Reasons to Picket -
Where does the money go?
From: Markus Grahn
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Sun, 11 Jul 1999 10:21:30 +0200
Message-ID: <3788540A.6836@algonet.se>
Birdie1127 wrote:
>
> The courses and auditing in Scientology cost so much...where does the money go?
> I had thought that perhaps the staff was well paid, and evidently this is not
> so. I've seen people getting paid less than $10 per week?!? I don't know how
> they live on this. So when these courses cost thousands of $$$$$, where does
> it go? Anyone know?
The CoS does indeed have high prices. But according to my experience
from an average local org the income is seldom big enough to cover the
basic costs, as rent, electricity, phones etc. Therefore local orgs can
be heavily insolvent. The salary sum shall be 30% and the "promotion
sum" amounts to 20 or 30% of the corrected gross income, CGI (the gross
income minus bounced checks, refunds, booksales, field staffmember
commissions etc.).
If an org makes $10,000 a week, for example, and if the CGI is $6,000,
the salary sum will be $1,800. If the org has 40 staffmembers it makes
an average pay of $45 (note that a high executive earn twice as much as
an ordinary full-time staffer. There may also be a social security cost,
which is deducted from the salary sum). The promotion sum will be $1,200
or $1,800, which is mostly spent on postage and printing.
The local orgs are bound to pay "tithes" to the "mother church" - The
Church of Scientology International (CSI) and the continental liaison
office (for management etc.) and to Golden Era (for tech films). These
payments together can amount to 20% of the CGI, sometimes lesser,
sometimes more.
Where the international money goes, I can't tell. Surely the CSI pays
licence fees to the Religious Technology Center (RTC). A certain
percentage goes to the Sea Org Reserves (SOR) - "the Big Vault (BV)",
these reserves are said to be HUGE.
Markus Grahn
Former Director of Disbursements,
Stockholm Org
From: "Roger Gonnet"
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Sun, 11 Jul 1999 08:41:25 +0200
Message-ID: <7m9h7l$8n4$1@news2.isdnet.net>
Birdie1127 a écrit dans le message :
19990711011652.12172.00001155@ng-fa1.aol.com...
> The courses and auditing in Scientology cost so much...where does the money go?
> I had thought that perhaps the staff was well paid, and evidently this is not
> so. I've seen people getting paid less than $10 per week?!? I don't know how
> they live on this. So when these courses cost thousands of $$$$$, where does
> it go? Anyone know?
Lots of infos exist about this into critical sites such wwww.xenu.net.
To make it short, money went first for a large part into L. Ron Hubbard
pockets, till his death.
Now, it goes to the upper echelons of scientology, which have probably
continued the reserves funds (Hubbard said every org were to possess at
least 2 years of reserves to make the org run without new income).
When I was there, large orgs were spending lots of money remaining into
stupid commercial lines, like sending lots of inept and uncommunicating
brochures, leaflets, invitations to lectures or "events". The "registrars"
went to 300 or more kilometers sometimes to get immediately monies from
people ready to buy, instead of waiting the checks by post.
Scieno orgs spend lots of money into insane "legal" wars against their
critics; they spend tons of silver onto so-called "social" programs, but in
fact, those are just plain frauds to get scientology known as a "caritative"
thing, when it's nothing like this (in fact, many of the programs like ABLE
etc, are paid by more contributions from the members, either by their work
or their wallets.).
Scientology spend enormous sums to fabricate lies upon itself, like the
famous pack of lies "What is Scientology" book, portraying the "church" as
better ever, with totally falss and faked figures about themselves or their
founder, and lots of lies upon other mind tech (psychology and psychiatry,
other religions, etc). This book weighs 3 K, and is given away to lots of
people in the media, govts, etc.
Scientology spends almost nothing for its hard working staff, except on
those who sell its "products", the "Field staff members", who can get as
much as 10 to 50 % on the sales of services or books etc.
roger
From: Lronscam
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Sun, 11 Jul 1999 07:19:47 -0400
Message-ID: <37887DD3.562C93DD@aol.com>
Roger Gonnet wrote:
>
> Birdie1127 a écrit dans le message :
> 19990711011652.12172.00001155@ng-fa1.aol.com...
> > The courses and auditing in Scientology cost so much...where does the
> money go?
> >
> Now, it goes to the upper echelons of scientology, which have probably
> continued the reserves funds (Hubbard said every org were to possess at
> least 2 years of reserves to make the org run without new income).
They definitely have that now, but what Hubbard said about it was
probably ambiguous. Remember, Scientology is not allowed to contribute
to a downstat. Money only flows upline, not downline. Kind of another
funny twist in Scientology: aren't the poor churches supporting the
downstat of the mother church?
