Tampa Bay Times: Scientology vs. The IRS ( June 21, 2009)

Scientology: The Truth Rundown, Part 1 of 3 in a special report on the Church of Scientology
By Joe Childs and Thomas C. Tobin, Times Staff Writers
Sunday, June 21, 2009 1:06am

This account comes from executives who for decades were key figures in Scientology’s powerful inner circle. Marty Rathbun and Mike Rinder, the highest-ranking executives to leave the church, are speaking out for the first time.

[…]Now they provide an unprecedented look inside the upper reaches of the tightly controlled organization. They reveal:

[…]

  • With Miscavige calling the shots and Rathbun among those at his side, the church muscled the IRS into granting Scientology tax-exempt status. Offering fresh perspective on one of the church’s crowning moments, Rathbun details an extraordinary campaign of public pressure backed by thousands of lawsuits.

[…]

Scientology vs. the IRS

By the late 1980s, the battle with the IRS had quieted from the wild days of break-ins and indictments. But Miscavige was no less intent on getting back the church’s tax exemption, which he thought would legitimize Scientology.

The new strategy, according to Rathbun: Overwhelm the IRS. Force mistakes.

The church filed about 200 lawsuits against the IRS, seeking documents to prove IRS harassment and challenging the agency’s refusal to grant tax exemptions to church entities.

Some 2,300 individual Scientologists also sued the agency, demanding tax deductions for their contributions.

“Before you knew it, these simple little cookie-cutter suits … became full-blown legal cases,” Rathbun said.

Washington-based attorney William C. Walsh, who is now helping the church rebut the defectors claims, shepherded many of those cases. “We wanted to get to the bottom of what we felt was discrimination,” he said. “And we got a lot of documents, evidence that proved it.”

“It’s fair to say that when we started, there was a lot of distrust on both sides and suspicion,” Walsh said. “We had to dispel that and prove who we were and what kind of people we were.”

Yingling teamed with Walsh, Miscavige and Rathbun on the case. She said the IRS investigation of Miscavige resulted in a file thicker than the FBI’s file on Dr. Martin Luther King. “I mean it was insane,” she said.

The church ratcheted up the pressure with a relentless campaign against the IRS.

Armed with IRS records obtained under the Freedom of Information Act, Scientology’s magazine, Freedom, featured stories on alleged IRS abuses: lavish retreats on the taxpayers’ dime; setting quotas on audits of individual Scientologists; targeting small businesses for audits while politically connected corporations were overlooked.

Scientologists distributed the magazine on the front steps of the IRS building in Washington.

A group called the National Coalition of IRS Whistleblowers waged its own campaign. Unbeknownst to many, it was quietly created and financed by Scientology.

It was a grinding war, with Scientology willing to spend whatever it took to best the federal agency. “I didn’t even think about money,” Rathbun said. “We did whatever we needed to do.”

They also knew the other side was hurting. A memo obtained by the church said the Scientology lawsuits had tapped the IRS’s litigation budget before the year was up.

The church used other documents it got from the IRS against the agency.

In one, the Department of Justice scolded the IRS for taking indefensible positions in court cases against Scientology. The department said it feared being “sucked down” with the IRS and tarnished.

Another memo documented a conference of 20 IRS officials in the 1970s. They were trying to figure out how to respond to a judge’s ruling that Scientology met the agency’s definition of a religion. The IRS’ solution? They talked about changing the definition.

Rathbun calls it the “Final Solution” conference, a meeting that demonstrated the IRS bias against Scientology. “We used that (memo) I don’t know how many times on them,” he said.

By 1991, Miscavige had grown impatient with the legal tussle. He was confident he could personally persuade the IRS to bend. That October, he and Rathbun walked into IRS headquarters in Washington and asked to meet with IRS Commissioner Fred Goldberg. They had no appointment.

Goldberg, who did not respond to interview requests for this story, did not see them that day, but he met with them a week later.

Rathbun says that contrary to rumor, no bribes were paid, no extortion used. It was round-the-clock preparation and persistence — plus thousands of lawsuits, hard-hitting magazine articles and full-page ads in USA Today criticizing the IRS.

“That was enough,” Rathbun said. “You didn’t need blackmail.”

