Scientologists dirty campaign to stop book

[no date, probably January 1986]
by Richard Palmer

THE CHURCH of Scientology has mounted a campaign of intimidation and harassment against the author and publisher of a new book on the founder of the religious cult to be serialised shortly by The Sunday Times.
Scientologists and private detectives have been used to put pressure on people in Britain and the United States involved in the forthcoming publication of Bare Faced Messiah: the True Story of L Ron Hubbard.
Russell Miller, the author, who spent more than two years researching the book, has been subjected to harassment and a mysterious and anonymous hate campaign by someone who has tried to "frame" him for causing the murder of a private detective in south London and other crimes, including a suspicious fire at an aircraft factory in Wiltshire.
Miller was followed for days on end during his research in America. In recent weeks supporters of the cult and private detectives have visited his friends and business associates in Europe and America in an attempt to discover details of his personal life and to discredit him.
The Sunday Times, which plans to begin serialisation of the book on November 1, has also been pestered by scientologists trying to prevent publication. Senior executives have received threatening telephone calls. Last week one member of the cult told a Sunday Times executive: "If you publish false information, the church will defend itself. There will be trouble."
The scientologists have employed two men in London to harass the newspaper and the publisher of the book, Michael Joseph, a subsidiary of Penguin books. Last Wednesday the men, claiming to be members of a consumers' group, gained access to the offices of The Sunday Times in Wapping, east London.
Eugene Ingram, a Los Angeles private investigator employed by the church since 1982, and a Briton who did not give his name, used a false business card to obtain an interview with Brian MacArthur, the paper's executive editor. Only later did they reveal they were acting for the Church of Scientology and tried to discredit one of the sources for Miller's book, Gerry Armstrong.
The pair, using a videotaped interview with Armstrong, had tried the same tactic of discrediting him earlier in the day with executives at Penguin books. A similar videotaped interview with Armstrong was described by the judge at a trial in Portland, Oregon, in May 1985 as "devastating for the church" because of its cynical use of skilful editing and its "amateurish" attempt at entrapment.
Miller, a former Sunday Times journalist, is by no means the first author to feel the wrath of the Church of Scientology, which has been accused of breaking up families and brainwashing its devotees. Almost every writer who has attempted to publish a critical book on the church since 1970 has had to fight his way through the courts and endure a campaign of intimidation.
In almost every case the cult has managed to obtain copies of the manuscript before publication, on many occasions using burglary.
Courts in the US have heard incredible tales of the lengths scientologists have been prepared to go to prevent publication of embarrassing books. Documents seized by the FBI have implicated them in covert and criminal operations, including some arranged from the cult's British headquarters in East Grinstead, West Sussex.
In 1985 Paulette Cooper, a New York journalist who wrote one of the earliest books on the cult, was paid $400,000 in an out-of-court settlement after it was found that the church had tried to frame her for a bomb threat. Cooper went through years of hell as she was forced to appear before grand juries. Her.. career was almost wrecked by McCarthyite attempts to discredit her and have her imprisoned or incarcerated in a mental institution.
Miller's book, due to be published on Monday week, is the subject of a forthcoming appeal court hearing. The church, which was branded "corrupt, immoral, sinister and dangerous" by a High Court judge in 1984, has claimed photographs used are in breach of copyright. The appeal was granted after Mr. Justice Vinelott on October 10 rejected the church's attempt to delay publication as "mischievous and misconceived."

March 2, 2000
Attention: Mike Piper
Letters to the Editor
The Spotlight
Washington, D.C.
Dear Editor:
In the article "France gets smart" published in the February 21 edition of the Spotlight, there were some glaring inaccuracies. I would like to clarify these points. The Church is not solely recognized by the United States government as a tax exempt organization.
There are a number of countries which have granted that status to the Church. Among them are Australia, Sweden and Venezuela, to name a few. The Spotlight has made an opposing accusation on numerous occasions and I felt it was time to clear this up.
Additionally, in France, the court records the Spotlight referred to were verified as having been destroyed by a court clerk. The Spotlight's accusation of nefariousness on the part of the Church was irresponsible and just plain lazy reporting.
The Church of Scientology is well-known for its community betterment programs including disaster relief in nations around the globe, especially including the United States. These programs include anti-drug education programs, literacy programs and neighborhood clean up programs. Perhaps the Spotlight would be willing to spend some time showing positive actions which are factual about the Church.
Matt Bratschi
Human Rights Department
Founding Church of Scientology
1701 20th St., NW
Washington, D.C. 20009

Special leave to appeal granted.
Appeal allowed with costs.
Judgment of the Full Court of the Supreme Court of Victoria set aside and in lieu thereof order:
(i) that the appeal to that Court from the judgment of Crockett J. be allowed with costs;
(ii) that the judgment of Crockett J. be set aside and in lieu thereof order -
(a) that the appeal against the assessment of the appellant to Pay-roll tax be allowed with costs;
(b) that the applicant's assessment to Pay-roll tax be reduced to nil.
27 October, 1983
Solicitors for the Applicant: Cohens, Frenkel, Berkovitch, Kefford & New
Solicitor for the Respondent: R. Lambert, Acting Crown
Solicitor for Victoria

(FRI) 11. 26' 99 7:45,/ST. 7:44/NO. 4260229454 P 2
DATE: 25 NOV 1999
The Church of Scientology does not need to pay tax. That is the context Of a decision from the tax authority in Stockholm. The authority in its decision writes that the Church is to be seen as a publicly beneficial, nonprofit association with a religious object which is run totally without any purpose of profit. The decision means that the Church of Scientology does not need to pay income tax and vat.
1999-11-25, 20:51 eng kiw sclentologskatt Tkn:376
Scientologerna blir momsbefriade
Stockholm (TT)
Scientologikyrkan slipper betala skatt Det är innebörden av ett beslut fran Skattemyndigheten I Stockholm. Myndigheten skriver i sitt beslut att kyrkan AY att anse som en al!männyttig Ideell förenlng med religiöst andamal som bedrivs helt utan vinstsyfte_ Beslutet Innebär att Scientologikyrkan slipper betala Inkomstskatt och moms.

