los Angeles to meet her. I took along a file of some of my work and left it with her. In my meeting with her she wanted to know my perspective on the lawsuit idea and my thoughts on removing the organization’s criminal leadership.

11

19. While claiming that the Loyalists wanted to take legal action to bring about a safe transfer of power, both Sherman and Kluge also claimed that they didn’t know anything about legal matters, nor any of the organization’s litigations, and that there were other people higher up in the Loyalist network who were trained in legal, stayed abreast of the organization’s litigation battles, and had an understanding of the Loyalists’ legal options and an overview of their plan which Sherman and Kluge didn’t have. Coupled with their claimed need to keep me in the dark for fear of their lives, their assertions of ignorance of legal matters caused considerable frustration in me and in our communications. As a result, I requested in a number of communications to speak to their “best legal mind.”

20. Finally the Loyalists said that their legal expert would meet me and a rendezvous was set up, again in Griffith Park. The “legal expert” turned out to be Mike Rinder, a person I had known in the organization, who had held various lower level administrative posts. Rinder, it turned out, also professed ignorance of legal concepts, and my meetings and communications with him were even more frustrating.

21. Some time after my last meeting with Rinder, which occurred November 30, 1984, I received a phone call from Kluge, advising me that the Loyalists did not trust me and would not be communicating with me again. I then wrote them my final communication, a copy of which is appended hereto as Exhibit A6, and gave it to Sherman to give to them.

12

22. During my cross-examination7 in the spring, 1985 trial of Julie Christofferson v. Scientology, Circuit Court of the State of Oregon, Multnomah County, No. A7704-05184, the organization broke the fact that Sherman, Kluge and Rinder had been covert operatives, the Loyalists were invented, and that my meetings with Kluge and Rinder had been videotaped.8 The organization called the whole more than two year affair the “Armstrong Operation.” Organization lawyers, Earle Cooley and John Peterson, claimed the Armstrong operation had been authorized by the Los Angeles Police Department, and they produced a letter dated November 7, 1984, a copy of which is appended hereto as Exhibit B 9, signed by an officer Phillip Rodriguez, directing organization private investigator Eugene M. Ingram to electronically eavesdrop on me and Michael Flynn.

23. On April 23, 1985, Los Angeles Police Chief Daryl F. Gates issued a public statement, a copy of which is appended hereto as Exhibit C10, denying that the Rodriguez letter was a correspondence from the Los Angeles Police Department, denying that the Los Angeles Police Department had cooperated with Ingram, and stating emphatically that all purported authorizations directed to Ingram by any member of the Los Angeles Police Department are invalid and unauthorized. On information and belief, the officer, Phillip Rodriguez, who signed Ingram’s letter was paid $10,000.00 for his signature. Also on information and belief, following a Los Angeles Police Department Internal Affairs Division investigation and a Police

13

Department Board of Rights, Officer Rodriguez was suspended from the Los Angeles Police Force. Eugene Ingram had himself some years before been drummed out of the Los Angeles Police Department. He is reputed to have been busted for pandering and taking payoffs from drug dealers. He is a liar and a bully who has been involved in organization intelligence operations against its perceived enemies for many years. During the period I was involved with the Loyalists Ingram called me at my home and threatened to put a bullet between my eyes.

24. Initially the presiding judge in the Christofferson trial Donald F. Londer refused to admit the tapes because they had been obtained illegally. Then he viewed them in chambers and when he returned to the bench stated that “the tapes are devastating, very devastating to the church.” Then he admitted them into evidence.

25. Despite Judge Londer’s ruling and comments, and despite Chief Gates’ repudiation of the Rodriguez “authorization,” the organization has continued in press and courts around the world to claim that the videotape operation was “police-sanctioned.”

The organization has continued to claim that I originated the “plot to overthrow ” church” management” and that I initiated the contact with the organization members, who merely played along with my plan while remaining “loyal” to the organization. It also has continued to claim that the videotapes show me plotting to forge documents and seed them in organization files to be found in a raid, show me creating “sham lawsuits,” show me urging

14

the Loyalists to not prove anything but “just allege it,” and show me seeking to take control of the organization. The videotapes show none of those things. The tapes show that in the fall of 1984, during the reign of the organization’s present supreme leader David Miscavige (DM), the fair game doctrine was alive and as unfair as ever. The tapes show a mean-spirited, mendacious and malevolent organization using well-drilled operatives and electronic gadgetry to attempt, unsuccessfully, to set up an unwitting, funny, sometimes silly, clearly helpful, at times foul-mouthed, but otherwise ordinary human male.

26. The organization’s refusal to stop telling these lies is not surprising, however, because its leaders have put so many of their eggs in their dirty tricks basket. These leaders are unbalanced and in a very precarious situation. Having lied about the Armstrong Operation in so many courts and publications and to so many people, including their own followers, these leaders risk their positions of power, and in their minds their very lives, if they ever admit the breadth of those lies. Yet it is in the acknowledgement of the truth behind those lies where ultimately their safety will be found.

27. It has not ceased to be embarrassing to me whenever the organization trots out the Armstrong videotapes, because I do say some silly and raunchy things. But the organization has never been able to embarrass me into silence and it won’t now.

28. The Scientology legal war has almost run its course. The organization’s leaders can never rewrite all history.

15

Scientologists of good will everywhere can be free.

I declare under the penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed at San Anselmo, California, on February 20, 1994. 11
[signed]
GERALD ARMSTRONG

Copyright © 1994 Gerry Armstrong

16


Notes

  1. The Guardian’s Office (“GO”), headed from 1966 to 1981 by Mary Sue Hubbard, who reported to and was controlled by L. Ron Hubbard, consisted of five bureaus: Intelligence, Public Relations, Legal, Finance and Social Coordination (front groups). The GO was responsible for hiding its money and its actual command lines, defending the organization against attacks and for eliminating all opposition to its progress. Hubbard patterned its intelligence bureau, B-1, and the organization’s total espionage mentality on the work of Reinhard Gehlen, Hitler’s spy master. On Hubbard’s orders, after the conviction of 11 top GO intelligence personnel, including Mary Sue, for criminal activities against the US Government, Scientology’s second major arm of power, the Sea Organization, in a 1981 putsch took control of the GO’s functions and subsequently renamed the GO arm the Office of Special Affairs, “OSA.”
  2. Sec checks are accusatory interrogations using Hubbard’s electropsychometer or E-Meter as a lie detector. Sec checks could be brutal, could go on for many hours or days, could involve several people asking questions, threatening and badgering, and could have disastrous results for the interrogee.
  3. Pc folders, also called preclear or auditing files or folders, contain the record of processes run and questions asked by the auditor (psycho- therapist), E-Meter reads, and answers given and statements made by the preclear (or patient) during Scientology auditing (or psychotherapy) sessions. It was well known that I had opposed and exposed the organ- ization’s misuse of information divulged by the organization’s “preclears” (what were essentially psychotherapist-patient confidences) in auditing. I had been attempting to get the organization to deliver to me my pc folders throughout the Armstrong I litigation, and the misuse of auditing information was an issue in the Armstrong I trial. Judge Paul G. Breckenridge, Jr. stated in his decision following the 30-day Armstrong I trial: “[Mary Sue Hubbard
  4. See The Breckenridge Decision, filed June 22, 1984.
  5. This Royal Courts of Justice case, known as Re: B and G Wards resulted in a Judgment on July 23, 1984 issued by Justice Latey in favor of the non-Scientologist parent. The Judgment, which was upheld on appeal, contained a scathing condemnation of organization policies and practices.
  6. Exhibit A: Letter to the Loyalists
  7. See Excerpts of Proceedings in Christofferson
  8. See Illegal Videos
  9. Exhibit B: Illegal authorization November 7, 1984
  10. Exhibit C: Public Announcement by LAPD Police Chief Daryl Gates
  11. Also see related Declaration of Gerry Armstrong (February 22, 1994).

Declaration of Gerry Armstrong (February 20, 1994)

FIND A BETTER BASKET

A Literary Work Created and Written
by
GERALD ARMSTRONG

FIND A BETTER BASKET
Copyright © 1994 Gerald Armstrong
All Rights Reserved
Contact:
The Gerald Armstrong Corporation
Copyright © 1994 Gerald Armstrong
© 1994 Gerald Armstrong


FIND A BETTER BASKET

    I, Gerald Armstrong, declare:

1. I am making this declaration in response to allegations made by Scientology organization leaders, attorneys and agents in court proceedings and public media around the world concerning a 1984 organization intelligence operation targeting me, which has been called the “Armstrong Operation.” I am copyrighting this document prior to its use in court because it will, in addition to putting the organization’s allegations into a proper context, form an outline for a screenplay I am writing. It is my story.

2. After I left the organization at the end of 1981, the organization intelligence bureau assigned Dan Sherman, a Los Angeles spy story writer and intel operative, to get close to me and become my friend, which he did. I had been the intelligence officer on board the “Apollo” with the organization’s founder and supreme leader L. Ron Hubbard, had studied his intelligence policies and Guardian’s Office 1 intelligence materials, had an

1

appreciation for that literary genre, and I was myself a writer, so Sherman and I had a real basis for a real friendship.

3. Sherman told me he was no longer involved in Scientology, wanted nothing to do with it, saw it as a personal waste of time, and also saw that its leaders were ruthless and dangerous, and claimed to be afraid of them finding out that he was friends with me. Sometime in 1982 or 1983 he told me that he was still in communication in a limited way with some of his old friends still in the organization. He described these friends as smart, reasonable and not fanatics. They were still Scientologists and worked on staff, but felt that organization leaders were criminals. Having no allegiance to these leaders, Sherman’s friends would occasionally tell him about conditions inside and their desire to end the organization’s criminal activities. They said the conditions inside were oppressive and chaotic and they were at risk even talking to him because sec checks2 were rampant.

4. During the 1984 trial of the organization’s case against me, Church of Scientology of California and Mary Sue Hubbard v. Gerald Armstrong, Los Angles Superior Court no. C 420153 (“Armstrong I“), Sherman told me that one of these friends, whom he called “Joey,” had told him that there was an

2

actual group inside the organization who were dedicated to reforming it because management had become suppressive. They called themselves the “Loyalists,” claiming to be ” loyal” to the preservation of the ideals of Scientology, “what worked.” They also recognized that its leaders were criminal, crazy, dangerous, and not dedicated to those ideals but were acting to destroy them. The “Loyalists” wanted to take control in a well-planned, effective and peaceful action before some tragedy happened. They claimed to know of criminal activities and a key part of their plan was the documenting of these activities.

5. Sherman said they were 35 in number, or at least there were 35 who knew they were “Loyalists,” all smart, reasonable and not fanatics. Some of them were his old friends from B-1. Such persons tended to be smart, reasonable and often were not fanatics. The people whom I knew to be, including Hubbard, the organization leaders, prided themselves on their recognition of unreasonableness as a virtue, and maintained an abiding fanaticism to justify their abuses and keep their positions of power. Sherman was smart and gave every appearance of being reasonable and unfanatical. He said the Loyalists knew he was in communication with me and wanted to talk with me but were afraid for their lives. This was not surprising to me because I knew from my own experiences that the organization had a brutal side and its leaders were dangerous, armed and desperate. Thus the first communications with the Loyalists were a few messages relayed by Sherman. They said that I had a proven record against

3

the organization, that my integrity had been unshakable and they wanted my help.

 6. A few days after the Armstrong I trial ended, Joey, who, I later learned, was actually one David Kluge, made the first direct contact with me, a phone call to my home in Costa Mesa, California. He said the Loyalists knew I wanted my pc folders,3 was the head of the Guardian Office for years and among other things, authored the infamous order ‘GO 121669’ which directed culling of supposedly confidential P.C. files/folders for the purposes of internal security.” “The practice of culling supposedly confidential ‘P.C. folders or files’ to obtain information for purposes of intimidation and/or harassment is repugnant and outrageous. The Guardian’s Office, which plaintiff [Mary Sue Hubbard] headed, was no respector of anyone’s civil rights, particularly that of privacy.”]4  that my folders were being moved on a certain day and that I could get them if I wanted. I told Kluge that even though the folders were mine the organization would claim, if it was discovered I had them, that I was accepting stolen property, so I had to decline his offer. I was also already booked, on the same day the Loyalists said they would get me my pc folders, to fly to London to testify in a child custody case5 involving

4

Scientology, and I told Kluge that I couldn’t change my plans.

7. When I returned from the UK, where, incidentally, I had been harassed by a pack of English private investigators working for the organization, Kluge reestablished contact, and I communicated with him or Sherman several times over the next few months. I was happy to be in communication with them, because I’m happy to be in communication with anyone, and my relationship with the Loyalists, who were admitted Scientologists, seemed a spark of hope in the seemingly hopeless and threatening Scientology situation.

8. I have believed and stated that when Scientologists have the freedom to communicate to the people their leaders label “enemies,” Scientology will cease to have enemies. The organization’s leaders prohibit their minions from communicating with me, thus I am their enemy. This prohibition is enforced with severe “ethics” punishment, which could easily include “declaring” the person who dared to communicate with me a “suppressive” person, thus making him the target of the organization’s philosophy and practice of opportunistic hatred Hubbard called “fair game.”

9. I had lost my law office job because of the Armstrong I trial, which really ran from April into June, 1984, and I did not get another job for some months, so had considerable time on my

5

hands in the fall of 1984 to meet with Sherman and the Loyalists and do some of the things they wanted. I had begun to draw and write seriously during this period, and some of my writings concerned the Scientology battle and the Loyalists. My situation with the organization and the Loyalists was bizarre and psychologically traumatic, and this is reflected in my writings of the period. Thanks to, I believe, my growing faith in God I was given the gift of a healthy sense of humor and that too is a facet of my communications and writings during the period.

10. In late July, 1984 the organization fed to the media the story, and filed papers in various court cases, including Armstrong I, charging, that Michael Flynn, who had fought the organization’s fair game tactics for five years, who had been my friend and attorney for two years and had just successfully defended me in the Armstrong I trial, was behind a plot to cash a forged check for $2,000,000.00 on one of Hubbard’s accounts at the Bank of New England. Sherman and Kluge communicated that the Loyalists knew Flynn was not involved, and that the organization leaders knew Flynn was uninvolved but were framing him with the forgery. The Loyalists said that they were working inside the organization to acquire the proof of the frame-up, and that when they proved Flynn’s innocence they would be in a position to effectuate the reforms they sought. This was fine with me, because I fully believed that Flynn was innocent, and that the organization was framing him just to be able to attack him to eliminate the threat he represented to its antisocial practices

6

 

and nature.

11. Over the next few months Sherman and Kluge communicated with me regularly about the Loyalists’ progress in documenting the truth about the Flynn frame-up. They claimed that all staff were searched before they could leave OSA or management offices, so it was hard to get any documents out. Nevertheless, on a couple of occasions Sherman and Joey gave me a page or two that had been smuggled out. I learned that a US Attorney in Boston had become involved in the investigation of the frame-up, and I passed whatever I got from the Loyalists to him through Flynn.

12. One of the ideas which developed with the Loyalists in the early fall of 1984 was the possible filing of a lawsuit to take control of the organization from the “criminals.” I saw this as an idea with merit, and could be the effective action the Loyalists said they were looking for to avert a major organization tragedy. I told Flynn what they wanted and he drafted a “bare bones” complaint which I passed to them. Sherman, Kluge and I discussed the lawsuit concept on several occasions, both of them asking me for my ideas and I helped as I could within the limits of my knowledge, ability and imagination.

13. The Loyalists then began discussing with me finding a financial “backer” for their lawsuit, basing this need on the likelihood that the bringing of the suit would freeze organization accounts, and the Loyalists would need operating capital. They claimed that the leaders had lots of money they had skimmed from the organization and squirreled away in their

7

own bank accounts, and the Loyalists were all staff members and thus broke. I couldn’t help them with money, and knew of no one who might finance whatever they did, so they said that, because I understood the situation so well, and had a proven record, they wanted me to talk to and encourage some prospective backers with whom they were in touch. One day I got a call from Kluge, asking me to fly to Las Vegas to meet with such a person, a “rich Scientologist” who had been mistreated by the organization and was aligned with the Loyalists on their goal of reformation.

Although on Kluge’s instructions I purchased a plane ticket, I called off the trip before leaving because my lawyers warned me that I could be walking into a trap.

14. There were many times during this period when I considered the possibility that I was walking into a trap. The thought arose in all my meetings with Kluge, and later with Mike Rinder, the second Loyalist I would meet. Their communications often didn’t jibe with what they or Sherman had said on earlier occasions, and sometimes they said things which were downright stupid. I had no way of originating a communication to them, had no telephone numbers, no locations, no names, and no idea what any of them did. They had my address, phone number, knew exactly what I did, and could call me any time they wanted. They told me almost nothing, and wanted to know everything I knew. They claimed I had to be kept in the dark because of their fear for their lives, and for that reason I went along with their, even to me, strange behavior.

8

15. Because of their fear for their lives they depended on secrecy, duplicity and intelligence procedures and goals.  Although I had been in intelligence in the organization and had the essential quality for the field; i.e., native intelligence, I had, after leaving the organization, come to the conclusion that Scientology’s brand of intelligence; i.e., the secret world of data, duplicity, stealth, hidden intentions and hidden identities, was ineffective, unhealthy, unholy, and not my choice for how I would make my way through life and deal with my problems. Even inside the organization, which is an intelligence-based group, I had urged those who were in positions to do something about it to open up, stop lying, disclose its leaders, divulge its secrets; because I felt that its lies, secrets, and secret orders from its secret leaders would only bring upon it more problems. After leaving the organization, a factor in my life which led to my faith in openness and freedom as opposed to secrecy and leverage, was all the testifying I did, in trial in Armstrong I and in B & G Wards, and in many days of depositions in several more Scientology-related cases. Also I knew that the organization’s leaders, who had an undeniable determination to harm me, possessed my pc folders which contained every embarrassing incident or thought in my life, and my lives back umpteen impossibillion years. These facts had resulted in a tendency in me at times during this period to not care what happened to me and to act a little wild and silly.

16. Sometime during 1984 it came to me that what I was

9

 following, and what was a far superior technology and faith than intelligence, or perhaps perfect intelligence, was guidance. I had been given, before and after my asking, a desire to know my Creator, and I believe I received during this period some of His communications to me. Hubbard in his writings put no faith in his Creator, but put it in something of his own making, an intelligence apparatus in which he was the secret leader with secret bank accounts, secret  communication lines, secret codes, secret intentions, and secret lawyers to keep them all secret. I had come to know God a little, and understood that no matter how scary things got I was in hands in which I was in no real danger. I could be shot, my body could be destroyed, I could be defamed and ruined, and I would still be in no real danger. And things did get scary for me in my dealings with Sherman and the Loyalists during this period. I picked up surveillance on a number of occasions, and there was the nagging strangeness of the Loyalists’ communications and the movie-like quality of this play in which I was being played with. I still retained my intellect and acted with good sense most of the time, but a shift was occurring in my mind and soul. I began to walk deliberately into danger, but I was also new at this approach to life, and as yet a little foolhardy and undisciplined, and these facts too are reflected in my writings and actions of the period.

17. Sherman’s and Kluge’s interest was intelligence and they didn’t want to hear much of my philosophy of guidance, courage and openness, so I turned my mind to the intelligence

10

game, and as always happens when I turn my mind to any subject, I had ideas. Some of these ideas I communicated to the Loyalists, some I wrote down, some were only funny. Our meetings had a secretive, spy story feel to them, partly because of the danger the Loyalists said they were in and the danger I was in anyone would say, partly because of the subject matter we discussed, and partly because of the settings in which we met. Sherman insisted that I couldn’t come to his home, so we met on many occasions in the bird sanctuary in Griffith Park. My first meeting with Kluge was in a cemetery in Glendale. I met him two more times in early November at different locations in Griffith Park, and then met with Rinder two times in late November at two more locations in the park.

18. Sherman told me around October, 1984 that the Loyalists had found a potential backer, a woman named Rene, another “rich Scientologist,” who he said had been horribly hurt by the organization. He said he knew her personally and considered her a good and trusted friend. He said that she owned a publishing company which printed calendars, that he had told her about my artwork and writing, and that she wanted to see some of my materials for possible publication. Following our first meeting in Griffith Park Kluge took me to the Sheraton Grand Hotel in downtown Los Angeles to meet her. I took along a file of some of my work and left it with her. In my meeting with her she wanted to know my perspective on the lawsuit idea and my thoughts on removing the organization’s criminal leadership.

11

19. While claiming that the Loyalists wanted to take legal action to bring about a safe transfer of power, both Sherman and Kluge also claimed that they didn’t know anything about legal matters, nor any of the organization’s litigations, and that there were other people higher up in the Loyalist network who were trained in legal, stayed abreast of the organization’s litigation battles, and had an understanding of the Loyalists’ legal options and an overview of their plan which Sherman and Kluge didn’t have. Coupled with their claimed need to keep me in the dark for fear of their lives, their assertions of ignorance of legal matters caused considerable frustration in me and in our communications. As a result, I requested in a number of communications to speak to their “best legal mind.”

