Scientology The Thriving Cult of Greed and Power
Written by: Time Posted on: 05/01/2003
Category: Cults / Sects / Non Christian Religions and Topics
Copyright 1991 Time Inc.
DATE: May 6, 1991
PAGE: 50 LENGTH: Long
SECTION: SPECIAL REPORT
BYLINE: By RICHARD BEHAR
The Thriving Cult of Greed and Power. Ruined lives. Lost fortunes.
Federal crimes. Scientology poses as a religion but is really a ruthless
global scam - and aiming for the mainstream.
By all appearances, Noah Lottick of Kingston, Pa., had been a normal,
happy 24-year-old who was looking for his place in the world. On the day
last June when his parents drove to New York City to claim his body, they
were nearly catatonic with grief. The young Russian-studies scholar had
jumped from a 10th-floor window of the Milford Plaza Hotel and bounced
off the hood of a stretch limousine. When the police arrived, his fingers
were still clutching $171 in cash, virtually the only money he hadn't yet
turned over to the Church of Scientology, the self-help "philosophy"
group he had discovered just seven months earlier.
His death inspired his father Edward, a physician, to start his own
investigation of the church. "We thought Scientology was something like
Dale Carnegie," Lottick says. "I now believe it's a school for
psychopaths. Their so-called therapies are manipulations. They take the
best and brightest people and destroy them." The Lotticks want to sue the
church for contributing to their son's death, but the prospect has them
frightened. For nearly 40 years, the big business of Scientology has
shielded itself exquisitely behind the First Amendment as well as a
battery of high-priced criminal lawyers and shady private detectives.
The Church of Scientology, started by science-fiction writer L. Ron
Hubbard to "clear" people of unhappiness, portrays itself as a religion.
In reality the church is a hugely profitable global racket that survives
by intimidating members and critics in a Mafia-like manner. At times
during the past decade, prosecutions against Scientology seemed to be
curbing its menace. Eleven top Scientologists, including Hubbard's wife,
were sent to prison in the early 1980s for infiltrating, burglarizing and
wiretapping more than 100 private and government agencies in attempts to
block their investigations. In recent years hundreds of longtime
Scientology adherents - many charging that they were mentally or
physically abused - have quit the church and criticized it at their own
risk. Some have sued the church and won; others have settled for amounts
in excess of $500,000. In various cases judges have labeled the church
"schizophrenic and paranoid" and "corrupt, sinister and dangerous."
Yet the outrage and litigation have failed to squelch Scientology. The
group, which boasts 700 centers in 65 countries, threatens to become more
insidious and pervasive than ever. Scientology is trying to go
mainstream, a strategy that has sparked a renewed law-enforcement
campaign against the church. Many of the group's followers have been
accused of committing financial scams, while the church is busy
attracting the unwary through a wide array of front groups in such
businesses as publishing, consulting, health care and even remedial
In Hollywood, Scientology has assembled a star-studded roster of
followers by aggressively recruiting and regally pampering them at the
church's "Celebrity Centers," a chain of clubhouses that offer expensive
counseling and career guidance. Adherents include screen idols Tom Cruise
and John Travolta, actresses Kirstie Alley, Mimi Rogers and Anne Archer,
Palm Springs mayor and performer Sonny Bono, jazzman Chick Corea and even
Nancy Cartwright, the voice of cartoon star Bart Simpson. Rank-and-file
members, however, are dealt a less glamorous Scientology.
According to the Cult Awareness Network, whose 23 chapters monitor more
than 200 "mind control" cults, no group prompts more telephone pleas for
help than does Scientology. Says Cynthia Kisser, the network's
Chicago-based executive director: "Scientology is quite likely the most
ruthless, the most classically terroristic, the most litigious and the
most lucrative cult the country has ever seen. No cult extracts more
money from its members." Agrees Vicki Aznaran, who was one of
Scientology's six key leaders until she bolted from the church in 1987:
"This is a criminal organization, day in and day out. It makes Jim and
Tammy ((Bakker)) look like kindergarten."
To explore Scientology's reach, TIME conducted more than 150 interviews
and reviewed hundreds of court records and internal Scientology
documents. Church officials refused to be interviewed. The investigation
paints a picture of a depraved yet thriving enterprise. Most cults fail
to outlast their founder, but Scientology has prospered since Hubbard's
death in 1986. In a court filing, one of the cult's many entities - the
Church of Spiritual Technology - listed $503 million in income just for
1987. High-level defectors say the parent organization has squirreled
away an estimated $400 million in bank accounts in Liechtenstein,
Switzerland and Cyprus. Scientology probably has about 50,000 active
members, far fewer than the 8 million the group claims. But in one
sense, that inflated figure rings true: millions of people have been
affected in one way or another by Hubbard's bizarre creation.
Scientology is now run by David Miscavige, 31, a high school dropout
and second-generation church member. Defectors describe him as cunning,
ruthless and so paranoid about perceived enemies that he kept plastic
wrap over his glass of water. His obsession is to attain credibility for
Scientology in the 1990s. Among other tactics, the group:
- Retains public relations powerhouse Hill and Knowlton to help shed the
church's fringe-group image.
