Mark Rathbun: on Clayton Ruby and Marlys Edwardh (May 28, 2013)

I retained two of Toronto’s most highly regarded and aggressive criminal civil rights lawyers, Clayton Ruby and Marlys Edwardh1 They immediately began what would turn into years of litigation over the legality of the search and seizure. I formed up a team of a half dozen staff as the legal unit, to service the attorneys and work to prevent charges from being laid. Early intelligence indicated that the aim of the raid was to go after high-level GO executives as well as the top of Scientology management, including David Miscavige and L. Ron Hubbard as individual defendants. The raid had been supervised by a long-time Scientology antagonist within the OPP, Al Ciampini, and was sanctioned and directed by a Scientology hater in the Crown Law Office, Casey Hill.

Rathbun, Mark (2013-05-28). Memoirs of a Scientology Warrior (p. 209-10).

Notes

CSI 1023 Submission: Exhibit III-10-U [Legal Memorandum Re: Scientology criminal proceedings in Toronto, Canada] (November 23, 1992)

Ruby & Edwardh1, 2
barristers
11 Prince Arthur Avenue
Toronto, Ontario
M5R 1B2
Telephone (416)964-9664

November 6, 1992

Monique Yingling
Attorney-at-law
888 17th Street N.W.
7th Floor
Washington, D.C.
U.S.A.

Dear Ms Yingling:

I have been asked to assist in answering a question posed by the American authorities.

QUESTION 10.e.111: THE SERVICE UNDERSTANDS THAT CRIMINAL LEGAL PROCEEDINGS ARE PENDING IN CANADA. PLEASE PROVIDE A FULL DESCRIPTION, INCLUDING THE CURRENT STATUS OF THE PROCEEDINGS.

Background

Between 1974 and 1978, a tiny handful of members of the Church of Scientology Guardian’s Office acted in violation of Church policy and doctrine by committing crimes in Canada. These crimes were designed to be kept secret from parishioners and Church staff for fear of exposure by the Church.

Upon discovery of these crimes, the Church began 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 remove guilty staff from Church employ.

Thus the Guardian’s Office Canada and Guardian’s Office Toronto were investigated and there the CMO mission found that some of the GO staff had been involved in illegal activities. Actions were therefore instituted which ultimately led to their removal from staff.

While the Church was investigating and cleaning out the GO in Toronto, the Ontario

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Provincial Police (OPP) and the Crown Law Office of the Attorney General of Ontario surreptitiously placed one undercover operative in the Church of Scientology of Toronto and one in the Guardian’s Office Canada. This undercover operation included an action taken by one of the undercover officers that was later described in police testimony as an attempt to “provoke a possibility of criminal conduct response on the part of Church of Scientology”. It was unsuccessful.

One of the police operatives, Constable John Cunha, who had posed as a Church staff member, made it known to Church staff that he had left the Church, that he had removed Church financial documents and that he was going to write a critical book on Scientology. When this produced no response, despite the fact that the Guardian’s Office was aware of this threat, Cunha made further contacts. He had provided a phone number and address of where he could be reached. In his further contact, Cunha gave more detail of the documents he had taken and threatened that he would release these documents to the police, and as a result, he having spoken already with the police, Church executives were likely to go to jail.

The police then staked out a hotel, where Cunha had made known he would be, to await an expected response from the Guardian’s Office. No response ever came, despite the police’s best efforts to precipitate criminal conduct on the part of the Guardian’s Office or Church staff.

“Q. it is your expectation, was it not, that there would be some response from the Church of Scientology?

A. Yes.

Q. Was your response the kind of criminal conduct that you were concerned about that you had explained, about break, enter and theft removal of documents, the basis of Count 3 (in the search warrant), that something of that nature would occur?

A. Yes.

Q. Nothing of that occurred, did it?

A. No.”

Cross Examination of Ciampini October 16, 1991, p.43

The most important of the police operatives, Constable Barbara Taylor, worked in an undercover capacity in the Guardian’s Office Toronto. Over the course of her tenure as an undercover officer, she regularly reported the ongoing removal of GO staff as, one by one, they were held responsible for their illegal conduct. She also reported that the policy of the Church would not countenance criminal activities and that no criminal acts must take place.

David Miscavige and other senior Scientologists voluntarily came to Canada to testify

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during the trial even though neither they nor the organizations they worked for were parties to the case. They described in detail the ways in which the Guardian’s Office had grown separate and autonomous from the Sea  Organization. They described the dramatic events when they as Sea Organization executives found out that the GO was involved in illegal activities, and how they immediately acted to reform and ultimately disband the GO.

Despite this, preparations began to obtain the search warrant which was based upon allegations of current illegalities. This search warrant ultimately authorized the largest search and seizure in the history of Canada.

The Canada Raid

In March 1983, one hundred police officers, some armed with axes and sledge hammers, entered the premises of Church of Scientology of Toronto, the Guardian’s Office Canada and the Guardian’s Office Toronto. They seized thousands of documents – including Scientology religious books and the confidential priest-penitent confessional files of hundreds of innocent parishioners. The largest raid in the history of Canada resulted in the seizure of 2 million pieces of paper filling 950 banker’s boxes.

The Church continued its own measures to disband the GO entirely and to discover the true facts of what had occurred. In an effort to cooperate with the OPP, in March 1984, Church representatives went to the Crown Law Office and offered to help prosecute the expelled individuals who had planned and ordered the crimes. Crown Attorney Casey Hill refused the Church’s offer, as OPP Inspector Germaine’s notes reveal, saying “You’ve got no cards to play with.”

OPP Officer Ciampini solicited the help of David Mayo and Mayo’s attorney, Gary Bright to approach two of the individuals expelled by the Toronto Church, one of whom was a former GO official, and convince her to talk to Ciampini. Ciampini then used this individual to get others of the former GO officials involved in crime to also agree to join the government’s case.

Solicitor/client privileged documents taken in the raid were read by the police and used to convince these former GO officials that the “train was coming both ways“ as they showed that the Church was planning to prosecute certain of these individuals. As noted by Justice Southey in his ruling of March 26, 1992:

“Both these documents were obviously covered by solicitor and client privilege but it is apparent that they were used by the police, despite the privilege.”

With Mayo’s help, these individuals were made aware of the Church’s plan to prosecute.

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States and his own expulsions from the Church. The OPP investigation included interviews with other potential witnesses in the United States. In a June 1983 interview with Boston attorney Michael Flynn, Ciampini proposed a criminal indictment of Religious Technology Center Trustee David Miscavige in order to obtain the cooperation of a potential witness. Mr. Miscavige was the driving force behind the disbandment of the GO. At the time of this suggestion, Ciampini was fully aware that this potential witness was trying to overthrow Mr. Miscavige who had kicked the GO criminals out of the Church.

The actual criminals were embraced by the Crown while the Church and those who were involved in the GO reform and disbandment became the target of the Crown’s case.

Involvement by the IRS and Michael Flynn

The hard-line attitude by the Crown and OPP was encouraged in no small measure by the Internal Revenue Service and by Boston Attorney, Michael Flynn.

The OPP and IRS exchanged information. During 1984, OPP officers went to Los

Angeles where they copied documents from the IRS which were brought back to Toronto. IRS CID agents Al Lipkin and John Petersell went to Toronto hoping to review the documents which had been seized in the Canada raid. At this time there existed an undertaking between Crown counsel and counsel for the Church that seized documents would not be disclosed to agencies outside those prosecuting in Canada itself.

The Crown Law Office, the OPP and the IRS circumvented this agreement by giving the IRS access to a 2 volume report developed from a review of the seized documents which itself contained extracts from the documents subject to the undertaking. The forensic accountant retained by the Crown to assist in the prosecution aided the IRS in their review of this information. He later testified that he could not remember if the IRS agents also looked at the extracts of the documents.

“A. There are a number of things included in the report. There is a synopsis, summary of our finding. There are a number of sections in which detailed discussions of our findings are elaborated upon. Those sections contain essentially two things – one being an overview of that specific area, and secondly extracts from Scientology documents in support of that overview. Those overviews were combined and formed the basis for our summary conclusions.

Q. When you met with these gentlemen, did they actually see this document, or did you just read it to them, or portions of it, I take it?

A. We were in the same room. They would have seen it in front of me.

Q. Did they read from it, or did you refer to it in answering questions?

A. I definitely referred to it. I don’t remember if they read it. Certainly, if I was requested to turn it over to them, you know, I would have…

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Q. There was nothing wrong, so far as you were aware, in them seeing the actual documents during this meeting?

A. No. I really had no involvement with whether or not documents could or could not be disclosed to them. I was there to answer questions.

Q. And I take it from time to time in answering the questions you would turn to a page in the brief and read from it?

A. That’s correct.”

Cross Examination of Joe Zier January 16, 1992, pp.56-58

According to a diary kept by Ciampini, Lipkin and Petersell briefed the OPP on the IRS CID investigation and offered to assist the OPP in locating L. Ron Hubbard and David Miscavige when the OPP brought charges against them.

Another entry to Ciampini’s diary, in October 1984, when the Crown was preparing its formal charges against the Church of Scientology of Toronto and Church members, stated that Michael Flynn had called to say that he wanted to know when the OPP charges were to be laid “because he has 30 – 35 people inside [the Church] who are immediately going to take physical control of the Church of Scientology California and then ASI [Author Services. Inc.] – then file suit in court – turn over all documents to IRS CID for their investigation.” He further stated his hope that the OPP would move soon and that the “momentum of [the OPP’s] charges will cause Scientology to collapse.”

Sergeant Ciampini was questioned at trial about his connection to those seeking to take over the Church.

“Q. And did you know his clients were trying to take physical control, to take over the Church of Scientology in the United States and around the world?

A. I heard, as you can see from my notes here, that it was people within the organization that felt that they wanted to take over the organization. Certainly I had no control over that.

Q. But you knew that they were doing that?

A. I knew it as of October 9, 1984, yes.”

Cross Examination of Ciampini January 10, 1992. p.111

“Q. If I read this note correctly that you made, the takeover of the Church of Scientology of California and ASI is going to follow immediately upon your arrest, your laying of charges. Isn’t that so?

A. That’s what he is saying, yes.

Q. Well, surely you said to him, “Listen, you can’t tie this takeover of these church institutions to my laying of charges in Canada. You must have nothing to do with this.”

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A. I had nothing to do with this.

Q. You must have told him you must have nothing to do with this. Surely you said, ‘Don’t involve me in this.’

A. I gave him no instructions.

Q. Am I wrong in suggesting to you that the sense of this now is that you were quite content to let this all happen?

A. I had no control over it, Mr. Ruby.”

Cross Examination of Ciampini January 10, 1992, p.117

This testimony above corroborates the plan exposed in late 1984 in a police authorized video tape of IRS CID operative Gerry Armstrong in which Armstrong planned to plant phony documents in the Church that could be seized in an IRS CID raid designed to topple the Church hierarchy so that Armstrong and Flynn could seize control.

On December 12, 1984 (6 days before charges were laid), OPP Inspector Ormsby wrote in his diary that he returned a call from Lipkin, and that Lipkin was interested in doing a joint investigation with Revenue Canada. Lipkin wanted to be notified if charges were laid and if they could have access to the financial records.

There were three allegations made against the Church in the search warrant that authorized the Toronto raid: tax fraud, consumer fraud, and conspiracy to commit indictable offenses.

The Charges

Contrary to the assertions set out in the Information to the Search Warrant, no charges were ever laid in relation to tax fraud, consumer fraud or indeed conspiracy.

In December 1984, 18 months after the raid, charges were brought by the Ontario Provincial Police against the Church of Scientology of Toronto and 19 named individuals. The charges dealt with theft of confidential information and property, breach of trust, and possession of stolen information and property, alleging the removal of information and documents in government and private agency files by GO operatives for use by the Guardian’s Office. All of these incidents were alleged to have occurred between 1973 and 1983.

The Guardian’s Office executives who were in charge at the time of the alleged thefts and who actually directed the individuals involved were given Immunity by the government (Crown) so they could testify against their former subordinates. These government witnesses were all who had been removed from GO staff for their activities, and some had been excommunicated from Scientology – all well before the raid and before the Church had any knowledge of the OPP investigation or infiltrators.

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The lower level individuals who had obeyed the orders of these government witnesses were charged along with the Toronto Church corporation. By this time, these individuals who were charged had already performed hundreds of hours of independent community service at the direction of the Church to make amends to society for their wrong-doing. This was the first time, anywhere in the free world, that a church was criminally prosecuted by the state for the wrongdoing of a tiny handful of its former members.

During the preliminary hearing, on June 15, 1988, a judge in the Ontario Provincial Court dismissed 4 counts of theft of information, thereby leaving only 15 outstanding charges. On September 21, 1990, this same judge dismissed all counts of possession of stolen property leaving 7 counts of theft and 5 counts of breach of trust, to proceed to trial.

Raid Declared Illegal

On December 2, 1991, Judge Southey of the Ontario Court of Justice, who presided over the trial, ruled that the Church’s constitutional right to be free from unreasonable search and seizure had been violated. The judge further found that the OPP officers “conducting the search did not act in good faith”. To remedy these violations, he ordered all the documents seized by the OPP to be excluded from trial.

On January 27, 1992, the OPP returned the bulk of the 2 million seized documents to the Church, save those kept by the Crown for possible appeal purposes. On March 26, 1992, the judge ruled that the testimony of the ex-GO officials, who had been granted immunity, be excluded in relation to all counts of theft.

He noted,

“The breach (of the Charter) was a serious one. The loss of the documents in the illegal seizure caused substantial hardship to the Church.”

Ruling by Southey, J. March 26, 1992, p.20

The Trial

Almost a decade after the raid and more than 15 years after the alleged acts that were the subject of the case, a trial on 5 counts of breach of trust commenced in the Ontario Court of Justice on April 23, 1992, against the Church of Scientology of Toronto and 5 individuals.

On June 26, 1992, the Church and 2 individuals were acquitted on 3 counts of breach of trust. The Church and 3 individuals were convicted on 2 counts of breach of trust. In a

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separate jury trial held on June, 25lune 25. 1992, the Church and 7 named individuals were acquitted on all 7 counts of theft of documents.

On September 10, 1992, the Church was sentenced to pay a fine of $250,000 Canadian total for the 2 counts on which it was convicted. The individuals were fined, but no jail terms or probation or community service was imposed: the court recognized that they had already done thousands of hours of community service to society.

Janice Wheeler was fined $2,000 for breach of trust in respect to the Attorney General’s Office of Ontario; Don Whitmore was fined $2,000 for a breach of trust in respect to the Royal Canadian Mounted Police; Jacqui Matz was fined a total of $5,000 for a breach of trust in respect to the Attorney General’s Office of Ontario and the Ontario Provincial Police.

