From martinottmann@yahoo.com Tue Dec 31 19:10:27 2002
VI - Scientology's Relationship With The U. S. Federal Government

Hubbard and the U. S. Navy (1941 – 1950)

Hubbard and Scientology's stormy relationship with the U. S.
government actually has its origin in a time nine years before the
release of Dianetics. On July 19th, 1941 L. Ron Hubbard began his
military service at the U. S. Navy [Exh. No. 109], which finally ended
on October 30, 1950 when he received an honorable discharge, after
having already been released from active duty on February 16th, 1946
[Exh. No. 110, Excerpt]. In light of Scientology's past and current
activities, it is important to note that its founder, Hubbard, began
his military service with the Navy intelligence and worked as an
intelligence officer from December 1941 until June 1942 [Exh. No. 111,
Excerpt]. That fact might explain Hubbard's later pre-occupation with
intelligence matters and why he integrated a private intelligence
service as the "Guardian's Office" in its "Church"-structure.

Hubbard, the FBI and Dianetics (1951 – 1953)

Five months after his retirement from the Navy, Hubbard tried to get
in contact with another federal authority, the FBI. This was at a time
when the initial success of his "Dianetics"-movement had already died
down and he was experiencing additional difficulties in his second
marriage with Sarah Northrup. In the upcoming divorce trial Northrup
would accuse him of torture and having conducted sleep deprivation
experiments on her. Hubbard in return reported her to the FBI and was
subsequently interviewed on March 1st, 1951 [Exh. No. 112]. He claimed
that the "Hubbard Dianetics Research Foundation" in Los Angeles had
been infiltrated by Communists, and that one of them, Miles Hollister,
"was instrumental in driving (his) wife, Sarah Northrup Hubbard, to
the point of insanity."

Two months after, on May 14th 1951, Hubbard wrote another letter, this
time to the Attorney General in Washington, DC [Exh. No. 113], saying,
that his organization was flooded with Communists and that during one
night in February his wife Sarah Northrup, in collaboration with Miles
Hollister, "knocked him out, had a needle thrust into his heart to
give it a jet of air to produce ‘coronary thrombosis.'" He "was given
an electric shock with a 110 volt current." It is my understanding
that Hubbard wrote several of such letters to federal agencies,
accusing his partners and close adherents of being communists, while
his business was in fact collapsing due to the false claims he had
made about the workability of Dianetics. Consequently he got into
serious financial trouble, several of the Dianetics Foundations
subsequently failed and Hubbard had to declare bankruptcy a few times
before U. S. courts [Exh. No 114].

The FDA, the IRS, the CIA and Scientology (1954 – 1971)

Despite all his personal and financial trouble Hubbard got back on his
feet again and with the founding of the "Church of Scientology" and
the "Church of American Science" he found new vehicles to pursue his
ideas and visions within a legally more secure framework.

Soon enough, on January 2nd 1957, the Internal Revenue Service
pronounced Hubbard's "mother church," the "Church of Scientology of
California" a tax-exempt operation. Other organizations, "Churches" as
well, would follow with being tax-exempt [Exh. No. 115, Excerpt].

Despite its momentary upswing the Scientology organizations remained
at odds with other authorities because of Hubbard's unsubstantiated
medical claims: In 1958 Hubbard claimed to have developed a substance
that would shield a person from harmful radiation if ingested. That
substance was called "Di-anazene" and the organization marketed it
through the company "The Distribution Center." Subsequently the Food &
Drug Administration (FDA) raided its offices, seized 21,000 tablets of
"Di-anazene" and destroyed them later ["A Piece Of Blue Sky," page
142, Jon Atack, Carol Publishing, © 1990].

Such activities finally attracted the attention of another federal
agency. The FBI started a formal investigation too and reviewed its
information on this occasion on Hubbard and his followers [Exh. No.
116].

On January 4th, 1963 Hubbard's "Distribution Center" received again a
visit by the government: U. S. Federal Marshals seized about 100
E-Meters and 20,000 pages of literature, acting on the charge of false
libeling and false scientific claims brought up by the FDA. It was the
start of a long legal controversy between Scientology and the U. S.
government, which would keep the courts busy for the years to follow
[Exh. No. 117].