>
The "registrars"
> went to 300 or more kilometers sometimes to get immediately monies from
> people ready to buy, instead of waiting the checks by post.
This, I can vouch for myself. This happened to me on several occasions.
If I weren't in such a desperate situation, I would have been more
critical of this. The acceptable truth was that the registrars had to
uphold a statistic too. Any salesman who has been a salesman knows that
most people don't buy with what they say they are going to. Get the
money now! In many cases, they would always borrow some staff's or a
public's car. Never giving them gas money and never saying thanks (from
the complains I saw). I saw this on several occasions. Thank God I saw
this. This is what cued me into the true scam.
From: "Roger Gonnet"
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Mon, 12 Jul 1999 12:02:54 +0200
Message-ID: <7mcocm$2cm$5@news4.isdnet.net>
Lronscam a écrit dans le message :
37887DD3.562C93DD@aol.com...
> Roger Gonnet wrote:
> >
> > Birdie1127 a écrit dans le message :
> > 19990711011652.12172.00001155@ng-fa1.aol.com...
> > > The courses and auditing in Scientology cost so much...where does the
> > money go?
> > >
> > Now, it goes to the upper echelons of scientology, which have probably
> > continued the reserves funds (Hubbard said every org were to possess at
> > least 2 years of reserves to make the org run without new income).
>
> They definitely have that now, but what Hubbard said about it was
> probably ambiguous. Remember, Scientology is not allowed to contribute
> to a downstat. Money only flows upline, not downline. Kind of another
> funny twist in Scientology: aren't the poor churches supporting the
> downstat of the mother church?
Yes, you are right; it's impossible to pay the staffs if there is not GI.
That's why my brother, still a scieno in Paris, is moonlighting to get
enough to give something to eat to his small kids. He's certainly not alone
to moonlight: paris or any french org stats are not near to get high.
>
> >
> The "registrars"
> > went to 300 or more kilometers sometimes to get immediately monies from
> > people ready to buy, instead of waiting the checks by post.
>
> This, I can vouch for myself. This happened to me on several occasions.
> If I weren't in such a desperate situation, I would have been more
> critical of this. The acceptable truth was that the registrars had to
> uphold a statistic too. Any salesman who has been a salesman knows that
> most people don't buy with what they say they are going to. Get the
> money now! In many cases, they would always borrow some staff's or a
> public's car. Never giving them gas money and never saying thanks (from
> the complains I saw). I saw this on several occasions. Thank God I saw
> this. This is what cued me into the true scam.
Sure! fact is that they went farther into this, if you want to look
attentively: almost every travel done by scieno staffs is either aimed :
A/ to go working defintely in another org
B/ to get some sales done in another org, or steal its staffs.
They'll pretend they are also "keeping scientology working", but that's a
lie: AOSH EU (DK) had lots of staffs coming down from Flag for "tech", but
the day I was forced to take and apply the "KSW technical specialist"
course, I had to make a real drilling: checking all the High crimes
checkouts for the tech staffs; I discovered that none, but the senior cram
officer herself (Edith Loringett), had that line in! Senior C/Ses had never
signed the high crimes log since months, but no "upper staff from Flag " had
ever observed such an obvious evidence. What were they doing while coming
into DK? Stealing staffs, ethics handlings, or such... Most probably, lots
of them technicians were not technicians at all; or unable to open the eyes.
Another time, for the Angers Org, I received on demand the folders of one of
"my" pcs; they had done a 75 hours auditing program on him, completely
stupid! Though two Class IV auditors and C/Ses were leading the org, none of
them had asked anything changed to the stupid program: that guy has had 75
hours mostly flunked sessions... on ARC breaks mixed with L1s: a record,
but he was never asked to go to purif first or so.
They were obeying to the preclear, who ended up asking his refund. Another
time, I met a Paris org' pc who had had 930 (yes, nine hundred thirty!)
hours of dianetics auditing. And was completely messed up... under
directives from "technicians terminals" like Jean Michel Wargniez, Cl IV
senior C/S, Alain Kartuszinski (now a class XII C/S and auditor with Lisa
Mc Pherson's blood on his hands at Flag), and some others.
Not to speak of the ED int in Europe, the crazy cretin Guillaume lesevre.
roger
From: eldonb123@aol.com (EldonB123)
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: 11 Jul 1999 08:59:53 GMT
Message-ID: <19990711045953.05204.00000371@ng-cg1.aol.com>
>It goes towards suing people who speak the truth about Scientology.
>
>It goes to private investigators and hired thugs to harass the critics of the
>business.