The fact that Scientology is a religion was not questioned by the Crown during this trial. This was the first time in Canada that a recognized non-profit corporation was charged respecting the actions of individuals under what, in my opinion, was an unconstitutional application of the law. Thus the convictions of the Church of Scientology of Toronto are presently under appeal and the payment of the fine has been ordered stayed by the Court of Appeal for Ontario.

The Ontario Court of Justice did not dispute:

(1) that Church doctrines never condoned these criminal acts;
(2) that all criminal activity within the Guardian’s Office ceased in 1978, years prior to the raid, and that all those responsible were removed from positions of
(3) that none of the present directors of the Church were directors at the time of the offenses; and
(4) that vast numbers of the Church’s present parishioners were not even parishioners then.

The Court acknowledged that the Guardian’s Office itself was disbanded in 1983 by senior Church management who had discovered what these wrongdoers had done as described by David Miscavige and other senior Scientologists. And indeed, in dealing with sentence, Justice Southey concluded that specific deterrence respecting the Church was not needed.

In his Charge to the Jury, Justice Southey said:

“There is no evidence that the Church of Scientology authorized the Guardian’s Office in Toronto, either expressly or by implication, to participate in the unlawful plant operations…”

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He had earlier ruled on August 2, 1991:

“there is no suggestion that the stealing or documents or the breaches or trust by government employees, if they occurred, were acts condoned by the religious doctrines of the Church. Indeed, quite the reverse, the Church has vigorously repudiated the*conduct of persons who have engaged in such acts and has expelled such persons from its organization.”

The raid and the prosecution must have involved years of court time and tens of thousands of man-hours on the part of the Attorney General’s Office of Ontario and the Ontario Provincial Police and may have cost over 15 million dollars of taxpayer’s money. All of this time and expense was to prosecute a Church which had long since cleaned its own house.

The unprecedented conviction of the Church of Scientology of Toronto on theories of vicarious criminal liability is under appeal.

Yours very truly,

Clayton C. Ruby

/mm

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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

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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.

* * * *

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.

——————-

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.

Christofferson: Excerpt of Proceedings (April 10, 1985)

http://gerryarmstrong.org/50k/legal/related/5196.php

Christofferson: Excerpt of Proceedings (April 4, 1985)

IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MULTNOMAH1

JULIE CHRISTOFFERSON TITCHBOURNE,

Plaintiff,

vs.

CHURCH OF SCIENTOLOGY, MISSION OF DAVIS, a non-profit California corporation, doing business in Oregon; CHURCH OF SCIENTOLOGY OF CALIFORNIA, a California corporation, doing business in Oregon; and L. RON HUBBARD,

Defendants.

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No. A7704-051842

EXCERPT OF PROCEEDINGS

Volume VII
Pages 4059 to 4163
Testimony of Gerald D. Armstrong

April 4, 1985

BILL ELLIS & ASSOCIATES
Court Reporters
1001 S. W. Fifth Ave.
Portland, Oregon

G. ARMSTRONG – X – 4059

(Court reconvened on Thursday, April 4, 1985, beginning at the hour of 9:40 a.m. Following proceedings held out of the presence of the jury.)

THE COURT: Ready to go?

MR. WADE: Your Honor, we have brought copies of the time track of Mr. Armstrong and his B1 file. The first thing we would be discussing this morning is the B1 file materials.

THE COURT: Mr. Armstrong was going to testify about those specific items missing from his B1 file.

(Mr. Armstrong resumed the witness stand.)

THE COURT: You are still under oath.

MR. WADE: Your Honor, we have marked — had marked as Court Exhibit 253, the time track and also an additional typewritten listing Mr. Armstrong prepared, showing other documents which are missing besides those circled in the time track. We would offer that as Court Exhibit 253 at this time.

THE COURT: Just one second. Somebody gave me a copy of a transcript of the deposition of Mr. Armstrong — I think you did, Mr. Runstein.

Number 253, is a Court Exhibit received for that

G. ARMSTRONG – X – 4060

purpose. Okay.

(Court Exhibit No. 253 received.)

VOIR DIRE EXAMINATION

BY MR. WADE:

Q. Mr. Armstrong, I’m going to hand you what has been produced as your B1 file. Before we go into the additional items which are on the first page of Court Exhibit 253, would you please go to your time track and tell the Judge what you have done to show which documents are missing from the time track from the B1 file and then explain how you know those documents are missing.

A. What I did, Your Honor, was circle on the left-hand side, all of the items which are missing. These items were used in the preparation of this time track and they should form part of this B1 file. All these things should have been filed in here, the various FCOs, Conditions Order, and the various reports, some of which are quoted from, but the report which has been quoted from is not in the file. Everything that I have circled here should be here and is missing from the file. This is several pages.

THE COURT: There is a great deal of material, if I’m looking at this correctly, that we are talking about.

THE WITNESS: That’s correct, Your Honor.

MR. MANION: Your Honor, I have an

G. ARMSTRONG – X – 4061

explanation for it.

THE COURT: Okay.

MR. MANION: Last night I spoke with our client and they told us about how B1 file was compiled. Again, they gave us their absolute assurance that the entirety of Mr. Armstrong’s file was produced.

A time track is compiled from a variety of sources and documents. They talk to people, they review Ethics files, they review Flag Orders, they review hundreds and hundreds of documents. Somebody sits down and makes a chronological summary of Mr. Armstrong’s activities while a member of the Church of Scientology. Those documents never become part of the B1 file. Flag Orders, Ethics Orders, Knowledge Reports, internal communications, they never find their way into the file, Your Honor.

The B1 file is just what we have produced. Those documents that we turned over to Mr. Wade. Now, for Mr. Armstrong, who has been out of the Church since 1982 and whose involvement with the Guardian’s Office and B1 is at best tangential and remote, to say that as a matter of practice, custom and business the B1 files contain such documents is incompetent and unsubstantiated.

G. ARMSTRONG – X – 4062

Under the order that this Court issued, Your Honor, Mr. Armstrong said as a part of his claim the B1 file was missing documents, that documents even up to today were not included in it. Your order, Your Honor, only required the production of documents through April 11, 1983. Our clients assure us, and I believe it’s the requirement and the obligation of a party responding to a request to produce, that everything contained in Mr. Armstrong’s B1 file was produced to him. That the documents and the categories of documents found in Mr. Armstrong’s B1 files are the kind of documents that you would find in anyone’s B1 file. For Mr. Armstrong to say because sources, Ethics Orders, Flag Condition Orders, bulletins, all kinds of documents were referred to or utilized in the preparation of a time track, doesn’t automatically put those documents in the B1 file. They may have been consulted, they might have been utilized. There is documents all over a world-wide organization. But they were never in the B1 file.

We give you our representation of counsel that the question was asked specifically to the client. The client was instructed as to the Court’s order. I went over in detail the Court’s order,

G. ARMSTRONG – X – 4063

what it encompassed with the client, and I assure the Court that every document contained in the B1 file was produced to Mr. Armstrong.

Now, if Your Honor wants me to go through the eight item that Mr. Armstrong has identified on page one of Exhibit 253, and say were these reports ever contained in the B1 file? Did you have any knowledge they were pulled out of the B1 file? I would be happy to do that. But I’m telling you, Your Honor, these are the B1 files, notwithstanding this witness’ assertion that other things should have been in it.

THE COURT: Let me understand this. This addendum, additional documents, of eight items, is that in addition to the circled numbers that are contained —

MR. WADE: Yes, Your Honor. We would request that we be provided the name with the person Mr. Manion spoke to who gave him that information.

MR. MANION: I have no problem with that. It was Mr. Gutfeld. And he’s here.

MR. WADE: I would like to ask Mr. Armstrong some more questions, if Mr. Manion is finished.

MR. MANION: Sure.

THE COURT: I’m in a difficult position

G. ARMSTRONG – X – 4064

because I am in a position of not knowing what goes in a B1 file.

MR. MANION: Your Honor, their request to produce, we understand our obligation to press on the client and explain to him, in very understandable language, what they are required to produce, and we did that. They have said this is what is the B1 file. We are in the same position you are, other than we give you our assurance that we as counsel have discharged our obligation and are satisfied with it.

BY MR. WADE: (Continuing)

Q. Mr. Armstrong, with respect to the listing from the time track, how did you become familiar with the kinds of documents that are in the B1 files?

A. Well, I have seen other B1 files in the organization. I saw a B1 file which was Nibs Hubbard’s B1 file. It was over a whole file cabinet in size. And for every entry on the time track, there was a document in the file.

Q. With respect to the listing and — which is the first page of Exhibit 253, would you explain to the Court what items are missing and what leads you to believe that such items would have been in the B1 file.

A. We are talking about the cover note on the front?

Q. Yes.

G. ARMSTRONG – X – 4065

A. First of all, there is a note here saying: “No. 4. I note the organization has B1 one files for this” — should be “the rest of my family members.” That’s not really an item which is omitted from my file. However, the rest of them, there are various references in here from which I can determine that these reports were consulted or that they should have been there. The first one is a major event. I was locked up in B1 by the Deputy Guardian for Intelligence, in June of 1976, in the Fiefield Manor. And there would be a mass of reports from that period, all of which would have gone into my B1 file. It’s ludicrous to say they were when it was such a major event for B1 itself.

There’s a document in here called the Jerry Armstrong Project, which involves a number of targets to be done regarding me. There should have been all the reports which arose from that. All the, actions which were taken by B1, because it was a B1 operation. There are a number of references in the B1 time track of material which was taken from my PC files. All of the cullings which were done of my PC files should have been in there.

There’s a document which begins, number three, that — this is number five on my list here, “Data on how” — it continues on for half a page, at least page one of that document is missing.

There is a page of Intelligence Report regarding the

G. ARMSTRONG – X – 4066

Curacao Consulate, United States Consulate in Curacao in the Netherlands Antilles. There are no other Intelligence Reports for operations I was involved in in the Guardian’s Office, on the ship or later.

There’s a document there having to do with a dead agenting of Jerry Armstrong’s, dated September 30, 1982. It references a number of things about me, known out securities, some phone calls I allegedly made, a mission which I was supposed to have done to Charleston, communications to and from George Kelly. It references a Madrid incident, an incident when I was detained at the Madrid airport for a number of hours. This also — this is in itself, the DA of Jerry Armstrong, is a Black Propaganda Campaign orchestrated by the organization and there should be a mass of documents to do with that.

There’s a reference regarding an order from the Special Unit, PAC, Pacific area, stating I was not to be harassed. This is referenced, but it is not in the file.

Those are what I was able to, at a glance, see last night.

Q. So what you find are actually parts of documents or incomplete documents, and in addition to that, you find documents which reference other documents which are not in the file?

A. That’s correct. Every time my name would be

G. ARMSTRONG – X – 4067

mentioned, that document would go into my file. There is massive cross filing within the Guardian’s Office in B1.

Q. Mr. Armstrong, are there any other documents which are not contained in your B1 file besides those you have already mentioned?

A. If we are only taking a cutoff date of April 1983, then all the documents concerning the month and a half of harassment by private investigators hired by the organization should all be in there.

Q. Would there be anything else in there?

A. I don’t know. Thereafter, there’s a mass of documentation which ought to be there.

Q. What would that mass of documentation concern?

A. It would concern all operations by the organization against me, operations in which people from the organization were sent out to contact me for various things, Terri Gamboa, Mark Rathbun. There was an operation in which I was harassed in London, England; that also would be in the B1 file or be in the Intelligence files in the organization, whatever those Intelligence files currently are. They renamed the Intelligence — the Guardian’s Office, the Office of Special Affairs at some point.

There would be information regarding photographs that were taken of me by the organization in November 1984. There would be references to and hopefully all the documents which

G. ARMSTRONG – X – 4068

were stolen from the trunk of my car, in November 1984.

There’s a mass of documentation which the organization has assembled on me which they have in their possession, and they may have renamed the files from B1 to some other name, but they’ve got this information.

Q. Are you then aware of operations against you in the last year or two?

A. Yes.

MR. WADE: Your Honor, I think it’s clear from Mr. Armstrong’s testimony, if the Court would like to review, we’ve brought this B1 file. I think of particular interest is the fact that certain of these documents mention other documents of the same sort, yet those documents are not in the file.

The B1 file of Nibs Hubbard, which Mr. Armstrong has testified about, was produced for us. I can provide to the Court the copies we have from that file which show that when these excerpts are taken, the other documents are contained in the same — it was then the B1 file. The difference may be that in Nib’s file, it was things that — the documents which they produced were unfavorable to L. Ron Hubbard, Jr., whereas in this case, the documents not being produced would be favorable to Mr. Armstrong.

G. ARMSTRONG – X – 4069

We request that there be sanctions against the defendants if they do not forthwith produce the entire B1 file of Mr. Armstrong, and those documents which would be contained in that file. What has happened is, they have produced documents which are incomplete in many instances, documents which have been removed in many instances, and the entire file should be produced.

MR. MANION: Your Honor, Mr. Armstrong has no familiarity with what his file contained before he left the organization, so he can’t tell us what has been taken out of the file. He says a lot should have been, should have been, ought have been. He’s been out of the organization since December of ’81.

THE COURT: Mr. Manion, where are all these documents ?

MR. MANION: All the documents referenced in the time track? They are collected throughout the organization in Ethics files, in Knowledge Reports, in Flag Orders. The man was in the organization, according to his own testimony, for eleven years. Hundreds and hundreds of documents and other sources, talking to people, were used to compile the time track. For him to say that L. Ron Hubbard’s son’s time track is different to him —

G. ARMSTRONG – X – 4070

THE COURT: I don’t care about that. I want to know where these documents are in the organization.

MR. MANION: They are in the organization.

THE COURT: Let’s have them.

MR. MANION: All right. We’ll get on it.

THE COURT: In view of what we decided last night of what cross-examination is going to consist of, I want all documents with reference to Mr. Armstrong, everything listed here, everything circled, everything on this addendum list, produced.

MR. WADE: Your Honor, we would request documents to date since the allegations concern things which would have taken place after May of 1983.

THE COURT: I was expecting that question. Are we going to get into an area after the date he left?

MR. COOLEY: Yes, sir.

THE COURT: Then we need those documents as well.

MR. COOLEY: All right, Your Honor.

MR. WADE: Thank you, Your Honor.

THE COURT: Now the question is, when?

MR. COOLEY: We will put our people to work

G. ARMSTRONG – X – 4071

on it as soon as business concludes today.

THE COURT: Mr. Gutfeld is sitting there.

MR. COOLEY: May I consult with him, Your Honor?

THE COURT: Sure.

(Mr. Cooley and Mr. Manion consulted off the record with Mr. Gutfeld.)

