Legal judgments on what this regulation means have been nebulous at best because it deals with invisible assets in relative terms.  It may be simple to count the dollars one receives, but but not so easy to measure the trust, influence, authority, good will, promises, teaching, gifts, relationship advantages, shame or gratitude that are connected to money received by members of an organization.  The term “inurement” is so much of a mystery that WordPress doesn’t even provide spelling for the word.

Although legal considerations matter since a nonprofit organization can lose or fail to obtain tax exempt status for violation of the private inurement code, the greater danger may be a loss of trust and transparency among members/supporters of an organization.  The negative results are more felt than proved on a specific budget line and can be harmful to much more than an organization’s tax status designation.

At the core of private inurement is a practice of using the assets of a nonprofit organization for personal gain.  It is often limited to examining the tangible investment of nonprofit funds to create exuberant compensation for paid staff of the organization, but a moral interpretation goes beyond legal definitions to suggest that anyone in leadership may unfairly use their intangible power or leadership over members to influence them is such a way that he or she profits financially as a result.

Leadership is a sacred trust that ought not be entangled with suspicion or mixed motives.  When considering a profit/nonprofit partnership, there is always the possibility that as members of a community enter business arrangements within the social network, there may be charges of private inurement, or using the organization for personal benefit.  This can happen when an auto mechanic, real estate agent, financial planner, construction contractor or Mary Kay representative does business within a congregation or nonprofit organization.

We may argue with a minster or nonprofit CEO who strongly influences their group to contract with their own family members to perform maintenance on properties owned by the nonprofit at a fee that is far beyond normal or for services that are never rendered.   We would probably not, however, complain about a son or daughter providing music lessons for a reasonable fee to members of the group (as long as no undue pressure is applied by leaders), or about the leader of a group selling books he or she has authored.  When members of an organization freely choose to do business with one another, the normal conflicts of commerce may arise, but the burden of unfair advantage among members should not be an issue.

Care must be taken to level the playing field of opportunity for all and ensure that no one benefits simply because of their position.  It is difficult to establish rules since the connection among friends is a primary dynamic of relationship marketing and coexists with more formal relationships and informal power within organizations.  One possible strategy is to be sure the organization benefits from any commercial endeavor and then the organization can choose ethically and legally how a leader would be compensated rather than allowing a leader to act independently with unlimited range of profit through the organization.

1.  My boss, a middle-aged white man said, “The people doing all of the talking about education reform are just a whole bunch of old, white guys.”

2. We’re probably going to get evicted from the building we’re in right now.  My boss thinks begging many different people for more space is going to somehow keep us where we are.

Update: We just got an email from the lawyer of our landlords requesting that we stop contacting them.  Hahahahahaha.

3.  ”The Internal Revenue Code and Regulations specifically prohibits inurement, the unlawful enrichment of persons at the expense of the 501(c)(3) org’s charitable purpose. If this loan was issued at terms more favorable than market then this loan may fall under the inurement prohibition. The larger issue is whether such a loan is necessary for allowing the 501(C)(3) to carry out it’s exempt purposes and whether it is considered substantial in terms of the size of the 501(c)(3). If the loan is not furthering their charitable works and is material in size, then you venture into the area where the tax exempt status is at risk. Simply loaning to an employee “to help them out” won’t cut it.”

Just a few minutes of Google searching led to this.  Guess who took out an interest-free loan from the school?

4. Another guess-who game: Guess who convinced the board of directors to pay him for the three years prior to the founding of the school?  $80,000/year for 3 years = way too much money for someone who wasn’t working at the time.

5. Arnoldo (the fake concussion kid) is headed to public school.  His parents wouldn’t believe that he was faking it, and they were upset we wouldn’t hold an anti-bullying, anti-concussion workshop at school.

6.  I skipped school today because my flight was delayed, and I was exhausted.

See you tomorrow.

N. Halden

Church PR tried to cover up the fact that LRH joined a group run by Crowley in 1945. They say he was working for Naval intelligence to infiltrate the group. The above data shows that to be false. From an early age, before Hubbard entered the Navy, he admired Crowley and believed the ideas that Crowley presented. He joined the group because of shared beliefs, beliefs that Hubbard continued to practice after Crowley died. Two of those beliefs were – take illegal drugs and utterly destroy those who would oppose you.