- Joined such household names as Sony and Pepsi as a main sponsor of Ted
Turner's Goodwill Games.
- Buys massive quantities of its own books from retail stores to propel
the titles onto best-seller lists.
- Runs full-page ads in such publications as Newsweek and Business Week
that call Scientology a "philosophy," along with a plethora of TV ads
touting the group's books.
- Recruits wealthy and respectable professionals through a web of
consulting groups that typically hide their ties to Scientology.
The founder of this enterprise was part storyteller, part flimflam man.
Born in Nebraska in 1911, Hubbard served in the Navy during World War II
and soon afterward complained to the Veterans Administration about his
"suicidal inclinations" and his "seriously affected" mind. Nevertheless,
Hubbard was a moderately successful writer of pulp science fiction. Years
later, church brochures described him falsely as an "extensively
decorated" World War II hero who was crippled and blinded in action,
twice pronounced dead and miraculously cured through Scientology.
Hubbard's "doctorate" from "Sequoia University" was a fake mail-order
degree. In a 1984 case in which the church sued a Hubbard biographical
researcher, a California judge concluded that its founder was "a
Hubbard wrote one of Scientology's sacred texts, Dianetics: The Modern
Science of Mental Health, in 1950. In it he introduced a crude
psychotherapeutic technique he called "auditing." He also created a
simplified lie detector (called an "E-meter") that was designed to
measure electrical changes in the skin while subjects discussed intimate
details of their past. Hubbard argued that unhappiness sprang from mental
aberrations (or "engrams") caused by early traumas. Counseling sessions
with the E-meter, he claimed, could knock out the engrams, cure blindness
and even improve a person's intelligence and appearance.
Hubbard kept adding steps, each more costly, for his followers to
climb. In the 1960s the guru decreed that humans are made of clusters of
spirits (or "thetans") who were banished to earth some 75 million years
ago by a cruel galactic ruler named Xenu. Naturally, those thetans had to
An Internal Revenue Service ruling in 1967 stripped Scientology's
mother church of its tax-exempt status. A federal court ruled in 1971
that Hubbard's medical claims were bogus and that E-meter auditing could
no longer be called a scientific treatment. Hubbard responded by going
fully religious, seeking First Amendment protection for Scientology's
strange rites. His counselors started sporting clerical collars. Chapels
were built, franchises became "missions," fees became "fixed donations,"
and Hubbard's comic-book cosmology became "sacred scriptures."
During the early 1970s, the IRS conducted its own auditing sessions and
proved that Hubbard was skimming millions of dollars from the church,
laundering the money through dummy corporations in Panama and stashing it
in Swiss bank accounts. Moreover, church members stole IRS documents,
filed false tax returns and harassed the agency's employees. By late
1985, with high-level defectors accusing Hubbard of having stolen as much
as $200 million from the church, the IRS was seeking an indictment of
Hubbard for tax fraud. Scientology members "worked day and night"
shredding documents the IRS sought, according to defector Aznaran, who
took part in the scheme. Hubbard, who had been in hiding for five years,
died before the criminal case could be prosecuted.
Today the church invents costly new services with all the zeal of its
founder. Scientology doctrine warns that even adherents who are "cleared"
of engrams face grave spiritual dangers unless they are pushed to higher
and more expensive levels. According to the church's latest price list,
recruits - "raw meat," as Hubbard called them - take auditing sessions
that cost as much as $1,000 an hour, or $12,500 for a 12 1/2-hour
Psychiatrists say these sessions can produce a drugged-like,
mind-controlled euphoria that keeps customers coming back for more. To
pay their fees, newcomers can earn commissions by recruiting new members,
become auditors themselves (Miscavige did so at age 12), or join the
church staff and receive free counseling in exchange for what their
written contracts describe as a "billion years" of labor. "Make sure that
lots of bodies move through the shop," implored Hubbard in one of his
bulletins to officials. "Make money. Make more money. Make others
produce so as to make money. . . However you get them in or why, just do
Harriet Baker learned the hard way about Scientology's business of
selling religion. When Baker, 73, lost her husband to cancer, a
Scientologist turned up at her Los Angeles home peddling a $1,300
auditing package to cure her grief. Some $15,000 later, the
Scientologists discovered that her house was debt free. They arranged a
$45,000 mortgage, which they pressured her to tap for more auditing until
Baker's children helped their mother snap out of her daze. Last June,
Baker demanded a $27,000 refund for unused services, prompting two cult
members to show up at her door unannounced with an E-meter to interrogate
her. Baker never got the money and, financially strapped, was forced to
sell her house in September.
Before Noah Lottick killed himself, he had paid more than $5,000 for
church counseling. His behavior had also become strange. He once remarked
to his parents that his Scientology mentors could actually read minds.