MR. COOLEY: We believe we can do it by Monday, Your Honor.

THE COURT: That will work; in view of what our timetable is, I think that will work.

MR. COOLEY: I think it will, too, Your Honor.

THE COURT: All right, that satisfies that requirement, Mr. Wade.

MR. WADE: Thank you, Your Honor.

THE COURT: We have this document; I’ll hold on to it and let’s work again.

Bring the jury back.

(Following proceedings held in the presence of the jury.)

THE COURT: Good morning.

Mr. Cooley.

MR. COOLEY: Thank you, Your Honor.

CONTINUED CROSS-EXAMINATION

G. ARMSTRONG – X – 4072

BY MR. COOLEY:

Q. On or about November 7, 1984, did you meet in Griffith Park in Los Angeles with a person known to you by the name of Joey?

A. I can’t tell you the date, but I have met someone known to me as Joey.

Q. And did you meet him in Griffith Park in November?

A. It’s very likely. Again, I met him a number of times, and November comes to mind.

Q. And did you understand at that time that Joey was a representative of a group within Scientology known as the Loyalists?

A. That’s basically how he called himself.

Q. And did you understand at that time or believe at that time that Joey was a staff Scientologist?

A. I asked Joey at the outset whether or not he was working for Scientology, and he said he was not. I never determined what post he was on or where or what organization he was in, if he was. In fact, I attempted to find out exactly where he and where the others in the organization, that he said he was a part of, where they were, who they were, and I could not and did not. But he assured me that he was not working for the organization; that is, he was not working for RTC ASI Scientology, whatever that corporate thing is.

Q. On the occasion that I refer to, did Joey furnish you

G. ARMSTRONG – X – 4073

with some internal documents?

A. The one time — I believe there was one time Joey furnished me with some documents, they were public documents — that is, they were published by the organization — and I took them and gave them to the Criminal Investigation Division of the IRS.

Q. On the occasion of your meeting with Joey, to which I have been referring, did you review the documents, saying that you would study them later and that you and Mike would have a lot of questions based on the documents?

A. Boy, I may have said something like that, but it really doesn’t come to mind. What I did was provide the documents to the IRS. The documents all concerned some organization called, my recollection is, the International Hubbard Ecclesiastical League of Pastors. And Joey had described this organization to me as something that the organization — that is, Scientology or whoever — corporately had set up in order to cover up the decimation of what was called the Mission Network. And I didn’t know, prior to Joey’s telling me, of the existence of this group. But he said that that was the key to unraveling the corporate octopus, and I provided them to the IRS.

Q. Did you inform Joey, as you reviewed the documents, that you felt like a kid in a candy store and asked him whether the written issues that passed through the

G. ARMSTRONG – X – 4074

organization were run off in the Church and whether the type face used on those issues was similar to the type face that appeared on the documents that he showed to you?

A. Run that by me again.

Q. Did you say to Joey in substance, when he handed you these documents and as you reviewed them, that you felt like a kid in a candy store and then asked him whether the type face on issues that went through the Church was the same as the type face that appeared on the documents that he was giving to you?

A. First of all, the kid in the candy store would not be my phrase at all. I don’t believe I have ever said that. He may have said it. But I would not have been concerned about the type face of these documents; it wouldn’t have concerned me at all. These documents were, I recall, mimeographed issues and were regular standard mimeo issues. We may have talked about type faces at some other time, but I don’t recall at that time. Perhaps Joey could correct me, but it doesn’t make any sense that I would have brought up type faces in regards to organization documents which I was getting.

Q. Did you on that occasion tell Joey that you could create documents with relative ease because you had done it for a living?

A. Not — Mr. Cooley, that’s — No.

Q. Did you on that occasion tell Joey that it was

G. ARMSTRONG – X – 4075

necessary for you to talk about the kind of documents that should be created and who was going to get them?

A. I don’t quite understand your question. That I should talk — Run that by me.

Q. Did you tell Joey that it was necessary for the two of you to discuss the kinds of documents that should be created and placed in the files of Scientology and to whom they would be disseminated?

A. Joey had, perhaps on this occasion, and definitely on earlier occasion, brought up to me the possibility of placing documents in the organization. It was one of the plans of the group he belonged to. Obviously, it was an operation from the outset, but what he told me was, one of their plans was, in order to get rid of the little clique at the top of the organization, they wanted to plant — create documents and plant it — plant them in the organization. He brought this up on at least a couple of occasions. I said, “It makes no sense.” I said, “That will ultimately only get you more trouble and it really isn’t needed.” And I never agreed to such a thing, and I never suggested it.

Q. Had you, prior to the meeting to which I refer, furnished Joey or any other alleged Loyalist, with a copy of a complaint to be filed against the Church and individuals in the Church, including L. Ron Hubbard?

A. What happened was — I’ll give you that, because we

G. ARMSTRONG – X – 4076

are talking about two documents here. So I will go back, now that the whole situation is out, and again, it’s obvious that this is an operation, was from the start, and that I was sucked in by this organization one more time.

I was called just after the Armstrong trial, which ended in early June, 1984. I was called by someone, and this person said, did I want my PC files. I had wanted my PC files for a long time, and it was obvious that, sure, I wanted my PC files, I didn’t want the organization to have them, and I wanted them for my own peace of mind and any number of reasons.

The person — it was a male voice — said that they were being transferred that night. And later I got that they were being transferred from ASI. They were being transferred that night, and did I want them. I said, “Are you going to deliver them to me?” I still don’t know who made the call, but I thought at the time it might be Mark Rathbun, who I saw in the court this morning, but it probably wasn’t, it was probably someone else working for the organization.

So I then asked — or it came out that I would have to go somewhere and pick them up, and I said you, “Could that be construed as accepting stolen property?”

And the person said, “I don’t know what the legal definition of it would be.”

So I said, “Well, in that case, as much as I want

G. ARMSTRONG – X – 4077

them, I’ll pass.” That was my first direct contact, and here it was just a voice on the end of the phone.

Within a day or two — I was at that time — The trial had just completed, my trial, and I had already made arrangements prior to the trial to testify in a case in London, England, a custody case. And I was called again and — same voice — and I was told that “While you are in England, you are going to be served with a lawsuit by the organization. And the reason this is to take place in England is because over there, you are going to have to get an attorney and you are going to have to come back here, and you are going to have to go back there, and they are going to break you financially by your having to defend yourself.”

So in any case, I still decided to go to England. While in England — I arrived on a Friday in England, and by Tuesday, I had picked up surveillance.

I was with my wife over there, and we were staying in a little hotel, and we knew we were being surveilled on Tuesday. I had testified on a Monday and we left on a Friday, and we picked up surveillance in London on a Tuesday, Wednesday, Thursday and Friday. And it made it an extremely unpleasant stay in London when it could have been something half decent.

On the way, flying out of Heathrow Airport in London, three people who identified themselves as private

G. ARMSTRONG – X – 4078

investigators — we only had about — The plane was boarding when this thing happened and we were in a panic to get through lines and to get there, and we were followed from the hotel out to the airport. And then two more PI’s picked us up in the airport, and I was indeed served with a paper.

The paper was not a lawsuit. It had — It was an emergency stay in my case from the Appellate Court, sealing the documents which had been admitted into evidence. This was served on me; it made no sense whatsoever, because what had been custom up to that point, simply to give my attorney a copy of whatever paper I was being noticed with.

During this period, which lasted about ten minutes with the private investigators, this guy kept repeating that — first of all, he said, “What were you doing in the Old Cock Tavern on Tuesday night?” And I said, “You are nuts.” The Old Cock Tavern happens to be on Fleet Street right — a little down the road from the Court, High Court in which I was testifying in the custody case. And I — in fact, my wife and I had had lunch at the Old Cock Tavern on the Monday preceding this alleged incident on the Tuesday. I said, “You are nuts.” He said, “You were observed by two private investigators in the Old Cock Tavern on Tuesday.” I said, “You are nuts. I was in the Old Cock Tavern on Monday.” He said, “Who was the Arab you were talking to in the Old Cock Tavern?” Again I said, “You are nuts. I never talked to an Arab.”

G. ARMSTRONG – X – 4079

And he kept pushing this and finally he ended up saying, “You were observed by two private investigators passing sealed documents to a bearded Arab in the Old Cock Tavern on Tuesday evening” — an incident which never took place. My wife and I had, in fact, gone to the Old Cock Tavern on Tuesday because the luncheon Monday had been okay, and the place was sealed off. That is, the dining room part was sealed off. So after the Monday, I was never in the Old Cock Tavern; I never spoke to any Arabs there. The only person I did speak to there was the waitress and my wife.

In any case, I knew at this point there was some operation going down regarding me, and I was extremely freaked out and upset. Then I got back to the U.S. And the day after my arrival I prepared an affidavit, which was filed in my case, laying out all of these — the incidents from London.

Then there was another series of events which happened. I was in court in my own case — there was a hearing — and I had won my case and there was a decision which had come from the judge; it was a very strong decision, it was completely in my favor. And the attorney for the organization, a guy by the name of John Peterson, went into an absolute tirade in the court, again going through the same party line of the organization: that I was a thief, that I had stolen these documents, and I was guilty — when those private investigators who harassed me and my wife for a month

G. ARMSTRONG – X – 4080

and a half, I was guilty because I had taken their photographs.

And I knew then that there simply is no way that courts can restrain these people; that it is a terrorist organization. I had beat them in court and yet it was meaningless. And I knew this whole thing came from Hubbard. And I knew that I had no future whatsoever, and the only thing to do was to confront what was this thing which was masquerading as a religion and was, in fact, a terrorist organization.

So during that period of time, I was again contacted by — by whoever. It probably ended up being this person Joey; I never got his real name; I don’t know it to date. There was a meeting that took place. And I don’t recall if — during the meeting or before, but any case, at one of these events, and they took place over at least a couple of months and possibly several months. I had a complaint which had been prepared a couple of years before by my then attorney Michael Flynn, and the complaint was essentially to have a receiver — I don’t know the legalese on this, but to have a receiver appointed, to put the organization in the hands of a receiver so that the money which was being paid to private investigators to attack people like myself, that that sort of activity could be curtailed.

Around the same time, I learned of — in the press,

G. ARMSTRONG – X – 4081

the organization made an accusation against my attorney, Michael Flynn, for — the claim was that he had attempted to cash a forged check of $2 million on LRH’s account. I know Michael Flynn, and Michael Flynn has saved my life in this whole thing. And I knew that that was again nothing more than an organization operation.

I knew that they were trying to tie me in, because the person that they — that the organization claimed linked Michael Flynn in was an Arab by the name of Tamimi. And the organization came with this idea, or they claimed that they had obtained the proof of Michael Flynn’s forging the check, by — from a private investigator by the name of Eugene M. Ingram. I had known that Ingram was working for the organization sometime prior to that. I had been shown press on Eugene M. Ingram during the Armstrong trial. I knew this was a guy who had been dismissed from the Los Angeles Police Department, that he had been indicted on charges of pimping, pandering, involvement in drugs, and that this was the guy that the organization was using to set up Michael Flynn. And this was the guy that Hubbard, ASI, that group within the organization was paying him and his ilk to destroy me. And I knew that I’ll do whatever I can. I never did anything illegal, in any case.

I knew then that they had this alleged incident with me passing alleged documents to this bearded Arab — Tamimi’s

G. ARMSTRONG – X – 4082

an Arab. Somehow they are trying to hook me into it. I went to the FBI, and I continued to provide whatever information I could to the FBI as this whole thing developed. I think it’s very serious. And they are talking about the absolute destruction of a decent man’s reputation, and they bought the testimony of Tamimi, a known perjurer who was then, awaiting extradition to the United States, in an Italian jail. And they used this as the facts on which to smear Michael Flynn’s name. I was obviously involved because of the Arab connection. I didn’t know how, but I knew it was an operation.

In any case, sometime along, I was recontacted by Joey. And the main thrust of the communications from Joey was that this group — he never identified them — they were apparently within and without the organization. I don’t know who they are. He said that they want to reform the organization. He said that they believed that the smear of Michael Flynn was a setup by the organization. They said that they had more information regarding this.

And at some point, either prior to or right following the first incident, they gave me a document — you know, who they are, I don’t know — it was the second page of what in Scientology is called a Cramming Order. Someone — and she was identified as Ann Rackerman or Rackeman, was crammed within the organization — crammed means that you are sent to

G. ARMSTRONG – X – 4083

be straightened out, to be corrected, because you erred in something. She was somehow involved in the Tamimi-Ingram setup: Michael Flynn. Within that document was a name “Rezervitz”; it was partially blacked out, but I was able to make that out of it.

I knew, via Michael Flynn, the name of the Assistant U.S. Attorney in Boston who was involved in the investigation of this matter. And I called him up and I read to him what this thing which had been provided to me said, and he said send it to him. All I had was a handwritten — it was handwritten off the document, off the second page. I had handwritten it. And I did call up Brackett Deniston, gave him the information and sent him that document.

Subsequently as the — this mythical group, whoever they were in the organization, provided me more information. I don’t know — again, it is probably an operation by Hubbard-Ingram, right from the start; it probably was, and probably I was duped.

In any case, I trusted these people, and they provided me more information. It was information which linked in a company by the name of Intercap in Arizona, and Intercap led to a company called Intertel — Intertel is an international intelligence — private intelligence organization. And the organization had given money to Intercap and Intertel. The information however, which she

G. ARMSTRONG – X – 4084

said should have been in the files, had been removed from the files in an attempt to cover up the Ingram-Intercap-Intertel connection. That’s all I know of that, but I provided that information again to the Assistant U.S. Attorney in Boston.

I met with Joey — the first time I met him was — and each time I met him — it was on his instructions on where to go, and I followed whatever security precautions he deemed were advisable to take. I was fairly high profile by choice. That’s the way I felt that it was my best protection in this whole thing. He chose a different route. And when I met with him, I accepted whatever directions he gave. I always asked him if he was taping the conversation, he said no. I asked him if he was working for the organization, he said no.

In all conversations, I stressed that I have no interest in Scientology. To me, it is a perfidious organization. It doesn’t mean anything to me. I don’t care if other people continue to be Scientologistists, that’s up to them. But the reign of terror of the organization, I considered, had to stop. And I was out there. How it happened to — you know, how I got put in the position, I will never know. By misfortune, probably.

Joey’s and this group’s, so he said, their main interest was in proving that the Tamimi-Ingram story was false. I think that current events, as have been up folding, have been showing that to be true. I was recently sent a copy

G. ARMSTRONG – X – 4085

of a post card which had been received in the U.S., from Tamimi, in which he stated that he now knew what Ingram was up to and that people were being hurt, and that he wanted to talk to somebody. He said he had sent the same thing to the press and that he had sent it to the U.S. Consulate. I think he said the consulate or embassy. I have a copy of that post card. And that was within the last month.