>
>It goes to the private bank accounts of the crime bosses that run the
>business.
>
>It goes to the victims of the crime syndicate who sued because of the abuse
>and won their suits against the business.
>
>It goes to long-distance phone bills so that the sporger injecting hundreds
>of
>thousands of forged articles in this newsgroup can continue to do so.
Those are some of the places. It also goes "uplines" to be put into
ridiculously expensive facilities--like a state-of-the-art recording studio
that looks like a Scottish castle; the "Super Power" building in Clearwater;
and the opulent Celebrity Center in Los Angeles.
This while the local organizations are forced to move into cheaper quarters, in
worse parts of town--as in Portland. Scientology resources are obviously being
consolidated in Clearwater, Florida and Southern California. The "expansion"
strategy is starting to look pretty top-heavy, wouldn't you say?
EldonB123@aol.com
From: [privacy deletion -ed.K] at Spiritual Research Workgroup
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Sun, 11 Jul 1999 18:30:02 GMT
Message-ID: <3794d342.10308468@newsact.lightlink.com>
On Sun, 11 Jul 1999 07:23:11 GMT, shy_david@nospam.org (Shy David)
wrote:
>On 11 Jul 1999 05:16:52 GMT, birdie1127@aol.com (Birdie1127) wrote:
>
> >The courses and auditing in Scientology cost so much...where does the money
> > go?
> > I had thought that perhaps the staff was well paid, and evidently this is not
> >so. I've seen people getting paid less than $10 per week?!? I don't know how
> >they live on this. So when these courses cost thousands of $$$$$, where does
> >it go? Anyone know?
I know. I worked in Treasury and on the project to set the Church up
to be audited by the IRS.
Most of the money goes to paying present time bills of the Church in
question (local branch), such as staff pay (minimal), electric bills,
heating bills (these are quite extraordinary, some times, when the
buildings are large), sending out mailings, whatever. Very normal
expenses. I can't remember if it is 10%, but some amount like that
gets automatically taken out of the gross income, and sent directly to
Flag, where it is put in the "war chest" for:
>
>It goes towards suing people who speak the truth about Scientology.
>
>It goes to private investigators and hired thugs to harass the critics of the
>business.
>
>It goes to the private bank accounts of the crime bosses that run the business.
>
>It goes to the victims of the crime syndicate who sued because of the abuse
>and won their suits against the business.
>
snip
I can't speak for what else Flag does with this money, but mostly,
they just invest it. That is why they have billions in offshore
accounts. It is why, when things start to hit the fan for the Church,
they will last a long time on interest alone, or dissolve, and the
Board members might get to split the money, I haven't seen the
relevant documents.
[privacy deletion -ed.K]
[privacy deletion -ed.K]
currently guest at
Workgroup for Fundamental Spiritual Research and Mental Training
http://www.sgmt.at
From: "Roger Gonnet"
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Mon, 12 Jul 1999 12:17:32 +0200
Message-ID: <7mcocs$2cm$8@news4.isdnet.net>
Lronscam a écrit dans le message :
3789260B.6AEA647C@aol.com...
> "[privacy deletion -ed.K] at Spiritual Research Workgroup" wrote:
> >
> > On Sun, 11 Jul 1999 07:23:11 GMT, shy_david@nospam.org (Shy David)
> > wrote:
> >
> > >On 11 Jul 1999 05:16:52 GMT, birdie1127@aol.com (Birdie1127) wrote:
> > >
>
> > Most of the money goes to paying present time bills of the Church in
> > question (local branch), such as staff pay (minimal), electric bills,
> > heating bills (these are quite extraordinary, some times, when the
> > buildings are large), sending out mailings, whatever. Very normal
> > expenses. I can't remember if it is 10%, but some amount like that
> > gets automatically taken out of the gross income, and sent directly to
> > Flag, where it is put in the "war chest" for:
> > >
> >
>
> It would be great if could put down what you do remember. If everyone
> who left Scientology who had anything to do with the Cof$'s treasury
> would put their minds together, then there would be a great amount of
> data about how much money they actually make and they have. There is a
> great deal of evidence now but no specifics.
>
I've given some percentages above, as well as in my book "La Secte". They
were not discussed by clams.
Estimation: in the best franchsies and missions, more than 50 % of the GI is
to be funnelled to higher orgs; that is, if you are extremely attentive to
what you are really forced to pay; and in the higher orgs, like Cl IV, tehy
yet better tools to make the orgs bankrupt if they want to: not only they
get the accounts suignatures, but as well, they ask for completely illegal
contracts to be signed off by orgs presidents with RTC and CSI: they ould by
instance take 1000 dollars per day of presence of a "Flag Staff going to
check the out-techs" or such.