When his father suffered a major heart attack, Noah insisted that it was
purely psychosomatic. Five days before he jumped, Noah burst into his
parents' home and demanded to know why they were spreading "false rumors"
about him - a delusion that finally prompted his father to call a
It was too late. "From Noah's friends at Dianetics" read the card that
accompanied a bouquet of flowers at Lottick's funeral. Yet no Scientology
staff members bothered to show up. A week earlier, local church officials
had given Lottick's parents a red-carpet tour of their center. A cult
leader told Noah's parents that their son had been at the church just
hours before he disappeared - but the church denied this story as soon as
the body was identified. True to form, the cult even haggled with the
Lotticks over $3,000 their son had paid for services he never used,
insisting that Noah had intended it as a "donation."
The church has invented hundreds of goods and services for which
members are urged to give "donations." Are you having trouble "moving
swiftly up the Bridge" - that is, advancing up the stepladder of
enlightenment? Then you can have your case reviewed for a mere $1,250
"donation." Want to know "why a thetan hangs on to the physical
universe?" Try 52 of Hubbard's taperecorded speeches from 1952, titled
"Ron's Philadelphia Doctorate Course Lectures," for $2,525. Next: nine
other series of the same sort. For the collector, gold-and-leather-bound
editions of 22 of Hubbard's books (and bookends) on subjects ranging from
Scientology ethics to radiation can be had for just $1,900.
To gain influence and lure richer, more sophisticated followers,
Scientology has lately resorted to a wide array of front groups and
financial scams. Among them:
CONSULTING. Sterling Management Systems, formed in 1983, has been ranked
in recent years by Inc. magazine as one of America's fastest-growing
private companies (estimated 1988 revenues: $20 million). Sterling
regularly mails a free newsletter to more than 300,000 health-care
professionals, mostly dentists, promising to increase their incomes
dramatically. The firm offers seminars and courses that typically cost
$10,000. But Sterling's true aim is to hook customers for Scientology.
"The church has a rotten product, so they package it as something else,"
says Peter Georgiades, a Pittsburgh attorney who represents Sterling
victims. "It's a kind of bait and switch." Sterling's founder, dentist
Gregory Hughes, is now under investigation by California's Board of
Dental Examiners for incompetence. Nine lawsuits are pending against him
for malpractice (seven others have been settled), mostly for orthodontic
work on children.
Many dentists who have unwittingly been drawn into the cult are filing
or threatening lawsuits as well. Dentist Robert Geary of Medina, Ohio,
who entered a Sterling seminar in 1988, endured "the most extreme
high-pressure sales tactics I have ever faced." Sterling officials told
Geary, 45, that their firm was not linked to Scientology, he says. But
Geary claims they eventually convinced him that he and his wife Dorothy
had personal problems that required auditing. Over five months, the
Gearys say, they spent $130,000 for services, plus $50,000 for
"gold-embossed, investment-grade" books signed by Hubbard. Geary contends
that Scientologists not only called his bank to increase his credit-card
limit but also forged his signature on a $20,000 loan application. "It
was insane," he recalls. "I couldn't even get an accounting from them of
what I was paying for." At one point, the Gearys claim, Scientologists
held Dorothy hostage for two weeks in a mountain cabin, after which she
was hospitalized for a nervous breakdown.
Last October, Sterling broke some bad news to another dentist, Glover
Rowe of Gadsden, Ala., and his wife Dee. Tests showed that unless they
signed up for auditing, Glover's practice would fail, and Dee would
someday abuse their child. The next month the Rowes flew to Glendale,
Calif., where they shuttled daily from a local hotel to a Dianetics
center. "We thought they were brilliant people because they seemed to
know so much about us," recalls Dee. "Then we realized our hotel room
must have been bugged." After bolting from the center, $23,000 poorer,
the Rowes say, they were chased repeatedly by Scientologists on foot and
in cars. Dentists aren't the only ones at risk. Scientology also makes
pitches to chiropractors, podiatrists and veterinarians.
PUBLIC INFLUENCE. One front, the Way to Happiness Foundation, has
distributed to children in thousands of the nation's public schools more
than 3.5 million copies of a booklet Hubbard wrote on morality. The
church calls the scheme "the largest dissemination project in Scientology
history." Applied Scholastics is the name of still another front, which
is attempting to install a Hubbard tutorial program in public schools,
primarily those populated by minorities. The group also plans a
1,000-acre campus, where it will train educators to teach various Hubbard
methods. The disingenuously named Citizens Commission on Human Rights is
a Scientology group at war with psychiatry, its primary competitor. The
commission typically issues reports aimed at discrediting particular
psychiatrists and the field in general. The CCHR is also behind an
all-out war against Eli Lilly, the maker of Prozac, the nation's
top-selling antidepression drug. Despite scant evidence, the group's
members - who call themselves "psychbusters" - claim that Prozac drives
people to murder or suicide. Through mass mailings, appearances on talk
shows and heavy lobbying, CCHR has hurt drug sales and helped spark
dozens of lawsuits against Lilly.
