I think that for some legal/paranoid reason the Personal Office of LRH was then going by “Public Affairs” or “PA.” Barbara was the “Properties Director,” which referred to Hubbard’s “properties” and their commercial exploitation, such as his biography.

The “Dick” mentioned in the PS is Dick Sullivan. He had been married to Laurel Watson, had been on MCCS, along with Laurel, Barbara and me, and we had been friends in a way at Gilman Hot Springs and in LA. I’d had a Colt 45 automatic at Gilman and had sold it to Dick before I left the cult.

I put the dispatch on org communication lines, knowing or hoping that Barbara, who was then posted at Gilman, would only receive it some hours later or the next day. So my wife Jocelyn and I had time to carry the last of our few belongings out of the blue building and get away.

As noted in my dispatch, I turned over to Vaughn Young the car I’d been using on the Hubbard biography project, MCCS and wherever else I was directed. That is, I left the keys, and instructions for various things, in his comm basket in LRH External Comm.

I’d been able to buy the car new for the biography project, etc. because of Hubbard’s order to get him a Nobel Prize, and his accompanying order directing unlimited org funds be allocated for that purpose. It stood to reason that Hubbard’s biography and his worldwide PR were essential to execution of that command intention. I didn’t know if Hubbard’s loyal officers — then assembling in the Special Project or in the Special This-or-that Unit — would let Vaughn keep and use the car, but I thought he’d need it and should have it.

Omar Garrison had loaned me his pickup for the escape, and Jocelyn and I took it all the way to British Columbia. We took these photos through the windshield, I think in Utah, and it all appeared so bleak up ahead.

For some reason, while in BC, we drove to Powell River, a city on the northern end of BC’s Sunshine Coast. The sunshine is relative because it’s in the country’s rainiest biogeoclimatic zone. I’d only been to Powell River once before, a Vancouver Province paperboy trip, possibly in 1961, to see the pulp and paper mill, which was what the town was all about. Maybe that’s why I’d returned at the age of thirty-five.

At one point we stopped somewhere close to Powell River and near the ocean, the east coast of the Georgia Strait.

It was right then, contemplating and talking about our future, that I faced the fact that I had the same psychology I had when I got into Scientology when I was 22, the same inadequacies, the same fears, the same inabilities, the same intelligence, the same human condition.

I confronted then the devastating truth that Scientology had not worked. Thank God, I was able to see that it did not work. Jocelyn and I had no money, no resume, no history, no prospects. Plus I now would have Hubbard and the Scientologists – the defenders of Hubbard and Scientology – coming to get me. We walked around and talked and I took this photo on a spot and day that seemed so dismal.

Many years later, Vaughn would testify:

Although the Guardian’s Office was “disbanded,” a new campaign was undertaken against Gerald Armstrong in 1981, a staff member who had fled with some of Hubbard’s files. Contrary to what Mr. Farny said, there were Fair Game actions taken against Armstrong after the GO was “disbanded.” I know because I sat in on those strategy meetings and was ordered by Hubbard as well as David Miscavige to “get Armstrong.” For example, Hubbard ordered a “reward” poster that would characterize Armstrong as a criminal. (I did not comply with the order, for which I was severely berated by Miscavige.)

http://www.gerryarmstrong.org/50k/legal/related/4462.php

Scientology and Mary Sue Hubbard introduced my resignation dispatch to Barbara De Celle at trial in Scientology v. Armstrong I, in LA Superior Court in 1984. It was plaintiffs’ exhibit 30, my attorney did not object, and it was admitted into evidence.

My memories of Barbara are of a kind, smart, gentle, efficient, and already elderly lady. We are forever linked because she gave me the MCCS tapes that made their way into the US Supreme Court’s Reports.

The District Court and the Court of Appeals found that the tapes at issue in this case recorded attorney-client communications and that the privilege had not been waived when the tapes were inadvertently given to Armstrong. 809 F.2d, at 1417 (noting that Armstrong had acquired the tapes from L. Ron Hubbard’s personal secretary, who was under the mistaken impression that the tapes were blank). These findings are not at issue here. Thus, the remaining obstacle to respondents’ successful assertion of the privilege is the Government’s contention that the recorded attorney-client communications were made in furtherance of a future crime or fraud.

http://www.gerryarmstrong.org/50grand/legal/us-v-zolin-us-sup-1989-06-21.html

LRH Pers Sec, that was Barbara.

In my partial and semi-chronological B-1 file index, which the Scientologists produced in 1985 in the Christofferson v. Scientology case, there are a number of mentions of Barbara, reports from her, etc., but I found this one really disgusting:

22 Mar 82
Spec Pjct PA orders SC Int CMO to pull in Barbara Decell [DeCelle]for an interview on another subject, then metered interview to pick up her relationship with GA.

http://www.gerryarmstrong.org/50k/fairgame/ops/427.php

The Scientology v. Armstrong war continues. Another crop or cluster of Scientologists and their collaborators have come along to accomplish LRH’s command intention. They’re all out to get me. And they should stop. But, as I prophesied to the Scientologists thirty years ago, I’ve become their anti-opinion leader.

PA Props Dir
PA Archivist
12 Dec 1981

re: Post

Dear Barbara:

This is an official note of resignation from the Archives Post and the Sea Org.

Please pass it on to the proper person.

I would have liked to spend some time with someone to turn the post over, but that simply wasn’t possible. Therefore someone will have to pick up the files, etc. basically from scratch. It’s actually better that way as the person will become thoroughly familiar with them rather quickly.

I would wish that Vaughn would be kept on as the biog research person to work with Omar. However, I’ll probably now be an “anti-opinion leader” and any “advice” I have would be shunned like the plague.

I would wish that my family not be contacted. I frankly don’t know where I’ll go right now, but will be in touch with them in the near future. It would be a bit distressing for them, and they have not all been pro-Scientology over the years.

I would also ask that I not be harassed. I know the organization is very capable of that sort of thing, but I don’t wish them any ill, and I would hope they will not intend any toward me.

Someone will want to know why I (and Joyce) left. It really isn’t important, however it is simply because it was time. I think everyone comes to this point In their lives.

There are disagreements, of course, and these would also preclude any further involvement at this time. But I don’t have to go into those here.

I would be most grateful If you could ensure that the line to Omar Is picked up again (Vaughn I hope, as he has the insight the job requires). The biography is so important to righting the scene, and Omar is one of the best friends the organization and LRH has ever had.

Any comm can be sent to this address:
c/o
115 Princess Avenue East
Chilliwack, B.C., Canada V2P 2A6

I’ll turn the car over to Vaughn for now as he’ll need it.

The copier, see my other note.

Files are all intact. They really require a full-time files person as they are not in a decent order at all. I spent the last several months trying to get Omar copied all the materials he would need, and more stuff kept pouring in. So the files are not in any sensible order.

Omar has a great deal of materials, but there will be holes which have to be filled. And there are a great number of important letters/docs/files, etc. which haven’t been copied. His assigned terminal can pick this up.

I’ll be willing to be consulted on anything. I’ll just not be a part of the Church. So, actually my relationship doesn’t change much. That is, I’m not any enemy as the organization sees such.

I’ll be in touch after Christmas, and if there are any questions, or any way I can help at that time, just let me know.

This is a rather hasty note, as I’m rather hasty right now.

Maybe will send you something later, when I allow myself more time.

And maybe will see you again soon.

Much love,

Gerry

PS: Here are Christmas gifts for you and Dick. Have a great holiday time.

Click here for radio program

This is a discussion on Voice of Russia Radio between Dr. Alexander L. Dvorkin and Dr. Thomas F. Farr on September 26, 2011, about the criticisms of Russia in US State Department’s annual International Religious Freedom Report.

Dr. Dvorkin heads the Moscow-based cult education organization Saint Ireneus of Lyons Informational Consultative Center, which is affiliated with the Russian Orthodox Church. ³ He is a major opponent to Scientology’s antisocial intentions and activities in Russia, and, naturally, a major Scientology fair game target. ⁴

Dr. Thomas F. Farr is director of the program on Religion and US Foreign Policy Religious Freedom Project at the Berkley Center for Religion, Peace, and World Affairs at Georgetown University in Washington, DC. ⁵ He has a significant US military and foreign service history, and was involved in US military nuclear policy, and US arms control talks with the Soviet Union. He is connected to Joseph Grieboski’s Institute on Religion and Public Policy as an expert. ⁶ Dr. Farr was the first director of the State Department’s Office of International Religious Freedom, and was in NATO’s Bureau of Intelligence and Research. (Note that Elliott Abrams came from Intelligence to chair the U.S. Commission on International Religious Freedom, and is also at Georgetown⁷)

 Notes

804 F.2d 1520: United States of America, Plaintiff-appellant-cross-appellee, v. Author Services, Inc., Defendant-appellee-cross-appellant

United States Court of Appeals, Ninth Circuit. – 804 F.2d 1520

Argued and Submitted Aug. 8, 1986.Decided Dec. 1, 1986.As Amended March 3, 1987.*

John Dudeck, Michael L. Paup, Chief, App. Section, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellant-cross-appellee.

Michael L. Hertzberg, New York City, Stephen A. Lenske, Mark L. Edwards, Lenske, Lenske & Heller, Woodland Hills, Cal., for defendant-appellee-cross-appellant.

Appeal from the United States District Court for the Central District of California.

Before TANG and BRUNETTI, Circuit Judges, and JAMESON,* District Judge.

