Fight Over Funds Divides Scientology Group

Source: New York Times
Date: January 6, 1983

The Church of Scientology is embroiled in a bitter internal battle over the control of hundreds of millions of dollars.

The church is described by its leaders as a religion and by its critics as a highly profitable business with cultlike overtones. It has long been a target of investigations by the Federal Bureau of Investigation and other law-enforcement agencies in this country and abroad.

According to dissident members, former Scientology officials and allegations in court documents, the church is currently controlled by a cadre of former servants of the organization's founder, L. Ron Hubbard, 71 years old, whose 1950 book "Dianetics" became the cornerstone of its program. The takeover by these members, who are in their 20's, has led to the expulsion or resignation of more than 150 senior members in the last year.

Faced with the loss of millions of dollars in income, the expelled operators of several regional Scientology franchises have set up their own organizations based on Mr. Hubbard's teachings.

Meanwhile, the oldest son of Mr. Hubbard, Ronald E. DeWolf, has contended in a lawsuit that his father is either dead or being held captive by the former servants. He is suing to gain control of his father's estate, which he says is worth more than $100 million.

Last Thursday, a Superior Court judge in suburban Riverside County ordered a trial to be held April 18 to determine whether Mr. Hubbard is dead or mentally incompetent.

The Church of Scientology says it has a worldwide membership of six million, although former officials say the number of adherents is probably fewer than 700,000. Whatever the correct number, the recent defections and the publicity over Mr. DeWolf's suit are believed to be cutting into the membership.

In interviews and affidavits, some former church officials and other dissident members have contended the church is a lucrative business enterprise that systematically suppresses dissent. And more than 20 suits have been brought against the church by former members, represented by Michael Flynn, a Boston lawyer.

Spokesmen for the church have denied the accusations, including assertions of fraud and contentions that the church does not represent a bona fide religion.

In 1979, Mr. Hubbard's third wife, Mary Sue, and seven other members of the group were convicted on charges of conspiracy to obstruct justice or conspiracy to obtain Government documents illegally. After losing several appeals, Mrs. Hubbard is scheduled to appear for sentencing Friday in a Federal court in Washington.

Documents seized at Scientology offices in Los Angeles and Washington and made public at the trial showed that its members had stolen thousands of pages of Government files and had run a farreaching intelligence operation that included burglaries, wiretapping and spying on more than 120 public agencies, including the F.B.I., the Central Intelligence Agency and the Internal Revenue Service. Harassment of Officials

The documents also revealed a pattern of harassment against public officials and journalists who investigated or criticized the organization.

In an interview Heber Jentzsch, the church's chief spokesman, said the organization was not currently involved in such operations. "It's a con - it was a fraud from the beginning," Gerald Armstrong, formerly a close aide to Mr. Hubbard and the church's archivist, said of the organization. He said he left the church a year ago after gaining access to records that he asserted indicated a long pattern of deception and fraud.

And in a declaration submitted in connection with his suit, Mr. DeWolf, who says that he worked closely with his father from 1949 to 1959 in developing Scientology, asserted that most of the details of his father's life presented to the church's followers were lies.

"Thousands of people," he said, "have paid millions of dollars to my father on the belief that he was 'twice pronounced dead' from war wounds and miraculously cured himself through Scientology, having achieved a state of 'perfect, physical, mental and emotional health' for the past 30 years; in fact, this is a total falsity, but my father suffers from severe paranoid schizophrenia with delusions." Response by Church's Attorney

In a telephone interview, Harvey Silverglate, a Boston lawyer representing the church in most of the lawsuits, said that its religious status had been upheld in court and that the attacks by former members were part of a "gigantic power struggle" aimed at tapping the church's resources. And Bent Corydon, who was head of the Scientology branch in Riverside, Calif., until he was expelled two weeks ago, agreed, saying, "It's all about money."

According to estimates by some former church officials, the organization, much of whose income is tax exempt, has assets of more than $300 million around the world, much of it in bank accounts in Switzerland and the Caribbean area. And each week, the former members said, it takes in more than $2 million at more than 100 branches in this country and abroad. The church declined to give an estimate of its total assets.

Although some of the income is generated by the sale of Mr. Hubbard's books, the former officials said, most comes from people who, for a mandatory donation of up to $300 an hour, receive a type of counseling called "auditing." Special Counseling Sessions

In the one-on-one auditing sessions a device called an "E-Meter" is used to test emotional responses by measuring changes in the electrical properties of a person's skin.

The tested individuals are told the session will help them eradicate debilitating mental images called "engrams," allowing them to communicate with others more effectively and to become better able to help solve the world's problems.

According to Mr. Corydon, whose Riverside branch in the past was one of many accused of using high-pressure sales methods to push its counseling courses, it is not uncommon for people to spend more than $100,000 over five or six years to eliminate all the "engrams," a state referred to as "clear." 'He's Not Very Happy'

Mr. Corydon said that many had mortgaged their homes or otherwise gone deeply into debt to pay for the counseling. "I just talked to a plumber who had spent $250,000," he said, "and he's not very happy."

The Church of Scientology owns large teaching and counseling centers in several places, including Clearwater, Fla.; Los Angeles, and Suffolk, England. Former officials estimated that the Florida facility alone took in upward of $1 million a week.

However, much of the church's income, according to former members, originates in its regional branches, and the current dispute has largely involved a battle for control of revenue from these socalled missions, which until recently had been largely independent.