Another Scientology-linked group, the Concerned Businessmen's
Association of America, holds antidrug contests and awards $5,000 grants
to schools as a way to recruit students and curry favor with education
officials. West Virginia Senator John D. Rockefeller IV unwittingly
commended the CBAA in 1987 on the Senate floor. Last August author Alex
Haley was the keynote speaker at its annual awards banquet in Los
Angeles. Says Haley: "I didn't know much about that group going in. I'm a
Methodist." Ignorance about Scientology can be embarrassing: two months
ago, Illinois Governor Jim Edgar, noting that Scientology's founder "has
solved the aberrations of the human mind," proclaimed March 13 "L. Ron
Hubbard Day." He rescinded the proclamation in late March, once he
learned who Hubbard really was.
HEALTH CARE. HealthMed, a chain of clinics run by Scientologists,
promotes a grueling and excessive system of saunas, exercise and vitamins
designed by Hubbard to purify the body. Experts denounce the regime as
quackery and potentially harmful, yet HealthMed solicits unions and
public agencies for contracts. The chain is plugged heavily in a new
book, Diet for a Poisoned Planet, by journalist David Steinman, who
concludes that scores of common foods (among them: peanuts, bluefish,
peaches and cottage cheese) are dangerous.
Former Surgeon General C. Everett Koop labeled the book "trash," and
the Food and Drug Administration issued a paper in October that claims
Steinman distorts his facts. "HealthMed is a gateway to Scientology, and
Steinman's book is a sorting mechanism," says physician William Jarvis,
who is head of the National Council Against Health Fraud. Steinman, who
describes Hubbard favorably as a "researcher," denies any ties to the
church and contends, "HealthMed has no affiliation that I know of with
DRUG TREATMENT. Hubbard's purification treatments are the mainstay of
Narconon, a Scientology-run chain of 33 alcohol and drug rehabilitation
centers - some in prisons under the name "Criminon" - in 12 countries.
Narconon, a classic vehicle for drawing addicts into the cult, now plans
to open what it calls the world's largest treatment center, a 1,400-bed
facility on an Indian reservation near Newkirk, Okla. (pop. 2,400). At a
1989 ceremony in Newkirk, the Association for Better Living and Education
presented Narconon a check for $200,000 and a study praising its work.
The association turned out to be part of Scientology itself. Today the
town is battling to keep out the cult, which has fought back through such
tactics as sending private detectives to snoop on the mayor and the local
FINANCIAL SCAMS. Three Florida Scientologists, including Ronald
Bernstein, a big contributor to the church's international "war chest,"
pleaded guilty in March to using their rare-coin dealership as a money
laundry. Other notorious activities by Scientologists include making the
shady Vancouver stock exchange even shadier (see box) and plotting to
plant operatives in the World Bank, International Monetary Fund and
Export-Import Bank of the U.S. The alleged purpose of this scheme: to
gain inside information on which countries are going to be denied credit
so that Scientology-linked traders can make illicit profits by taking
"short" positions in those countries' currencies.
In the stock market the practice of "shorting" involves borrowing
shares of publicly traded companies in the hope that the price will go
down before the stocks must be bought on the market and returned to the
lender. The Feshbach brothers of Palo Alto, Calif. - Kurt, Joseph and
Matthew - have become the leading short sellers in the U.S., with more
than $500 million under management. The Feshbachs command a staff of
about 60 employees and claim to have earned better returns than the Dow
Jones industrial average for most of the 1980s. And, they say, they owe
it all to the teachings of Scientology, whose "war chest" has received
more than $1 million from the family.
The Feshbachs also embrace the church's tactics; the brothers are the
terrors of the stock exchanges. In congressional hearings in 1989, the
heads of several companies claimed that Feshbach operatives have spread
false information to government agencies and posed in various guises -
such as a Securities and Exchange Commission official - in an effort to
discredit their companies and drive the stocks down. Michael Russell, who
ran a chain of business journals, testified that a Feshbach employee
called his bankers and interfered with his loans. Sometimes the Feshbachs
send private detectives to dig up dirt on firms, which is then shared
with business reporters, brokers and fund managers.
The Feshbachs, who wear jackets bearing the slogan "stock busters,"
insist they run a clean shop. But as part of a current probe into
possible insider stock trading, federal officials are reportedly
investigating whether the Feshbachs received confidential information
from FDA employees. The brothers seem aligned with Scientology's war on
psychiatry and medicine: many of their targets are health and
biotechnology firms. "Legitimate short selling performs a public service
by deflating hyped stocks," says Robert Flaherty, the editor of Equities
magazine and a harsh critic of the brothers. "But the Feshbachs have
damaged scores of good start-ups."
Occasionally a Scientologist's business antics land him in jail. Last
August a former devotee named Steven Fishman began serving a five-year
prison term in Florida. His crime: stealing blank stock-confirmation
slips from his employer, a major brokerage house, to use as proof that he
owned stock entitling him to join dozens of successful class-action
lawsuits. Fishman made roughly $1 million this way from 1983 to 1988 and
spent as much as 30% of the loot on Scientology books and tapes.
