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 mall-order degree. In a I984 case in which the church sued a
Hubbard
biographical researcher, a California judge concluded that its founder
was "a
pathological liar."
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 be audited.
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 Scien- tology'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 S200 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 "intensive."
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 mem- bers, 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 it."
|
HARRIET
BAKER, 73, LOST HER HOUSE after Scientologists learned it was debt free
and arranged
a $45,000 mortage, 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 mortage, she had to sell. |
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.
The Lotticks lost their son, Noah, who jumped from a New York City
hotel clutching
$171, vitually 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 ruthlessness.
|
Noah Lottick |
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 psychiatrist.
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 tape-recorded 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.
Larger
view (169 k)
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.
|
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 Scientology.
|
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 once 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
Iearned
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
Scientology."
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 As-
sociation
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 newspaper publisher.
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 bio- technology 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 avoid
harassment.
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 other harassment.
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 Scien-
tology
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.
Mining Money in Vancouver
[Sidebar; page 54]
One source of funds for the Los Angeles-based church is the
notorious, self-regulated
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 short-term 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.
|
ATHENA GOLD'S WILLIAM
JORDAN
Cult member got cheap stock, then ran him out of the company
|
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 over.
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-and-gas
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.
[The following part was only in the international version of TIME]
Pushing Beyond the U.S.:
Scientology makes its presence felt in Europe and Canada
By Richard Behar
In the 1960s and '70s, L. Ron Hubbard used to periodically fill a
converted
ferry ship with adoring acolytes and sail off to spread the word. One by
one,
countries -- Britain, Greece, Spain, Portugal, and Venezuela -- closed
their ports,
usually because of a public outcry. At one point, a court in Australia
revoked
the church's status as a religion; at another, a French court convicted
Hubbard
of fraud in absentia.
Today Hubbard's minions continue to wreak global havoc, costing
governments
considerable effort and money to try to stop them. In Italy a two-year
trial of
76 Scientologists, among them the former leader of the church's Italian
operations,
is nearing completion in Milan. Two weeks ago, prosecutor Pietro Forno
requested
jail terms for all the defendants who are accused of extortion, cheating
"mentally
incapacitated" people and evading as much as $50 million in taxes.
"All
of the trial's victims went to Scientology in search of a cure or a
better life,"
said Forno, "But the Scientologists were amateur psychiatrists who
practiced
psychological terrorism". For some victims, he added, "the
intervention
of the Scientologists was devastating."
The Milan case was triggered by parents complaining to officials that
Scientology
had a financial stranglehold on their children, who had joined the
church or entered
Narconon, its drug rehabilitation unit. In 1986 Treasury and
paramilitary police
conducted raids in 20 cities across Italy shutting down 27 Scientology
centers
and seizing 100,000 documents. To defend itself in the trial, the cult
has retained
some of Italy's most famous lawyers.
In Canada, Scientology is using a legal team that includes Clayton
Ruby, one
of the country's foremost civil rights lawyers, to defend itself and
nine of its
members who are to stand trial in June in Toronto. The charges: stealing
documents
concerning Scientology from the Ministry of the Attorney General, the
Canadian
Mental Health Association, two police forces and other institutions. The
case
stems from a 1983 surprise raid of the church's Toronto headquarters by
more than
100 policemen, who had arrived in three chartered buses; some 2 million
pages
of documents were seized over a two-day period. Ruby, whose legal
maneuvers delayed
the case for years, is trying to get it dismissed because of "
unreasonable
delay."
|
This cult means business: ad
on a Paris
building for Dianetics. Below, the books are stacked by Scientologists
to resemble
a Rolls-Royce. |
|
Spain's Justice Ministry has twice denied Scientology status as a
religion,
but that has not slowed the church' s expansion. In 1989 the Ministry of
Health
issued a report calling the sect "totalitarian" and "pure
and simple
charlatanism." The year before, the authorities had raided 26
church centers,
with the result that 11 Scientologists stand accused of falsification of
records,
coercion and capital flight. "The real god of this organization is
money,"
said Madrid examining magistrate Jose Maria Vasquez Honrnbia, before
referring
the case to a higher court because it was too complex for his
jurisdiction. Eugene
Ingram, a private investigator working for Scientology claims he helped
get Honrubia
removed from the case for leaking nonpublic documents to the press.
In France it took a death to spur the government into action: 16
Scientologists
were indicted last year for fraud and "complicity in the practice
of illegal
medicine" following the suicide of an industrial designer in Lyon.
In the
victim's house investigators found medication allegeally provided to him
by the
church without doctor's prescription. Among those charged in the case is
the president
of Scientology's French operations and the head of the Paris-based
Celebrity Centre,
which caters to famous members.
Outside the U.S., Scientology appears to be most active in Germany
where the
attorney general of the state of Bavaria has branded the cult "
distinctly
totalitarian" and aimed at "the economic exploitation of
customers who
are in bondage to it." In 1984 nearly 100 police raided the church
in Munich.
At the time, city officials were reportedly collaborating with U.S. tax
inspectors
and trying to prove that the cult was actually a profitmaking business.
More recently,
Hamburg state authorities moved to rescind Scientology's tax reduced
status, while
members of parliament are seeking criminal proceedings. In another
domain, church
linked management consulting firms have infiltrated small and middle
sized companies
throughout Germany, according to an expose published this month in the
newsmagazine
DER SPIEGEL; the consultants, who typically hide their ties to
Scientology, indoctrinate
employees by using Hubbard's methods. A German anticult organization
estimates
that Scientology has at least 60 fronts or splinter groups operating in
the country.
German politics appears as well to attract Hubbard's zealots. In March
the Free
Democrats, partners in Chancellor Helmut Kohl' s ruling coalition in
Bonn, accused
Scientology of trying to infiltrate their Hamburg branch. Meanwhile the
main opposition
party, the Social Democrats, has been warning its members in the
formerly com-
munist eastern part of the country against exploitation by the church.
Even federal
officials are being used by the church: one Scientology front group sent
copies
of a Hubbard written pamphlet on moral values to members of the
Bundestag. The
Office of Foreign Minister Hans-Dietrich Genscher unwittingly endorsed
the Scientologists'
message: "Indeed, the world would be a more beautiful place if the
principles
formulated in the pamphlet, a life characterized by reason and
responsibility,
would find wider attention."
[end of Internationl Edition-only section]
The Scientologists and Me
[Sidebar, page 57]
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.
|
Church attorney Cooley |
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 Strike Force.
(RB)