In past years Mr. Hubbard's organization franchised the right to use the E-Meter and sell the counseling services based on his teaching to more than 80 of the local missions. According to the former franchise owners, the missions paid 10 percent of their gross revenue to the central organization. Rise to the Top

Much of the current strife in the organization, former members say, began in the spring of 1980, when, without warning, a number of new people appeared in the church's upper echelons and began demanding more money and less independence from the regional franchise owners.

Most of these new people joined the group when they were 13 or 14 years old and have known no other life except Scientology, according to Mr. Armstrong's wife, Jocelyn, a former member. Except for intensive daily schooling in the writings of Mr. Hubbard, she said, most have had no formal education beyond elementary school.

The majority of them were members of a group called the "Commodore's Messenger Organization" This designation stemmed from a period in the 1970's when Mr. Hubbard ran the church from a 300-foot yacht, the Apollo, and referred to himself as the "Commodore." Some Scientologists took their children to live with them on the ship, and older children were designated personal aides to Mr. Hubbard.

On the ship, and later, when Mr. Hubbard moved the headquarters to a 500-acre resort, called Gilman Hot Springs, that the church bought in the desert near Palm Springs, Calif., the status of the teen-agers was raised.

According to the dissidents, they were taught to obey Mr. Hubbard explicitly, to mimic his voice and to inform on members who criticized him. Not long after moving to the desert facility, former church members say, Mr. Hubbard retreated increasingly into seclusion and usually saw only members of the messenger corps, who were granted the right to discipline adult church members. Question of Control

Many of the former messengers are said to wear the naval uniform of an elite church branch called the "Sea Organization." The dissident members say that a half-dozen or so of them appear to be controlling the church and its assets through the Religious Technology Center, a corporation established in January 1982.

"It's like the 'Lord of the Flies,' " said a former franchise holder who spoke with the understanding that he not be identified. "The children have taken over."

The central figure in the corporation is David Miscavige, 22, who has told franchise holders that Mr. Hubbard had granted the corporation exclusive rights to the Scientology trademarks and the copyrights of his books.

According to the former officials, the new leadership group has demanded that franchise owners send their clients to the church-owned counseling centers rather than continuing to profit from them at the missions.

"They take what they want," asserted Mr. Corydon. He and franchise owners in Omaha and Kansas City have formed splinter churches. He said that it had become common for officers of the Religious Technology Center to demand payments of $20,000 to $30,000 from franchise holders and to take away franchises if the money was not paid.

At an Oct. 17 meeting at the San Franciso Hilton, members of the new leadership group informed the franchise owners that the church had been reorganized "to make the whole structure impregnable, especially in regards to the I.R.S.<

'New Breed of Management'

According to a transcript of that meeting, at which the Religious Center warned it had the right to withdraw franchises, one of the former messengers said, "The fact of the matter is you have a new breed of management in the Church. They're tough, they're ruthless, they are on Source." The term "Source" refers to the teachings of Mr. Hubbard.

In his lawsuit, Mr. DeWolf, a 48-year-old Nevadan who changed his name from L. Ron Hubbard Jr. after becoming estranged from his father, has accused Mr. Miscavege and others of forging his father's signature to gain control of his father's trademarks, copyrights and other assets.

The suit, filed in Riverside County, noted that Mr. Hubbard had not been seen since March 1980. It contended that he was dead or seriously ill and, in effect, being held captive by the his former servants, possibly at a secret hideaway in the California desert.

Mr. Jentzsch, the church's president and chief spokesman, declined to make Mr. Miscavege available for an interview. He said that he had not seen Mr. Hubbard lately but that he had no doubt that Mr. Hubbard was still alive.

Others, including some of the recent church defectors, also said they believed Mr. Hubbard was still alive, possibly living under an assumed name in or near Los Angeles.

In his court declaration, Mr. DeWolf said that his father, a onetime science fiction writer, was a drug addict and that he had referred to Scientology as one of the "most advanced 'brainwashing' technologies in the world."

Church Founder Described

Spokesmen for the church have dismissed Mr. DeWolf's allegations as an attempt by him to obtain the church's millions. "Ron DeWolf in classic oedipal fashion would like to take over what he perceives of as the empire his father created and to step into his shoes," Mr. Silverglate asserted.

Mr. Flynn, the dissidents' attorney, said he had been harassed and his life had been put in jeopardy because of his court battle against the church. He asserted that its internal struggle was significant but added, "The real story is the power they have to use information for blackmail."

In the auditing sessions, he said, Scientology members are required to disclose various personal facts, including the "most intimate" details of their sexual activity and family lives. He said the church made this information public if members criticized or left it.

"They have audited two to three million people," he said, "and they are all recorded and stored, and they use it." Mr. Armstrong, 37, who said that as an aide to Mr. Hubbard he sometimes shuttled suitcases stuffed with $50 bills and large denominations of Swiss francs to accounts in a variety of foreign countries, was a Scientologist for 11 years.

"When I first went in to it, I thought it was the hope of mankind," he said. But he added that later, after being assigned to collect biographical material about Mr. Hubbard, "I learned it was all based on lies and deceptions."

"I think L. Ron Hubbard is either dead or he's being kept locked up by this group of people who have taken over," Mr. Armstrong said. "What you have is a situation where people of sub-average intelligence are in charge of thousands of people and in control of countless millions of dollars; they bleed these honest, trusting people who pay up to $300 an hour."

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