The purpose of this summary is not to expose every point of the
document "supplemental submission #1" (it is
192 pages long). It's rather to show some of the contradictions,
lies and twisted truths presented by scientology to the IRS..
A. General observations:
- David Miscavige, the successor leading the cult, declared in
october 1993 that scientology had made a $ 1 billion profit when the cult got the tax exemption.
This contradicts the small revenues and very small profits declared
by the cult in USA - the largest portion of its operations (about 100 millions GI a year).
- The document refers to past US rulings. Most come from discussions
between IRS and other dubious cults, like FDM (page C-4 of the document). Another comparison is made with the "National
Geographic". This exemple shows also that National Geographic should not have its tax exemption, but scientology
made the parralel to it to get exempted...
- Scientology insists a lot on the biographies of the experts
it has paid to do the expertises on prices. Too bad there is no justice paid experts facing them.
- As usual, Scientology multiplied the "religious" terminology
all along the document, even when completely unuseful or evident. It looks as brainwashing: "overwhelm [opponents]",
said Hubbard.
- We believe that the complexity and number of the scientology
organizations and of their links and policies demonstrate a desire to hide their real functions - such as the 8
trusts for managing the reserves of the cult.
- Miscavige and his lieutnants have disobeyed/squirrelled Hubbard policy when
authoring this document. It is forbidden by Hubbard to ever volunteer anything to tax people (ref: HCO PL 25 june 1967, volume 3 OEC page 403 which says: "The real stable datum
in handling tax people is NEVER VOLUNTEER ANY INFORMATION".
(caps in original).
B. Specific notes, with or without comments:
Page A-5: see "Most of the issues
discussed at the Conference related to activities conducted by or associated with CSI or RTC and can be classified
in two basic categories -- private Benefit for periods before Mr. Hubbard's death and commercialism."
Page C-1: "Commercialism is Irrelevant
when Activities are Inherently exempt".
That's how EXXON, Microsoft, GM and other "religions" should be tax-exempted.
Page C-11: the ruling given looks similar to what scientology does in its hotels.
Page D1-D2: important passage that could be possibly taken as an avowal of Hubbard
having made profits on scientology back. The scientology chiefs argument here shows also that the IRS should not
have believed them, since many evideences of Hubbard's profits existed, but he was'nt taxed for them, and they
were not visible on scientology accounts.
F-1 [151505]: "Members of the Sea
Organization are entitled to receive all of their religious services, including upper level services for free." This is untrue, not only because they are supposed to reimburse them if they leave, but
also because working in exchange for almost nothing 100 hours a week is not what one could call "free".
F-2: "However, the Church has never
attempted to
enforce reimbursement in a court of law and, as a matter of Church policy, will never do so." - Yet the cult menaces the staffs and does not inform it that it does not sue (and besides,
no policy says that the cult won't ever ask justice to get freeloaders debts: it is therefore scripture violation and verbal
data to allegate it!).
G-2: "1. Policy and Ecclesiastical Review
All prices and contribution rates are set pursuant to
Church policy, as adopted by CSI. In general, proposals to change prices for books, E-Meters and jewelry initiate
with Bridge, are approved by CSI, and are then verified by RTC.
Proposals for changing contribution rates for services initiate and are approved within CSI and are then authorized
by RTC. Contrary to the Service's assertions, neither L. Ron Hubbard, NEP nor any other entity establishes prices
and contribution rates." When, as a scientology association chief,
I tried to discuss the prices during the years 78-82, the prices were determined by Hubbard himself, and transmitted
by the WWide management. He had written "LRH EDs on these increase, where he said that scientology had to
compensate the inflation rates. Then, prices were multiplied by 10 to 15 in 4 years.
G-3: "First, the price [of service
etc.] or rate must be affordable to a broad segment of the general public."
Is it "affordable for a broad segment" to have to pay 10 years of an upper level executive's salary to
make it to OT 8, which is not the end of the scientology "Bridge"? (at least 360000 $)
G-4: ...Bridge should make a 33 % profit rate.
G-17: "CSI policy for setting contribution
levels for
religious services is to set them so sufficient funding is provided to achieve the Church's primary goal of wide
dissemination of the religious technology and spiritual enlightenment. .../...
"Proposals for contribution levels are designed to
achieve Church policy of (1) making the entire spectrum of Scientology's religious technology available to the
average person,"
Is setting the total at 400 or 800000 $ per person a way to reach wide dissemination
and reach the average person?
G-20: "Under this formula, contribution rates for the certificate
courses noted above must equal approximately one month's average income for the country in which the services will
be delivered. (Again, average income is the average for the
upper lower-class or lower middle-class pay scale. )"
Wrong: even at package prices, in 1985, the cost to reach class V interned auditor
was ca $ 50000 plus accommodation, time etc..