When I left, there was the equivalent of 100000 $ on reserves: three months
later, they had nothing left, and probably had debts against higher orgs.
roger
From: Markus Grahn
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Mon, 12 Jul 1999 18:31:17 +0200
Message-ID: <378A1855.4017@algonet.se>
Roger Gonnet wrote:
> When I left, there was the equivalent of 100000 $ on reserves: three months
> later, they had nothing left, and probably had debts against higher orgs.
The Stockholm Org had reserves of that size too in 1982. That account
was known as the G.O. reserves. When the G.O. was disbanded in 1983, the
account was emptied, and the money was transferred to Copenhagen. One
part of it went to New Era Publications and one part went to the
Nordland Hotel. I left in 1984, so I can't tell if the org ever
accumulated new reserves. I'll bet it never will; CoS is a dying
business in Sweden.
Markus
--
"Money, in short, is a passionate subject."
- L. Ron Hubbard
From: mikemandav@aol.com (MikeMandav)
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: 12 Jul 1999 04:06:59 GMT
Message-ID: <19990712000659.19029.00004403@ng-co1.aol.com>
>Lronscam
:
>How did you get paid? Were you working as if you were a salesman? Is
>that how they didn't pay you much? How did you know how much money was
>being brought in? You got a percentage? The thing I don't understand is
>how they pay so little and get away with it. What ever happened to
>minimum wage?
--------------------------------------------------------------------------
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------------
Thank you for answering my post. I will be happy to answer your questions, and
any other questions which you might have. In fact, I am "flattered" that you
consider my "case" even important enough to "consider".
I got paid with cash in an envelope once a week with the group. I even
remember my exact words upon receiving my first payment. I said (mockingly)
"Wow! Now I can purchase that comic book that I always wanted to get!" Funny,
but I can still remember those words.
I was not working as a salesman. That would have been the "registrar". He was
aaaaaalways wanting to get money from me.
They didn't pay me much because they didn't have much, but even if they did, I
doubt that they would have paid more. They were highly inefficient. Strange,
but I actually felt sorry for them. Even though they abused me, they were
delusional.
I knew that not much money was coming in, because no services were being
purchased, or hardly any, anyway. Yet somehow, the rent was being paid.
Yes, I got a percentage.
They got away with paying me so little because I was not there to make a
living. I fancy myself as being an amature-sociologist "wannabee" (Eric Hoffer
is one of my heroes, the "lumberjack scholar" (or longshoreman, as Martin Hunt
has pointed out.
I spent half of my time at the academy, "learning how to learn" (I never did
learn-duh) and the rest of my time writing letters intending to get people back
who had left. They probably left because they hated writing those letters.
This was a total waste of time because ten thousand UT freshman, who are "prime
meat" to cult leaders, were immediately across the street. They were just too
"dumb" to know where to put their effort.
I would be happy to answer any additional questions which you might have.
Cheers,
--Michael Mandaville
From: Markus Grahn
Newsgroups: alt.religion.scientology
Subject: Re: Where does the money go?
Date: Mon, 12 Jul 1999 12:14:12 +0200
Message-ID: <3789BFF4.487D@algonet.se>
Lronscam wrote:
> How did you get paid? Were you working as if you were a salesman? Is
> that how they didn't pay you much? How did you know how much money was
> being brought in? You got a percentage? The thing I don't understand is
> how they pay so little and get away with it. What ever happened to
> minimum wage?
Here are some basics on the CoS pay system (written from memory)...
The salary sum is 30% of the corrected gross income for the week (the
gross income for the week minus gross book sales, field staff member
commissions, refunds etc.).
Each staff member is paid in units. The number of units depends on the
person's position, training, case level, period of service and ethics
condition.
The highest executives (i.e. the Executive Director, the LRH
Communicator, the Flag Representative, the Finance Banking Officer
and the Director of Special Affairs) get 120 units.
Executive secretaries get 100 units.
Secretaries (division heads) get 90 units.
Directors (department heads) get 70 units.
Ordinary staff members get 60 units.
Expediters (new recruits) get 55 units.
Some achievements in scientology are rewarded with extra units:
Examples: Clear: 5 units, OT III: 5 units, Class IV auditor: 1 unit,
Class V (NED): 1 unit, Class VI (SHSBC): 5 units, One year on staff: 1
unit... etc.
The above applies to full-time staff members, who work at least 55 hours
per week. Part-timers get 1 unit per hour, regardless of position, case
level, training etc.
There is no pay for overtime.
The personal ethics condition affects the pay...
Up-stats are rewarded:
Power: +50%, Affluence +25%, Normal + 10% of the person's total units.
