Affidavit of Theodore Heisig, Jr.

1 November 1991


I, Theodore Heisig, Jr., state:

1. I am a resident of Orange County, California.

2. I am a licensed private investigator in the State of California. My license number is # 13793.

3. I was engaged by or on behalf of the Church of Scientology or its related organizations ("Scientology") to undertake private investigations during the period 1989 through 1991. During that period the payments I received for investigative activities on behalf of Scientology accounted for more than 80% of my total income from private investigation work.

4. Beginning in 1989, one of my assignments for Scientology was to perform an investigation of Werner Erhard ("Erhard") and his organizations, "EST" and "Werner Erhard & Associates" (WE&A), as part of a project designated by Scientology as the "EST Project". My assignment was to get damaging information on Erhard, to monitor current litigation against Erhard and to conduct interviews.

5. I commenced my investigation of Erhard as part of the EST Project in October, 1989,including a trip to San Francisco area to interview people. My instructions included, but were not limited to, the following: do legal checks on Erhard to see if there were criminal cases in other states, check with the Board of Psychiatric Examiners for any complaints against Erhard of WE&A, interview Erhard's ex-maid Dawn Damas about his alleged drug abuse and get names of drug dealers that associated with him, contact disaffected EST employees and members, do surveillance on Erhard's boat in Sausalito where he lived and worked to determine his activities, contact reporters that did critical articles on EST, contact and interview Erhard's ex-wife, Ellen Erhard, contact parties suing Erhard or EST to obtain information concerning Erhard's alleged illegal activities, and contact Vic Krohn in the Sacramento Scientology office regarding information on Erhard's IRS tax case 1n Washington, DC.

6. In furtherance of the EST Project, I received written instructions dated November 27, 1989 and titled "Additional Targets for EST Project" from David Butterworth, my case officer and the head of the Office of Special Affairs for the Pacific Region of Scientology. I understood that David Butterworth's superior, Doug Jacobsen, a SEA org investigation officer, was the person who re-initiated the current activity against Erhard.

7. These written instructions described above were for me to: recontract Paul Gutfreund and arrange the exchange of documents, to re-contact Erhard's ex-maid Dawn Damas and ask her to find out if Ellen Erhard would be willing to meet with me to help me expose any possible criminal activities of Erhard's, and if not, then could Ms. Damas get further data from Ellen Erhard to get to me. In addition, the instructions included contacting new "targets" for the purpose of obtaining information regarding illegal or criminal activity of Erhard as well as a list of "undone targets" from previous instructions. I was to contact any new leads from the named targets. I was also instructed to stay on the main line investigation of ferreting out and documenting crimes so that Scientology would have actual documents and affidavits in hand.

8. Pursuant to such instructions, I made several trips to the San Francisco area during the period between November 1989 and February 1990.

9. In November, 1989, I spoke with Landon Carter, a former EST trainer, and identified myself as a private investigator working for clients who were interested in exposing any criminal activities that Erhard might be engaged in. I informed Mr. Carter that I knew people who believed that Erhard had cocaine stored in a warehouse in Sausalito. Mr. Carter responded that when he worked for EST, he knew what was going on and there was no such activity or any other criminal activities conducted by Erhard or in which Erhard was involved. Mr. Carter went on to say that since he left he hadn't heard of anything illegal, and there is enough of a network of talk about Erhard that he would have heard something. I had no further conversations with Mr. Carter.

10. On or about December 2, 1989, I went to the residence of Pia Smith, a former EST employee, in Sausalito, California. I identified myself as a private investigator and said that I wanted to speak with her about Erhard. She declined to open the door of her residence and instructed me to contact her by phone. I made no further contact with Ms. Smith.

11. On or about December 2, 1989, I spoke with William Clements, a former EST employee, and said that I was a private investigator investigating allegations of criminal conduct by Erhard. Mr. Clements questioned how a private investigator could conduct a criminal investigation. I responded that I wasn't actually conducting an investigation of criminal activities and that I represented clients from Los Angeles who were former EST people looking for someone to cooperate with them in their effort to discredit Erhard. I told Mr. Clements that I was looking for someone to sign an affidavit. Mr. Clements said he knew of no criminal activities on Erhard's part and that he was not interested in helping me. I had my last contact with Mr. Clements shortly after the 60 Minutes program aired in March 1991 when I again asked for information on Mr. Erhard. After that I had no further conversations with Mr. Clements.