See here.
G-38: "The Service's questioning,
as innocuous as it may
have seemed to Service representatives, in point of fact,
severely disrupted the ecclesiastical management of a very important facet of the Church's religious activities.
It
also cost the Church a great deal of money to identify,
compile and analyze the requested data. As a result, the
religion of Scientology suffered a significant loss.".
No comment.
G-39: "DMSMH softcover has a suggested
list price of $ 4.95. To date, over 9 million copies have been sold. Unlike almost every other Scientology book,
DMSMH softcover is primarily sold to the general public through commercial bookstores located throughout" Indeed, DMSMH softcover is cheap and scientology says why in the bottom note page G-40,
or to recall that some scientologists received an offer for DMSMH leatherbound at 10000 (ten thousands) dollars
apiece, in 1985. Page G-43 (image) shows that Bridge costs are composed of $ 0,64 royalties for a book sold $ 2,04
by Bridge, that's 31 % of the price.
G-41 shows that royalties are paid by scientology to scientology.
G-50 shows how the E-meters price is calculated; manufacturing costs being not
much above 1 % of the price paid by the client. Scientology forgets to remind that E-meters were sold at 750 to
850 FF (ca 130 dollars) in 1976, in Ron's home - Saint Hill Manor . Admitting a correction for the better presentation
now (though the matérial quality is lower than before) and the difference of money value, the 1993 meters
should have costed ca 600 $, not 6 times more.
G-56-57: "Quite frankly, CSI was
a bit perplexed. CSI is absolutely certain that its policy and method for setting contribution levels for religious
services run afoul of no rule under the tax exemption laws. As discussed above, levels are set so they will be
affordable to all -- and primarily the upper lover class and lower middle class — yet enable the Scientology faith
to be practical and grow as it determines best. CSI had hoped to establish this fact conclusively through the opinion
of appropriate experts.
Just recently, a United States Court of Appeals clearly and
succinctly stated the reason why qualified experts could not be found."
Is it really possible to find experts for prices of pseudo-religious frauds? See
also G-58-60 for the delusion account and pricing of a "religious win", and its scientology's conclusion
: "The courts cannot evaluate Scientology's religious services, nor
can the Service, without violating the Church's fundamental rights under the constitution. Consequently, the Service
must accept CSI's representation that contribution rates for religious services are not set to maximize profits."
Which means that anybody declaring anything religious could, according scientology,
steal as much as he wants to its victims.
G-61 affirms that some scientology prices have decreased during a certain period
- possibly so... but scientology forgets to remind that the total price of the "Bridge" was then around
$ 360000-400000 instead of $ 25000 , in constant value, 20 years before (during the period 1974-1977).
It forgets also to announce that the time (and scientology hotel costs) to get
the same delusion level had tripled for many. It forgets also to announce that scientology managers have do their
best to deviate the clientele to non-Bridge's steps like "Lists", KTL, E-meter's professional course, etc.
G-63 "reconstructed" some prices. Student
Hat costed 850 $ in 1990, but scientology forgets to remind that almost
everyone had to do the purif rundown before - adding $ 2000 to these past 850.
G-64 speaks of a period 1980 to 84 whose choice was not a random one: there had
been such a nuisance for scientology from the Hubbard's prices repetitive increase of 5 % to 10 % a month during
years 77-82 that the cult was in very bad shape. So, prices of some items were partly stabilized , while the number
of steps and the total was multiplied, adding to the total.
H-4: see the abundant list of "Trusts" from where money flows back and
forth... multiplying the complexity of accounts so as to make them impossible to understand for external people.
The next page indicates that each of the many orgs participant to these Trusts has two accounts (orgs were forced
to have SIX accounts in 1980. We can't affirm that they still have six in 1993)
H-6:..." for example, in 1986 SDT
received approximately $ 1,000,000 in [scientology missions] tithes".
So, the 61 missions [document figure p. H-4] from the biggest scientology country
were not making more than $ 10 millions a year, while Flag was already declaring $ 75 millions per year (see here page 21)?
H-9: "Church policy requires that
every proposal for an
expenditure from central reserves must set forth complete details of the proposed expenditure. Specifically, each
proposal must contain a description of the activity to be funded or asset to be purchased, the amount requested
(with all supporting financial data), an explanation of why the activity or asset is necessary, how it will contribute
to the expansion of the religion, and how it - aligns with the goals of the religion and with the particular functions
of the part of the organization that is making the proposal.
Then, the ecclesiastical hierarchy within the organization
responsible for the activity or asset in question reviews each proposal to ensure it meets the foregoing criteria.
A proposal is initially reviewed by the immediate seniors of the staff member who prepared it and eventually by
the organization's Advisory Council and Executive Council, and from there to the Reserves Committee."
