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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.

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