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<p>
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From TIME Magazine, May 6, 1991:</p>
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<p>THE THRIVING CULT OF GREED AND POWER</p>
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<p>Ruined lives. Lost fortunes. Federal crimes.
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Scientology poses as a religion but is really a ruthless
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global scam - and aiming for the mainstream.</p>
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<p>By Richard Behar</p>
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<p>By all appearances, Noah Lottick of Kingston, Pa. had been a
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normal, happy 24-year-old who was looking for his place in the world.
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On the day last June when his parents drove to <span class="GPE" title="GPE">New York</span> to claim his
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body, they were nearly catatonic with grief. The young
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<span class="NORP" title="NORP">Russian</span>-studies scholar had jumped from a 10th-floor window of the
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Milford Plaza Hotel and bounced off the hood of a stretch limosine.
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When the police arrived, his fingers were still clutching $171 in
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cash, virtually the only money he hadn't yet turned over to the Church
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of Scientology, the self-help "philosophy" group he had discovered
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just seven months earlier.
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His death inspired his father Edward, a physician, to start his
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own investigation of the church. "We thought Scientology was
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something like Dale Carnegie," Lottick says. "I now believe it's a
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school for psychopaths. Their so-called therapies are manipulations.
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They take the best and brightest people and destroy them." The
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Lotticks want to sue the church for contributing to their son's death,
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but the prospect has them frightened. For nearly 40 years, the big
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business of Scientology has shielded itself exquisitely behind the
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First Amendment as well as a battery of high-priced criminal lawyers
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and shady private detectives.
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The Church of Scientology, started by science-fiction writer L.
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Ron Hubbard to "clear" people of unhappiness, portrays itself as a
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religion. In reality the church is a hugely profitable global racket
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that survives by intimidating members and critics in a Mafia-like
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manner. At times during the past decade, prosecutions against
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Scientology seemed to be curbing its menace. Eleven top
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Scientologists, including Hubbard's wife, were sent to prison in the
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early 1980's for infiltrating, burglarizing, and wiretapping more than
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100 private and government agencies in attempts to block their
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investigations. In recent years hundreds of longtime Scientology
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adherents - many charging that they were mentally or physically abused
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- have quit the church and criticized it at their own risk. Some have
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sued the church and won; others have settled for amounts in excess of
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$500000. In various cases judges have labeled the church
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"schizophrenic and paranoid" and "corrupt, sinister and dangerous."
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Yet the outrage and litigation have failed to squelch
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Scientology. The group, which boasts 700 centers in 65 countries,
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threatens to become more insidious and persuasive than ever.
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Scientology is trying to go mainstream, a strategy that has sparked a
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renewed law-enforcement campaign against the church. Many of the
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group's followers have been accused of committing financial scams,
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while the church is busy attracting the unwary through a wide array of
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front groups in such businesses as publishing, consulting, health care
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and even remedial education.
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In Hollywood, Scientology has assembled a star-studded roster of
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followers by aggressively recruiting and regally pampering them at the
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church's "Celebrity Centers," a chain of clubhouses that offers
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expensive counseling and career guidance. Adherents include screen
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idols Tom Cruise and John Travolta, actresses Kirstie Alley, Mimi
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Rogers and Anne Archer, Palm Springs mayor and performer Sonny Bono,
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jazzman Chick Corea and even Nancy Cartwright, the voice of cartoon
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star Bart Simpson. Rank-and-file members, however, are dealt a less
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glamorous Scientology.
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According to the Cult Awareness Network, whose 23 chapters
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monitor more than 200 "mind control" cults, no group prompts more
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telephone please for help than does Scientology. Says Cynthia Kisser,
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.the network's Chicago-based executive director: "Scientology is quite
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likely most ruthless, the most classically terroristic, the most
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litigous and the most lucrative cult the country has ever seen. No
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cult extracts more money from its members." Agrees Vicki Aznaran, who
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was one of Scientology's six key leaders until she bolted from the
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church in 1987: "This is a criminal organization, day in and day out.
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It makes Jim and Tammy [Bakker] look like kindergarten."
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To explore Scientology's reach, TIME conducted more than 150
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interviews and reviewed hundreds of court records and internal
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Scientology documents. Church officials refused to be interviewed.
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The investigation paints a picture of a depraved yet thriving
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enterprise. Most cults fail to outlast their founder, but Scientology
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has prospered since Hubbard's death in 1986. In a court filing, one
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of the cult's many entities - the Church of Spiritual Technology -
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listed $503 million in income just for 1987. High-level defectors say
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the parent organization has squirreled away an estimated $400 million
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in bank accounts in Leichtenstein, Switzerland and Cyprus.
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Scientology probably has about 50000 members, far fewer than the 8
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million the group claims. But in one sense, that inflated figure
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rings true: Millions of people have been affected in one way or
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another by Hubbard's bizarre creation.
