Copyright (C) 1982 John Zegel Redistribution rights granted for non-commercial purposes.
((This is the complete and unabridged, word for word transcript of John Zegel's tape number 1. Remember that Zegel recants the entirety of his first 3 tapes, including this one, in the 4th tape.))
And in order to handle a portion of that problem, which included the excess amount of income that was coming into the Church beyond what was being spent and problems that might have occurred as a result, Herbie Parkhouse, a fairly well-known person of Church history, decided that it would be appropriate to set up a foreign corporation to handle foreign money coming to the Flagship. That is, anybody coming to the ship that was not a US citizen, their money, rather than traveling through USA banks, would go directly from the ship to a foreign bank.
A corporation was set up called the Religious Research Foundation, or the RRF. It apparently was founded in Luxembourg, and bank accounts were established in Luxembourg to handle the Church's money there.
When a person would come to the Flagship who was not a US citizen, his income would be received, it would be invoiced to the RRF and that money would be couriered from the ship directly to Luxembourg where it would be deposited in the accounts there.
The couriers that were active at the time were two young men. Pat Broeker was one of them, and Peter Gillham Jr. is another.
In 1975, the ship stopped sailing around and the Flag Land Base was established. The ship landed in Florida, I believe in Dayton, and projects were initiated to find suitable quarters to house the Flag Land Base.
The money that came into the country to purchase the Flag Land Base came from the Luxembourg accounts of the RRF into the United States in cash. And it went through a corporation that was set up called the United Churches, and it was United Churches who initially made the purchase of the building ((Fort Harrison Hotel in Clearwater Florida.))
Now that the Flag Land Base was landed, the RRF nonetheless was continued, and so that money coming into the United States from those people from overseas was again invoiced to the RRF and that money was packeted up, sent to the Guardians Office, that was apparently then responsible for couriering it out of the country, again to the accounts in Luxembourg.
We have talked to a couple of people who have been present while these things have gone on, including a Flag Banking Officer who was at Flag and WROTE the invoices, and people from other countries who came to the Flag Land Base and received those invoices.
Now, Ron was in the area around Clearwater during the early years of the establishment of the land base. And he was known to travel in and out of the buildings there occasionally, giving lectures to the C/Ses, participating in directing research, and so forth. However, during the raids and just slightly thereafter, as the legal problems of the Church began to multiply, it was considered that the Flag Land Base was probably not the best location overall for Ron to be, particularly in terms of his security. Now there may have been other reasons for considering a change of location, but those are the ones we can easily see.
Nonetheless, it was decided that a location in the western part of the United States would be appropriate, and the area around Palm Springs apparently was selected. When I say around Palm Springs, I mean approximately a 50-mile radius around Palm Springs. Some teams of individuals were sent out to locate property, some properties were found, and a new headquarters for the international management was established in the western part of the United States, again in the Palm Springs area.
The external communication lines of the Church were set up there, telex lines and so forth, and the international management team established its location there.
Ron was also there, the Senior C/S International and other individuals as well.
During that period of time, we are now looking at the year 77, 78 and 79, that group began to grow, and among the responsibilities of the individuals there, aside from international management overall, was that Dave Mayo was working with Ron on NOTS, and specifically, was auditing Ron on his audited NOTS ((as opposed to Solo NOTS)).
Dave Mayo, however, was also doing some traveling at that period of time, doing some missions around the country, and was becoming well known, almost a celebrity if you will, as the foremost tech terminal aside from Ron himself. That was considered to be potentially a security problem. Also, the size of the staff that was there with Ron was also considered to be a possible security risk, and concurrently, a lawsuit in Oregon being run was also considered to be a potential risk.
The solution to that was going to be to find a new location for Ron to live. Ron's audited NOTS apparently was finished up, Ron's staff was moved to the newly purchased Gilman Hot Springs. That was purchased about the middle of the year in 1979. That was a resort that was just outside of a town called Hemet, again in the same 50-mile radius approximately around Palm Springs, and was simultaneously, the home of Golden Era Studios.
Ron selected two people from his staff to be his full-time aides, essentially personal associates, and the two people who were selected were Pat and Annie Broeker.
Now one of the reasons for selecting Pat Broeker, although there may be others, was that as a principle courier for the RRF, no new courier would be needed to be told where Ron was living and he and his wife Annie had been part of LRH's household staff or personal staff for some time, and so they seemed apparently to be logical choices.
The Broekers apparently participated in selecting the new quarters, and when the new quarters were found, they and Ron moved off to those new quarters, along with a couple of people to be grounds-keepers and security folks.
In 1980, Ron apparently began to become concerned about his eventual death. Evidence of that is that he sent letters to each of his children indicating that he did not expect to live longer than 5 years, and that they should begin to make whatever preparations would be appropriate for his passing. In addition, several individuals of the Commodore's Messenger Org staff received similar letters, and the activities were put into operation to prepare for the establishment of trusts that would allow Ron to drop the body, go off and pick up another body, return, and pick up where he had left off.