TANG, Circuit Judge:

1 The United States petitioned the district court to enforce an Internal Revenue Service (IRS) summons served on Author Services, Inc. (ASI) in connection with a criminal tax investigation of L. Ron Hubbard.¹ ASI contended the IRS was not acting in good faith and sought an evidentiary hearing to support that contention. ASI appeals from the district court’s denial of its request for an evidentiary hearing and from the enforcement order; the United States appeals from the district court’s restriction on the IRS’s use of the documents, prohibiting release of the documents to any other government agency without a court order unless criminal tax prosecution is sought. We affirm.

2 BACKGROUND

3 In August 1984 the Los Angeles District Office of the IRS began a tax investigation of individuals connected with the Church of Scientology (Church), including L. Ron Hubbard. On September 13, 1984 the IRS served an administrative summons in connection with the Hubbard investigation on ASI, a literary business management company whose principal client was L. Ron Hubbard.

Notes

Issue 61¹

THE INDEPENDENT JOURNAL PUBLISHED BY THE CHURCH OF SCIENTOLOGY

BOSTON ATTORNEYS LINKED TO UNDERWORLD IN PLOT TO LOOT HUBBARD ESTATE

Gerry's attorney, Michael Flynn

BOSTON — Two Boston attorneys with ties to organized crime tried to loot the personal estate of New York Times list best-selling author L. Ron Hubbard and blame it on the Church of Scientology, according to documents released by Church President Heber Jentzsch and Los Angeles private investigator Gene Ingram.

The conspiracy hinged on a counterfeit $ 2 million check drawn on Hubbard’s account at the Bank of New England and later used in the sensationalized Riverside, Calif., probate case in an abortive attempt to seize control of the legendary writer’s estate. Hubbard’s business managers stopped payment on the check before it was cashed.

According to documented eye-witness accounts filed in a Los Angeles Federal District Court, Boston attorneys Michael Flynn ² and Wayne Hollingsworth conspired with Boston underworld figures to counterfeit and pass the check two years ago. Flynn subsequently used his own felony to initiate the sensationalized 1982 probate case brought by Hubbard’s estranged son Ronald E. De Wolf in Riverside. Flynn argued that the attempted forgery was proof that the best-selling author’s estate was in jeopardy and should be seized. Flynn blamed the Scientologists “to divert attention from himself” the documents state.

[...]

Notes

COINTELPRO

The FBI Takes The Law Into Its Own Hands

by Fletcher Prouty ¹

Fletcher Prouty

Mr. Prouty, author of The Secret Team, a controversial book about the CIA, is a leading authority on U.S. intelligence activities.

There are many countries in this world where it is necessary to protect the security and lives of those in control of the state from political opponents — foreign and domestic.

In such cases, the intelligence organization, with the power to arrest, is the first line of defense. In these countries, there is an “elite” or “palace” guard staffed and trained for such purposes. This awareness carries over into all governments, to a degree, and the intelligence organizations of all countries tend to drift in this direction whether they are authorized by law to perform such functions or not.

In this country, the CIA is specifically precluded by law from having police, subpoena or law enforcement powers. There is, in fact, no law that authorizes the existence of its sister agency, the National Security Agency, but the NSA is a part of the Department of Defense and is presumed to have the same restrictions in this area as the military, even though it operates under deep secrecy.

The FBI, on the other hand, does have certain specific police powers. The FBI is authorized from time to time to investigate the actions of citizens, primarily to keep a wary eye on enemies of the State — foreign and domestic.

There have been times when the bureau has overstepped these bounds. One of these cases was its program called COINTELPRO. On March 8, 1971, the FBI resident agency in Media, Pennsylvania, was broken into, and FBI documents were acquired during this break-in which carried the caption COINTELPRO, an acronym unknown to the public at that time.

As a result of a Freedom of Information Act lawsuit brought by an NBC reporter, other documents were obtained, and COINTELPRO was exposed.

Less than two months later, on April 27, 1971, the FBI reported it had terminated this program.

This action proved many things. One thing it proved was that “terminated” does not mean the same thing to the FBI as it does to you and me.

COINTELPRO had begun in 1956. During the next 15 years, the FBI conducted an elaborate vigilante operation directed at the prevention of First Amendment rights of free speech and free association — and much more. The FBI had taken it upon itself to do whatever it believed was necessary in order to combat perceived threats to the existing social and political order.

In actual practice, the law enforcers became the lawbreakers.

The FBI utilized extralegal methods to counter what they themselves perceived to be threats to national security and public order, because they had persuaded themselves to believe that ordinary legal processes, which apply equally to all citizens,were insufficient to do the job.

“In essence,” as the Senate Select Committee to Study Governmental Operations said in 1976, “The Bureau took the law into its own hands, conducting a sophisticated vigilante operation against domestic enemies.”

Fifty years earlier, Justice Louis D. Brandeis of the U.S. Supreme Court had written:

“Our government is the potent,the omnipresent teacher. For good or for ill, it teaches the whole people, by its example. Crime is contagious. If the government becomes a law-breaker,it breeds contempt for law; it invites every man to become a law unto himself. To declare that in administration of criminal law the end justifies the means — to declare that the government may commit crimes in order to secure the conviction of the private criminal — would bring terrible retribution. Against the pernicious doctrine this Court should resolutely set its face.” Olmstead v. U.S. 277 U.S. 439, 485 (1927) COINTELPRO was a “rough, tough, dirty business,” in the words of a top-echelon FBI spokesman. It was an acronym for “counterintelligence program.” Counterintelligence is what it was supposed to be on the surface. Counterintelligence is as old as intelligence, and nations have practiced intelligence operations for thousands of years.

As far back as we can trace in recorded history, the Chinese sent trained emissaries to the Arab lands and to Eastern Europe. Their goal was the acquisition of and exchange of knowledge. They went bearing gifts and lived in their host country for many years. They returned to China with priceless knowledge, customs and artifacts.

Fletcher Prouty, 4th from left

Centuries later, the Portuguese began to explore the east coast of Africa. From there, they sailed to India and, eventually, to China and Japan. They came with guns. They looted and pillaged the land. Their visits were unfriendly, and it became necessary for the people of the Far East to defend themselves against these marauders.

With this, the age of counterintelligence was born.

Although the United States did not have a central coordinating intelligence organization before or during World War II, it did have active counterintelligence units in the Army and Navy, and in the FBI. All of these organizations were active against infiltration by the Germans, Italians and Japanese. During World War II, this was an effective and respected profession.

It is not surprising, then, that when the FBI decided to move out and take the law into its own hands, it chose to perform extralegal activities under the cloak of “counterintelligence.”

What the bureau did during those 15 years, however, was not traditional, actual counterintelligence. This was, to put it mildly, a misnomer and a bureaucratic fraud. They were doing quite a bit more than traditional counterintelligence.

Up to this period of time, counterintelligence had been defined as those actions by an intelligence agency that were intended to protect its own security and to undermine hostile intelligence operations.

The CIA, with no domestic police powers, had a strong and active counterintelligence division under the able, old professional, James Angleton. It was the task of that division to guard the agency against penetration from the outside and defectors from the inside.

During the 1960s, carried away with the “anti-war” fever that was sweeping the country, the CIA did use informants to secretly penetrate domestic groups, but not to the extent that the FBI was active with informants.

The FBI cultivated informants from two sectors:

• It recruited and hired people and inserted them into the target group, and
• It “turned or recruited members of the group to be FBI informants.

In this second capacity, the FBI was always on the alert for defectors — or for people it could recruit and label “defectors.” This tactic — using someone who had actually been a part of the targeted organization at one time —tended to give the informant more credibility with a true dissident within the group.

In addition to such classes of informants, the FBI used “confidential sources.” These are people who furnish the FBI with information that is available to them because of the position they hold in some organization.

Such confidential sources are frequently bankers, secretaries, computer personnel, telephone company employees, and landlords, to name a few examples. This is a particularly insidious “informant,” because there is no way to safeguard the narrow distinction between the work of a professional counterintelligence expert and some busybody who reports on associates for personal, perhaps malicious, reasons.

This is a particularly dangerous activity. I have had such FBI files made available to me during work being performed while I was assigned to the Office of the Secretary of Defense.

The thing about these files that is dangerous is that they are written up precisely as reported by the agent.

There is no editing. There is no evaluation. There is nothing to tell under what circumstances the report was made. There is nothing to guarantee that the information has been checked or otherwise validated.

Usually the material in an individual’s file would consist of one or more five- or six-inch thick stacks of papers just bound together. Anything can be in that file, from a shopping list found in the trash to a record of a bugged telephone conversation. When one considers the millions of such files and the billions of such records, this becomes a most sinister body of material, and a potentially dangerous record on most any one of us for use by anyone else at any time.

This is one of the great dangers of such programs as COINTELPRO.

As the Senate Committee learned, the FBI had originally planned its covert action programs against five targets that it perceived as threats to national security and domestic tranquility.

These were:

• The Communist Party, USA;
• The Socialist Workers Party;
• The “White Hate” group;
• The “Black Nationalist Hate” group; and
• The “New Left.”

There was no certainty that any of these groups could be identified as hostile — or even that they could be identified as actually existing. These were simply general concepts, to be used as nebulous targets for the program.

When this program first began, it was said that all activity would be cleared with FBI headquarters in Washington before it was set in motion. In actual practice, it was discovered that the field offices operated on their own, and before COINTELPRO had been terminated, 2,370 separate counterintelligence actions had been approved. There is no telling how many thousands more took place without specific approval from anyone.