20. Finally the Loyalists said that their legal expert would meet me and a rendezvous was set up, again in Griffith Park. The “legal expert” turned out to be Mike Rinder, a person I had known in the organization, who had held various lower level administrative posts. Rinder, it turned out, also professed ignorance of legal concepts, and my meetings and communications with him were even more frustrating.

21. Some time after my last meeting with Rinder, which occurred November 30, 1984, I received a phone call from Kluge, advising me that the Loyalists did not trust me and would not be communicating with me again. I then wrote them my final communication, a copy of which is appended hereto as Exhibit A6, and gave it to Sherman to give to them.

12

    22. During my cross-examination7 in the spring, 1985 trial of Julie Christofferson v. Scientology, Circuit Court of the State of Oregon, Multnomah County, No. A7704-05184, the organization broke the fact that Sherman, Kluge and Rinder had been covert operatives, the Loyalists were invented, and that my meetings with Kluge and Rinder had been videotaped.8 The organization called the whole more than two year affair the “Armstrong Operation.” Organization lawyers, Earle Cooley and John Peterson, claimed the Armstrong operation had been authorized by the Los Angeles Police Department, and they produced a letter dated November 7, 1984, a copy of which is appended hereto as Exhibit B 9, signed by an officer Phillip Rodriguez, directing organization private investigator Eugene M. Ingram to electronically eavesdrop on me and Michael Flynn.

23. On April 23, 1985, Los Angeles Police Chief Daryl F. Gates issued a public statement, a copy of which is appended hereto as Exhibit C10, denying that the Rodriguez letter was a correspondence from the Los Angeles Police Department, denying that the Los Angeles Police Department had cooperated with Ingram, and stating emphatically that all purported authorizations directed to Ingram by any member of the Los Angeles Police Department are invalid and unauthorized. On information and belief, the officer, Phillip Rodriguez, who signed Ingram’s letter was paid $10,000.00 for his signature.  Also on information and belief, following a Los Angeles Police Department Internal Affairs Division investigation and a Police

13

 Department Board of Rights, Officer Rodriguez was suspended from the Los Angeles Police Force. Eugene Ingram had himself some years before been drummed out of the Los Angeles Police Department. He is reputed to have been busted for pandering and taking payoffs from drug dealers. He is a liar and a bully who has been involved in organization intelligence operations against its perceived enemies for many years. During the period I was involved with the Loyalists Ingram called me at my home and threatened to put a bullet between my eyes.

24. Initially the presiding judge in the Christofferson trial Donald F. Londer refused to admit the tapes because they had been obtained illegally. Then he viewed them in chambers and when he returned to the bench stated that “the tapes are devastating, very devastating to the church.” Then he admitted them into evidence.

25. Despite Judge Londer’s ruling and comments, and despite Chief Gates’ repudiation of the Rodriguez “authorization,” the organization has continued in press and courts around the world to claim that the videotape operation was “police-sanctioned.”

The organization has continued to claim that I originated the “plot to overthrow ” church” management” and that I initiated the contact with the organization members, who merely played along with my plan while remaining “loyal” to the organization. It also has continued to claim that the videotapes show me plotting to forge documents and seed them in organization files to be found in a raid, show me creating “sham lawsuits,” show me urging

14

the Loyalists to not prove anything but “just allege it,” and show me seeking to take control of the organization. The videotapes show none of those things. The tapes show that in the fall of 1984, during the reign of the organization’s present supreme leader David Miscavige (DM), the fair game doctrine was alive and as unfair as ever. The tapes show a mean-spirited, mendacious and malevolent organization using well-drilled operatives and electronic gadgetry to attempt, unsuccessfully, to set up an unwitting, funny, sometimes silly, clearly helpful, at times foul-mouthed, but otherwise ordinary human male.

26. The organization’s refusal to stop telling these lies is not surprising, however, because its leaders have put so many of their eggs in their dirty tricks basket. These leaders are unbalanced and in a very precarious situation. Having lied about the Armstrong Operation in so many courts and publications and to so many people, including their own followers, these leaders risk their positions of power, and in their minds their very lives, if they ever admit the breadth of those lies. Yet it is in the acknowledgement of the truth behind those lies where ultimately their safety will be found.

27. It has not ceased to be embarrassing to me whenever the organization trots out the Armstrong videotapes, because I do say some silly and raunchy things. But the organization has never been able to embarrass me into silence and it won’t now.

28. The Scientology legal war has almost run its course. The organization’s leaders can never rewrite all history.

15

Scientologists of good will everywhere can be free.

I declare under the penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed at San Anselmo, California, on February 20, 1994.
[signed]
GERALD ARMSTRONG

Copyright © 1994 Gerry Armstrong

16


Notes

 

  1. The Guardian’s Office (“GO”), headed from 1966 to 1981 by Mary Sue Hubbard, who reported to and was controlled by L. Ron Hubbard, consisted of five bureaus: Intelligence, Public Relations, Legal, Finance and Social Coordination (front groups). The GO was responsible for hiding its money and its actual command lines, defending the organization against attacks and for eliminating all opposition to its progress. Hubbard patterned its intelligence bureau, B-1, and the organization’s total espionage mentality on the work of Reinhard Gehlen, Hitler’s spy master. On Hubbard’s orders, after the conviction of 11 top GO intelligence personnel, including Mary Sue, for criminal activities against the US Government, Scientology’s second major arm of power, the Sea Organization, in a 1981 putsch took control of the GO’s functions and subsequently renamed the GO arm the Office of Special Affairs, “OSA.”
  2. Sec checks are accusatory interrogations using Hubbard’s electropsychometer or E-Meter as a lie detector. Sec checks could be brutal, could go on for many hours or days, could involve several people asking questions, threatening and badgering, and could have disastrous results for the interrogee.
  3. Pc folders, also called preclear or auditing files or folders, contain the record of processes run and questions asked by the auditor (psycho- therapist), E-Meter reads, and answers given and statements made by the preclear (or patient) during Scientology auditing (or psychotherapy) sessions. It was well known that I had opposed and exposed the organ- ization’s misuse of information divulged by the organization’s “preclears” (what were essentially psychotherapist-patient confidences) in auditing. I had been attempting to get the organization to deliver to me my pc folders throughout the Armstrong I litigation, and the misuse of auditing information was an issue in the Armstrong I trial. Judge Paul G. Breckenridge, Jr. stated in his decision following the 30-day Armstrong I trial: “[Mary Sue Hubbard
  4. See The Breckenridge Decision, filed June 22, 1984.
  5.  This Royal Courts of Justice case, known as Re: B and G Wards resulted in a Judgment on July 23, 1984 issued by Justice Latey in favor of the non-Scientologist parent. The Judgment, which was upheld on appeal, contained a scathing condemnation of organization policies and practices.
  6. Exhibit A: Letter to the Loyalists
  7. See Excerpts of Proceedings in Christofferson
  8. See Illegal Videos
  9. Exhibit B: Illegal authorization November 7, 1984
  10. Exhibit C: Public Announcement by LAPD Police Chief Daryl Gates

Affidavit of Helen Margaret Barlow (First) (February 7, 1994)

HM Barlow
First
Plaintiff
Sworn February 1994
1984 S. No. 1675

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

B E T W E E N :

CHURCH OF SCIENTOLOGY ADVANCED ORGANIZATION

SAINT HILL EUROPE AND AFRICA             Plaintiff

-and-

(1) ROBIN SCOTT
(2) RON LAWLEY
(3) MORAG BELLMAINE
(4) STEVEN BISBEY
Defendants


AFFIDAVIT OF
HELEN MARGARET BARLOW 1


I, HELEN MARGARET BARLOW, Solicitor’s clerk with the firm of Allen, Ticehurst & Bird of 59-63 Railway Approach, East Grinstead, West Sussex RH19 1BT MAKE OATH and say as follows:

1. I am a solicitor’s clerk employed by the firm of Allen, Ticehurst & Bird which firm has, since 26th November 1993, had the conduct of these proceedings on behalf of the Plaintiff in place of its former solicitors.

2. I am authorized to make this Affidavit on behalf of the Plaintiff in reply to:-

 

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a. the Affidavit of Ron Lawley sworn on behalf of the First, Second and third Defendants on the 12th July 1993; and

b. the Seventh Affidavit of Ron Lawley sworn on 4th January 1994 on his own behalf as Second Defendant;

and

c. the Affidavit of Robin Edwin Bates won on 13th January 1994 on behalf of the Third and Fourth Defendants;  each of these Affidavits being in support of two applications, one by the First and Second Defendant, and the other by the Third and Fourth Defendants, for Orders that the Plaintiff do make and file an Affidavit pursuant to Order 24 rule 7 RSC and, in the case of the Second Defendant’s Seventh Affidavit, in support of an application by the First and Second Defendants for leave to amend their Defence.

3. All facts and matters deposed to by me herein are within my own knowledge save where otherwise appears. Where I depose to information obtained otherwise than from my own knowledge, I believe that information to be true. In making this Affidavit I have made enquiries of the Plaintiff and as appears below also of the United States attorneys of the Church of Scientology International in

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relation to some of the allegations raised in the Defendant’s affidavit evidence.

4. At the outset I should inform this Honorable Court that while the Summons for the above mentioned Order was issued by the Second Defendant’s Solicitors on 12th November 1993, it was not until 11th January 1994 that their Summons (with a return date of 21st January 1994), and the Supplementary Affidavit of the Second Defendant in support thereof, were served ont his firm on behalf of the Plaintiff (by the Second Defendant through the post). Furthermore, the First and Third Defendants’ Solicitors issued their Summons on 14th January 1994 (again with a return date of 21st January 1994) but again it and the Affidavit of Robin Edwin Bates in support thereof were not served on the Plaintiff until 18th January 1994 although it was open to them to serve the same by facsimile on 14th January. While this is within the time required by Order 32 rule 3, it is well established that applicants who obtain fixed dates for hearings should notify the other parties forthwith and serve the Summons and supporting affidavits without delay. On 20th January 1994 I was telephoned by Mr. Harbinson of Elborne Mitchell (Solicitors for the Second Defendant) who agreed that the hearing of the summonses fixed for the next day be adjourned to be heard before the Judge in charge of the lists on a date to be fixed.

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I would also point out to this Honourable Court that the Second Defendant in his two Affidavits has included a number of irrelevant, bald and offensive allegations of a serious nature which are not accepted by the Plaintiff. While these statements are irrelevant and I would ordinarily not even respond to them, they will receive brief address herein lest this Honourable Court grant them any credence in its consideration of these matters.

6. Turning now to the Affidavit of the Second Defendant sworn on 12th July 1993, I comment thereon as follows (references to paragraph numbers are to the numbered paragraphs of the said Affidavit):

7. I first make the general comment that the Second Defendant is clearly trying to fog the issues and avoid the true background to this action. The Defendants were involved in the theft and/or unlawful acquisition of advanced materials and procedures written by L Ron Hubbard, founder of the Scientology religion, and licensed for use by the Plaintiff, namely OT 5 or “NOTs” (hereinafter referred to as “the NOTs materials”). I should explain at this point that in the Scientology religion progression towards full spiritual awareness is achieved through completing various stages of counselling or “auditing”. (A full description of auditing can be found at p. 156 of the book “What is Scientology?” a copy of which is now produced and shown to me marked “HMB 1”.) Those various stages are

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often referred to by Scientologists as “the Bridge”, that is, a bridge to total freedom. Detailed information about “the Bridge” is found at p. 171 of Exhibit HMB 1, to which I would refer this Honourable Court. L Ron Hubbard’s written and spoken materials relating to the lower stages of the Bridge are freely published and available to all. However, the materials relating to the upper levels of the Bridge are kept confidential by the Church. The reason for this is that understanding of and ability to apply these materials are dependent upon having fully attained the earlier states of awareness and abilities attainable from auditing on the lower levels of the Bridge. Accordingly these materials are only released to those who have honestly attained all earlier states. The first three Defendants have admitted that they obtained the NOTs materials by subterfuge, travelling to the Plaintiff’s premises in Denmark disguised as senior executives in uniforms of the Sea Organisation (a religious order), which had been provided to the thieves by another conspirator. There is now produced and shown to me marked “HMB 2” excerpts of a statement by one Nancy Carter relating to these matters. The First Defendant was subsequently arrested, tried and convicted for the theft in Copenhagen, Denmark. There is now produced and shown to me marked “HMB 3” a true copy of a certified trnnslntion of that conviction.

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In paragraph 2 the Second Defendant asserts that (1) L Ron Hubbard completely controlled all of the Scientology organisations throughout the world; and (2) that it follows that the 200 or more Churches or companion are really just one large organisation. No real evidence is adduced by the Second Defendant in support of these statements. The number of Churches and companies is incorrect. In 1992 the Churches, Missions, and related social reform organisations which follow the doctrines of Scientology numbered over 1,000. I refer this Honorable Court to p. 456 of Exhibit HMB 1, a copy demographic chart showing the number of Churches, Missions and so on at various points in time. Furthermore, these organisations are not “one large organisation”. It is true to say that Churches of Scientology are arranged in a hierarchial ecclesiastical structure, but the various Churches within that ecclesiastical hierarchy consist of separate non-profit religious corporations that are governed by their own independent boards of directors and officers, each corporation being fully responsible for its own activities. There is now produced and shown to me marked “HMB 4” a copy of a booklet “Description of the Scientology Religion”, which is distributed by the United States Internal Revenue Service (the “IRS”) in response to questions asked about the Church; information on the various Churches and other corporations can be found on pages 4-7 of this booklet, to which I would refer this Honorable Court. I verily believe that this booklet was prepared in connection with

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an exhaustive review of the United States Churches of Scientology conducted by the IRS. This review was done in the process of recognising the tax-exempt status of those Churches. The result of this review was that on 1st October 1993 letters of recognition were issued by the IRS  resulting in the tax exemption of 153 Scientology Churches and related social reform entities. These exemptions are not prospective; they contain no beginning date and therefore are retroactive to the earliest incorporation of each entity. There is now produced and shown to me marked “HMB 5” copies of the individual exemption letter and group exemption letter issued to Church of Scientology International, the mother Church of the Scientology religion. In granting these exemptions, the IRS did an exhaustive review over a two year period of over 12 linear feet of records covering many years. The IRS required extensive responses to numerous detailed questions, ranging from questions regarding Church activities and financial affairs to civil litigation and various accusations by Church detractors. All of the detailed  questions asked by the IRS were answered. Their extensive queries into the financial structures of the Churches of Scientology hierarchy, the services they deliver, the organisation of each Church, the receipt and disbursement of donations, and myriad other detailed inquiries were fully satisfied in the process. The IRS did not conduct a milk-and-water enquiry – its questions were searching, it sought explanations of the most inflammatory accusations and “information” which

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it could find regarding Scientology and its Churches. After receiving the responses, the IRS were satisfied that the Churches were organised and operated exclusively for charitable and religious purposes and therefore granted them tax exemption. There is now produced and shown to me marked “HMB 6” a true copy of a declaration of Thomas L Spring, filed in consolidated cases of Religious Technology Center et al v. Scott et al No. CV 85-711 AWT (Bx) and Religious Technology Center et al v. Wollersheim et al No. CV 85-7197 AWT (bx) in the United States District Court for the Central District of California, which discusses these facts, arises out of the same theft of the NOTs materials, and in which the Defendants herein are also named as defendants. The inclusion of the description of the corporate structure and functions of various Scientology corporations in the booklet which the IRS is sending to all those making enquiry thereon is an obvious endorsement of the fact that the IRS’s investigation of the underlying facts proved nothing to the contrary. Furthermore, during the course of its enquiries, the IRS became acquainted with the source of, and the truth about, the considerable amount of false information concerning Scientology which had been disseminated in various parts of the world; in order to correct matters the IRS has sent a copy of the booklet, together with official covering letters, to all those countries to which such false information had been passed. More detailed information on the ecclesiastical hierarchy

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of the Church of Scientology can be found in Chapter 21 of Exhibit HMB 1 at pp. 349-359.

9. The Second Defendant referes to Church of Spiritual Technology (“CST”). A short description of CST is found at page 8 of the booklet at Exhibit HMB 4. The Plaintiff is not aware of what documents CST may or may not have, and in any event any such documents are not in the Plaintiff’s possession, custody or power. Furthermore, as can be seen from Exhibit HMB 4 at page 8, CST, while a Church of Scientology, is not part of the Scientology hierarchy. Like other Churches of Scientology, it is a separate corporate entity. Unlike the majority of those churches, however, it is not involved in the delivery of religious services to the public, but has the exclusive function of acting as an archives for the preservation of the many religious writings and taped lectures of L. Ron Hubbard.

10. The Second Defendant refers in paragraph 2 to an Affidavit of one Gerald Armstrong, sworn over 11 years ago (not sworn in these proceedings). I am informed by the Plaintiff and verily believe that Gerald Armstrong (“Armstrong”) is an individual involved in litigation with Church of Scientology International and Church of Scientology of California. Armstrong is a long-time attacker of the Scientology religion, who, since the time of  execution of the Affidavit referred to by the Second Defendant, testified in another case (Julie Christofferson-Titchbourne 

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v. Church of Scientology Mission of Davis et al Circuit Court of the State of Oregon, Multnomah County, No. A7704- 05184. His testimony in this case directly contradicts the proposition on which the Second Defendant relies in support of his assertion that L Ron Hubbard was a managing agent of the Plaintiff. The following excerpt from a video tape transcript, admitted into evidence in the above-referenced case, shows that Armstrong had no knowledge of who was running the Church or who its managing agent was. In the transcript, “G” is Armstrong, “M” is Mike Rinder, a Church executive in Los Angeles.

“G: It can be done during the chaos of whatever RTC, ASI’s got going. Who runs the organisation right now?

M: Which organisation?

G: All of it. Who runs it?

M: Well, it gets run through CMO Int.

G: And who are those people?

M: Well, you know, probably the same guys as when you were around.”

I am informed by the Church of Scientology International’s United States attorneys and verily believe that the videotape from which this transcript was made is a recording of a meeting set up by Armstrong after his sudden departure from the staff of Church of Scientology of California in late 1981. Armstrong had been in charge of a large quantity of personal and private documents belonging to L. Ron Hubbard. Part of Armstrong’s duties included research to support the work of an author who had been retained to write a biography of Mr. Hubbard. After

11

Armstrong’s departure, in the summer of 1982, the Church received evidence that Armstrong had stolen thousands of documents from those archives when he left the Church. Armstrong refused the demands of the Church’s Counsel that he return the documents. Litigation against Armstrong was thereafter filed to recover the documents, while Armstrong pursued a plan to infiltrate and take over the Church. The meeting recorded in the videotape excerpted above was part of Armstrong’s conspiracy. Armstrong had contacted Church staff members who, while pretending to work with Armstrong, actually remained loyal to the Church. They received permission from the Los Angeles Police Department to tape this meeting. The videotape further shows that Armstrong intended to (1) recruit additional persons to create “as much shit for the organisation as possible”; (2) foster this plan by creating sham lawsuits against the Church; (3) seed the Church’s files with forged and ” incriminating” documents which would then be seized in a raid by the IRS as part of its investigations. He claimed the ability to create documents with relative ease because “he did it for a living”; (4) take control of the Church after such a raid; and (5) lie under oath to prevent discovery and to protect his co-conspirators, as evidenced by his statements that “we don’t have to prove a goddam thing. We don’t have to prove shit; we just have to allege it” and that if he is deposed “no-one will ever get any names, any communications, any times, any dates or anything out of me, that’s just the way it is.” There is now produced and 

12

shown to me marked “HMB 7” a copy of the pertinent extracts from that tape transcript. 2More recently Armstrong has been quoted in the press, expressing his opposition to the use of currency as the basis of the economy, as the self-proclaimed founder of the “Organisation of United Renunciants”. There is now produced and shown to me marked “HMB 8” a copy of a newspaper article containing information on Mr Armstrong’s latest activities, including a nude photograph of Mr Armstrong. 3

11. I am informed by the Plaintiff and verily believe that L Ron Hubbard ran the early Dianetics and Scientology organisations until 1966, when he retired from running them on a day to day basis and turned this function over to Scientology Church executives; and that he continued to take an interest in the Church’s expansion and advised on administrative matters when specifically asked for advice but he mainly spent his time researching the upper levels of Scientology and codifying the technology. I refer this Honourable Court to pp. 633-645 of Exhibit HMB 1 which givens information relating to that period of L. Ron Hubbard’s life. The Second Defendant’s claims that Mr Hubbard controlled the Church of Scientology and received inurement of millions of dollars of funds from the Church was exposed as false by the IRS. If such allegations had not been proven false in the IRS’s extensive and exhaustive enquiry which went back a number of years before L Ron Hubbard’s death, the IRS would never have granted exemption

13

to those Churches. I would also refer this Honourable Court to the declaration of Thomas L Spring which appears at Exhibit HMB 6 hereto.

12. The Second Defendant also refers to Issue 15 of “Impact” magazine, published by the International Association of Scientologists in 1987, which he asserts states “who the current real leaders of the church are” and that “these people control ALL of Scientology worldwide” without adducing any evidence in support of this statement. I have already deposed as to the ecclesiastical hierarchy and would simply reiterate that it is the boards of directors or equivalent of the Church corporations which control those corporations and their activities. There is now produced and shown to me marked “HMB 9” a copy of a booklet “The Corporations of Scientology” which gives further information about the various corporations which make up the Church of Scientology hierarchy. This booklet does not discuss CST because it is not part of the hierarchy and has no role in it.