Hubbard himself had his own interpretation of the actions of the FDA.
On October 27th, 1962 when it was clear, due to several visits by
FDA-officials at the Scientology-organizations, that an investigation
was underway, Hubbard wrote in a "Hubbard Executive Letter" [Exh. No.
118]:

"In the U.S., on the heels of my informing the White House we could
help them with their fight against Communism, the Food and Drug
Administration came into every large U.S. org in a space of 48 hours
(DC, NY and LA) demanding evidence about the E-Meter. This seems most
peculiar that they'd want out of existence a machine that detects
Communists while they pretend to be mad at them."

In 1967 the IRS revoked the tax-exempt status of several
Scientology-organizations [Exh. No. 115, Excerpt]. This marked the
beginning of another legal conflict that would last 26 years and would
involve hundreds of lawsuits between the various Scientology
organizations, its members and the IRS.

At this time the Scientology-network was spread throughout several
countries with Hubbard residing on a fleet of ships that would cruise
the Mediterranean Sea. There he directed and managed his "churches,"
outside of any legal boundaries and thereby escaping the problems and
legal consequences his organizations encountered in the United
Kingdom, South Africa, New Zealand, Rhodesia and the United States.
Though outside of the United States, Hubbard was not completely
outside of the scope of the government, as his worldwide activities
attracted the attention of the Central Intelligence Agency.

On July 16th, 1968, for example, an internal CIA-dispatch reported on
some of Hubbard's newspaper credentials. At the end of the report the
writer expressed his rather blunt judgement about Hubbard's
organization [Exh. No. 119]:

"… 4. FYI: Subj has long history (Censored) was proponent
pseudoscientific pulp. (Censored) 5. Pouching Details. From HQS
material appears ref a ‘floating college' probably part of charlatan
cult (Censored)."

One year later the activities of the Scientology organization in
Washington, DC were the subject of two court cases. In "Founding
Church of Scientology of Washington, DC (FCDC) vs. United States," No.
226-61, the United States Claims Court found on July 16th, 1969 that
the Scientology organizations were not entitled to tax exemption and
had in fact to pay back-taxes to the IRS for the years 1956 – 1959.

In the second suit, "Founding Church of Scientology of Washington, DC
vs. United States," No. 21483, the United States Appeals Court in
Washington, DC had to decide over the legality of the FDA-raid 6 years
earlier. Scientology claimed that the raid and the seizure of the
E-Meters by the government had violated Scientology's rights for
practicing its religion. Finally on February 5th, 1969 the court
ruled:

"(1) On the basis of the record before us, the Founding Church of
Scientology has made out a prima facie case that it is a bona fide
religion and, since no rebuttal has been offered, it must be regarded
as a religion for purposes of this case.

"(2) On the record before us, a prima facie case exists that auditing
is a practice of Scientology, and that accounts of auditing integrated
into the general theory of Scientology are religious doctrines. Since
no rebuttal has been offered, we must take the point as proven.

"(3) In view of the constitutional doctrine of United States v.
Ballard, supra, literature setting forth religious doctrines, and
related to an instrument in the manner in which the ‘auditing'
literature here is related to the E-meter, cannot be subjected to
courtroom evaluation and therefore cannot be considered ‘labeling' of
such an instrument for purposes of the ‘false or misleading labeling'
provisions of the Act.

"On the other hand, the following should be noted:

"(1) We do not hold that the Founding Church is for all legal purposes
a religion. Any prima facie case made out for religious status is
subject to contradiction by a showing that the beliefs asserted to be
religious are not held in good faith by those asserting them, and that
forms of religious organization were erected for the sole purpose of
cloaking a secular enterprise with the legal protections of religion.