The legal activities apparently were quite extensive, trust funds were established, trustees were appointed and it is around the appointment of these trustees that things began to become..., the intrigue begins to grow here.
First, was the settlement of some of Ron's personal affairs, and it was considered that the Church owed Ron not an inconsiderable sum of money for past use of trademarks, copyrights and so forth.
And so, Ron got together with several of his financial advisors, personal staff and so forth, and during the year 1980, or perhaps early 1981, began to work out exactly how much money was owed. Now, according to Time Magazine, the figure that was eventually arrived at was 85 million dollars, and a demand for that amount specifically, or one close to it, was made of the Church.
Now, it wasn't "We have to have this money by Thursday at 2 o'clock", a little bit more time than that was allowed, but nonetheless, that's a big task to gather together that kind of money, and according to reports we have, people were told that the Church reserves were not to be reduced in order to satisfy this particular request.
((The "by Thursday at 2 o'clock" is an inside joke, all Church financial cycles were one week long and ended every Thursday at 2 o'clock. So if stats were down on Wednesday night, they would hustle to get money in by the next day at 2 o'clock often going to great and ridiculous lengths to get this done.
It would have been the ultimate irony and joke if the demand for the 85 million HAD been by Thursday at 2!
The significance of the order to not reduce Church reserves to get the 85 million, is that the money had to be newly raised which led to some of what followed.))
It was not going to be an inconsiderable problem, as well to deal with the tax consequences of that kind of income. Nobody thought that it would be a good idea for Ron to get 85 million dollars and then have to turn around and give half of it to the federal government in terms of taxes. So a solution was needed for that problem as well.
And the solution that was eventually arrived at among Ron and his various advisors was to set up a non-profit religious corporation separate from the Church. The solution continued in that the trademarks, the trademarks we are all familiar with, the double triangle and S, the name Scientology, the name Dianetics, the name L. Ron Hubbard, the initials LRH, the signature L. Ron Hubbard, those trademarks would be withdrawn from the Church. That is, the Church wouldn't be allowed to use them, and that those trademarks would be donated ((by Ron)) to this new religious corporation. That religious corporation would then receive those trademarks as a donation and they would value them, in terms of their actual cash value, in such a way as to offset the tax liability.
Let's just review this quickly because it's a little bit complex. The Church would give Ron the cash money, 85 million dollars, allegedly. Ron would withdraw from the church the various trademarks. The trademarks would be donated ((by Ron)) to this new religious corporation, and Ron would receive a tax benefit for having made that donation, enough to offset the income taxes that he would have to pay on this 85 million dollars of income.
((Having some experience in tax law and charitable donations, I am not sure I follow this. Assuming the deal was done under normal Federal 1040 rules, a person is allowed to deduct donations up to half of his income to charitable purposes in any given year. So if you made 10,000 in a year, but donated 20,000 say, you would only be allowed to deduct 5,000 in the year of the donation, so you would still have to pay taxes on 5,000. However the remaining undeducted 15,000 could still be deducted against income in future years as a carry over, but again only against half of each years income until all of the donation was accounted for, or until 5 years had passed whichever came first. The laws may have been different in 1982.
So really, there is no way to escape all taxes on income. At best, Ron could have donated '42.5 million' dollars of trademarks to the RTC, and deducted the 42.5 million donation from his 85 million income, leaving him with 42.5 million to pay taxes on, which would have been 21.25 million in taxes. He, at best, saved himself 21.25 in further taxes had he not made the donation.
In other words, if he had paid taxes on the full 85 million, he would have paid 42.5 million in taxes. But since he deducted 42.5 million as a charitable donation from the 85 million, he only paid taxes on the remaining 42.5 million which would have come out to 21.25 million in taxes, which is 21.25 million less than the full amount of taxes he would have paid without the donation.
I am not a tax expert on this, and I might have it all wrong.))
So among others things, that was the purpose of the set up of the Religious Technology Center (RTC). Now there was some other laudable purposes as well. What the RTC was supposed to be doing was to regulate the use of the tech, to encourage people to use it, to push tech into a variety of different areas around the country, to encourage field auditing, to encourage the growth of missions.
And to ensure that this happened, when the original papers were drawn up, the members of the Board of Directors, and so forth, of the RTC were to be trained individuals, and they were to be progressing in their training on a yearly basis.
It was clear that the current situation regarding Ron, and the legal problems that he was facing, was far from an optimum situation. And Ron put together a group of people that was to be called the All Clear Committee. And the ACC had a specific purpose and that purpose was to get rid of all the legal hassles that were facing Ron, so that he could again come back out in the public.
And the person who was selected to be the chairman of the All Clear Committee was a young man named David Miscavige. Now David Miscavige's principle claim to fame was that he had worked as part of the film unit. He had been in the CMO for some years, and he had gained a reputation as a person who could get things done when other people couldn't.