13. Save as detailed below, much of the documentation sought by the Defendants to be disclosed is not and has not been in the possession, custody or power of the Plaintiff. This is not to say necessarily that all such documents are not or never have been in the custody, possession or power of other Churches, Missions and related social reform organisations. The Plaintiff has no right (whether legal

14

or moral) to call for documents or information from Church of Scientology International or any other Church following the doctrines of Scientology.

14. In paragraph 3 the Second Defendant asserts that the documents referred to in paragraph 1 of his Affidavit relate to the matters in question in these proceedings. I will deal with these in turn:

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a. All issue of the Rehabilitation Project Force

There is no reference in any of the Defendant’s pleadings to the Rehabilitation Project Force. In any event, this broad request is not limited in time and these documents are not relevant to the matters in question in these proceedings.

b. The Sea Organisation billion year contract

Undue influence is not pleaded by the Defendants and this document is not relevant to the matters in question in these proceedings.

c. L Ron Hubbard correspondence

These documents are not and never have been in the possession, custody or power of the Plaintiff, and to the best of my knowledge and belief no genuine documents as are described exist or have ever existed.

d. Plaintiff’s current price list

Fraud has not been pleaded by the Defendants; this document is not therefore relevant to the matters in question in these proceedings. The Plaintiff has had in its possession, custody or power the list of fixed donations required for its services dated 1983 which may be relevant on quantum.

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e. Impact magazine Issue 15

This document is not relevant to the matters in question in these proceedings but the Plaintiff does not object to disclosing it. I would however draw the attention of this Honourable Court to the fact that this document is already in the possession of the Second Defendant, excerpts being exhibited to this Affidavit.

f. Tapes made by David Mayo and L Ron Hubbard

These documents are not and never have been in the Plaintiff’s possession, custody or power. Furthermore the Second Defendant makes bald and contentious allegations of fraud which are not contained in the pleadings. The characterisation of these materials by the Second Defendant as “pernicious nonsense” and “mumbo- jumbo” is a complete volte-face on his part. In their Defence, the Defendants admitted that the copies of the NOTs documents forming the subject-matter of the balance of these proceedings were taken for their own purposes and that these purposes were “the furtherance of dissident groups of scientologistws [sic] not associated with but hostile to the Plaintiffs and purporting to be able to teach and counsel at all levels, including advanced levels of Scientology”. There is now produced and shown to me marked “HMB 10” copies of two magasines distributed by a group of which the Second and Third Defendant formed

17

part and which contain price lists for services being provided by that group using these materials, thus demonstrating that their present pejorative characterisations of these materials are calculated solely with a view to avoiding liability for their actions. Further, the status of the materials as a trade secret has been recognised. For example in Bridge Publications Inc. v. Vien 827 E.Supp, 629, 632 (S.D.Cal. 1993) a copy of which is now produced and shown to me marked “HMB 11” the Court found that “as a matter of law, plaintiffs’ ‘Advanced Technology’ qualifies as a trade secret …” which was defined by the Court as “information which has independent economic value from not being generally known, the secrecy of which has been reasonably protected, or reasonably attempted to be protected.” The NOTs materials are part of the ‘Advanced Technology’. The same view was expressed by the Court in Religious Technology Center et al v. Wollersheim et al to which I have referred in paragraph 8 above. The Court stated regarding the NOTs materials that “the body of material that is at issue here clearly meets the definition of a trade secret and of a set of trade secrets … I am probably also convinced that these are sacred scriptures viewed from the standpoint of those persons who are Scientologists.” There is now produced and shown to me marked “HMB 12” a true copy of the transcript of the hearing which contains this

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statement at page 382:20-25 and additional supporting statements at page 384:5-19. With regard to David Mayo, claims that he was badly treated and that he is an authority who needs to examine these materials, I  am informed by the Church of Scientology International’s United States attorneys and verily believe that David Mayo is an individual who was living in the United States in 1983 who received materials stolen from the Church and subsequently altered them for his own financial gain, through the delivery of Church of Scientology services by a group of which he was part. There is now produced and shown to me marked “HMB 13” a copy of that group’s price list. It is clear from that group’s returns of income in the United States that his group made nearly $2,000,000 from their delivery of these services. There is now produced and shown to me marked “HMB 14” true copies of such returns for the years 1983-1985.

The Court in the United States found that Mayo’s claim, namely that he had written the materials and did not need to have stolen materials to prepare an altered version of them, was not credible. There is now produced and shown to me marked “HMB 15” a true copy of the published declaration, pages 517 and 518 of which I would refer this Honourable Court.

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g. Sunshine Rundown, OT 2 and OT 3

These documents are not the subject matter of these proceedings and are not relevant to any of the matters in questions in these proceedings.

h. Tapes of MCCS meetings

These documents are not and never have been in the Plaintiff’s possession, custody or power. I am informed by the Church of Scientology International’s ‘United States attorneys and verily believe that these tapes were recorded in connection with a project which was never implemented. They have no bearing on the current corporate structure. I have already referred this Honourable Court to the booklet “Corporations of Scientology”, found at Exhibit HMB 9 hereto, which does set out the current corporate structure for the Church of Scientology hierarchy.

i. Mission Corporate Category Sort out plan

The Plaintiff does not now nor ever has had these documents in its possession, custody or power.

j. Commodore’s Messenger Logs

The Plaintiff does not now nor ever has had these documents in its possession, custody or power.

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k. Steven Bisby personnel files

The Plaintiff does not now nor never has had these documents in its possession, custody and power.

l. NOTs bulletins

Although the Plaintiff has the original documents, the copy documents the subject matter of the balance of these proceedings are held by Messrs Alan Taylor & Co. pursuant to the order of Mr Justice Boreham dated 29th March 1984. The Plaintiff would be most concerned to ensure that these copy documents are not put into the hands of the Defendants in view of the history of the Defendants’ role in taking and use of such documents without authority as appears from the Statement of Claim.

15. Turning now to the Second Defendant’s Supplementary Affidavit sworn on 4th January 1994, and I would stress that this Affidavit was sworn on his own behalf and not on behalf of any other Defendant herein, none of the documents listed in paragraph 1 are the subject of an application by the First or Second Defendant, or indeed any Defendant, presently before this Honourable Court.

16. Furthermore, none of these documents are relevant to the matters in question in these proceedings, specifically:

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a. The Second Defendant claims (in the second sub-paragraph under paragraph 4) that it is “our contention” that interference with the Plaintiff is trifling as they have no ownership of any property that ” we” are accused of interfering with. This is not what the Defendants have pleaded. On the contrary, by paragraph 1 of their Defence the Defendants have admitted and averred that the Plaintiff was the owner and/or entitled to the immediate possession of the original documents the subject-matter of these proceedings (ie the NOTs materials). The First, Second and Third Defendants herein have already admitted the wrongful conversion of these materials and on 14th July 1984 judgment was entered against them for damages to be assessed for wrongful interference with an Order for costs. At the same time, Mr Justice Kennedy ordered that the Defendants do deliver up the original NOTs materials stolen from the Plaintiff’s premises in Copenhagen.

b. The Second Defendant also seems to assert, in the last sub-paragraph of paragraph 2 of his Affidavit, that the Plaintiff has no cause of action. No application has been made to strike out these proceedings on that ground. This assertion is in the circumstances of these proceedings ridiculous. I would also refer this Honourable Court to the Affidavit of Edith Maria Loringett sworn on 16th March 1984 and in particular

22

Exhibit EL 4 thereto which is a licence in favour of the Plaintiff in relation to inter alia the NOTs materials.

c. I deal with the application by the third and Fourth Defendants for an Order that the Plaintiff give security for costs in a separate Affidavit and would simply herein refer this Honourable Court to pp. xx – xxi of Exhibit HMB 1 and in particular the photograph marked ” Copenhagen, Denmark” which shows one of the large buildings owned by the Plaintiff.

d. There is no pleading on the part of any of the Defendants that there was no consideration provided by the Plaintiff in return for any undertakings the Defendants may have made. Neither do the Defendants plead fraud or misrepresentation on the part of the Plaintiff.

e. In relation to document 1(f), this is already in evidence as exhibit EM 4 to the Affidavit of Edith May Loringett as stated in paragraph (b) above.

17. In relation to any failure to provide discovery, as I have already deposed in paragraph 1 hereof, this firm was instructed in place of the Plaintiff’s former solicitors on 26th November last and I am unable to comment on matters prior to that date. However, it appears that none of the

23

parties have complied with the directions herein and steps are now being taken to remedy this so far as the Plaintiff is concerned.

18. The Second Defendant makes a gratuitous reference to an application on the Defendants’ part to strike these proceedings out for want of prosecution alleging inexcusable delay. The Second Defendant is perfectly well aware that the Defendants’ application was dismissed and costs were awarded against the Defendants and it is quite improper for him to reiterate these allegations when the matter has already been the subject of  interlocutory proceedings.

19. Finally, the First and Second Defendants are seeking to amend his pleading. This application was made by Summons dated 3rd February 1994. The trial of this action is fixed for 21st February 1994, just two weeks hence. The Defence in this action was served on 3rd March 1992 and the First and Second Defendants have had therefore considerable opportunity to amend their pleading since that date. It is manifestly an injustice that the Plaintiff should now be required to deal with what is an entirely new issue at this late stage in the proceedings and I would therefore humbly request this Honourable Court not to grant the First and Second Defendants leave to amend their Defence.

 

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20. Turning now to the Affidavit of Robin Edwin Bates, Solicitor for the Third and Fourth Defendants herein, I would comment as follows:

21. In relation to paragraph 2 of Mr Bates’ said Affidavit, I have already adequately dealt with these matters above.

22. In regard to the personnel, ethics and auditing files of the Third and Fourth Defendants, these are not now and have never been in the possession of the Plaintiff. Neither have the Defendants nor any of them ever been contractually bound, punished or treated in any way by the Plaintiff. Until the First, Second and Third Defendants by subterfuge wrongfully converted the NOTs materials to their own use they were not known to the Plaintiff and I refer this Honourable Court to paragraph 6 of the Affidavit of Edith Maria Loringett sworn on 16th March 1984 in this regard.

23. I therefore humbly request this Honourable Court not to make the Orders sought by the Defendants herein.

SWORN at 1/2 Judges Terrace
East Grinstead West Sussex
This seventh day of February 1994

Before me,

[signed]

A Solicitor

Notes

CSI 1023 Submission: Response to Question 10 [Civil litigation involving the Church] (November 23, 1992)

Question 10

INTRODUCTION1

In the responses that follow, the Church is providing all of the information the Service has requested in the various subparts to Question 10. It is only fair, however, that the following responses be considered in their proper context, and for that reason we submit the following additional information by way of introduction.

Question 10 relates exclusively to public policy questions, focusing on civil litigation involving the Church. There is no escaping the irony of being asked to catalogue the unsubstantiated allegations of civil litigation adversaries when those allegations often have been manufactured, promoted, disseminated, and even subsidized by a cadre of anti-Scientology individuals within the Service itself. The Church does not believe that the Service as an institution, hates Scientology. We believe there are and have been, however, a core of dedicated “Scientology-bashers” within the Service who have allied themselves with encouraged, and even fixed the tax problems of the principal sources of the tired civil allegations we are now being asked to chronicle.

Question 10.e.i and 10.e.ii request a list of all of the tort allegations that have been made against any Church of Scientology in more than a score of cases arising within the last twelve years and for copies of all verdicts, decisions or findings made by any court that any of those allegations were true. As may be seen in the following responses, two of the only four cases where any such decision has been issued, and a majority of the other cases were instigated or heavily influenced by the Cult Awareness Network (“CAN”).

CAN and its influence on the litigation in question was described in passing at page 10-20 of our response to Question 10 of your second series of questions. There is no escaping the fact that CAN has been able to survive financially and has drawn much of its false veneer of credibility from the Service’s recognition of it as exempt under section 501(c)(3).

CAN was formed in 1975, under its original name, Citizen’s Freedom Foundation. CAN’s activities, from its inception until today, have consisted of negative propaganda campaigns against nontraditional religious organizations and promoting and perpetrating “deprogrammings,” a euphemism for kidnapping people and using force and coercion to dissuade individuals from maintaining their voluntarily held religious beliefs.

CAN applied for tax exemption in March of 1976 as an educational organization. Literature provided with its

10-1
CSI Prod 11-4-93
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application, however, clearly evidenced CAN’s biased views and its involvement in deprogramming. Indeed this material shows CAN’s close association with Ted Patrick (one of its founders), who has   been convicted on numerous occasions for kidnapping, assault and related charges arising from his violent deprogramming activities. It was Patrick who touched off the premier tort case against Scientology when he deprogrammed Julie Christofferson in 1977. (This is further described at pages 10-15 and 10-16 of our response to Question 10 of your second series of questions and infra.)

The IRS denied CAN’S initial application for exemption because “after reviewing your publications, we concluded that a significant portion of your viewpoints were not supported by relevant facts.” CAN reapplied in 1977 but the application and CAN’s accompanying literature showed that CAN had not reformed. Consequently, the Service again informed CAN that its application was being denied because “Your revised application for exemption contains disparaging statements about organizations which are not supported by facts. Your revised application indicates that the reasons for our denial of your previous application are still present.” (Exhibit III-10-A).

CAN did not give up. In July 1978, CAN submitted additional information to the IRS including a “Statement of Purpose, Functions and Activities” which included the claim that one of CAN’s functions was to recommend personnel and facilities for deprogramming. CAN furnished the Service with an example of how CAN would handle a contact from a caller who intended to join the Church of Scientology: referral of the person to ex-members for negative information on Scientology and to an attorney in his or her area, as well as providing the person with a list of “Dos and Don’ts” which included advising the person to file complaints with the government. (Exhibit III-10-B). CAN identified the Church of Scientology as one of its principal targets and the Service granted CAN tax exempt status. (Exhibit III-10-C).

From that point forward until the present, CAN has followed the precise modus operandi concerning Scientology that it described   to the Service in 1978. CAN refers individuals to ex-members for negative information about the Church and to attorneys who then create causes of action against the Church that almost always recite the same boilerplate tort claims. As will be seen in the response to Question 1.e.i, a large number of the cases listed in that section have been filed by attorney Toby L. Plevin. Plevin is a CAN member who gets all of her client referrals from CAN in exactly the manner CAN described in its 1978 application supplement.

CAN also continues to be involved in the felonious practice CAN calls deprogramming, which is as flagrant a violation of public policy as can be imagined. While CAN enjoys exempt status

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its deprogrammers are being arrested and jailed by local police agencies and the FBI. Recently, CAN deprogrammers Galen Kelly and Bob Moore, and CAN attorney Robert (“Biker Bob”) Point, were arrested by the FBI and charged with conspiring to kidnap Lewis DuPont Smith, heir to the DuPont fortune, and to “deprogram” him   from his support of Lyndon LaRouche’s political organization. (Exhibit III-10-D). At this writing there are several other CAN deprogrammers under indictment as a result of their deprogramming activities, including Joe Szimhart, Mary Alice Chrnaloger, Karen Reinhardt and Randall Burkey. (Exhibit III-10-E). It is troubling that in the face of this kind of evidence individuals in the Service like Jacksonville District EO agent Melvin Blough, continue to use CAN as an investigative arm to drum up false charges against the Church of Scientology. (Exhibit III-10-F).

There are individuals in the Los Angeles IRS Criminal Investigation Division (“CID”) who harbor sentiments about Scientology very much akin to those espoused by CAN, who have directly brought about or have had a major influence on Scientology-related civil litigation. Much of this information has been covered before or is covered in more detail in the responses to specific subparts of Question 10 that follow. Consider the following:

* The decision in Gerry Armstrong’s case is one of those described in detail in response to Question 10.e.ii. Armstrong’s fanatical hatred of Scientology ingratiated him with the LA CID and earned him the status of IRS operative in an unlawful scheme to infiltrate and destroy the Church through, among other things, the seeding of Church files with forged or manufactured documents. Armstrong was a link between the CID and Michael Flynn, whose multi-jurisdictional litigation campaign against Scientology was encouraged and assisted by the CID. (See pages 10-8 to 10-16 of our response to Question 10 of your second series of questions). The allegations, first manufactured by Armstrong and Flynn, have been adopted and parroted by many of the other tort litigants whose cases are described in the response to Question 10.e(i). In exchange, Gerry Armstrong has been insulated from liability for his theft of Church documents and encouraged to continue and to expand his nefarious efforts.

*The Aznarans, whose case was described at pages 10-18 and 10-19 of our response to Question 10 of your second series of questions, left the Church and filed suit for $70,000,000,

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resulting almost immediately in their being embraced by the IRS CID. The CID agents then passed the Aznarans on to like-minded EO agents in Los Angeles who interviewed them, encouraged them to continue their attacks on Scientology, treated their claims as fact and used their allegations as a basis to throw five years of cooperation from the Church down the drain. A tax debt that the Aznarans had been unable to handle with the IRS for ten years disappeared when they became civil litigants against the Church and CID informants.

*Question 10.e.iii asks for a description of the criminal case involving the Church in Canada, which is described in the answer to Question 10-e-(iii) and in a memo from counsel for the Church of Scientology of Toronto attached as Exhibit III-10-U. As that memo details, LA IRS CID agents fed information, allegations and witnesses to the Ontario Provincial Police (“OPP”) and plotted with Armstrong, Flynn and OPP officers to bring about the “collapse” of the Church. CID agents traveled to Canada where they encouraged the OPP to bring indictments, offering to help locate L. Ron Hubbard and others in the Church if OPP moved forward with their case. The CID and OPP also utilized apostate David Mayo and his cronies to recruit ex-GO criminals as government witnesses to testify against the church and their former subordinates about crimes that they themselves had perpetrated. Mayo is further described below.

* As early as 1969, a CID operative named Gene Allard was allowed to get off scot-free with the out-right theft of Church records. (See response to Question 10.d.1, infra.).

* Laurel Sullivan, who left and became disaffected with the Church after she was removed from her Church post for being a Guardian’s Office sympathizer, was embraced as an informant by the CID, and was represented by a government attorney when the Church sued her personally for improperly disclosing attorney-client information to the IRS. (See page 3-40 of our response to Question 10 of your second series of questions).

* As described below apostate David Mayo gained favor with the IRS as an informant and IRS reciprocated by granting exempt status to his group in support of his anti-Scientology stance. This list could go on with example after example of times when some person or organization has manifested an anti-Scientology sentiment and has suddenly emerged as an IRS ally, operative or beneficiary. At that moment such a person or group is transformed into a fountainhead of unassailable virtue whose claims are gospel, whose protection is guaranteed and who is given unwarranted, improper encouragement and assistance. As described in detail below, while Churches of Scientology receive unprecedented scrutiny when they apply for tax exemption, apostates who sue the Church and attack the religion have been aided by IRS tax exemption subsidies.

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An anti-Scientology sentiment has existed in the IRS National Office Exempt Organizations Technical Division, dating at least back to CAN’S 1978 exemption. Certain EO Technical Division officials appear to have directly colluded with the CID in 1984 and 1985, using information gathered by the CID, including the statements and allegations of their informants, to sabotage the Church’s exemption proceedings at that time. Evidence of their bigotry is best seen in their treatment of anti-Scientologists.

David Mayo:

David Mayo was removed from a senior Church position for moral turpitude. He was using his position for economic advantage. Even more serious from a Scientology perspective, he was the source of serious alteration and denigration of the technical scriptures of Scientology. Rather than atone for his misdeeds, he left the Church in 1982.

Upon leaving, Mayo and a few others established an organization he called the Advanced Ability Center (“AAC”), which utilized a badly altered version of Dianetics and Scientology technology in an effort to lure parishioners away from the Church for economic advantage. For example, Mayo dropped the use of Scientology ethics technology altogether, eschewing ethics as an applicable concept. Solely for the tax advantages it would afford, he incorporated the AAC under the name “Church of the New Civilization” (“CNC”), but it operated solely as the Advanced Ability Center. Mayo’s prime objective was to obtain copies of the confidential upper level scriptures so that he could represent that CNC/AAC could deliver the entire Bridge as it existed in the early 80’s and thus attract a larger following. Mayo conspired with like-minded apostates in Europe and effected the theft of these scriptures on December 9, 1983 from AOSH EU & AF in Denmark. These events prompted the suit by RTC and the Church as described on pages 10-17 and 10-18 of our response to Question 10 of your second series of questions. Mayo also actively endeavored to lure Scientologists away from Scientology, including putting out a publication of negative propaganda on the Church.

In 1984 CNC filed for tax exemption. The original application identified CNC’s source of financial support to be “Fees received from parishioners for counseling.” CNC’s statement of activities stated that “The program of activities of [CNC] are limited to personal counseling and spiritual studies” and responded affirmatively to questions on whether or not recipients would be required to pay for counseling. Subsequently, Mayo gave an opposite answer to the question. Eventually, the 1023 application was forwarded to National Office for processing by Rick Darling who inquired further into CNC’s fundraising methods. Mayo responded that “Parishioners receive spiritual enhancement and guidance from the Church in a program of services for which monies are given and received” to a question asking why parishioners would donate to CNC.