(THU)11. 25' 99 1:56/ST. 1:49/NO. 426C229347 F'
Office of Special Affairs
November 25, 1999
For further information
contact: Karin Pouw
(323) 960-3500
Tax authorities in Sweden have granted the Church of Scientology exemption from all taxes on the basis that the Church is a nonprofit organization with a religious purpose. In a decision of November 23, 1999, the tax office in Stockholm adjudicated that the Church is an idealistic association providing a public benefit and therefore exempt from corporate income tax and value added tax.
In the written background to the decision, which arose out of a past tax matter relating to the Swedish Church, the ruling from the tax authorities refers to the Church's activities as "consist[ing] among other things of worshipping God, services such as naming ceremonies, weddings and funerals, spiritual counselling and studies of the Church's scriptures." The Church's economic activity, the tax authorities found, forms a natural part of its publicly beneficial purpose, and the Church falls within the tax code which exempts associations whose purpose is to forward religious objectives.
President of the Church of Scientology international, Heber C, Jentzsch, acclaimed the decision as further evidence that the Church is part of mainstream religion in Europe.
"The Swedish people recognize that religious pluralism is the foundation of the stable societies we must build in the next century. In the field of religious freedom, Sweden is leading the rest of Europe into the new millenium, and upholding the governmental separation of church and state," said Rev, Jentzsch.
(THU)11. 25' 99 1:574T. 1:49/NO. 4260229347 F 3
The adjudication by the Swedish tax authorities is consistent with tax authorities, decisions on Scientology in the United States, Australia, and Venezuela and a recent ruling by the Supreme Federal Administrative Court in Germany and the Italian Supreme Court. Earlier this month, the Administrative court in Stuttgart held that the Church of Scientology is an idealistic organization whose members are seeking salvation.
The Swedish Church of Scientology has for a number of years been seeking to persuade the Swedish tax authorities of its status as a bona fide religious community. That effort has now been crowned with success days after the Church celebrated its 30th anniversary in Sweden. Scientologists in Sweden therefore welcomed the news as a "birthday present" from the government.
"We look forward to the year 2,000 with great hope and confidence as well as determination to contribute towards a better society," said Tarja Vulto, Public Relations Director of the Church of Scientology in Sweden.
Scientology was founded by philosopher and humanitarian L. Ron Hubbard in 1954. As part of its social mission the Church supports many charitable and social programs in the areas of drug rehabilitation, criminal reform and literacy programs.

France fined over missing Scientology files
Reuters World Report Wednesday, January 05, 2000 2:43:00 PM
Copyright 2000 Reuters Ltd. All rights reserved.@bThe following news report may not be republished or redistributed, in whole or in part, without the prior written consent of Reuters Ltd.
PARIS, Jan 5 (Reuters) - A French court on Wednesday ordered the state to pay 20,000 francs ($3,070) in damages to two plaintiffs over the mysterious disappearance of legal evidence in a probe into the Church of Scientology. The court said Paris investigating magistrate Marie-Paule Moracchini was at fault for failing to make copies of the 44 documents whose disappearance in 1998 has never been explained. The plaintiffs, both former Scientology members, had launched legal action against other former members of the Church, accusing them of fraud and illegally practising medicine.
Lawyers for the plaintiffs said foul play was involved in the disappearance of the files.
The Church of Scientology has denied responsibility and says the case is covered by the statute of limitations that says a probe must be closed if it has been dormant for more than three years.
Legal evidence vanished in another case against the Church of Scientology in Marseille last year.
Justice Minister Elisabeth Guigou has said it was destroyed by mistake by court clerks who thought the documents were related to an investigation that had been closed, and that foul play was not involved.
Scientology, founded in 1954 by the late American science fiction writer L. Ron Hubbard, claims more than eight million adherents worldwide. Unlike the United States, France does not recognise it as a religion.

FEBRUARY 21, 2000
FRANCE GETS SMART. The cult of Scientology has been under attack for its activities in France, including stealing court records. French Minister of Justice Elizabeth Guigou would like to see the "church" banned entirely. The only country in the world that gives Scientology tax-exemption as a bona fide religious organization is the United States. Tax exemption of Scientology costs taxpayers millions of dollars every year because the taxes unpaid by the cult's profit-making businesses have to be made up by the taxpayers.

Church of Scientology International
Office of Public Affairs
October 5, 1994
Willis A. Carto
The Spotlight
300 Independence Avenue, S.E.
Washington, D.C. 20003

Dear Willis,
Please see the attached article that ran in the September 30th issue of The New York Jewish Week. Note, in particular, the nasty comments from ADL National Director Abraham Foxman, regarding the Church of Scientology.
I repeat, there has been no Scientology/ADL deal. I'll look forward to hearing from you.

