Los Angeles Times: Converting the Business World

Source: Los Angeles Times
Date: June 27, 1990

by Joel Sappell and Robert W. Welkos

Scientology is using a network of private consulting firms to gain a foothold in the U.S. business community.

The firms promise businessmen higher earnings but appear to be mainly interested in recruiting new members for the church.

Although these profit-making firms operate independently of each other, they sell the same product: Scientology founder Hubbard's methods for running a profitable enterprise. The Church of Scientology has for years employed these same methods — heavy marketing, high productivity and rigid rules of employee conduct — to amass hundreds of millions of dollars for itself.

Critics contend that the consulting firms are concealing their Scientology links so they can attract to the church prosperous people who might otherwise be put off by Scientology's controversial reputation.

The strategy appears to have proven effective.

A Scientology publication in 1987 reported that the consultant network earned a combined $1.6 million a month selling Hubbard's management methods to a variety of professionals, many of whom have reported improved incomes. It also said that 50 to 75 businessmen were recruited monthly into the church, where each week they spent a total of $250,000 on Scientology courses.

Two of the movement's firms have been ranked by Inc. magazine as among the fastest growing private businesses in America.

The consulting firms use seminars and mailers to attract health professionals, salesmen, office supply dealers, marketing specialists and others.

Those who have dealt with the firms describe the process this way:

Businessmen are drawn into Scientology after they have gained confidence in Hubbard's non-religious management methods. They are often told that, to achieve true business success, they should get their personal lives in order. From there, the church takes over, encouraging them to purchase spiritual enhancement courses and begin a process called "auditing."

During auditing, a person confesses his innermost thoughts while his responses are monitored on a lie detector-type device known as the E-meter. Auditing must be purchased in 12 1/2-hour chunks, costing between $3,000 and $11,000 each, depending on where it is bought.

Spearheading all this is an arm of the church called World Institute of Scientology Enterprises, or WISE.

In recent months, WISE has been encouraging Scientologists nationwide to become consultants within their respective professions. The appeal is simple: make money while disseminating your religion.

In the process, WISE profits, too. It trains and licenses the firms to sell Hubbard's copyrighted "management and administrative technology." WISE charges roughly $12,000 for its basic no-frills training course. For consulting services, it charges $1,875 a day.

On top of this, the consulting firms that sell Hubbard's business methods must pay WISE 13% of their annual gross income.

At the heart of Hubbard's business system is a concept he called "management by statistics," which he said guarantees optimum office efficiency. Scientology critics maintain, however, that it creates an oppressive and regimented workplace environment.

An employee is judged solely upon his productivity, which is charted on a graph each week. Sagging productivity could bring a rebuke from the boss. Or it could lead to an employee's firing.

The management techniques promoted by the consulting firms are identical to those used by the church, except that all Scientology references have been deleted from the materials. The consultants even employ the most basic instrument used by the church to recruit new members off the street — a 200-question personality test that purports to let people know if they have ruinous personality flaws.

The consultants encourage businessmen and their employees to purchase Scientology courses to remedy personality problems uncovered by the test.

One of the most successful consulting firms licensed by WISE is Sterling Management Systems, which targets dentists and other health care professionals. For the past two years, Inc. magazine has ranked it among America's fastest-growing privately held businesses.

Sterling, based in Glendale, claims to be the "largest health care management consulting group in the U.S."

A company spokesman said the firm charges clients $10,000 for its complete line of Hubbard courses and 30 hours of private consultation. The spokesman said Sterling has helped dentists increase their income an average of $10,000 a month.

He insisted that the company has "no connection" to the church, but added: "If people are interested in Scientology, we will make it available to them."

Sterling publishes a tabloid called "Today's Professional, the Journal of Successful Practice Management." Mailed free to 300,000 health care professionals nationwide, it is filled with "management" articles by Hubbard that are actually excerpts from Scientology's governing doctrines.

The company also holds nationwide seminars that, according to its promotional literature, have been drawing 2,000 people a month.

Sterling Management was founded in 1983 by Scientologist Gregory K. Hughes, at the time a prosperous dentist in Vacaville, Calif. Hughes holds seminars across the country, offering himself as evidence that Hubbard's methods work.

In promotional publications for Sterling, Hughes has said that his annual income soared from $257,000 in 1979 to more than $1 million in 1985. In one month alone, he has claimed to have seen 350 new patients.

Sterling's paper, Today's Professional, has boasted that "the techniques that produced amazing results when applied to Greg's practice are being applied all over the U.S."

But neither the paper's readers nor those who attend Hughes' seminars are told that his dental office, which employed the high-volume Hubbard techniques that he imparts to others, has been accused by former patients of dental negligence and malpractice.

Hughes currently is under investigation by the California Board of Dental Examiners. The board already has turned over some of its findings to the state attorney general's office, which will determine whether action should be taken against Hughes' dental license.

To date, there are more than 15 lawsuits pending against Hughes and his dental associates, alleging either negligence or malpractice. He has denied the allegations.

Attorney E. Bradley Nelson is representing most of those who have sued Hughes.

"It is my opinion," he said, "that the overall quality of care took second place to the profit motive.... I've never seen anything approaching this volume of complaints against one dentist in such a short period of time."

In mid-1985, Hughes closed his office without warning to devote full time to Sterling. He left behind a reputation so tarnished that he was unable to sell his million-dollar-a-year practice, according to dentists in the area.

"He actually had to walk away," said Roger Abrew, co-chairman of the peer review committee of local dental society.

He also left behind patients with worse problems than they had before they were treated by Hughes' office, according to Abrew and other dentists, who have since been treating them. The dentists said that, based on their examinations, Hughes' office performed both substandard and unnecessary work.

"I think its kind of ironic to see a guy who did such a botched job of dentistry teaching others," said dentist David C. Aronson, summing up the sentiments of most of his colleagues in the small Northern California community.

Hughes, who continues to conduct his "Winning With Dentistry" seminars, refused to be interviewed for this story. But Frederick Bradley, an attorney defending him in the lawsuits, suggested that the Vacaville dentists may simply resent his client's success because their patients had deserted them for Hughes.

Another firm once licensed by Scientology's WISE organization to sell Hubbard's management techniques was Singer Consultants. Before it merged with another management company, Singer was ranked as one of the nation's fastest growing private businesses.

The company focused its training on America's chiropractors. It brought hundreds of new members into the church and triggered a nationwide controversy among chiropractors over its links to Scientology. In fact, a chiropractic newspaper devoted almost an entire issue to letters praising and condemning Singer Consultants, which was located in Clearwater, Fla., where Scientology is a major presence.

"We felt that there were young doctors who didn't know they were being solicited to do something above and beyond the practice of their profession," said Dynamic Chiropractic editor Donald M. Peterson, explaining why his Huntington Beach-based newspaper entered the controversy.

Singer Consultants was headed by Scientologist David Singer, an accomplished speaker and chiropractor who held nationwide seminars to pitch Hubbard's business methods.

Two years ago, the company was absorbed into another management firm owned by Scientologists.

Although Singer refused to be interviewed by The Times, he told Dynamic Chiropractic: "Hubbard was a prolific writer and wrote on a multitude of subjects. We do not, have not and will not make part of our program the teaching of any religion."

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