He also gained a reputation of being the kind of person that could get things done by screaming at the top of his lungs, but getting things done was the important factor, and he gained for himself quite a reputation in that regard.
When it came time to select the chairman of the All Clear Committee, David was recommended. He was also a close friend of Pat Broeker, and he seemed to be just the right guy for doing that particular job.
Along with him, three women, or three other members specifically, were appointed to be part of the committee, and that committee was constituted separately from the Commodores Messenger Org. It had its own special communication line directly to Ron and that was going to prove to be instrumental in the future.
As time passed, the ACC began to come apart. That is to say, David Miscavige survived, but the other people who were members of the committee either left it for one reason or another, were perhaps Comm ev'd, one person was, or left the Sea Org. I don't have the specifics on what happened to each individual person, but suffice it to say, the other three people from the committee eventually disappeared and David Miscavige was left on his own, holding this rather important post, and again, SEPARATE from the CMO.
And because he had this separate and rather special communication line, it put him in a position of being, in essence, senior to the CMO. Now, earlier than this time, when Ron and the CMO were all in the same location, the CMO worked directly with Ron, and consequently, had an enormous amount of power because of that personal and specific communication line. When Ron's location was moved to his more secure quarters, and the quarters were...only Pat and and Annie Broeker were his principle aides, the CMO, in essence, became simply another management org in the upper level strata of Church management.
And this ACC, and eventually, just David Miscavige then, would be in a senior position because of this special communication line.
Now the evolution continued, and what happened was that David Miscavige became the principle communication link between the Church as a whole ((and Ron)). The whole management structure of the Church below was like a giant inverted funnel headed directly to him ((David Miscavige)), and he actually became the relay point for all communication from the Church directly to Ron.
Now that communication was on a couple of vias. It would all come up through the Church lines to David Miscavige, who would then specifically transport it and turn it over to Pat Broeker at a predesignated meeting place. Pat Broeker or his wife Annie Broeker would then transport that material back to LRH ((LRH's headquarters)) where it would be read ((by the Broekers)) and those particles that needed to go directly to Ron would be passed onto him.
That communication link and this secrecy of Ron's physical location is going to turn out to be the basis of the power of these three people, Pat Broeker, Annie Broeker and David Miscavige.
Additionally, a few minutes ago, we were talking about trustees being appointed to manage Ron's affairs during his absence, and these three people were going to become the trustees.
It is worthwhile now to spend a little time and talk about David Mayo, and what happened to remove him from a point of no inconsiderable responsibility.
As we mentioned earlier, David Mayo had been the Senior C/S International, a principle confidant and terminal of Ron's. The two had worked together very closely in piloting new material, in working on research projects and so forth, and the fact that David Mayo has subsequently been removed from the Church and declared a Suppressive Person, is quite a story in itself, and how that came about is rather interesting.
Now David was posted as the Senior C/S International. That person is, in essence, the highest posted technical official in the Church outside of Ron himself. That's a person who is responsible for the application of tech on a worldwide basis, and this is a person who works very closely with LRH when projects such as new pilot programs are put together and so forth.
David Mayo and Ron had a regular correspondence going back and forth IN WRITING after Ron moved to his new secure quarters. And the two of them would exchange a few letters a week, sometimes more, sometimes less, but at any rate, there was a constant stream of communication between them.
At one point, Ron asked David if he would please do a Security Check or a couple of sec checks on Pat Broeker. The purpose of these sec checks is not entirely clear but, nonetheless, Ron went to Pat Broeker and asked him to report to David Mayo and get these sec checks. Pat, of course, obliged, and he went to where David Mayo was stationed and received these sec checks.
Now I have not heard any specifics on exactly what was found, aside from the fact that some of the findings on those sec checks were unfavorable to Pat Broeker. A report was apparently written to Ron by David Mayo and sent up the lines. Now here is where this via of David Miscavige through the Broekers becomes a very important factor, because that was the comm line that any such report would have had to travel on. And indeed, those were the lines that the reports traveled on, and one or both of the reports regarding the sec checks were pulled off the lines by Pat Broeker.
Acknowledgements from Ron that went to David Mayo, contained a copy of the altered report that Pat Broeker had written, replacing David Mayo's actual report of the outcome of the sec check. And the two reports were not precisely the same, as you might imagine.
David Mayo, on learning of this, tried a variety of approaches to correct this problem. He tried sending additional communications up the lines, and a personal confrontation with Pat Broeker, but this was to no avail. At that point, of course, he was, if you will, a marked man. He had to be gotten rid of because he had the secret.
So a campaign was initiated, ON THE RUMOR LINES, that David Mayo was plotting with some known Church enemies, specifically Alan Walter and Bill Franks, to take over the Church. Now those people who have worked closely with Ron in the past, several of whom I have spoken to, have indicated that Ron does not appreciate those kinds of take-over attempts. As a matter of fact, that is quite a button((with Ron)), and if you wanted to do somebody in, in terms of discrediting them, that's the ideal way to do so.