He and Miscavige prepped incessantly for their meeting. “I’m sitting there with three banker’s boxes of documents. He (Miscavige) has this 20-page speech to deliver to these guys. And for every sentence, I’ve got two folders” of backup.

Miscavige presented the argument that Scientology is a bona fide religion — then offered an olive branch.

Rathbun recalls the gist of the leader’s words to the IRS:

Look, we can just turn this off. This isn’t the purpose of the church. We’re just trying to defend ourselves. And this is the way we defend. We aggressively defend. If we can sit down and actually deal with the merits, get to what we feel we are actually entitled to, this all could be gone.

The two sides took a break.

Rathbun remembered: “Out in the hallway, Goldberg comes up to me because he sees I’m the right-hand guy. He goes: ‘Does he mean it? We can really turn it off?’ ”

“And I said,” turning his hand for effect, ” ‘Like a faucet.’ ”

The two sides started talks. Yingling said she warned church leaders to steel themselves, counseling that they answer every question, no matter how offensive.

Agents asked some doozies: about LSD initiation rituals, whether members were shot when they got out of line and about training terrorists in Mexico. “We answered everything,” Yingling said, crediting Miscavige for insisting the church be open, honest and cooperative.

The back and forth lasted two years and resulted in this agreement: The church paid $12.5 million. The IRS dropped its criminal investigations. All pending cases were dropped.

On Oct. 8, 1993, some 10,000 church members gathered in the Los Angeles Sports Arena to celebrate the leader’s announcement: The IRS had restored the church’s tax exemption, legitimizing Scientology as a church, not a for-profit operation.

“The war is over,” Miscavige told the crowd. “This means everything.”

Retrieved on 16 March 2014 from http://www.tampabay.com/news/scientology-the-truth-rundown-part-1-of-3-in-a-special-report-on-the/1012148.

Freedom (February 1986)

Notes1

  1. This document in PDF format.

Freedom: Religious Freedom Crusade supplement (June 1985)

Freedom: Religious Freedom Crusade supplement (June 1985)

Another one of Christofferson’s key witnesses, Gerry Armstrong, a government informant, was indisputably shown to have engaged in an operation to infiltrate the Church of Scientology. Based on evidence submitted in court, Armstrong’s plot, which appears to have been conceived with the advice and consent of Flynn and members of the IRS intelligence branch, was to plant forged documents in the Church which could then be “discovered” by government agents in planned raids on Church premises. The forged documents would incriminate” the Church in nonexistent illegal activities and would serve as a basis for the indictment of members of current Church management.

An Attack on Religion. (1985). Freedom, 17(11), 11-18.

Freedom Magazine: WTTP Radio Show in Boston (June 11, 1985)

TRANSCRIPT OF RADIO SHOW “FREEDOM MAGAZINE” ON WTTP IN BOSTON ON JUNE 11, 1985

Welcome back. This is David Aden with the Church of Scientology’s “Freedom Magazine.” We’re talking about religious freedom today, and in particular we’re talking about a case involving the Church of Scientology. Actually we’re talking about several cases. But we’re talking about one in particular involving the Church of Scientology in Portland, Oregon.

Phil Profit, who’s the public affairs representative of the Church of Scientology in California was in Portland, was involved in covering the case out there, and dealing with the issues surrounding it, talking with the clergy who come to protest that particular decision. He’s here with us today. If you’d like to give us a call, we have a few minutes left. From Boston we can be reached at 969-1060. From Metro West 651-1060. Again, we’re talking about the issue of religious freedom.

Phil, almost as a wrap-up on this, it’s obvious that the Portland case represented some situation where a government agency was trying to dictate to a  religion what it should and should not do.

PP: Oh yes, absolutely. In fact, it’s interesting you should mention that government agency. I don’t know if you’re aware, but during the trial it was brought out that a government agent was actually planted within the Church and was involved in a plot to basically overthrow the Church. Gerald Armstrong who’s
a witness in the trial in Portland was filmed on video conspiring with another individual whom he thought to be within the Church and conspiring to  overthrow the Church. The video tape showed Gerald Armstrong basically plotting to create false documentation which he said he could easily create and had done so in the past; to create false documents and plant them within the Church and then at a later date when the IRS or the FBI or somebody came to raid the Church would find this false documentation which would be very damaging to the Church, and, you know, there you go. Why it’s all history then.

