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Title Scientology - Scientology's Crushing Defeat
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Scientology s Crushing Defeat August 19th, 2008 - Six years ago, when I was a reporter at New Times LA, I d written several stories about Scientology (Los Angeles is one of its headquarters), and I was about to uncork the longest one yet a 7,000 word piece about an embarrassing, $8 million defeat Scientology had just suffered, when the weekly paper suddenly folded. That unpublished story has been sitting in storage ever since. Fast forward to 2008, and the world of reporting on Scientology has changed radically, thanks in part to the lunacy of Tom Cruise, but also in part to a worldwide, leaderless movement that calls itself Anonymous. Ravenous for any information about L. Ron Hubbard s strange organization, Anonymous scours the world for the least tidbit about Scientology. Well, here was a pretty meaty morsel just sitting in my hard drive. It s still a substantial bit of reporting, and it fills in some gaps in the historical record of one of the most humiliating court losses Scientology has ever suffered. Originally scheduled to be printed in October 2002, the piece follows. (It s unchanged except for updates in [brackets].) This material may come as a revelation to some readers, but even for the know-it-alls at Anonymous, there are juicy bites. Tony Ortega What Scientology Paid $8 Million To Hide With an hour to spare, Hubbard s minions settle a debt they vowed never to pay (Prepared for publication in October, 2002) by Tony Ortega Even before it started, the 1986 trial of Lawrence Wollersheim v. the Church of Scientology of California caused a mob scene at L.A. s downtown superior court. When a judge decided during pretrial motions that documents describing confidential Scientology beliefs should be put in a file open to the public, 1,500 Scientologists swamped the court clerk s office to keep anyone else from requesting them. The next day, the judge resealed those records. But an L.A. Times reporter managed to get past the crush of Scientologists and copy the file. Newspapers around the country had a field day with what the Times reported: the documents showed that high-level Scientologists are taught that each human contains the souls of alien creatures banished to Earth 75 million years ago by a galactic overlord named Xenu. Scientology s process of dianetics, developed by science fiction writer L. Ron Hubbard over a period beginning in the late 1940s, was supposed to rid the body of those alien creatures. But Lawrence Wollersheim, who had defected from Scientology after serving 11 years and making about $50,000 in payments, claimed that the organization s pricey rituals instead had made him insane and drove him to the brink of suicide. He filed suit in 1980, and six years later his trial was a sensation. Still the most expensive civil trial in L.A. court history, [This was true even in 2002, post-Simpson T.O.] it made headlines almost daily in the spring and summer of 1986 as Scientologists jammed the courtroom and protested outside of it, complaining that their religious freedoms were being trampled on. For many in the public, reports of the trial gave them their first detailed description of Scientology, which today counts such celebrities as John Travolta and Tom Cruise among its members. Travolta himself made a visit to the trial that May which was widely reported. In the lawsuit, Wollersheim claimed that after he left Scientology in 1979 the organization retaliated by destroying his business and attempting to destroy him. In five months of testimony, Wollersheim, his psychologist, and former Scientologists described the coercion he was subjected to, sacrifices he was expected to make, and bizarre teachings he was fed, which made Hubbard s outfit sound more like a mind control cabal out of The Manchurian Candidate than the mainstream faith it claimed to be. Scientology s attorneys countered that Wollersheim had come to the organization with a preexisting mental condition and was a drug user. Wollersheim was seeking $25 million in damages. The jury awarded him $30 million. It was a stunning blow to Scientology, but probably the most lasting impression that many took from the trial was the reaction of Scientologists themselves, who continued to protest at the courthouse day after day for more than a month after the verdict. Staging their demonstrations from a tent city set up across the street, the members wore pins made from ten cent coins and chanted over and over: Not one thin dime for Wollersheim! It was a vow that Scientology kept for 16 years. [...] And then, suddenly, Scientology threw in the towel. [...] A Scientology spokeswoman says that the organization was simply tired of the case. But the timing of the payment suggested another reason. The very morning that Scientology paid to end the case, superior court judge Robert L. Hess was scheduled to begin a new hearing in the 22-year-old case