~

I thought I would share with our readers here, rough drafts of a beginning organization of information into a book format. The information I am using is gathered from the combined efforts of my wife, myself, and the 123jump authors of Scribd.

The book Scientology Roots can be viewed as an Encyclopedia of Historic Events showing what Scientology really is and it’s relationship within the larger Game Plan of what we call The Slavemasters.      (or “Enslavers”)     The carrier subjects of Dianetics and Scientology are propagating the mental, religious, and political ideas of what some have termed The New World Order.

Here is Chapter Twenty-Seven (out of 56 so far). Complete chapter listing (with links) is available at a special page for Series and Books.

Mike McClaughry

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Church of Scientology staff members are paid weekly according to the weekly income.
Therefore, each week their pay varies – they may commonly earn about $1.00 an hour, sometimes a little more or a little less. Their pay is usually well below minimum wages.

Another lie told by Ron Hubbard was him stating that he received less pay than the staff.

In 1969 Hubbard wrote What Your Fees Buy. He said – “Even today I draw less than an org staff member, and they draw very little. So the fees you pay for your services do not go to me.”

The following shows Ron Hubbard lied to Scientologists again, this time about money.

—–

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15 December 1953 – Ron Hubbard incorporates three churches in Camden, New Jersey:
Church of Scientology
Church of American Science
Church of Spiritual Engineering

18 February 1954 – Church of Scientology of California is incorporated by Burton Farber. Part of its purposes include to accept and adopt the aims, purposes, principles and creed of the Church of American Science, as founded by L. Ron Hubbard.

In an explanatory letter of the following month, Hubbard said the new Church was contracted to the Church of American Science, to which it paid a twenty percent tithe. Ron Hubbard was the President of the Church of American Science. ¹

In tax court it was found that from 1956 to 1959 the Founding Church of Scientology in Washington DC had made $758,982 and allegedly paid L. Ron Hubbard more than $100,000 plus the use of a car and a home, along with some unexplained payments to his family, and in some cases ten percent of the gross income of ‘the various groups’. The tax court ruled that FCDC fails to qualify as a corporation “organized and operated entirely for religious purposes.” ²

Hundreds of millions of dollars of Church money was going into the hands of Hubbard, through various surreptitious means. In tax court it was proven that during the 1960′s, Scientology orgs around the world were required to pay directly to Ron Hubbard, ten percent of their income. These payments were termed “debt repayments” because they were designed to compensate Mr. Hubbard for his work in originating the Scientology religion.

In 1968, L. Ron Hubbard, Mary Sue Hubbard, and Leon Steinberg incorporated the Operation Transport Corporation in Panama. The tax court found that OTC was a sham corporation run for the private benefit of LRH and his family. ³

On 26 April 1972, Howard D. Jones, the local American consul general in Morocco, sends a cable to Washington:

“Little is known of the operations of Operation and Transport Company here, and its officers are elusive about what it does. However, we presume that the Scientologists aboard the Apollo and in Tangier do whatever it is that Scientologists do elsewhere. There have been rumours in town that Apollo is involved in drug or white slave traffic. However, we doubt these reports… ” ⁴

Three Flag employees ran the Operation Transport Corporation. In the summer of 1972, they approved L. Ron Hubbard’s decision to transfer about two million dollars from an OTC bank account in Switzerland to the Apollo. The money was stored in a locked file cabinet to which Mary Sue Hubbard had the only set of keys.

Between 1971 and 1972, the Church made payments in excess of three and a half million dollars to OTC. These payments were placed in the United States Church of Scientology Trust of which L. Ron Hubbard was the sole trustee. The trust funds were deposited in several Swiss bank accounts. L. Ron Hubbard and Mary Sue Hubbard were signatories of the accounts and L. Ron Hubbard kept the trust checkbooks. ³

In July 1973 another secret bank account was opened for Hubbard under the name United States Church of Scientology Trust. Hubbard was the sole trustee of this Swiss account, and it received large donations from Scientology organizations throughout the world. The tax court found that the United States Church of Scientology Trust and the Operation Transport Corporation were run for the private benefit of LRH and his family. ³

In August 1973, another new corporation was formed, once again with the sole purpose of siphoning funds to Hubbard. The Religious Research Foundation was incorporated in Liberia by Ron and Mary Sue Hubbard, with numbered bank accounts in Liechtenstein. The RRF and these bank accounts were dominated and controlled by LRH. In excess of 100 million dollars belonging to the Church of Scientology was transferred into the RRF accounts, for the personal control and use of LRH.