Scientology denies any tie to the Fishman scam, a claim strongly
disputed by both Fishman and his longtime psychiatrist, Uwe Geertz, a
prominent Florida hypnotist. Both men claim that when arrested, Fishman
was ordered by the church to kill Geertz and then do an "EOC," or end of
cycle, which is church jargon for suicide.
BOOK PUBLISHING. Scientology mischiefmaking has even moved to the book
industry. Since 1985 at least a dozen Hubbard books, printed by a church
company, have made best-seller lists. They range from a 5,000-page sci-fi
decology (Black Genesis, The Enemy Within, An Alien Affair) to the
40-year-old Dianetics. In 1988 the trade publication Publishers Weekly
awarded the dead author a plaque commemorating the appearance of
Dianetics on its best-seller list for 100 consecutive weeks.
Critics pan most of Hubbard's books as unreadable, while defectors
claim that church insiders are sometimes the real authors. Even so,
Scientology has sent out armies of its followers to buy the group's books
at such major chains as B. Dalton's and Waldenbooks to sustain the
illusion of a best-selling author. A former Dalton's manager says that
some books arrived in his store with the chain's price stickers already
on them, suggesting that copies are being recycled. Scientology claims
that sales of Hubbard books now top 90 million worldwide. The scheme, set
up to gain converts and credibility, is coupled with a radio and TV
advertising campaign virtually unparalleled in the book industry.
Scientology devotes vast resources to squelching its critics. Since
1986 Hubbard and his church have been the subject of four unfriendly
books, all released by small yet courageous publishers. In each case, the
writers have been badgered and heavily sued. One of Hubbard's policies
was that all perceived enemies are "fair game" and subject to being
"tricked, sued or lied to or destroyed." Those who criticize the church -
journalists, doctors, lawyers and even judges - often find themselves
engulfed in litigation, stalked by private eyes, framed for fictional
crimes, beaten up or threatened with death. Psychologist Margaret Singer,
69, an outspoken Scientology critic and professor at the University of
California, Berkeley, now travels regularly under an assumed name to
After the Los Angeles Times published a negative series on the church
last summer, Scientologists spent an estimated $1 million to plaster the
reporters' names on hundreds of billboards and bus placards across the
city. Above their names were quotations taken out of context to portray
the church in a positive light.
The church's most fearsome advocates are its lawyers. Hubbard warned
his followers in writing to "beware of attorneys who tell you not to sue
. . . the purpose of the suit is to harass and discourage rather
than to win." Result: Scientology has brought hundreds of suits against
its perceived enemies and today pays an estimated $20 million annually to
more than 100 lawyers.
One legal goal of Scientology is to bankrupt the opposition or bury it
under paper. The church has 71 active lawsuits against the IRS alone. One
of them, Miscavige vs. IRS, has required the U.S. to produce an index of
52,000 pages of documents. Boston attorney Michael Flynn, who helped
Scientology victims from 1979 to 1987, personally endured 14 frivolous
lawsuits, all of them dismissed. Another lawyer, Joseph Yanny, believes
the church "has so subverted justice and the judicial system that it
should be barred from seeking equity in any court." He should know: Yanny
represented the cult until 1987, when, he says, he was asked to help
church officials steal medical records to blackmail an opposing attorney
(who was allegedly beaten up instead). Since Yanny quit representing the
church, he has been the target of death threats, burglaries, lawsuits and
Scientology's critics contend that the U.S. needs to crack down on the
church in a major, organized way. "I want to know, Where is our
government?" demands Toby Plevin, a Los Angeles attorney who handles
victims. "It shouldn't be left to private litigators, because God knows
most of us are afraid to get involved." But law-enforcement agents are
also wary. "Every investigator is very cautious, walking on eggshells
when it comes to the church," says a Florida police detective who has
tracked the cult since 1988. "It will take a federal effort with lots of
money and manpower."
So far the agency giving Scientology the most grief is the IRS, whose
officials have implied that Hubbard's successors may be looting the
church's coffers. Since 1988, when the U.S. Supreme Court upheld the
revocation of the cult's tax-exempt status, a massive IRS probe of church
centers across the country has been under way. An IRS agent, Marcus
Owens, has estimated that thousands of IRS employees have been involved.
Another agent, in an internal IRS memorandum, spoke hopefully of the
"ultimate disintegration" of the church. A small but helpful beacon shone
last June when a federal appeals court ruled that two cassette tapes
featuring conversations between church officials and their lawyers are
evidence of a plan to commit "future frauds" against the IRS.
The IRS and FBI have been debriefing Scientology defectors for the past
three years, in part to gain evidence for a major racketeering case that
appears to have stalled last summer. Federal agents complain that the
Justice Department is unwilling to spend the money needed to endure a
drawn-out war with Scientology or to fend off the cult's notorious jihads
against individual agents. "In my opinion the church has one of the most
effective intelligence operations in the U.S., rivaling even that of the
FBI," says Ted Gunderson, a former head of the FBI's Los Angeles office.