Apparently, this rumor was planted on Church lines, and as you can imagine, those rumor lines virtually hummed all around the Church with that information.
Well, any diligent staff member hearing such a rumor would feel obliged to write it up, and so the Knowledge Reports began to flow up the lines regarding this rumor, which was now beginning to circulate about David Mayo plotting to take over the Church. Those rumors, of course, found their way directly to Ron very quickly.
Dave Mayo's communications about the fact that these sec check reports had been altered were stopped, but the Knowledge Reports of the take-over zipped right through the lines. So his position, David Mayo's position in the Church, from Ron's viewpoint, began to deteriorate. David Mayo had apparently completely fallen out of communication, all of his letters and so forth coming up the lines were stopped. Ron became concerned as to what had happened to David. He sent communications to various terminals in the Church, asking what happened to Dave Mayo, where is he, why haven't I heard from him, that sort of thing. But no answers that David could originate could actually get through.
As a result of his being discredited, he was eventually removed from post and taken from Gilman Hot Springs to a Church location which is known as Happy Valley.
Now, there is a real place called Happy Valley. It is part of an Indian Reservation that's apparently situated near a boxed canyon. Happy Valley is a chunk of land that is surrounded on all sides by the Indian Res. with a right of way for a road that goes back to it. These people were going to be transported to Happy Valley and what was going to happen to them there was that their ethics was going to be handled and this cycle was going to be handled with them.
The people that were being handled at this moment totaled sixteen. This included the Senior C/S International staff, which was 5 people and 11 additional people from other units. They were all transported to this particular location, which again, is in this Palm Springs area out in the desert.
Previous to this, a program had been announced by Ron called the Running Program. This was for staff of Golden Era Studios and for INT, the International Management Groups. What the running program consisted of was: vigorous exercise outdoors. The idea of the program was to stabilize the sleep/awake cycle and handle people, whose cases that had been apparently very badly enturbulated in some way, by extroverting their attention getting them outdoors and giving them good vigorous exercise to do. When this program had originally been put into action, David Mayo had been the person responsible for piloting it and Ron had sent him the materials and the instructions for doing so.
Again, this is 1982 now, and he had begun people running this program on a gradient. When he was transported out there, apparently this idea of gradients was not considered to have been standard and they were put on it for twelve hours a day, seven days a week. Now, during this period of time, several things were to happen: 1. Ethics handling was to be done on these 16 people. They were to receive a Comm ev and other ethics handling as required and ; 2. They were to do this running program and presumably be rehabilitated and recycled, if you will, back into the Church. In the earlier tape I made, some people got the impression that these individuals were just simply being victims of this activity and I want to correct that impression.
David Mayo and those people that were around him worked very hard using standard Church lines, knowledge reports, write-ups of one kind or another, to try and solve this dilemma that they were in; this sort of forced ethics situation, the fact that they were held captive, they were guarded 24 hours a day and those sorts of things. The idea that they were just victims of this is far from the truth. They were working very hard.
That's not to say these people were treated kindly, or that this was a very pleasant time for them, because it certainly wasn't. They were out in the middle of the desert, they were being forced to run during the daylight hours, and it was a very difficult period of time. You can imagine what it would be like, running in August, in the desert, around and around a tree, at about a 50ft radius, all day long. It was devastating, bodily, for them. They lost a tremendous amount of weight as a result of this kind of stress on a body. Many of them suffered from physical maladies, from sprained ankles, pulled ligaments, to the actual loss of teeth as a result of the body leeching minerals out of it's own system.
This was a terribly difficult period of time for all of them, but these were individuals of enormous commitment to the Church and they were really knocking themselves out to not blow and to consequently take on the apparency of being an enemy. Because it really was their intention to sort out and resolve any difficulties that were there. But also, this period of time was not without its humor as well. People in the most adverse situations can make adjustments and find ways to live their lives in spite of these horrendous events.
Dave Mayo tells a story of him being assigned his own particular tree, separate from everybody else. The reasons for that are not completely clear but, nonetheless, it was felt important that he be completely segregated from the group. They had a supervisor whose job was to watch them during the day and make sure they didn't stop running; that their rest periods were not excessive and so forth. The two trees, the one tree the balance of the people were running around, and David's tree, were apparently a considerable distance apart. One person standing in one spot could see both trees but, it was a good walk from one to the other.
So, what David would do is: sit down and the supervisor would, of course, begin to walk across the intervening space to get to David. By the time he would get there, everybody at the other tree was sitting down. So, the supervisor would say to David, "Come on, get up and get going here," and David would comply and get up and start to jog around the tree, or whatever, and the supervisor would turn around and, of course, would now have to head back for the other tree, because everybody else there was sitting down. Right after he would pass the half way point, David would sit down, so, he would then turn around and see David sitting down but, he was past the half way point , so he would go and handle the other ones and apparently, they caused this fellow considerable excess walking back and forth between the two trees as this period went on.