"(2) We do not hold that, even if Scientology is a religion, all
literature published by it is religious doctrine immune from the Act
…"

Two years later the FDA-matter and the seized E-Meters were again the
subject of a court ruling ("United States vs. An Article or Device
‘Hubbard E-Meter', etc. Founding Church of Scientology of Washington,
DC," No. D.C. 1-63, United States Court for the District of Columbia,
Opinion, July 30th, 1971) [Exh. No. 117]. This time the court issued a
final ruling, which regulated the future use of the E-Meter and the
way the Scientology organizations could promote it:

"… Dismissal of this libel after eight years of legal proceedings is
not justified on the grounds that the Government has not used the most
appropriate remedy. A decree of condemnation will therefore be
entered, but the Church and others who base their use upon religious
belief will be allowed to continue auditing practices upon specified
conditions which allow the Food and Drug Administration as little
discretion as possible to interfere in future activities of the
religion. Pursuant to 21 U.S.C. 334 (d), upon the findings and
conclusions contained in this Memorandum Opinion, relief in the
following form shall be set out in an implementing order:

"All E-meters are condemned together with all writings seized. The
Government shall have its costs.

"The device and writings condemned shall be returned to the owners,
upon execution of an appropriate bond, to be destroyed or brought into
compliance with the Food, Drug & Cosmetic Act. An E-meter shall be
deemed to comply with the Act if and only if it is used, sold or
distributed upon specified conditions.

"The device may be used or sold or distributed only for use in bona
fide religious counseling …

"Each user, purchaser, and distributee of the E-meter shall sign a
written statement that he has read such warning and understands its
contents and such statements shall be preserved.

"Any and all literature which refers to the E-meter or to auditing,
including advertisements, distributed directly or indirectly by the
seller or distributor of the E-meter or by anyone utilizing or
promoting the use of the E-meter, should bear a prominent notice
printed in or permanently affixed to each item or such literature,
stating that the device known as a Hubbard Electrometer, or E-meter,
used in auditing, has been condemned by a United States District Court
on the grounds that the literature of Dianetics and Scientology
contains false and misleading claims of a medical or scientific nature
and that the E-meter has no proven usefulness in the diagnosis,
treatment or prevention of any disease, nor is it medically or
scientifically capable of improving any bodily function …

"The effect of this judgment will be to eliminate the E-meter as far
as further secular use by Scientologists or others is concerned.
E-meter auditing will be permitted only in a religious setting subject
to placing explicit warning disclaimers on the meter itself and on all
labeling."

Operation "Snow White" (1973 – 1983)

While the conflict with the FDA was finally settled, the
self-proclaimed "war" of Scientology against the IRS had just began.
After its tax-exempt status was revoked in 1967, the "Church of
Scientology of California" (CSC) refused to file income tax returns,
but submitted instead Form 990 information returns for the years 1970
- 1972.

In order to resolve the continuing legal problems with various
governments Hubbard devised in 1973 a program, which he called "Snow
White." One year later the staff of Hubbard's intelligence service,
the "Guardian's Office" (GO) received a "Guardian Order," which
briefed them about its purpose and importance [Exh. No. 120]:

"He (Hubbard) called it ‘Snow White' because it contains most of the
elements of the famous fairy story. There is the evil stepmother and
Witch, ‘poison apples' and intrigue, the dashing Prince and buffons
[sic] like the Seven Dwarfs. There is even ‘treasure' and ‘gems' and a
great deal of digging involved.

"The purpose of the programme [sic] is to trace back the attacks of
the past 24 years to find and handle their Source. …

"To date the full programme contains a total of 38 major projects and
innumerable sub-projects and sub-sub-projects. It involves most of the
areas of the planet that have been touched by Scientology on one form
or another.

"… In actual fact the Snow White Programme has the HIGHEST PRIORITY OF
ALL GO ACTIVITY."

Meanwhile the CIA was continuing to observe the activities of
Hubbard's fleet. On October 16th, 1975 a review at CIA's headquarters
was drafted. It contained a classic example of a completely wrong
intelligence assessment [Exh. No. 121]:

"Review of available info regarding overseas activities Church of
Scientology reveals only that its founder L. Ron Hubbard is [an]
eccentric millionaire who has been expelled from residence in several
countries because of his odd activities and behavior. He is [the]
owner of several ships whose appearance in several ports of [the]
world have [sic] stimulated queries to (Censored) and (Censored) from
other governments asking info re vessel's mission and crew. Responses
indicate we know very little, except that there [is] no indication
that Hubbard or members of his organization have been engaged in
intelligence or security matters. …"