So I said to Joey, and I said it on the first occasion, and I said it a number of occasions, that “If they want to take over this organization, fine with me. If they say they want to end the reign of terror, fine with me. If they want to reform the organization, fine with me.”

They said that they contacted me because I had a track record. They said that I had the only — I was the only one with known statistics, that I had taken on the organization and beat them; that is, in my own case. And that I had been the only one to do that and that’s why they were contacting me. I don’t know. You know, they know my buttons, and they know on what subjects I’m sensitive and they probably played them to the hilt. They know how chose I was to Mike Flynn. They knew I wanted to protect Mike Flynn.

Anyway, I met with him a number of times. There was probably two main meetings. Throughout this, as well, I was writing a book, which I continue to writeworking title of that book was, from the outset, On The Trail of Eugene M. Ingram.

G. ARMSTRONG – X – 4086

It probably is on the trail of L. Ron Hubbard, ultimately, but it’s a book and it involves this massive intelligence operation by the organization. And it involves my own part in it. It involves communications which I gave to these people, different kinds. Some were quips, because underneath this all, I do have a sense of humor. Some were — you know, statements which they requested. Various, various things. I don’t even recall what they all are right now.

I’m sure Mr. Cooley is going to bring them all out here and parade them in front of everyone.

I was asked about various possibilities. They said that they had a concern and I had a concern, that what happened, when this thing finally resolves, is not a Jonestown. And the various things which I suggested and which Joey suggested, I thought were in alignment with that need to make — they wanted a transition of power within the organization. They wanted to get rid of the clique at the top. They were very concerned about Ingram. They were very concerned — they laid out to me how — when I say “they”, I spoke to two people. Joey was, I suppose, a messenger for the organization. So often I say “they”, because he spoke as if he were speaking for this group.

They wanted to get rid of the private investigators. They were very afraid of the private investigators. They were afraid for their lives. So they said.

G. ARMSTRONG – X – 4087

I told them that they should know from the outset that the organization knows who I am, they know where I live, they have taken my deposition many days so far, they are going to take it again. I’m going to be asked questions. I said that I would try to protect identities. And I still would do that today if the Judge ordered me to name names, I would have to give it a lot of thought. I suppose it’s moot at this point, because it was an organization operation from the start. But I told them that.

We discussed a number of things. Some of the things were light. Some of the things were heavy. I can’t recall everything that we did discuss. There was a very intense time. I met him — I only recall two locations. One was in the cemetery and one was in Griffith Park. And it may be as Mr. Cooley, says November 7.

On November 8, I was photographed by people from the organization about two miles away from the organization, from the Cedars Complex in Los Angeles. And at that time, I was going to the IRS and I parked in an underground parking. And I was up talking to the IRS for approximately 45 minutes, during which time a briefcase containing a manuscript, the original handwritten pages of a manuscript, and about 50 pages of artwork, so there was about 350 pages in all, was stolen from my trunk. It was locked. They went through with a little tool.

G. ARMSTRONG – X – 4088

In my opinion, although the evidence is only circumstantial, the organization got that manuscript and the various documents which went along with it.

I had my attorney at the time, Julia Dragojevic, write a letter demanding the photographs that were taken of me. She also mentioned in her letter that the manuscript that had been stolen, and in you got that, give it up.

I got back a rather disgusting letter from John Peterson, in which he said — didn’t even mention the photographs. He didn’t mention the organization having them. And he went on a tirade again about me. Some of those documents from the manuscript or from whatever was in my briefcase, probably you will see them here today.

Sometime later, I met with another person. I don’t know if he’s been identified by the organization yet or not. If it’s an operation, it’s obvious. If they got him through one of their sec checks, his fate is also obvious. In any case, I won’t give you his name, but he was supposedly above Joey within this group. This group of reformers. And I met with him —

Oh, now, we come to the subject of the complaints, which Mike Flynn had prepared this one approximately two years before. There were, at that time, a number of people who had left the organization who also wanted to reform it, perhaps they considered themselves Scientologists, certainly they had

G. ARMSTRONG – X – 4089

given their lives to Scientology, and they wanted to do something. They never did. But he prepared a complaint and the object of it was to put the organization, Scientology, in the hands of a receiver. Which, in my opinion, still exists as a possibility for resolution of the Scientology problem and still is the sanest solution, because it should be with the courts. It just, in my opinion, it should not happen that this organization can continue hiding behind the cloak of religiosity.

So I gave a copy of this first complaint to these people. They wanted to do something. Later they said — and I can’t recall exactly who said what, whether or not it was in a telephone call or whether or not the intermediary told me or whether it was Joey or the other guy. But one of them told me that the complaint was for — that it wasn’t current enough. And that they even had some people who were in the organization, who they said would be parties. So I asked Mike Flynn — and this is Mike’s sole involvement with this — Mr. Cooley asked me about something about Michael Flynn being involved in covert activities. And the fact is no, he never has been. Mike — At my request, he gave me this thing. And his idea has always been from the outset, get it out in the open. Get the truth known. That’s the way he’s approached it. He’s been completely open with me and he has given me free reign to say whatever I know. He has never tried to

G. ARMSTRONG – X – 4090

suppress the truth and he has never engaged in covert activity.

So I asked Mike, and he drafted this document and I gave it to these people. When I met this person, he asked me a question — I think this was the first meeting, because I met him twice. He asked me something about Mike Flynn being behind this. I had not mentioned Mike Flynn or that this document had come from him, and I thought it strange at the time. And I should have twigged, as we say, that there was something going on because the question in retrospect was possibly a setup. And I said, “I won’t tell you who is behind it. And if I’m asked under oath, I’ll tell you the same thing. I’m behind it. Mike did it for me. I relayed it to them at their request. They are be behind it.”

In any case, I had these two meetings. We exchanged information. They said that they were using me because — as I say, I had a track record, I had known statistics, I was in connection with people on the outside.

Oh, also, at the first meeting, they wanted to know of the possibility, what would the federal agencies do? Could they cut a deal, was their word. Excuse me. Could they cut a deal with the federal agencies. I had given testimony at that time to the — Ontario Provincial Police, the state attorneys office in Florida, the FBI — that was in a separate case — and the criminal division of the IRS. They said that they

G. ARMSTRONG – X – 4091

were concerned because there had been this IRS ruling which had come down denying their tax-exempt status. And they thought that if they were going to take over this organization, or do whatever they had to do to get rid of the little cabal at the top, that they would want to reinstate their tax-exempt status or get it back or get it. And they asked me about cutting a deal with any of these agencies.

I said, “In my opinion, that all of these agencies would probably be pleased to know that the organization was becoming honest and that they would probably work with these people, but that they could do nothing.”

During this period of time when I was talking to these people, I brought up the subject with the criminal investigation division of the IRS. I said that I had been contacted by these people who say that they want to reform the organization, they want to know what you will do. Their answer was, “Have these people come forward and testify. If they are afraid for their life, we will meet them anywhere under any conditions. We want to protect them the best way that we can protect them as if they are witnesses.”

I, myself, was a witness and to some degree, I feel protected because I am a federal witness. I doubt that the organization is going to bump me off, because I’m a known federal witness.

And the IRS also said that — that if there was a

G. ARMSTRONG – X – 4092

transition in power within the organization, that it would probably be business as usual. They, their attorneys, would simply then be in communication with this new — new management’s new attorneys, and that that’s how it would be. They would not be involved. They did say that if there is going to be anything going down, they also don’t want a Jonestown, and that if something like that happens, that these people should get in touch with them. And this is basically what I relayed back. I gave them the people inside, because I felt that, you know, if these people are sincere and if they are nailed by the organization, they are in some trouble so they should at least have phone numbers to contact. And I gave these to Joey with a couple of names. FBI and CID of the IRS.

I then — I also relayed to them that — and I said this many times in many contexts, there’s nothing that I can do, there’s nothing that the IRS can do, there is nothing that the FBI can do. If you guys want to do something, you do it. You cannot tag onto the coattail of indictments which may come down at some point. Because we all knew that there was a criminal investigation going on by the IRS and there was — the investigation and pending case by the Ontario Pronvincial Police, and I think there’s even a mention of that in the second complaint, which was just — it was a draft. It was not to be used because, you know, Mike was writing this at my

G. ARMSTRONG – X – 4093

request on the information which I relayed from these people, and it could simply not be accurate.

I was asked at one point about an attorney. They said they were considering Mike Flynn or Contos and Bunch. Both of whom were my attorneys in the Armstrong case. I said that, in my opinion, because you people, in bringing this action, are in essence Scientology, that it would be a — what’s the legal term? —

THE COURT: Try conflict of interest.

THE WITNESS: Thank you, Your Honor.

There would be a conflict of interest. And I checked this out with the attorneys involved. Mike and Contos and Bunch — they said, yes, but that’s how they would perceive it as well.

So the organization — this group, said they wanted to get an attorney, they wanted me to find them an attorney. So I did what I could. I got ahold of a couple of possible names. Then they said that they had already contacted an attorney. And through a series of communications and ultimately being directed to a particular secret location, I met with an attorney. And I don’t know if his name is out or not or if he was working for the organization. My guess is he was, but if — I would just as soon not say whose name it is.

G. ARMSTRONG – X – 4094

Now, not being very gifted in the legal business, I asked him at the outset — I was driven there and just dropped off. So I met with this guy alone. I said at the outset, “I don’t know what’s going to happen in all this. I would — I would only talk to you if it would be considered that our communication is confidential.” He said, “Yes, but in any case I’m here now and I will waive it.”

He had the complaint and he said that he was working on it. I still didn’t know his client. And the main — the substance of my communication to this man was, because he wanted me to substantiate some of the allegations in this complaint. I said, “These are things which your client, whoever that is, has been saying, they were saying to me. They have the information. I can’t do a thing. I can’t tell you when indictments are going to happen. All of the federal agencies or law enforcements of any kind is extremely closed mouthed. They don’t tell me anything. Occasionally they will call up and ask for a specific esoteric piece of information and I’ll try to provide it. But I don’t get anything from them.” I said that, “This all depends on your client. If your client is legitimate, if your client legitimately wants to do something about

G. ARMSTRONG – X – 4095

this, then perhaps there’s a vehicle that they can use, they can go through the court and they can do that thing. In my opinion, a receivorship makes sense. The terrorism should end.” It was a fairly brief communication with this attorney.

I haven’t communicated to him since. I left him with the recommendation that, “I am not an attorney, I can’t — certainly cannot recommend anything to you. Talk to Michael Flynn. He can explain this better than I am. He has been involved with the organization since 1979, at least. It’s been a long-term thing. He understands it. He understands the issues. He knows about Ingram. He knows about John Peterson. He knows about the control of the ASI, Author Services. He knows about the funneling of money to Hubbard. He could better than I.” I said, “It all depends on your client. If your client has the courage, great. If it’s all a sham, if it’s all bogus, too bad.” That’s really how we left it. If they taped the conversation, maybe we will hear it later today.

My final meeting with one of those people — actually there was a subsequent one which was just going out to dinner. It was with Joey, having a few beers, eating a meal, and mainly discussing his

G. ARMSTRONG – X – 4096

conflict about staying in the organization or getting out of it. That was — I don’t know, maybe it was two — maybe two months ago. It is probably another part of whole operation to keep Armstrong on the hook.

But this last time I met with this — the second guy, it was sort of a heated conversation. And I felt like he was trying to get me to say things say. He was trying to make me responsible for this whole — whole thing. I was responsible, I was wrong because the Canadians hadn’t come through. That kind of thing. And we discussed Scientology a little bit. I gave him my viewpoint, which I would give to anyone. And we left.

Sometime after, maybe a couple days later, I got a phone call from Joey and he read me a short message which apparently had come from these people, and it was — it was sort of a kick in the teeth. And I felt, you know, it a bit heavy. And I wrote them a letter which I sent in via this intermediary. I don’t know where the stuff goes. You know, obviously it went into the — you know, their B1 files.

And, you know, a letter like a lot of my stuff kind of flips between absolute morbidity and

G. ARMSTRONG – X – 4097

absolute mirth. And that was the last real communication. Anything I got from them, and there was only those two instances, I provided to the appropriate law enforcement agency; anything I gave to them, I don’t know what there is.

I do know that at one point I wrote — this is my recollection of what I have written — they wanted to get rid of the PIs, the private investigators. They wanted to get rid of Ingram. They were scared of Ingram. I noted that the use of private investigators is by Scientology’s own policy, off-policy. Hubbard states that they are not to use outside agencies. Use our own professionals. That’s a quote. Citing this, I wrote up, and I can’t even tell you what I said, it was probably funny, probably — I can’t tell you. We are probably going to see it here today. And just an idea for these guys to do whatever they were going to do to get rid of the — get rid of the PIs, due to the fact it was off-policy, due to the fact that the private investigators had, in fact, got them in more trouble than they got them out of. And I wrote in a few notes. And I really can’t tell you what they are.

In all communications to these people, I

G. ARMSTRONG – X – 4098

tried to impress on them that I had survived this far because I had not done anything illegal. The organization had. That was their downfall. They at least twice, possibly more times, suggested — they had this idea of creating documents and then having a raid, having the organization raided. I thought it was a stupid idea.

In these conversations, I may have said at the outset, even this I doubt, when asked — I may have mulled it over, like it is a possibility. But I never left anyone with that impression that that was ever my idea or that I ever condoned it.

So I think I have covered more or less the whole sordid story. I should say, as well, that right after the story of Michael Flynn came out by the organization in the national press, I called and Eugene Ingram at that point was involved, and I was told by the people, these people, Joey and his friend, that Hebert Jench, who is the figurehead president of the Scientology International Corporation, had given a speech or a number of speeches in which he had laid out that Ingram was responsible for the investigation. They also provided me with the names of other private investigators. I don’t recall who their names are

G. ARMSTRONG – X – 4099

at this time, but I passed those on. They said that Hebert was going around making a speech, that Ingram was there, and that Ingram was making this claim about Michael Flynn.

When I heard this, I called up Eugene Ingram, I first called his office, I talked to a secretary in the office, couldn’t get ahold of him. He called back fairly shortly thereafter. It was a very intense communication from Mr. Ingram. He stated that he was going to — pardon me here — he was going to fuck with me. He was going to get me. He was going to see me in jail. And he ended it by saying he was going to put a bullet between my eyes. And this was the guy who was employed by L. Ron Hubbard as his hired muscle. That occurred shortly after the materials surfaced in the newspaper, after I was back from London. That was the last communication I had with Eugene M. Ingram.