Alexander R. Jones cc: Mike Piper
Paul Croke

The New York Jewish Week
Vol 287 No. 22 - - SEPT. 10-OCT. 6, 1994
Dianetics Uber Alles?
The Church of Scientology International is in a huff. It seems the organization is not well liked in Germany -- it's considered a cult with economic goals -- and that doesn't sit well with, Scientologists But the group's response in the U.S. press isn't sitting well with some Jews.
Armed with tons of money, the axiom "Never Again!" and pictures of swastika-toting Nazis, the Scientologists placed a series of full-page ads in The New York Times and Washington Post using recent acts of neo-Nazi violence to warn of rising nationalism in Germany. What irks the followers of L. Ron Hubbard is that Germany hasn't granted them status as a religion, though the United States gave them tax-exempt status last year. Germany's leading political party forbids membership to Scientologists, considering them harmful. And in 1993, a performance by jazz musician Chick Core& was canceled by a government, concert hall because Cones is a Scientologist. "'The situation with the church ... and with other religious and ethnic minorities has gone too far," said Scientology spokesperson Susan Taylor. "Today, we would be wise not to ignore, the early warning signs from a country which has twice this century brought the world to war," reads the Sept. 22 TV= ad, which aims "not only for solidarity with the Jews but with all people concerned with persecution," Taylor said.
But the ad has backfired with those in the Jewish community who are wary of Scientology. Cult experts note that Scientologists are said to manipulate vulnerable people into expensive memberships.
And the ad's use of "Never Again" is a "manipulation and hypocrisy of the first order," said Abraham Foxman, executive director of the Anti-Defamation League. And Ismar Schorsch bristled at having been misrepresented in the ad. Without naming Schorsch, the ad says the "Chancellor of the Jewish Theological Seminary" criticized an exhibit on German anti-Nazi movements as "intended solely to polish Germany's international prestige." "It's totally inaccurate" said Schorsch, who finds hopeful signs of "a new Germany." Ekkehard Brose of the German Embassy in Washington calls the ads "an insult to the victims of the Holocaust," echoing Ignatz Bubis, head of Germany's Jewish community, who has blasted Scientologists for linking themselves with persecuted Jews.
Toby Axelrod


Federal Marshals Raid Critic of Scientology

A populist activist also involved in active criticism of the Church of Scientology has been raided by federal marshals and had all his electronic equipment confiscated.

Arnaldo Lerma, longtime populist activist and prominent critic of the Church of Scientology, had his computer, 400 computer disks, four hard drives, keyboard, mouse and scanner confiscated from his home in Arlington, Virginia by federal marshals accompanied by lawyers for Scientology. Lerma has been posting factual information on the church, of which he is a former member, on the Internet for over a year. The Internet, the largest computer network in the world and a rapidly growing means of worldwide communication, is currently unregulated by federal law. Scientologists claim Lerma's hardware contains information copyrighted by the church. Some of Lerma's posting included the church's teachings and "scriptures," written by founder L. Ron Hubbard, which show the church in an unfavorable light. Lerma obtained the material from an affidavit in a California court case, and claims free speech rights protect him in this case.

A lawyer for the Electronic Frontier Foundation, a group of free speech advocates serving as watchdogs over government attempts to regulate or hamper the free flow of ideas and expression electronically, told the Washington Post, "The church's use of legal process to harass Lerma offends both the free speech and privacy interests protected by the Constitution and our laws ... The underlying intent is to intimidate critics of the church."

Lerma told The SPOTLIGHT: "The question comes down to the following. What is more important, the public interest, or the fine points of copyright law as manipulated by big money interests? This case is. not about me. It's about whether freedom of speech applies to the Internet, and by extension, to the rest of society. And, does the Fourth Amendment [protection against unreasonable search and seizure] still apply to citizens who are targeted by these very same big money interests?"

All of Lerma's personal files and information were confiscated as well, to the point where he no longer had the phone numbers of friends and associates who might be able to help him. All of his personal financial records were also taken. He makes his living as a computer consultant, which is now very difficult without his equipment.

FACTNet, a clearinghouse of information about Scientology started by disaffected former members, has established a defense fund for Lerma, at FACTNet 601 16th St. C-217, Golden, Colorado 80401.

2- SPOTLIGHT October 2,1995

SCIENTOLOGY LOSES. In Denver, federal district court Judge John Kane has ordered the immediate return of computer equipment and other material seized by federal marshals on August 22 from the home of Lawrence Wollersheim, a leading critic of the Church of Scientology. The Scientologists had fled a suit against Wollersheim claiming that he was violating their copyrighted teachings by posting them on the Internet, but the judge disagreed. Wollersheim says, "We will stand up to them. What they did was outrageous. They raided a library and archive on false premises. Now they're going to have to suffer the consequences." The Scientologist's lead defense attorney in another legal battle with Wollersheim was Larry Heller, who also represented Mel Mermelstein in the second phase of his 10-year- long campaign to destroy the Institute for Historical Review and Liberty Lobby. On September 4, The SPOTLIGHT reported on another similar Scientology raid on a church critic, Arnie Lerma, an active populist and a member of Liberty Lobby's Board of Policy.

2- SPOTLIGHT December 18, 1995

BAD CHOICE. When the Church of Scientology decided to start picking on computer users who were posting Scientology materials on the Internet and on other computer bulletin boards, the Scientologists made a big mistake. Now "computer nerds" all over the country -no, make that around the world- are starting to hit hard at the Scientologists. According to Martin Poulter, a student at the University of Bristol in England, "The Internet is a haven for freedom of thought like no other. Scientology is the opposite." Poulter's home page may be reached at (http://mail.bris. and is linked to many other related sites.

2-SPOTLIGHT May 13, 1996
SCIENTOLOGY UNPOPULAR. The federal minister of the family in Germany has presented a paper on The Church of Scientology, saying the time has come to root out the controversial organization. "Hiding under the cover of a religious association, Scientology is in fact an organization with totalitarian tendencies that pursues dubious goals ... It is a for-profit business operation," said the minister. In Hamburg, all financial dealings of the group must be registered as a business.