Gerry Armstrong was found to be working with the IRS, CID, Criminal Investigation Division, and the Department of Justice. And, in fact, on the video tape he gave the names of his contacts and their phone numbers.

So it was a very interesting revelation, and just that by itself coming out in the case made it worth going through all of that.

DA: So in more ways than one the government had its fingers into this case.

PP: Absolutely. Absolutely.

DA: What was the final goal of this plan that he was laying out?

PP: Basically to obtain financial control of the church, and its assets.

Gerald Armstrong was represented by and working with an attorney in Boxford here named Michael Flynn who has had a personal vendetta against the church since 1979. And we find that Michael Flynn has a number of suits against the church, with ex-parishioners of the church which he has solicited, not just
in the Boston area but around the country. And the sum total of these suits is in the neighborhood of like two billion dollars, I think. It’s like totally insane.

So you can see, it’s obvious that obtaining financial control of the church from an outside source and then settling all of the suits would be, of course, financially advantageous.

DA: We’ve got to begin to wrap up now. Maybe thirty seconds. What do you see as the end goal of the coalition that came together.

PP: I see as the end goal a restoration of our First Amendment rights, okay. Our rights as guaranteed to us under the Constitution. The right of a religion to believe as it will, to practice as it will its religious beliefs, free from government harassment, government control. I should hope that we will achieve that in the very near future. I’d like to see a growing awareness on the part of Americans of the Constitution, of the Amendments thereto, and their rights under the Constitution. And I’d like to see them aware of the fact that religion is under attack in this country.

DA: Thanks very much for being here.

PP: Absolutely, my pleasure.

DA: We really appreciate it. We’ve been talking with Phil Profit who’s a public affairs representative of the Church of Scientology of California. We’ve been talking about religious freedom, and its ramifications. This is David Aden of the Church of Scientology’s “Freedom Magazine.” We’re here every Tuesday from one to two in the afternoon. We’d like to hear from you. We enjoy you joining us, either through the phone, or writing. If you’d like to get in touch, you can reach me at the Church of Scientology, 448 Beacon Street, Boston 02115. 266-9500. I’d like to hear from you. If you have suggestions about the program, please give a call.

WTTP 244-7680
Scientology’s “Freedom Magazine”

Tuesdays 1-2 p.m.
Host David Aden
Producer Andy Epstein
Receptionist – Lisa
ABC Affiliate
address: 24 West Central
Natick, MA 01760

Transcript of Radio Show “Freedom Magazine” on WTTP Boston (June 11, 1985)

Welcome back. This is David Aden with the Church of Scientology’s “Freedom Magazine.” We’re talking about religious freedom today, and in particular we’re talking about a case involving the Church of Scientology. Actually we’re talking about several cases. But we’re talking about one in particular involving the Church of Scientology in Portland, Oregon.

Phil Profit, who’s the public affairs representative of the Church of Scientology in California was in Portland, was involved in covering the case out there, and dealing with the issues surrounding it, talking with the clergy who come to protest that particular decision. He’s here with us today. If you’d like to give us a call, we have a few minutes left. From Boston we can be reached at 969-1060. From Metro West 651-1060. Again, we’re talking about the issue of religious
freedom.

Phil, almost as a wrap-up on this, it’s obvious that the Portland case represented some situation where a government agency was trying to dictate to a  religion what it should and should not do.

PP: Oh yes, absolutely. In fact, it’s interesting you should mention that government agency. I don’t know if you’re aware, but during the trial it was brought out that a government agent was actually planted within the Church and was involved in a plot to basically overthrow the Church. Gerald Armstrong who’s
a witness in the trial in Portland was filmed on video conspiring with another individual whom he thought to be within the Church and conspiring to  overthrow the Church. The video tape showed Gerald Armstrong basically plotting to create false documentation which he said he could easily create and had done so in the past; to create false documents and plant them within the Church and then at a later date when the IRS or the FBI or somebody came to raid the Church would find this false documentation which would be very damaging to the Church, and, you know, there you go. Why it’s all history then.

Gerry Armstrong was found to be working with the IRS, CID, Criminal Investigation Division, and the Department of Justice. And, in fact, on the video tape he gave the names of his contacts and their phone numbers.

So it was a very interesting revelation, and just that by itself coming out in the case made it worth going through all of that.

DA: So in more ways than one the government had its fingers into this case.