Whenever such a program gets under way, there are new bosses who want to make a name for themselves, and new recruits who want to prove how good they are. Many of the COINTELPRO recruits were little more than common criminals. They knew how to get action. When they could not find trouble, they would incite trouble. They became effective agents provocateurs.

There is an exquisite distinction between a criminal and an agent provocateur.

The criminal infiltrates an unsuspecting group — e.g., a group planning to rob a bank, and incites that criminal action. He gets caught with the others and is punished as they are.

The agent provocateur infiltrates a similar, unsuspecting organization and incites an even bigger criminal action. He gets caught as the rest are, but he does not get punished.

He is innocent, because he works for the government.

These informants like their role. It gives them all kinds of special advantages, pursuing the business of being an informant and pursuing other criminal matters on their own behalf.

Then they either go scot-free because they were working in their informer Intelligence expert L. Fletcher Prouty role, or they go scot-free because they threaten to reveal their FBI relationship and “blow the deal.”

Fletcher Prouty

So they go scot-free either way.

Another great weakness of the agent provocateur or informer program is that there just are not that many organizations or individuals who really represent a threat to the national security of this 230 million-person nation. There are not even that many organizations that represent a credible threat to domestic tranquility on a major scale.

Are 200— or even 2,000 — aroused activists on the steps of the Pentagon a real threat to national security? Not really. Yet, the FBI’s COINTELPRO actions were predicated on the validity of that kind of “threat.”

Since there are not very many bona fide organizations that are a real threat, the informant — to make points — must invent or create the atmosphere of these threatening organizations and people. This is done in many ways.

What follows are examples by type and method that may not necessarily represent actual cases. No one, without subpoena authority, can discover exactly what goes on behind the cloak of the government process, but by experience and diligent research one can discover methods.

Have you ever noticed, in downtown areas, the posters that appear on bare walls, on mailboxes and city trash bins, or in any other public place?

Have you ever noticed that these posters, ostensibly by obscure and unknown groups, all seem to have been drawn and printed by the same people? Well, they are.

The invention, creation, printing and circulation of such posters is a big inside deal. It makes the public believe there are such weird, oddly named outfits, and at the same time, these posters and handbills do attract some people who are taken in by them.

They are part of a program of psychologically clever work. They do have some appeal to certain people in special situations. When these few people show up for the “big event” — to “liberate Lithuania,” for example — our agent provocateur, all sweetness and light, throws a little money around and announces the visit of a major underground dignitary and a most important meeting. He signs up several unwitting souls, and all of a sudden there is a new wing of the “Socialist Workers Party” or some such facade.

A democratic society has no place for extralegal organizations and activities sponsored by the government and directed against its own citizens, no matter what their intention. And the fact is that this country has never had any real threats that would have justified the setting up of such a machine.

Even the anti-war movement of the 1960s, at its peak, was no genuine threat to the government of the United States. These people were simply trying to say to the government that it was wrong. They had the right to assemble, and they had the right to say the government was wrong.

The real wrong was that most of the really violent activists in the group were, in reality, underground informers and agents provocateurs who were there specifically to incite the violence.

The far greater threat to domestic tranquility is the action of the thousands upon thousands of undisciplined agents who incite illegal and terrorist acts themselves in order to embroil and involve others who, if left on their own, without provocation, would not have done such things.

These agents have money; they can get weapons and explosives; they can be supported with such things as posters and handbills; they can hire halls, rent public address systems and do anything designed to stir up trouble where trouble may not have existed.

They are the danger – not the people they say they are after.

Our concern today, in 1985, is that, although we know that William Sullivan, deputy director of the FBI in 1971, did prepare and sign the memo that terminated COINTELPRO, we also know that the FBI left the door open to start the program again if the bureau ever perceived the need again.

We also know that COINTELPRO-like programs are under way in several branches of the government.

They must be exposed and terminated as they were in 1971.

Men have fought long and hard to preserve their freedoms. We may wish to recall the words of Sir Thomas May from his “Constitutional History of England from the 19th Century: “Men may be without restraints upon their liberty; they may pass to and fro at pleasure; but if their steps are tracked by spies and informers, their words noted down for crimination, their associates watched as conspirators — who shall say that they are free?”♦

Notes

OFFICE OF THE DISTRICT ATTORNEY
COUNTY OF LOS ANGELES
SPECIAL INVESTIGATIONS DIVISION

18000 CRIMINAL COURTS BUILDING
210 WEST TEMPLE STREET
LOS ANGELES. CALIFORNIA 90012 -3275
(213) 974-7437

IRA REINER, DISTRICT ATTORNEY

April 25, 1986 ¹

Rev. Ken Hoden
Rev. Kathleen Gorgon
Rev. Heber Jentzsch
Mr. John Peterson
Mr. David Butterworth
Church of Scientology
1301 N. Catalina
Los Angeles, California 90012

Gentlemen:

In re S.I.D. CASE NO. C85-0054

In your letters dated May 1 and July 19, 1985, you asked that this office investigate your allegations that:

1. Chief Daryl Gates of the Los Angeles Police Department, Agents Al Lipkin and Al Ristuccia of the Internal Revenue Service, Gerald Armstrong, and Michael Flynn have committed the crime of conspiracy to obstruct justice.

2. Internal Revenue Service Agents Al Lipkin and Al Ristuccia additionally “aided and directed” the commission by Gerald Armstrong of violations of Penal Code Sections 182 (Conspiracy), 134 (Preparing False Evidence), and 653f (Solicitation of the commission of certain crimes).

3. Gerald Armstrong additionally prepared false documentary evidence in violation of Penal Code Section 134; committed extortion in violation of Penal Code Section 518; and solicited commission of the crimes of burglary, receiving stolen property, and forgery, in violation of Penal Code Section 653f.

Rev. Ken Hoden,et al.
April 25, 1986
Page Two

4. Michael Flynn additionally aided Gerald Armstrong in his violations of Penal Code Section 182, conspiracy, and Penal Code Section 653f, solicitation of burglary, receiving stolen property, and forgery.

Following his receipt of your letters, Steven A. Sowders, Head of the Special Investigations Division, met personally with Rev. Jentzsch and Rev. Hoden to discuss your complaint. I have since reviewed the voluminous materials you submitted in support of your charges, and I have spoken at length on the telephone and in person with church members John Peterson and David Butterworth. In our several conversations, I informed both Mr. Butterworth and Mr. Peterson that in order intelligently to evaluate the Church of Scientology’s allegations, I would need further information. In addition to the documents already provided, I asked them to provide me with:

(1) A complete description of the events to which the submitted documents relate, including:

(a) the time, date, and place of each event;

(b) the names of all persons present;

(c) the circumstances in which the event occurred;

(d) the name of each speaker and identifying information about him.

(2) A description of the manner in which the recording or other source information was obtained.

(3) A statement from the person who obtained the recording or other data, identifying him, describing the manner in which he obtained it, and setting forth the manner in which he could authenticate any recording and any transcript involved.

(4) An explanation of the relevance of the conversations and other materials cited to the allegations of criminal conduct.

I further requested that they furnish any other evidence they might have in support of the Church of Scientology’s allegations. I particularly requested documentation setting forth the specific facts in support of the allegations recited above. I asked that they provide the date, time, and place of each alleged event, and the name, address, and telephone number of each witness.

Rev. Ken Heden, et al.
April 25, 1986
Page Three

In response, I received from Mr. John Peterson a letter dated September 27, 1985, which letter I discussed on October 3, 1985, with Mr. Butterworth. Thereafter, following many attempts on my part to schedule a meeting with either Mr. Peterson or Mr. Butterworth or both of them, on December 10, 1985, they came to my office and conferred with Investigator Alan Tomich and me.

In that meeting, I reiterated my need to know the date, time, and place of each alleged event, and the name, address, and telephone number of each witness. I further asked whether the Church of Scientology had any additional evidence in support of its allegations. Messrs. Peterson and Butterworth responded that they had submitted to this office all the evidence that they had.

I explained to them that, in order to decide whether a prosecutable crime had been committed, we had to interview those persons who had observed the events that were alleged to constitute the criminal conduct; and that in order to interview those persons we needed to know who they were and where we could find them. In response, Mr. Peterson repeated the suggestion he made in his letter of September 27, 1985, that we interview Eugene Ingram, who had videotaped certain events which, Mr. Peterson said, were the basis of his allegations. He declined, however, to identify, beyond the name “Joey,” the persons other than Gerald Armstrong who appear on the tapes. It was my understanding that Messrs. Peterson and Butterworth intended to review the matter and that they would subsequently forward the requested witness information to me. Their response was a letter dated December 15, 1985, which contained a witness list comprised of the names of the persons the Church of Scientology has accused plus another I.R.S. agent and two police officers. He furnished no further information.

I responded to Mr. Peterson in a letter dated January 16, 1986, in which I summarized our December 10 meeting. In it, I also asked Mr. Peterson to permit Investigator Tomich to interview Mr. Eugene Ingram (whom Mr. Peterson, as an attorney, apparently represents), and I again requested that Mr. Peterson supply us with the information outlined above.

Rev. Ken Hoden, et al.
April 25, 1986
Page Four

In response, I received from Mr. Peterson a letter dated March 18, 1986. In it, he denied that he and Mr. Butterworth had intended, after the December 10 meeting, to provide further information, and he declared that we had received all the data he felt we needed.