Foreign governments have been moving even more vigorously against the
organization. In Canada the church and nine of its members will be tried
in June on charges of stealing government documents (many of them
retrieved in an enormous police raid of the church's Toronto
headquarters). Scientology proposed to give $1 million to the needy if
the case was dropped, but Canada spurned the offer. Since 1986
authorities in France, Spain and Italy have raided more than 50
Scientology centers. Pending charges against more than 100 of its
overseas church members include fraud, extortion, capital flight,
coercion, illegally practicing medicine and taking advantage of mentally
incapacitated people. In Germany last month, leading politicians accused
the cult of trying to infiltrate a major party as well as launching an
immense recruitment drive in the east.
Sometimes even the church's biggest zealots can use a little
protection. Screen star Travolta, 37, has long served as an unofficial
Scientology spokesman, even though he told a magazine in 1983 that he was
opposed to the church's management. High-level defectors claim that
Travolta has long feared that if he defected, details of his sexual life
would be made public. "He felt pretty intimidated about this getting out
and told me so," recalls William Franks, the church's former chairman of
the board. "There were no outright threats made, but it was implicit. If
you leave, they immediately start digging up everything." Franks was
driven out in 1981 after attempting to reform the church.
The church's former head of security, Richard Aznaran, recalls
Scientology ringleader Miscavige repeatedly joking to staffers about
Travolta's allegedly promiscuous homosexual behavior. At this point any
threat to expose Travolta seems superfluous: last May a male porn star
collected $100,000 from a tabloid for an account of his alleged two-year
liaison with the celebrity. Travolta refuses to comment, and in December
his lawyer dismissed questions about the subject as "bizarre." Two weeks
later, Travolta announced that he was getting married to actress Kelly
Preston, a fellow Scientologist.
Shortly after Hubbard's death the church retained Trout & Ries, a
respected, Connecticut-based firm of marketing consultants, to help boost
its public image. "We were brutally honest," says Jack Trout. "We advised
them to clean up their act, stop with the controversy and even to stop
being a church. They didn't want to hear that." Instead, Scientology
hired one of the country's largest p.r. outfits, Hill and Knowlton, whose
executives refuse to discuss the lucrative relationship. "Hill and
Knowlton must feel that these guys are not totally off the wall," says
Trout. "Unless it's just for the money."
One of Scientology's main strategies is to keep advancing the tired
argument that the church is being "persecuted" by antireligionists. It is
supported in that position by the American Civil Liberties Union and the
National Council of Churches. But in the end, money is what Scientology
is all about. As long as the organization's opponents and victims are
successfully squelched, Scientology's managers and lawyers will keep
pocketing millions of dollars by helping it achieve its ends.
BOX: L. RON HUBBARD SPEAKS
"In all the broad universe, there is no other hope for man than
ourselves. This is a tremendous responsibility. I have borne it too long
alone. You share it with me now."
"The law can be used very easily to harass, and enough harassment on
somebody who is simply on the thin edge anyway . . . will generally be
sufficient to cause his professional decrease. If possible, of course,
ruin him utterly."
"All men are your slaves."
"Don't ever tamely submit to an investigation of us. Make it rough,
rough on attackers all the way."
CHART: NOT AVAILABLE
CREDIT: NO CREDIT
CAPTION: THE BRIDGE TO ENLIGHTENMENT
"Flowing up the Bridge" from Personality Test to O.T. 8 will cost the
average person an estimated $200,000 to $400,000. The steps shown are
only a sample of the many courses and treatments available. Also offered:
expensive books, tapes, E-meters (for auditing members), alarm clocks,
polo shirts, tote bags, stained-glass windows and ceramic mugs, among
many other items.
CREDIT: NO CREDIT
THE CULT OF GREED
HOW THE GROWING DIANETICS EMPIRE SQUEEZES MILLIONS FROM
DESCRIPTION: Color cover illustration.
CREDIT: NO CREDIT
CAPTION: L. Ron Hubbard, 1911-86: the cult's founder and continuing
DESCRIPTION: Black and white.
CREDIT: GIORGIO PALMISANO FOR TIME
CAPTION: THE LOTTICKS LOST THEIR SON, Noah, who jumped from
a Manhattan hotel clutching $171, virtually the only
money he had not yet turned over to Scientology. His
parents blame the church and would like to sue but are
frightened by the organization's reputation for
DESCRIPTION: Color: Edward Lottick and wife at grave of son,
CREDIT: NO CREDIT
CAPTION: See above.
DESCRIPTION: Color: Noah Lottick.
CREDIT: NO CREDIT
CAPTION: THE CURRENT LEADER Obsessed with security, church
boss David Miscavige reportedly likes to shoot photos
of perceived enemies with a .45 automatic.
DESCRIPTION: Color: David Miscavige.
CREDIT: KRISTIE ALLEY BY SCOTT DOWNIE - CELEBRITY PHOTO
CAPTION: WHAT THEY THINK
"It's not hocus-pocus . . . If you can erase engrams,
then you can get better."
- Kirstie Alley.