12- SPOTLIGHT July 8, 1999

What Went on Behind Closed Doors

America is supposed to be an open society, but the IRS is keeping secret the details of its decision to exempt the profitable Church of Scientology from paying taxes.
The need to defeat a greater common enemy causes two mortal enemies to come together in a sudden and unpredictable truce. Almost certainly, such a union is struck behind closed doors and its terms never fully disclosed.
This appears to be the case between the Internal Revenue Service and the Church of Scientology. For decades, the two were at odds, largely over the question of the church's tax exempt status. Suddenly, in 1993, there was a legal cease-fire. It is unclear why the two have come to terms. To be sure, the peace accord was forged in private and the IRS is determined to keep it a secret.
Shortly after its founding in 1950 by L. Ron Hubbard, the church claimed tax exempt status under tax code section 501(c)(3). In 1967, the IRS revoked the exempt status and began what turned into a 10-year investigation of the Scientology "mother church" and its related entities. The purpose was to determine its tax liability in light of the revocation of exempt status.
After a final decision was made in 1977, the matter worked its way through the courts. It was found that the church indeed failed to qualify under the law for exempt status.
In the eyes of the law, the churchfailed the test for exempt status on several grounds. Primarily, the church was found to be chiefly a commercial enterprise engaged in the business of selling the copyrighted works and patents of its founder, Hubbard. The church's main income stream was and still is generated through the process of selling its primary sacrament, personal "auditing."
The Scientology religion holds that civilization can be cleared of war, insanity, criminal activity and that individuals can grow and prosper if they are "cleared" of the emotional problems and behaviors which generate these negative results. The process of "auditing" is the.means by which a Scientologist is moved from his "pre-cleared" mental condition to his "cleared" mental state.
The bone of contention with the IRS is not the nature of the Scientology religion. Code section 501(c)(3) is silent on the nature of a religious philosophy entitled to exempt status. Rather, the statute addresses solely the organizational and more importantly, the operational aspects of an entity claiming exemption.
According to code section 501(c)(3) organizations are considered exempt and contributions are deducted by donors only if they are " ... organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes . . ." and then only when " . . . no part of the net earnings of which inures to the benefit of any private shareholder or individual . . ."
As you can see, exempt purposes cannot be commercial in nature. The acts of selling auditing services and Hubbard's literary works have been found,consistently by the courts to be, a commercial undertaking. The church, on the other hand, claims that its members make payments akin to a Christian's tithe. In exchange, the member receives only intangible religious benefit in the form of "clearing."
On the basis of Hubbard's own writings, which the church holds to be the "scriptures" of Scientology, the courts have repeatedly rejected this claim. The "contributions" which the Scientologist makes in exchange for his auditing services are based upon a fixed and inflexible scale, measured by the nature of the audit.
This fixed scale is based upon the principle, established by Hubbard himself, of the "Doctrine of Exchange." Payment for auditing services is described by Hubbard as a "requirement" under this doctrine. Hubbard explains at length in Scientology "scriptures" that it is error to allow the public to pay on credit, or to sell auditing for less than full price. In a Communications Office Policy letter April 27, 1965,' Hubbard described such a process is defined as the "covert lowering of prices once set."
Interestingly, Hubbard authorized the church to give auditing services away to selected celebrities "who are just beyond or just approaching their prime." This practice is quite like the commercial practice of giving away services in an effort to increase sales through the use of a celebrity endorsement.
On the basis of these and a myriad of other commercial practices, the courts have denied exempt status to the church. This opinion was expressed as late as June 29, 1992, by the Claims Court in the matter of Church of Spiritual Technology o. United States, 26 Cl. Ct. 713 (1992), in sales through a scholarly analysis of the church's labyrinthine hierarchical structure.
In addition to denying the church itself exempt status, the courts have steadfastly refused to allow individual , Scientologists a deduction for auditing fees. This question was presented to the Supreme Court in 1989 during Hernandez u. Commissioner, 490 U.S. 680 (1989). The court ruled that the payments in that clearly commercial context were not deductible.
Since 1967, the condition that existed between Scientology and the United States government can only be, described as legal war. In fact, in the history of the income tax, there is no other organization which has been involved in more adverse legal battles with the government than the church.
In light of this historical backdrop, the truce seems even more incredible. Not only is the truce hard to imagine, but the manner in which it was achieved is even more suspect.
On October 1, 1993, the Internal. Revenue Service granted tax exempt status to several Scientology organizations, thus ending the decades old battle.
Under section 6104, all information which is part of the "administrative record" of tax exempt organizations is subject to public disclosure. From the administrative record in a given case, can determine the exempt purpose of an organization and see from its documentation that it complies with all aspects of code section 501(c)3).
The rule of public disclosure applies to all exempt entities except, it appears, the Church of Scientology. To date, the IRS has flatly refused to release any of the substantive data in the Scientology files.
Scientology representatives say everything one needs to know about the case can be found in 12 linear feet of. documents available at the Freedom of Information Act reading room in Washington. However, the closing agreement is not among those documents.
The IRS's refusal has led to disclosure litigation against the IRS. The suit was brought by Tax Analysts, of Arlington, Virginia, a tax law publishing company. The litigation has revealed some very interesting facts about the Scientology ruling.
One of these is that the IRS created a so-called "negotiating committee" for the purposes of resolving several disputes with the church. One of those disputes was, of course, the question of exempt status. What makes this unusual is two facts.
First, the question of exempt status s never resolved by the IRS through negotiations. The question of exempt status is purely statutory in nature. The question is determined by tax law specialists within a division of IRS known as Employee Plans/Exempt Organizations (EP/EO). These specialists are trained to apply the requirements of code section 501(cx3) to the facts. Simply speaking, it's an all or nothing test. You either meet the guidelines or you don't. If not, your group cannot be exempt and there is nothing to negotiate. Secondly, the question of Scientology's exempt status had been previously determined time and again. The determination was made both by the IRS at the administrative level and by virtually every court in the land. Scientology, because of its inherent commercial nature, simply was not an exempt organization.
Given the courts' uninterrupted practice of rejecting Scientology's, exemption claim, it is astonishing that the IRS would finally concede the' issue.
One must ask why the IRS formed a "negotiating committee" to even revisit the issue. More importantly, what concessions were made and by whom in order that the church's coveted exempt status was finally granted?
The nature of the negotiating committee is still a mystery. Early on, the IRS didn't even want to admit its existence. Faced with hard evidence to the contrary, however, it was forced to.
Names of all of the members haven't been released."' Documents in the record show that at least some, if, not all, of the members of the committee; were: Howard Schoenfeld special assistant in the office of assistant commissioner EP/EO; James J. Mc Govern, current assistant commie sioner EP/EO; Bob Gardiner, ther senior projects analyst in the office a EP/E0 field compliance; Beth Purcell assistance branch chief in the office ol associate chief counsel EP/EO; and Steve Miller, then special counsel to associate chief counsel EP/EO.
Monique Yingling, a Washington attorney who represented Scientology in this and other matters with the ME answered some of the questions about the case.
She maintained the IRS "relented' on nothing. Rather, she said, when faced with the true facts of the case, the IRS had no choice but to conclude Scientology is a legitimate church entitled to exempt status. When asked about the negotiating committee, Miss Yingling said such a term was a misnomer. She called it a "working group." She said it was not at all unusual for the IRS to bring together representatives of various elements of the service to work out details of a case. "In this case," the attorney added, "there were litigation issues, income tax issues, FOIA issues, as well as the exemption question." Miss Yingling acknowledged that the exemption question is an all or nothing test. She insisted the IRS neither "relented nor negotiated" the matter. The exemption "was proven," she said.
The church's attorney said the Tax Court's 1984 decision against Scientology -stemming from the 1977 case mentioned earlier- covered only one block of years dating back to the early 1970s.
She added each tax year rises and falls on its own merits. Just because an organization is not exempt in one year, does not bar exemption in another.
Miss Yingling said that the Tax Court noted in its opinion that the church was free to re-apply to the IRS for recognition of exempt status for years other than those covered by the opinion.
IRS counsel refused to allow any IRS witness to state who within the agency directed the formation of the committee. Some reports indicate that former Commissioner Fred Goldberg authorized its existence. However, IRS counsel specifically denied Tax Analyst attorneys access to that information.
Another anomaly is that the question of exempt status was not decided on the "substantive issues" of the case. Section 501(c)(3) provides rigid standards for exempt status. Chief among them are the questions of the organization's exempt purpose and personal inurement of the organization's net earnings.
In the Scientology case, however, these pivotal issues were not to be considered by EP/EO specialists. Rather, they were expressly instructed to disregard them.
While Schoenfeld refused under oath to describe. the particulars of the "negotiations," he did admit that he instructed EP/EO specialists to "not make or consider any substantive matters" regarding Scientology's compliance with section 501(c)(3).
In particular, specialists were not to consider the issues of inurement, private benefit, commerciality, or "any other substantive issue."
The church, however, maintains that EP/E0 considered all the appropriate facts, simply at a higher level. "Top people at the IRS and the EP/EO, in fact, the assistant commissioner for exempt examination of the church's tax exemption" worked on the case, according to Debbie Blair, public affairs director in the Church of Scientology International said.
The IRS will not say what happened during the course of the negotiations. It refuses to release any of the documents generated during the process, including the closing agreement between it and Scientology.
The IRS says the closing agreement and buttressing documents are not part of the "administrative record" of the 501(c)(3) question. Clearly, however, the closing agreement granted exempt status to Scientology, Clear too is the fact. that the 'documents which buttress the conclusion are subject to public scrutiny under code section 6104. Why is the IRS determined to keep these negotiations a secret?