12. I spoke several times with Ms. Dawn Damas, a former employee in Erhard's home, who made statements regarding sexual molestation and physical abuse by Erhard of family members, that Erhard disowned his son and that Erhard's daughters were scared to death of him. Ms. Damas told me that Ellen Erhard wanted her to write a negative book about Erhard and it was my impression that Ellen Erhard was giving information to Dawn Damas for that book and for me. Ms. Damas made it clear that she had no personal knowledge or proof of these statements. Ms. Damas told me that I should speak to people who had been around Erhard: Becky and Landon Carter, Raz and Liza Ingrasci, Bill and Carla Clements, Wendy and Vincent Drucker. I informed Ms. Damas that I'd gotten her name from them, and they hadn't told me anything. I informed Ms. Damas that I had been given information that a warehouse in Sausalito was a drug front. She replied that she didn't know anything about that, but she knew that fine art was kept there. I also informed Ms. Damas that I had gone to Ellen Erhard's home, knocked on the door, that a young girl came to the door and suddenly ran upstairs without talking to me.

13. During November 1989 - March 1991, I also spoke with the following persons:

(a) Vincent Drucker - I spoke with Mr. Drucker, a former EST employee, who suggested that a satire on self-deception should be done on Erhard.

(b) John Toth - I spoke with Mr. Toth, an electrician who had performed work in the Franklin House, a building in which Mr. Erhard had worked. Mr. Toth said that he had heard that one or more rooms in the Franklin House was bugged and that in one instance, a recording was made of Erhard and a female employee. Mr. Toth further said that when Erhard later learned of this, he ordered that room debugged.

(c) Mari Sharkey - I spoke with MB. Sharkey, a former food server at the Franklin House. Ms. Sharkey indicated that Erhard most likely furnished cocaine to Landon Carter and his wife in 1978.

(d) Carol Farland - I spoke with Ms. Farland, who had previously performed work at the Franklin house. Ms. Farland spoke very highly of Erhard.

(e) Bob Curtis - I spoke with Mr. Curtis shortly after the 60 Minutes program aired in March 1991. He declined to give me information on Erhard.

14. During November - December 1989, I also attempted unsuccessfully to contact several other persons regarding Erhard. These included Ellen Erhard, his former wife, and Arnold Siegel, a former associate.

15. One of the targets whom I was to contact in my original instructions as well as in follow-up instructions, was Paul Gutfreund ("Gutfreund"), a resident of Sausalito, California. I was in regular communication with Gutfreund from October 1989 through the summer of 1991, including lengthy telephone conversations on or about October 29 and November 21, 1989; I had initially contacted him in view of his pending lawsuit against Erhard in San Francisco. I was to obtain documents that Gutfreund had on Erhard and EST in exchange for documents I had on Erhard and EST. Since November, 1989, I have had several telephone conversations with Gutfreund and I met with him several times in Marin County, California on or about April 24, 1990.

16. During the period since October, 1989, Gutfreund provided me with the names (and in some instances the telephone numbers) of individuals to contact regarding possible damaging information about Erhard. These individuals included, but were not limited to, Dawn Damas, John Toth, Margaret Singer, Arnold Siegel and Sharon Billings. I provided Gutfreund with the names of individuals for him to contact regarding damaging information about Erhard. These individuals included, but were not limited to, Mari Sharkey and Charlene Afremow. Gutfreund and I also discussed the content of conversations which he or I had with individuals regarding Erhard. These individuals included, but were not limited to Landon Carter, Dawn Damas, John Toth, Vincent Drucker, Ellen Erhard, Charlene Afremow and Audrey Tanzer.