a hearing Wollersheim s attorneys had been preparing for, and demanding, for years. [...] Scientology s attorneys had managed to keep Miscavige out of the proceedings, but the organization s nominal president, Heber Jentzsch, was facing cross examination by Wollersheim s attorneys if the hearing came off as planned. [...] Scientology s $8.7 million check arrived just an hour before the proceeding was scheduled to begin. In the months since, the court has gradually released the money to Wollersheim for him to dole out to numerous attorneys to pay for years of service. Those fees will eat up much of the money, but Wollersheim expects to end up with between $1 to $2 million of it. [That hasn t turned out to be the case see the update at the end of the piece.] [...] A central contention in Wollersheim s case was that even sixteen years after Hubbard s death, his writings provided an unalterable blueprint to how the organization of Scientology really operated. And to understand what happened to Wollersheim and others who have defected and now regret the time and large sums they spent learning about Xenu and other dubious concepts, they say, you have to have a working knowledge of Hubbard s jargon and policies. [...] That day in 1969, Wollersheim followed the young woman to an office and she handed him over to other Scientologists, who asked him to take a personality test. It seemed innocent enough, but later he ended up convincing many others to do the same thing. No matter how you answer the test, he says, they tell you you re screwed up and that they can fix you. He was soon hooked. I decided to quit school, make a bunch of money, and pay them to get all these secret levels of ability. New recruits are told that advancement in the religion can bring them all sorts of benefits high level members are said to experience raised IQs, clairvoyance, an immunity to disease, and are able to leave their bodies. Scientologists believe they can attain these abilities through a process called auditing, which enables them to remove engrams from their reactive mind, something akin to talking away the scars left over from life s traumas. When all of those scars are removed, a Scientologist is said to be a clear, and can attain amazing powers. Like other low-level Scientologists, Wollersheim was kept in the dark about much of Scientology s true core beliefs. Only through attaining far more experience and going through increasingly expensive auditing could he hope to go clear. He found himself making good money, however, and he gave nearly all of it to Scientology, [...] They have a belief that if they control Hollywood, they will be able to create a mass recruiting phenomena, he says. Finding new celebrity recruits was a serious endeavor, and required lots of planning and research, sometimes with the use of private investigators. We d develop a battle plan and rehearse drills of how we were going to surprise the celebrity, he says, often making use of actors they had already attracted to the religion. [...] As a Sea Org member working at the Celebrity Center, Wollersheim was paid $18 for a six day work week, and was supplied food and meager lodgings, and all the while paid for his own auditing, which was becoming more and more expensive. But if the organization s stats were down if the numbers of new recruits or money taken in for auditing or other criteria that were measured weekly had dipped then a Sea Org member s food and pay was cut, Wollersheim says. [...] Wollersheim says the threat of retaliation kept him from bailing out. It was known among Scientologists that defectors were hit with large bills for services they had received at discounted prices called freeloader debt and could also find themselves the target of aggressive private investigations and legal action, a policy Hubbard had called fair game. [...] And that s when Wollersheim learned the secrets of OT III. [...], Wollersheim says. I went psychotic on OT III. I lost a sense of who I was. OT III totally shatters the core sense of identity. The central concept of mind control is attacking the core personality, the threat that you are not who you think you are. At OT III, you find out that you re really thousands of individual beings struggling for control of your body. Aliens left over from space wars that are giving you cancer or making you crazy or making you impotent. The reason for every bad thing in your life is these alien beings Years can be spent removing these aliens called body thetans or BT s by talking to and about these supposed hitchhiking entities while holding onto a device called an e-meter. You re talking to thousands of beings. They have histories. And anger. They re complex personalities. I started drinking heavily to drown out the voices. I was non-functional, irrational, filthy. I wandered the streets of L.A. for three days. Finally I came enough to my senses to get in touch with Scientologists I knew. He was cleaned up and calmed down, but Wollersheim was told that the solution to his troubles