*The SPOTLIGHT has learned that Scientology's delegation was headed by its boss, David Miscavige, successor to L Ron Hubbard. -Ed.

Daniel J. Pilla is a tax litigation consultant from St. Paul, MN. He is a regular contributor to The SPOTLIGHT and author of 8 books and a monthly newsletter on dealing with the IRS.

SPOTLIGHT December 2.1996 -.9

Was Church Tax Exemption on Level?

The day the federal government gave the Church of Scientology a .tax exemption, some church members seized the Institute for Historical Review. Was it a coincidence?
A federal judge is examining some fascinating but secret papers, which may shed light upon events that led to the takeover of the Institute for Historical Review (IHR).
On October 1, 1993, the same day the IRS made a secret deal with the Church of Scientology and granted it tax-exempt status as a "religion," Scientology operatives acted to take over the IHR. The statistical probability that two unrelated events will happen on the same day of a year is 133,225-to-one.
Some wonder if the ADL wanted to take over the IHR, after years of branding those scholars and historians as "anti-Semitic" because they examine the events of World War II under the light of facts instead of wartime propaganda.
History reveals two possibilities:
• Simply let the IHR die and not be troubled by its findings that World War II was more complicated than good men fighting bad men.
• Maintain the IHR and be your own enemy by changing its conclusions or discrediting it by requiring erratic conduct. (The ADL's own newsletters have pointed out that contributions fall when fewer "anti-Semitic incidents" are reported.) COINCIDENCE?
Whatever the motivation, these interesting events occurred on October 1,1993:,,
• After denying tax-exempt status to Scientology's numerous commercial enterprises since 1967, and being sustained by the courts, the IRS concluded secret negotiations' with the "church" by announcing that the church and more than 100 front organizations would, now, be tax-exempt
• The same day, some people associated with Scientology who had infiltrated the staff of the IHR in Los Angeles, sent a letter to its founder, Willis Carto, announcing they had taken over the institution.
Did the ADL compel the IRS to reverse its decades-old position that Scientology is not a church? Or should Scientology pay tax on its business income like any profitable business? Clearly, Scientology's income comes from its sales. Free-will contributions do not support Scientology as they do a real church.
The ADL, actually an unregistered agent of a foreign country, Israel, has awesome power over the U.S. government and Congress. That includes the IRS. By their own accounts -in their own words- Sens. Charles Percy (R-Ill.) and the late J. William Fulbright (D-Ark.) were thrown out of the Senate and Reps. Paul Findley (R-Ill.) and Pete McCloskey (R-Calif.) were thrown out of the House for questioning the blank check Israel has on the U.S. Treasury. None could be described as "right wing," but even questioning the several billion tax dollars given Israel each year was not tolerated by the ADL. Unfortunately, the documents describing the secret deal between Scientology and the IRS will not be made public for a long time, if ever, according to lawyer William Lehrfeld, who is suing to force disclosure on behalf of Tax Analysts of Arlington, Virginia, a tax law publishing company.
A federal judge in Washington ordered the IRS to give him the documents so he could determine if they should be made public.
If Tax Analysts prevail, and the judge orders the documents to be made public, the IRS will move to delay the action pending years-long appeals up the Supreme Court, Lehrfeld said.
If the IRS prevails, Lehrfeld will have to decide if they have the resources to pursue the long appeals journey to the Supreme Court.
*See Dan Pilla's comprehensive article about this subject in the July 8 issue of The SPOTLIGHT.