These bonuses are usually withheld and are not paid until all of the
org's income and delivery stats are up, which they seldom are.
Down-stats are punished:
Emergency: -10%, Danger: -25%, Non-Existence: -50%, Lower conditions:
-100% of the person's total units.
The unit value equals the salary sum divided by the total number of
units.
Salesmen (registrars) get the usual staff pay plus commission on book
sales. This commission is 10 or 15 %. There is also an additional
reg-bonus, which is paid on condition that several of the org's stats
are up. This bonus equals 1 or 2% of the corrected gross income and is
divided amongst the registrars.
Markus Grahn
Former Director of Disbursements,
Stockholm Org
From: Markus Grahn
Newsgroups: alt.religion.scientology
Subject: The Safe Environment Fund
Date: Tue, 25 May 1999 22:15:37 +0200
Message-ID: <374B04E9.C34@algonet.se>
What is the Safe Environment Fund?
I was pay-roll officer in Stockholm org in the early eighties. I
remember that many staff members used to donate 5 or 10 SEK (approx. 0.7
- 1.4 USD) a week to the Safe Environment Fund (SEF). The donations were
drawn directly on the pay-roll, and the total amount (maybe 400 - 500
SEK a week) was handed over (by me) to the local Guardian Office.
I presume that SEF would cover extraordinary costs related to legal
matters. I have heard that the fund came into existence after the
Operation Snow White disaster. (I seem to remember that the GO officials
involved were described as innocent in the internal propaganda: "They
had only taken some Xerox papers".)
When GO was disbanded, SEF seemed to disappear. And the staff members
donated their money to CCHR instead.
Markus
From: http://www.entheta.net/entheta/1stpersn/warrior/1998-021.htm
Re: Followup to Zed's mysterious document - CST, RTC, GO, wacky
conspiracy theories and more [26 Feb 1998]
In my opinion, "corporate lines" were *only* to confuse the "tax cruds",
as LRH liked to say. _Real_ control of Scientology was, and always has
been vested in the Guardian Office, the Office of Special Affairs, and
the Sea Organization.
From: Warrior
Newsgroups: alt.religion.scientology
Subject: Re: Followup to Zed's mysterious document - CST, RTC, GO, wacky conspiracy theories and more
Date: 26 Feb 1998 11:36:23 -0800
Message-ID: <6d4g7n$t89@drn.newsguy.com>
References: <6c869j$fs0@enews4.newsguy.com> <6ccfr8$ahg$1@wyrm.its.uow.edu.au>
<6cgdgg$k97@enews1.newsguy.com> <6cpbp4$e1g$1@s3000-01.magna.com.au>
<6d35ur$4aj@enews1.newsguy.com>
In article <6d35ur$4aj@enews1.newsguy.com>, tallulah@mail.storm.ca says...
>
>In article <6cpbp4$e1g$1@s3000-01.magna.com.au>, zed@magna.com.au (Zed) wrote:
>
>>It looks to me like the author has made fairly good observations,
>>but drawn the wrong conclusions. This is one of the points where I
>>think some freezoners have a bit of a blind spot: according to
>>statements from ex-Scientologists who were involved with ASI, the
>>money collected was for the benefit of the Founder, L Ron Hubbard
>>himself.
One person who would know quite a lot about the financial affairs of
Author Services is a CPA named Peter Blecha. He was Finance Audits Director
PAC (later GLA) GO before being transferred to ASI. Since I have been unable
to locate Peter, I am of the assumption that he is still in Scientology. I
worked with Peter quite a bit, and I remember well his telling me, "I was
sec checked within an inch of my life before being posted at ASI". After
his transfer to ASI, I saw very little of Peter. Being from Texas, Peter
liked to play Buddy Holly songs on his guitar. It sure would be nice to sit
down with Peter and catch up on what he has been up to for the last 14 years.
Normally it is pretty easy to locate a CPA, but finding no public trace of
him leads me to believe he is still working exclusively for and in the cult.
>Yup. The impression one gets from reading some freezone accounts is that if
>LRH had only known about the terrible wrongs that were being done in his name,
>and hadn't been held captive in the desert by those who usurped his power, he
>would have ridden to the rescue, and saved the CoS from the evil Prince
>Miscavige. Whereas on reading this document, at least, it seems that he was
>perfectly happy to take money from the various trusts. Although I very much
>doubt he was the only one with his fingers in the till.
Too bad Herbie Parkhouse will probably never talk. But who knows, maybe
he is busy writing his memoirs, to be published posthumously. One can hope.