At any rate, the result of the Comm ev was that David, and virtually everyone else connected with the Comm ev, were found to be suppressive people and were going to be expelled from the Church and so forth. David will be issuing or has already issued a not inconsiderable paper on his position regarding what happened and I don't presume to speak for him here, but, suffice it to say here, the findings were not, from his point of view, just, and I have seen substantial evidence that supports that point of view.
What we're going to do now is, we are going to return to looking at what the RTC, the Religious Technology Center, has been doing, or had been doing since that time. To clarify something, the RTC was incorporated in California in Jan of 1982. It was clear that the IRS was not going to simply roll over on its back and say, well, hey, if you guys say that these trademarks that have been donated to the RTC are worth 42 and a half million dollars, or whatever the appropriate dollar figure would be to have offset the taxes, if you guys say that they are worth that much, that's good enough for us. The RTC was going to have to demonstrate in some sort of a real way that it really was in control of the trademarks, that it was more than just a paper transaction and two, that those trademarks really did have some significant value.
So, the first step that was done in early 1982 was to put together all new paperwork for the Class 4 Churches and above. What was done there was to make the RTC, essentially, the senior management organization responsible for the activities for all of these Class 4 orgs, and that paperwork gave the RTC sweeping powers over the Churches.
They could send groups of individuals into a church, the books could be examined, the preclear folders could be examined, the personal space could be inspected, personnel could be pulled in and sec checked and otherwise handled. Nothing could be done to stop those activities from going on. Nonetheless, it was well understood that the RTC was to benefit the Church, so the resistance to this was not terribly great. An additional portion of the gross income of each church was also to be paid to the RTC in exchange for that organizations being allowed to use the trademarks. My information is that there was an additional 5 percent of the gross income.
Once that was complete, apparently in the spring of 1982, work began to relicense all the Missions on a worldwide basis. That is a bit more difficult a task because missions exist in many more locations than Class 4 orgs and above. And the paperwork had to be constructed in such a way that it would be legally usable in every locale.
That was a considerable task and they worked during the bulk of the summer to get that paperwork together. In the early fall, around the beginning of Sept, the new mission charters were mailed out to all the missions on a worldwide basis. This consisted of a new charter that made the mission subservient to the RTC and new papers that had to be filed with the state or federal government, depending on where each particular mission was located. A time machine was also sent along with these papers, that they were to be signed by the mission holders and filed with the state, let us say. Certified copies were to be received back and forwarded to the RTC. All this was to be done by Oct 1, 1982.
Compliance was pretty good. It wasn't really clear what this RTC was all about during the period of time, but the changing of mission incorporation paperwork was fairly routine. It had happened any number of times over the past years and nobody gave a whole lot of credence to it. There were a few missions holders who had apparently read these materials carefully and had some objections, but some fairly heavy-handed tactics from the RTC got those papers filed and forwarded in. The stragglers were gathered up and, for the most part, all of the papers that could be expected to be gotten were indeed gathered all together by 14 Oct 1982.
Within 72 hours, the infamous San Francisco mission holders meeting was held.
It is worthwhile to know that a complete transcript was made of that meeting and was published and I invite you to try and get a hold of a copy of that because it makes good reading. I would also, however, be cautious because there are two versions of it. There is a very severely pared-down edited version and there is quite a long version that's perhaps 40, or even 50, pages long. That's the one you want to see because the content of that meeting is pretty scary.
Mission holders are told that if they don't comply with what the RTC says, and what the RTC says is source, that their right to use the Tech, the rights to call themselves Scientologists or be Scientology missions, will be simply canceled. If they don't comply with those cancellation orders, individual mission holders will be either civilly or criminally prosecuted, or both, and there were a variety of threats to throw them into jail and other activities of that kind.
In addition to all of this activity, groups of individuals are going to be sent around to investigate the missions. They are going to look into their books, review their tech and so forth, and each mission holder is going to have to pay for the privilege for having this done. The tariff for doing this is going to be exactly 15,000 dollars per day, payable in advance, in cash.
The mission holders meeting then ended and the individual mission holders went back to their missions and these teams of investigators came to the missions as promised. They arrived, they charged the fees that they said they were going to charge, and within 10 days after that meeting was completed, the RTC and the people doing those investigations had collected in excess of 2 million dollars in cash.
25 missions of the 98 missions in the U.S. network either defected, that is, left the Church, or were bankrupt and closed their doors. The Westwood mission, here in the Los Angeles area, was severely hit. Literally every dollar from every bank account they have was taken out and given to the RTC, and/or these teams of investigators, either in fees or in fines. In addition, an agreement had been made previously that those missions that had been chartered prior to SMI (Scientology Missions International) would be allowed to keep their charters and they would not have to buy a new charter from SMI. That agreement was canceled and all of those missions previously chartered now have to buy new charters at 35,000.00 dollars each. The Westwood mission ended up with fines of approximately 30,000.00 dollars, plus having to buy the new charter at 35,000.00 dollars, bringing its total fees to 65,000.00 dollars. That was a financial burden that that group has yet to recover from.