10-SPOTLIGHT December 2; 1996

Scientologists Keep Pressure on Populist

When this newspaper made a mis-statement about the Church of Scientology, a few letter writers demanded blood
The Church of Scientology has placed The SPOTLIGHT in its gun-sight. The newspaper has received three letters from admitted Scientologists who claim this America first weekly is "continuing to labor on behalf of subversive foreign interests."
The SPOTLIGHT'S "sin" was publishing an account of the Tom Cruise/ Mission Impossible boycott in Germany. The item, widely reported elsewhere, was a paragraph in the August 26 News You May Have Missed
German government officials have claimed Scientology is a dangerous racket that preys on the gullible, not a genuine religion.
The item reported a youth group in Germany protested showings of Mission Impossible because it would put money in the actor's pocket, allowing a Scientologist, Cruise, to spend more money on the church.
Then this newspaper reported Scientology "is banned in some European countries." This is incorrect. Scientology is only banned in Singapore. However, numerous European countries label it a racket, not a tax-exempt religion, as it has been in the United States since the mysterious IRS decision of October 1, 1993.
Scientologists have been quick to let The SPOTLIGHT know we were wrong.
"Do you have a vested interest in slandering a religion that is helping millions of people every day?" asked Stan Durbin of Clearwater, Florida. "Your treatment of the Tom Cruise/ Mission Impossible/Scientology issue argues that most powerfully."
"I note that you are continuing to labor on behalf of subversive foreign interests whose purpose is clearly anathema to everything the United States of America stands for," wrote Larry Byrnes.
The letter writing campaign took nine weeks to kick in. Normally when a mistake appears in The SPOTLIGHT readers make it known within a week. The letters have a couple of other things in common. For one thing, the writers claim to have held subscriptions to The SPOTLIGHT that they wanted to cancel.

SPOTLIGHT December 2, 1998 -11

Institution, Slander Germans

According to The SPOTLIGHT subscription department, only one of the writers had a subscription, and it had expired months earlier. The Church of Scientology has a long history of attacking those willing to print the truth about it.
For example, Time was sued for libel, claiming $187 million in damages, after it called the church a dangerous cult of greed and power. David Miscavige, the top boss of; Scientology, ordered church members to buy up or destroy all copies of that May 6, 1991 issue.
The magazine won the case earlier this year, but had to spend five years worth of lawyers' fees to claim victory. Germany has been the butt of a Scientologist smear campaign. The church regularly takes out full page advertisements in mainstream newspapers, such as the New York Times. In the ads, which can cost up to $75,000 per pop, Scientologists compare their plight today to the Jews' dilemma in the 1930s, slandering the German people.
The church also had a long term fight with the U.S. government before Uncle Sam mysteriously granted it a tax exemption. (See related story on page 9.)
Durbin told us, "the Internal Revenue Service will supply you with documentation" showing its findings on Scientology.
The SPOTLIGHT asked tax consultant Dan Pills to check the file. He reported, "The IRS has flatly refused to release any of the substantive data in the Scientology files" (SPOTLIGHT, July 8).
Public records show that the courts ruled the Church of Scientology failed to qualify under the law of exempt status. The church was found to be a commercial enterprise.
In addition, the IRS created a "negotiating committee" for the Scientology case. Tax exemption has never before been "negotiated." Either one meets the guidelines or one doesn't.
The fact that both the IRS and Scientology want the record kept secret is highly disturbing to IRS-watchers, some of whom suspect that "something is rotten in Denmark." Public perception that the IRS is operating corruptly would seriously damage the agency.


:Resistance to tyrants is obedience to God."-THOMAS JEFFERSON

`Cult' Leader Tied to Death of Frenchman

When powerful, secretive groups start forging high-level, behind-the-scenes alliances with the plutocratic elite, don't count on the controlled media to bring you all of the news you need to know.

lf you were reading one of the nation's daily newspapers on November 23, you quite possibly could have missed a story that received major play in Europe. Yet, although the primary events of the story took place in Europe, it's a story that affects Americans in a number of ways.
This is the story of the conviction of the chief of the Lyon branch of the Church'of Scientology on charges stemming from the death of a follower.
Jean-Jacques Mazier and 22 associates were charged in the death of Patrice Vic, a Scientology recruit. Fifteen including Mazier were found guilty. Officials claim Vic killed himself.
Mazier was sentenced to 18 months ail, 18 months' probation and was d $100,000; his associates received suspended, two-year sentences. It was more than the prosecution had asked. Eight defendants were found not guilty.
Newspapers in France, Switzerland and Germany ran banner headline page one stories on the case, which was decided after an eight-day trial in October.
The story as reported here in the United States in the Washington Times consisted of two small paragraphs in a lengthy column of news from around the world. It read as follows:

LYON, France -A court yesterday sentenced the former head of the Church of Scientology in France to 18 months in jail for manslaughter and fraud in a case stemming from a follower's suicide.
After an eight-day trial in October, the court jailed Jean-Jacques Mazier and handed down suspended sentences on 14 other defendants tied to the organization on charges ranging from embezzlement to fraud.
Interestingly, the Times' capital city rival, the Washington Post, actually printed a much more detailed story.