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During the same time period Darling and Friedlander were considering the CNC application, they were using “commercialism” as a reason to deny tax exemption to various church of Scientology applicants. Their purported reason was that the Church charged fixed donations for services giving them a “commercial hue and purpose.” Shortly after issuing adverse determination letters to the Scientology applicants, EO granted CNC’s application on substantially identical information as to funding practices.

Mayo had become a CID informant (Exhibit III-10-G) and Darling/Friedlander were now aware that Mayo was an enemy of the Church of Scientology. (Exhibit III-10-H). On March 27, 1986, David Mayo himself responded for CNC to a set of questions from   Darling. In response to a question whether CNC charged fixed amounts for their services, Mayo provided information which contradicted CNC’s 1023 record and was flatly impossible stating that CNC had “no predetermined price.” (Exhibit III-10-H).

Frank Gerbode:

Psychiatrist Frank Gerbode is an heir to the Alexander Baldwin sugar fortune. He left psychiatry for Scientology in the 1970s and for several years was the mission holder of the Palo Alto mission. He ran afoul of Church management in the early 1980s when the Church tried to reform his financial misdealings. In March 1984, Gerbode left the Church to join up with David Mayo. He set up a parallel operation he also called Advanced Ability Center in Palo Alto which, for tax purposes, he named the Church of the Universal Truth (“CUT”). Gerbode’s 1023 application, along with those of CNC and various Church applicants also went to Darling and Friedlander.

The exemption applications for the churches of Scientology were denied; the applications for CNC and CUT were granted. While Darling and Friedlander asked endless intrusive questions of the Scientology applicants, they chose not to find out about CNC and CUT. For example, by the time they recognized CNC’s exempt status, CNC had long since ceased operations. Mayo had cashed in its assets and deposited them in his personal Liechtenstein bank account and had gone to work for Gerbode at CUT. He essentially liquidated the corporation into his own pocket, even though it was a non-profit organization purportedly dedicated to section 501(c)(3) purposes.

More specifically, the last known letter from Mayo to the IRS on the CNC exemption application is the one mentioned above, dated March 27, 1986. (Exhibit III-10-H). According to the deposition testimony of his wife, Julie Mayo, CNC closed its doors one month later, on April 30, 1986, at which time David and Julie Mayo both resigned their respective director and officer positions. They also sold the house in which they were living that had been purchased in their name by CNC as a “parsonage,” and using other

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rsed to them from CNC as “severance pay,” “travel expenses”and “vacation pay accrued,” they traveled for the next several months to Europe, Australia and Florida with Gerbode and his wife. While on this trip they stopped over in Liechtenstein where Gerbode introduced Mayo to his banker who opened an account for him with the $80,000 received from the sale of their “parsonage.” CNC’s exempt status was granted subsequent to these events. In fact the only ongoing activity of CNC at the time it was granted exemption was ongoing litigation with the Church of Scientology.

Gerbode obtained tax exemption for CUT ostensibly based on representations that the organization was a church and conducted exclusively religious activities. (Exhibit III-10-I). In fact, once tax exempt status was obtained, CUT ceased carrying out any religious activities and began dispensing a novel brand of psychology under the name Center for Applied Metapsychology (“CAM”), and promoting Gerbode’s personal books and literature, co-authored by Mayo, much of which are plagiarized from the works of L. Ron Hubbard. In 1986, Gerbode also established the Institute for Research in Metapsychology (“IRM”), another tax exempt organization which operates at the same address using the same personnel as CAM, and which produces the literature and materials that CAM promotes and distributes. IRM characterizes metapsychology in scientific terms, making it clear it is not a religion and followed no belief system. Yet metapsychology is what Gerbode’s church, CUT operating as CAM, dispenses.

Compare the representations made by CUT in Exhibit III-10-I, a letter to the IRS in support of their exemption application in December 1985, to the representations made by Gerbode concerning the same organization on November 2, 1992 in Exhibit III-10-J. In the December 5, 1985 letter in support of its exemption application, CUT discussed its purported “religious doctrine” and “religious history” and submitted copies of their baptismal, funeral and marriage ceremonies, representing that it was a Church conducting exclusively religious activities. (Exhibit III-10-I). On November 2, 1992, Gerbode wrote to the City of Menlo Park, California in response to a “complaint that a church is being operated at the premises” to set the record straight so that they would not lose their zoning permit:

CAM [really CUT] is classified under the IRS code as a church . . . However . . . CAM does not hold worship services, perform baptisms, or carry out other such activities typical of churches.

* * * *

“‘Church’ means a structure intended as a meeting place for organized religious worship and related activities.” We feel that this does not apply to the building or the activities occurring therein.

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Exhibit III-10-J.

This is the “church” that passed muster with Friedlander and Darling as soon as it was apparent to them that, like Mayo, Gerbode   was no longer associated with and was opposed to L. Ron Hubbard and the Church of Scientology. Gerbode has made substantial “contributions” to both CAM and IRM, which he deducts on his personal income tax returns as charitable contributions. However, at the same time Gerbode receives the direct benefit of the bulk of these “contributions” from CAM and IRM in the form of rent, salaries and payment of personal expenses. The organizations also   provide Gerbode with an administrative staff and office facilities, all tax-free. The following are specific tax law violations Darling and Friedlander could have found if they had subjected CUT   to the same kind of scrutiny they had subjected Churches of Scientology to during the same period.

In 1982 and 1983, prior to the incorporation of CUT, when Gerbode was still the mission-holder of the Church of Scientology Mission of Palo Alto, he claimed substantial tax deductions on his personal tax returns for books, office furnishings, equipment, artwork, etc., that he purchased for use at the Mission. When Gerbode left the Mission in 1984 and established CUT, he donated these same books, office furnishings, equipment and artwork to the new corporation and again claimed them as charitable contribution deductions on his personal tax return. These were listed as donations in the 1023 application for CUT that Darling reviewed in 1986. When Gerbode left Scientology in 1984 he evicted the mission from his building in favor of his new operations, CAM and IRM from which he now collects rent. It is also evident that he launders donations to CAM/IRM back to himself as rent in order to get the benefit of both the charitable deductions and depreciation write-offs.

The IRS continues to probe litigation involving the Church while it ignored litigation against Mayo et al. Indeed the Service gave a de facto subsidy to the Gerbode/Mayo litigation by granting exemption to their litigation tax shelter. In the letter that Mayo wrote to the Service in support of CNC’s exempt status in March of 1986 (Exhibit III-10-H) he sent along part of the complaint in the suit RTC and CSI had brought against Mayo and CNC which alleged theft and violations of the RICO statute. Darling apparently did   not consider it necessary to inquire about the possible public policy implications of this litigation once he saw that Mayo was on opposite sides in the litigation to the Church and granted exempt status.

In 1986, Gerbode and Mayo established and obtained tax exempt public charity status for the Friends of the First Amendment (“FFA”), an organization purportedly established to support and promote First Amendment rights, but which in fact enabled Gerbode to claim tax deductions for hundreds of thousands of dollars he

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“donated” to FFA, which sums were then used to pay Mayo’s litigation costs in his litigation with the Church. Although Gerbode is not a party to this litigation, a central issue in the suit concerns the control of copyrights in the name of L. Ron Hubbard that Gerbode has exploited. Gerbode struck a deal with David Mayo that Mayo will continue the litigation provided that Gerbode funds it, with the understanding that Gerbode will be reimbursed for the litigation costs if Mayo wins a counterclaim for damages. Thus, Gerbode has used FFA to deduct as charitable contributions what are in reality his own litigation expenses, that he expects to recover if the litigation is successful. David Mayo, on the other hand, hopes to net millions of dollars if the counterclaim is won. Gerbode has also disguised some of the millions of dollars he laundered through FAA so that they would not appear to be from him in order to avoid FFA being found to be a private foundation, and cemented this by shutting FFA down just before its advance ruling period on private foundation status expired in 1990.

The only question Mayo’s and Gerbode’s groups were asked concerning litigation was whether their “legal defense fund” was set up solely to battle the Church of Scientology. When they answered in the affirmative, exemption was awarded.

Unlike CNC, CUT, and CAN, who to this day enjoy exemption, our principal clients have no such status. Yet we alone of that group have been and are providing truthful and full answers to each question you have asked.

———————-

All of the information the Service has requested in the various subparts of Question 10 is contained in the responses to the individual subparts that follow.

* * * *

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Questions 10.a, 10.b, 10.c and 10.d.2

In question 10 of our second series of questions, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.

a. Attached is a document relating to a program referred to as Snow White that apparently existed as of December 16, 1989. Please explain the apparent discrepancy between the document contained at the attachment and the response to Question 10.b.

b. The response to Question 10.b refers to a decision by Judge Osler of the Supreme Court of Ontario (page 10-5). Please provide a complete copy of the cited opinion.

c. What is the status of Operation Transport Company? Does it continue in existence? If not, please specify when and to whom all assets were distributed or transferred.

* * * *

d.2. Please provide the following information with respect to Exhibit II-10-A; (i) fill in the blank under the heading of “Primary” contained in #6; (ii) an explanation of the reference to “HF” or “AS” under the heading of “Primary” at #7; and, (iii) fill in the blanks under the heading of “Vital Targets” contained in #7.

—————–

As a preliminary matter, we note that question 10 has two subparagraphs denominated as “10.d.” For the sake of clarity, we will refer to the first as “10.d.1″ and the second as “10.d.2.” Subparagraph 10.d.1 and paragraph 10.e are addressed in separate responses. This response addresses the remainder of question 10.

Subparagraph 10.a

Subparagraph 10.a asks for an explanation of an “apparent discrepancy” between the response to Question 10.b of your second series of questions and Exhibit II-10-A.

That which is attached is a copy of a document written in December of 1989 by a person holding the position of Snow White Programs Chief in the Office of Special Affairs United States,

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and describes her functions and those of the Snow White Unit. The document also specifically mentions the Snow White program and its “Ideal Scene”: “All false and secret files of the nations of operating areas brought to view and legally expunged and OTC, “Apollo” and LRH free to frequent all Western ports and nations without threat and all required ports open and free.”

Initially, it must be stated that the document in question was stolen from Church offices by an individual who had infiltrated the Church at the behest of the Cult Awareness Network. It was then passed on to the IRS by the CAN infiltrator via CAN. (See page 10-20 of our response to your second series of questions and supra for discussions of the Cult Awareness Network).

The “apparent discrepancy” to which subparagraph 10.a refers seemingly arises from use of the word “programs” in a post title that includes the words “Snow White” viewed against the statement on page 10-5 of our response to your second series of questions that “The Snow White program is not being executed today.” There is no inconsistency. That same page also states that the term Snow White became synonymous with the activity of legally locating and correcting false reports on the Church. The Church vigorously pursues these objectives through the use of the Freedom of Information Act and through direct negotiation with government agencies intended to persuade them, at minimum, that if expungement of false reports is not feasible, corrective reports should be filed.

The original Snow White program, provided as Exhibit II-10-A, was written specifically to address problems which existed in 1973 with respect to OTC, the Apollo and Mr. Hubbard. Because the United States State Department and other government agencies had engaged in the circulation of false reports, free access to various Western ports and nations had been severely curtailed. The Apollo was sold in 1975, OTC became inactive at that time, and Mr. Hubbard passed away in 1986. Clearly, the original Snow White program became obsolete within a couple of years of its creation and is no longer in effect. In fact, the Apollo no longer exists. Once converted by its new ownership to a restaurant in Texas, it was involved in a train collision and in dry dock was cut into scrap. So, there is no way the Apollo will be frequenting Western or any ports!

However, obsolescence of the actual program did not invalidate Mr. Hubbard’s observation that when governmental and police agencies are allowed to accumulate false information in their files, and disseminate it to other agencies, they then “…tend

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to act on the file without the presence of the real scene data which is factually good but which is then ignored.” In an ongoing effort to practice the Scientology religion free from the interference of misinformed government agencies, the Church continues to pursue the Snow White objectives with the legal means at its disposal. Only when the Church is free from governmental harassment and is accorded its rights will the 6 need for Snow White activities vanish.

Subparagraph 10.b

Subparagraph 10.b requests a copy of Justice Osler’s decision cited in the June submission. A copy of that Supreme Court of Ontario decision is submitted as Exhibit III-10-J-1, with the appropriate sections highlighted.

Subparagraph 10.c

Subparagraph 10.c addresses the present status of OTC, as well as details regarding the timing and distribution of any of OTC’s former assets.

OTC effectively ceased to operate in late 1975 when the Church activities that had been housed on the Apollo moved ashore in Florida. OTC remained inactive from that point forward except for ongoing litigation against the Portuguese government which is described on page 10-3 of our response to your second series of questions.

In July 1981, OTC’s aggregate assets were approximately $2,244,252 plus Pounds Sterling 2,254,852. At that time, OTC transferred all of its assets except for approximately Pounds Sterling 200,000 and its pending Portuguese claim to the Scientology Endowment Trust. This trust was recognized as tax exempt by the IRS under Section 501(c)(3) in 1983 after the particulars relating to the transfer of funds from OTC were specifically reviewed. In 1988, OTC dissolved and all assets still remaining, approximately $180,000, were transferred to Church of Scientology Religious Trust.

Subparagraph “10.d.2″

In Subparagraph “10.d.2,” you ask to have some blanks in the copy of the Snow White program provided to you with the June submission filled in and for an explanation of the terms “HF” and “AS.”

The version of the Snow White program provided with the June submission contained blanks in the places that you noted, apparently left there by whoever retyped that version. We have located, and are including here as Exhibit III-10-K, another

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version which appears to be a copy of the original version and contains no blanks. The abbreviations “Cont,” “Gdn” and “DG/US” in Vital Target 7 stand for Controller, Guardian and Deputy Guardian United States.

The abbreviation “HF” stands for Hubbard Freedom Foundation. Our records show that it was set up as a Liberian corporation in November 1972 for scientific, research and educational purposes, received a total of $500 from OTC, but then never became active and never received any other funding.

The abbreviation “AS” stands for American Society which was another Liberian corporation also established in late 1972, at or around the same time as the Hubbard Freedom Foundation and probably for similar or related purposes. The best available information is that the American Society had a fate similar to Hubbard Freedom Foundation, receiving a small amount of money to get started, but then never actually carrying out any activities or function.

As neither of these Liberian corporations was ever active and as no effort was made to maintain their corporate charters in Liberia, we assume that they were dissolved by operation of law many years ago. The Liberian attorney who originally formed them was killed in a political upheaval more than a decade ago, and we, therefore, have no access to HF or AS records.

* * * *

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Subparagraph 10.d.1

In our prior question 10, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.

* * * *

d. In CSC v. Commissioner, 83 T.C. 381 (1984) at 431-437, there is a discussion of the actions of several persons identified by name or office (e.g., Vicki Polimeni). Please identify the persons who held the following offices during the period referenced at pages 431-437 of the CSC opinion: (i) FBO International; (ii) FBO AOLA; and (iii) FBOs at various other Advanced Organizations as described at page 431 of the CSC opinion. Please state whether Vicki Polimeni or any of the individuals identified in the response to this question have at any time subsequent to 1989 been related (by reason of being service-provider or otherwise) to any Scientology-related organization (either as staff or in any other capacity). Please describe the current relationship between Martin Greenberg and Scientology-related organizations.

——————–

During the period of time described at page 431 and 432 of the CSC decision, i.e., May through August 1969, there were only three Advanced Organizations in existence. Consequently, the positions you have inquired about and the individuals who held them were:

FBO International — Al Boughton FBO AOLA — Lauren Gene Allard FBO AO United Kingdom — Don Clark FBO AO Denmark — Rob Sanderson

Vicki Polimeni, Don Clark and Rob Sanderson ceased having any relationship with any Scientology-related organization many years ago, long before 1989. From 1989 to the present, Al Boughton has been a staff member at the American Saint Hill Organization (ASHO) in Los Angeles. He holds the position of Auditing Supervisor for the Saint Hill Special Briefing Course, responsible for overseeing the auditing done by students training to be Scientology auditors on this course. The Church has had no specific information concerning the activities or whereabouts of Gene Allard since 1981, when he appeared as an IRS witness in the Tax Court trial of the CSC case.

The Church has long suspected that Allard was sent into AOLA in 1969 by IRS Intelligence Division agent John Daley, to infiltrate the Church as an agent provocateur. John Daley was an agent in the IRS’ Case Development Unit in Los Angeles, a unit

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which served as a model for a national intelligence operation known as the Intelligence Gathering and Retrieval System (“IGRS”). The IGRS was disbanded in 1975 when Congress found that it had “fostered unrestrained, unfocused intelligence gathering and permitted targeting of groups for intelligence collection on bases having little relationship to enforcement of the tax laws.” Congress found that “there were the beginnings of politically motivated intelligence collection in at least one district; and evidence that the fruits of similar investigative efforts in two districts had been destroyed.” One of the districts that destroyed its files on the eve of the Congressional investigation was the Los Angeles District (i.e. John Daley’s files) and the other was the St. Louis District, where Congress found that a file labelled “Subversives” that “contained only material on the Church of Scientology” had been destroyed. (See pages from Supplementary Detailed Staff Reports On Intelligence Activities And the Rights of Americans, Final Report of the Select Committee to Study Governmental Operations With Respect to Intelligence Activities, attached as Exhibit III-10-L).

Circumstantial evidence strongly suggests that Allard was a clandestine operative who reported to Daley. Daley had been investigating the Church since at least 1968 and, by the time Allard first appeared at AOLA, Daley had already used a plant inside Crocker Bank who provided Daley with illegally-obtained copies of the Church’s confidential bank records. After occupying the position of FBO AOLA for barely two months, Allard suddenly disappeared, taking with him some internal Church correspondence and other Church assets. Allard turned over the documents to the IRS in Kansas City; the documents were forwarded to John Daley in Los Angeles.

The Church filed criminal charges against Allard. He was later located and arrested by the FBI in Florida and brought back to Los Angeles. Not long after Daley interviewed Allard in jail, the California Attorney General’s office decided the evidence against Allard was insufficient and dropped the charges. Then, in 1981, Allard surfaced as a witness for the IRS in the CSC case along with the documents that he had stolen, admitting on cross-examination that he was hopeful of receiving a reward if his testimony resulted in collection of any taxes. Judge Sterrett demonstrated a willingness throughout the CSC trial to regard any anti-Church witness as credible, but even he had problems with Allard’s testimony: Judge Sterrett found that “There were significant inconsistencies in his testimony . . .”. 83 T.C. 509.

Nevertheless, it was Allard’s testimony and the documents that he stole that formed virtually the sole basis for the findings at

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pages 431 and 432 of the CSC decision about which you now inquire. Judge Sterrett’s gratuitous comments suggested that whatever occurred at AOLA in 1969 constituted some kind of criminal conspiracy. All of this evidence however, was known in 1969 when Revenue Agent Woodrow Wilson unsuccessfully sought to institute a fraud investigation. In June 1969, Daley even went so far as discussing with California State officials the use of the Allard evidence as “grounds for dissolution” of the Churches of Scientology. (Exhibit III-10-M.) In August of 1969, Wilson presented this information in the form of a “fraud referral” in an effort to elevate it from “case development” status to an actual criminal investigation. The fraud referral was declined by the Chief of Intelligence. (Exhibit III-10-N.)

You have also asked about the current relationship of Martin Greenberg to any Scientology-related organizations. Mr. Greenberg has not been on the staff of any Scientology-related organization since early 1980’s. He is a certified public accountant with an accounting practice in Clearwater, Florida. Although we understand that individual Church members have used his services for their personal or business accounting, he has not to our knowledge been retained nor has he done any accounting work for any Scientology-related organizations for many years. Mr. Greenberg is a parishioner of the Scientology religion.

While in Los Angeles in 1978, Martin Greenberg, along with CPA James Jackson, formed the firm of Greenberg and Jackson. In 1983 Greenberg moved away and sold his interest in the practice to Jackson, who retained the name “Greenberg and Jackson” for the professional corporation. At that time Mr. Greenberg ceased having any involvement in or knowledge of the affairs of any Scientology-related organizations. Recently, Mr. Jackson also sold his interest in this practice and presently there is neither a Greenberg nor a Jackson associated with “Greenberg and Jackson.” Several Scientology- related organizations continue to utilize the services of CPA Brad Bernstein, one of the present shareholders of that firm.

* * * *

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Questions 10 e(i)-(ii)

In our prior question 10, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.

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e. We have carefully reviewed the response to Question 10.d. The Service still requires a more complete understanding of the cases listed in the response. Please provide the following information, as well as any other information or documentation that you believe would assist the Service in this regard.

(i) For each of the cases listed on pages 10-20 through 10-22, please provide a short description of all claims by the non-Church of Scientology parties. In particular, please describe any allegations that the Scientology-related organizations, and/or the individuals, described in Question 2.d of our second series of questions have engaged in any action that is an intentional tort and/or that would violate any criminal law. In your description, please include the date the action is alleged to have occurred and the party alleged to have committed the action.