The Scientology Church was again billed retroactively for earlier services rendered. This was the second time the Church had paid Hubbard for these services: retroactive billing was the function of the “LRH Good Will Account” in the late 1960s. The Church paid for the third time in 1982. Millions of dollars paid to the Church went straight into Hubbard’s personal accounts.
Laurel Sullivan was Ron Hubbard’s personal public relations director from 1972 to 1981. During that time she was in charge of a secret operation to transfer money from church funds to Hubbard through a corporate shell, the Religious Research Foundation (RRF), incorporated in Liberia with accounts in banks in Lichtenstein and Luxemburg. When she left Scientology in 1981, she said that the RRF’s assets were between $200 million and $300 million, and at one point in the 1970s they totalled $330 million. Sullivan states that through the RRF alone, Hubbard received up to $385,000 annually. ^{5, 6}

December 1980 – LRH appoints Bill Franks to the post of ED International and ordered Franks to become a signatory on certain bank accounts in Luxembourg containing about 150 million dollars. Between now and December 1981, there is a conflict between Franks and David Miscavige over control of these bank accounts. ⁷

13 October 1981  – Attorney Sherman Lenske incorporates Author Services Incorporated.

David Miscavige is Chairman of the Board. ASI becomes the corporate entity controlling Church of Scientology bank accounts and assets. In fact, the officers and directors of ASI possessed no authority from any Church of Scientology corporation to control its bank accounts and property.

Vicki Aznaran says that ASI was incorporated to be the funnel through which profits from Scientology Churches were channeled to LRH.  Stacy Young says that she and all ASI staff were instructed that making large amounts of money for LRH was an integral part of running Scientology. LRH’s communications to ASI staff made it clear that he felt justified in taking as much money out of the Church as Miscavige & ASI staff could get away with. Miscavige’s success or failurewas based onhow much money he could make for LRH, whether it came from the Church or other sources.

Accordingly, Miscavige made sure as much money as possible was taken from Church accounts. Treasury Secretary, Fran Harris, thought up “labels” which were attached to huge lump sums, which Miscavige then ordered transferred from non profit Church accounts, into ASI accounts every week. These labels were designed to conceal from the IRS the true nature of the transfers.

The line was that Pat Broeker would tell David Miscavige to bring hundreds of thousands or millions of dollars for LRH. Miscavige would bring the money in a briefcase to Las Vegas. Pat would meet him there and then take the briefcase of money back to LRH. ⁸

November 1981 – David Miscavige has Bill Franks locked in a room for several weeks while David assumed control over all Scientology corporate bank accounts, and other assets. David was represented by attorneys Sherman Lenske and John Peterson and paid them millions for their assistance in this unauthorized and illegal takeover. ⁹

Author Services Incorporated staff member, Lyman Spurlock, held a general power of attorney from LRH. Therefore ASI could act as Ron Hubbard’s agent in everything. ^{10, 11} They could sign anything for him, in his absence. They could have used that for emptying out LRH bank accounts. So, what appeared to be transfers of money to LRH, could have been withdrawn from LRH bank accounts by someone other than LRH.

12 November 1982 – L. Ron Hubbard, Jr., files a petition in Superior Court in Riverside County, California. He alleges “that officials of the church have stolen millions of dollars, gems and securities from his father or from his estate in the past year. He charges David Miscavige and James Isaacson “forged Hubbard’s signature to loot the accounts.”
Since October 1981, millions of dollars have been removed from Hubbard’s bank accounts with forged signatures. The New England Merchants Bank froze Hubbard’s account after determining that a $2 million check written against it in June had a forged signature.

1982 – Howard “Homer” Schomer, who was the Treasury Secretary of Author Services Incorporated, has testified that money was being channeled frantically into Hubbard’s bank accounts during 1982. Schomer was in a position to know since he made the transfers. He has said that during his six months at ASI, about $34 million was paid into Hubbard’s accounts. Schomer says this money came mostly from the Church, rather than from book royalties. Schomer says there was a target figure of $85 million by the end of 1982. ¹

The New York Times  July 11, 1984 -

Scientology Chief Got Millions, Ex-Aides Say

Former officials of the Church of Scientology say they helped L. Ron Hubbard… to secretly divert more than $100 million from the church into foreign bank accounts he controlled.