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Scientology is now run by David Miscavige, 31, a high school
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dropout and second-generation church member. Defectors describe him
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as cunning, ruthless and so paranoid about perceived enemies that he
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kept plastic wrap over his glass of water. His obsession is to attain
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credibility for Scientology in the 1990s. Among other tactics, the
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group:
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* Retains public relations powerhouse Hill and Knowlton to help
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shed the church's fringe-group image.
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* Joined such household names as Sony and Pepsi as a main sponsor
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of Ted Turner's Goodwill Games.
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* Buys massive quantities of its own books from retail stores to
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propel the titles onto best-seller lists.
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* Runs full-page ads in such publications as NEWSWEEK and
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BUSINESS WEEK that call Scientology a "philosophy," along with a
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plethora a TV ads touting the group's books.
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* Recruits wealthy and respectable professionals through a web of
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consulting groups that typically hide their ties to Scientology.
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The founder of this enterprise was part storyteller, part
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flimflam man. Born in Nebraska in 1911, Hubbard was a moderately
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successful writer of pulp science fiction. Years later, church
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brochures described him falsely as an "extensively decorated" World
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War II hero who was crippled and blinded in action, twice pronounced
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dead and miraculously cured through Scientology. Hubbard's
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"doctorate" from "Sequoia University" was a fake mail-order degree.
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In a 1984 case in which the church sued a Hubbard biographical
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researcher, a California judge concluded that its founder was a
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"pathological liar."
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Hubbard wrote one of Scientology's sacred texts, "Dianetics: The
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Modern Science of Mental Health," in 1950. In it he introduced a
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crude psychotherapeutic technique he called "auditing." He also
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created a simplified lie detector (called an "E-meter") that was
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designed to measure electrical charges in the skin while subjects
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discussed intimate details of their past. Hubbard argued that
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unhappiness sprang from mental aberrations (or "engrams") caused by
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early traumas. Counseling sessions with the E-meter, he claimed,
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could knock out the engrams, cure blindness and even improve a
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person's intelligence and appearance.
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Hubbard kept adding steps, each more costly, for his followers to
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climb. In the 1960s the guru decreed that humans are made of clusters
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of spirits (or "thetans") who were banished to earth some 75 million
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years ago by a cruel galactic ruler named Xenu. Naturally, those
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thetans had to be audited.
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An Internal Revenue Service ruling in 1967 stripped Scientology's
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mother church of its tax-exempt status. A federal court ruled in 1971
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that Hubbard's medical claims were bogus and that E-meter auditing
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.could no longer be called a scientific treatment. Hubbard responded
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by going fully religious, seeking First Amendment protection for
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Scientology's strange rites. His counselors started sporting clerical
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collars. Chapels were built, franchises became "missions" fees became
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"fixed donations," and Hubbard's comic-book cosmology became "sacred
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scriptures."
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During the early 1970's, the IRS conducted its own auditing
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session and proved that Hubbard was skimming millions of dollars from
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the church, laundering the money through dummy corporations in Panama
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and stashing it in Swiss bank accounts. Moreover, church members
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stole IRS documents, filed false tax returns and harassed the agency's
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employees. By late 1985, with high-level defectors accusing Hubbard
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of having stolen as much as $200 million from the church, the IRS was
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seeking an indictment of Hubbard for tax fraud. Scientology members
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"worked day and night" shredding documents the IRS sought, according
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to defector Aznaran, who took part in the scheme. Hubbard, who had
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been in hiding for five years, died before the criminal case could be
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prosecuted.
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Today the church invents costly new services with all the zeal of
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its founder. Scientology doctrine warns that even adherents who are
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"cleared" of engrams face grave spiritual dangers unless they are
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pushed to higher and more expensive sessions that cost as much as
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$1000 an hour, or $12500 for a 12 1/2-hour "intensive."
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Psychiatrists say these sessions can produce a drugged-like,
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mind-controlled euphoria that keeps customers coming back for more.
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To pay their fees, newcomers can earn commissions by recruiting new
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members, become auditors themselves (Miscavige did so at age 12), or
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join the church staff and receive free counseling in exchange for what
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their written contracts describe as a "billion years" of labor. "Make
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sure that lots of bodies move through the shop," implored Hubbard in
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one of his bulletins to officials. "Make money. Make more money.
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Make others produce so as to make money...however you get them in or
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why, just do it."
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Harriet Baker learned the hard way about Scientology's business
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of selling religion. When Baker, 73, lost her husband to cancer, a
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Scientologist turned up at her Los Angeles home peddling a $1300
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auditing package to cure her grief. Some $15000 later, the
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Scientologists discovered that her home was debt free. They arranged
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a $45000 mortgage, which they pressured her to tape for more auditing
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until Baker's children helped their mother snap out of her daze. Last
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June, Baker demanded a $27000 refund for unused services, prompting
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two cult members to show up at her door unannounced with an E-meter to
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interrogate her. Baker never got the money and, financially strapped,
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was forced to sell her house in September.