CREDIT: JOHN TRAVOLTA BY EVERETT COLLECTION
CAPTION: WHAT THEY THINK
"It ((Scientology)) just contains the secrets of the
universe. That may be hard for people to handle sometimes,
- John Travolta
CREDIT: MARK RICHARDS FOR TIME
CAPTION: HARRIET BAKER, 73, LOST HER HOUSE after Scientologists
learned it was debt free and arranged a $45,000 mortgage,
which they pressured her to tap to pay for auditing.
They had approached her after her husband died to help
"cure" her grief. When she couldn't repay the mortgage,
she had to sell.
CREDIT: MIKE CLEMMER FOR TIME
CAPTION: THE ROWE FAMILY SPENT $23,000 on Dianetics treatment.
Like many dentists, Glover Rowe was drawn in by Sterling
Management, which does not publicize its ties to
DESCRIPTION: Color: Glover Rowe, Dee Rowe and Steve Rowe.
CREDIT: NO CREDIT
CAPTION: Church of Scientology International headquarters, Los
CREDIT: NO CREDIT
CAPTION: One of the heaviest TV advertising campaigns in the
publishing industry pushes the 40-year-old Dianetics,
the cult's basic sacred text
DESCRIPTION: Color: Frame from the Dianetics TV commercial which
reads: Can you revive your goals?
CREDIT: NO CREDIT
CAPTION: NO CAPTION
DESCRIPTION: Color: Book DIANETICS by L. Ron Hubbard.
CREDIT: NO CREDIT
CAPTION: Celebrity Center International in Hollywood is one
of several church clubhouses that cater to stars
CREDIT: NO CREDIT
CAPTION: E-meter: $4,375
CREDIT: NO CREDIT
CAPTION: The Freewinds: high-level enlightenment
DESCRIPTION: Color: The Scientology yacht Freewinds.
CREDIT: NO CREDIT
CAPTION: Scientology's college in Sussex, England
DESCRIPTION: Color. END OF DOCUMENT.
Copyright 1991 Time Inc.
DATE: May 6, 1991
PAGE: 54 LENGTH: Medium
SECTION: SPECIAL REPORT
BYLINE: By Richard Behar
Mining Money in Vancouver
One source of funds for the Los Angeles-based church is the notorious,
selfregulated stock exchange in Vancouver, British Columbia, often called
the scam capital of the world. The exchange's 2,300 penny-stock listings
account for $4 billion in annual trading. Local journalists and insiders
claim the vast majority range from total washouts to outright frauds.
Two Scientologists who operate there are Kenneth Gerbino and Michael
Baybak, 20-year church veterans from Beverly Hills who are major donors
to the cult. Gerbino, 45, is a money manager, marketmaker and publisher
of a national financial newsletter. He has boasted in Scientology
journals that he owes all his stock-picking success to L. Ron Hubbard.
That's not saying much: Gerbino's newsletter picks since 1985 have
cumulatively returned 24%, while the Dow Jones industrial average has
more than doubled. Nevertheless Gerbino's shortterm gains can be
stupendous. A survey last October found Gerbino to be the only manager
who made money in the third quarter of 1990, thanks to gold and other
resource stocks. For the first quarter of 1991, Gerbino was dead last.
Baybak, 49, who runs a public relations company staffed with
Scientologists, apparently has no ethics problem with engineering a
hostile takeover of a firm he is hired to promote.
Neither man agreed to be interviewed for this story, yet both
threatened legal action through attorneys. "What these guys do is take
over companies, hype the stock, sell their shares, and then there's
nothing left," says John Campbell, a former securities lawyer who was a
director of mining company Athena Gold until Baybak and Gerbino took it
The pattern has become familiar. The pair promoted a mining venture
called Skylark Resources, whose stock traded at nearly $4 a share in
1987. The outfit soon crashed, and the stock is around 2 cents. NETI
Technologies, a software company, was trumpeted in the press as "the next
Xerox" and in 1984 rose to a market value of $120 million with Baybak's
help. The company, which later collapsed, was delisted two months ago by
the Vancouver exchange.
Baybak appeared in 1989 at the helm of Wall Street Ventures, a start-up
that announced it owned 35 tons of rare Middle Eastern postage stamps -
worth $100 million - and was buying the world's largest collection of
southern Arabian stamps (worth $350 million). Steven C. Rockefeller Jr.
of the oil family and former hockey star Denis Potvin joined the company
in top posts, but both say they quit when they realized the stamps were
virtually worthless. "The stamps were created by sand-dune nations to
exploit collectors," says Michael Laurence, editor of Linn's Stamp News,
America's largest stamp journal. After the stock topped $6, it began a
steady descent, with Baybak unloading his shares along the way. Today it
trades at 18 cents.