I think that’s about it.

COOLEY: (Continuing)

Did you, on or about November 7 —

MR. WADE: Your Honor, could we have a recess at this time. It’s about time for the morning recess. Mr. Armstrong’s been talking —

THE COURT: We will take a very brief recess.

G. ARMSTRONG – X – 4100

Please remember my cautionary instructions.

(Jury was excused.)

MR. McMURRY: We have a brief matter.

(Following proceedings held out of the presence of the jury.)

MR. McMURRY: We have a matter for the Court, Your Honor.

THE COURT: Okay.

MR. McMURRY: When this line of questioning was suggested yesterday afternoon, we objected strenuously under the evidence code of the State of Oregon. We also objected on the grounds — excuse my voice. I have a bad cold.

THE COURT: It’s okay.

MR. McMURRY: We also objected on the ground that it is incumbent upon the Court to protect the witness from harassment and embarrassment and undue delay or opening issues that will unduly confuse and prolong a proceeding. The Court, based upon Mr. Cooley’s statement that he would connect up criminal activity and a conspiracy — criminal conspiracy, allowed for this limited question.

I thank the Court for allowing the testimony to be fully stated. Obviously very, very sensitive to the witness. I now move that the matter be

G. ARMSTRONG – X – 4101

stricken and that the Court give the jury the limiting instructions that the matter was inquired into for the limited purpose of credibility. That’s the only purpose for which it could be inquired into. And that as a matter of law, the matter has been explained, and unless and until Mr. Cooley at this time can, in-camera, bring clear and convincing evidence, the matter is stricken from the Court and then we would ask the Court for additional sanctions to be imposed, depending upon what the in-camera showing of this great evidence that he promised as an officer — special officer of this Court.

MR. COOLEY: I haven’t finished laying the groundwork yet. I would then, after doing so, be pleased to have the Court view, in camera, the evidence that I have of this witness’ criminal conduct.

MR. McMURRY: Further cross-examination on this subject without an in-camera showing by sworn testimony would be improper, and highly prejudicial, Your Honor. The full discussion of the incident was allowed by the Court, and I think properly, to give the context. And I don’t think that further cross-examination on this subject will do anything but prejudice, harass, attack, confuse and prolong

G. ARMSTRONG – X – 4102

this proceedings. Without such an in camera, under oath, by witnesses, not by protestation of counsel, but by witnesses, a full hearing on this extraneous matter of criminal conspiracy.

MR. COOLEY: I simply wish to ask the witness additional statements and give him an opportunity to either admitt them or deny them in connection with his conversationss with Pal Joey. And once he’s done so, I would be happy to submit to the Court, in camera, the evidence that I have.

THE COURT: All right. I think you have the right to ask questions regarding conversations he’s been allowed to testify to. And then I’m going to grant your motion, Mr. McMurry, to hear in camera what this evidence will be.

MR. McMURRY: Sworn testimony, Your Honor.

MR. COOLEY: I will inform the Court as to what my evidence is at the appropriate time. May I make a representation to the Court that I have it.

THE COURT: That’s the representation that I was relying on yesterday afternoon that allowed us to go forward in this matter.

MR. COOLEY: Yes, sir.

MR. McMURRY: Your Honor, we object to that proceeding. The procedure within discretion of this

G. ARMSTRONG – X – 4103

Court and the federal procedure, as a matter of practice, it is when this type of extraneous evidence on this serious a matter for a witness, before proceeding further, then the evidence must be adduced upon which further examination shall take place, because the prejudice cannot be offset by a limiting instruction.

THE COURT: To my way of thinking, the only person that has been prejudiced so far is Mr. Cooley’s clients.

MR. COOLEY: I have allowed the full explanation to be made by this witness because I felt it was consistent with Rule 609 (1), that he be permitted to make that explanation.

THE COURT: And he did.

MR. COOLEY: Now he has made it. I wish to finish making my record and then we will let the Court and jury decide whether the impeaching testimony —

THE COURT: No, first I’ll hear what that’s going to be.

MR. COOLEY: Yes, Your Honor.

THE COURT: And then we will decide.

MR. COOLEY: Thank you, Your Honor.

THE COURT: Okay.

G. ARMSTRONG – X – 4104

(Court recessed at 11:12 a.m. Reconvened at 11:28 a.m.)

THE COURT: Get the jury.

(Following proceedings were held in the presence of the jury.)

THE COURT: Mr. Cooley.

MR. COOLEY: Thank you, Your Honor.

BY MR. COOLEY: (Continuing)

Q. The meeting on November 7th with Joey, did you say to him that the best way to handle the creation of documentation was through the preparation of CSW or completed staff work in connection with an issue on which the person creating the issue would keep copies of the CSW that would be in the files in the event of discovery in a civil case brought against the Church or in the event of a raid?

A. No. We did discuss creation of the writing of a CSW, and the main area of interest was private investigators. And the object was — again, this was — you know, they asked me and I gave them whatever ideas I could. The object was to get the private investigators removed. The object was — These people considered themselves, at least to some degree the way they presented themselves, were the old-time GO personnel. Joey considered himself an intelligence specialist. The object was to reestablish intelligence in the hands of the organization, show that it had worked in the past and

G. ARMSTRONG – X – 4105

therefore they could get rid of these thugs, private investigators. It was necessary to write a CSW and get the various people’s signatures on the way up, even if it was a turndown, because the organization was, in fact, involved further on in an off-policy action by the use of private investigators. So how exactly they were going to do this? I don’t know. In fact, they asked me and I even just scribbled one out for them, something about the private investigators. Mr. Cooley undoubtedly has it.

They would have to retain a copy, not in the event of a raid, but simply as proof that it did occur. There could not be a denial by the top of the organization if a copy was retained.

Q. Did you tell Joey you could write the CSW and that you could duplicate the print and the ink?

A. Well, the two questions are actually different questions. I said I could not write the CSW because I don’t have the information. They had the information. They have the specifics. I did, in fact, write — I don’t think I completed it, and I think that it was just some notes, and whatever it is, is what it is. That has nothing to do with the use of inks. What was planned, and this centered around the fear that the transition, whatever these guys had planned, would be a blood bath.

So there were a number of possibilities discussed.

G. ARMSTRONG – X – 4106

One of them was, they had contacts on the outside, they had contacts on the inside, so they said. This is based on their representation to me, because I don’t know who these people are.

And we discussed ways in which people within the organization could be contacted in advance of whatever these people did. They knew; I didn’t. I even asked them, “Where are your people placed so that I can assess who the heck I’m dealing with?” I didn’t get that information.

I suggested sort of a buddy system, so that in the event one of them got nabbed, they would know what to do; that the other guy would take care of them.

I suggested, and — I don’t know who actually suggested it, but we did talk about the necessity of in advance of whatever these guys do, writing some issues which would pave the way so that there was not a blood bath. And that’s the only idea that the use of inks, that is nothing whatsoever to do with the CSW; that is, the creation of mimeographed issues similar to whatever the organization uses so that there could be something written by the organization, by them, whoever they are, so that it just was not miniature holocaust. That’s what was discussed.

Q. Did you review papers with Joey and tell him that you had ideas on how to change them, and that since you could not go within a mile of the organization and you could not be

G. ARMSTRONG – X – 4107

stuffing things into their communications baskets, that you would need helpers?

A. It wasn’t — He apparently was in touch with people who was inside the organization. It would be ludicrous for me to say that I was going to do this. It’s just ludicrous. He had these things. He came to me and said he — his group — I don’t even know if he knew who they all they were. He said they were placed in various places within the organization. He said that they had been in the organization for two years prior to ever contacting me; that they had been operating as this group, the Loyalists, for two years.

So I did ask him about people in various places. Did he have someone in mimeo? He told me they had as they placed people, he said, within the organization. He told me about it. He told me about they now had two members on the Board of Scientology of California. He said that they had people in PR; that they had recently placed someone in PR. He said that they had placed someone at Gilman Hot Springs. All of these were his resources. I had no way of contacting them.

Q. Did you meet with Joey again in Los Angeles on November 9, 1984?

A. I can’t tell you, again, if that’s the date or not. It may have been. In Los Angeles?

Q. Yes, sir.

A. Okay. This is another meeting that I had not brought

G. ARMSTRONG – X – 4108

up earlier.

I was taken by Joey — I don’t think we had initially met in Los Angeles; we usually went through a series of stops, drops, whatever they are called, and he took me to a hotel in Los Angeles — I think it’s the Sheridan Grand. And there I was to meet someone that he said was the group’s backer or potential backer.

Q. Financial backer?

A. That’s correct. As I’ve said, they were considering the filing of a lawsuit. He took me — And the way he introduced me was as he had talked to me before, as the person with known statistics, the person who knew what was going on on the outside of the organization, the person who had taken on the organization in the Armstrong trial and won.

Q. Excuse me Mr. Armstrong, just so you will know what I am talking about. I’m not talking about that meeting. I’m talking about another outdoor meeting.

A. That’s the only one in Los Angeles. The other ones were in Griffith Park, to my recollection.

Q. All right, Griffith Park. I’m talking about another meeting in Griffith Park.

A. Again, I don’t have records of dates, but I can tell you that I did meet him, probably two times in Griffith Park, this one time in Los Angeles, one time he took me to the attorney. One time he took me to this other guy, the second

G. ARMSTRONG – X – 4109

person. A couple of times I met him and there was no meeting. I was supposed to meet the other guy; it couldn’t be established. Those are the times that I recall. There may be more, but those are definitely the times when I did meet him.

Q. On the second occasion of the second meeting in Griffith Park, did you tell him that you had reviewed the documents he had given you two days previously, and checked out the type styles and were then asked by him what your ideas were with respect to creating documents? And did you, before you would discuss your ideas with him, go over with him what the agreed story would be if he or you were deposed on the subject matter of your meetings?

MR. WADE: Your Honor, at this time we would object on the grounds that it appears that Mr. Cooley is reading from a transcript. If he is, we would request a copy of that transcript be given to the witness so he can determine whether or not it’s been read out of context.

THE COURT: Do you have a transcript of some sort?

MR. COOLEY: I have notes here. There will be the full text after I finish questioning the witness for the —

THE COURT: If it’s not an official transcript, overruled. Go ahead.

G. ARMSTRONG – X – 4110

BY MR. Q. Can you answer that question, sir?

A. We may have discussed that sort of thing. Generally, what I have — what I have said is, I will try and protect names, but I can’t tell you anything else. They are going to depose me, and if this comes up, it comes up. I don’t think there’s a Court, knowing this organization, that’s going to compel me to divulge the names of these people because it would put them at risk. As I say, obviously that’s moot because it was a setup from the start.

Q. Did you on that occasion, that second occasion, pose a situation to him whereby he is served with a paper saying you are deposed and not only that you are out of the organization, and put the question, what do we say in the deposition? And did you ask him whether or not he was going to say that Armstrong and he talked about this and had a whole bunch of ideas about how to infiltrate the communication lines and spread turmoil and disaster? What are we doing here, did you say to him? That is the question before I tell you my ideas on documents. Did you have that conversation with him?

A. Well, I do not recall those statements.

Q. Did you then say for an agreed story, of your meetings, that you and he got together had a goal of global settlement of the cases; that he had felt that the turmoil and abuses that had gone on so long were too long, and hence you and he got together and discussed things, and have not

G. ARMSTRONG – X – 4111

discussed anything about destruction of the tech or that Scientology is bad or anything like that? And did you ask him whether he would agree to give such testimony if asked?

A. Something like that definitely may have occurred, because that has been my statement from the outset. It is that I sought a resolution of all the battles which were going on. I was enmeshed in this thing and, in fact, I had said to him from the outset that I want — what I’m seeking is down weapons and the madness. If I asked him would he agree to that? That’s why I’m here. If you are here for something else, maybe that’s the way it was.

Q. After he agreed to that scenario, did you then say to him, “Did it seem to you that the use of the communications lines were what he should do?” And did you say to him, “I’m saying that I can do it; I can type those goddamned things in duplicate and make them look exactly the same. You can’t. And you would not be able to tell the difference”?

A. That’s probably the case. Again, this had to do with the necessity of: if they were going to do anything — in advance of that, having something to explain what was going on, they had asked me a number of times to — on the outside, they wanted me to contact the press; they wanted me to contact — to set it up with a reporter in Clearwater, so that a story — so that their story could be in the press. So there was a number of things like that in which they elicited my help, and

G. ARMSTRONG – X – 4112

I agreed.

Q. Did you not ask Joey to get you the information data, that you needed so you could prepare the documents to be planted in the form of CSW in the files of Scientology for the purpose of framing David Miscavage, Gene Ingram, John Peterson and others?

A. No.

MR. COOLEY: At this time, Your Honor, I am prepared to the submit to the Court two videotapes of the meetings of the seventh and ninth of November 1984.

THE COURT: I’m going to send you to lunch before we get into that — 1:30. You all know my cautionary instructions. Be sure you leave your notes locked in the jury room.

(Jury was excused. Following proceedings held out of presence of jury.)

MR. COOLEY: Get the equipment set up.

THE COURT: I assume you are going to want to say what these things are.

MR. WADE: Certainly, Your Honor.

THE COURT: Do you want to review those before I see them, so you can make any objections?

MR. COOLEY: An in camera inspection — I

G. ARMSTRONG – X – 4113

have no objection to Mr. McMurry being here while you view it and seeing it right along as we view it together.

THE COURT: I don’t want to go through the lunch hour watching tapes.

MR. COOLEY: I couldn’t blame you for that, Your Honor.

MR. MCMURRY: Your Honor, we want to do two things. Number one, we will want to have the tapes examined by an audo-visual expert for determination of the amounts that have been edited and what editing has occurred, if any. And then we will need an opportunity to review them. Now, I don’t know whether the person that we have in mind would be available at noon today or not.

THE COURT: I suggest we better start making some phone calls.

MR. COOLEY: That’s what I recommend, Your Honor. That we get things set up, that the Court view them in camera commencing at 1:30. I can represent to the Court that the two full tapes run 1 hour and 48 minutes. And so perhaps 1:30 — it might be appropriate to give the jury their vacation early, because I’m sure we will have some skirmishing thereafter, after the Court has looked

G. ARMSTRONG – X – 4114

at them.

MR. McMURRY: Well, in the first place we want to take the tapes and — what size tape is it?

MR. COOLEY: It’s a VHS.

MR. McMURRY: We would like to play it on our VHS system, Your Honor, in our office. Perhaps I can get the man to come to our office. I’m not sure whether I can or not. We will be back at 1:30 with the tapes and with such objections as we may have.

MR. COOLEY: I stenuously object to furnishing the tapes before the judge has seen them in camera.

THE COURT: We will get to the objection they made previously about releasing of their tapes.