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Before Noah Lattick killed himself, he had paid more than $5000
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for church counseling. His behavior had also become strange. He once
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remarked to his parents that his Scientology mentors could actually
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read minds. When his father suffered a major heart attack, Noah
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insisted that it was purely psychosomatic. Five days before he
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jumped, Noah burst into his parents' home and demanded to know why
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they were spreading "false rumors" about him - a delusion that finally
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prompted his father to call a psychiatrist.
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It was too late. "From Noah's friends at Dianetics" read the
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card that accompanied a bouquet of flowers at Lottick's funeral. Yet
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no Scientology staff member bothered to show up. A week earlier,
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local church officials had given Lottick's parents a red-carpet tour
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of their center. A cult leader told Noah's parents that their son had
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been at the church just hours before he disappeared - but the church
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denied this story as soon as the body was identified. True to form,
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the cult even haggled with the Lotticks over $3000 their son had paid
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for services he never used, insisting that Noah had intended it as a
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"donation."
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The church has invented hundreds of goods and services for which
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members are urged to give "donations." Are you having trouble "moving
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swiftly up the Bridge" - that is advancing up the stepladder of
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enlightenment? Then you can have your case reviewed for a mere $1250
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."donation." Want to know "why a thetan hangs on to the physical
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universe?" Try 52 of Hubbard's tape-recorded speeches from 1952,
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titled "Ron's Philadelphia Doctorate Course Lectures," for $2525.
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Next: Nine other series of the same sort. For the collector,
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gold-and-leather-bound editions of 22 of Hubbard's books (and
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bookends) on subjects ranging from Scientology ethics to radiation can
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be had for just $1900.
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To gain influence and lure richer, more sophisticated followers,
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Scientology has lately resorted to a wide array of front groups and
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financial scams. Among them:</p>
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<p>CONSULTING. Sterling Management Systems, formed in 1983, has been
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ranked in recent years by INC. magazine as one of America's
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fastest-growing private companies (estimated 1988 revenues: $20
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million). Sterling regularly mails a free newsletter to more than
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300000 health-care professionals, mostly dentists, promising to
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increase their incomes dramatically. The firm offers seminars and
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courses that typically cost $10000. But Sterling's true aim is to
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hook customers for Scientology. "The church has a rotten product, so
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they package it as something else," says Peter Georgiades, a
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Pittsburgh attorney who represents Sterling victims. "It's a kind of
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bait and switch." Sterling's founder, dentist Gregory Hughes, is now
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under investigation by California's Board of Dental Examiners for
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incompetence. Nine lawsuits are pending against him for malpractice
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(seven others have been settled), mostly for orthodontic work on
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children.
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Many dentists who have unwittingly been drawn into the cult are
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filing or threatening lawsuits as well. Dentist Robert Geary of
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Medina, Ohio, who entered a Sterling seminar in 1988, endured "the
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most extreme high-pressure sales tactics I have ever faced." Sterling
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officials told Geary, 45, that their firm was not linked to
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Scientology, he says. But Geary claims they eventually convinced him
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that he and his wife had personal problems that required auditing.
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Over five months, the Gearys say, they spent $130000 for services,
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plus $50000 for "gold-embossed, investment-grade" books signed by
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Hubbard. Geary contends that Scientologists not only called his bank
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to increase his credit-card limit but also forged his signature on a
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$20000 loan application. "It was insane," he recalls. "I couldn't
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even get an accounting from them of what I was paying for." At one
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point, the Gearys claim, Scientologists held Dorothy hostage for two
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weeks in a mountain cabin, after which she was hospitalized for a
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nervous breakdown.
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Last October, Sterling broke some bad news to another dentist,
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Glover Rowe of Gadsden, Ala., and his wife Dee. Tests showed that
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unless they signed up for auditing, Glover's practice would fail, and
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Dee would someday abuse their child. The next month the Rowes flew to
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Glendale, Calif., where they shuttled daily from a local hotel to a
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Dianetics center. "We thought they were brilliant people because they
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seemed to know so much about us," recalls Dee. "Then we realize our
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hotel room must have been bugged." After bolting from the center,
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$23000 poorer, the Rowes say, they were chased repeatedly by
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Scientologists on foot and in cars. Dentists aren't the only ones at
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risk. Scientology also makes pitches to chiropractors, podiatrists
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and veterinarians.</p>
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<p>PUBLIC INFLUENCE. One front, the Way to Happiness Foundation, has
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distributed to children in thousands of the nation's public schools
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more than 3.5 million copies of a booklet Hubbard wrote on morality.
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The church calls the scheme "the largest dissemination project in
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Scientology history." Applied Scholastics is the name of still
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another front, which is attempting to install a Hubbard tutorial
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program in public schools, primarily those populated by minorities.