>>>Then again, it's possible that the bulk of the money went straight into
>>>"trusts" like RRF, which (as far as I can tell) were under no obligation to
>>>pay taxes anywhere but Liberia. On paper, that is. If the corporate veil was
>>>pierced, the jig wouldn't been up.
I wonder if the IRS ever had a copy of BPL 15 September 1975 Issue V
"Accounts Audit Series 9 - THE DISBURSEMENT AUDIT"? Using the attachment
to this issue, one could make some sense out of the disbursement breakdown,
could decifer the disbursement category codes (those numbers inside the
circle on every disbursement voucher), and could generally very effectively
trace the movement (transfers) of funds from various corporations and
accounts to others. Also, it would be useful to have copies of all bank
statements and cancelled checks. In particular, one would want to be
especially mindful of categories 2 (salaries and allowances), 3 (commissions),
15 (charitable donations), 18 (legal and professional charges), 19 (audit and
accountancy fees), 27 (fixed assets), 27a (land and buildings), 28 (loans to
individuals), 29 (loans to other orgs), 30 (payments to or on behalf of LRH),
31 (contras - relays of income received, payments of which offset an income
received), 32 (inter-account transfers), 32a (transfers to 'defense' funds,
bank accounts of which are not kept by org staff, but by the Assistant
Guardian Finance), 33 ('scholarships' authorized by the Legal Bureau),
34 (suspense - used for items which are 'unidentified'), 36 (Flag payments),
36a (Flag billings - payments against Flag bills owing), 36b (Flag 'logistic'
payments), 39 (inter-org transfers) and 40 (contributions to other orgs).
The disbursements audit BPL was written by Mike Totman in 1975; at that
time he was Deputy Finance Audit Branch Director World Wide. He was under
Derek Field (Chartered Accountant World Wide) and Herbie G. Parkhouse (Deputy
Guardian Finance World Wide).
According to BPL 15 September 1975 "Accounts Audit Series 9 - THE
DISBURSEMENT AUDIT", the "purpose of the disbursements audit is to account
for all the money spent [including transfers to 'reserve' accounts] and to
provide a breakdown of the total spent into categories of expenditure."
I used to do the disbursements audit every month, within 5 days following
the last day of the previous month.
The "Accounts Audit Series" as issued by Scientology consists of ten BPLs
(Board Policy Letters). The first five issues in this series were originally
issued as "HCO PLs" in 1970. Over the years between 1975-1978, these were
re-issued as BPLs. The final five issues of the "Accounts Audit Series" were
issued on 15 September 1975.
BPL 15 September 1975 Issue II "Accounts Audit Series 7 - THE INCOME AUDIT"
gives the procedure for providing "a categorized breakdown of the total income"
and it "proves the total of the Income [caps in original] by matching it with
the bankings". Included as an attachment to this issue is a sheet entitled
"INCOME BREAKDOWN - CATEGORY CODES & HEADINGS". Like the attachment to the
disbursement breakdown, it contains a list of the categories used by Scientology
to break down the income by types (e.g., training, processing, book sales, etc)
of monies received.
I mention these issues for a couple of reasons. First, it is extremely
unlikely that the IRS ever saw Scientology's Income and Disbursement packs
containing the original invoices and disbursement vouchers. Hubbard dictated
in finance policy to "put everything known about each transaction" on the
original invoice and/or DV (disbursement voucher). He said to "leave nothing
to memory". On top of the accounting system used by Scientology, other
records are erected. The Income and Disbursement Audits are easily understood
by a lay person, *if* one has the attachments referred to above. Second, the
income and expense reports, and the balance sheets, are erected on top of the
basic records. Unless the IRS or other auditor actually looked at the original
records, one would not necessarily know the truth of each transaction.
>>I think the whole massive re-structuring came about partly because
>>the jig was dangerously close to being up. Mission Corporate
>>Category Sort-Out was started in 1981 (I think) to work out which
>>areas of the Co$ could be a problem. There were tapes made of some
>>of the meetings, apparently, and a small excerpt has found its way
>>onto the Net. Here it is:
>
>> "There is no need at all for them to be the Board of
>>Directors in order for them to run the Church, but the
>>authority of the Church has to lie somewhere, and on some
>>basis. And since the Church has always chosen a corporate
>>entity, eventually the authority is going to have vest with
>>the Board of Directors. The only reason it's worked so long
>>without that occurring is because everyone has effectively
>>been bound by the authority of LRH and have ignored
>>corporate lines...."
In my opinion, "corporate lines" were *only* to confuse the "tax
cruds", as LRH liked to say. _Real_ control of Scientology was, and
always has been vested in the Guardian Office, the Office of Special
Affairs, and the Sea Organization.