17. During the period since October, 1989, Gutfreund also sent me a number of documents that he thought contained information that was damaging to Erhard. The documents included a 15-page Table of Contents prepared by Gutfreund reflecting approximately 500 pages of backup documentation which Gutfreund had regarding Erhard and his activities as well as those of the organizations with which Erhard is involved. Included in the documentation which was sent to me by Gutfreund were copies of the following.

(a) Declarations signed by Vincent Drucker and several other individuals that were filed with the Superior Court in San Francisco on behalf of Charlene Afremow in her then pending lawsuit against Erhard. The copies of the Declarations which I received from Gutfreund in March, 1990 did not bear the court stamp showing they had been filed with the Court. The Declarations contained allegations by Drucker and the other individuals that were damaging to Erhard.

(b) Letter dated June 6, 1989 purported to be written by an unnamed employee of Erhard's company, Werner Erhard and Associates, together with documents relating to emotional upsets of participants in the EST Training and also to financial information with respect to Erhard. The letter was not signed and the party to whom it was addressed was blackened out.

(c) Gutfreund's Table of Contents included references to Erhard's "personality disorders" and to Erhard's possible "connections with neo-Nazism."

(d) Media articles critical of Erhard and his organization. All of the materials that I received from Mr. Gutfreund were turned over by me to the representatives of Scientology.

18. During the period since October, 1989, I sent or gave to Gutfreund documents regarding Erhard and his organization in exchange for the material he provided to me. The documents I gave to Gutfreund included materials pertaining to the lawsuit filed by Erhard against Congressman Cox in Orange County, California, and copies of several letters written to the San Francisco Chronicle in response to their April 3, 1990 article on the Afremow lawsuit.

19. During the course of my telephone conversations with Mr. Gutfreund and my meetings with him on or about April 24, 1990, Mr. Gutfreund verbally made the following statements regarding Erhard:

(a) Erhard is a profoundly evil man.

(b) Erhard is a gross pathological liar.

(c) Erhard is paranoid.

(d) Erhard has a fascist organization and it is a cult.

(e) Gutfreund contacted 60 Minutes regarding an involvement between Erhard and the CIA.

(f) Erhard stole all the material he started with in EST.

(g) Erhard was definitely a neo-Nazi in the 1970's.

(h) Erhard has a criminal mind.

I transmitted all of this information that I was told by Mr. Gutfreund to the representatives of Scientology.

20. During our conversations, Gutfreund made the following additional statements relating to matters pertaining to past, current and pending lawsuits involving Erhard:

(a) Gutfreund received the documents, consisting of the purported letter from an employee of Werner Erhard and Associates and the attachments relating to emotional upsets and to Erhard's financial information, from Margaret Singer.

(b) Gutfreund said that the Declarations in the Afremow lawsuit which he sent me in March, 1990 could not be made public for the time being, since he promised the lawyer that these documents were sent back or that nobody did anything with them for the time being. He said that the lawyer didn't want the judge to get upset because these documents got out since that would mess up his case.

(c) Gutfreund had provided audio tapes and other material on Erhard and his organization to Randy Loftin, the man who lives with Charlene Afremow who had a pending lawsuit against Erhard in San Francisco.

(d) Gutfreund had a telephone conversations with Gerald Ragland, the attorney in another lawsuit (Slee) pending against Erhard in Connecticut.

(e) Gutfreund supplied numerous members of the media with material in an attempt to get the stories he wanted published. He specifically supplied the Chronicle both with material connected to the Afremow lawsuit, which included declarations without the seal of the court, that he obtained by various means, and with material I supplied him from Scientology. On several occasions Gutfreund contacted reporters on the staff of the San Francisco Chronicle which led to the two articles published in January and April, 1990 on the Afremow lawsuit which were critical of Erhard and his organization. Gutfreund was in regular and sometimes daily communication with Don Lattin, one of the Chronicle reporters.

(f) Gutfreund spoke with a reported for KGO-TV in San Francisco regarding Erhard on or about April 5, 1990, several days after publication of the article on the Afremow lawsuit in the San Francisco Chronicle.