PP: Absolutely. Absolutely.

DA: What was the final goal of this plan that he was laying out?

PP: Basically to obtain financial control of the church, and its assets.

Gerald Armstrong was represented by and working with an attorney in Boxford here named Michael Flynn who has had a personal vendetta against the church since 1979. And we find that Michael Flynn has a number of suits against the church, with ex-parishioners of the church which he has solicited, not just
in the Boston area but around the country. And the sum total of these suits is in the neighborhood of like two billion dollars, I think. It’s like totally insane.

So you can see, it’s obvious that obtaining financial control of the church from an outside source and then settling all of the suits would be, of course, financially advantageous.

DA: We’ve got to begin to wrap up now. Maybe thirty seconds. What do you see as the end goal of the coalition that came together.

PP: I see as the end goal a restoration of our First Amendment rights, okay. Our rights as guaranteed to us under the Constitution. The right of a religion to believe as it will, to practice as it will its religious beliefs, free from government harassment, government control. I should hope that we will achieve that in the very near future. I’d like to see a growing awareness on the part of Americans of the Constitution, of the Amendments thereto, and their rights under the Constitution. And I’d like to see them aware of the fact that religion is under attack in this country.

DA: Thanks very much for being here.

PP: Absolutely, my pleasure.

DA: We really appreciate it. We’ve been talking with Phil Profit who’s a public affairs representative of the Church of Scientology of California. We’ve been talking about religious freedom, and its ramifications. This is David Aden of theChurch of Scientology’s “Freedom Magazine.” We’re here every Tuesday from one to two in the afternoon. We’d like to hear from you. We enjoy you joining us, either through the phone, or writing. If you’d like to get in touch, you can reach me at the Church of Scientology, 448 Beacon Street, Boston 02115. 266-9500. I’d like to hear from you. If you have suggestions about the program, please give a call.

WTTP 244-7680
Scientology’s “Freedom Magazine”

Tuesdays 1-2 p.m.
Host David Aden
Producer Andy Epstein
Receptionist – Lisa
ABC Affiliate
address: 24 West Central
Natick, MA 01760

Notes

Letter from Scientologist to Congressman Bilirakis (May 12, 1985)

FBI File No.: 62-116151-71

[Return address redacted]

May 12, 1985

Congressman Bilirakis
1100 Cleveland Street
Clearwater, Fl. 33515

Dear Congressman Bilirakis:

I just became aware of a matter which I find quite alarming. There is a strong threat posed by certain internal intelligence operations to the constitutional rights of citizens of the United States. It is being conducted currently by the IRS and the FBi. There are Department of Justice people in cooperation with this operation. This is very undermining to the well being of the American people.

I am sending a copy of this letter to all the people mentioned below and am especially appealing to Don Edwards, Chairman of the Subcommittee on Civil and Constitutional Rights, to have his committee look into this.

I also need your help as my key congressman of this district. This is what has happened: A former Church of Scientology employee has released video tapes made during an undercover sting operation. The video shows a multi-agency plan to disrupt the Church internally and in the confusion, to oust current executives, replacing them with government picked, government controlled persons. You can see the effect this would have on the Church. It is also blatant infringement on religious freedom. If this is let to occur, what indeed is next?! The lion dens? I just have been reading books with my 8 year old son of those first Americans who came to the colonies so they could follow their religion in peace. I didn’t make the stories up — they are our history.

For the reasons stated above, I am requesting that you come to the Church’s aid and to other Americans as well, by supporting a call for hearings into government domestic intelligence operations. I am afraid that this may just be the tip of an iceberg. Heaven forbid! It is harmful if you or I, as citizens, just sit back watching constitutional rights getting whittled away. Its like being a spectator to a severe accident and watching someone who needs an ambulance but doing nothing about it, but on a much grander scale.

Page 2

Could you also write the IRS and the FBI requesting an explanation for the above multi-agency plan?

So that you have no missing information I suggest you write FREEDOM magazine: 1413 N. Berendo St., Los Angeles, California 90027, or call them so they can send you their April/May 1985 issue2 in which the video tapes have been transcribed.

I await your letter advising me of what you have discovered and of what I am to do next as a concerned (frantic) citizen.