(ii) For each of the cases on pages 10-8 through 10-22, other than the “GO Criminal Activity Fallout Litigation” cases listed on pages 10-16 and 10-17, please provide a copy of any jury verdict, or any decision, finding or statement by a court that any Scientology-related organization, and/or any individuals described in our prior Question 10.d, engaged after 1980 in any action that is an intentional tort and/or that would violate any criminal statute. The copy should be provided regardless of the ultimate disposition of the underlying legal action (e.g., even if an appeal is still pending or the action was settled, dis- missed, or successfully appealed). With respect to each copy provided, please state whether the Church agrees with the court’s statement, and, if so, whether there is presently any connection or relationship between the individual(s) involved and the church.

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Subparagraph 10 e(i)

In our response to the Service’s prior Question 10.d, we provided a lengthy description of litigation involving Scientology-related organizations or individuals since 1980. To facilitate the Service being able to understand these cases and put them into proper context, the cases were grouped according to the kind of case and allegations and the phenomena that brought the various suits about.

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In this follow-up question the Service is asking for copies of any jury verdicts or judicial findings respecting all but a few of those cases, where it was found that a Scientology-related organization or individual committed a tort or criminal law violation; and with respect to just three of the groupings of cases, the Service wants further information concerning the allegations made in those cases. Those groupings are: 1) cases listed as financial or property disputes or transactions; 2) personal injury or medical-related suits; and 3) suits that appear to have been instigated directly or indirectly by the Cult Awareness Network.

As described above in the Introduction to Question 10, in the vast majority of these cases the allegations that have been made and which are described below, trace back in one way or another to the IRS itself.

Nonetheless, in the spirit of cooperation, we are providing in this response all of the information requested — i.e. the description of the allegations in each of the cases listed on pages 10-20 to 10-22 of our response to your second series of questions and copies of the verdicts, decisions and findings requested in Question 10.e (ii). We feel it is appropriate, however, to make the following preliminary observations.

Public Policy As An Exemption Issue:

All of these questions concerning litigation relate to the issue of public policy. Section 501(c)(3), however, contains no express condition that an organization must operate in conformance with public policy to qualify for tax exemption. Whether or not an organization violates public policy is relevant to exemption only in the context of whether the organization is operated exclusively for one of the exempt purposes that section 501(c)(3) enumerates.

Only one judicial decision has ever applied a public policy condition to the exempt status of a church — the Tax Court decision concerning the Church of Scientology of California (the “CSC decision”). Judge Sterrett, however, limited his findings of public policy violations affecting CSC’s exempt status strictly to the activities of the Guardian’s Office (“GO”) that resulted in a number of GO members being convicted of crimes. Thus, although the Service was prepared to present testimony in the CSC case from tort claimants such as Larry Wollersheim and some of attorney Michael Flynn’s clients, Judge Sterrett precluded that testimony and made no finding regarding public policy based on any civil tort claims. (See our response to Question 10.d of your second series of questions for a description of Michael Flynn’s and Larry Wollersheim’s claims infra.).

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The CSC decision, upon which the Service has often relied, itself highlights the irrelevancy of pending, dismissed or settled legal cases where any form of tort allegation has been made. The public policy issue was addressed in the CSC case and decided in that case, and the only acts of any Church of Scientology members that were found to provide a basis for questioning exempt status were the criminal activities of the Guardian’s Office. If Judge Sterrett did not find the allegations of Flynn’s clients, Wollersheim and the rest to be relevant, there can be no legal basis for considering the same kinds of allegations now.

The Church has addressed the Guardian’s Office both here (see responses to Questions 3.e, 10.a and 10.d) and in our prior response (responses to Questions 3.d and 10.d). The Church also addressed at some length the various kinds of other litigation Scientology-related organizations and individuals have been involved in (response to your prior Question 10.d). On this basis, the Church feels that it has adequately addressed public policy against the relevant legal authorities.

Public Policy As Applied to Other Churches:

The Service has enforced the public policy standard selectively, applying it only to the Church of Scientology and not to other churches to which it could just as easily, if not more appropriately, be applied. For example, for most of the past decade the Catholic Church has been embroiled in a major scandal arising from the exposure of an astonishingly large number of instances of child molestation involving Catholic priests. Copies of newspaper and magazine articles about this subject are attached as Exhibit III-10-O. A book published in October 1992, Lead Us Not Into Temptation by Jason Berry, states that between 1984 and 1992 four hundred Catholic priests in North America were reported for molesting children, and in this same period the Catholic Church has paid out $400 million to resolve these cases. The book further details how other Catholic officials, including many high in the Catholic hierarchy, have covered up what occurred or were guilty of complicity by knowing what was happening and ignoring it or reassigning a tainted priest to another job where he would still have contact with children. These are not merely cases where unproven allegations have been made; some of the cases resulted in criminal convictions of the priests involved. In the case of Father Gilbert Gauthe, for example, Father Gauthe pleaded guilty to 36 counts of child molestation while serving as a parish priest in Louisiana. The attempts to cover-up Father Gauthe’s crimes described in Jason Berry’s book spanned the Catholic hierarchy and included archbishops, bishops, other priests and directions and orders emanating from Rome. Thus a jury also awarded a verdict of $1.25 million to one of the victims and his family against the responsible Catholic diocese.

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We are not suggesting that the IRS should now investigate the Catholic Church or make a tax exemption issue out of an unfortunate scandal that should be dealt with in the criminal justice system. Rather, this example serves simply to illustrate the unfair double standard that has been applied to the Church of Scientology.

Nevertheless, the following is a description of the cases that were listed in our prior response, describing the allegations in those cases of commission of intentional torts or violations of criminal statutes.

Description of Tort Litigation:

The suits listed on pages 10-20 through 10-22 each have their own set of facts and assortment of claims, but for the most part are of the same general character. They involve frivolous claims by “crazies” who think they can make some money suing Scientology; suits against former spouses or business associates naming the Church to seek a tactical advantage; and a considerable number of suits inspired by the Cult Awareness Network, which bombards the person with negative information about the Church and then refers them to an attorney who tells them they can sue the Church and get rich. (See the “Introduction To Question 10″ for further information on CAN) . There are a few instances, like the Rabel case, where a stereo speaker fell from the window of a Scientology mission injuring someone walking below, where there was a valid claim which the Church equitably settled. Not one of the cases asked about in Question 3.e.1 has been adjudicated by a court; thus all the claims listed are unproven.

Because many of these suits are refund suits, it is useful first to review the Church’s refund policy. It has been a longstanding policy of the Church that if someone is dissatisfied with their Scientology services and asks to have their contributions returned within a three month period, these amounts will be returned. Likewise, if the person asks for return of contributions for which no services were received (i.e. an advance payment), there is no three month limitation period. Anyone newly enrolling in services at a Church of Scientology is informed of the policies and signs an agreement to abide by them. As a further condition of receiving a refund or repayment, the person understands that they may not again receive services from the Church.

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Within the Church, there are two separate terms: A “refund” refers to a return of contributions to a parishioner within 90 days of participating in religious services while a “repayment” refers to a return of a parishioner’s advance payment before he or she has participated in religious services. For simplicity, the following discussion will use the term “refund” to describe both types of transactions, because both involve a return of parishioner contributions.

The Church’s refund policy is exceedingly fair. If someone isn’t happy with Scientology — which is a very small minority of people — he simply has to make a proper request for his donations back, agree to forego further services and his donations will be returned. For the Church, in addition to the fact that this policy aligns with Scientology principles of exchange, it also serves the purpose of allowing our churches and the parishioners who are very happy with Scientology, to carry on without the unhappy few in their midst.

The presence of a considerable number of refund suits in the following list is directly related to the influence of CAN and CAN attorneys. As described in the “Introduction to Question 10,” CAN’s modus operandi is to seek out anyone who is unhappy with Scientology, feed them negative information and then refer them to an attorney. The CAN attorney then convinces the person that he can not only get a refund of his donations, but by allowing the attorney to handle the claim he can get damages as well, and possibly get rich. As will be seen in the descriptions of the cases that follow, almost one for one such suits are ultimately settled for the refund amount the person could have obtained in the first place simply by requesting it.

It is also of interest that we know of no suit filed for refund that wasn’t instigated by CAN. In fact, the Church rarely has any refund requests, by suit or otherwise, except when instigated by the IRS-sanctioned CAN. And in most cases, further discussion reveals the person was quite happy with his service at the Church and seeks his money back only after CAN has told him how “terrible” Scientology is.

Descriptions of individual suits follows:

Mira Chaikin v. Church of Scientology. L. Ron Hubbard. et al.: The following is from the judge’s ruling dismissing the case, which says all that needs to be said about this case:

“In this pro se complaint, which can most charitably be described as bizarre, plaintiff Mira Chaikin (‘Chaikin’) alleges that the various defendants are exploiting her, impersonating her and ‘implanting’ her.

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She alleges that because defendant Ron Hubbard has been ‘flowing to (her) sexually and romantically’ she is his ‘true wife,’ as well as ‘having been (his) wife in (her) last life who was murdered. ‘ Thus, she further alleges, defendant Mary Sue Hubbard is ‘in no way the wife of Lafayette Ron Hubbard ‘ but has merely been impersonating plaintiff with resulting severe endangerment of plaintiff’s mental health.

“As against the Church of Scientology, Chaikin appears to be claiming that the organization is acting contrary to its theoretical foundation. For the reasons set forth below, I dismiss the complaint.

“An action may be dismissed ‘when the allegations of the complaint are beyond credulity . . .’ [cite omitted]. I find plaintiff’s allegations, to the extent they are comprehensible at all, to be patently incredible.

Terry Dixon v. Church of Scientology Celebrity Center of Portland, et al.: This is a typical CAN-influenced suit for refund by Terry Dixon, which also asks for damages based on claims of breach of contract and breach of fiduciary duty. Dixon alleges that the Church of Scientology Celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Flag Service Org, breached a contract with him and their fiduciary duty, by failing to deliver to him results he considers to have been promised him from Scientology religious services. The suit was filed in December 1990.

Each of the three churches filed motions to abate the case pending arbitration, based on enrollment agreements signed by Dixon while he was in the Church, which include a clause that any disputes between the Church and the parishioner must be arbitrated. The judge ordered the case to arbitration and it has now been settled for the refund amount.

John Finucane, David Miller, Alexander Turbyne v. Emery Wilson Corporation, et al.: This suit was instigated directly by CAN and CAN attorney Toby Plevin. All of the plaintiffs are dentists who were clients of Sterling Management Systems (Emory Wilson Corporation) for a brief period of time and also briefly received some services from the Church of Scientology of Orange County. Sterling is a company that has been owned and run by Scientologists and uses methods of organizational administration developed by L. Ron Hubbard to help business people improve their businesses. Some of these individuals, upon being impressed with Mr. Hubbard’s works, have become interested in Scientology.

The lawsuit was filed in LA Superior Court on December 26, 1991 by Finucane, Miller, and Turbyne, who reside, respectively, in Aiken, South Carolina, Sacramento, California, and Sohigan, Maine,

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against Sterling and the Orange County Church. The complaint contains causes of action for deceptive trade practices, fraud, and injunctive relief, alleging that Sterling misrepresented itself to be an independent management training organization when, in fact, it was a part of the Church of Scientology and operated as a recruitment office for the Church with the goal of procuring new members and getting them to take Church services.

Miller and Turbyne settled their cases with the Church of Scientology of Orange County for a refund, but not with Sterling, leaving all plaintiffs with claims against Sterling, and only Finucane suing the Orange County Church. Finucane has so far refused offers from the Church to have his claim arbitrated as per the enrollment agreement he signed. The Church therefore filed a counter-claim and criminal complaint against Finucane relating to his breach of contract (his refusal to abide by the enrollment agreement) and invasion of privacy (for secretly tape-recording a conversation with a Church staff member and then broadcasting a heavily edited version of it on national television).

Dorothy Fuller, an individual v. Applied Scholastics International, et al.: This is another Toby Plevin, CAN instigated suit filed in April 1992. The claims are breach of lease, fraud and negligent misrepresentation. Applied Scholastics leased a residential property from Fuller who claims that the house was misused in several ways, including housing more people than agreed upon in the lease, use of the house as a child center, dormitory style living, and fabrication of products for resale. Thus it is a minor property dispute escalated by Plevin into tort litigation. It is expected that this suit will be quickly settled.

Lisa Stuart Halverson v. Church of Scientology Flag Service Organization, et al.: This was another suit for refund that CAN attorney Toby Plevin filed, alleging several torts for purposes of effect. The claims were for violation of the deceptive practices act and fraud, based on Halverson being told she could get a refund and then not being able to get it. The suit was settled for the refund amount.

Thomas and Carol Hutchinson v. Church of Scientology of Georgia, et al.: The complaint in this suit is virtually a carbon copy of the complaint in the Corydon case, one of the Michael Flynn cases listed at page 10-13 of our prior response. Although the Corydon case was settled, Hutchinson apparently got a copy of the complaint, very likely provided by CAN, and felt its inflammatory claims against a wide array of Church organizations would add spice to what is otherwise a suit for refund of money paid to the Church of Scientology of Georgia. The claims are stated as fraud and deceit and infliction of emotional distress, seeking unspecified damages and injunctive relief. However, the claims revolve around a core that the teachings of Scientology differ from those of

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Fundamentalist Christianity, a topic constitutionally barred from secular adjudication.

The Church anticipates dismissal of this suit, favorable summary judgment or settlement for a refund of the Hutchinson’s donations.

Mark Lewandowski v. Church of Scientology of Michigan, et al.: This suit was against the Church of Scientology of Michigan and two individuals, one former and one current staff member of the Michigan Church. Mark Lewandowski, who had previously been under psychiatric treatment with a substance abuse disability, took some courses at the Church of Scientology of Michigan in 1988. Although Lewandowski’s relationship with the Church was short, in his suit he alleges that the Church committed consumer fraud by failing to ascertain his unstable mental condition, fraud, for allegedly misrepresenting the nature of the courses he took, and intentional infliction of emotional distress through the above. The nature of Lewandowski’s claims and allegations strongly suggest that he was influenced to file suit by CAN.

This case went before a mediation panel where a settlement was accepted by the Lewandowski’s attorneys for a refund. The Church of Scientology of Michigan is in the process of paying this amount to end the suit.

Peter and Francis Miller v. Church of Scientology et al.: The suit was filed on April 29, 1991 by CAN attorney Toby Plevin against several organizations, including CSI, Church of Scientology Orange County and Sterling Management Systems. This suit makes claims not unlike those of the Finucane suit described above, that they were misled into Sterling and Scientology and therefore want their money back. The claims include fraud, breach of express and/or implied warranties, invasion of privacy, intentional infliction of emotional distress and negligence. The Millers’ claims against Sterling were arbitrated, with the millions the Millers originally claimed reduced to the refund amount. The case is still at the pleading stage as regards the Church parties.

Dee and Glover Rowe v. Church of Scientology of Orange County, et al.: This is another Toby Plevin/CAN suit naming the Church of Scientology of Orange County, RTC, CSI, the Sea Org and Does 1-100. It was filed on October 7, 1991, alleging fraud/deceptive trade practices, invasion of privacy, false imprisonment, assault, and intentional infliction of emotional distress. The suit essentially repeats the allegations made by the Rowes in the May 6, 1991 edition of Time magazine, that they took courses at Sterling Management Systems and allegedly under the guise of management training were induced to take Scientology services. Discovery in this case has demonstrated that the Rowe’s claims are contrived and maliciously false, and that these are people with a history of criminal activity. Glover Rowe embezzled

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money from a fraternity in college and Dee Rowe has a history of emotional turbulence starting long before any contact with any Scientology organization. One of their claims, which has already been dismissed on summary judgment, was that the Church bugged their hotel room. This was a completely fabricated claim as seen by the fact that the staff of the hotel testified that this was impossible and that the Rowes could “support” it only by stating without any proof that their room “must have been bugged.” It was not, a fact quickly recognized by the court. The Rowes were referred to Time magazine by CAN and continue to be encouraged by CAN.

Pretrial summary judgment motions are still being considered in this case and the Church expects all of the Rowe’s claims to be dismissed. The Church also expects to prevail on a counterclaim naming the Rowes and CAN defendants, for libel and breach of contract, and that by deprogramming the Rowes, CAN interfered with the Church’s relationship with the Rowes.

Frank and Joan Sanchez v. Sterling Management Systems, et al.: This is yet another CAN-inspired suit involving a dentist, Frank Sanchez and his wife, Joan Sanchez, filed against Sterling, the Church of Scientology of Orange County and IAS.

The Sanchezes attended a Sterling seminar at the end of October 1989, after which Sanchez asked Sterling to administer a program in his office. The Sanchezes went to the Church of Scientology of Orange County in December 1989 and were involved with the Church for less than a month. Sanchez wanted help with his marriage as he and his wife had marriage counseling over a twenty year period but it had been unable to straighten out problems arising from twenty years of adulterous affairs. Joanne Sanchez was opposed to the trip to Sterling and Orange County and went only because her husband wanted her to go.

The Sanchezes paid some money to Sterling and the Orange County Church, but then returned to New Mexico and refused further participation in any services at either Sterling or the Church, which would appear to have been directly caused by negative information provided them by CAN. Although the bottom line of what they are seeking is a refund of their money, their complaint asks for damages for breach of contract, intentional infliction of emotional distress, breach of covenant of good faith and fair dealing, for fraud and all the usual, boilerplate CAN allegations. The suit was dismissed with respect to the Orange County Church and it is expected that ultimately it will be settled for a repayment of the money they paid to Sterling.

Thomas Spencer v. The Church of Scientology, et al.: This suit was settled for a refund and dismissed on August 31, 1992. It was another suit for refund laced with the standard CAN claims,

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breach of contract, fraud, and intentional infliction of emotional distress.

Irene Zaferes v. Church of Scientology: This was a personal injury suit filed in April 11, 1989. The plaintiff was a Hollywood woman who claimed that a wrongful death occurred when her brother, Luke Andrea (a.k.a. Louis Zaferes) died on April 12, 1988, some months after he did some “heavy construction work” at the Church of Scientology Flag Service Org, while having a heart condition. Zaferes was acting as her own attorney. The case was dismissed.

Jo Ann Scrivano v. Church of Scientology of New York, et al.: Jo Ann Scrivano, had an extensive psychiatric history including the use of heavy psychiatric drugs, before she came to the Church of Scientology Mission of Long Island in January of 1986. After receiving a small amount of introductory level auditing for which she donated $450, Mrs. Scrivano became upset and blamed this on her auditing. She was offered her money back, but refused it and left. She subsequently filed a suit naming not just the Long Island Church but also a number Church organizations that had never heard of her. She even alleged an array of torts and sought $10,000,450 in damages. Her claims include Fraud, Constructive Trust, Breach of Fiduciary Duty, Malpractice, Negligence, and Intentional Infliction of Emotional Distress. None of these claims is true, and both Scrivano’s own attorneys and the judge assigned to the case have encouraged her to accept a token settlement offered by the Church just to get rid of the suit.

Marissa Alimata and Richard Wolfson v. Church of Scientology of California, etc., et al.: This case, of Marissa and Richard Wolfson, furnishes an excellent example of how any fruitcake can file a civil suit. The Wolfsons sued for $1 billion alleging intentional infliction of emotional distress and that the conduct of the Church was “outrageous, fraudulent, malicious, abusive, indecent, intentional, unduly influential, willful, wanton and beyond bounds of common human decency.” They claimed to have been subject to “undue influence” and to have suffered “violation of fiduciary relationship,” interference with prospective economic advantage, loss of consortium and fraud. Before winning summary judgment on all of the Wolfsons’ claims, the church was required to endure the public airing of delusional charges and suffer through such bizarre conduct as Mr. Wolfson appearing at his deposition dressed as Mrs. Wolfson.

Sherry Fortune v. Church of Scientology American Saint Hill Organization and Chuck Tingley: This case was brought by Sherry Fortune against the Church of Scientology American Saint Hill Organization and Chuck Tingley, her former husband, an independent contractor who had been a computer programmer at the Church. The case was essentially a domestic dispute between Fortune and Tingley that involved the rights to some computer software Tingley had developed. Fortune believed that naming the Church in her suit

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would give her additional leverage over her former husband so she alleged that the Church was guilty of intentional interference with economic advantage, fraud and misrepresentation, intentional infliction of emotional distress, and conversion. The frivolous claims against the Church were dismissed and Fortune and Tingley reached a settlement between them.

Gary and Susan Silcock v. Church of Scientology, Mission of Salt Lake, et al.: The Silcock’s received some religious services from the Church of Scientology Mission of Salt Lake in 1984 and then asked for a refund. The refund amounts requested were paid to the Silcocks and the suit was dismissed in September 1986.

Pedro H. Rimando and Irene Marshall v. The Church of Scientology of San Francisco, et al.: This suit was a suit brought by the parents of Rodney Rimando, a former Church staff member who committed suicide in November 1986 by jumping out of a window of a Church of Scientology building. The suit’s claims were wrongful death, intentional infliction of emotional distress, negligence, and outrageous conduct. The suit claimed that Rimando came to the Church of Scientology of San Francisco for spiritual guidance and that no precautions were taken to prevent his suicide or see that he got psychiatric help. This suit only came about because a CAN attorney incited the parents to file it. The parents did not really believe the Church to be responsible for their son’s suicide. The suit was never served and was voluntarily dismissed with prejudice.