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The group also plans a 1000-acre campus, where it will train
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educators to teach various Hubbard methods. The disingenuously named
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Citizens Commission on Human Rights is a Scientology group at war with
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psychiatry, its primary competitor. The commission typically issues
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.reports aimed at discrediting particular psychiatrics and the field in
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general. The CCHR is also behind an all-out war against Eli Lilly,
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the maker of Prozac, the nation's top-selling antidepression drug.
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Despite scant evidence, the group's members - who are calling
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themselves "psychbusters" - claim that Prozac drives people to murder
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or suicide. Through mass mailings, appearances on talk shows and
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heavy lobbying, CCHR has hurt drug sales and helped spark dozens of
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lawsuits against Lilly.
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Another Scientology-linked group, the Concerned Businessmen's
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Association of America, holds antidrug contests and awards $5000
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grants to schools as a way to recruit students and curry favor with
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education officials. West Virginia Senator John D. <span class="PERSON" title="PERSON">Rockefeller</span> IV
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unwittingly commended the CBAA in 1987 on the Senate floor. Last
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August author Alex Haley was the keynote speaker at its annual awards
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banquet in Los Angeles. Says Haley: "I didn't know much about that
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group going in. I'm a Methodist." Ignorance about Scientology can be
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embarassing: two months ago, Illinois Governor Jim Edgar, noting that
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Scientology's founder "has solved the aberrations of the human mind,"
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proclaimed March 13 "L. Ron Hubbard Day." He rescinded the
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proclamation in late March, once he learned who Hubbard really was.</p>
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<p>HEALTH CARE. HealthMed, a chain of clinics run by Scientologists,
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promotes a grueling and excessive system of saunas, exercise and
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vitamins designed by Hubbard to purify the body. Experts denounce the
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regime as quackery and potentially harmful, yet HealthMed solicits
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unions and public agencies for contracts. The chain is plugged
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heavily in a new book, "Diet for a Poisoned Planet," by journalist
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David Steinman, who concludes that scores of common foods (among them:
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peanuts, bluefish, peaches and cottage cheese) are dangerous.
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Former Surgeon general C. Everett Koop labeled the book "Trash,"
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and the Food and Drug Administration issued a paper in October that
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claims Steinman distorts his facts. "HealthMed is a gateway to
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Scientology, and Steinman's book i a sorting mechanism," says
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physician William Jarvis, who is head of the National Council Against
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Health Fraud. Steinman, who describes Hubbard favorably as a
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"researcher," denies any ties to the church and contends, "HealthMed
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has no affiliation that I know of with Scientology."</p>
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<p>DRUG TREATMENT. Hubbard's purification treatments are the mainstay of
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Narconon, a Scientology-run chain of 33 alcohol and drug
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rehabilitation centers - some in prisons under the name "Criminon" -
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in 12 countries. Narconon, a classic vehicle for drawing addicts into
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the cult, now plans to open what it calls the world's largest
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treatment center, a 1400-bed facility on an <span class="NORP" title="NORP">Indian</span> reservation near
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Newkirk, Okla. (Pop. 2400). At a 1989 ceremony in Newkirk, the
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Association for Better Living and Education presented Narconon with a
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check for $200000 and a study praising its work. The association
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turned out to be part of Scientology itself. Today the town is
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battling to keep out the cult, which has fought back through such
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tactics as sending private detectives to snoop on the mayor and the
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local newspaper publisher.</p>
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<p>
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<span class="ORG" title="ORG">FINANCIAL</span> SCAMS. Three Florida Scientologists, including Robert
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Bernstein, a big contributor to the church's international "war
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chest," pleaded guilty in March to using their rare-coin dealership as
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a money laundry. Other notorious activities by Scientologists include
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making the shady Vancouver stock exchange even shadier (see
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accompanying article) and plotting to plant operatives in the World
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Bank, International Monetary Fund and Export-Import Bank of the U.S.
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The alleged purpose of this scheme: to gain inside information on
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which countries are going to be denied credit so that
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Scientology-linked traders can make illicit profits by taking "short"
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positions in those countries' currencies.
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In the stock market the practice of "shorting" involved borrowing
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shares of publicly traded companies in the hope that the price will go
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down before the stocks must be brought on the market and returned to
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.the lender. The Feshbach brothers of Palo Alto, Calif. - Kurt, Joseph
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and Matthew - have become the leading short sellers in the U.S., with
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more than $500 million under management. The Feshbachs command a
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staff of about 60 employees and claim to have earned better returns
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than the Dow Jones industrial average for most of the 1980's. And,
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they say, they owe it all to the teachings of Scientology, whose "war
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chest" has received more than $1 million from the family.
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The Feshbachs also embrace the church's tactics; the brothers are
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the terrors of the stock exchanges. In congressional hearings in
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1989, the heads of several companies claimed that Feshbach operatives
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have spread false information to to government agencies and posed in
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various guises - such as a Securities and Exchange Commission official
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- in an effort to discredit the companies and drive the stocks down.