1975 was also the year when the Scientologists started to implement
the legal part of the Snow White program. Several corporations started
to flood U. S. government agencies with Freedom of Information
Act-requests. Not satisfied with the responses, the organizations then
filed suit at federal courts. The purpose of those suits was evident:
to find "false information on Scientology" in government files planted
by the alleged "Source" and to discourage government agencies to file
anything on Scientology. Exemplary of such tactics are the following
court cases:

CSC vs. U. S. Department of Justice & DEA, No. CV-76-2506, filed on
December 4th, 1974;
CSC vs. U.S. Department of the Army, No. CV-75-3056-F, filed on
September 9th, 1975;
FCDC vs. FBI & Griffin Bell, No. CV-78-1391 , filed on September 26th,
1975;
CSC vs. U.S. Department of Defense, No. CV-75-4072-F, filed on
December 4th, 1975;
CSC vs. CIA & Stansfield Turner, No. CV-80-1172, filed in 1975/76;
CSC vs. U.S. Postal Service, No. CV-76-1610, filed in 1976;
CSC vs. U. S. Department of Treasury et al, No. CV-76-1719, filed in
1976;
CSC vs. U.S. Department of Health et al, No. CV-80-1189, filed on June
9th, 1976;
FCDC vs. NSA et al, No. CV-76-1494, filed in August 1976;

But filing suits were not the only actions Scientology and Hubbard
would initiate to get the American government under their control. In
late Spring of 1976 a first ray of light fell on what the
Scientologists were actually up to at that time [Exh. No. 122,
Excerpt]:

"On May 31st, 1976, the night librarian Charles Johnson and the GSA
Security Guard (of the United States Courthouse in Washington, DC)
notified the United States Attorney's Office that two individuals who
had identified themselves as IRS employees and who had in their
possession IRS identification cards had been seen using the
photocopying machines of the United States Attorney's Office on the
previous Friday evening. Both Mr. Johnson and the guard were
instructed to immediately contact the FBI if those two individuals
returned to the Courthouse."

They did not have to wait a long time. On June 11th, the two persons,
who identified themselves as "John M. Foster" and "Thomas Blake," but
whose names were actually Michael Meisner and Gerald Wolfe, appeared
again in the courthouse at 7 o'clock in the evening. Upon them signing
in at the library, the security guards called the FBI.

"Shortly thereafter FBI Special Agents Christine Hansen and Dan Hodges
confronted the defendant Wolfe and Mr. Meisner at one of the back
tables within the Bar Association Library, and demanded to see their
identification cards. Mr. Meisner presented his IRS identification
cards to the FBI agents, and informed them that he had since resigned
from the IRS. … Mr. Meisner informed Agent Hansen that he and the
defendant Wolfe had been in the Courthouse to do legal research, and
that they had used the United States Attorney's Office photocopying
machine to photocopy legal books and cases. He gave her as his home
address an address a few doors away from his actual residence. Neither
individual mentioned either's association with the Church of
Scientology, or the true purpose for which they were in the United
States Courthouse. After fifteen minutes of questioning, Mr. Meisner
inquired if they were under arrest. When Agent Hansen responded that
they were not, Mr. Meisner told Wolfe that they were leaving. …"

Meisner and Wolfe were not only members of Scientology, but were in
fact agents of Scientology's "Guardian's Office" (GO) and their task
at the U. S. courthouse was to steal and photocopy files from
Assistant U. S. Attorney Nathan Dodell who represented the government
in litigation against Scientology.
After their operation had been compromised by the FBI-agents, the
Guardian's Office initiated a cover-up. Under the direction of the
"Controller" of the GO, Mary Sue Hubbard, the wife of L. Ron Hubbard,
Meisner fled to Los Angeles, while Wolfe was prepared to take the fall
for the use of his false credentials, while he would not reveal
anything else to the authorities.

In May 1977 the situation began to take a dramatic turn. In Washington
on the 13th, Wolfe entered a plea of guilty "for the wrongful use of a
government seal," while in Los Angeles the GO executives placed
Meisner under guard in a safe house, as he had begun to have doubts
about the whole operation. He escaped on the 29th, but returned
shortly after he was persuaded by his superiors, whom he contacted
later by phone to discuss the situation.