Wendy and William Rabel v. Eric Rising, Jane Doe Rising, Church of Scientology Mission of University Way, et al.: As described previously, this suit involved an incident where a stereo speaker placed in the window of the University Way Mission in Seattle, Washington fell out of the window and struck Wendy Rabel on the head. A settlement payment was negotiated and the case was dismissed in January 1988.

Francine Necochea, a minor child, by her Guardian Ad Litem Cecilia Garcia v. Church of Scientology, et al.: This was an insurance suit dealing with an incident in 1983 when a girl on a motorized bike hit a Golden Era Studios Bus. She sustained a broken leg and other minor injuries. The girl’s family sued the Church and the Church’s insurance company handled the case and settled it for $5,000.

Roxanne Friend v. Church of Scientology International, et al.: Some background leading up to the filing of this suit will help make it understandable.

Shortly after breaking away from the Church of Scientology, Roxanne Friend became romantically involved with a non-Scientologist. After an on-again, off-again relationship, they

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finally broke off the relationship in August 1989. For months after this Friend experienced what she later characterized on a medical questionnaire as a “nervous breakdown.”

Documents authenticated by Friend in her own hand illustrate her state of mind during this period, and outline the series of bizarre and violent acts that she admits were preceded and prompted by the break-up with her non-Scientologist boyfriend. She first secretly absconded with her former boyfriend’s young son and molested him sexually. She next tried to persuade a karate instructor to murder her former boyfriend. Failing this, she wrote letters to the ex-boyfriend claiming that he had drugged, hypnotized and forced her to perform lewd sexual acts for he and his friends. When all of this further alienated the man, her conduct became more bizarre. She scrubbed her mare’s vagina with bleach causing the animal severe pain and then physically assaulted and injured the proprietor of the stable when she tried to intercede on behalf of the horse. A bit later Friend was stopped for dangerous reckless driving and resisted arrest by assaulting a police officer.

Church staff who knew Friend and Friend’s brother, nonetheless attempted to help by taking her to doctors in Los Angeles and then escorting her to Florida to be in a less stressful environment where she could also be examined by doctors. Once in Florida, Friend refused help, and went to the police with the hallucinatory claim that someone put crack cocaine in her cigarettes to account for her bizarre behavior. She was taken to a hospital at her insistence. The Church attempted to get her to submit to a full medical examination, knowing that most such behavior episodes are initially prompted by some undetected and untreated physical ailment. Friend refused.

Friend was then taken to her mother along with a written recommendation from the Church that she receive a full medical examination.

Friend’s mother ignored the recommendation and Friend was later arrested, incarcerated in a mental hospital and sent for counselling at a Jewish support group. A psychiatrist at that group turned her over to the Cult Awareness Network (CAN). As they do in every such case, CAN promptly pumped Friend full of false and derogatory information about the Church and turned her over to their attorney Plevin. Up to that point, when CAN became involved, Friend had never considered the efforts of the Church members to help her as anything other than help, and despite her agitated state, had never accused the Church of causing the condition — indeed she recognized that the break-up of her ill-fated romance was what brought it on. After being manipulated by CAN, however, Friend decided the Church was to blame and should pay her damages.

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Months after the Church had its last communication with Friend, she finally received two medical examinations. The first found nothing wrong with her. The second found that she had a large lump in her abdomen and it was diagnosed as a very rare form of cancer. Friend’s CAN attorneys, the same attorneys who had represented the Aznarans (see description of the Aznaran litigation in the response to your prior Question 10.d) considered this the next best thing to a plane crash, and suddenly saw in Friend the prospect of a circus trial with a dying woman to play on the emotions of a jury. Her attorneys rushed to court with a lawsuit that claimed the Church was responsible for her cancer not being earlier detected by not allowing her to see a doctor, and that all her psychotic episodes stemmed from this undetected physical condition. The attorneys characterized the efforts of Church members to help her as examples of assault and battery, wrongful imprisonment, invasion of privacy and intentional infliction of emotional distress. The suit also claimed the Church was guilty of fraud and false advertising and breached express and implied covenants in representing it would refund money to those not satisfied but then failing to do so.

These claims were completely unfounded as discovery proved that Friend had seen many doctors on a regular basis during the period that she was at the Church, both at the Church’s direction and on her own, and thus the Church took the appropriate measures to see that she got the care and diagnosis needed. Her own doctor testified that the type of cancer Friend contracted was very rare and virtually undetectable by modern medical science until well developed and spread. The doctor testified that the only way to detect such cancer was for the patient to complain of a lump and then have a biopsy performed. Friend subsequently testified that she had felt a lump developing for two years, but never mentioned it during that time to the several doctors she did see.

The Church settled this case for nuisance value, for less than the cost of a trial, even if the Church prevailed. David Miscavige met with Friend in settlement talks as he was concerned that her attorneys would leave her destitute when doctor reports were submitted in court stating she only had several months left to live. Once settlement terms were generally agreed upon, the first thing Friend did was ask whether if she miraculously recovered, could she get back into the Church and take services. Thus, in the final analysis Friend herself acknowledged that her frightening claims against the Church were contrived.

To our knowledge, despite the claims that were made by Friend and her attorneys of imminent death, she is still alive.

Bruce and Lynnel Arbuckle v. Skip Pagel M.D., Church of Scientology Celebrity Center Portland, et al.: This suit was brought by the parents of Chris Arbuckle, a former Church

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parishioner, who died of kidney failure. The suit’s claims were wrongful death against Scientologist Dr. Skip Pagel and the Tuality Community Hospital, and breach of fiduciary duty against the Church of Scientology Celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Mission of Fairfax. Arbuckle, a 25-year-old chiropractor, participated in the Purification Rundown after first receiving a physical examination by Dr. Pagel. Subsequent to this Arbuckle died, in August of 1986, of a heart attack resulting from a kidney failure which followed a dying liver, with the cause of the dying liver attributed to “probably hepatitis” on the death certificate. The complaint alleged that the Purification Rundown caused this to occur. What was found on further examination was that Arbuckle was known to be abusing steroids for body building purposes, that he had undergone a bout of hepatitis prior to doing the Purification Rundown (which he did not disclose to Dr. Pagel), and that a pathologist familiar with Arbuckle’s death stated that his liver died as a result of Hepatitis B, and that there was no way the Purification RD could have caused this to occur. The suit was settled and dismissed in August 1990.

In re Dynamic Publications Inc.: Dynamic Publications was a company owned by two now-expelled former Scientologists, who filed for bankruptcy in early 1987 in United States Bankruptcy Court for the District of Maryland. The trustee in bankruptcy, appointed by the court to collect all the assets of the company, determined that these individuals had made donations to Churches of Scientology and Scientology-related organizations through the company and sought to get some of this money back as having been fraudulently conveyed when the company was in debt. The suit was settled in January of 1991.

Ted Patrick, et al. v. Church of Scientology of Portland, et al.: The Church of Scientology of Portland filed a suit against the deprogrammers of Julie Christofferson in September, 1980, suing them for barratry and practicing medicine without license. Ted Patrick, a convicted felon, was one of the deprogrammers. He filed a counterclaim in September 1980 alleging abuse of process and claiming that the Church’s suit was frivolous and vexatious. The attorney on the suit was an associate of Michael Flynn associate. The counter-suit was ultimately dismissed.

Gregory F. Henderson v. A Brilliant Film Company, et al. and Gregory F. Henderson v. Marvin Price, et al.: Henderson had a contract with Brilliant Film Company to shoot a movie written by L. Ron Hubbard. Brilliant Film went bankrupt and Henderson filed suit on May 14, 1982 against a series of defendants, including L. Ron Hubbard. It raised financial claims and also that there had been a conspiracy to induce Henderson to agree to a loan that would not be repaid and to keep him from pursuing his legal remedies. He

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also filed a second suit, against Marvin Price, an ex-Scientologist who had was the mission holder of the Church of Scientology Mission of Stockton stating claims for negligent misrepresentation, fraud, breach of fiduciary relationship and conspiracy to defraud. The suit with Brilliant Film Company was settled and the other suit was then dismissed with prejudice in July 1984.

Peter Siegel v. Religious Technology Center, et al.: Peter Siegel is a “sports hypnotherapist”, doing business as “Achievement Plus Institute”. Siegel used a logo similar to a trademark owned by RTC. Attempts were made prior to litigation to settle Siegel’s confusion as to the ownership of the mark, which was registered by RTC in December 9, 1986, and to obviate the need for litigation. Siegel was uncooperative in this and RTC and CSI filed suit. Siegel filed a pro per cross-complaint on December 20, 1989 for registration of the mark in his name, cancellation of RTC’s registration, trademark infringement, intentional infliction of emotional distress and revocation of RTC and CSI’s tax-exempt status. Siegel has no valid claim to this trademark and RTC’s summary judgment motion is presently pending. Although Toby Plevin   came in at the last minute to represent the defendant at the summary judgment hearing, the court, after hearing her argument, told Plaintiff’s counsel to propose an order on the summary judgment motion to be written from the viewpoint that the court was ruling in Plaintiff’s favor. The court has also asked for more detailed information concerning RTC’s pending motion for attorneys’ fees.

Steve Dunning v. Church of Scientology, et al.: Dunning was a Church staff member for three months in 1983 and came and went for very brief periods after that. He is currently in a half way house for psychiatric patients where he committed himself because he could not function in the outside world, has an outstandingwarrant for his arrest in North Carolina for assault with a deadly weapon and another arrest for threatening someone with a knife. He filed a suit against the Church asking for over $5 billion claiming breach of contract, breach of implied covenant of good faith and fair dealing claims, fraud and intentional infliction of emotional distress. The suit was completely groundless and it was dismissed in favor of the Church in August 1987 when Dunning failed to appear at the hearing on the Church’s Motion for Entry of Final Judgment.

Jeff and Arlene Dubron v. Church of Scientology International, et al.: This suit which named 21 defendants and 50 “John Doe” defendants, alleged claims of defamation, invasion of privacy, outrageous conduct, and negligent infliction of emotional distress. The suit stemmed out of an incident where some Church staff posted a notice around Scientology churches calling for Scientologists to report unethical conduct and used some facts concerning Dubron as an example. The suit was voluntarily dismissed.

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Vicki Adler v. American Sun, Inc., Church of Scientology of Los Angeles: This suit alleged emotional distress as a result of Adler’s alleged brainwashing by American Sun, a business owned and operated by several Scientologists. The suit was essentially an employment dispute between Adler and American Sun where Adler made Scientology an issue to intimidate the company. The suit was settled and dismissed in 1988.

Benham v. Church of Scientology Celebrity Center of Dallas This was a personal injury case in Dallas, Texas. Vicki Benham alleged that she was injured while on the Purification Rundown and that she had emotional distress. The case was settled in 1991 for a refund and nominal nuisance fee which was paid by the insurance company.

Michael Burns v. The Recording Institute of Detroit, Inc., et al.: This case was filed on July 25, 1991 against the Church of Scientology of Michigan, Church of Scientology Flag Service Org and several individual Scientologists, and a recording school owned by a Scientologist. Burns claimed that he was subjected to mind control by the Scientologist from the recording school and that this induced Burns to become involved with Scientology and join Church staff, which prevented him from pursuing his studies in the recording field. The case alleged fraud, breach of contract, intentional interference with a contractual relationship, intentional infliction with emotional distress, and conspiracy. The suit has no merit and is expected to be dismissed shortly.

Clay Eberle and Eberle & Jordan Law Firm v. Church of Scientology of California: Eberle is an attorney who formerly represented refund/repayment claimants suing the Church. His suit alleges that he was damaged when CSC settled directly with some of the claimants as the claimants then did not pay him attorneys’ fees. In April 1988, the Court granted the Church’s summary judgment motion dismissing the case and ruled that there was a qualified privilege for the Church to deal directly with its former members notwithstanding the retention of an attorney by the former member, and there was no evidence that the Church intended for the persons to breach their attorney/client contracts with Eberle, and no evidence that the Church caused the attorney/client contracts to be breached.

Mario Metellus v. Church of Scientology of New York, and Linda Barragan: Metellus was a non-Church member who responded to an advertisement placed by the New York Church for part-time help. After working less than a day, on November 29, 1989 he was dismissed. Metellus refused to leave and the police had to be called in to remove him from the premises. Metellus even refused to respond to the police officer’s directions to leave and

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was arrested. When Metellus refused to allow the police to take his fingerprints, he was held in custody. The complaint, claimed that Metellus was falsely accused of criminal trespassing and falsely arrested. Metellus also sued the City of New York. The complaint against the New York Church was settled for a nominal amount.

Subparagraph 10.e(ii)

In this subparagraph, the Service has asked for a copy of any verdict, decision or judicial finding that any Scientology-related organization or individual was involved in the commission of an intentional tort or violation of criminal law. Copies of these documents are attached as Exhibit 10-P. There were verdicts, or decisions with judicial findings of intentional torts in only four of the cases discussed on the pages of the prior submission referenced in this question, and all of these cases were discussed in the response to Question 4.d of the Service’s May letter — the Stifler case, the Christofferson case, the Wollersheim case, and the Armstrong case, discussed at pages 10-12; 10-15 to 10-16; 10-16; and, 10-12 respectively, of our prior response.

The Service has asked the Church to state whether it agrees with the findings of the Courts in each of the above decisions. The Church’s response to this part of the question follows:

Lawrence Stifler v. Church of Scientology of Boston:

The Stifler case was, for all practical purposes, won by the Church, as the only money judgment in the case was entered against an individual Church member for $979 in medical bills. This was one of Michael Flynn’s stable of cases described in our prior response at 10-12. Lawrence Stifler accosted a staff member of the Boston Church, Roger Sylvester, on the streets of Boston, Massachussetts in the early 1980’s. Stifler verbally abused Sylvester for attempting to disseminate his religion. Both men lost their tempers and came to blows. As a result of the altercation Stifler suffered a minor injury to his knee. Stifler filed suit claiming $4,250,000 in damages.

During the 1984 trial, Flynn attempted to show that the altercation was part of a nefarious Church of Scientology scheme. Flynn sought to introduce his standard retinue of professional anti-Church witnesses in order to reap a large punitive damages award. The Court refused to go along with this charade, bifurcated the Boston and California Churches from the trial and prohibited Flynn from introducing any of his general Scientology issues or “evidence.”

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Stifler claimed to have suffered major trauma to his knee which had permanently incapacitated him. Yet, when the evidence was presented at the trial, the defense showed that whatever injuries he may have suffered at the time of the altercation with Sylvester were extremely minor. Evidence supporting this defense included photographs of Stifler engaging in competitive stair climbing up skyscrapers at the very time he claimed to be incapacitated. The jury awarded a mere $979.00 against Sylvester to cover Stifler’s medical costs, and the Church defendants were dismissed from the case.

The Church disagrees with the fact that Stifler was awarded any money at all. The Church agrees with the dismissal of the Church of Scientology of Boston and the Church of Scientology of California from the case.

Church of Scientology v. Gerald Armstrong:

We have included some background information here and an epilogue to the decision in question. That is because the Service has continuously thrust the Armstrong case at us, demanding an explanation. The Armstrong case decision was so inflammatory and intemperate that it was used to stigmatize the Church in the legal arena and make other outrageous decisions possible. As we shall demonstrate below, all this decision ever involved was Armstrong’s state of mind, which subsequently obtained evidence proved conclusively to be one sordid, sado-masochistic nightmare. Furthermore, Armstrong’s state of mind horror stories have fallen on deaf ears in recent litigation. Relying on Armstrong or the Armstrong decision is wholly unjustified.

During the later years of his tenure as an employee of the Church, Gerald Armstrong was placed in charge of a huge quantity of documents that belonged to Mr. Hubbard that contained private and personal information regarding Mr. Hubbard. Part of his duties included research to support the work of an author who had been retained to write an authorized biography of Mr. Hubbard.

In late 1981 after the initial clean out of the higher levels of the Guardian’s Office, and when investigations were turning toward identifying those in alliance or sympathy with the GO, Armstrong suddenly vacated Church premises and left its employ, taking with him huge numbers of confidential documents that belonged to Mr. Hubbard or his wife which the Church was holding as bailee. It was no coincidence that Armstrong left at that time because he had repeatedly expressed his ambition to join the GO and work in Bureau 1 (Information Bureau), the same area of GO that had been responsible for the criminal acts of the 70’s. Armstrong also had been a long-time friend and confidant of Laurel Sullivan. Just prior to the take over the GO taking place, Sullivan had made a

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proposal to place convicted GO members into corporate positions of control throughout the top of the ecclesiastical hierarchy. She was also found to be spying on the CMO for the GO during the early days of the CMO’s investigation into the GO. Armstrong assisted and supported Sullivan in her efforts.

In the summer of 1982 the Church received evidence that Armstrong had stolen thousands of documents from archives when he left the Church. Church counsel wrote to Armstrong, demanding that he return them. Armstrong denied the theft.

Once the demand for return of documents was made, Armstrong turned the stolen documents over to Michael Flynn, with whom Armstrong decided he could make a lot of money.

In August 1982, the Church sued Armstrong for conversion, breach of fiduciary duty and confidence, and invasion of privacy based on Armstrong’s theft of extensive amounts of private papers owned by the Church or the Hubbards. The Church sought return of the papers and the imposition of a constructive trust over them, and any proceeds derived from them, as well as preliminary and permanent injunctive relief against dissemination or disclosure of the private documents.

In September 1982, Armstrong, represented by Flynn, answered the complaint and raised the defense that he was justified in stealing the documents entrusted to him as a fiduciary because he wished to make public information about Mr. Hubbard and the Church out of fear for his safety and well-being. His defense was stricken on four different occasions by three different judges.

In April 1984, the case was assigned for trial before Judge Paul Breckenridge, Jr. At that time, the Church presented motions in limine to prevent Armstrong from introducing the stolen, confidential documents since their introduction into evidence would vitiate the very rights of privacy the action sought to protect. The Court not only allowed Armstrong to introduce the confidential documents, but also allowed him to raise his four-times stricken defense with a new perverted twist. He would not have to prove there was anything to fear from the Church, but only his state of mind when he stole the documents. The Church was completely ambushed in the trial by these documents, as in most cases Armstrong had stolen the only copy that existed. Then, after he and Flynn had ample time to prepare their case from them, the documents were placed under seal in the Court. Although the inflammatory allegations that Armstrong made and purported to support with these docments could have been shown to be false or grossly distorted by other evidence, the Church had no chance to prepare and put on that evidence before being hit with the documents in court.

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During the trial, Armstrong presented testimony from numerous witnesses who testified for the purpose of establishing Armstrong’s supposed “state of mind” with regard to his alleged justification for stealing the documents. Each of the witnesses was hostile to the Church and, in fact, was a plaintiff against or taking a position adverse to the Church in other litigation in which Flynn was the counsel. Each witness gave general testimony about his or her own viewpoint on relationships with the Church in an effort to bolster Armstrong’s state of mind justification defense.

The Court did not allow the Church to put on evidence to rebut the testimony of those witnesses. The Court also declined to allow the Church to put on evidence explaining the confidential documents and precluded the Church’s proffered rebuttal evidence on the ground that the adverse testimony was admitted only for the purpose of establishing Armstrong’s state of mind and not for the truth or falsity of the matter testified about.

On July 20, 1984, Judge Breckenridge issued a Statement of Intended Decision which became final a month later, which held that the Church had “made out a prima facie case of conversion…, breach of fiduciary duty, and breach of confidence” (as the former employer who provided confidential materials to its then employee for certain specific purposes, which the employee later used for other purposes to employer’s detriment). Judgment, however, was entered in favor of Armstrong. The Statement of Decision adopted as the facts of the case the allegations which Armstrong had made in his trial brief. These allegations included the statements on which Armstrong premised his justification defense; i.e., that defendant “… became terrified and feared that his life and the life of his wife were in danger, and he also feared he would be the target of costly and harassing lawsuits.” The judge went on to pontificate on the psychological mind-set of not only Mr. Hubbard, but Scientology at large. The only lawsuit that there was to fear was the one that was ultimately filed for return of the stolen documents. It never would have been brought had Armstrong voluntarily returned the documents when asked, despite the theft.

The IRS CID, however, absorbed Breckenridge’s findings as the definitive statement of what Scientology is, and used this decision and the Flynn witnesses who testified at the trial as the nucleus of their investigation. The Church tried repeatedly to explain to the IRS that the Armstrong decision was nothing more than a statement concerning Armstrong’s state of mind. The CID and EO weren’t interested, as they found in Armstrong a kindred spirit who echoed their own sentiments. They therefore embraced Armstrong and the Flynn witnesses and used their fabrications as the basis for their investigations and denials of exemption.

Evidence found after the Armstrong trial proves not only that Armstrong never was afraid of the Church as he claimed at trial,

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but that he was engineering a plan to infiltrate and take over the Church at the behest of the CID.

Shortly after the trial, Armstrong’s conspiracy against the Church surfaced when he sought, at the behest of IRS CID agents Al Lipkin and Phillip Xanthos, to recruit Church employees and organize them against the Church. To this end Armstrong contacted a Church member and former friend to enlist his aid in recruiting a group of dissident Scientologists to overthrow Church management. After this individual, however, informed the Church of Armstrong’s plan, it obtained permission from the Los Angeles Police Department to conduct undercover surveillance of Armstrong. The Church then used two “undercover” persons to collect evidence of Armstrong’s machinations.