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Michael Russell, who ran a chain of business journals, testified that
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a Feshbach employee called his bankers and interfered with his loans.
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Sometimes the Feshbachs send private detectives to dig up dirt on
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firms, which is then shared with business reporters, brokers and fund
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managers.
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The Feshbachs, who wear jackets bearing the slogan "stock
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busters," insist they run a clean shop. but as part of a possible
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probe into insider stock trading, federal officials are reportedly
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investigating whether the Feshbachs received confidential information
|
|
from FDA employees. The brothers seem aligned with Scientology's war
|
|
on psychiatry and medicine: many of their targets are health and
|
|
biotechnology firms. "Legitimate short selling performs a public
|
|
service by deflating hyped stocks," says Robert Flaherty, the editor
|
|
of EQUITIES magazine and a harsh critic of the brothers. "But the
|
|
Feshbachs have damaged scores of good start-ups."
|
|
Occasionally a Scientologist's business antics land him in jail.
|
|
Last August a former devotee named Steven Fishman began serving a
|
|
five-year prison term in Florida. His crime: stealing blank
|
|
stock-confirmation slips from his employer, a major brokerage house,
|
|
to use as proof that he owned stock entitling him to join dozens of
|
|
successful class-action lawsuits. Fishman made roughly $1 million
|
|
this way from 1983 to 1986 and spent as much as 30% of the loot on
|
|
Scientology books and tapes.
|
|
Scientology denies any tie to the Fishman scam, a claim strongly
|
|
disputed by both Fishman and his longtime psychiatrist, Uwe Geertz, a
|
|
prominent Florida hypnotist. Both men claim that when arrested,
|
|
Fishman was ordered by the church to kill Geertz and then do an "EOC,"
|
|
or end of cycle, which is church jargon for suicide.</p>
|
|
<p>BOOK PUBLISHING. Scientology mischiefmaking has even moved to the
|
|
book industry. Since 1985 at least a dozen Hubbard books, printed by
|
|
a church company, have made best-seller lists. They range from a
|
|
5000-page sci-fi decalogy ("Black Genesis," "The Enemy Within," "An
|
|
Alien Affair") to the 40-year-old "Dianetics." In 1988 the trade
|
|
publication PUBLISHERS WEEKLY awarded the dead author a plaque
|
|
commemorating the appearance of "Dianetics" on its best-seller list
|
|
for 100 consecutive weeks.
|
|
Critics pan most of Hubbard's books as unreadable, while
|
|
defectors claim that church insiders are sometimes the real authors.
|
|
Even so, Scientology has sent out armies of its followers to buy the
|
|
group's books at such major chains as B. Dalton's and Waldenbooks to
|
|
sustain the illusion of a best-selling author. A former Dalton's
|
|
manager says some books arrived in his store with the chain's price
|
|
stickers already on them, suggesting that copies are being recycled.
|
|
Scientology claims that sales of Hubbard's books now top 90 million
|
|
worldwide. The sceme, set up to gain converts and credibility, is
|
|
coupled with a radio and TV advertising campaign virtually
|
|
unparalleled in the book industry.
|
|
Scientology devotes vast resources to squelching its critics.
|
|
Since 1986 Hubbard and his church have been the subject of four
|
|
unfriendly books, all published by small yet courageous publishers.
|
|
In each case, the writers have been badgered and heavily sued. One of
|
|
Hubbard's policies was that all perceived enemies are "fair game" and
|
|
.subject to being "tricked, lied to or destroyed." those who criticize
|
|
the church - journalists, doctors, lawyers and even judges - often
|
|
find themselves engulfed in litigation, stalked by private eyes,
|
|
framed for fictional crimes, beaten up or threatened with death.
|
|
Psychologist Margaret Singer, 69, an outspoken Scientology critic and
|
|
professor at the University of California, Berkeley, now travels
|
|
regularly under an assumed name to avoid harassment.
|
|
After the Los Angeles TIMES published a negative series on the
|
|
church last summer, Scientologists spent an estimated $1 million to
|
|
plaster the reporters' names on hundreds of billboards and bus
|
|
placards across the city. Above their names were quotations taken out
|
|
of context to portray the church in a positive light.
|
|
The church's most fearsome advocates are its lawyers. Hubbard
|
|
warned his followers in writing to "beware of attorneys tell you not
|
|
to sue...the purpose of the suit is to harass and discourage rather
|
|
than to win." Result: Scientology has brought hundreds of suits
|
|
against its perceived enemies and today pays an estimated $20 million
|
|
annually to more than 100 lawyers.
|
|
One legal goal of Scientology is to bankrupt the opposition or
|
|
bury it under paper. The church has 71 active lawsuits against the
|
|
IRS alone. One of them, "Miscavige vs. IRS," has required the U.S. to
|
|
produce an index of 52000 pages of documents. Boston attorney
|
|
Michael Flynn, who helped Scientology victims from 1979 to 1987,
|
|
p\personally endured 14 frivolous lawsuits, all of them dismissed.