On June 10th Wolfe was sentenced by a U. S. judge for a year of
probation. He was subsequently served with a subpoena and had to
appear before a Grand Jury to testify about his entering of the court
building. There Wolfe neither revealed the true reasons for his being
at the courthouse nor the true identity of "Foster."

Finally on June 20th, Meisner escaped again from his current safe
house in Glendale, called the U.S Attorney's Office in Washington and
declared that he was ready to surrender. Two hours later he was met by
FBI-agents, was flown to Washington, where he entered a plea of guilty
to a five-year conspiracy felony and agreed to cooperate fully with
the FBI [Exh. No. 123, Excerpt].

About two weeks later, on July 8th, more than 100 FBI agents raided
the offices of the Scientology organizations in Washington and Los
Angeles [Exh. No. 124]. Thousands of documents were seized in one of
the biggest police raids in the American history. One year later, on
August 18th, 1978, 11 Scientologists, who were working for the GO,
were indicted for "conspiracy," "theft of government property,"
"aiding and abetting," "obstruction of justice," "false declaration
before a Grand Jury" and "interception of oral communication [Exh. No.
125]."

By that time it was found out that the 11 defendants, among them
Hubbard's wife Mary Sue Hubbard, had infiltrated several offices of
the IRS and the U.S. Department of Justice offices, had stolen and
photocopied government documents and had even bugged an IRS-meeting in
1974. The review of the seized files also revealed that the operation
of the GO not only targeted federal offices and representatives, but
also state offices, companies and private citizens.

Unimpressed by the indictment, CSC and other organizations continued
its FOIA-litigation against government agencies. Also on March 28th,
1978 CSC had filed suit against the IRS in the U. S. Tax court,
challenging the commissioner's determination of CSC's tax deficiency
for the years 1970 – '72.

Additionally the Guardian's Office started a public relations campaign
against the U.S. government, exposing chemical and biological warfare
experiments that the CIA and the U.S. army had conducted during the
1950s [Exh. No. 126].

Last but not least, Scientology challenged the legality of the two
raids in Washington and Los Angeles at U. S. Courts in California and
in the District for Columbia ("In re: Search Warrant dated July 4th,
1977, for premises at 2125 S. Street, Northwest, Washington D.C.," No.
CV 79-2138, CV 79-2176). All of these suits were later dismissed, the
last one, concerning the raid in Washington, on October 2nd, 1981 by
the U.S. Court of Appeals for the District of Columbia Circuit.

In the meantime the U. S. government started an extradition process
concerning two defendants of the indictment. Jane Kember and Morrison
Budlong, GO officials, were living and working at the GO headquarters
in Saint Hill, England. They were finally extradited to the United
States and found guilty on nine counts of burglary after a jury trial
and were sentenced to prison terms in late 1980 [Exh. No. 127].

The nine other defendants signed a Stipulation of Evidence on October
10th, 1979, which summarized the criminal operations they were
involved in. On December 6th and 7th finally, the U. S. District Court
for the District of Columbia found the "Guardian 9" guilty and
sentenced them to prison terms [Exh. No. 128, Excerpt].

U.S. Judge Richey also unsealed hundreds of internal GO-documents that
were seized in the raids, which caused the Scientologists to start
additional suits against this decision.

The defendants appealed the GO-verdict, but the U. S. Appeals Court in
Washington upheld the lower court judgements on October 30th, 1981
[Exh. No. 129]. Sensing that the appeals process would not help the
defendants, a group of Scientologists under the direction of David
Miscavige had already removed Mary Sue Hubbard through an internal
coup d'état from her position as Controller of the GO during the
summer of 1981, together with several other executives.

Finally, after an appeal to the U. S. Supreme Court had failed, Mary
Sue Hubbard was sentenced to four years imprisonment on January 7th,
1983 [Exh. No. 130]. In that same year the Guardian's Office was
dissolved by the a new management of Scientology and its functions
were re-established within the new Office of Special Affairs and the
Finance Network.