It appears, then, that no further evidence in support of your allegations is forthcoming; and based on Mr. Peterson’s statement on December 10, 1985, that I had understood and accurately summarized the evidence the Church of Scientology had submitted, it appears that the assertions of fact described below constitute in its entirety the evidence in support of your allegations of criminal conduct.

Allegation 1:

That Chief Daryl Gates conspired to obstruct justice.

Evidence:

The allegation of “planting a ‘wire tap’ on Michael Flynn” was referred to Chief Gates [1] by Assistant City Attorney Lewis N. Unger on April 17, 1985. [2] On April 23, 1985, Chief Gates publicly rebuked Officer Phillip Rodriguez and Investigator Eugene Ingram for video taping Gerald Armstrong. Within hours, Investigators Lipkin and Ristuccia were seen, apparently by Rev. Heber Jentzch, [3] leaving Parker Center. There has allegedly been no effort to do anything about “Mr. Armstrong’s crimes.”[4] Chief Gates also initiated an investigation “into the police officer and private investigator” (July 19 letter, p. 6).

Allegation 2:

That Internal Revenue Service Agents Al Lipkin and Al Ristuccia conspired with Gates, Armstrong, and Flynn to obstruct justice and that they “aided and directed” Gerald Armstrong in the commission of violations of Penal Code Sections 182, 134, and 653f.

Evidence:

John G. Peterson declared under penalty of perjury [5] that “Armstrong showed he was being used by the Internal Revenue Service to gather information.” In support of that declaration, Mr. Peterson included “excerpts from the videotape” which indicated that “GA” mentioned Al Ristuccia and gave Al Lipkin’s telephone number to “J”.

Rev. Ken Hoden, et al.
April 25, 1986
Page Five

Agents Lipkin and Ristuccia visited Officer Phillip Rodriguez and allegedly attempted to “strong arm” him. Agents Lipkin and Ristuccia stated that, on April 18, 1985, they interviewed Rodriguez, who admitted signing an authorization letter. The agents considered Rodriguez evasive and sought police assistance in obtaining his cooperation. The agents were seen leaving Parker Center on April 23, 1985. [6]

Armstrong told ” J” that he had told Lipkin some people might want to talk to him, [7] and that he had told Lipkin to go after Peterson.

Allegation 3:

That Gerald Armstrong conspired with Michael Flynn, Daryl Gates, Al Lipkin, and Al Ristuccia to obstruct justice; prepared false documentary evidence; committed extortion; and solicited the commission of the crimes of burglary (Penal Code Section 459), receiving stolen property (Penal Code Section 496), and forgery (Penal Code Section 470), in violation of Penal Code Section 653f.

Evidence:

John Peterson declared that Armstrong conspired with a “church…staff member,” was “used by… the Internal Revenue Service to gather information,” “explained to the conspirators plans for attacking the church…and…Hubbard,” and had a videotaped conversation with “J” which demonstrates his involvement with the government. [9]

“GA” told “J” to type the completed staff work on the policy and bring it in, that “issues can be created,” but he was “not really saying create incrimination (sic) evidence-but just to write about the speculation.” He also said, “They can never tell where the issue came from.” He wanted the lawsuits to end so that he could get his “global settlement.” [10]

Armstrong told ” J” about a “good-looker” named Carol. He said “the way to the man’s mind is through his cock” and “that’s definitely the way to get to the top.” He wrote a note which reads in part, “Establish available route for holding the cock of someone in ASI/WDC/etc.”[11]

Rev. Ken Hoden, et al.
April 25, 1986
Page Six

Armstrong allegedly wrote and handed over to someone on November 9, 1984, a “shopping list” of information which he asked a “church member to purloin.” “GA” told “J” “something should be done so that they can capitalize on getting stuff…into writing and…unstabilizing the whole PI, attorney apparatus.” He asked if “J” could get money to Peterson and told “J” to check the finance records. He said, “if we can get anything on Ingram (or) Peterson (or) finance records (or) other PI’s (or) operation ‘X’…, it’s all vital.”

Armstrong asked for specifics on payments to Ingram, and told “J” he should find what payments went to attorneys.

The handwritten list read in part, “1. Plan on Van Schaick…4. Anything on Hubbard or Don/ 5. Anything on upcoming legal battle… 8. Get me an original of an LRH Ed (current) or other issue type which could be from Hubbard. 8a. Same for WDC. Create one, get it distributed and get an assessment. Any partial that gives UP or ORG.”[12]

He also told ” J” he had given one “fanatic” document “to the Feds” and was giving them another. [13]

Armstrong told ” J” on November 9, 1984, that he could type “things and duplicate them and make them look exactly the same” and that “we could set up a press and…produce issues…” He thought, “shouldn’t I get some I HELP materials (?)”. He wanted to know “how they’re run off, what the type face is like…, – because we can simply create these;… – I can create documents with relative ease ….”

“J” suggested changing some documents. “GA” responded that “a lot of things can be done”, but he did not propose to “be stuffing things into their comm basket.” He later commented that something could be pasted and photocopied. [14]

Allegation 4:

That Michael F Flynn conspired to obstruct justice, and aided Gerald Armstrong in the crimes of conspiracy (Penal Code Section 182) and solicitation of burglary, receiving stolen property, and forgery (Penal Code Section 653f).

Rev. Ken Hoden, et al.
April 25, 1986
Page Seven

Evidence:

In April, 1985, Flynn contacted the United States Attorney in Boston, the Internal Revenue Service, and the Los Angeles Police Department. Flynn’s attorney, Raul Martinez then made allegedly false accusations of wire tapping.

Flynn told the Los Angeles Police Department that “Cooley” had had a video recording and a letter signed by Officer Rodriguez authorizing such a recording. By letter, Attorney Raul Martinez, representing Mr. Flynn, asked the City Attorney to investigate. The City Attorney forwarded the letter to Chief Gates. [15]

John Peterson declared under penalty of perjury that evidence indicated that Michael Flynn was directing Gerald Armstrong in order to steal documents, plot forgeries, steal legal strategies, implement a plot to seduce and blackmail a Scientologist, and conspire to suborn perjury. [16]

The “Van Schaick” case, referred to in Armstrong’s “shopping list”, was settled by Attorney Flynn.

* * *

As Mr. Peterson has noted, I have spent a considerable amount of time reviewing and comprehending the materials you have submitted to this office. For the reasons set forth below, I do not find that those materials contain sufficient evidence of the commission of any of the alleged crimes to justify the further investigation of those allegations.

At the outset, I should like to point out the following regarding Mr. Peterson’s letter dated September 27, 1985 and my subsequent communications with him. 1) Mr. Peterson told me that “the interviews took place in Griffith Park during… November, 1984.” He has not otherwise responded to my request for a complete description of the events to which the documents related, including times, dates, places, names, circumstances, and identifying information, (See Request #1, above.)

2) Mr. Peterson told me that “tapes are not in dispute” and that details of the taping should be sought from Gene Ingram.

Rev. Ken Hoden, et al.
April 25, 1986
Page Eight

But when Investigator Tomich sought to follow his advice, Mr. Peterson asserted he was Mr. Ingram’s attorney, and he refused to permit Investigator Tomich to interview him.

In his letter of March 18, 1986, Mr. Peterson refused further to respond to my requests for a description of the manner in which recordings and other source information were obtained; and for a statement from the person who obtained the information (some of it apparently recorded, some of it apparently from other sources) identifying that person and describing the acquisition of the information, documents, or tape, and the manner in which it could be authenticated (proved to be what it purports to be). (See Requests Nos. 2 and 3, above.)

3) He submitted ” data on the background of Jerry Armstrong” and the other documents referred to in the footnotes to this letter, in which he highlighted those portions he considered relevant to the allegations. He has not otherwise explained the relevance of the submitted materials to the allegations of criminal conduct. (See Request #4, above.)

4) He told me that the individuals speaking on the video tapes are “responsible witnesses who can be produced if necessary.” Beyond submitting a list of the names of the persons you have accused and three of their associates, he has not otherwise responded to my requests that he document the specific facts which prove the commission of the crimes alleged, including the particular details about each event and the names, addresses, and telephone numbers of the witnesses (See the paragraph following request #4, above).

* * *

A conspiracy to obstruct justice is an agreement between two or more persons to do an act or omit to do an act, as the result of which justice or the due administration of the laws is obstructed or perverted. To convict a person of that crime the prosecution must prove that he made such an agreement with the specific intent to commit or omit the necessary act and that, while he was a member of the conspiracy, he or a co-conspirator committed an overt act in furtherance of the object within the prosecuting jurisdiction (in our case, Los Angeles County).

Rev. Ken Hoden, et al.
April 25, 1986
Page Nine

Assuming that the factual allegations are true, and that Daryl Gates did receive from Michael Flynn a wiretapping complaint; did rebuke Officer Rodriguez and Investigator Ingram; and did initiate an investigation into possible criminal conduct by Rodriguez and Ingram; that Gerald Armstrong did have the above described conversations with “Joey” about Al Lipkin and Al Ristuccia; that Lipkin and Ristuccia did interview Rodriguez, did consider him evasive, did seek Los Angeles Police Department assistance in obtaining Rodriguez’s cooperation, and did visit Parker Center on April 23, 1985; that Armstrong told “Joey” to type staff work in order to create issues and that he did all the other things alleged (talked to “Joey” about “Carol,” told “Joey” that “they” should destablilize the “PI, attorney apparatus,” told “Joey” to check financial records, wrote and delivered the “shopping list,” and gave documents “to the Feds”) and that Michael Flynn both personally and through his attorney contacted the United States Attorney, the Internal Revenue Service, and the Los Angeles Police Department to complain about the tape recording, the actions of Officer Rodriguez, and other matters; and that he settled the “Van Schaick” case; we are unable to find in any of those allegations any evidence which would support an allegation that Chief Gates, Agent Lipkin, Agent Ristuccia, Mr. Armstrong, or Attorney Flynn agreed with anyone to commit or omit any act which might pervert or obstruct justice or the due administration of the laws.