was just more auditing. [...] Wollersheim says he paid $28,000 for classes in Clearwater, Florida that were supposed to help him locate alien beings that had been a part of him during past lives. It induced another psychotic episode. I went so raving nuts, I tore down a fence at the center. I thought I was an alien warlord who couldn t be stopped. After about a day and a half, they came and got me. Eventually, however, Wollersheim graduated to a level where he believed he had finally eradicated all of the thetans from his body. You think you ve made it. You re free of all these beings. But then Hubbard releases the second big secret [on a level called New Era Dianetics for Operation Thetans, also called NED for OTs or NOTs. ] He tells you there are far more of these beings than anyone ever dreamed of. Inside those original thetans are clusters of other beings. Beings that are eight feet from you, floating near you all the time. Beings miles away from you that are still connected with you. Beings in the television, and you re told that watching television will wake them up, so you re told not to watch TV. If OT III made some people nuts, NOTs really drove them over the edge, he says. While auditing NOTs, Wollersheim had his third psychotic break. Back in Los Angeles, he remembers lying in a dark room with a .45 revolver, thinking about killing himself. A friend discovered him and took him to a Scientology center for more auditing. Once again, he went back to Clearwater. But when his friend saw that it wasn t helping him, she told him to get away. Those were the magic words, he says. He decided to leave. Word traveled quickly, however, that Wollersheim was going to leave Scientology after 11 years. At a restaurant in Clearwater, he says, he was approached by a member of the Guardian s Office, Scientology s intelligence bureau. He looked at me and said, Don t you ever tell a doctor, lawyer or priest anything that ever happened to you in Scientology. The organization then declared Wollersheim a suppressive person (or SP ) in other words, an enemy of Scientology and commanded other Scientologists to disconnect from him, he says. His customers stopped paying bills, and 80 percent of his employees quit their jobs within three days. Weeks later, his business had collapsed, leaving him with hundreds of thousands of dollars in debts and no way to pay them. For several months, Wollersheim went into hiding, worried that harm would come to him. You re told in Scientology that if you reveal their secrets, bad things will happen to you, he says. His parents, however, were thrilled that he was out, and they gave him some money to live on. At some point in that six months I realized that something bad had happened to me, and I needed someone else s perspective. He returned to Los Angeles, looking for others who had left Scientology. On a hunch, he went to the downtown superior court and asked to see the names of people who were suing Scientology. I was shocked to find a whole list of people, he says. Some he recognized. He decided to call the attorney handling their cases. [...] Scientology claimed that its practices were protected by freedoms guaranteed in the First Amendment, but the court rejected that argument by pointing out that Wollersheim had been coerced to remain a Scientologist through the threat of freeloader debt, the use of fair game, and the use of confidential information in his files. The opinion by the appellate court remains one of the most damning in a long history of court denouncements of Scientology which have occurred worldwide. The Wollersheim case is among the most important decisions against Scientology in its history because it showed that the organization s standard practices used against a member were harmful, says Stephen Kent, a sociologist of religion at the University of Alberta who is one of the few academics who studies Scientology in depth. [...] Meanwhile, the particular entity Wollersheim had sued, the Church of Scientology of California (CSC), was mysteriously shrinking. In 1985, the year before Wollersheim s trial, in a suit brought by another disgruntled former member in Oregon, an official for CSC claimed that it had assets of more than $350 million. But during Wollersheim s proceedings just twelve months later, CSC officials testified that it was worth only $13 million. (And one of Wollersheim s attorney s, Dan Stein, used CSC s own documents to show that even this amount was ephemeral. By the time Wollersheim won his verdict, CSC was essentially broke.) Wollersheim and his attorneys suspected where the money had gone. [...] Wollersheim has long argued that to avoid paying him, Scientology effected its highly complex reorganization, gutted CSC, and moved its assets to other entities such as RTC and CSI, which in turn used their financial muscle to go after Wollersheim in other actions. And in 1997, he got proof that his theory was correct. The supposedly dormant CSC had filed yet another lawsuit against Wollersheim (eventually