Videotaped conversations show that Armstrong intended to recruit additional persons to create “as much shit for the organization as possible.” Armstrong intended to foster this plan by creating sham lawsuits against the Church, seeding the Church’s files with forged and “incriminating” documents which would then be seized in a raid by the Internal Revenue Service as part of the then ongoing CID investigation, taking control of the Church after such a raid, and lying under oath to prevent discovery and to protect Armstrong’s co-conspirators.

Armstrong admitted on videotape that there was no basis in fact for his justification defense since he had no fear that anyone associated with the Church could or would harm him. Speaking with an undercover operative known to Armstrong as “Joey,” Armstrong revealed his “justification” defense for the fraud it was, and that his only “fear” was that his conspiratorial plans would be discovered:

JOEY: Well, you’re not hiding!

ARMSTRONG: Huh?

JOEY: You’re not hiding.

ARMSTRONG: Fuck no! And. . .

JOEY: You’re not afraid, are you?

ARMSTRONG: No! And that’s why I’m in a fucking stronger position than they are!

JOEY: How’s that?

ARMSTRONG: Why, I’ll bring them to their knees!

(Exhibit 10-Q).

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Armstrong requested that the undercover persons give him Church documents so that he could forge documents in the same style. In particularly revealing language with respect to the documents he stole and later relied on at trial, Armstrong stated with respect to forgeries that he can “create documents with relative ease” because he “did it for a living.” (Exhibit III-10-Q).2

Armstrong then planned to “plant” forged, incriminating documents in the Church’s files so that those documents could be later discovered and used to discredit the Church. Armstrong planned to “tip off” investigators for the Criminal Investigations Division of the Internal Revenue Service once the phony documents were safely planted so that they could be “discovered” in a later IRS raid.

JOEY: (Laughs) Great, so what kind of stuff are we going to want to create and who’s going to get it?

ARMSTRONG: That’s what we need to talk about!

* * *

JOEY: — and what do the agencies want on this?

ARMSTRONG: O.K. Well, the agencies have asked for some specific things, that’s all they asked for. Now – – * * *

JOEY: Now, who wanted this?

ARMSTRONG: CID.

(Exhibit III-10-Q).

The videotapes also reveal Armstrong’s true motivations and his systematic and fraudulent sabotage of the trial. Armstrong stated he would bring the Church to its knees and that the fomentation of litigation was one of the prime vehicles for accomplishing this objective. He stated:

ARMSTRONG: That they’re going to lose in a whole bunch of jurisdictions. They’re going to lose, they’re going to lose, they’re going to lose (tapping his palm each time he said it). And they’re going to start losing (shrugs) 1985. They only even have to lose one, and attorneys all over the country are going to jump on the fucking bandwagon. And watch, you know, all of a sudden you’ve got precedents being established, which are incredible.

(Exhibit III-10-Q).

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Armstrong further explained that, from his perspective, neither the truth nor good faith play any significant role in litigation. He instructed the undercover Church member that facts mean nothing to a civil litigant and that truth is merely an avoidable obstacle. Armstrong explained how a civil claim can be pursued despite an absence of a claim or essential facts:

ARMSTRONG: They can allege it. They can allege it. They don’t even have — they can allege it.

MIKE: So they don’t even have to have the document sitting in front of them and then —

ARMSTRONG: Fucking say the organization destroys the documents

* * *

ARMSTRONG: Where are the — we don’t have to prove a goddam thing. We don’t have to prove shit; we just have to allege it.

(Exhibit III-10-Q).3

As to Armstrong’s “dedication to the truth,” for which he is complimented in the trial court’s decision, Armstrong took the opportunity to instruct both “Joey” and “Mike” separately on the need and desirability of lying under oath:

ARMSTRONG: . . . . By the way, no one will ever get any names, any communications, any times, any dates or anything out of me, that’s just the way it is. I’ll go to prison before I ever talk, okay. So you have to know that, because they’re wanting to depose me every couple of months. I’m simply saying no, anyone I talked to that’s, that has nothing whatsoever to do with this lawsuit, the causes of action in my lawsuit began in 1969 when I was enticed into the Sea Organization and it ended in 1981, or they actually they continue on because you guys have continued to harass me but you…

MIKE: Not us, hey!

ARMSTRONG: No, I’m telling you what I would tell them in deposition, but they don’t get anything else, go ahead.

MIKE: Okay, so that, that’s fine, we have an agreement on that point.

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ARMSTRONG: Right. And you guys also have to have your agreements marked out between yourselves too, like, I don’t know who knows I’m involved but, I’ll deny it!

MIKE: Okay, well, we haven’t said anything either.

ARMSTRONG: Good, Good.

(Exhibit III-10-Q).

Armstrong was even more direct in discussing the fine points of perjury when speaking with Joey:

ARMSTRONG: OK. What are our conversations, should it come down to it?

JOEY: What do you mean?

ARMSTRONG: What do we talk about. You’re deposed. You walk out there, and there’s a PI hands you paper, saying you’re deposed Jack, and not only that, you’re out of the organization. And what do you say in deposition. Well,Armstrong and I talked about this, and he had a whole bunch of ideas about how to infiltrate the communication lines and spread turmoil and disaster, you know! What are we doing here? That’s my question, before I tell you my ideas on documents.

* * * *

ARMSTRONG: OK. So as far as the doc… Let me just say ah, you and I get together, we get together because I have a goal of global settlement. You have felt that the turmoil and abuses and so on have gone on too long… Hence we get together and discuss things. We have not discussed anything about a destruction of the tech, or Scientology is bad, or anything like that. Are we agreed?

JOEY: Yeah.

(Exhibit III-10-Q).

The evidence shows Armstrong’s state of mind, not to be fear, but instead to be of a calculating, aggressive and dishonest character.

Armstrong’s own writings illustrate Armstrong’s state of mind to be sickly and twisted. Attached are two examples of Armstrong’s writings illustrating Armstrong’s psychosis and his plan to entrap a senior Scientologist in a compromising sexual situation, as previously presented but not provided to the Service. (Exhibits III-10-R and III-10-S).

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We do not enjoy even reading much less repeating Armstrong’s demented ramblings. However, we have tried to explain to the IRS at every level that the Armstrong decision only stood for what Armstrong’s feigned state of mind was during the trial. Yet, the allegations kept getting raised for us to have to deal with as some sort of fact. And they are being raised here again.

The Armstrong case was reviewed by the California Court of Appeal in summer 1991. The Court of Appeal refused to accept the evidence that the Church had discovered after the trial as outlined above, on the technicality that the trial court never got to see it first (an impossibility since it was obtained after the trial). The Court of Appeal upheld Breckenridge’s decision on the legal technicality that it believed a justification defense is available to defend against theft in California. As to the Church’s protest to the gratuitous and condemning language of the Armstrong decision, the Court of Appeal ruled there was not a problem of stigmatization because Breckenridge was only reciting Armstrong’s purported state of mind – exactly what we had been telling the IRS from 1984 to this writing.

In December 1986, Armstrong entered into a settlement agreement with the Church as part of the overall Flynn case settlement. The agreement was designed to resolve all present and future issues between the parties. Armstrong agreed not to insert himself into future legal proceedings regarding the Church absent legal process. Within a short time after receiving the Church’s money, however, Armstrong embarked on a course of conduct in direct, intentional violation of that agreement.

Upon entering into the agreement, Armstrong acknowledged that he understood the provisions of the settlement and had received legal advice thereon. Armstrong now states, however, that he found these provisions to be “not worth the paper they were printed on.” He now says that he “put on a happy face” and “went through the charade” of signing the settlement agreement. The Church recently sued Armstrong for his blatant disregard of his obligations under the settlement agreement. After a full hearing, in which Armstrong was able to fully air his “justification defense”, essentially replaying his 1984 case, another Superior Court Judge was not impressed and slapped Armstrong with a preliminary injunction. So, history has proven Breckenridge wrong. Armstrong is anything but frightened. As he so clearly said – “just allege it.”

There is a compelling body of evidence that suggests that Armstrong case was manufactured and arranged by the IRS prior to it even going to trial. The following is brief synopsis of some of that evidence:

– The IRS was part of Armstrong’s attorney Flynn’s FAMCO plan from the very beginning. FAMCO documents disclosed plans to create

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“Federal and State attacks” with the objective of “closing orgs”. Flynn conducted a FAMCO conference in May 1981 that included “representatives of Internal Revenue Service”

– The IRS was the recipient of attorney-client privileged audio-taped conferences that were stolen by Armstrong. The IRS pleaded at one point during the US v. Zolin proceedings (see more about this below) that they had received a copy of the tapes from a “confidential informant” whom they refused to identify. This revelation shows the CID had a very strong vested interest in Armstrong being found justified, after they were in receipt of stolen property. This is evidence of motive for tampering with the outcome of the Armstrong case. It also explains their conduct in illegally and secretly obtaining a “legitimate” copy of the tapes from the Superior Court after the Breckenridge decision had been rendered.

– Despite the fact that communication with the IRS or any other federal agency was never an issue in the Armstrong case, Breckenridge’s ruling inexplicably invited Armstrong to discuss the contents of the sealed archives documents, and share them, with “any duly constituted Governmental Law Enforcement Agency”.

– During post trial proceedings, Armstrong’s counsel let slip a mention to Judge Breckenridge that “The IRS is interested, as the court probably knows. An investigation is ongoing right now with respect to the IRS criminal office concerning the testimony in this case and the evidence that was introduced at trial.” However, the Church knew of no such investigation and was not informed of such for 2 months. In fact, the CID to this day claims the investigation did not begin until July. Apparently, the IRS saw fit to inform Armstrong, his attorneys, and a sitting Judge about their investigation before informing the Church or the individual targets. The only explanation for this is ex parte communication with the judge on the part of the IRS to the exclusion of the Church.

– Discovery in the Canadian case revealed that Armstrong’s video taped statements concerning Flynn, the IRS CID and the Ontario Provincial Police (OPP) actively conspiring to create the “collapse” of the Scientology religion were borne out. Detective Ciampini’s notes revealed constant communication with Armstrong, Flynn, and LA CID agents. The CID agents travelled to Canada in late 1984 to coordinate. Canadian documents and agent testimony also revealed that Ciampini and his associates travelled to LA to coordinate with Armstrong and LA IRS in April 1984 – one month BEFORE the Armstrong trial.

– The CID’s own Special Agent’s Report of May, 1985 also corroborated that they were working in alignment with the FAMCO plan and Armstrong’s video taped aims. The report stated that the

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objective of the investigation was to cause the “ultimate halt” to and “final disintegration” of the Church of Scientology.

– In the David Miscavige v. IRS FOIA case covering the IRS CID files, the IRS has strenuously evaded acknowledging the name of a single informant, despite the fact Mr. Miscavige has provided public documents irrefutably proving two dozen of them are Flynn clients. In fact, every single witness for Armstrong was an IRS CID informant. The CID has gone so far as to knowingly file a forged document in order to prejudice the court in the effort to prevent the disclosure of any documents generated by informant contacts.

– LA CID agents have sworn under oath several times that the CID investigation started as the result of a 11 July, 1984 New York Times story that covered the Armstrong case. Yet, the New York Times story itself quoted an IRS spokesman as claiming the “Internal Revenue Service has been investigating Mr. Hubbard’s financial arrangement with the Church of Scientology for more than a year.”

– On Sept 26, 1984 David Miscavige met with several high ranking IRS officials in Washington D.C. including Al Winbourne, Charles Rumph, Joe Tedesco, Marvin Friendlander, and Bill Connet, to answer to allegations made in the New York Times article since that was what purportedly caused the CID investigation. When Mr. Miscavige began by asking how the NY Times article could be the impetus for the CID investigation when the same article states it has been going on for a year, none of the IRS personnel could answer and in fact ended the entire discussion on the article – yet an explanation of the article is precisely why they asked for someone to attend this meeting.

CID agents continuously dispute evidence that their investigation began earlier than the 11 July, 1984 New York Times article. If the investigation started before 11 July, then it would clearly show there was no “reason” for it, other than the reason that has been clearly emerging in evidence obtained through discovery in Canada, and in FOIA cases – to wit, the CID started the investigation much earlier, orchestrated the Armstrong case and N.Y. Times article as a pretext to justify their concerns, with the aim to bring about the “final halt” to and “ultimate disintegration” of Scientology.

The Church contends the 1984 Armstrong decision was brought about by IRS agents illegally working in collusion with private litigants. The Church vigorously disagrees with the 1984 decision and with Judge Breckenridge’s observations about Scientology. The Church agrees with the 1992 Armstrong decision preliminarily

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enjoining him from injecting himself into other private and government actions concerning the Church.

—————-

Among the fall-out from the Armstrong case has been litigation for most of the past decade over the IRS’s use of some of the fruits of Armstrong’s theft. In addition to Mr. Hubbard’s private and personal papers, Armstrong stole a tape made of a GO attorney conference in 1980. This conference was attended by Laurel Sullivan (later an IRS informant) who headed a project called Mission Corporate Category Sort Out (MCCS). The purpose of MCCS was to align the Church’s corporate structure with its expanding ecclesiastical hierarchy. MCCS was disbanded in early 1981, coincident with the overthrow and disbandment of the GO, when it was learned that Sullivan was attempting to place some of the indicted GO criminals in high corporate positions and also in control over the trade and service marks of Dianetics and Scientology.

The IRS gained illegal possession of these tapes through a secret summons served on clerk the Superior Court (Frank Zolin) without notice to the Church. A Federal Court later ruled the IRS must return the tapes back to their sealed position in the Superior Court. In defiance of the court order, the IRS made a copy of the tapes, transcribed them, and sent the transcripts to IRS agents around the country. Several CID and EO agents working on Church cases fully reviewed the transcripts, while the Church itself never had access to them.

The IRS has used the existence of the stolen tapes against the Church both in court and in the exemption proceedings. Knowing full well that the Church did not have access to them or knowledge of their contents, the IRS has demanded the Church provide copies of them in virtually every 1023 proceeding.

This ploy was taken to its most outrageous extreme in the CST declaratory judgement case before the Court of Claims in Washington DC. The Department of Justice attorney representing the IRS in this litigation vehemently asserted the bald face lie that CST failed to establish its entitlement to exemption by not providing copies of the MCCS tapes during its exemption proceedings. He used that as the stepping stone for the rest of his argument in which he speculated that nefarious purposes for the establishment of CST were evident in the MCCS tapes, and that these inferences had to be accepted since CST failed to produce them. Not only were the tapes unavailable to the Church, contrary to DOJ assertions, but the IRS had possession of them and knew they didn’t contain the inferences put forth to the court. The big lie was pressed so insistently and forcefully that the judge bought and premised his entire ruling on it.

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These tapes are still the subject of ongoing litigation. The most recent decision was rendered by the United States Supreme Court on November 16, 1992 in (U.S. v. Zolin which acknowledged that the IRS had access to the tapes in 1984 and had access in 1991 up through present time. In fact, the IRS argued unsuccessfully that because they had the tapes, the Church’s appeal of the ruling granting the IRS access was moot.

Christofferson v. Church of Scientology:

The Christofferson case, described at pages 10-15 and 10-16 of our prior response, went to trial twice, had two jury verdicts and both verdicts were overturned. The case ultimately was settled as a nuisance.

Julie Christofferson made her claims against the Church only after being kidnapped and deprogrammed by convicted felon and CAN founder Ted Patrick, and after being induced to file suit by unethical attorneys as part of Michael Flynn’s FAMCO scam, as described in the response to Question 10.d of our prior response. Christofferson’s attorneys were FAMCO members.

Christofferson claimed that she had been defrauded, brainwashed and subjected to emotional distress. The first trial of the case, conducted in 1979, was a free-for-all, in terms of Scientology bashing. The judge at that trial allowed Christofferson’s counsel to parade a string of former members and store-bought psychiatrists through the court room and essentially put the Scientology religion on trial, as seen through their hate-filled eyes. This resulted in a verdict against the Church of Scientology of Portland and other Church entities in the Portland area, of $2 million.

The Oregon Court of Appeals resoundingly reversed the verdict on the ground that it was a runaway, heresy trial prohibited by the First Amendment. The case was remanded for a new trial.

Given the admonitions of the Court of Appeals in remanding the case, the second trial should have been better controlled. It was not. If anything the second trial, conducted in 1985, was worse, as by that time Michael Flynn had put together a regular traveling circus of apostates that he exported to his allied FAMCO attorneys who were trying the case. All the witnesses had three things in common. One, they had never met Julie Christofferson. Two, they were all represented by Flynn and had a stake in the outcome of the litigation. Three, they were CID informants. This was the same turn-key arrangement used in the Armstrong case.

None of the witnesses had a single thing to say about Christofferson. They were simply summonsed to rant about the

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“evil” Church for days on end. Gerald Armstrong, an IRS informant whose love poem to a pig was written at plaintiff attorney Gary McMurry’s farm-home between days of testimony, spent several days denigrating the Church and its beliefs.

On cross examination Armstrong was questioned about the facts disclosed in the video tapes outlined earlier in the Armstrong section of this answer. True to his premeditated pledge to deny any of it, even under oath, he proceeded to do just that. Thus, he denied that he had ever been involved in any planning to take over the Church or to seed its files with phoney documents in preparation for a CID raid, and other similar facts that the tapes clearly documented. He was asked if he ever met with anyone to discuss anything like this. Armstrong vehemently denied it. His blatant perjury then was exposed when the Los Angeles police department sanctioned video tapes were put into evidence.

Within two hours of this testimony, CID agents and District Counsel attorneys were in Portland in the Judge’s chambers, and in a clear attempt at intimidation, demanded access to and sealing of the tapes. Simultaneously, CID agents Lipkin and Ristuccia visited the Chief of the Los Angeles police department to arrange cover for their operation. This case should have exploded in the plaintiff’s face with a summary perjury conviction of her star witness. Instead, as a result of IRS CID interference it was allowed to run its full course as a modern-day heresy trial against the Scientology religion.

Not only was Armstrong not charged with perjury, but other CID informants such as Laurel Sullivan, Bill Franks, Eddie Walters and Howard Schomer, were also allowed to disparage the Scientology religion to their heart’s content; and CAN psychologist Margaret Singer, whose theories on “cults” and “brainwashing” have subsequently been completely discredited in several courts, was allowed to expound upon those theories making Scientology out to be something entirely evil and diabolical. This went on to the point where once again Scientology was on trial and the jury was overwhelmed by the poisoned atmosphere and the inflammatory accusations.

The resulting $39 million verdict was so outrageous that a public outcry went up, not just from Scientologists but from the religious community at large. The judge himself was shocked, and in admitting that the case had gotten out of hand in violation of the court of appeals ruling in the first case, declared a mistrial and nullified the verdict completely.

The Church thus does not agree with the verdict reached by the jury but does agree with the mistrial declaration that nullified that verdict exactly 60 days after it was entered. Lawrence Wollersheim v. Church of Scientology of California.

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The Wollersheim case, discussed on page 10-16 of the prior submission is still under consideration by the California Supreme Court. The original $30,000,000 verdict was reached after months of testimony by Michael Flynn’s regular stable of witnesses, including Laurel Sullivan, Eddie Walters, and psychiatrist Margaret Singer, none of whom had even met Larry until the eve of trial. The trial was no different than Christofferson – same witnesses, same documents – except that it lasted for an additional two months. The entire trial was five months of unrestrained ridicule and attack of the Scientology religion.

On appeal the verdict was reduced by the California Court of Appeal to $2.5 million. The Court of Appeal characterized the amount of the verdict as “preposterous.” Although clearly shocked by the outrageous verdict, the court of appeal went out of its way to recite a factual record absolutely unsupported by the record below to justify Wollersheim receiving the $2.5 million they arbitrarily decided he was entitled to.

Both Wollersheim and the Church filed petitions with the United States Supreme Court. Wollersheim’s petition was denied, but the United States Supreme Court granted the Church’s petition, vacated the judgment and remanded the case to the state appellate court for further proceedings. On remand, the Court of Appeal issued a new decision giving Wollersheim a choice of accepting a $2.5 million award or having the case remanded for a new trial. When Wollersheim refused to accept the award, the Court of Appeals changed their decision and, instead of sending the case for a new trial as required, amended the decision to affirm their original award of $2.5 million.

That decision was superceded as a matter of law by the California Supreme Court’s grant this summer of CSC’s Petition for Review. The matter is pending before the California Supreme Court. The final adjudication of this case is yet to be made.

However, the only thing the Church of Scientology was ever guilty of with respect to Larry Wollersheim was trying to help him, which is why he kept coming back for over a decade, even after being expelled for unethical conduct. The Church obviously disagrees with the jury’s treatment of the Wollersheim case as well as the dishonest manner in which the California Court of Appeals dealt with the case on both occasions on which that court acted. The Church agrees with the US Supreme Court’s decision vacating the judgment, and the California Supreme Court’s decision to review the case.