(g) Gutfreund informed me that he has 4 or 5 reports [sic, reporters?] interested in getting into the sealed divorce case.

(h) Gutfreund told me that he is working with the IRS against Erhard.

(i) He was in contact with former EST members now in Scientology who were working with him against EST to prove their worth to the church. Both Gutfreund and Scientology disseminate the information they obtain on people to the Cult Awareness Network.

(j) Gutfreund things [sic] that Erhard paid off Ford Greene, his attorney in his case against Erhard.

(k) Gutfreund was also in regular communication with Richard Behar, a reporter published in Time Magazine.

21. Gutfreund had been in communication with several individuals who were to be witnesses for Afremow in the trial of her lawsuit against Erhard. These included Randy Loftin and Sharon Billings with whom Gutfreund has been in regular communication.

22. Roger Stodola, from the San Francisco Office of Scientology, sent material to Gutfreund as well as distributed it to the media through his own media contacts.

(a) Stodola was in direct contact with Jessie Kornbluth of the Vanity Fair who wrote a negative piece on Erhard in the fall of 1990 that didn't get published and a piece in New Times magazine that did get published in the mid 70's.

(b) Stodola fed information through his media contacts to John Hubner of the San Jose Mercury News who wrote and had published several negative articles on Erhard.

(c) Stodola fed information to Jonathan Littman, an author who wrote a negative article in PC Magazine about Bill Millard, a former associate of Erhard's, and who is now reportedly doing a negative piece on Erhard.

(d) Stodola told me at one point that Randy Loftin informed him that there was going to be an expose in the Marin Independent Journal.

(e) Stodola sent a packet to Gutfreund that contained among other items, documents from Erhard's IRS tax case, the Slee vs. Erhard case, and an anonymous letter from Erhard's office with the address whiten out.

(f) It is my impression that Roger Stodola, San Francisco Office of Scientology, has someone in Erhard's organization. Scientology is too confident, they know too much about what is going on in Erhard's office. Gutfreund definitely has someone who is working inside the organization and is protecting them.

(g) Roger Stodola stated to me that in April of 1990 they had received a call from someone they suspected as Gutfreund. This person offered to sell "explosive material" regarding Erhard to Scientology for $1 million.

23. During all of my contacts with non-Scientology individuals described above, I did not identify myself as having been engaged by or on behalf of Scientology. I generally described myself as a private investigator working for an attorney representing a group of disaffected former "EST people" based in Los Angeles. I specifically told Gutfreund that the objective of this group was to document Erhard's criminal activities and then to notify the proper authorities.

24. I am aware of other private investigators who had been engaged by or on behalf of Scientology to perform investigations of Erhard and his organization as part of the EST Project.

(a) One such person is Seth Derish, a licensed private investigator in San Francisco, who was engaged by or on behalf of Scientology on or about July, 1989 to obtain financial information regarding Erhard and his organization. Mr. Derish did obtain such financial information and he transmitted it to the representatives of Scientology. I saw the financial reports that Mr. Derish submitted. In the information I saw in the files that Scientology has on Werner Erhard, I saw information that Scientology believes Erhard has a Swiss bank account and that they have the account number.

(b) Another person was Alan Clow, a licensed private investigator. Although I never met him, Mr. Clow also started an investigation on behalf of Scientology. Mr. Clow identified himself to these people in the same manner that I did, namely as representing former EST people. Paul Gutfreund informed me that Alan Clow asked him questions about Erhard sometime during 1990.

26. Scientology has five (5) full filing cabinets of information on Erhard and EST and the material goes back to 1943. It includes in it their actions and activity against Erhard going back to approximately the last 20 years. Apparently Scientology had some problem with Erhard and have been attempting to put him out of business for some time. From the material in these cabinets it was evident Scientology was compiling a media blitz against Erhard and that Scientology was behind the 60 Minutes program and a national disinformation campaign to get Erhard. I declare under penalty of perjury under the laws of the State of California that the foregoing statements are true and correct. This Declaration is executed on this 1st day of November, 1991 in the City of Tustin, County of Orange, California.

Theodore Heisig, Jr.

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