>> "[Charles Parcelle] We could say that the RRF, [Religi-
>>ous Research Foundation], and CSC are part of the same
>>church, even though they are corporately different. I mean
>>if anything was a sham corporation, it's RRF.
>
>Charles Parselle (his name is misspelled in the transcript) was, of course,
>Guardian Legal World Wide. And this line definitely goes into the Big Book of
>Unintentionally Honest Remarks by Scientologists.
Yes; Charles B. B. Parselle is his name. I believe his wife Helen was in
the Legal Bureau of the GO World Wide as well.
Thinking about this time period reminded me of two more Guardian Office
World Wide Finance persons: David Cusworth, Audit Officer World Wide in the
70s. Also on staff at WW during this time period was Ian M. Logan, the Audit
Unit I/C (In Charge) World Wide.
>[Allen
>>Wertheimer attorney for L Ron Hubbard answers.] As I
>>understand it RRF receives monies that would otherwise be
>>due to the California Church for services rendered by the
>>California Church to people outside of the country who
>>decide to pay the Church from outside the country. [CP]
>>That's right. [AW] So that's basically right? [CP] That's
>>right. Foreign - non US Scientologists pay RRF they go to
>>Flag [the flag Ship Org, FSO] and take the services. RRF
>>was originally supposed to hold the money until the service
>>was rendered and then pay it to CSC. But in fact it has not
>>really done that and so CSC has rendered much service to
>>many foreign Scientologists and RRF has got the money
>>Fortunately for us RRF wasn't incorporated until 1973 and
>>were litigating 1972. So I haven't really tried to sort this
>>one out but it obviously is the classic case (loud laugh) of
>>inurement, if not fraud. (several laughs) [Laurel Sullivan]
>>Well put. (speaker unidentified) It's all privileged.
>>[Dick Sullivan] The tape recorder is going here Charles...."
Too bad Homer Schomer and Laurel Watson Sullivan are under gag orders.
>>"Now when you talk around a table like this and there
>>is no internal revenue agent present, (whispered:I
>>hope so), bugged or otherwise, one can work out solutions.
>>But when you are a few weeks away from a trial and
>>everything you say is going to be rammed down your throat,
>>then you have to start looking at what actually happened.
>>And its very difficult to assign significances to things
>>other than what was actually being done at the time."
It would be especially hard to assign an altered significance to
financial transactions. In truth, one *could* assign _any_ altered
significances (lies, called "alter isnesses" in Hubbardspeak) to transactions.
The problem of course, is in having the lie pass scrutiny by the "tax cruds".
>>Just a quick point about "assigning significances" - there's an
>>HCOPL about taxes which says that the way to get around paying tax
>>is to assign a significance to the figures before the government has
>>a chance to do it, and think of a "better" significance than the
>>government can. Hubbard boasts about how he always puts enough
>>errors in his tax returns to "satisfy their [the Government's]
>>bloodsucking appetite and STILL come out zero".
This is true. Hubbard did say this in a policy letter.
>So the trick is to leave some "crumbs" for the IRS auditors, or whoever, to
>seize upon, in hopes that they'll be satisfied, and not trouble themselves to
>look more closely at the other figures, where the really big stuff is hidden.
>Ron was a classic con artist. Always looking for an angle.
Another trick, given by Marty Greenberg (former CPA USGO), is to give the
IRS a box of records which have been all mixed up and are incomplete and
not related to each other.
>>So what that last sentence in the excerpt says is that there was
>>some difficulty in trying to lie about (assign fake significances
>>to) the movement of money in the Co$.
That's exactly what the difficulty was. Lying necessitates more lying.
>So an example of a "significance" would be if the CoS claimed that the money
>in RRF was being used to, ummm, further the research of scientology by funding
>for factfinding missions in pursuit of spiritual knowledge by the founder of
>the religion? Instead of that it was used to pay for Ron's trips around the
>world on his boat, avoiding legal prosecution? I mean, are we talking actual
>lies, or acceptable truths? Not that it matters in the long run, I suppose -
>the IRS still would have smelt a rat, if it had ever looked into these sham
>corporations and trusts.
The *whole* picture needs to be looked into. By this I mean *every* bank
account Scientology had needs to be audited. This is why the accounts audit
series is so important - it makes it possible to *trace* money flows.
>>>(I wonder who the CoS hired as tax attorneys to come up with these schemes.)
Marty Greenberg knows. Call Greenberg & Jackson in LA at (213) 666-7700.
Ask for Bradford N. Bernstein, CPA, or Leslie Smith Sobol, CPA (and wife of
attorney Neal Sobol). Or perhaps call Stephen P. Tyrell at the Wahington
DC branch of Greenberg & Jackson at (703) 709-7072.