Respectfully yours,

[Name redacted]

(teacher)

cc: Paula Hawkins, Wash, D.C.
Rep. Don Edwards (San Jose, Ca.)
Rep. Jake J. Pickle (Austin, Tx.)
Sen. Orrin Hatch (Utah)
Lawton Chiles

Notes

  1. This document in PDF format.
  2. See Freedom April/May 1985

Letter from Scientologist to Senator Lawton Chiles (May 10, 1985)

FBI File No.: 62-116151-71

[Return address redacted.]

Lawton Chiles
U.S. Senate
Washington, DC 20510

Dear Mr. Chiles,

As a voting American citizen, I am demanding an investigation into the illegal and unconstitutional COINTELPRO-style tactics that have been and continue to be taken against the Church of Scientology.

Such tactics as are currently being carried out by agencies and officials of the U.S. government, including the FBI and the IRS’s Criminal Investigation Division (CID), are illegal and were exposed by Congress in the 1970’s as such, yet they continue against the Church of Scientology.

I believe that this lawless COINTELPRO campaign, exposed by Freedom News Journal in its April/May 1985 special edition story, “Videotapes of Federal Informant Reveal Bizarre Government Plot to Destroy Church,”2 poses the greatest threat in our nation’s history to the rights and freedoms guaranteed to every American.

You have it in your hands to do something about this. Call for a thorough and public investigation into the illegal COINTELPRO-style activities.

Sincerely,

[name redacted]

Member of the International Association of Scientologists

Notes

  1. This document in PDF format.
  2. See Freedom April/May 1985 Special Edition

Letter from Scientologist to Senator Pete Wilson; US Reps Vic Fazio, Robert Matsui, Don Edwards (ca. May 10, 1985)

FBI File No.: 62-116151-71

U.S. Senator Pete Wilson
U.S. Rep Vic Fazio
U.S. Rep Robert Matsui
U.S. Rep Don Edwards

Dear Sir:

I am writing to you stating that I am sincerely shocked and very much alarmed after viewing the film & reading the story exposed by Freedom News Journal entitled “Videotapes of Federal Informant Reveal Bizarre Government Plot, to Destroy Church” 2 whereby it is very clear that the lawless Cointelpro campaign supposedly exposed & stopped by Congress in the 1980s proves to be alive & well. I am urging you as a representative of the American people to maintain our constitutional rights by holding a thorough & searching investigation which will once and for all, get rid of such atrocities which threaten our freedom much more so than the Communist bloc as these atrocities are internal to our own system & way of life & much more easily tear apart lives.

Please help!

Thank you.

[name redacted]

Notes

 

  1. This document in PDF format.
  2. See Freedom April/May 1985 “Videotapes of Federal Informant Reveal Bizarre Government Plot to Destroy Church

Letter from Scientologist to Senator Lawton Chiles (ca. May 10, 1985)

FBI File No.: 62-116151-71

[Return address redacted]

Lawton Chiles
U.S. Senate
Washington, DC 20510

Dear Mr. Chiles,

As a voting American citizen, I am demanding an investigation into the illegal and unconstitutional COINTELPRO-style tactics that have been and continue to be taken against the Church of Scientology.

Such tactics ass are currently being carried out by agencies and officials of the U.S. government, including the FBI and the IRS’s Criminal Investigation Division (CID), are illegal and were exposed by Congress in the 1970’s as such, yet they continue against the Church of Scientology.

I believe that this lawless COINTELPRO campaign exposed by FREEDOM News Journal in its April/May 1985 special edition story, “Videotapes of Federal Informant Reveal Bizarre Government Plot to Destroy Church2,” poses the greatest threat in our nation’s history to the rights and freedoms guaranteed to every American.

You have it in your hands to do something about this. Call for a thorough and public investigation into the illegal COINTELPRO-style activities.

Sincerely,

[name redacted]

Member of the International Association of Scientologists

Notes

  1. This file in PDF format.
  2. See Freedom April/May 1985 special edition.

Freedom: (May 1985)

freedom-1985-05-1-255x300

Freedom (May 1985)

  • IRS Strategic Plan Exposed1
  • Videotapes of Federal Informant Reveal Bizarre Plot to Destroy Church
  • Agencies in Turmoil As Conspiracy Exposed: Freedom’s expose of the Armstrong videotapes has created an uproar in a number of government agencies and departments

Notes

  1. This document in image format. This document in PDF format.