This might have something to do with the fact that the Times itself is published by another bizarre cult group, Sun Myung Moon's Unification Church.
.. The Unification Church has bought "respectability" by giving millions of dollars to American "conservative" and "pro-family" leaders and by fixing a strategic alliance with the Israel lobby in Washington. In a similar vein, the Church of Scientology has allied with the U.S. State Department and Rep. Ben Gilman (R-N.Y.), a leading voice in Congress for the pro-Israel lobby, in waging a propaganda war against Scientology's critics in Germany.
There is growing evidence that Scientology's leader, David Miscavage, made a strategic alliance with the powerful Israel lobby in Washington: the Scientologists would deploy their agents employed inside the Institute for Historical Review (IHR) to disrupt the IHR's work; in return, the Israel lobby would use its clout at the highest levels to ensure that the Scientologists would get tax exemption.
In handing down the sentences, the court in Lyon characterized Scientology's methods as "grand fraud." According to the court, the group serves up "a religious brew" that doesn't help the low-level followers but "enriches the few chiefs."
The court explained -as reported in Europe- that the personality tests and subsequent lessons are more and more expensive, leading followers to spend more and more money on the road to a goal that is apparently unattainable.
The victim, Vic, apparently became despondent after spending a good deal of money but never reaching a goal promised to him. New members, according to the court, become "seduced" by Scientology and don't realize how caught up in the web they have become.
According to the court, Scientology is "pernicious" in that it "totally annihilates the ethical sense" of its followers. The court, in its decision, called the group "diabolical and dangerous."
The court's verdict was praised in Paris and Lyon as a major victory in France's fight against Scientology, which the government labels a "sect." According to Marie Geneve, president of the Paris-based Center Against Mental Manipulation, the sentences were "extremely significant," since the prosecution had asked for three years' probation for Mazier and no jail time.
"It's proof that the magistrates are beginning to grasp the importance of the problem," Ms Geneve was quoted. Scientology, which received tax-free status as a "church" from the IRS in 1993, is in trouble in several countries (See SCIENTOLOGIST, Page 4)

SPOTLIGHT ,December 9, 1996 399E

Scientologist Convicted

(Continued From Page 1)
in Europe in addition to France. In Germany, for instance, the goverment has been described as "at war" with Scientology. It is not treated as a religion for tax purposes, and Scientologists are not allowed to belong to any of the major political parties.
Earlier this year, according to published reports, a French parliamenary report on the activity of sects said Scientology uses "defamation, calumnious denunciation and violations of private life" to further its ends. The report led to the formation of a new watchdog body in France, where Scientology claims 40,000 adherents of the 8 million members it claims worldwide.
According to Scientology, it helps it. members find inner harmony and self, knowledge Numerous published reports say critics contend that Scientology effectively enslaves its members and harasses and blackmails those who leave the group or oppose it. Vic was a 31-year-old industrial designer who jumped from the 12th floor of an apartment building in a Lyon suburb in March of 19 Shortly before he jumped he told his wife, while in the company of Mazier, that he had to find $6,000 to pay for a course of "purification."
Ten months later, his widow, who was left with two small children, brought legal action against Scientology, charging sect officials with pressuring her husband to give them money. The trial originally focused on; Vic's death, but its focus widened as the five-year investigation probed the organization's activities.

SPOTLIGHT December 16, 1996-3

'Church' Members Buy Foe's Identity

Can freedom of speech coexist with wealthy and powerful litigants? Groups targeted by the well-connected Church o f Scientology can expect the worst.

The Cult Awareness Network (CAN) is out of business. It was driven into bankruptcy by the Church of Scientology. Beginning in 1991, Scientologists began filing lawsuits against CAN in what was obviously a harassment tactic in retaliation for CAN's evaluation of Scientology as a "cult." Now bear in mind, The SPOTLIGHT has absolutely no brief for CAN whatsoever. We know o£ the role that CAN played in stirring up the holocaust that engulfed the Branch Davidian church at Waco. CAN's record, on the whole, was reprehensible. However, the demise of CAN is an interesting story in that it demonstrates the growing clout of the international Church of Scientology which has been granted tax-exempt status by the IRS under circumstances which continue to remain mysterious, to say the very least.
Here's what happened to CAN: Individual Scientologists, with an apparent unlimited supply of money and attorneys, sued the relatively poorly-funded CAN over, and over again. Each suit had to be answered by a lawyer. That, in itself, was burning up CAN's resources, making operations very difficult. Scientology needed to win only one suit for total victory; it did. Good-bye CAN.
Ironically, if you asked CAN about Scientology early this year, you would have received the reply that the group is a cult. If you ask next year, it's likely you'll he told that Scientology is a legitimate- even mainstream-church. That's because the name "Cult Awareness Network" and the group's logo have been purchased by an attorney who is also a Scientologist.
The attorney who bought CAN's identity, Steven Hayes, said in an interview that he represents a group of several people he cannot name without "permission." He said they put up money of their own and money "from this country and other places." Hayes said he is a Scientologist, not an employee of the Church of Scientology. He had sued CAN in the early 1990s on behalf of several Scientologists who wanted to attend CAN's national conference, according to CAN attorneys.
Hayes said his group intends to revamp CAN so that "religions that have been attacked in the past would have an opportunity to at least show what they believe the truth to be." In other words, anyone asking CAN about Scientology will hear an endorsement.
But the ramifications of this action go far beyond the Church of Scientology and the Cult Awareness Network. It means that a tenacious, well-funded organization with all the time it needs can effectively silence a non-profit organization. Lawsuits are the modus operandi. If someone files suit against your organization, your organization must answer. That means attorneys. That means money that your organization needs for operational purposes. For 20 years, the Cult Awareness Network was the nation's best known organization with information on -as the name implies- cults. It ran a hot line for parents whose children had been absorbed into cults. From its offices in Barrington, Illinois, a Chicago suburb, the network answered more than 350 phone inquiries every week.
The very fact that CAN itself decided what was a "cult" is what made it so controversial to begin with. CAN often overstepped the bounds of decency and was often reckless in its actions.
However, as CAN's profile and influence grew, so did the annoyance of its enemies. One of those enemies was Scientology. No wonder. According to CAN records, of all of the calls received, more people asked about Scientology than any other group.
CAN ran into big trouble when it became associated with so-called "deprogrammers" who "rescued" people from cults. Although CAN officially rejected any illegal methods of removing people from cults, Scientology used the alleged association as the basis for some lawsuits.
The Scientology magazine Freedom devoted a special 1995 issue to CAN, calling the group's executive director, Cynthia Kisser, "the mother of the serpent"
Beginning in 1991, CAN and its local affiliates and staff were hit with a series of lawsuits filed by numerous members of the Church of Scientology and others. In one week in 1992, Scientologists filed 12 suits against CAN. Most of the suits were civil rights claims, according to attorneys. People who identified themselves in the suits as Scientologista alleged that the group denied them membership or participation.
Many of the suits were dismissed, but it was costing CAN dearly. Eventually, as Scientology apparently intended, the staff was absorbed with defending itself rather than with its stated mission. The suit that drove the final nail into CAN's coffin involved an 18-year-old and a "cult de-programmer" who allegedly acted illegally.
Eventually the deprogrammer was found not guilty in criminal court, but a civil suit survived. The 18-year-old, Jason Scott, hired Kendrick L. Moxon, who has a history of representing Scientology against its perceived enemies, not the least of which was CAN. Moxon successfully tied CAN to the deprogrammer. It seems a CAN volunteer, without official permission, had referred Scott's mother to the deprogrammer. That was enough for the jury, which found all the defendants liable and awarded the plaintiff more than $4 million in damages. CAN was ordered to pay up to $1.8 million. The decision is being appealed. But CAN was forced into bankruptcy and, as pointed out above, is being restructured as an adjunct of Scientology.
Does might makes right? The decision has ominous overtones for non-profit organizations and free speech in this country.