|
|
Another laywer, Joseph Yanny, believes the church "has so subverted
|
|
justice and the judicial system that it should be barred from seeking
|
|
equity in any court." He should know: Yanny represented the cult
|
|
until 1987, when, he says, he was asked to help church officials steal
|
|
medical records to blackmail an opposing attorney (who was allegedly
|
|
beaten up instead). Since Yanny quit representing the church, he has
|
|
been the target of death threats, burglaries, lawsuits and other
|
|
harassment.</p>
|
|
<p>Scientology's critics contend that the U.S. needs to crack down
|
|
on the church in a major, organized way. "I want to know, Where is
|
|
our government?" demands Toby Plevin, a Los Angeles attorney who
|
|
handles victims. "It shouldn't be left to private litigators, because
|
|
God knows most of us are afraid to get involved." But law-enforcement
|
|
agents are also wary. "Every investigator is very cautious, walking
|
|
on eggshells when it comes to the church," says a Florida police
|
|
detective who has tracked the cult since 1988. "It will take a
|
|
federal effort with lots of money and manpower."
|
|
So far the agency giving Scientology the most grief is the IRS,
|
|
whose officials have implied that Hubbard's successors may be looting
|
|
the church's coffers. Since 1988, when the U.S. Supreme Court upheld
|
|
the revocation of the cult's tax-exempt status, a massive IRS probe of
|
|
church centers across the country has been under way. An IRS agent,
|
|
Marcus <span class="PERSON" title="PERSON">Owens</span>, has estimated that thousands of IRS employees have been
|
|
involved. Another agent, in an internal memorandum, spoke hopefully
|
|
of the "ultimate disintegration" of the church. A small but helpful
|
|
beacon shone last June when a federal appeals court ruled that two
|
|
cassette tapes featuring conversations between church officials and
|
|
their lawyers are evidence of a plan to commit "future frauds" against
|
|
the IRS.
|
|
Foreign governments have been moving even more vigorously against
|
|
the organization. In <span class="GPE" title="GPE">Canada</span> the church and nine of its members will
|
|
be tried in June on charges of stealing government documents (many of
|
|
them retrieved in an enormous police raid of the church's Toronto
|
|
headquarters). Scientology proposed to give $1 million to the needy
|
|
if the case was dropped, but <span class="GPE" title="GPE">Canada</span> spurned the offer. Since 1986
|
|
authorities in France, Spain and Italy have raided more than 50
|
|
Scientology centers. Pending charges against more than 100 of its
|
|
overseas church members include fraud, extortion, capital flight,
|
|
coercion, illegally practicing medicine and taking advantage of
|
|
medically incapacitated people. In Germany last month, leading
|
|
politicians accused the cult of trying to infiltrate a major party as
|
|
.well as launching an immense recruitment drive in the east.
|
|
Sometimes even the church's biggest zealots can use a little
|
|
protection. Screen star Travolta, 37, has long served as an
|
|
unofficial Scientology spokesman, even though he told a magazine in
|
|
1983 that he was opposed to the church's management. High-level
|
|
defectors claim that Travolta has long feared that if he defected,
|
|
details of his sexual life would be made public. "He felt pretty
|
|
intimidated about this getting out and he told me so," recalls William
|
|
Franks, the church's former chairman of the board. "There were no
|
|
outright threats made, but it was implicit. If you leave, they
|
|
immediately start digging up everything." Franks was driven out in
|
|
1981 after attempting to reform the church.</p>
|
|
<p>The church's former head of security, Richard Aznaran, recalls
|
|
Scientology leader Miscavige repeatedly joking to staffers about
|
|
Travolta's allegedly promiscuous homosexual behavior. At this point
|
|
any threat to expose Travolta seems superfluous: last May a male porn
|
|
star collected $100000 from a tabloid for an account of his alleged
|
|
two-year liaison with the celebrity. Travolta refuses to comment, and
|
|
in December his lawyer dismissed questions about the subject as
|
|
"bizarre." Two weeks later, Travolta announced that he was getting
|
|
married to actress Kelly Preston, a fellow Scientologist.
|
|
Shortly after Hubbard's death the church retained Trout & Reis, a
|
|
respected, Connecticut-based firm of marketing consultants, to help
|
|
boost its public image. "We were brutally honest," says Jack Trout.
|
|
"We advised them to clean up their act, stop with the controversy and
|
|
even to stop being a church. They didn't want to hear that."
|
|
Instead, Scientology hired one of the country's largest p.r. outfits,
|
|
Hill and Knowlton, whose executives refuse to discuss the lucrative
|
|
relationship. "Hill and Knowlton must feel that these guys are not
|
|
totally off the wall," says Trout. "Unless it's just for the money."