dubbed Wollersheim 4), but after Wollersheim successfully defeated it with a SLAPP motion a California legal strategy that defendants can use to have frivolous lawsuits thrown out of court and be awarded attorney s fees CSI admitted that it, not CSC, was really behind the action and paid Wollersheim s lawyers nearly $500,000. [...] One of the most damning accounts came from one of Scientology s own attorneys, a man named Joseph Yanny, who was hired in 1984 and left in disgust three years later. In his court declaration, Yanny testified that the lead Scientology attorney in the Wollersheim case, Earle Cooley, had personally ordered the destruction of evidence relating to Cult litigation in my presence. Yanny also witnessed the gathering of information from parishioners confidential files for use by the legal team. He was told that using such confidential files to prepare for court was standard practice. And Yanny also was present when a blackmail campaign was planned against Wollersheim s original attorney, Charles O Reilly. The medical records of O Reilly were to be stolen from the Betty Ford Center and another location in Santa Barbara, to show that he was using cocaine, discredit him, and possibly blackmail him into easing off on his 30 million dollar verdict now on appeal. I objected to this as illegal and an alternative plan was quickly arrived at to settle my nerves. These declarations and other documents, Wollersheim s attorney say, painted a clear picture: the jumble of organizations CSC, RTC, CSI and many, many others meant little when it came to defending Scientology against claims that its technology was harmful. Miscavige, they claimed, was in firm control, which ignored corporate and legal niceties. If it had been shown in court that the 350 organizations of the church of Scientology were all controlled by David Miscavige, it doesn t look like a legitimate religion but the authoritative cult that it is. It would have been terrible public relations, and they still would have had to pay the money. And that s why they paid the money when they did, to avoid the bad PR, says longtime Wollersheim attorney Ford Greene. But Dan Leipold, another Wollersheim lawyer, says that Scientology had even more to worry about than bad PR from the documents and testimony they had gathered. I think all of the evidence could have threatened the church of scientology s tax exempt status, he says. Hubbard organized Scientology as a religion in 1954. But in 1967, it was stripped of its tax exempt status by the IRS. For the next 25 years, the U.S. government repeatedly turned down Scientology s appeals to regain its exemption on the grounds that Scientology was not so much a religion as a money-making venture benefiting one man, Hubbard. Scientology retaliated in an extraordinary way. With Hubbard s knowledge and direction, agents of his intelligence unit, the Guardian s Office, began infiltrating IRS and other government offices in the mid 1970s. Dubbed Operation Snow White by Hubbard, the illegal operation netted stolen government documents by the yard, and went undiscovered until a 1977 raid of Scientology offices by the FBI. Eleven Scientologists, including Hubbard s wife Mary Sue, were sentenced to prison. Hubbard himself was named an unindicted co-conspirator. Scientology subsequently disbanded the Guardian s Office, claiming that it was a rogue outfit. But its war with the IRS did not stop. Even after Hubbard s death in 1986, the IRS continued to deny the organization tax-exempt status, and Scientology fought back by siccing personal investigators on individual IRS employees and filing more than 2,000 separate lawsuits against the agency. Despite the harassment, however, the IRS continued to win victories against Scientology in court. In 1992, A United States Claims Court upheld the IRS denial, citing the commercial character of much of Scientology and its scripturally based hostility to taxation. Tax exempt organizations, the claims court wrote, simply do not exhibit the financial complexity or the phenomenal preoccupation with money displayed by Scientology s management churches and organizers. By then, however, the IRS had already, secretly, caved. In 1991, under the first George Bush presidency, the IRS had reversed itself and began a process that wasn t made public until 1993, under the Clinton administration, when the IRS revealed that it was giving nearly every Scientology entity the tax exempt status it coveted. It was a stunning turnaround and one that, [more than] a decade later, still has tax experts shaking their heads. Former IRS exempt organizations specialist and tax journalist Paul Streckfus says that the IRS simply cracked from the pressure Scientology had been applying for so many years. The IRS found that Scientology was more than they could handle, Streckfus says. We think of the IRS as so powerful, but by 1991, the commissioner of the time, Fred Goldberg, decided that the case was tying up the IRS. Scientology seemed to have limitless money, so I