Laurel Sullivan, 34 years old, left the organization in 1981 after serving 15 years as a senior official, the last eight as Mr. Hubbard’s public relations adviser. She said in an interview that from 1972 to 1981 she was in charge of a secret operation to transfer church assets to Mr. Hubbard through a ”corporate shell,” the Religious Research Foundation, incorporated in Liberia.

When she left Scientology in 1981, Mrs. Sullivan said, the foundation’s assets were $200 million to $300 million, although at one point in the 1970′s they totaled $330 million.

Mrs. Sullivan …asserted that to make it appear that money was being transferred from the foundation to Mr. Hubbard legally, she and other Scientologists had created fraudulent and retroactive billings.

Mrs. Sullivan said that shortly before she left the organization she helped develop a plan by which Mr. Hubbard was to be paid $85 million by a new corporation, Religious Technology Center, in exchange for the ”Dianetics” trademark and copyrights to some of his books.

Kima Douglas, Mr. Hubbard’s personal medical officer until she left Scientology in 1980, testified at the trial here that she had helped establish ”14 or 15” corporations, including the Religius Research Foundation, and had ”couriered hundreds of thousands of dollars out of the United States” for the Church of Scientology in violation of Federal laws requiring cash amounts over $5,000 to be disclosed to Customs officials.

She also said she had ferried money, ”in large bundles” of Swiss francs, to banks in Luxembourg and Liechtenstein, for accounts listed in the names of the church and Mr. Hubbard.

Howard D. Schomer, a former Scientologist who was an executive of the company from March 1982 until November 1982, said in an interview that he had been told a major task of its staff was to convert assets of the Church of Scientology to the assets owned by Mr. Hubbard, in part by preparing invoices for fictitious services by Mr. Hubbard.

He said that in the first six months he worked for Authors Services, Mr. Hubbard’s assets grew to $44 million from $10 million. Our purpose was to get as much money as we could from the church and make it look legal, he said. ”We were skimming money from the church; it was fraudulent as far as I was concerned.”

In July 1984, the Criminal Investigation Division of the IRS (Los Angeles District) began investigating L. Ron Hubbard’s tax returns for the tax years 1979 through 1983.  ¹²

24 September 1984 – The U.S. Tax Court in the District of Columbia handed down the decision that the Church of Scientology of California does not qualify for tax exemption.

The court found substantial evidence of private inurement to LRH and his family, including salaries, management fees, complete support of LRH’s family, and royalty payments on LRH’s writings. Additionally, the court found ”covert indicia of benefit” to LRH including repayment of unspecified debts, and LRH’s absolute control over the millions of dollars resting in Operation Transport Corporation, Limited and the United States Churches of Scientology Trust.

Operation Transport Corporation is a Panamanian corporation. OTC was found to be a sham corporation.

The court found that the United States Churches of Scientology Trust and the Operation Transport Corporation were run for the private benefit of LRH and his family. ³

In late September 1985, the Internal Revenue Service sent a letter to the Church of Scientology, warning that it might indict Hubbard for tax fraud. Vicki Aznaran made an affidavit saying that IRS indictments were about to be handed down against LRH and David Miscavige for conspiracy to commit tax fraud. ^{13, 14}

January 1986 – Ron Hubbard dies of a stroke. An autopsy found the psych drug Vistaril in his blood.

Forbes  October 27, 1986   -

L. Ron Hubbard … Now he’s declared dead, and the question is, did he take $200 million with him? …at least $200 million in cash produced by his strange creation was gathered in Hubbard’s name, and there is believed to be much more in organization assets.
It is something no one may know outside a small, secretive band of Hubbard’s followers: What is happening to all that money?

The IRS was later able to prove in court that he was meanwhile skimming money, at least $3 million in 1972 alone, and laundering it through schemes involving phony billings, a dummy corporation in Panama and secret Swiss bank accounts.

The question was always how to get more money into Hubbard’s pocket and how to hide that from the IRS, says Bill Franks, who was responsible for investing about $150 million of church reserves in 1980, most of it held in foreign currencies.

There was literally cash all over the place. There would be people leaving from Florida for Europe with bags of cash on a weekly basis. There were hundreds of bank accounts. In 1981 Franks started taking Hubbard’s name off these accounts as signatory – 15 years after Hubbard was said to have retired from the church – to hide the connection to church funds they represented.