|
|
One of Scientology's main strategies it to keep advancing the
|
|
tired argument that the church is being "persecuted" by
|
|
anti-religionists. It is supported in that position by the American
|
|
Civil Liberties Union and the National Council of Churches. But in
|
|
the end, money is what Scientology is all about. As long as the
|
|
organization's opponents and victims are successfully squelched,
|
|
Scientology's managers and lawyers will keep pocketing millions of
|
|
dollars by helping it achieve its ends.</p>
|
|
<p>
|
|
MINING MONEY IN VANCOUVER</p>
|
|
<p>One source of funds for the Los Angeles-based church is the
|
|
notorious, self-regulated stock exchange in Vancouver, <span class="NORP" title="NORP">British</span>
|
|
<span class="GPE" title="GPE">Columbia</span>, often called the scam capital of the world. The exchange's
|
|
2300 penny-stock listings account for $4 billion in annual trading.
|
|
Local journalists and insiders claim the vast majority range from
|
|
total washouts to outright frauds.
|
|
Two Scientologists who operate there are Kenneth Gerbino and
|
|
Michael Baybak, 20-year church veterans from Beverly Hills who are
|
|
major donators to the cult. Gerbino, 45, is a money manager,
|
|
marketer, and publisher of a national financial newsletter. He has
|
|
boasted in Scientology journals that he owes all his stock-picking
|
|
success to L. Ron Hubbard. That's not saying much: Gerbino's
|
|
newsletter picks since 1985 have cumulatively returned 24%, while the
|
|
Dow Jones industrial average has more than doubled. Nevertheless
|
|
Gerbino's short-term gains can be stupendous. A survey last October
|
|
found Gerbino to be the only manager who made money in the third
|
|
quarter of 1990, thanks to gold and other resource stocks. For the
|
|
first quarter of 1991, Gerbino was dead last. Baybak, 49, who runs a
|
|
public relations company staffed with Scientologists, apparently has
|
|
no ethics problem with engineering a hostile takeover of a firm he is
|
|
hired to promote.
|
|
Neither man agreed to be interviewed for this story, yet both
|
|
threatened legal action through attorneys. "What these guys do is
|
|
.take over companies, hype the stock, sell their shares, and then
|
|
there's nothing left," says John Campbell, a former securities lawyer
|
|
who was director of mining company Athena Gold until Baybak and
|
|
Gerbino took it over.
|
|
The pattern has become familiar. The pair promoted a mining
|
|
venture called Skylark Resources, whose stock traded at nearly $4 a
|
|
share in 1987. The outfit soon crashed, and the stock is around 2
|
|
cents. NETI Technologies, a software company, was trumpeted in the
|
|
press as "the next Xerox" and in 1984 rose to a market value of $120
|
|
million with Baybak's help. The company, which later collapsed, was
|
|
delisted two months ago by the Vancouver exchange.
|
|
Baybak appeared in 1989 at the helm of Wall Street Ventures, a
|
|
start-up that announced it owned 35 tons of rare Middle Eastern
|
|
postage stamps - worth $100 million - and was buying the world's
|
|
largest collection of southern Arabian stamps (worth $350 million).
|
|
Steven C. <span class="PERSON" title="PERSON">Rockefeller</span> Jr. of the oil family and former hockey star
|
|
Dennis Potvin joined the company in top posts, but both say they quit
|
|
when they realized the stamps were virtually worthless. "The stamps
|
|
were created by sand-dune nations to exploit collectors," says Michael
|
|
Laurence, editor of LINN'S STAMP NEWS, America's largest stamp
|
|
journal. After the stock topped $6, it began a steady descent, with
|
|
Baybak unloading his shares along the way. Today it trades at 18
|
|
cents.
|
|
Athena Gold, the current object of Baybak and Gerbino's
|
|
attentions, was founded by entrepreneur William Jordan. He turned to
|
|
an established Vancouver broker in 1987 to help finance the company, a
|
|
4500-acre mining property near Reno. The broker promised to raise
|
|
more than $3 million and soon brought Baybak and Gerbino into the
|
|
deal. Jordan never got most of the money, but the cult members ended
|
|
up with a good deal of cheap stock and options. Next time they
|
|
elected directors who were friendly to them and set in motion a series
|
|
of complex maneuvers to block Jordan from voting stock he controlled
|
|
and to run him out of the company. "I've been an honest policeman all
|
|
my life and I've seen the worst kinds of crimes, and this ranks high,"
|
|
says former Athena shareholder Thomas Clark, a 20-year veteran of
|
|
Reno's police force who has teamed up with Jordan to try to get the
|
|
gold mine back. "They stole this man's property."
|
|
With Baybak as chairman, the two Scientologists and their staffs
|
|
are promoting Athena, not always accurately. A letter to shareholders
|
|
with the 1990 annual report claims Placer Dome, one of America's
|
|
largest gold-mining firms, has committed at least $25.5 million to
|
|
develop the mine. That's news to Placer Dome. "There is no
|
|
pre-commitment," says Placer executive Cole McFarland. "We're not
|
|
going to spend that money unless survey results justify the
|
|
expenditure."