MR. COOLEY: The last time we were only going to use excerpts, and Mr. McMurry said he was entitled to see them all. We are now going to screen them in their entirety, not just excerpts.

MR. MCMURRY: There are two tapes.

THE COURT: There are?

MR. MCMURRY: Certainly it would be a while to view them in our office and —

THE COURT: I don’t think he wants to give them to you. Then, somebody from their — if they resist giving them to you, then somebody can go over

G. ARMSTRONG – X – 4115

there with you, if they want.

MR. McMURRY: Fine.

THE COURT: And sit there with you when you watch them.

MR. COOLEY: I think it’s inappropriate, Your Honor, for Mr. McMurry to be screening these tapes before the Court sees them and while the witness is still on the witness stand. After the Court has seen them, and the tapes are played for the Court, then Mr. McMurry —

THE COURT: But the problem — it would save an hour and 48 minutes.

MR. COOLEY: Your Honor is going to have to view them in any event.

THE COURT: You may not have any objections.

MR. COOLEY: Your Honor, I guarantee he will have objections.

THE COURT: It looks like we are going to spend all afternoon watching tapes.

MR.COOLEY: I think it’s very important Your Honor.

MR. MCMURRY: That’s just delays. It’s absolutely some more delays. There’s no reason in the world. I have never been in a court yet where my reputation has not been sufficient that a

G. ARMSTRONG – X – 4116

document going to be offered or an exhibit that’s going to be offered cannot be removed for examination.

THE COURT: Most times they wouldn’t object to it.

MR. McMURRY: Right. This is absolutely absurd. Now to waste the afternoon going through the same kind of procedure that can be done over of the noon hour is just absurd.

THE COURT: I agree, I don’t see any reason why you can’t look at them at noon.

MR. MCMURRY: Then the Court can order it.

MR. COOLEY: Your Honor, I think it’s terribly important, particularly under Rule 609 that contains no provision that the impeaching material or biased material has to be presented to opposing counsel before it’s used; that the Court — particularly under the superintendent’s power, that I referred to yesterday, screen these tapes on a in camera or voire dire basis; that the objections if any that Mr. McMurry has made at the time. And I will then allow Mr. McMurry’s expert to examine the tapes to satisfy himself that there has been no tampering with them.

MR. MCMURRY: Whatever Mr. Cooley thinks is

G. ARMSTRONG – X – 4117

appropriate, Your Honor. Apparently he’s going to establish the rules, so —

THE COURT: Wait a minute, Mr. McMurry. That is not accurate. Let’s not get into that, as to what Mr. Cooley wants or what you want. I’m going to make the rules. And the rules are simple. They are not that complicated. If there is an objection to them giving them to you and request that the Court hear them in camera, that is the procedure that must be taken. Most times counsel will not make that objection. That’s why we don’t have this problem. He has made one. That requires the Court to look at them. That’s what we will do. We will look at them. I’m not crazy about the idea of wasting an hour and forty-eight minutes either. But if that’s what we have to do, so be it.

MR. COOLEY: Thank you, Your Honor.

(Court recessed at 11:55 a.m. Court reconvened at 1:36 p.m.)

THE COURT: The program will be, gentlemen, we will bring the jury back and I’m going to excuse them for the afternoon and they get their holiday tomorrow. We will take this afternoon on these tapes and legal arguments, which you indicated to me should take about two and half hours.

G. ARMSTRONG – X – 4118

(Following proceedings held in the presence of the jury.)

THE COURT: Well, I’ve got some good news for you. It is qualified. It’s going to take two and half hours and that may be three before we are through, to rule on some things that have to be ruled on before we can go forward with the case. I see no sense in having you sit in the jury room and just utilizing you for, at the most, an hour later today. So I’m going to let you start your vacation. You are going to get tomorrow off, as I indicated to you. I think it’s appropriate in view of the length of the case, the fact you have all been here promptly all the time and you have been paying close attention. I have been watching you and I know that you have. So I think at this time, it’s time you took a break from it for a day. That, plus the fact it’s Easter Sunday, Passover starts tomorrow night. Everybody should get their respective houses in order.

I’m going to go through the litany of my instructions. Do not discuss the case amongst yourselves. Do not discuss the case with your family or friends or anyone at all you may see over this long weekend. Do not allow anyone to

G. ARMSTRONG – X – 4119

communicate with you or discuss with you any of the parties or this case at all. Do not go to work tomorrow. Consider yourselves sequestered for the purposes of this trial. I don’t want you to go to your respective places of employment. My fear there is people will ask you questions and I don’t want to put in a compromising situation of having to discuss anything about the matter. So the day off means what it says: a day off. Both work and here. Please leave your notes locked in the jury room when you leave.

Avoid the media regarding this case or any parties thereto. I think you all understand what I mean by that. I’m talking about stories, I’m talking about advertisements, I’m talking about radio coverage, TV coverage; whatever it might be. If you hear about any parties in this case, immediately tune yourself out.

Okay? Any questions before I let you go until Monday morning?

All right. You are excused until Monday morning at 9:30.

(Jury was excused. Following proceedings held out of the presence of the jury.)

G. ARMSTRONG – X – 4120

THE COURT: This Court feels after five weeks they have earned it.

MR. COOLEY: I agree.

MR. McMURRY: Your Honor, if I may, if the Court would indulge me, I would like to ask you to take out the first volume of ORS, please, so that I can be reading from the statutes as you read with me. I would like the Court to turn to Chapter 133, please.

THE COURT: Criminal Procedure Generally?

MR. McMURRY: Yes, 133.731, which is the heading of that section entitled Interception of Communications. I would like the Court to be aware, as I’m sure you are, that —

THE COURT: You may rest assured I am.

MR. McMURRY: — that section 133.724 provides that: “Any Circuit Judge may, upon exparte motion of a person who is the District Attorney for the county, may authorize an interception or wire tap of an oral communication upon showing of certain factors contained in subsection (1) A through K.”

THE COURT: I know them very well. I just tried a case of the State v. Hinson, a murder in the first degree case and I had the problem.

MR. McMURRY: Very good, Your Honor.

G. ARMSTRONG – X – 4121

THE COURT: That was some weeks ago.

MR. McMURRY: There’s been no such showing in this proceedings. In addition, the statute, in its first section, provides: “That the interception or — describes an oral communication as “any oral communication, other than a wire communication, uttered by a person exhibiting an expectation that such communication is not subject to interception under circumstances justifying such exception.”

It goes on to define an agrieved person as “a person who was a party to any wire or oral communication intercepted under ORS 133. 724 or person against whom an interception was directed.”

The application for such an exparte order is —

THE COURT: You sound terrible.

MR. McMURRY: I am terrible, Your Honor. I am looking forward to —

THE COURT: I’m glad we have tomorrow off.

MR. McMURRY: I have a bad cold, but I’m not going to let that stand in the way of this matter.

Now, the Court knows the confidentiality of not only the application but the order, itself.

Going on, 133.733 provides: “The contents of any wire or oral communication intercepted under ORS

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133. 724 or evidence derived there from, shall not be received in evidence or otherwise disclosed in any trial, hearing, or other proceeding in any court of this state unless each party, not less than ten days before the trial, hearing or proceeding, has been furnished with a copy of the court order, accompanying application under which the interception was authorized or approved.”

That has not been done, of course.

Now, in such a situation, 133.735 applies and it provides: “Any agrieved person,” as I have previously defined, “in any trial, hearing or proceeding, in or before any court, department, officer, agency, regulatory body, or other authority of the state or of a political subdivision thereof, may move to suppress the contents of any wire or oral communication intercepted under ORS 133.724.”

It was not taken under that statute, as there has been no showing that such a motion was made by the District Attorney of this county. Nor has there been a motion to provide us with that application and the requisite showing.

Going on, 133.736 provides: “Any agrieved person in any trial, hearing or proceeding in or before any court, department, officer, agency,

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regulatory body or other authority of the state, or political subdivision thereof, may move to suppress under ORS 41.910, recordings of such conversation. Such motion shall be made before trial, unless the party did not have an opportunity, was not advised of the intent to use this tactic.”

Now, the statute goes on to provide in Oregon: “That any person whose wire or oral communication was intercepted, disclosed or used in violation of 133.724, or 133.737, shall have a civil cause of action against any person who wilfully intercepts, discloses or uses or procures any other person to intercept, disclose or use such communication and shall be entitled from such persons actual damages, but not less than damages conputed at the rate of $100 a day for each day of the violation or one thousand dollars, whichever is greater, punitive damages and attorneys fees.”

Going on, ORS Section 165.535, “Crimes and Punishments, and Section 165.540, part thereof, makes it a crime in this state for any person to obtain or attempt to obtain the whole or any part of a conversation by means of any device, contrivance, machine or apparatus, whether electrical, mechanical, manual or otherwise, if all participants

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in the conversation are not specifically informed that the conversations is being obtained.”

So not only has a criin our state, but the effort to introduce evidence of this type violates our procedures in this state, entitling Mr. Gerry Armstrong to damages against the participants and the person who made use before this jury without prior authorization from this Court we will off videotapes of entire discussions before this jury. Lest there be some mistake that this is conduct condoned in the great State of California —

THE COURT: That was my next question.

MR. McMURRY: — County of Orange or any other county, I would call the Court’s attention to Section 631 and 632 of the California Annotated Code. That section, interestingly enough, Your Honor — interestingly enough, is entitled, and most appropriate for this case, Invasion of Privacy.

It provides, among other things: “Any person who by means of any machine, instrument or contrivance, electrically, acousticaly, inductively or any other way, engages in attempted surveillance of an oral communication without the consent of all parties, is civilly liable, criminally liable by a fine not exceeding ten thousand dollars or by

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imprisonment in the county jail.”

The exceptions are to a public utility. There’s one other exception, which I think is very, very important, 63 — I’m sorry, 633.5. “Recording, communications relating to commissions of extortion, kidnapping, bribery, felony involving violence against the person.”

I would like to read that in its entirety, if I may, Your Honor.

“Nothing in Section 631 or 632 shall be construed as prohibiting one party to a confidential communication from recording such communication for the purpose of obtaining evidence, reasonably believed to relate to the commission by another party to such communication of the crime of extortion, kidnapping, bribery, any felony involving violence against the person. And nothing in Sections 631 and 632 shall be construed as rendering inadmissible in a prosecution for extortion, kidnapping, bribery, or felony violence against a person.”

The statute goes on to say that there’s a civil penalty, the statute goes on to provide that such evidence is not admissible in any court or tribunal in the state.

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So, we then looked, in the brief available time to us, at Section 632 to determine whether it followed and was as strict in its admonitions and prohibitions as the State statute of Oregon, and we found it to be so.

And I’ll hand to the Court a Xerox copy, together with the full volume of the California Penal Statute. The Xerox copy is of Section 632 of the California Annotated Penal Code. And I’ll hand to the Court the entire volume covering Section 447 to Section 680.

Number one, no predicate was placed before this Court as required by our statute. And no predicate can be placed before this Court, because this is not an action for bribery, kidnap, or extortion. This is a case involving Julie Christofferson Titchbourne. The only purpose for this type of tactic, and the marginal relevance that the Court allowed it in for, was to question bias. And that’s the only ground upon which it could be even marginally relevant.

It is a crime. It exposes these defendants and counsel to civil and criminal liability, and it has been brought before the jury through the extravagant outburst of Mr. Cooley, before the jury

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retired, in a grand gesture, that he was going to produce these tapes.

I submit, Your Honor, that no reference to these tapes can be made. I submit that the counsel that made the outbust is in violation of proper procedures and standards within this court. I submit that counsel is subject to civil and criminal liability for his participation in these activities. And after the Court has ruled, I will have a further motion to address to the discretion of this Court.

MR. COOLEY: At the outset, I entertain no doubt whatsoever that the Oregon statutes with respect to electronic interceptions would apply if this electronic interception had occurred within the state of Oregon. It obviously didn’t. This interception — these two exceptions occurred at Griffith Park in California. There was no — at any time there was no electronic surveillance in this state that would occasion coming before any Justice of this Court, or any other court in the state of Oregon in that regard.

Consequently the issue is whether or not this electronic surveillance was appropriate under the laws of the state of California.

THE COURT: Well, the question is one past

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that. We can argue that. The statutes in Oregon don’t make a distinction whether it’s illegally done in California or illegally done in Oregon. It says if it’s illegally done, it can’t be used in any court in the state of Oregon.

MR. COOLEY: Yes, but I think the determination whether it was legal when it was done has to be governed by the law of the state where it was done. If it was lawful where done, I do not believe that the Court would find that the law —

THE COURT: It has to meet the requirements before it’s admissible in this state.

MR. COOLEY: It has to meet the requirements of being lawful where done; I certainly agree with that. I don’t believe that the criminal laws of the State of Oregon reach beyond the borders of the state of Oregon.

THE COURT: No, they don’t.

MR. COOLEY: So if the law of California authorizes this, then I respectfully submit to the Court that the laws of the State of Oregon do not reach an electronic interception which occurred in the state of California. And I have a case, Your Honor, from Lexis, which we have a printout from Lexis, a California case, and before I read it to

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you I think it’s important to analyze the California statute.

Section 632, in substance, prohibits electronic interceptions as a general rule without two-party consent. But it talks about confidential communication. It is confidential communication which may not be intercepted.

The word “confidential” is defined in the statute as follows: “the term ‘confidential communication’ includes any communication carried on in such circumstances as may reasonably indicate that any party to such communication desires it to be confidential to such parties, but excludes a communication made in a public gathering or in any legislative, judicial, executive, or administrative proceedings open to the public, or in any other circumstancess in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.”

Now, that language has been construed by the State of California — and I’m about to hand to the Court the decision of the Court in the case of People vs. Chaim, Henry Chaim Brent. And I read this language to the Court.

It says — first of all, in a synopsis, it’s

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very interesting to note the context in which that Court was dealing — it says: “The primary issue raised in this appeal is the propriety of allowing the prosecution to introduce in rebuttal the contents of a secretly tape-recorded conversation allegedly made in violation of Penal Code 632. The trial Court allowed the evidence to be introduced in rebuttal because it felt certain” — “it felt certain defense witnesses had lied about the contents of the conversation during their testimony. In order to resolve the issue, we must examine what qualifies as a confidential communication within the meaning of Penal Code Section 632, Subdivision 3.”

The Court went on as follows: “The Constitutional right of privacy and the State and Federal regulations prohibiting the recording of conversations are all designed to protect confidential communications. Therefore, the test as to whether these salutory laws have been violated depends upon the person whose conversation was recorded had a reasonable expectation of privacy at the time of the recording. In the instant case, none of the parties present during the meeting had a reasonable justifiable expectation that the contents of their conversation would be kept confidential.