SPOTLIGHT December 30, 1998-3

Florida Cultist Found Dead

It's happened before: members of the Church of Scientology who have conflicts with the church often meet strange and tragic ends. BY THE SPOTLIGHT STAFF
A murder investigation has been launched into the mysterious death of a Florida-based Church of Scientology member who -according to family and close friends- was desperate to leave the cult.
"The Clearwater Police Department doesn't think she died of natural causes," said police spokesman Wayne Shelor of Lisa McPherson who had spent half of her life as a Scientologist.
An autopsy by the Pinellas-Pasco Medical Examiner's Office of the 36-year-old McPherson revealed bruises on her limbs and cracked and scaling skin. Her left pulmonary artery was blocked by a fatal blood clot brought on by, severe dehydration and "bed according to the medical examiner's s report.
McPherson's mother, Fannie (who lives in Dallas) says her daughter was under a lot of pressure in her job as a saleswoman for AMC Publishing, a Clearwater-based company owned by Scientologists which has the church as a customer, according to published reports.
Miss McPherson "called me three weeks before she died and she was crying," her mother said. "She was the last of my family." According to childhood friend Kelly Davis (also of Dallas), the victim "said she couldn't get into it over the phone, but she said she had a lot to talk about. She said she would explain when she got here."
Miss McPherson had hoped to visit her family in Texas for Thanksgiving but instead wound up on November ^18, 1995 at the Fort Harrison Hotel, the church's world headquarters in Clearwater (where the church has long been at the center of controversy).
After a hospital stay recovering from a traffic accident, she was taken by church members to the hotel. The circumstances of the accident itself are unusual, to say the least. According to Clearwater Police Detective Sgt. Wayne Andrews, "It was a minor accident, but paramedics at the scene said she was wild-eyed. She was walking down the street and removed all of her clothes."
After paramedics took McPherson to a hospital emergency room, several Scientologists showed up and checked McPherson out against the recommendation of attending physicians.
According to Sgt. Andrews, the Scientologists took McPherson to their headquarters, reportedly for "rest and relaxation." Then, said Andrews, "the next time there's any indication of what's happening to her is that on December 5, 1995 she shows up at a hospital in New Port Richey and she's dead on arrival," said Clearwater Police Detective Sgt. Wayne Andrews.
Ex-Scientologists, familiar with church tactics, contend that Miss McPherson was taken to the hotel and put under what is called "baby watch," a solitary confinement used when a member threatens to leave the cult. "They are put in a room with no one and nothing," said Dennis Erlich, who left Scientology and has since been actively exposing its inner workings.
The physician who treated Miss McPherson at New Port Richey, Dr. David Minkoff -a Scientologist- diagnosed her as having a "strep infection." However, Larry Bedore of the Medical Examiner's Office (who is not a Scientologist) said he was not aware of any strep infection or of any blood tests being conducted.
Three Scientology employees who, Andrews says, "worked in an office that would have had control over her," and are now wanted by the police for questioning, have left the country, according to church spokesmen.
Andrews believes they have split up; he places Suzanne Schnuremberger in Switzerland or Germany, Ildiko Cannovas in Hungary and Laura Arrunada in Mexico. Andrews posted a request for information on the former employees on the Internet.
Church spokesman Brian Anderson denies the "baby watch" charge. "That's completely false and there is liability if you print that," he threatened the Tampa Tribune. He also denied the three missing women who are wanted for questioning were connected with the death or that McPherson wanted to leave the cult. Anderson claimed the police were engaging in a harassment campaign against Scientology.
On December 9 The SPOTLIGHT reported on the strange death of a French member of Scientology which resulted in the conviction -on charges of manslaughter and fraud- of the head of the French branch of Scientology, along with fourteen of his associates. The victim in question, Patrice Vic, died after a fall from the 12th floor of a building.
Scientology is considered by the IRS to be a church since it was granted its special tax-exempt status in 1993. Neither the IRS nor the Church of Scientology will reveal the secret negotiations resulting in this privileged status, leading some to conclude that corruption was involved.