|
|
Baybak's firm represented Western Resource Technologies, a
|
|
Houston oil-and-gas company, but got the boot in October. Laughs
|
|
Steven McGuire, president of Western Resource: "His is a p.r. firm in
|
|
need of a p.r. firm." But McGuire cannot laugh too freely. Baybak
|
|
and other Scientologists, including the estate of L. Ron Hubbard,
|
|
still control huge blocks of his company's stock.</p>
|
|
<p>THE <span class="NORP" title="NORP">SCIENTOLOGISTS</span> AND ME</p>
|
|
<p>Strange things seem to happen to people who write about
|
|
Scientology, Journalist Paulette Cooper wrote a critical book about
|
|
the cult in 1971. This led to a Scientology plot (called Operation
|
|
Freak-Out) whose goal, according to church documents, was "to get P.C.
|
|
incarcerated in a mental institution or jail." It almost worked: By
|
|
impersonating Cooper, Scientologists got her indicted in 1973 for
|
|
threatening to bomb the church. Cooper, who also endured 19 lawsuits
|
|
by the church, was finally exonerated in 1977 after <span class="ORG" title="ORG">FBI</span> raids on the
|
|
church offices in Los Angeles and Washington uncovered documents from
|
|
the bomb scheme. No Scientologists were ever tried in the matter.
|
|
For the TIME story, at least 10 attorneys and six private
|
|
detectives were unleashed by Scientology and its followers in an
|
|
.effort to threaten, harass, and discredit me. Last Oct. 12, not long
|
|
after I began this assignment, I planned to lunch with Eugene Ingram,
|
|
the church's leading private eye and a former cop. Ingram, who was
|
|
tossed off the Los Angeles police force in 1981 for alleged ties to
|
|
prostitutes and drug dealers, has told me that he might be able to
|
|
arrange a meeting with church boss David Miscavige. Just hours before
|
|
the lunch, the church's "national trial counsel," Earle Cooley, called
|
|
to inform me that I would be eating alone.
|
|
Alone, perhaps, but not forgotten. By day's end, I later
|
|
learned, a copy of my personal credit report - with detailed
|
|
information about my bank accounts, home mortgage, credit-card
|
|
payments, home address and Social Security number - had been illegally
|
|
retrieved from a national credit bureau called Trans Union. The sham
|
|
company that received it, "Educational Funding Services" of Los
|
|
Angeles, gave as its address a mail drop a few blocks from
|
|
Scientology's headquarters.
|
|
The owner of the mail drop is a private eye named Fred Wolfson,
|
|
who admits that an Ingram associate retained him to retrieve credit
|
|
reports on several individuals. Wolfson says he was told that
|
|
Scientology's attorneys "had judgments against these people and were
|
|
trying to collect on them." He says now, "They are vicious people.
|
|
They are vipers." Ingram, though a lawyer, denies any involvement in
|
|
the scam.
|
|
During the past five months, private investigators have been
|
|
contacting acquaintances of mine, ranging from neighbors to a former
|
|
colleague, to inquire about subjects such as my health (like my credit
|
|
rating, it's excellent) and whether I've ever had trouble with the IRS
|
|
(unlike Scientology, I haven't). One neighbor was greeted at dawn
|
|
outside my Manhattan apartment building by two men who wanted to know
|
|
whether I lived there. I finally called Cooley to demand that
|
|
Scientology stop the nonsense. He promised to look into it.
|
|
After that, however, an attorney subpoenaed me, while another
|
|
falsely suggested that I might own shares in a company I was reporting
|
|
about that had been taken over by Scientologists (he also threatened
|
|
to call the Securities and Exchange Commission). A close friend in
|
|
Los Angeles received a disturbing telephone call from a Scientology
|
|
staff member seeking data about me - an indication that the cult may
|
|
have illegally obtained my personal phone records. Two detectives
|
|
contacted me, posing as a friend and a relative of a so-called cult
|
|
victim, to elicit negative statements from me about Scientology. Some
|
|
of my conversations with them were taped, transcribed and presented by
|
|
the church in affidavits to TIME's lawyers as "proof" of my bias
|
|
against Scientology.
|
|
Among the comments I made to one of the detectives, who
|
|
represented himself as "Harry Baxter," a friend of the victim's
|
|
family, was that "the church trains people to lie." Baxter and his
|
|
colleagues are hardly in a position to dispute that observation. His
|
|
real name is Barry Silvers, and he is a former investigator for the
|
|
Justice Department's Organized Crime Strike Force.</p>
|
|
<p>
|
|
</p>
|
|
<p>
|
|
</p>
|
|
<p>
|
|
</p>
|
|
<p>
|
|
</p>
|
|
<p>
|
|
</p>
|
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</div>
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</body>
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