Wollersheim, an attendee at numerous CAN functions, has   recently communicated directly with Church counsel. This is

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significant because the communication from Wollersheim confirms what the Church has asserted about Wollersheim the entire time — he is deranged and delusional. As can be seen from the attached correspondence (Exhibit III-10-T), Wollersheim’s current position is that the Church of Scientology is some sort of massive United States government intelligence experiment run amok. Wollersheim’s theory even has the Internal Revenue Service, along with the FBI, Justice Department and the Judiciary, having their actions with respect to Scientology dictated by the CIA:

“If you were sitting as director in one of the super-secret intelligence agencies or think tanks would you hesitate for a moment to run interference on the outer agencies, the FBI, the Justice Dept., the IRS or the Judiciary if this would insure that national security interests in this valuable thought reform field experiment would not be terminated. Wouldn’t you also periodically let the lower agencies publicly rough up Scientology to help maintain the great religion cover and release some of the pent up victim and social back-pressure.”

Wollersheim’s letter is plainly the ramblings of a decayed mind, but it illustrates the sort of persons against whom the Church has been forced to defend itself and further illustrates that any reliance by the Service on the claims of anti-Church plaintiffs like Wollersheim and other CAN members is seriously misguided.

CONCLUSION

As you no doubt expected, we don’t agree with the negative decisions concerning some Scientology corporations in the 1980s. More importantly, through the passage of time we are being vindicated.

The Service has criticized the Church for being over-litigious in fighting dissidents. In virtually every instance, however, it has been the Church that in the first instance was required to defend itself in litigation commenced by these dissidents; litigation packaged, marketed and sold by cynical merchants of religious intolerance like Michael Flynn, CAN and a significant element of the IRS.

As detailed in this and our previous submission, we have to litigate seriously because we have been subjected to great persecution. Perhaps those in the Service who complain about our “litigious nature” do so because we didn’t just fold under the onslaught of IRS sponsored attacks and this upset the best laid plans of the IRS Scientology-haters. The Service exhibits remarkable temerity to ask us to “explain” such cases when it was so integral in creating them.

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The Service also has directed the support these dissidents receive. An LA district counsel attorney encouraged Vicki Aznaran to “take a stand” against Scientology, and her lawyer discussed her civil case strategy at length with LA District Counsel and EO agents. Once Aznaran was on board her ten year old personal income tax dispute with the IRS magically disappeared. Laurel Sullivan was represented by the U.S. Attorney’s office (on the justification she was an IRS informant) in a civil case brought by the Church against her for violating the attorney-client privilege. Mayo’s perverted version of Scientology principles received tax exemption as soon as he became an IRS informant. Even Flynn’s “Scientology Victims Defense Fund” which raised “donations” to fund his contingent fee litigation against the Church received tax exemption.

Cult Awareness Network received exemption as soon as they stated in writing that they would actively refer innocent inquiries about Scientology to lawyers. No cases remain in existence that were not started or maintained by Cult Awareness Network, which continues to operate under the IRS’ imprimatur. If the IRS were to withdraw its support, CAN and its instigated cases would disappear.

Our consistent view has been that the civil litigants are solely motivated by greed. The exception is Armstrong who we truly believe to be psychotic. During the 1980’s, the IRS used every single civil litigant against Scientology as an IRS witness. The government, however, has no business in taking sides in a religious or civil dispute. It is indeed ironic to note that once the Flynn civil litigation in the 80’s was settled, with the exception of Armstrong, we hear no more of their “horror stories” from these paragons of virtue claiming to be interested only in “principle” and “what is right.”

But there is a more important point to be made. You are still holding us to a higher standard in these proceedings, which is not a fair and impartial administration of tax law. These decisions –Armstrong, Christofferson and Wollersheim– concerned CSC. Even putting aside whether we were right or not in the court room, how could these decisions have anything at all to do with these current proceedings? CST, RTC and CSI did not even exist when these individuals left the Church and the decisions in the aforementioned cases are not against these corporations.

We have more than answered your questions on the subject of litigation and we want you to understand how unfair we think this is. After all, as we have shown, significant elements within the IRS have actively participated in the litigation with a vested interest in the outcome. So you are asking us to defend ourselves against unfair attacks that your own agency has had a hidden and illegal part in creating. To understand why we have had to engage in so much FOIA litigation, you need only look at the bizarre

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occurrences in our general litigation. So why continue this war of attrition? Who keeps pushing to ask us questions about our civil litigation? It isn’t relevant to these proceedings and this should be the end of it.

Everybody today knows Pontius Pilate was a toady who rendered a dishonest decision to curry favor from the Roman establishment. Judge Breckenridge is of the same ilk. The true story of his decision is in LA CID files – provided they haven’t been destroyed to avoid our FOIA litigation.

It is time to end this shameful IRS involvement in trying to destroy Scientology. Why must the Service follow in the footsteps of the Nazis, who spread black propaganda about the Jews so that the German people would be inured to the massacre of millions. This is the same tactic used by significant and powerful elements within the Service in their dissemination of false information and active participation in attempting to destroy us.

We have no doubt that the IRS officials involved in unreasoned hatred and war against us are morally certain of their correctness that this isn’t the same as the early Roman attacks on Christianity, that it isn’t the same as the Nazis’ genocide against the Jews. No doubt, the Romans and Nazis also showed the same moral certainty. Many such dogmas have borne the imprimatur of government–the indestructibility of the Roman Empire, the supremacy of the Aryan race, the inevitable triumph of communism over capitalism, the legal segregation of the races. History, however, always has proven otherwise: Rome fell, the Nazis were defeated, communism collapsed and apartheid was unmasked for the evil it is. History is on our side today.

* * * *

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QUESTION 10.e.iii

iii. The Service understands that criminal legal proceedings are pending in Canada. Please provide a full description, including the current status of the proceedings.

In the preceding subparts to Question 10 and the response to Question 10.d of your second series of questions, the Church has described in detail litigation involving Scientology-related organizations or individuals in the United States. This final subpart broadens the scope of the Service’s public policy inquiry to include Canada. While the relevance of this inquiry is perhaps more attenuated than those concerning U.S. litigation, at the same time it provides a fitting conclusion because the Canadian case mirrors much of what occurred in the U.S., including a leading role played by the IRS. We are providing a full description of the Canadian proceedings below, and have also attached as Exhibit III-10-U, a memorandum prepared by counsel for the Church of Scientology of Toronto, setting forth his perspective on this case in response to this question.

Canadian Criminal Proceedings:

The acts that were at issue in Toronto occurred nearly 20 years ago, from 1974 to 1976. Canadian law, however, has no statute of limitations to bar anachronistic prosecutions such as occurred in this case. All the acts at issue were committed by Guardian’s Office members during the same time period as similar acts in the U.S. These included a conspiracy of infiltration and theft of documents in Canada similar to that which lead to the trial and convictions of GO members in the U.S. Yet, it was not until March of 1983, when the GO criminals in the U.S. had long since been convicted and sentenced, that the Ontario Provincial Police (“OPP”) conducted the largest raid in the history of Canada against the Church of Scientology of Toronto.

The Guardian’s Office Clean-up:

In our prior response, the Church’s response to Question 3-d provided a detailed description of the actions taken by the Church to investigate and disband the Guardian’s Office (“GO”). This included sending missions from CMO INT to Guardian Offices around the United States and in other countries to investigate involvement by GO staff in illegal activities and, based on the findings, to purge offending staff from Church employ. The Guardian’s Office Canada, located in Toronto, was one of those offices investigated. A CMO mission found that some of the GO staff had been involved in

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illegal activities. Actions were therefore instituted to weed out and discharge those involved. Church executives insisted that all wrongdoers make up for damage done to society by full and appropriate amends. During the thorough clean-up process, those who earnestly complied through thousands of hours of community-based charitable works, although barred from Church staff, were allowed to otherwise retain their membership in the Church. Those who refused to take responsibility for their actions were expelled.

A clique of the most high level GO members in Canada, lead by Brian Levman and Marion Evoy, who ran the Guardian’s Office in Canada and, in fact, were the ones originating criminal activities and ordering them carried out, refused to take any responsibility for their acts and were expelled from the Church. Their refusal to cooperate with investigations into the extent of the criminality made it impossible for the CMO missions to find out just how pervasive the crimes committed by GO Canada were.

By January of 1983 it was well known to the OPP that the Church had dismissed from staff all people even tangentially involved in criminal activities committed in the mid 70’s, and no one then currently on staff had the slightest inclination to commit crimes, and could not be induced to despite the best efforts of OPP informants. In February 1983, after 2 years of reorganization, a CMO mission fired to GO WW to begin the disbandment of the entire GO network. By late February 1983, GO WW no longer existed, and in the last week of February 1983, GO Canada was disbanded. This drove Ciampini and the OPP into a frenzy of activity.

Just two weeks later, as if fearing that the clean-up and elimination of the GO would completely undermine any case against the Church, the OPP conducted the largest raid in Canadian history, smashing Church property with sledgehammers and axes, and seizing two million documents, including confidential priest-penitent confessional materials from 641 parishioners. All together a total of 950 banker’s boxes full of materials were carted off from the Church.

Why did the OPP do this, almost a decade after the alleged acts occurred, six years after the FBI had raided U.S. churches and punished the masterminds of this activity in the US? It was at least in part pursuant to the goal of destroying the Scientology religion. It was also in large measure aimed at aiding U.S. attackers, including Scientology-haters in the IRS.

The IRS, Michael Flynn and his clients Gerry Armstrong and Laurel Sullivan, were key sources who had supplied the OPP with information for the warrant used in the raid. Indeed, a large portion of the Toronto warrant dealt with allegations of fraud (saying Church services did not result in spiritual betterment) and tax fraud against the Church based on information provided

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by these IRS witnesses. The warrant predicted broad charges being laid, not only against the Toronto Church, but against the religion’s Founder, L. Ron Hubbard, and senior Scientologists such as David Miscavige and Lyman Spurlock.

The two other main informants for the warrant were former Church members John and Nan Mclean. Documents received under the Freedom of Information Act evidence that during the 1970s and early 1980s while the Mcleans were assisting the OPP infiltrate the Church, they were at the same time acting as agents for the IRS. The Mcleans were also plaintiffs in one of the many Flynn FAMCO lawsuits. Other FOIA documents revealed that the OPP had arranged for government legal assistance in the form of money for the Mcleans’ attorneys in order to prosecute their civil claims.

Immediately following the raid, Ontario attorney general Roy McMurtry told the news media that a US government agency was coordinated with and served to help spearhead the investigation leading to the raid. Subsequent discovery showed the US agency working hand in glove with the OPP was the IRS. After the raid, IRS agents in LA CID became regular communicants with Detective Ciampini to get information seized in the raid and share with him information from their investigation. In August 1984, CID agents Al Lipkin and Stephen Petersell went to Toronto and met with Ciampini and the forensic accountants who had examined seized Church financial records.

Because of an agreement made with Church counsel, none of the seized documents could be given to foreign agencies. Nevertheless, the Crown allowed IRS agents Lipkin and Petersell to be briefed for several days on the information from the documents, including extracts from the documents themselves. CID agent Lipkin advised Ciampini that if the OPP indicted L. Ron Hubbard and others, the IRS would assist in locating them. Clearly the IRS was encouraging the OPP to go forward with charges despite the stale nature of the evidence, hoping to bolster their own chances to bring charges of some kind in the U.S.

In March 1984, Church representatives went to Toronto to offer the Church’s cooperation to the Crown law offices in prosecuting the GO criminals responsible for the criminal acts in Canada. The Crown categorically rejected the Church’s good faith offer saying they held all the cards. Instead, the Crown Law Office twisted the Church’s offer of good faith cooperation as a threat by the Church against the GO criminals and used this to convince the criminals to accept immunity from prosecution and attack their former religion and the very subordinates they had ordered to commit the crimes in question.

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Initially, the Toronto GO criminals were so uncooperative that the Crown could not even communicate with them directly. The Crown Law Office approached apostate IRS informant, David Mayo, for help in gaining support from the criminals. The OPP also utilized Mayo as a middleman to approach the expelled former Church members, as they knew Mayo was a GO supporter and part of the same splinter movement. The government chose sides in a religious dispute and went with those demonstrably guilty of criminal acts because they were willing to denounce the religion of Scientology.

In December 1984, 18 months after the raid, the OPP brought charges against the Church of Scientology of Toronto and 19 named individuals alleging theft of confidential information and property, breach of trust, and possession of stolen information and property. None of the other charges against the Church as set forth in the search warrant that authorized the raid – tax fraud, consumer fraud and conspiracy to commit indictable offenses – were raised in the indictment. After an extensive review by forensic accountants and Revenue Canada agents of all Church finance records and correspondence which had been seized in the raid, no evidence of any financial crime was ever found and no charges proceeded from these allegations. The only charges brought concerned the breaking and entering, and the infiltration activities by the GO.

The Crown gave immunity to the real culprits who actually ordered the activities of the charged individuals. Those given immunity were the GO staff who had been at the top-levels of the Guardian’s Office in Canada and who had planned out and ordered the criminal activities. Those who were prosecuted were the lower-level staff who were following these orders. In an unprecedented move, no member of the Board of Directors of the Church of Scientology of Toronto was charged, but rather the entire corporation itself was – a clear move by the Crown to attempt to stigmatize the entire religion for the acts of a few long-since-expelled criminals.

During the preliminary hearings from 1988 to 1990, the Crown produced no evidence that the Church as a corporate entity had advocated the illegal actions of those charged. Evidence that was produced showed that the Church forbade actions which violated the law, was not aware of these individuals’ activities and that when they were discovered, the Church removed these people from staff and disbanded the Guardian’s Office. Several charges were dropped as a result of the preliminary hearing.

The individuals who were indicted offered to plead guilty if the Crown would drop the charges against the Church, because neither the Church nor its directors nor Church members had any idea that the criminal acts in question were being committed.

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The Crown refused to change its position, insisting that the Church plead guilty as well.

In the litigation of this case, which spanned most of a decade, during which time government officials expended $15 million in attempts to “get” the Church of Scientology. As described below, of 19 original charges, only 12 proceeded to trial and of those the Church was acquitted on 10. The remaining two are on appeal. The case was ill-intentioned from the outset and fell apart in court.

In November 1991, the Ontario Court of Justice ruled that the search of the Toronto Church premises was unlawful and violated the Church’s rights under the Canadian Charter of Rights and Freedoms, which affords protection from unreasonable search and seizure. The Church had shown in the months-long evidentiary hearing that the OPP timed the raid to coincide with press deadlines of the international media; that many of the searching officers acted with no specific instructions or were left unsupervised, seizing everything in sight.

The judge ruled that the OPP failed to respect the terms of the search warrant that safeguarded against a general rummaging of the premises. Although the Crown argued that the police had acted in “good faith,” the judge found that the police either were unaware of this limitation or chose to ignore it, and he could not find they had acted in good faith. The judge found that the instigator of the raid, Detective Al Ciampini, was not a credible witness.

The judge cited as a significant example of the massive over-seizure, the large amount of religious confessional material respecting Church members taken by the police, noting that confessional material from 641 parishioners was unlawfully seized in violation of their privacy rights.

The judge also found it ironic that for two years prior to the raid, the two OPP officers, placed inside the Church as plants, had stolen hundreds of documents without authorization and without a warrant. These stolen documents then were used in the Information section of the warrant as the justification for the raid. The fact that the information came from documents the OPP had unlawfully stolen from the Church was withheld from the Justice of the Peace who issued the Warrant. The judge also observed the ironic fact that the OPP’s undercover police officers had done the very thing that was now the subject of charges against the Church and some of its members. The judge’s ruling resulted in acquittals on 7 of the remaining 12 charges, and the elimination of all theft charges. The remaining five charges for Breach of Trust were left for trial. The crime was that certain GO members had worked for Ontario government agencies, had signed confidentiality agreements and then

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breached those agreements by passing on information concerning the agencies’ activities outside the agencies.

The trial judge allowed the Crown to keep the Church in the case as a party on a tenuous legal theory. The law that was used to support the Crown’s position is called the “Dredge & Dock” case, in which a court had ruled that a corporation can be held criminally liable for the actions of its employees. This case was relied on even though it clearly pertained to a profit-making, commercial enterprise, had never been applied to, nor is applicable to, a church and had never been applied to an organization that had thoroughly and demonstrably taken responsibility to rectify the actions of the miscreants.

The trial proceeded in April and May 1992. The Crown put on several ex-GO criminals, all of whom had been expelled by the Church in the early 80s. They testified under immunity even though they were the masterminds of the Canadian criminal activity. These criminals testified against their erstwhile juniors, whom the criminals had ordered to commit criminal acts. The criminals also were allowed to manufacture justifications for their own unconscionable conduct, laying the blame on the Church’s doorstep with tortured and false stories about their states of mind.

The Toronto Church had no local witnesses testify as there was no one locally in good standing who knew the first thing about the criminal activity from the 1970s. Senior Scientologists from California did travel to Toronto to testify. David Miscavige, who Ciampini had earlier threatened to indict solely for the purpose of getting ex-GO criminals to testify, voluntarily testified. He told the entire story of the GO take over, what lead to it, how it was carried out, and how the Church was so offended by the GO’s crimes that it was the only entity or individual that volunteered its services to the Crown to prosecute the wrongdoers. None of the Church witnesses attempted to justify a single act of the GO. Instead they outlined how the GO had covered up their criminal activity from Church management, and when management found out about the acts, it acted, swiftly and responsibly.

Once the evidence was all in, the trial judge, misusing the “Dredge and Dock” case essentially directed a verdict for the Crown. The Judge stated that whether the GO was separate and autonomous or not, and whether or not they withheld from the Church what they were doing, and whether or not the Church cleaned house long before the OPP and Crown were even interested in any criminal charges, did not matter. He told the jury that despite the unrefuted nature of the evidence of the Church witnesses mentioned above, they must return a verdict against the Church on certain counts. Notwithstanding the de facto directed verdict, the jury found the Toronto Church innocent on 3 of the 5 counts tried. It

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was convicted on two counts of breach of trust. 3 ex-GO individuals were convicted on between one and two counts of breach of trust each.

No jail terms were given to any of the individual defendants. One was fined $5,000 and two others were each fined $2,500. No probation or community service work was ordered, in acknowledgment of the fact that they had already done thousands of hours of community service at the direction of the Church. The Church was given a fine of $250,000, one quarter the sum the Crown pleaded was an appropriate minimum.

The judge acknowledged that the alleged criminal acts had taken place more than 15 years ago and that all those responsible were removed by Church officials from positions of authority. He also recognized that not a single member of the present Board of Directors was a director at the time of the offenses, and that most present parishioners were likely not even members of the Church then. He specifically found that in light of those facts, deterrence was not required of the Church.

Following the decision, Church counsel immediately served the government attorney with a Notice of Appeal on the two counts upon   which the Church was found guilty. The Church and Church counsel fully expect these convictions to be overturned. Not only was a novel extension of the law used to find corporate responsibility, but the trial was fraught with numerous other errors. The fact that the directing minds of the GO criminality, who testified for the Crown under grants of immunity, were allowed to go on week after week denigrating the beliefs and practices of the religion in their attempt to lay the blame for their own acts on the Church’s shoulders, made for an inquisition-like, heresy trial.

On September 15, 1992, the Church filed notice of a $19 million Constitutional Damages suit against the Ontario Provincial Police and the Crown law office for the unconstitutional search and seizure in the 1983 raid. At the center of that suit are the discriminatory and violent acts manifested by the OPP’s raid; a raid that has already been ruled to have been illegal and conducted in bad faith.

The Toronto case began with dozens of charges being proposed in the early 1980’s. Internal OPP memoranda obtained through discovery have shown that the aim of the case was to complement the plans of IRS CID and US private litigant to physically overthrow leadership of the mother Church and to wipe out the religion of Scientology. It began with infiltration and attempted entrapment, followed then by an unconscionable physical assault on the Toronto Church, later ruled illegal and unconstitutional. The case was pressed by the OPP and Crown, despite the Church providing evidence it expelled the culprits and was willing to cooperate in their prosecution. The individuals who were convicted, GO underlings of

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the Crown’s immunized witnesses, had already made up for their wrong-doing years prior to trial at the Church’s insistence. The Crown’s animus against the Church was so strong that notwithstanding the failure of the IRS CID’s takeover plan, and the failure of the US litigants against the Church, they pressed forward by dismissing dozens of capital crime cases in order to make room for their several week heresy trial against Scientology.

The fact that the OPP and Crown walked away with 2 counts of breach of trust, a fine less than 1/4 of what they argued was the minimum possible, and no jail time for any of the individual defendants amounts to one of the biggest embarrassments in the entire history of Canadian jurisprudence. Nevertheless, the Church will continue to fight until justice is completely served. And that means reversal of the two breach of trust convictions, and full recompense awarded for the OPP’s vicious and illegal raid on the Toronto Church.

* * * *

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Notes

 

  1. This document in PDF format. Source image files: https://web.archive.org/web/20090927222617/http://www.xenu-directory.net/documents/corporate/irs/1993-1023-csi-questions-3-10.pdf
  2. Transcript excerpts from the illegal videos submitted as Exhibit III-10-Q on archive.org. Cf. court transcripts and illegal videos.
  3. Exhibit III-10-Q: Transcript excerpts of illegal videos on archive.org. Cf. court transcripts and illegal videos.