They lost their ability to advertise, the staff went on half or no pay and it's been financially rollercoastering, or very rocky ever since. Other missions found themselves in similar positions of either financially exhausted or administratively shocked as a result of what had occurred. But, the mission network was now thoroughly under the control of the RTC and its enforcement arm, the Financial Police, run by the Financial Dictator, a young man whose name is Wendell Reynolds.
The next target of these individuals was the field auditors. These were groups of people that were using scientology trademarks without paying their fair share. A meeting was called in Dec. in Los Angeles to gather all the field auditors together to announce the fact that a major campaign was being launched to license all the field auditors into an organization called I HELP.
I HELP stands for the International Hubbard Ecclesiastical League of Pastors. This was to be the licensing body for field auditors and the requirements for membership in I HELP were: a 100 dollar per year membership fee, plus 10 per cent of one's gross income as an auditor, again, payable to I HELP. That would make you a member in good standing. Additionally, you had weekly stat sheets that you were to fill out and you had to sign a contract to I HELP, canceling all of your previous agreements with the Church and with L. Ron Hubbard, and stating that you acknowledge the RTC as the holder of the trademarks and as the senior organizing body over the I HELP network of auditors.
The meeting in Los Angeles was held in Levinen (sic) Hall, and it was very well attended. Estimates range from 300 to 600 people attending and, when the meeting began, a question was asked, "How many people in the hall were field auditors?" Virtually every hand in the hall was raised. During the course of the meeting, field auditors were told that I HELP was going to stamp out squirreling and if you knew of somebody who was squirreling, and couldn't get fast enough action from the Church, you were empowered at this point to take that person out into an alley and, if you will, explain it to them by hand. This kind of vigilante ethics did not sit well with the field auditors and you could tell, I could tell, sitting in that meeting, that discontent was growing amongst the group.
They were additionally told that if they failed to comply with I HELP, if they failed to make folders available when they were demanded, to pay their fees and so forth, that they would be civilly and, ultimately, criminally prosecuted. Once again, this did not exactly bring in everyone's good indicators. About two-thirds through the meeting, another question was raised, "How many people here are field auditors?", and looking around the room, it appeared that less than a dozen people raised their hands. So, there was a considerable change in the number of field auditors present just during the course of the meeting. Nonetheless, the I HELP plans went forward, that meeting ended, and various people who had indicated they were field auditors were given copies of the contract and told to sign them on the spot.
Subsequently, people have smuggled copies of the contracts out and they are available to read. They make very interesting reading indeed. What they demonstrate is that the RTC is indeed in charge of the Church and via their various enforcement arms, can indeed fine, and otherwise prosecute, or go against field auditors. As a matter of fact, I'm acquainted with a field auditor who was handled in this fashion. He was called into a local org. He was told he had been investigated and found to be the center of a certain amount of discontent in the community, and that he was going to be looked into. He was taken to his office with five members of the finance police and others. He was what I call 'gang sec checked', that is, he was taken into a room and sec checked by more than one person at a time.
While that was going on, his personal files and all the materials in his office were searched and at the time that the sec check was completed, it was announced to him that he owed the Church fines in excess of $30,000. One of the fines that was levied against him was for committing the following heinous act: He had two preclears on his lines, one of whom was in the business of arranging tax shelters, and the other was in the business of drilling for oil. These two individuals were introduced to one another on a social basis. In discussing what they did for a living, and so forth, came to an agreement whereby they would make a tax-sheltered oil drilling program together. Some money was invested in putting this program together and this field auditor was told this was illegal, that these individuals should have been putting that money on the bridge. His having introduced them, consequently, was a crime and he was expected to pay a fine as a result for doing so.
So, I HELP did not become a terribly popular group in Los Angeles. I don't know specifically of other instances of this type, but I have heard stories that such things have occurred. The one I just related to you, I know about very specifically.
During this period of time, as you might imagine, mission statistics crashed. Now, the LRH Birthday Game, which was due to expire on Mar 9, 1983, based on LRH ED ((Executive Directive)) 339-1, dictated that the orgs were to expand by 5.4 times prior to that date. This was the Birthday Game target, and the crash of the mission stats didn't do that any good. A telex was sent to Los Angeles, to the finance police and others, saying that 250 people were to be gotten to Flag before March 9, 1982. Someone came up with a bright idea: let's get a hold of people in the field, the idea went, who have large followings of individuals, and we will use those people to help reg these followings and get them off to Flag.
The first person that was approached in this regard was a man named Richard Stewart. He had quite a large number of people that were part of, or had participated in, seminars and courses that he had given on financial management in one guise or another. He had given a course on How to Manage Real Estate, or How To Invest in Real Estate, a course on How to Be a Millionaire and things of that nature. Richard Stewart was asked to cooperate in this venture, to pull his entire staff off their daily work and put them to work on this regging program.