Instead, much of the organization’s cash reportedly wound up in the Religious Research Foundation (RRF), which former church members say was a Liberian shell corporation with bank accounts in Luxembourg and Liechtenstein. RRF was set up by three otherwise unimportant board members who had submitted their resignations in advance.

The RRF was used as a way station for money from the church to the unseen Hubbard’s own accounts in Switzerland and Liechtenstein. Franks claims that RRF accounts alone totaled well over $100 million by 1981.

In 1980 Laurel Sullivan, for seven years Hubbard’s principal public relations official, was put in charge of an internal operation called Mission Corporate Category Sortout at the behest of Miscavige. Sullivan says she planned ways to juggle the church’s corporations to shield the unseen Hubbard from legal liability and to ensure that the income lines to Hubbard from the church could not be traced.

A separate corporation called Author Services, Inc. (ASI) was formed to manage Hubbard’s financial affairs and, apparently, those of the church as well. According to Howard Schomer, ASI’s treasury secretary in 1982, he sent up through Hubbard’s messengers weekly updates on Hubbard’s net worth from ASI. Schomer says Hubbard was pulling in well over $1 million a week through ASI when he, Schomer, left and that Hubbard’s net worth, through ASI alone, had risen more than $30 million in a nine-month period in 1982.

A particularly handy device to get money to Hubbard was back-billing the church for Hubbard’s past services. According to Schomer and others, Hubbard’s weekly gross income was the most important statistic kept by ASI, and it was ordained that the income keep rising.

The most remarkable transaction of all took place in 1982, when sources say Hubbard or his agents sold some of his copyrights for a reported $85 million and donated his trademarks, which were also valued at $85 million, to still another corporation, Religious Technology Center. The head of Religious Technology Center also happens to be the very same man who notarized the document that authorized a key part of the transaction – David Miscavige.

Altogether, FORBES can total up at least $200 million gathered in Hubbard’s name through 1982. There may well have been much more.

In late September 1985, the Internal Revenue Service sent a letter to the Church of Scientology, warning that it might indict Hubbard for tax fraud. Moreover, an IRS criminal investigation is gathering momentum in Los Angeles…

Los Angeles Times  April 16, 1987 -

L. Ron Hubbard, the Scientology founder and author who died last year, left more than $26 million in assets, excluding trust funds, according to documents filed by the executor of his estate.

Total assets listed in the inventory amount to $26,305,706. They include $25 million even in copyright and trademark materials and $1,305,706 in oil, gas and business investments, said attorney Charles Ogle of Morro Bay.

Hubbard suffered a stroke and died Jan. 24, 1986, on his ranch in Creston. His will, filed in Superior Court the following February, did not detail his wealth. Hubbard signed the will the day before his death.

The listed assets do not include money Hubbard put into trust funds for his wife, four of his five children and the Church of Spiritual Technology. The amount in the trust funds is private, Ogle said.

Note:
Per Jesse Prince – MSH got $100,000 and each kid got $50,000.

The value of his estate was 26 million but 25 million was assigned to the copyrights, so only 1 million was cash. There is at least 200 million in missing money, who got that?

It was disclosed later that the amount in the trust funds was 25 million.

United States District Court Central District of California, Michael Pattinson vs RTC
Case No. 98-3985CAS (SHx) Graham Berry letter to Monique Yingling -

“Between March and November 1982, LRH, Pat Broeker, David Miscavige, Lyman Spurlock and others illegally transfer over 30 million dollars of Church of Scientology funds to the bank accounts of ASI and LRH in Liechtenstein and Luxembourg. These transfers are based on exaggerated billings by ASI to the Churches of Scientology.

After LRH died, these funds were then within the estate of LRH where they came to be in the possession, custody and control of Norman Starkey, executor of LRH’s estate. It is alleged that these funds were then illegally seized and stolen by David Miscavige in a fraud perpetrated on LRH’s heirs. ” ⁷

Church of Scientology v. Commissioner Internal Revenue

No. 85-7324. United States Court of Appeals Ninth Circuit

Decided July 28, 1987.

The Court of Appeals, Tang, Circuit Judge, held that:

“…significant sums of church money inured to benefit of church’s founder and his family thus constituting inurement to private individual, and thus, church was not entitled to tax exempt status.