think Goldberg decided he wanted to get rid of the case and to hell with it. He directed his people to get the best deal that they could. Miscavige, announcing the victory to his flock at a gathering in Los Angeles, bragged that in 1991 he had simply dropped by the IRS headquarters and, without an appointment, asked to speak to Goldberg. (After this was first reported, Scientology took out a full-page ad in the New York Times denying that Miscavige had said it.) Soon after the impromptu meeting, Goldberg established a special committee to examine the Scientology cases a move that tax experts say all but assured that the exemptions would eventually be awarded. In court testimony, IRS officials have admitted that during the process of granting the exemptions, they were instructed not to look into Scientology s business-like ventures. The final agreement called for Scientology to pay $12.5 million. [...] Today, Vaughn Young lives in Ohio, and is dying of cancer. But for 20 years, he was a Scientologist, worked directly with Miscavige, and at one time was Scientology s most senior public relations officer. He was an insider who understood both how Scientology worked behind the scenes, and how it presented itself to the public. He left in 1989 and has been a key figure in numerous court battles since then. [Young passed away in June, 2003.] Vaughn gave a declaration that was unimpeachable, says Leipold. He took 80 different internal documents, and various publications from L. Ron Hubbard and official Scientology texts. He laid them out and showed how the entire organization operates outside the corporate lines of authority. Using Scientology s own internal documents many of which, penned by Hubbard and considered sacred, cannot be altered and must be followed to the letter Young shows that Scientology has a rigid, paramilitary chain of command. Even non-religious entities that market themselves to the public as having no obvious tie to Scientology fall under the strict rubric. The Way to Happiness Foundation and Applied Scholastics, for example, are two organizations that market non-religious Hubbard writings to school districts and avoid mentioning a tie to Scientology. Narconon and Criminon, meanwhile, try to convince prison officials that they are effective methods for turning inmates from drugs and crime. To the non-Scientology world, Young writes, they will say they are not Scientology and try to appear secular. But internal documents, he shows, are explicit that these organizations fall under the command of the Scientology s hierarchy. [...] The defeat has certainly not seemed to affect business. In the most recent issue of Advance!, the magazine of the Los Angeles headquarters, Scientologists are encouraged to begin their advanced training on the OT levels after going clear. To entice them, the magazine contains stories by other Scientologists, identified only by initials, who have already attained advanced OT levels and have used their new abilities in what they call OT phenomena. One man writes of two gravel trucks bearing down on his automobile in what would have been a sure collision and his possible death until, using his OT abilities, he slowed down time and made beams come out of him to hold back the screeching trucks. Another Scientologist took over the body of a man who was losing control of his car on the freeway, righted the car, and calmed the driver down. Another man pacified a ghost that, unseen to others, was bothering workers in his office building. Also in the magazine is a price list for Scientologists anxious to attain their own extraordinary OT powers. A compact disc with some of L. Ron Hubbard s lectures lists for $1,623.75. The Super Mark VII Quantum E-meter retails for $5,280.00. The OT III materials, which tell the Xenu story and reveal the alien nature of the soul, is discounted at $7,040. And packages needed for high-level solo auditing (done by oneself at home), vary from $24,222 to $63,888. [More recently, Jason Beghe, an actor who announced in April that he had left Scientology after twelve years, revealed that he d paid about $160,000 for a single set of procedures called L Rundowns, and over his entire career gave Scientology about a million dollars.] Such lavish amounts for religious instruction, Scientology s critics say, is what allows it to spend so much fighting its foes. Or offering to buy them. Years ago, Wollersheim was offered $8 million to walk away from his judgment. They hinted they would go as high as $12 million, he says. But he refused the money. He says he had seen too many other former members accept settlements and the confidentiality agreements that came with them. [...] Scientology, meanwhile, has much bigger headaches than Larry Wollersheim these days, now that Cruise s antics have helped bring a new level of media and Internet scrutiny. Scientology continues, however, to maintain its tax-exempt status.] This is a summary extract from the full article as it appeared on Village Voice, June 24 2008 Full Article