Social Betterment Properties International
[Disclaimer: I am not a tax expert, the analysis that follows is simply my layman understanding of tax and corporate matters.]
In 2003, Scientology's secular front Association for Better Living and Education ("ABLE") granted over $22 million to Social Betterment Properties International ("SBPI"), a contribution that thwart any other made by ABLE by a long stretch. This is more than what ABLE has spent on its programs and contributed to other organizations between 1998 and 2005, all combined (1999 not included as I don't have ABLE's 990 filing for that year yet.) ABLE's stated primary purpose is "to rid the world of drug abuse, crime, illiteracy and immorality."
The details of 2003 contributions to SBPI:
- $21,752,855 in assets as "land, buildings and improvements" (see below for further details)
- $257,765 as cash grant
ABLE's statement of program service accomplishments on its 990 filing of 2003 doesn't give any detail about the purpose of this $22 million grant to SBPI.
SBPI
is a
California corporation, entirely owned by the Church of
Scientology International, as stated by SBPI's incorporation documents (
860KB):
In accordance with [Social Betterment Properties International's] status as an integrated auxiliary of Church of Scientology International, Church of Scientology International shall be the Sole Member of this Corporation.
Again according to its articles of incorporation, SBPI's purpose is:
SBPI's board of directors, as of 2005:
- Tom DeVocht (president)
- Lyman D. Spurlock (CEO)
- Gordon K. Steele (secretary)
- Edyth Quillin (CFO)
According to GuideStar.org (require registering), here are some general information about SBPI:
- SBPI is a 501(c)(3) public charity.
- SBPI is not required to file an annual return with the IRS because it is a religious organization. (my emphasis)
- contributions are deductible, as provided by law.
According to GuideStar.org and the Economic Research Institute, SBPI primary purpose is classified as "X02 - management & technical assistance." "X02" is an NTEE classification code which put SBPI in the "Religion, Spiritual Development" category.
The Economic Research Institute's web page on SBPI shows revenue slightly under $6 million, and assets of over $42 million (year unknown). It is unclear where these numbers come from since SBPI is not required to file a 990 form.
SBPI was mentioned in a newspaper article: Webster-Kirkwood Times (Dec. 2006): "Odenwald Critical Of Campisi's 3 Absences":
Eventually, the property tax exemption, previously denied because
of specific concerns about SBPI's incorporation articles (
860KB), was obtained from the city of St-Louis. (see
Google cache)
Worth noting:
- On GuideStar.org and Economic Research Institute, SBPI's address is the same as the Church of Scientology International's address — 6331 Hollywood Blvd., Los Angeles, CA
- On California Business Portal, SBPI's address is the same as the Religious Technology Center's address — 1710 Ivar Avenue, Los Angeles, CA (see Ron Sharp's My Maps)
ABLE claims to be secular and independent of the Church of Scientology [ref]. However, with ABLE's 2003 grant to SBPI, it can be said that more of its revenue from 1998-2005 went into supporting a faith-based corporation — which belongs to Church of Scientology International, rather than spent to benefit society at large.
Citizens Commission on Human Right's 2003 non-cash grant to Social Betterment Properties International
This means that in 2003, as far as is known at this point, SBPI received over $25 million in grants from Scientology secular fronts.
Details of the ABLE's 2003 non-cash grants to Social Betterment Properties International
Below are the details of what make up ABLE's grants to SBPI:
| Property | Year purchased | Tenant | Item | Cost value | Book value |
| HC 67 Box 5, Canadian, OK | 2000 | Narconon Arrowhead | Land | 113,705$ | 113,705$ |
| Buildings | 1,888,136$ | 1,781,929$ | |||
| Land improvements | 171,610$ | 94,385$ | |||
| Building improvements | 3,144,818$ | 2,791,087$ | |||
| 11755 Riverview Drive, St-Louis, MO | 2001 | Applied Scholastics International | Land | 342,772$ | 342,772$ |
| Buildings | 3,245,383$ | 3,218,338$ | |||
| Land improvements | 1,016,542$ | 948,773$ | |||
| Building improvements | 7,706,381$ | 7,577,941$ | |||
| 201 E. Broadway, Glendale, CA | 2001 | The Way To Happiness Foundation | Land | 823,329$ | 823,329$ |
| Buildings | 2,126,932$ | 2,118,070$ | |||
| Land improvements | 827$ | 799$ | |||
| Building improvements | 1,958,048$ | 1,941,731$ | |||
| Total | 22,538,483$ | 21,752,859$ |
Thus, starting in 2003, Narconon Arrowhead, Applied Scholastics International and The Way To Happiness Foundation became tenants of properties owned by SBPI, which means that part of their occupancy expenses are paid to SBPI.
ABLE spent almost $14 million in improvements on these properties. Unfortunately, prior to 2005, the IRS required only the disclosure of independent contractors paid $50,000 or more for professional services, thus it's not possible to have an idea how the funds were spent for these property improvements. Here are the only independent contractors disclosed on ABLE's 990 filings between 2000-2003:
| 2003 | Cardell Cooper | Consulting | 60,000$ |
| 2002 | Michael James Design Team | Interior and landscape design | 138,061$ |
| 2002 | David McCullough | Design and photography | 69,018$ |
| 2000 | Michael and Sherri James | Interior designer | 130,109$ |
| Total | 397,188$ |
SBPI and the IRS
Note that SBPI's status as an "integrated auxiliary," as seen in the incorporation document
(),
is actually an expression defined by the IRS as follow
[ref]:
- be described both as an IRC section 501(c)(3) charitable organization and as a public charity under IRC sections 509(a)(1), (2), or (3),
- be affiliated with a church or convention or association of churches, and
- receive financial support primarily from internal church sources as opposed to public or governmental sources.
Note that as an "integrated auxiliary of a church," SBPI's tax filing is not open to public inspection. The third point from the excerpt above is interesting. Code of Federal Regulations, 26 CFR section 1.6033-2, (h), (4) Internal support [ref]:
(i) Offers admissions, goods, services or facilities for sale, other than on an incidental basis, to the general public (except goods, services, or facilities sold at a nominal charge or for an insubstantial portion of the cost); and
(ii) Normally receives more than 50 percent of its support from a combination of governmental sources, public solicitation of contributions, and receipts from the sale of admissions, goods, performance of services, or furnishing of facilities in activities that are not unrelated trades or businesses.
In 2003, SBPI received over $25 million from public charities (ABLE and CCHR), and I understand that these entities do not qualify as "internal church sources." Also, it would seem that Narconon Arrowhead, Applied Scholastics International, and The Way To Happiness Foundation now pay a rent to SBPI. Therefore, can SBPI be characterized as "internally supported"?
In short: if SBPI is really an "integrated auxiliary" of the Church of Scientology, this implies that the entities that provided it with grants of over $25 million — ABLE and CCHR — are Scientology religious entities themselves (they are presenting themselves as secular entities), as well as the entities it serves through property rental — Narconon Arrowhead, TWTH, ASI, and possibly CCHR. If the entities it serves are not Scientology religious entities, than SBPI should not have "integrated auxiliary" status, and therefore its tax filings should be open for public inspection.
Also of interest, Code of Federal Regulations, 26 CFR section 1.6033-2, (h), (3) Facts and circumstances [ref]:
It would seem that upon dissolution of SBPI's, its assets are required to be distributed to the Church of Scientology International, which means that at least $25 million from public charities will have finally found their way to the Church of Scientology International.