No factual details (time, place circumstances, names of witnesses, etc.) have been submitted to support many of the conclusions that have been alleged. Thus there is no evidence that “there has been no effort to do anything about” crimes allegedly committed by Mr. Armstrong; that the Internal Revenue Service Agents attempted to “strongarm” Officer Rodriguez; that Mr. Armstrong conspired with a church staff member and explained to the conspirators his plans for attacking the church and Mr. Hubbard; that Mr. Armstrong wrote a “shopping list” of information and asked someone to “purloin” it; or that Michael Flynn made false accusations of wiretapping.

Therefore, the evidence of which we have been apprised of a conspiracy to obstruct justice is insufficient to warrant further investigation by this office.

To convict a person of the crime of preparation of false documentary evidence, the prosecution must prove that he in fact

Rev. Ken Hoden, et al.
April 25, 1986
Page Ten

made the document, that it was false, and that he intended it to be produced as true for a deceitful purpose in a proceeding authorized by law.

Even assuming that it can be proved by competent, admissible evidence that Gerald Armstrong told “Joey” to type staff work and that “issues can be created,” that “they can never tell where the issue came from,” and that he wanted the lawsuits to end so that he could get his “global settlement”; that Armstrong wrote and gave to someone the “shopping list”; that he told “Joey” he wanted to get “stuff…into writing” and to “unstabliz(e)” the “apparatus”; that he said getting records was “vital”; that he said he could type and duplicate things and create documents and set up a press and produce issues, that he wanted to know about a type face, that a lot of things could be done and that something could be pasted and photocopied; none of this, taken alone, constitutes evidence that Mr. Armstrong in fact created a single false document or that he intended that such a document be produced for any purpose in any legal proceeding.

Further, in the documents submitted to us, Mr. Armstrong is quoted as stating that he was not advocating the creation of incriminating evidence and that he did not propose to “be stuffing things into their comm baskets.”

We are aware of no other evidence which might lend criminal significance to the statements of Mr. Armstrong. We can find, therefore, no basis for a further investigation of the allegation that Penal Code Section 134 has been violated.

Extortion (Penal Code Section 518) is the obtaining of property from another with his consent, induced by a wrongful use of force or fear. The fear may be induced by a threat to injure a person or property, or to accuse the victim or a relative of crime, or to impute to any of them a deformity, disgrace, or crime, or to expose a secret affecting any of them. Penal Code Section 524 makes it a felony to attempt to commit extortion.

Assuming that it can be proved that Gerald Armstrong expressed the views alleged regarding the “way to the man’s mind” and that he wrote the note referring to “ASI” and “WDC”, that does not appear to us to be evidence that he or anyone obtained or

Rev. Ken Hoden, et al.
April 25, 1986
Page Eleven

attempted to obtain property from anyone by means of any threat. We therefore find no basis for further investigation of the allegation that Gerald Armstrong committed extortion.

The solicitation of another person to commit or join in the commission of burglary, receiving stolen property, or forgery is a felony, the proof of whose commission requires the testimony of two witnesses or of one witness plus evidence of corroborating circumstances. To convict a person of solicitation, the prosecution must prove that he asked another person to commit a crime with the specific intent that it be committed.

The solicitation of burglary requires a request that one enter a building or other specific place (See Penal Code Section 459) intending to commit larceny or a felony; the solicitation of receiving stolen property requires a request that one receive property that one knows has been stolen; the solicitation of forgery, a request that one, with the intent to defraud, sign without authority another’s name or counterfeit his handwriting, or make any of the false documents specified in Penal Code Section 470, or knowingly utter such falsified document, signature, or handwriting.

Assuming that the allegations are true that Gerald Armstrong told “Joey” to type staff work, that “issues can be created.” that “something should be done so that they can capitalize on getting stuff into writing,” that “if we can get anything on Ingram (or) Peterson (or) finance records…, it’s all vital,” and that “Joey” should find what payments went to attorneys; and, further assuming it to be true that Armstrong gave “Joey” a list which specified “plan” or “anything” ” on” certain matters and stated “get me an original …issue type”; that he told “Joey” he had given and would give documents “to the Feds,” that he could duplicate things and create documents, and that something could be pasted and photocopied; these allegations nonetheless do not constitute evidence that Mr. Armstrong, with the requisite intent, asked anyone to commit the crime of burglary, receiving stolen property, or forgery. We therefore find no basis for further investigation of the allegation that Gerald Armstrong violated Penal Code section 653f.

A person aids and abets the commission of a crime if, with knowledge of the perpetrator’s unlawful purpose and with the intent to encourage or facilitate the commission of the crime, he aids, promotes, or instigates its commission.

Rev. Ken Hoden, et al.
April 25, 1986
Page Twelve

The documents submitted to us indicate that Gerald Armstrong gave “Joey” Al Lipkin’s telephone number, that he told ” Joey” that he had told Lipkin some people might want to talk to him, that he told “Joey” that he had told Lipkin to go after Peterson, and that he mentioned Al Ristuccia to “Joey”. The allegations regarding Michael Flynn are described above.

None of those allegations is itself evidence of any unlawful connection between those men and Mr. Armstrong. Further, since we have been presented with no significant evidence of any unlawful conduct on the part of Mr. Armstrong, we do not find that there is sufficient evidence to warrant further investigation of the allegations that Al Lipkin, Al Ristuccia, or Michael Flynn aided and abetted the commission of any crime.

In addition to the lack of evidence set forth above, it must also be noted that, lacking knowledge of the manner in which the video tape recordings were obtained, we do not know whether their acquisition violated either United States or California law. If it violated federal law, material thus acquired even if relevant – which it does not appear to be -might be inadmissible in evidence.

For all of the reasons described above, we have concluded that there is no evidence in support of the allegations of criminal conduct on the part of Daryl Gates, Al Lipkin, Al Ristuccia , Gerald Armstrong, and Michael Flynn. Accordingly, we shall take no further action in this matter, and our file is closed.

Very truly yours,

IRA REINER District Attorney

CURT LIVESAY

Assistant District Attorney

By [signed]

ROBERT N. JORGENSEN

Deputy District Attorney

jeb

c: Chief Daryl Gates, L.A.P.D.

Ron Townsend, I.R.S.

Al Lipkin, I.R.S.

Al Ristuccia, I.R.S.

Gerald Armstrong

Michael Flynn

FOOTNOTES

1. This is set forth in a document entitled “6. Obstruction of Justice”.

2. See Exhibit 7 attached to “6. Obstruction of Justice.”

3. See Exhibit 11 attached to “6. Obstruction of Justice.”

4. See Number 1, above.

5. See document entitled “5. Conspiracy.”

6. See Number 1, above.

7. See document entitled “2. Soliciting… .”

8. See document entitled “1. Soliciting… .”

9. See Number 5, above.

10. See document entitled “4. Preparation of False Documentary Evidence.”

11. See document entitled “3. Extortion.”

12. See document entitled “1. Soliciting… .”

13. See Exhibit 1 page 16.

14. See document entitled “2. Soliciting… .”

15. See Number 1, above.

16. See Number 5, above.

17. See Number 8, above.

18. During our December 10 meeting, Messrs. Peterson and Butterworth identified “J” as “Joey”.

Notes

Employer Identification Number: 95-3781769
Form:1120
Tax Years: All Years

Dear Applicant:

This is a final adverse ruling as to your exempt status under section
501 (c) (3) of the Internal Revenue Code.

This ruling is made for the following reasons:

1. You have failed to establish that you are operated exclusively
for exempt purposes as required by section 501 (c (3) of the Code.
You have not demonstrated that your activities and purposes conform
to exempt purposes and activities as required by section 501 (c (3)
of the Code.

You are one of a number of organizations which were created pursuant
to a reorganization of the Church of Scientology which took place in
1981 and 1982. The reorganization was undertaken after the Service
revoked the exempt status of the Church of Scientology of California,
the former “Mother Church” of the denomination. The basis of the
revocation was that the California church was an ordinary commercial
enterprise, the Church’s income inured to L. Ron Hubbard, founder
of the Scientology religion, and the Church had violated public
policy by conspiring to impede the Service from assessing and
collecting taxes which were lawfully due. Church of Scientology of
California v. C. I.R., 83 T.C. 381 (September 1984). The
revocation was sustained by the Tax Court and upheld by the Court
of Appeals for the Ninth Circuit. 823 F. 2d 1310 (9th Cir. 1987).

An earlier case involving a Scientology organization had also resulted
in a finding of private benefit to Mr. Hubbard and members of his family.
Founding Church of Scientology v. U.S., 412 F. 2d 1197 (Ct. C1. 1969),
cert. den., 39 U.S. 1009 (1970).