When he declined, although not unpleasantly declined, he was nonetheless accused of being a squirrel. He was gang sec checked in his offices and his entire staff was called together and told that Richard Stewart had duped them, that he was a squirrel and a bad guy and that each and every one of these staff members had the responsibility to get busy and gather together every single person who had ever taken a Richard Stewart course and each and everyone of those individuals would have to go to Flag and do the Keeping Scientology Working course. Now, a number of individuals asked why it was necessary to go to Flag to do the Keeping Scientology Working course, when there were at least 4 major orgs right here in the Los Angeles area.
The reasons that they were told was that the Los Angeles area was significantly out tech, in that Richard Stewart had been allowed to operate in this environment and no one had written up reports to stamp out his squirreling. Additionally, they were told that, because the tech was so far out, they would have to go to Flag to be in the appropriate environment to receive this tech upgrade, if you will. Several individuals raised the question as to whether or not it wouldn't be more cost effective to bring supervisors from Flag here to Los Angeles, since there were 200 or 300 people in need of this course and wouldn't it be more cost effective to do it that way, given that a Scientologist ordinarily gets more case gain from auditing and training than from air fare. It seemed worthwhile to put the airline ticket money on the bridge as opposed to giving it to, let's say, National Airlines.
That idea was refused as well. Of course, it's very clear why. The idea was to get these people to Flag, to have them buying services at Flag, buying accommodations at Flag. And many of them, if they complained even in the least bit, were immediately put onto sec checks. That money that they had set aside for auditing was used to check out to see if they had overts and that's why perhaps they were complaining. Many, many thousands of dollars were consumed in doing unnecessary sec checks on people at Flag; although, you may be able to get some argument as to whether they were necessary, speaking to a number of people that went and actually had them, they were quite sure that they were unnecessary.
The target, apparently, for this program was to collect 3.8 million dollars at Flag. According to an interview that an individual I spoke to had with a registrar at Flag, this program fell short by about a million dollars, but was nonetheless successful to the degree of collecting over 2 and a half million dollars.
The mood in the Los Angeles area became very frightened. Other individuals in the area were similarly approached by the finance police. A doctor, a chiropractor, a health specialist, were all approached. Their people were pulled in, they were told that these individuals had been squirreling, or were otherwise altering the tech and individuals from those groups were ordered to go off to Flag and do the Keeping Scientology Working course as well.
Some were intimidated, many were told they would not be permitted to return to the bridge at all if they failed to comply with these orders. So there was a considerable atmosphere of fear generated and to this day the atmosphere has not diminished.
Now, there was still a group of Scientologists that were not paying their fair share to the RTC and/or Church organizations of one kind or another. Those were people who owned businesses. So, the World Institute of Scientology Enterprises, or WISE, as it's commonly called, was beefed up. A new ED International was appointed to WISE, and WISE was put on a program to sign up Scientology businessmen to pay their appropriate tithe. The tithe was to be a yearly membership fee of $250 and 6 percent of the gross income of the business, plus 7 percent of the net income of the business.
As you might imagine, several of the businessmen that were approached in this regard were not delighted. This particular policy of putting these people under contract to do that is currently under review. We're not sure whether they're going to continue to pursue that or not. The amount of anger that that generated was immeasurable. An additional program was under consideration and was actually begun apparently in one location, where simply, Scientologists who worked for a living were told that they were to pay 7 percent of their gross income as a tithe, because, it went on to say, they were using Scientology in their lives on an everyday basis and would not be doing as well as they were doing were it not for that.
Well, that pretty much summarizes the downside of what has happened. I think it brings together a number of the pieces of this story, to let you know in part what has happened to bring this new management into power. The new management bases its power on its ability to manage the comm lines to and from Ron. The people managing those comm lines are three: Annie and Pat Broeker and David Miscavige. Those communication lines are their power base. Those three individuals have been appointed the trustees of LRH's estate. Each one of them is to receive a fee of 5 percent of the total amount of the trust as a trustee's payment, if you will, for being responsible for that particular task. Obviously, there's a considerable financial incentive for them to stay in that position. The finance police, and its manhandling of the Scientology public, has been principally, to the best of our ability to understand it, a grab to increase the sizes of those trusts and to increase the Church's monetary power on a worldwide basis.
Recently, on June 12, 1983, to be precise, the existence of the Religious Research Foundation was exposed in the St Petersburg Times at St. Petersburg, Florida. In that article, it was revealed that certain monies from the Religious Research Foundation were being paid to LRH personally. That would be what is called in tax parlance, inurement. Inurement is the passing of money from a non-profit corporation into the benefit of a private person beyond simply that person being on staff and receiving a salary. Inurement is adequate evidence to lose tax-exempt status and the Church is apparently in considerable danger as a result. If the IRS finds against the Church, and that finding could be based on the fact that Ron himself received substantial amounts of money, that could cause the Church literally tens of millions of dollars in back taxes.