>>The pre-Miscavige finances were all set up by people within the Co$
>>rather than hired guns. I think Herbie Parkhouse was the main man.
Yes.
>It's almost impressive, in a slimy way. Reading about scn corporate management
>is like a crash course in running a corrupt organization. They may not have
>had much "real world" training, but those in-house scientologist accountants
>knew how to play international tax law like a violin. Which makes me all the
>more sure that they didn't stop playing hide-the-assets after "going legit"
>with the early eighties reorganization. What do you want to bet they're still
>up to their old tricks today, just with different names and new thetan
>corporations?
William D. Truax, Enrolled Agent, and husband of OSA person Debbie Truax,
said in one of his ads, "I can also advise you how to structure your business
and personal life to take advantage of little known tax loopholes". Truax is
an IRS "expert", and claims to have passed his exam on the first try.
>>Information about the current moneypockets of the Co$ is very
>>sketchy. The only publically available source I can think of is the
>>rooms full of Scientology-related documents that the IRS makes
>>available for public inspection.
>
>Even once you make it into the viewing room, I imagine it can be difficult to
>glean just which documents might hold the answers to the most interesting
>questions. It's like the old saying goes, if you can't stonewall 'em, bury 'em
>with bullshit.
Perhaps I should go have a look.
>A good project would be to come up with a simple, straightforward list of
>questions, with pointers to the documents that would likely hold the answers,
>and notes on exactly how to interpret the available information. It's so easy
>to get lost in the bafflegab of legal and financial-ese - but once you crack
>the code, it gets a lot more interesting.
Feel free to ask me questions in email.
>>>Or, perhaps, renamed. Second verse, same as the first. I wonder which of the
>>>currently active trusts best matches RRF? Then again, thanks to the IRS tax
>>>agreement, the CoS doesn't have to register corporations in tax havens; it is
>>>its very own tax shelter, with the blessings of the U.S government.
>>
>>I assume that there are still some tax regulations that 501(c)(3)
>>corporations have to follow. Then there's the penalties that the IRS
>>agreement lays out. I expect that the Co$ has a fair bit of money
>>tucked away from the IRS. The various Co$ trusts could do with a bit
>>of scrutiny, definitely.
Scientology also invests massive amounts of money in futures, stocks
and bonds, etc.
>This may be terribly naive, but reading the IRS agreement, it seems to hinge
>on the notion that the CoS is not a "for profit" entity - as in, the money
>that it takes in is largely spent on activities to further its (allegedly)
>benevolent goals. Good works, spreading the word, public good, all that stuff.
>Even though the agreement itself was virtually without precedent within the
>religious community, I assume that it was not intended that the CoS be allowed
>to stockpile vast sums of money for no discernable purpose - which, it would
>seem, is a pretty good definition of some of these "trusts."
Reserves are spent on legal fees, promotional and book campaigns, new
buildings, etc. And LRH did say to have a huge cushion to fall back on in
the event of an emergency.
>On another note - this question arose while I was working on the CST enigma.
>From what does the CST net its (considerable) assets? As far as I know, it
>has no visible source of income, with the exception of licence fees from RTC.
>Is the funding of CST discussed in the IRS agreement, or anywhere else, for
>that matter? How did it wind up with half a billion dollars in assets in the
>first place?
>
>>Um, I think I may have taken a wrong turn in the corporate maze.
>>Backpeddle a bit - "Sea Org Reserve" payments (abbreviated to SOR
>>payments) are made by _all_ scientology entities, according to the
>>CST vs IRS claims court ruling. Orgs, missions, and "higher level
>>churches" (I assume this means management-level organisations) all
>>have to pay up. The claims court also says that these payments go
>>into bank accounts, not trusts. This is a little confusing, since
>>the total amount of money in all the bank accounts as well as the
>>trusts is all referred to by the Co$ as "Central Reserves".
>
>Okay. So, basically, "Central Reserves" refers not only to the trusts
>themselves, but also the hundreds (thousands?) of individual bank accounts
>that hold the payments made by virtually every mission, org or centre to
>something called "Sea Org Reserves." Have I got it straight so far?
I'll have to cover this in another post.
[huge snip]
>>>>Bailing out now,
>>>
>>>Hah. Don't think you're getting off that easily :)
>>
>>Alrighty. This is kinda fun, anyway.
>
>Online interactive forensic accounting. Not for the faint of heart. But fun
>for the rest of us.
>
>Working on the new, improved CST webpage,
>
>
>K
>
Warrior
see http://www.entheta.net/entheta/1stpersn/warrior/