In the Church of California case, cited above, the Tax Court described
how the Church attempted to frustrate the Service’s efforts to examine its
financial affairs. The Church maintained no books or journals to record

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Church of Spiritual Technology

and systematize its financial transactions. Therefore, the examination had
to proceed on the basis of millions of separate checks, invoices, and
disbursement vouchers. The Church’s accountant saw to it that these
documents were provided in no semblance of order. He advised another
church to “give the IRS agent a bunch of records in a box in no semblance
of order, to place the agent in a dark, small, out-of-the-way room, [and]
to refuse to give practical assistance locating records.” In the face of
such tactics, the IRS spent approximately two years in an unsuccessful
attempt to audit the Church’s 1958 and 1969 financial operations.

In addition to the above tactics, the Church knowingly and purposely
misled the IRS concerning extensive operations it conducted in the United
Kingdom. It concealed from the examiners the fact that it regularly received
debit advices from foreign banks in lieu of canceled checks. It never
produced canceled checks from some of its accounts which it maintained in
the name of another corporation. When checks were produced, they were
sometimes detached from their stubs. Boxes of records were mislabeled.
The Church intentionally delayed in providing requested records and in some
instances it never provided the records at all.

In order to establish whether the reorganized Church of Scientology was
operated exclusively in furtherance of exempt purposes, we sought to obtain
detailed information from you and from the other newly created entities
which had filed applications for recognition of exemption. Although some
information was initially provided, the information was incomplete or partial.
Eight of the organizations eventually withdrew their applications without
providing the information we had requested.

While the applications were pending, witnesses gave testimony in court
cases involving churches of Scientology. See Church of Scientology of
California v. Gerald Armstrong, No. C 420153 (Calif. Super. Ct., July 20, 1984);
Founding Church of Scientology of Washington, D.C., Inc., et al. v. Director,
Federal Bureau or Investigation, et al., 802 F. 2nd 1448 , cert. den.,
56 U.S.L.W. 3231 (October 6, 1987). The testimony was to the effect that
L. Ron Hubbard continued to control the Church of Scientology for his
private benefit. Witness testimony in the Armstrong case alleged that the
project known as Mission Corporate Category Sort-Out (MCCS)² had been
undertaken by the Church of Scientology of California in 1980. The alleged
purpose of the MCCS project was, according to the testimony of Laurel
Sullivan, to devise a new organizational structure to conceal L. Ron
Hubbard’s continued control of the Church of Scientology. In the Founding
Church.v. Director, F.B.I. case, to which the Service was a party, the
government successfully argued that L. Ron Hubbard should be required to
appear and be deposed because he was a managing agent of the Church. Mr.
Hubbard did not appear and the case against the government defendants was
dismissed with prejudice.

-3-

Church of Spiritual Technology

We asked the remaining applicants who had not withdrawn their applications
to comment on the matters noted in the Armstrong and Founding Church v.
Director F.B.I. cases. They responded that the testimony related to other organizations
and time periods, attacked the credibility of the witnesses, and stated
that L. Ron Hubbard did not hold any position of control in any church of
Scientology even though he was still revered as the founder of the religion.
We were told that the present corporate structure had been designed after those
responsible for the MCCS project had been dismissed from the church and that
the work done on the MCCS project was not considered or consulted in
designing the new organizational structure presently in place. At the same
time, we were furnished for the first time a chart showing levels of
authority and departments within the new organizational structure. One of
the departments, the Commodore’s Messenger Organization (International),
exists within the corporate structure of Church of Scientology International,
the new “Mother Church” of the denomination. According to allegations made
in the Armstrong case, L. Ron Hubbard controlled the church through the
Commodore’s Messenger Organization utilizing David Miscavige, Pat Broeker
and Anne Broeker to carry out his orders. David Miscavige, Anne Broeker,
and Lyman Spurlock were the original trustees of Religious Technology
Center. Mr. Miscavige enjoys a position of influence in the reorganized
Scientology structure which we have been informed derives from”moral
authority” rather than from any official position in the corporate structure.
Lyman Spurlock is president of Church of Spiritual Technology and, along
with Mr. Miscavige, is an employee of Author Services, Inc. Author Services,
Inc., is a for-profit corporation formed to provide services to L. Ron
Hubbard in connection with exploitation of patents and copyrights which Mr.
Hubbard owned.

On January 7, 1986, we issued an initial adverse ruling on your
application. You submitted a written protest to our initial adverse ruling.
In your protest we learned for the first time of the existence of still
other organizations which were related to the new Scientology operating
structure. Following your protest conference, which was held in January,
1987, we asked you to provide more detailed information about these new
“international” organizations, including International Association of
Scientologists, International SOR Trust, SOR Management Services, Ltd.,
Scientology International Missions Trust, and International Scientology
Religious Trust. In a letter dated November 24, 1937, we noted that you
had previously agreed to supply that information to us. However, you did
not supply the information.

In support of the protest to our initial adverse ruling, we were supplied
with copies of affidavits dated December 4, 1986, from Gerald Armstrong³ and
Laurel Sullivan. Ms. Sullivan was the person in charge of the MCCS project.
The affidavits state that the new church management “seems to have returned
to the basic and lawful policies and procedures as laid out by the founder
of the religion, L. Ron Hubbard.” The affidavits conclude as follows:

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Church of Spiritual Technology

“Because of the foregoing, I no longer have any conflict with the Church
of Scientology or individual members affiliated with the Church. Accordingly,
I have executed a mutual release agreement with the Church of Scientology
and sign this affidavit in order to signify that I have no quarrel with the
Church of Scientology or any of its members.” ⁴

The history of Scientology’s operations detailed in the Church of
California case includes a lack of adequate financial records, public policy
violations, deceptive practices and the maintenance of enemies lists
against whom any actions, however illegal, were justified. The California case
also demonstrates inurement of net earnings and benefit to the private interest
of Mr. Hubbard, operations that primarily furthered commercial purposes
conducted amid continuous representations denying control by and benefit to
Mr. Hubbard, and a tenacious denial of the actual state of the organization’s
affairs in the face of overwhelming evidence establishing the true nature
of the organization’s operations. More recently, attempts to conceal
Mr. Hubbard’s ongoing control of Scientology were alleged in the Armstrong
case. Utilizing testimony any witnesses from the Armstrong case, the government
successfully argued that Mr. Hubbard was a managing agent of
the Church of Scientology as late as 1984. See the Founding Church v. Director,
F.B.I. case, cited earlier.

The events detailed in these court cases, which span almost the entire
period of Scientology’s history, create an inference that Scientology, even
after reorganization, is not operated exclusively for exempt purposes. The
fact that Mr. Armstrong and Ms. Sullivan elected to settle their personal
differences with Scientology does not detract from the relevance of the
statements they previously made concerning Mr. Hubbard’s use of Scientology
organizations to serve his private interest. Our experience with your
organization similarly reflects a continuation of the pattern of. inurement
and benefit to the private interest of Mr. Hubbard, operations that
primarily further commercial purposes, and denials of control by and benefit
to Mr. Hubbard for periods prior to his death despite contrary judicial and
Service findings. Blanket denials that Mr. Hubbard personally profited
from his position of influence in Scientology and assertions that your
operations exclusively further exempt purposes do not dispel this inference.

Mr. Hubbard died on January 24, 1986. But, his death did not alter the
history of Scientology’s prior operations or make available complete
information about your actual operations. Moreover, the same individuals
who controlled Scientology operations prior to Mr. Hubbard’s death, and who
participated in arrangements which resulted in inurement and private benefit,
continued to control your operations and those of the other top level Scientology
organizations after Mr. Hubbard’s death. Thus, the possibility of inurement
and private benefit continued after Mr. Hubbard’s death and more complete
information about your operations and financial affairs was required to assure
that your operations had changed to eliminate any further private benefit.

-5-

Church of Spiritual Technology

For the reasons explained above, in a letter dated March 17, 1988, we
proposed to review your books of account and records and those of Church
of Scientology International and Religious Technology Center. As explained in
our letter of :March 17, 1983, the purpose of this review was twofold.
First, to determine the integrity of your financial and accounting systems so
we could verify that the information you had provided was accurate. Second
to verify that no part of your net earnings inures to the benefit of any
private shareholder or individual and that there is no other disqualifying
activity.

Church of Spiritual Technology, Church of Scientology International,
and Religious Technology Center agreed to participate in the financial
reviews pursuant to the letters of March 17, 1988. Church of Spiritual
Technology, Religious Technology Center and Church of Scientology International
informed us by letter dated June 24, 1988, that they would no longer
participate in the review. The refusal to continue the review, concentrating
on those areas of concern, and their failure to fulfill the terms of the
March 17, 1988, agreement, prevents us from concluding that Scientology’s
operations have changed and that activities previously found to be
disqualifying for purposes of section 5O1(c)(3) of the Code have been
discontinued. Therefore, we conclude that you have not established that
you are operated exclusively for exempt purposes as required by section
501(c) (3) of the Code.
2. You are operated for a substantial non-exempt commercial purpose.
In our initial adverse ruling of January 7, 1936, we concluded
that you were operated for a substantial non-exempt commercial purpose
because your activities assisted other organizations in maximizing
sales of goods and services associated with the practice of Scientology.

In your protest and subsequent submissions you argued that your
activities were engaged in for religious rather than commercial purposes.
You contended that the provision of goods and services for a fee, which
is characteristic of Scientology, was a permissible means of providing funds
necessary for Scientology to support its operations, provide reserves
for renovations and expansion, and to attract potential new members
to the religion.