Now, there was a tax case filed against the Church in 1973, or based upon the 1973/74 tax year. That case was lost and in 1980, in the early part of the year, a lien was placed on the complex of buildings in Los Angeles, commonly known as the blue buildings. A lien was placed for 6 million dollars as a tax lien against those buildings pending the outcome of the appeals on that case. It would not be unlikely to expect that the IRS would take the Church into court and try to enforce further tax liens for other tax years based on the fact that this personal inurement has allegedly occurred.
The Church's response to this potential tax liability has been to mortgage the various properties it owns, the buildings in Florida, the Flag Land Base, the Miami Org, the Clearwater buildings and other buildings there, our investigations have revealed, have been quite heavily mortgaged recently. We have learned that other Church buildings around the country have also been mortgaged. The purpose in doing that, of course, is if a tax lien is filed and the property is mortgaged, there's no value in the property that can be seized, the worth of the property has been taken out. What the IRS, in this instance, is liening is the mortgage as opposed to the value of the real property.
So, the pressures that have been brought to bear on the Church financially, tax-wise, politically and so forth, have changed the atmosphere in the Church. Certainly it is no surprise to anybody that's been active on Church lines recently, particularly in the Los Angeles area, that ethics is very very heavy; that security is very very heavy; that the Church seems to be in an attitude, overall, very worried about it's survival. I think there's good reasons for it to be worried about it's survival and it's time now to begin to look at what alternatives are present for those individuals that want to progress up the bridge, who do not want to have to take Scientology services under the kinds of oppressions that we've been talking about and to pay the kinds of prices for services that the Church has apparently been forced to charge.
So, there's good news and there's bad news. Well, you've heard the bad news. Now let's take a few moments and talk about the good news. First of all, there are any number of places where one can do the Scientology bridge. All around the country there are field auditors and small groups that have sprung up, that can offer the lower parts of the bridge, the Clearing Course and the OT levels. Such groups are not, to the group, absolutely standard. There are some that are good and some that are bad. Scientologists now have a new responsibility, those that want to continue in what we call, alternative Scientology settings, and that is they have to look into them in much the way as they would have to look into a doctor or a dentist. They have to check the individual or group out that they may want to become associated with, to examine the tech for themselves, to be sure that the auditing and training that is going on in that location is standard and to make rational choices in that regard.
It has been certainly convenient over the years to be able to assign that responsibility to the Church. I certainly have seen evidence of the failure of the execution of that responsibility and I think it may be a boon to all of us to reassume that responsibility, each one of us for ourselves.
There are new Churches springing up around the country all the time. David Mayo and his associates have founded a new church in the Riverside area; Bent Corydon and his associates have founded the Church of Scio Logos and they are delivering services; in the Sacramento area, Marvin Price and his Personal Ability Center, or Advanced Awareness Center, I've forgotten the name precisely, are busy and actively moving Scientologists up the bridge at reasonable prices. These kinds of alternatives are available all around the country. It is felt among these groups that the reason these abuses that we've talked about here have been able to occur is because the Church has had a monopoly, and it has been their intention generally to help to break down that monopoly.
It has been my experience that these groups are not in a games condition with the Church. They are not trying to get out there and do the Church in. Parenthetically, I don't think that anybody could do a better job at that than the Church itself is doing at the moment. But, the point is, is that we all want to get people up the bridge. We all want to clear the planet, we all want to achieve the goals that we set out to achieve when we got into Scientology. And it is not necessary to fight with the Church, to unmock the Church if you will, in order to do that.
There are only certain pressures that really affect the Church in any meaningful way. Of course, Ron himself is a pressure, the market place, how much money is available in the marketplace, is the other pressure. And since it has been impossible to get meaningful communications back and forth to Ron, and since the internal struggles of the Church as a whole have been controlled by this new group of managers, the only pressure that really is effective against the Church, at this point, is the marketplace pressure.
And frankly, the ideal scene as far as everybody in the field is concerned overall, would be for the Church to examine the popularity and the strength of what's going on in the field, to realize that the tech can be delivered by any number of people, to come to its senses economically, and to begin to bring the Church back together again, rather than simply attacking and throwing away everyone that has an alternate idea. And you will find that in these alternate groups, freedom is the watchword and it's very difficult to advocate total freedom in an environment of enormous suppression and oppression. And the alternative groups we have found, for the most part, offer Scientology in a much less oppressive environment. And we invite you to have a look around and see what's going on in your area, to take some time to investigate the things that have been said on these tapes.
There is an enormous amount of documentation to go along with the things that have been said and that documentation is widely available. So, I would invite you to do so. Certainly, be as skeptical as you would be if you were buying a used car. Perhaps, many of us have made the mistake early on of becoming involved in Scientology, in adopting attitudes and viewpoints, without taking the time to seriously consider the ramifications of that. And this is not a time to repeat that mistake.