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There was never any agreement or understanding among the parties that the conversation would be kept to themselves. In fact, it was understood that at the very least, if any agreement were reached at the meeting, Levi’s brother would be contacted in Israel concerning the transfer of funds. And even if no agreement were reached, Dadon would discuss the meeting with Charon. The only persons not to be informed about the meeting were the police. An understanding by the parties present, that persons not present at a conversation will be told what was discussed, removes any such conversation from a protection of Penal Code Section 632, Subdivision C.”

Now, Mr. Armstrong, when we allowed him this morning to give his one-hour dissertation — and Mr. Manion is handing a copy of that decision to the Court — made it very clear that he understood fully that this fellow Joey would go back and report to his people what Mr. Armstrong and Joey were discussing, that those people, whom he did not even know by identity or by name or by position in the Church, were people to whom the contents of this discussion would be communicated in full. He therefore had no right, expectations of right of

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privacy, or that the subject matter of the conversation would not be disclosed.

And the case we have just handed to the Court is dispositive of the issue on the subject matter of the confidential nature of the communication as a condition prededent under Section 632 of the California Code.

More over, that does not end the inquiry, because there are additional matters which have to be dealt with as to the 634 of the statute. Mr. McMurry, it seems to me, rather summarily passes over a situation to which the statute does not apply. And namely, it does not apply for an interception that deals with the issue of extortion. I’m sorry — I have the wrong section; it’s 633.5 of the California Code.

It says, in substance — or it says verbatim: “Nothing in Section 631 or 632 shall be construed as prohibiting one party to a confidential communication from recording such communication for the purpose of obtaining evidence reasonably believed to relate to the commission, by another party to such communication, of the crime of extortion.” It goes on also to include kidnapping, bribery, the like.

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And so, Your Honor, not only does the interception — is the interception justified under the definition of confidential communication, but what we were dealing here is gathering evidence of the crime of extortion. Because, as these tapes will clearly show, the game plan was to plant documents in the files of Scientology, through the use of the completed staff work, that would implicate Scientology in unlawfull activity, for the purpose of bringing down the present management, putting in place the loyalists which would result in the settlement of all of Michael Flynn’s cases. And that, Your Honor, is extortion, pure and simple.

There’s a third exception for authorizations and the like, but I respectfully submit to the Court at this point that it is sufficient that the communication was not confidential within the meaning of the statute. The evidence was gathered in an effort to gain evidence of extortion. And I’m informed, also, that it was authorized by a police officer in the state of California and that that is permitted under the following Sections of Code: 635 — 633, I’m sorry.

Section 633, which provides: “Nothing in Section 631 or 632 shall be construed as probiting

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the attorney general, any district attorney; or any district, assistant, deputy, or any investigator of the attorney general or any district attorney; or any officer of the California Highway Patrol or any chief of police, assistant chief of police, or policeman of a city or city and county; or any sheriff, under-sheriff, or deputy sheriff regularly employed and paid as such of a county or any person acting pursuant to the direction of one of the above above-named law enforcement officers, acting within the scope of his authority, from overhearing or recording any communication which they could lawfully here record prior to the effective date of this statute.”

Your Honor, on all points, the California law has not been violated. I think that the confidential aspect of it is dispositive under the case I have given you. I believe the investigation of the crime of extortion also is justification, even if it weren’t confidential — if it weren’t a communication in which there was no reasonable expectation of privacy.

Mr. McMurry’s suggestion that I have committed a crime — I’m sure he would like to see me take a long vacation at the courtesy of the State

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of Oregon. But I respectfully submit that the Oregon law does not apply to the interception; that if lawful under California law, that it was lawfully intercepted, and I respectfully submit that it was.

MR. McMURRY: Let me go to the last reference made to the California Code. That’s why I brought it down. Section 633.5 provides that: “Nothing in the Invasion of Privacy section of the California Code shall make illegal prior sheriffs’ and police officers’ invasion of privacy that was theretofor legal, prior” — I think to 1976. If you read the statute and the effective date of it it says: “Prior to the enactment of this Section — or Code.” And the effective date is 1976.

Going to the second point, he takes out a case which has a date — let me see here — May 4, 1984, in which, at the time of the person who was charged with illegally receiving stolen property — and they were discussing how to fence it, apparently; the language is not to clear — the following people were present: Dadon, the defendant; Levi; Bentoff; Levi’s wife; and Dadon’s girl friend. And there was discussion about having to also discuss this with Levi’s brother in Israel. And Dadon would discuss the meeting further with Mr.

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Charon. We don’t know who they are, because the language of the case doesn’t allow us to make that interpretation. I cite to the Court an interpretation of Section 632, found in the case of Warden — this is a civil case, it looks to me, not a criminal case; this looks to be a civil case — Warden vs. Kahn.

K-a-h-n. 1979. 160 California Report 471, 99 CA 3rd, 471. In which interpretation of Section 632 calls for: “A determination as to whether circumstances reasonably indicate that any party to such communication desires it to be confined to such parties, or whether circumstances are such that parties to communications may reasonably expect the communication to be recorded.” Direct language that exactly follows the definition in our statute and the California statute.

Now, as to the first point, that this is — or some point, I don’t know which one it came in — that this was some method of extortion, under no circumstances is that the purpose for which this evidence is attempted to be brought into this case. Under no circumstances has any crime of extortion been alleged as a defense, nor has the rudiments —

THE COURT: Well, I would not have let it

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come in at all, if we were talking about another crime. We clearly talked about that yesterday. I said it was coming in under bias.

MR. McMURRY: Correct.

THE COURT: Not to show any other crime, because it was inadmissible for that reason.

MR. McMURRY: Correct. Finally, Mr. Cooley misconstrues the Oregon statute. It does not provide that recordings taken under some other circumstances, in some other state or country, may be — just because they are legal there — even if they are — our statute says it may not be intercepted, used, or disclosed.

Now the word “use” obviously implies that what may be legal in Russia cannot be used in the United States of America, in Oregon. What may be legal in California cannot be used to attack a witness in Oregon. And that’s the only reason the word “use” or “disclose” would be present in our statute. Therefore, submission of this scandalous piece of evidence must be supressed, and we would submit — Well, we will wait for further order of the Court.

MR. COOLEY: Your Honor, in Mr. Armstrong’s testimony this morning, he, himself, went to the CID

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of the Internal Revenue. He said he went to the FBI. He was, himself, disclosing contents of what occurred in that conversation. He may have felt that that was all right, but he also knew that Mr. Joey was going back to his people.

In addition, Your Honor, to suggest that the Oregon statute, which I heard read here today by Mr. McMurry, which says that if it’s done in violation of the Oregon statute, that it shall not be received, it is not done in violation of the Oregon statute since it’s not done here. If lawful were done, I respectfully submit it’s admissible here.

And finally, I invite once again the Court’s attention to the Court’s vested interest in superintending the proceedings that take place before it. If perjury has been committed from that witness stand, this Court has a vested interest in finding out about it. So I respectfully ask that we get on with the screening of this tape by the Court, in-camera.

THE COURT: I have some serious questions about the legality of even this tap — I shouldn’t call it a tap — this interception under California law, although I’m only saying that off the top of my head without researching California law. I know it

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would not be permissible under Oregon law. And I have very serious considerations as to the admissibility of this evidence under Oregon law. I have no control over what out-of-state counsel is doing.

Mr. Runstein, I would be very careful, very careful, of knowingly at least, trying to use evidence that was illegal under the State of Oregon. I’m not saying you have, I am just saying, be careful.

MR. COOLEY: Mr. Runstein has had absolutely nothing to with the presentation of this evidence. I take full responsibility.

THE COURT: His unfortunate position is that he’s Counsel of Record in Oregon Court as the Oregon counsel.

MR. COOLEY: Mr. Runstein hasn’t even seen these things. I’m handling this and I take full responsibility for it.

THE COURT: You can’t take full responsibility, unfortunately. Mr. Runstein has to take the responsibility.

MR. McMURRY: Your Honor, Mr. Wade has kindly brought to the Court a case that I did cite to the Court: WARDEN vs. KAHN, a civil case, which of

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course has even more impact because this is a civil trial, and not one which we are talking about stolen goods. And with the Court’s permission I would like to hand up the decision and allow the Court some time to read it. It seems to me that it’s compelling.

Finally, this Court, prior to the commencement of the jury trial, was repeatedly asked by Mr. Wade and myself —

THE COURT: I know what you are going to say.

MR. McMURRY: — to be produced documents that were relevant, that were clearly within the ambient of the Court’s ruling. This Court said, to its credit on at least three occasions that I can recall —

THE COURT: And probably more.

MR. McMURRY: — that you had an abiding interest in the rights of privacy. The rights of privacy that you were protecting were the incumbent common law law right of privacy not known in statutory form. We are relying upon the statutes of the State of Oregon and the statutes of the State of California. We are also relying upon the inherent power of this Court and the inherent duties of this Court to protect witnesses from harassment, abuse

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and intimidation.

Just by measuring the marginal relevance of this biased testimony against its illegal form, against its illegal method of production, and against the violation, even if it were legal in California, procedurally, it couldn’t be offered in this state.

THE COURT: I can’t believe the laws of California — I haven’t looked at this — that they can go around intercepting communcations without some form of order from a district attorney, police agency or court. I just can’t believe that could be the law in California.

MR. McMURRY: It can’t, Your Honor. I haven’t cited the procedure —

THE COURT: There’s a procedure to do that just as there’s in Oregon. There has to be. I don’t know what it is, but there just simply has to be one.

MR. McMURRY: There’s even a first amendment right in California, at last look.

THE COURT: I know that we are more progressive than they were, but certainly they have to know about that.

MR. McMURRY: They have the first, the fourth

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and the fourteenth amendment in California, even. So the argument that you can walk up to the cop on the beat and say, “Hey, we are going to take —

THE COURT: Am I just out in left field somewhere? Doesn’t there have to be some authorization to do —

MR. COOLEY: No, sir. Not if under the California law it is not a confidential communication. And not if it deals with gathering evidence for the crime of extortion.

THE COURT: Forget that argument about crime. I told you none of this is coming in under that theory.

MR. COOLEY: I’m not putting it in here under that, but that is the justification for taping it originally. I’m not going to put it in as —

THE COURT: You can call a posy a rose if you want to, but it’s not going to come in under that basis at all.

MR. COOLEY: Your Honor, you are now dealing with a whole different issue. You are not dealing with what it’s coming in for. It’s coming in for bias under Rule 609.1. That’s a different matter. We are now dealing with the issue of not what it’s coming in for, but what was the legal justification

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for it being made in the first place. That’s a different —

THE COURT: Anybody ever heard of Professor Younger?

MR. COOLEY: Sure.

MR. McMURRY: Yes.

THE COURT: He has a really good rule about this sort of thing for judges: If it smells bad, his nose, use your nose, he always told the judge. If it smells bad, it doesn’t come in. And this smells bad.

MR. COOLEY: I think you ought to see it, Your Honor, I really do.

THE COURT: I have nothing to do all afternoon.

MR. COOLEY: I will pass the California statute to you, Your Honor.

THE COURT: I’ve got to see the law in California that says anybody can go around willy nilly making —

MR. McMURRY: I beg of you, just take a look at the statute he is relying upon, 633.5. It states, if you take it for the purpose of extortion, kidnap and violence to a person, it is admissible in prosecution of those crimes.

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THE COURT: I understand that, Mr. McMurry.

MR. McMURRY: So it’s bogus to say —

THE COURT: And I understand that Mr. McMurry.

MR. COOLEY: I also ask you to look at the definition of confidentiality and compare it with the case that I have given you and with the testimony of Mr. Armstrong.

THE COURT: They are contemplating prosecutions in those cases and prosecution for those crimes. I know what those cases are. I’m interested now for you gentlemen to tell me under what authority in the state of California, who issues an order allowing wire taps, body taps, communication taps. Where does the authority come from?

MR. McMURRY: Superior Court, Your Honor.

THE COURT: That’s our Circuit Court.

MR. McMURRY: That’s right. It tracks very closely to our court procedure. As the very constitutions of both states require, with the one exception —

MR. COOLEY: I have handed the Court a letter from Police Officer Philip Rodriguez, Serial No. 16924, Los Angeles Police Department, authorizing

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this electronic interception.

THE COURT: To a private investigator?

MR. COOLEY: Yes, sir.

MR. McMURRY: Here is Ingram.

THE COURT: Please.

MR. COOLEY: May it be marked for identification, Your Honor?

THE COURT: Certainly.

MR. COOLEY: I invite your attention to Section 633. I passed up the California code, I believe.

THE COURT: Yes. 633 is the one you are inviting my attention to?

MR. COOLEY: Yes, sir.

THE COURT: That’s a different date setting.

MR. COOLEY: It’s a different what?

THE COURT: This talks about what they could do prior to the effective date of this chapter.

MR. COOLEY: It says, “…or any person acting pursuant to the direction of one of the above named law enforcement officers acting within the scope of this is authority from overhearing a recording, any communication which they could lawfully overhear or record prior the effective date.

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THE COURT: Yes. They could do that before they passed the law saying they couldn’t.

MR. COOLEY: And this statute doesn’t prevent them from continuing to do it. That’s what it says. In other words, I think what the section says is, to the extent that this —

THE COURT: Let me understand this correctly. You are saying that this direction by a police officer —

MR. COOLEY: And the statute says police officer.

THE COURT: — directed toward a private investigator gives him the authority to do it.

MR. COOLEY: That’s what Section 633 says, Your Honor.

THE COURT: Who is Officer Philip Rodriguez?

MR. COOLEY: He’s a police officer of the —

THE COURT: Is he here? I would like to talk to him. I’m not going to accept just his writing that Officer Rodriguez without some other authority —

MR. COOLEY: Your Honor, it really is not required.

THE COURT: I’m going to make a ruling on that. It’s not in accordance with Oregon law; it’s

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subject to a motion to suppress. If there’s a motion to suppress, I will hear it.

MR. McMURRY: Your Honor, pursuant to ORS 41.490, we move to suppress the tapes that have been offered into evidence. It’s not in accordance with Oregon procedures, practice and is in violation of our statutes.

THE COURT: I make no ruling on the legality of the interception. I’m not making a ruling on that. Nor am I making any ruling regarding any ethical considerations. I am simply saying that pursuant to Oregon statute, evidence derived from this interception of communications, in this Court’s opinion, whether under this Oregon statute or whether under the Federal Constitution or whether under the common-law right of privacy which I have used for Mr. Hubbard, under any three, would not be admissible. If it’s good enough for Mr. Hubbard, it’s good enough for Mr. Armstrong.