-6-

Church of Spiritual Technology

We have carefully considered your arguments, but fail to see that
sales of goods and services for a fee by Scientology organizations under
policies and directives which emphasize sales and profits does not result
in a primary purpose of engaging, in activities similar in nature to
those of an ordinary commercial enterprise, in which profits are the
primary goal, rather than in advancing religious purposes. The fact
that the fees provide a source of funds for operating expenses and future
expansion and dissemination does nothing to distinguish these fee-for-service
operations from similar activities of ordinary commercial enterprises.
Therefore, by assisting and aiding in the marketing of Scientology, you
are engaged in activities which further a substantial non-exempt commercial
purpose.

Your archival activities relate to the materials constituting the
scriptures of Scientology. These materials consist of the written and
spoken works of L. Ron Hubbard on the subject of Scientology. Prior to
his death, Mr. Hubbard held the copyrights on these materials. The
works you collected were being commercially exploited by Mr. Hubbard
and some of the organizations licensed by him. You were supported by
income paid to you by some of the organizations engaged in this
exploitation, notably Religious Technology Center and Church of
Scientology Flag Service Organization, Inc., a subordinate of Church of
Scientology International. You were thus performing functions which
benefited these organizations and furthered their objective of marketing
Scientology products and services.

After Mr.. Hubbard’s death, Religious Technology Center and Church
of Scientology International and its subordinates have continued to
market Scientology products and services. Your collection of original
Hubbard writing and tape recordings enhances their marketing efforts
because the products they market are derived from these original writings
and tape recordings. Therefore, you are operated for a substantial
non-exempt commercial purpose.

In addition, the refusal to continue the review agreed to in the
letters of March 17, 1988, to Church of Spiritual Technology, Church of
Scientology International, and Religious Technology Center, concentrating
on those areas of concern, and their refusal to fulfill the terms of
the March 17, 1988, agreement prevents us from concluding that
Scientology’s operations have changed and that activities previously
found to be disqualifying for purposes of section 501(c) (3) of the Code
have been discontinued. Therefore, we conclude that you have not
established that you are operated exclusively for exempt purposes as
required by section 501(c) (3) of the Code.

-7-

Church of Spiritual Technology
3. You are operated for the benefit of private interests and
your net earnings inure to the benefit of private individuals.

In our initial adverse ruling, we concluded that your operations
furthered the private interest of and resulted in inurement of net
earnings to L. Ron Hubbard because he received royalties on the
sales of products associated with the practice of the religion he
founded. We also concluded that your activities served Mr. Hubbard’s
private interest through your participation in a plan to exploit
Mr. Hubbards’s trademarks, trade names, service marks, copyrights,
and patents through licensing and assignment arrangements. We also
concluded that your activities served the private interests of and
resulted in inurement of net earning to organizations associated
with Mr. Hubbard.

In your protest you called our attention to the fact of
Mr. Hubbard’s death and noted that his estate is in probate. Church
of Spiritual Technology is the principal beneficiary of the estate
and will receive the royalty income formerly received by Mr. Hubbard
if it is determined to be exempt under section 501(c) (3). Based
on these facts, you contend that private benefit, if there was any,
ceased upon the death of Mr. Hubbard on January 24, 1986.

Mr. Hubbard’s death does not erase the benefit and inurement
to his private interest that occurred.

Further, both before and after Mr. Hubbard’s death, you made
the original writings and other materials formerly owned by Mr.
Hubbard available to Church of Scientology International and
Religious Technology Center in exchange for so-called “contributions”
from Religious Technology Center and Church of Scientology Flag
Service Org, Inc., a subordinate of Church of Scientology International.
Religious Technology Center and Church of Scientology International
engage in marketing Scientology to the public in a manner
indistinguishable from that of an ordinary commercial enterprise.
Therefore, your provision of the original Hubbard Materials to
Religious Technology Center and Church of Scientology International
serves the private interests of Religious Technology Center and
Church of Scientology International.

In addition, the refusal to continue the review agreed to in
the letters of March 17, 1988, to Church of Spiritual Technology,
Church of Scientology International, and Religious Technology
Center, concentrating on those areas of concern, and their refusal
to fulfill the terms of the March 17, 1988, agreement prevents us
from concluding that Scientology’s operations have changed and

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Church of Spiritual Technology

that activities previously found to be disqualifying for purposes
of section 501(c) (3) of the Code have been discontinued. Therefore,
we conclude that you have not established that you are operated
exclusively for exempt purposes as required by section 501(c) (3) of
the Code.
4. You have failed to establish that you are not operated for
the benefit of private interests and that your net earnings
do not inure to the benefit of private individuals.
Trusts and corporations can be used to siphon income from
allegedly exempt organizations for the benefit of private individuals.
This happened in the Church of California case. An allegedly religious
trust and dummy Panamanian corporations were used to funnel money
to L. Ron Hubbard.

Although the organizational structures employed by Scientology
have changed since the California case, you have not clearly
established that your relationship with the new entities furthers
your exclusively exempt purposes. The past history of Scientology’s
operations suggests that the purpose of these organizations may be
to disguise the fact that private interests are the ultimate
beneficiaries of the reorganized operating structure.

An example of an organization which may serve private interests
is International Publications Trust (IPT). Prior to the formation
of IPT, L. Ron Hubbard granted licenses to New Era Publications (NEP)
to produce Scientology books and E-meters. NEP sublicensed Bridge
Publications, Inc. (BPI). The license and sublicense agreements
provided for royalty payments from BPI to NEP and from NEP to L.
Ron Hubbard. Then, IPT was formed to act as the holding company parent
of BPI and NEP.

You informed us that IPT has two foreign trustees, Church of
Scientology Religious Education College, a corporation, and Geoffrey
Clunie, an individual. Our requests for additional information
about IPT and its trustees and their relationship to the reorganized
Scientology structure have not been answered. So, we see in place
an entity that controls Scientology publications and E-meter
production controlled by persons about whom no information has
been provided. In the absence of any other explanation for this
arrangement, we have no alternative but to conclude that the
holding company’s real purpose could be to benefit Mr. Clunie’s
private interest or the private interest of the College, just as
intervening trusts and corporations were used to mask benefits to
the private interest of L. Ron Hubbard.

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Church of Spiritual Technology

It is also clear that NEP and BPI share in the commercial
exploitation of these properties to benefit their own private
interests. Mr. Hubbard’s death did not effect the rights that NEP
had already received from Mr. Hubbard prior to his death. Therefore,
NEP and BPI are continuing to benefit from their part in the
commercial exploitation of these properties even though Mr. Hubbard
is no longer sharing in the benefits of the commercial exploitation.
Even if Church of Spiritual Technology does eventually become the
owner of the patents and copyrights formerly owned by Mr. Hubbard
the licenses granted to NEP will still be in effect. Thus the
private benefit to NEP and BPI is ongoing even though Mr. Hubbard
is dead and even though a number of new Scientology organizations
have been created. Further, it has not been established that
other new and old organizations about which our requests for
detailed information remain unanswered are not sharing in private
benefit. The potential beneficiaries include Author Services,
Inc., SOR Management Servies, Ltd, International Scientology Film
Trust, and International Scientology Religious Trust.

The same persons who were in charge of Scientology prior to
Mr. Hubbard’s death hold positions of control or influence in some
of these new organizations. For example, persons who hold positions
of influence in the reorganized Scientology structure also hold
positions in Author Services, Inc., a for-profit corporation formed
to benefit L. Ron Hubbard, Lyman Spurlock, David Miscavige, Greg
Wilhere, Terri Gamboa, Marion Meisler, Maria Starkey, and Becky
Hay, persons who hold influence in the reorganized Scientology
structure, also hold positions in Author Services, Inc. Author
Services, Inc., is now performing the same function of “collecting
royalties” for the beneficiary of L. Ron Hubbard’s estate. Thus,
as happened in the Church of California case, the income of an
allegedly exempt organization (Church of Spiritual Technology
should it obtain recognition of exemption) will be passed through
a for-profit corporation which is controlled by persons who also
hold positions of influence in the Scientology structure.

A similar problem exists with regard to the “central reserves”
of Church of Scientology International and its subordinate churches.
A nonexempt foreign entity, SOR Management Services, is being paid
under a contract to “manage” these reserves. Again, the income of
allegedly exempt organizations is being passed through a nonexempt
organization controlled by persons who hold positions in, or act
as nominees for, organizations in the topmost levels of the
reorganized Scientology structure.

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Church of Spiritual Technology

Moreover, a newly revealed organization, International SOR Trust,
about which our inquiries remain unanswered, has an ongoing
relationship with some of the organizations engaged in the
exploitation of the properties formerly owned by Mr. Hubbard. For
example, at one time International SOR Trust purchased the stock
of Bridge Publications, Inc., from Church of Scientology of
California and later disposed of the stock to International
Publications Trust.

Furthermore, individuals closely associated with Cancorp
Investment Properties, a for-profit British Columbia corporation
allegedly formed to serve the private interests of L. Ron Hubbard,
about which we inquired, have been in positions of influence in
the reorganized Scientology structure. You refuse to provide
detailed information about Cancorp Investment Properties or
Religious Research Foundation, another organization allegedly
formed to serve the private interest of L. Ron Hubbard, about
which we also inquired.

The proliferation of associated entities also includes a number of
other new “international” organizations, about which we have inquired but
you have not responded to our inquiries. Since the Scientology operating
structure is the only funding source for these organizations, they and the
persons who control then are also sharing in the income generated by the
activities of. Church of Spiritual Technology, Church of Scientology
International, and Religious Technology Center.