This is one of the main waste of work time in scientology. I've seen big major
Orgs' staffs unable to get ballpoints to work.
H-12: "the International Landlord".
Who is that? It reminds another similar post held by Hubbard's wife. Here is the
quote from the Scientology management dictionary: "GUARDIAN, 1. there
is only one Guardian, WW .../... 2. the most senior executive of Scn just below the Executive Director. The post
is senior to Executive Secretaries. The character of the post is best
understood legally as "trustee" or even "proprietor sole.../..."
H-15: "As discussed above , the Reserves
Committee does not have unfettered control over reserves accounts. If a proposal involves any large, unusual expenditure
for a particular Church or trust.../..."
Who or what is behind this "Reserves Committee"?
H-17: see how scientology managers are supposed to act when a building like Super
Power - Clearwater - is to planned.
H-19: "Accounts of Reserves - Much has been said about
the possible size of the Church's reserves. The Service has, for example, speculated that it exceeds any conceivable
use to which the funds could be put. The Service also has maintained that the size of these reserves single-handedly
establishes the Church's hidden agenda -- to accumulate money."
Read the answer from scientology to IRS. Like in H-21#3.
H-23: "Tangible property (all of
which is used exclusively for religious purposes) is valued at the lower of cost or market. Investment property
(primarily oil and gas properties) are valued at the lower of cost or market. The value reported for oil and gas
properties is market, based on a recent valuation."
Like adding millions and slave work to their values, but saying their values have
decreased? (see this other BMS form 1023, pages 3 and 4)
H-24 (image): it gives values in millions of dollars of a consolidated balance
sheet.
H-26: "one thing is certain — each
and every dollar in these accounts is dedicated to some specified use that either supports or advances the religion
of Scientology. There simply are no reserves in excess of those the Church will need to meet its anticipated needs"
Needs for money and reserves, as per senior policy "Make
Money make more money..."
H-29#3: see planned use for $ 156 millions reserves (note:this is contrary to
Hubbard policy saying that the cult must have two years of expenses in its reserves).
H-30: "In the first half of 1987,
approximately $ 4.1 million was spent for public dissemination of books. Between now and the end of 1988 it is
estimated that an additional $ 25.2 million of reserves will be devoted to book dissemination campaigns."
So, they could spend more to sell books than they get GI from these? Interesting, since Hubbard (and now, ASI), are those
profiting of those sales whose advertising is done by a "non-profit".
H-31: "L. Ron Hubbard discovered
a method of totally cleansing a body of all residual drugs and toxins while simultaneously increasing spiritual
awareness known as the Purification Rundown.
[Lie. See experts texts on the purification rundown here.]
"The Church intends to launch a seminars to educate the general
public on the inmediate and practical uses of this religious technology. The Reserves Committee anticipates
spending $ 3,144,360 " -
So scientology puts perhaps more money on this that it could make? Trade people
calls that a "loss leader". Sauna and vitamins, a religious technology?
H-32: b. Legal defense of the religion : everything is of interest in this section.
H-35: see the level of funds designed to constructions and buildings. It is a
very large percentage of the GI, much more than what the cult spends on its staffs pay and servicing of clientele.
This is accumulation of often unneeded material wealth. A religious person can pray everywhere, and scientology
"auditing" can happen everywhere. But getting rich Tom Cruises
or Feshbacks families is perhaps the only purpose of scientology, one needing large appearance efforts. H-38
#2 adds another $ 47 millions to the $ 56 millions page H-35.
H-42: ..."450 children of the Los
Angeles area Sea Organization staff "
For the most populated WWide scientology area, staffs have only 450 children?
H-45: see re Gilman Hot Springs
H-47: other material purchases ... for $ 37 millions (H-48 gives figures for the
INCOMM system)
H-52: "CSI is also purchasing 500
specially modified projectors to replace the Churches' current obsolete "
Since scientology had nowhere 500 orgs or missions in USA, why such a number of
special projectors, and why should they exempted of taxes in the foreign countries where they could go?
H-56, last #: see the effort -171000 copies of "The Crusader" to disseminate
scientology to religious people. Please, observe that Crusades are pillage and abusing organizations than pilgrimage's ones.
H-57: "Support of Church staff : As part of their
staff position, Sea Organization members are provided by the Church with their food, accommodations, medical and dental care, a small weekly stipend
for incidentals, and uniforms. "
Where are the accounting evidences of this ? Nowhere in the accounts on forms
1023 we have seen social insurance costs or medical materials.
H-58 to the end of the document: a
MUST READ : all these pages give bad justifications, whinings and
lies regarding the "make money make more money" famous Hubbard Senior Policy, as well as on other topics
related to tax exemption.