MR. COOLEY: Mr. Armstrong’s taken the witness stand, Your Honor.

THE COURT: Come on, Mr. Cooley.

MR. COOLEY: All I can say is this. What the Court has available to it here are tapes that I respectfully submit to you will show the Court that

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Mr. Armstrong has committed perjury in this court.

THE COURT: If he has, then there’s a form to determine it.

MR. COOLEY: Is the Court going to view these tapes in-camera or not? I don’t know what Court’s decision is.

THE COURT: Well, now that the jury is gone, I’m not going to receive them.

MR. McMURRY: It would be prejudicial to Mr. Armstrong. They are inadmissible for any purpose. The statutes don’t say, the rights of privacy don’t say, “Well, we just don’t want the jury to see it. It’s inadmissible for all purposes.” The rights of privacy mean privacy.

THE COURT: Mr. McMurry, really, before I should make that determination — I read Mr. Hubbard’s documents. Now, if I’m going to apply the same rules to everybody, it would seem the same rule that I’m applying for one should apply to the other.

MR. McMURRY: Much difference in kind, Your Honor, for two reasons: The Court has ruled that this is inadmissible, and properly so. Had the Court ruled that the subject matter of which we were inquiring of Mr. Hubbard was not discoverable, that ends the matter.

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THE COURT: But Mr. McMurry, I don’t want some Appellate Court To say this Judge did not even see the tapes upon which he could at least change his opinion.

MR. McMURRY: The only basis upon which you could change your opinion would be one. They were offered for the purpose of bias, to show bias.

THE COURT: Why don’t we wait for that argument until I see them.

MR. McMURRY: Because the only possible legal basis that you would have to make inquiry of the tapes would be based upon, once again, Mr. Cooley’s assertion that there’s been perjury committed in this court.

THE COURT: What if he says somewhere along in these tapes, “I hate those guys. I would go out of my way to do anything to those guys”? That’s bias.

MR. McMURRY: Right.

THE COURT: If that’s there, I want to see it.

MR. McMURRY: But it won’t make it admissible.

THE COURT: I didn’t say that. I want to at least have an informed judgment upon which an

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Appellate Court can onder looked at, made an informed judgment, made a judgment on the law initially, looked at the tapes, reaffirmed his decision, period.

MR. COOLEY: I think that’s fair for Your Honor to do that. I would ask your —

THE COURT: Simply because I think it’s a matter of my responsibility. It’s not a question of even whether or not it’s — I think I owe that to the system. I owe it to see what — It’s nothing but a search for truth, anyway, Mr. McMurry. At least that’s what I’m hopeful it is.

MR. McMURRY: I quite agree with that philosophically, Your Honor. I think —

THE COURT: Both of you tell me you agree philosophically, but I can’t get you guys to agree on much of what’s coming into this case.

MR. McMURRY: That isn’t our role. May I suggest to the Court — and I’m speaking now for Mr. Armstrong, not for Ms. Christofferson — it’s offensive. It’s offensive the way this material was obtained by entrapment and deceit. It’s offensive the way it was sprung in this case in violation of our standards and in violation of sense of decency. Then to say, “Well, that being true, all of that

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being correct, we still should determine whether there’s something that might be” —

THE COURT: No. I should determine whether there is some overriding consideration that makes it so probative that it would override anything else that I have ruled on already. For that purpose I’m going to see them. I’m not going to view them out here because I think it’s a matter for a right of privacy. I don’t think every spectator should see them. In-camera means in chambers; that’s where I will see them.

MR. McMURRY: Thank you, Your Honor. Your Honor, I do not intend to participate in that. I think, as is appropriate, we were not allowed to see the private documents of Mr. Hubbard. I know Mr. Cooley and Mr. Manion have availed themselves of this opportunity, but I don’t think it’s appropriate for other counsel to do so.

THE COURT: Nobody was there when I read the other documents.

MR. McMURRY: Correct.

THE COURT: I read those all by myself. I’ve got a slight problem in that I don’t know how to work it.

MR. COOLEY: We have a technician here. If

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there’s no objection, we will send him in with you, Your Honor.

THE COURT: He can get me started and let me turn it on and so forth.

We are recessed, now, for an hour and forty-eight minutes.

MR. COOLEY: Your Honor, as an aid, we have made up a transcript that Your Honor can follow as the tape is played.

(Court recessed at 2:30 p.m and reconvened at 4:30 p.m.)

THE COURT: I have reviewed them. I have some observations. I’m not going to change my decision. I think they are devastating. I think they are devastating against the Church. We certainly view them in different a way, Mr. Cooley, you and I. I’m not going to let them come in under any circumstances.

For the record, let me straighten out some things. With reference to California law, once again, I’m not making a determination at this time. It’s not my forum, it’s not my job. But I have carefully studied this California law. Even under California law, without some authority, and even if you view it in the most liberal terms possible, the

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only authority for Mr. Ingram to do this would be under Penal Code 633. There is not even a showing, even on the face of the document, of any authority. It’s on private paper. There’s no letterhead on it. Very questionable to me, and I think it would be to any judge. How Mr. Ingram obtained it, I don’t know. That’s not for me to decide. It could very well be a violation of California Penal Code.

Under Oregon law, the correct interpretation is not so much under the criminal statutes where we were looking, which is under 133, but 165 and the statutes contained thereunder. And that is the — 165.400 and all the contents that follow that, et cetera.

The problems we were looking at are the authorization needed under 133 all involved criminal prosecutions. This is not a criminal prosecution that these tapes were made for. So 133 really is not the applicable statute, in my opinion.

If they were done in Oregon, if they had been done in Oregon, it would have been a violation of 165.540.

Now, I’m not going to disclose a great deal of what was on there. I really don’t think I want to get into it. I can say this much, if it were a

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criminal prosecution, it would be it suppressed — it borders more on entrapment than it does on anything else. How a sophisticated person, which Mr. Armstrong purports to be, could go for such an amateurish performance as I heard on those tapes is beyond me. The questions were being fed to him obviously; anytime he wanted to make an explanation, it was properly cut off. There was no evidence of any attempt to commit a crime that I saw. If it were, it would probably not be admissible, as I have just indicated.

He did ask the other person if he was wired, the person said no. There’s some reference on the tapes that are very disturbing to me that I intend to take up with counsel privately. Because there’s some reference made to the judiciary. And now that’s serious.

The letters from Officer Ortega will be marked as an exhibit, 876, and will be a Court Exhibit only, for the Appellate Court to review. The two tapes should marked 877 and 878 and kept by this Court for the Appellate Court to review. I don’t think we have heard the end of those tapes.

Be sure those are marked “Court only”.

THE CLERK: Yes, Your Honor.

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THE COURT: Okay. I think I have straightened out everything I had to straighten out regarding my questions, including the distinction in the statute as I saw it from the Oregon statutes and my reading of the California statutes, which I have done and I reviewed the tapes.

MR. McMURRY: Yes, Your Honor. At this time I do not wish to propose a motion for sansctions, but I am going to submit to the Court and counsel a memorandum — it’s been a long week, and I would like to submit to the Court a memorandum for its consideration over the weekend, with the advice to the Court that I will be moving for sanctions and instructions to the jury arising out of these matters on Monday.

THE COURT: I’ll read it.

MR. McMURRY: Thank you, Your Honor.

THE COURT: I intend to be working in my office tomorrow.

MR. McMURRY: So do we.

THE COURT: I will read it then. There is no reason for you gentlemen to be here unless you want to see me for anything special.

MR. McMURRY: No. Thank you, Your Honor.

MR. COOLEY: We might want to furnish the

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Court with a copy of this morning’s transcript. The court did not have an opportunity to compare statements that the Court heard with this morning’s transcript. It might be appropriate for the Court to examine that over the weekend.

THE COURT: Okay. Furnish me a transcript and I’ll read whatever is furnished to me.

MR. McMURRY: Will they furnish us with whatever they furnish the Court.

THE COURT: Okay. We will be in recess, for purposes of this trial, until Monday morning at 9:30 with the exception I will see counsel, and no other matters will be taken up until Monday morning.

(Court recessed at 4:40 p.m.)

(Following proceedings held in chambers.)

THE COURT: I don’t think this is a public concern as much as it is a private concern. Matters that I don’t understand. It mentioned setting up poor old Judge Brisbee. I don’t know what that’s about.

MR. COOLEY: Who said that? Armstrong said it.

THE COURT: Yeah. He said they furnished the boat, they didn’t furnish the drugs and the broads, but he furnished the boat. I don’t know what that’s

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all about. I’m disturbed by it, obviously.

On the second tape, there is a mention about FBI agents and judge tampering. And I don’t know what that’s about. They don’t name the judge. These things disturb me.

I’m going to ask one more time, I have asked Mr. Peterson, Mr. Merten, Mr. Runstein, Mr. Manion and Mr. Cooley: is there any such shenanigans going on now with Ingram? Everybody has said no. Every lawyer has represented to me no. I’m taking that at face value.

MR. COOLEY: It is true. There’s nothing. That stuff is old GO operations.

THE COURT: Okay. I’m asking the question. I expect answers from you as officers of the Court and as gentlemen. I’m talking about as it pertains to this case, Portland, Oregon, my staff, me, family, McMurry, Wade. I don’t care who it is.

MR. COOLEY: The answer is no.

MR. MANION: The judge asked me this before and I told him this. And I share it with my co-counsel. If we found out that was going on, I assure you that myself and Mr. Cooley would be on the next plane out of here.

THE COURT: Fair enough.

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I would be very shocked and dismayed if they knew anything. My concern is what they don’t know.

MR. COOLEY: I am with these people most of the time.

THE COURT: Okay.

MR. McMURRY: They have to know —

THE COURT: I don’t want any accusations in here. I’m just spelling out my concern out of the presence of — I the privacy of a closed chamber.

MR. COOLEY: I gave you the tapes, warts and all.

THE COURT: You did. The bad part with the good parts.

MR. COOLEY: I gave it to you just the way it went down. You got a whole picture.

THE COURT: Obviously, Mr. Cooley, it was a difficult decision to give me that, because those were not the greatest tapes in the world for your client, I’ll tell you that.

MR. COOLEY: The portions of them, Your Honor, that I wanted you to have.

THE COURT: I heard it.

MR. COOLEY: I think that we have got a real, real problem with what you have heard on the tapes and what you have heard on the witness stand. I

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don’t know how you handle it. But the conflicts that exist between the testimony that’s given here and some of the questions were asked with great specificity, because of the tape, and were answered contrary to what was said on the tape. Now, that seems to me presents a very serious problem with this man’s continued testimony.

THE COURT: Let me address that. I did review them with that thought in mind. And I frankly, Earl, disagree with you. I didn’t see that much inconsistency in what he was saying there and what he was saying on the tapes. That’s consequently why I’m sticking by my ruling.

Aside from that, that’s a ruling; it’s done. I’m talking about now these other things. One other thing Charlie Merten said at that time, “Don, as long as I’m here, nothing will ever be done with reference to you.” He also said, “Watch your ass if I’m not here.”

MR. COOLEY: Well, number one, I subscribe to that philosophy on the first point. But I do not subscribe to it on the second point. I don’t think you have to worry about your ass whether anybody is here or aren’t.

THE COURT: Fine. That’s what I like to

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hear.

MR. COOLEY: All right.

THE COURT: Because I have not done any phone checks, I have not done any of that stuff. Frankly, I didn’t think it was necessary.

MR. COOLEY: It is not.

THE COURT: I have expressed my concerns.

MR. COOLEY: What I plan to do, Your Honor, is to have this morning’s testimony highlighted and set against that testimony, things that you have seen on the tape and submit it to you as an additional Court’s Exhibit. But we have all weekend to do that.

THE COURT: All right. Off the record.

(Discussion had off the record.)

MR. McMURRY: I am aware that I have been followed to and from my home. I am not aware, but three of the people that have been staying with me, when they drove in at one time, an object was thrown from an overpass and struck the windshield of the car they werew, that has nothing to do, that we can prove, with anything that — These people are very fragile and they are very damned worried as to their safety. That’s obvious. That is the paramount reason that I have had them live in my home. But if

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— I’m sure Mr. Cooley or Mr. Manion or Mr. Runstein have not been aware of me being followed. But I think it’s imperative — I know this of my own knowledge, it has happened, and I would urge them to discontinue —

MR. MANION: I don’t believe it.

THE COURT: Let me say this. I think it would be — on the other hand, I think of these people’s position and I can’t envision them being that incredibly stupid at this point.

MR. COOLEY: It’s the same thing that happened in the last case. People started calling up jurors. Do you think my people are stupid?

THE COURT: I can’t think of anything worse than to try to tail a lawyer, a judge or tap — you know, I would go on the other side of that coin and I can’t think why anybody would be that incredibly stupid.

MR. McMURRY: Whether you believe it or not is not why I said it. It has happened and I am just stating that for the record.

MR. RUNSTEIN: What happens in these cases is — fortunately or unfortunately they haven’t used the incident, and I assume the plaintiff will not. But she acknowledged there had been a car watching

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her house and had taken a license number. When we investigated that, because we were afraid we were going to hear it at trial. We located it as the car of her next door neighbor’s boy friend. And we are prepared to establish the chain of title and also she indicated they had had phone calls that people you know, didn’t hang up.

Well, while we were out investigating the car, finding out that it was her neighbor’s boy friend, you know, I noticed not only does she have a listed telephone, but she has a huge sign on her house “For Sale By Owner” with the telephone number there. People can get carried away with these things —

THE COURT: I don’t want to get into that with paranoia problem. That’s not my style, guys.

MR. COOLEY: My credit card case was stolen. I’m not paranoid, I’m just careless, I guess.

THE COURT: I have expressed my concerns. If there are any further concerns by anybody, let me know.

I expect counsel, to the best of their ability, will keep control over everybody.

(Court recessed at 5:05 p.m.)

  1. This document in PDF format.
  2. More Christofferson trial transcripts.

Letter from B. R. Burley (OPP) to Michael Flynn (October 31, 1984)

October 31, 1984
Michael FLYNN
12 Wharf Road,
Boston, Massachusetts

RE: Alleged Association to Organized Crime1

Dear Michael:
Please find enclosed several documents which have recently come into my possession.

As you are no doubt aware, the Ontario Provincial Police have conducted quite a lengthy investigation into the Church of Scientology. Should criminal proceedings be launched, numerous witnesses from the United States and Canada will be required for Court.

It is my understanding that you act as Counsel for several potential witnesses, so I would appreciate any comments you might have in regards to these allegations.

Thanking you in advance.

B.R. Burley
Provincial Constable #4194
Ontario Provincial Police
Anti-Rackets Branch
BRB/jt
Encl.

Notes

  1. This document in PDF format.