In light of the past history of Scientology’s operations, this
continuing sharing in the net earnings of Scientology by nonexempt
entities is sufficient by itself to raise serious concerns about
private benefit and inurement. Nonetheless, you have chosen to
ignore these concerns or have provided incomplete or partial information
which is not adequate to establish that private benefit and inurement
are not flowing to nonexempt entities, some of which employ and are
directed by the same people who hold positions of influence in the
new Scientology operating structure. Such self-dealing does not
lose its identity as private benefit and inurement merely because
it is conducted through intermediary individuals and/or organizations.

Accordingly, we find that you are not exempt because you have failed
to establish that you do not operate for the benefit of private
interests and that your net income does not inure to private individuals
contrary to the prohibition contained in section 501(c) (3) of the
Internal Revenue Code. In addition, the refusal to continue the
review agreed to in the letters of March 17, 1988, to Church of Spiritual
Technology, Church of Scientology International, and Religious Technology

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Church of Spiritual Technology

Center, concentrating on those areas of concern, and their refusal to
fulfill the terms of the March 17, 1988, agreement prevents us from concluding
that Scientology’s operations have changed and that activities previously
found to be disqualifying for purposes of section 501(c) (3) of the Code
have been discontinued. Therefore, we conclude that you have not established
that you are operated exclusively for exempt purposes as required by section
501 (c) (3) of the Code.

Furthermore, the Service considers your failure to fulfill the terms
of the March 17, 1988, agreement as constituting a failure to exhaust
administrative remedies, as required by section 7428(b) (2) of the Code.

Contributions to your organization are not deductible under Code section
170.

You are required to file federal income tax returns on the above form.
Based on the financial information you furnished, it appears that returns
should be filed for the tax years shown above. You should file these
returns with your key District Director for exempt organization matters
within 30 days from the date of this letter, unless a request for an
extension of time is granted. Returns for later tax years should be filed
with the appropriate service center as indicated in the instructions for those
returns.

If you decide to contest this ruling under the declaratory judgment
provisions of section 7428 of the Code, you must initiate a suit in the
United States Tax Court, the United States Claim Court, or the District
Court of the United States for the District of Columbia before the 91st
day after the date that this ruling was mailed to you. Contact the clerk
of the appropriate court for rules for initiating suits for declaratory
judgment. Processing of income tax returns and assessment of any taxes due
will not be delayed because a declaratory judgment snit has been filed under
code section 7428.

If you have questions, please contact the person whose name and telephone
number are shown in the heading of this letter.

Sincerely yours,
(Signed) E. D. Coleman
E.D. Coleman
Director, Exempt Organizations
Technical Division

Notes

Urge Congress to Investigate COINTELPRO Abuses

COINTELPRO is an acronym formed from the words COunter INTELligence PROgram.

Although this FBI program was outlawed by Congress in the 1970s, vicious COINTELPRO-style attacks on American citizens and groups have never the less continued. This issue of FREEDOM documents one such attack.

A thorough congressional investigation of present-day COINTELPRO activities is needed. Urge Congress to probe COINTELPRO abuses — the greatest threat to American rights and freedoms.

Read this important letter, then fill it out, and send to:

Senator Orrin Hatch
Chairman, Senate Subcommittee on the Constitution
308 Senate Hart Office Building
Washington, D.C. 20002

Dear Senator Hatch,

It is vital to the survival of freedom and justice in this country that a full-fledged, public congressional investigation be launched into the facts and perpetrators of the far-reaching, flagrantly illegal, and unconstitutional counter-intelligence program, known as COINTELPRO.

COINTELPRO, originally exposed by Congress and supposedly terminated in the 1970s, nevertheless continues to be ruthlessly and indiscriminately carried out against American citizens by agencies and officials of the U.S. government, including the FBI and the IRS’s Criminal Investigation Division (CID).

I believe that this lawless COINTELPRO campaign, exposed by FREEDOM News Journal in its April/May 1985 special edition story, “Videotapes of Federal Informant Reveal Bizarre Government Plot to Destroy Church,”¹ poses the greatest threat in our nation’s history to the rights and freedoms guaranteed to every American.

I urge you to once againuse the watchdog powers of Congress to expose the truth and thereby preserve our system of constitutional government of, by and for the people, by holding a thorough and searching congressional investigation — before the eyes of the American public — into COINTELPRO. ²

Name: ________
Address: ________
City: ________ State:________ Zip: ________ ³

Notes

Agencies in Turmoil as Conspiracy Exposed

Immediately following the FREEDOM expose of the Armstrong videotapes, a number of events occurred which served to confirm the existence of the government plot which Armstrong had unwittingly exposed.

 Feeble Attempt

A hasty and feeble attempt to divert attention from the contents of the videotapes came from an unexpected source when Los Angeles police chief Daryl Gates made a public statement¹ attacking the private investigator who had done the taping and the police officer who had authorized the surveillance.²

Instead of addressing the evidence of government agency criminality exposed in the videotapes, Gates denounced the private investigator who procured the videotapes, saying it would be “a cold day in hell” before the Los Angeles Police Department (LAPD) would cooperate with the private investigator.

Failing to mention that the surveillance techniques are widely used by all echelons of the police in gathering evidence of criminal activity, Gates attempted to undermine the legality of the evidence by challenging the police officer’s authority to permit it in the first place.

Los Angeles Police Department Chief Daryl Gates

Two IRS Criminal Investigation Division (CID) agents identified in the videotapes as being actively involved in the conspiracy to disrupt and destroy the Church of Scientology — Al Lipkin and Al Ristuccia — were seen leaving the LAPD building shortly after Gates’ statement was released to the news media.

One of the agents was heard to say, “They can do this to the FBI, but they can’t f__k over the IRS.”

Gates’ statement regarding the videotapes was released on a news wire out of Los Angeles at the same time that a press conference was being held by the Church in that same city, where excerpts from the videotapes were being played for the news media.

To further chill the widespread exposure of the criminal conspiracy revealed in the Armstrong videotapes, three armed men who refused to identify themselves showed up at the press conference. Although they wouldn’t give their names, one did admit that he was with the LAPD.

The extent of Gates’ complicity or involvement in this government criminal conspiracy to destroy the Church is not known at this time. FREEDOM has learned, however, that the Los Angeles police refused to assist the Church in 1982 when asked to help recover the thousands of valuable Church archival documents stolen by Armstrong.

Shake-Up in Boston

While the cover-up attempt was occurring in Los Angeles, the U.S. attorney’s office in Boston was who had ignored evidence provided by Church attorneys implicating Boston lawyer Michael Flynn in the crime, was unceremoniously removed from the case.

The grounds for Denniston’s removal, as reported to a Church attorney hours after it had occurred, was the “bad publicity” that had resulted from the revelations of Denniston’s involvement in the conspiracy to destroy the Church.

"The grounds for Denniston's removal...was the 'bad publicity' that had resulted from the revelations of Denniston's involvement in the conspiracy to destroy the Church."

Contacted by FREEDOM regarding his removal from the case, and questioned on his relationship with Gerry Armstrong, Denniston became flustered and finally blurted out, “I’ll save you some time. I have no comment — on anything!”

FREEDOM has learned that with his removal from the case, a grand jury concerning the check forgery is finally being convened.

It remains to be seen whether this grand jury will be an honest attempt to ferret out the truth of the check forgery or whether, as FREEDOM suspects, it will be just another chapter in the government’s continuing efforts to protect and whitewash Church foe and government ally, attorney Flynn.

 Further Developments

Meanwhile, an assistant U.S. attorney in Portland, Oregon, and an IRS CID agent unexpectedly burst into the courtroom where the Armstrong videotapes had first been introduced into evidence.

Apparently not realizing that the videotapes and their transcripts had been released to news media all over the country almost a week before, the assistant U.S. attorney filed a motion to obtain copies of the videotapes.

Church attorneys nonetheless supported the assistant U.S. attorney’s completely unnecessary motion to obtain the videotapes and urged the judge to release them, saying, “We welcome an investigation into the government criminal conspiracy revealed on those tapes.”

 Tight-Lipped Silence

FREEDOM gave nearly a dozen IRS officials — all the way up through the head of the IRS, Commissioner Roscoe Egger, and CID chief Richard Wassenaar — an opportunity to comment on the Armstrong videotapes and the evidence in the tapes that IRS agents were involved in the conspiracy.

Not one of the key IRS officials, however — at either the district, regional or national level of the agency — would venture to make any comment at all.

One source within CID told FREEDOM that if IRS officials were refusing to comment — at the district level at least — it meant they had received direct orders “from the top” to keep their mouths shut.

FREEDOM also sought comment from the FBI and the Department of Justice. As with the IRS, however, we ran into a tight-lipped wall of silence.

Congressional Investigation Needed

Grave concern has already been expressed by a number of congressmen over the fact that the very government agencies that have been entrusted with the responsibility for protecting American citizens from unlawful and unconstitutional actions have been found to be instigating, condoning and then attempting to cover up unlawful conduct on the part of their own agents.

The concern on the part of Congress comes not a minute too soon.

Nothing less than a complete and widespread exposure of all crimes and their perpetrators through a full congressional investigation — as was done after the Watergate scandal — will bring about a thorough housecleaning and replacement of criminal government officials, so that citizens’ confidence in the justice system of this country can be restored.♦ ³

Notes