Athena Gold, the current object of Baybak's and Gerbino's attentions,
was founded by entrepreneur William Jordan. He turned to an established
Vancouver broker in 1987 to help finance the company, a 4,500-acre mining
property near Reno. The broker promised to raise more than $3 million and
soon brought Baybak and Gerbino into the deal. Jordan never got most of
the money, but the cult members ended up with a good deal of cheap stock
and options. Next they elected directors who were friendly to them and
set in motion a series of complex maneuvers to block Jordan from voting
stock he controlled and to run him out of the company. "I've been an
honest policeman all my life and I've seen the worst kinds of crimes, and
this ranks high," says former Athena shareholder Thomas Clark, a 20-year
veteran of Reno's police force who has teamed up with Jordan to try to
get the gold mine back. "They stole this man's property."
With Baybak as chairman, the two Scientologists and their staffs are
promoting Athena, not always accurately. A letter to shareholders with
the 1990 annual report claims Placer Dome, one of America's largest
gold-mining firms, has committed at least $25.5 million to develop the
mine. That's news to Placer Dome. "There is no pre-commitment," says
Placer executive Cole McFarland. "We're not going to spend that money
unless survey results justify the expenditure."
Baybak's firm represented Western Resource Technologies, a Houston
oil-andgas company, but got the boot in October. Laughs Steven McGuire,
president of Western Resource: "His is a p.r. firm in need of a p.r.
firm." But McGuire cannot laugh too freely. Baybak and other
Scientologists, including the estate of L. Ron Hubbard, still control
huge blocks of his company's stock.
CREDIT: P.F. BENTLEY FOR TIME
CAPTION: ATHENA GOLD'S WILLIAM JORDAN
Cult members got cheap stock, then ran him out of the
DESCRIPTION: Color: William Jordan. END OF DOCUMENT.
Copyright 1991 Time Inc.
DATE: May 6, 1991
PAGE: 57 LENGTH: Short
SECTION: SPECIAL REPORT
BYLINE: By Richard Behar
The Scientologists and Me
Strange things seem to happen to people who write about Scientology.
Journalist Paulette Cooper wrote a critical book on the cult in 1971.
This led to a Scientology plot (called Operation Freak-Out) whose goal,
according to church documents, was "to get P.C. incarcerated in a mental
institution or jail." It almost worked: by impersonating Cooper,
Scientologists got her indicted in 1973 for threatening to bomb the
church. Cooper, who also endured 19 lawsuits by the church, was finally
exonerated in 1977 after FBI raids on the church offices in Los Angeles
and Washington uncovered documents from the bomb scheme. No
Scientologists were ever tried in the matter.
For the TIME story, at least 10 attorneys and six private detectives
were unleashed by Scientology and its followers in an effort to threaten,
harass and discredit me. Last Oct. 12, not long after I began this
assignment, I planned to lunch with Eugene Ingram, the church's leading
private eye and a former cop. Ingram, who was tossed off the Los Angeles
police force in 1981 for alleged ties to prostitutes and drug dealers,
had told me that he might be able to arrange a meeting with church boss
David Miscavige. Just hours before the lunch, the church's "national
trial counsel," Earle Cooley, called to inform me that I would be eating
Alone, perhaps, but not forgotten. By day's end, I later learned, a
copy of my personal credit report - with detailed information about my
bank accounts, home mortgage, credit-card payments, home address and
Social Security number - had been illegally retrieved from a national
credit bureau called Trans Union. The sham company that received it,
"Educational Funding Services" of Los Angeles, gave as its address a mail
drop a few blocks from Scientology's headquarters.
The owner of the mail drop is a private eye named Fred Wolfson, who
admits that an Ingram associate retained him to retrieve credit reports
on several individuals. Wolfson says he was told that Scientology's
attorneys "had judgments against these people and were trying to collect
on them." He says now, "These are vicious people. These are vipers."
Ingram, through a lawyer, denies any involvement in the scam.
During the past five months, private investigators have been contacting
acquaintances of mine, ranging from neighbors to a former colleague, to
inquire about subjects such as my health (like my credit rating, it's
excellent) and whether I've ever had trouble with the IRS (unlike
Scientology, I haven't). One neighbor was greeted at dawn outside my
Manhattan apartment building by two men who wanted to know whether I
lived there. I finally called Cooley to demand that Scientology stop the
nonsense. He promised to look into it.
After that, however, an attorney subpoenaed me, while another falsely
suggested that I might own shares in a company I was reporting about that
had been taken over by Scientologists (he also threatened to contact the
Securities and Exchange Commission). A close friend in Los Angeles
received a disturbing telephone call from a Scientology staff member
seeking data about me - an indication that the cult may have illegally
obtained my personal phone records. Two detectives contacted me, posing
as a friend and a relative of a so-called cult victim, to elicit negative
statements from me about Scientology. Some of my conversations with them
were taped, transcribed and presented by the church in affidavits to
TIME's lawyers as "proof" of my bias against Scientology.
Among the comments I made to one of the detectives, who represented
himself as "Harry Baxter," a friend of the victim's family, was that "the
church trains people to lie." Baxter and his colleagues are hardly in a
position to dispute that observation. His real name is Barry Silvers, and
he is a former investigator for the Justice Department's Organized Crime
CAPTION: Church attorney Cooley
DESCRIPTION: Black and white: Earle Cooley.
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