Royalty payments made by church to its founder on sales of books, recordings and electronic devices, were excessive, and thus supported determination that church’s net income inured to benefit of individual, where founder used church to generate copyrighted literature and market his products, church policy mandated that any book on subject be copyrighted in name of founder, and number of publications copyrighted by founder were actually written by church employees.

Church’s founder’s control over large amount of church’s assets compelled finding that church’s proceeds inured to benefit of private individual… that founder had unfettered control over millions of dollars in money which originated with church.

“Debt repayments” to church’s founder by church, which were based upon percentage of church’s total receipts inured to personal benefit of founder and thus, church’s claim to tax exempt status was defeated.

The Church of Scientology (Church) appeals a judgment of the Tax Court which affirmed the Commissioner’s assessment of tax deficiencies and late filing penalties against the Church for the years 1970, 1971 and 1972.

The Church was incorporated as a nonprofit corporation in the State of California in 1954.  In 1957, the Commissioner recognized it as a tax exempt organization under s 501(c)(3) of the Internal Revenue Code of 1954.

The Commissioner revoked the Church’s tax exempt status in 1967.  The letter of revocation stated that the Church was engaged in a business for profit, and was operated in a manner whereby a portion of its earnings inured to the benefit of a private individual, and was serving a private, rather than a public interest.

The Church did not file income tax returns for the years 1970 through 1972.

It held that the Church did not qualify for exemption from taxation under ss 501(a) & 501(c)(3) because:

“…its earnings inured to the benefit of L. Ron Hubbard, his family, and OTC, a private non-charitable corporation controlled by key Scientology officials…”

During the years in question, the Church of Scientology of California was the Mother Church of the many Scientology churches around the country. Flag was the highest division of the California Church. The Flag division was headquartered aboard the ship Apollo. L. Ron Hubbard, his wife, Mary Sue, and their family lived aboard the Apollo with other members of the ship’s crew and staff.

L. Ron Hubbard officially resigned his position as executive head of the California and other Scientology churches in 1966.  Despite his official resignation, the Tax Court found that he continued to exert significant control over the Church by making policy statements, directives, and orders. In addition, his approval was required for all financial planning. He was the sole trustee of a major Scientology trust fund into which the Church made substantial payments. He or Mary Sue Hubbard were signatories on many Church bank accounts.

During the tax years at issue, L. Ron Hubbard and Mary Sue Hubbard received salaries from the California Church and its affiliate, the United Kingdom Church, in the following amounts:

.
1970          1971           1972

$20,249      $49,648      $115,680

.
During these years, L. Ron Hubbard, Mary Sue Hubbard and their four children resided for the most part aboard the Apollo.

While aboard ship, the Church  provided the Hubbards with free lodging, food, laundry, medical services and vitamins.

The Church made royalty payments to L. Ron Hubbard for sales of his books, tapes and E-meters. The royalties amounted to ten percent of the retail price. The Church, for example, made $104,618.27 in royalty payments to Hubbard in 1972.

During the 1960′s, Scientology organizations around the world were required to pay directly to L. Ron Hubbard, ten percent of their income. These payments were termed “debt repayments” because they were designed to compensate Hubbard for his work in originating the Scientology religion. The Tax Court concluded that during 1971-1972 the Church continued to make debt repayments to Hubbard.

In 1968, L. Ron Hubbard, Mary Sue Hubbard, and Leon Steinberg incorporated a Panamanian corporation called Operation Transport Corp., Ltd. (OTC). Shortly after the corporation’s formation, Hubbard, Mary Sue Hubbard and Steinberg resigned and were replaced by three Flag employees. During the years in question, the new directors performed only one function.  In the summer of 1972, they approved L. Ron Hubbard’s decision to transfer approximately two million dollars from an OTC bank account in Switzerland to the Apollo. The money was stored in a locked file cabinet to which Mary Sue Hubbard had the only set of keys.

Between 1971 and 1972, the Church made payments in excess of three and a half million dollars to OTC. According to the Church, these payments were placed in the United States Church of Scientology Trust of which L. Ron Hubbard was the sole trustee. The trust funds were deposited in several Swiss bank accounts. L. Ron Hubbard and Mary Sue Hubbard were signatories of the accounts and L. Ron Hubbard kept the trust checkbooks.

We conclude that the Church failed to establish that “no part of the net earnings … inures to the benefit of any private shareholder or individual”

The finding of the Tax Court that a portion of the Church’s net earnings inured to the benefit of L. Ron Hubbard, his family, and OTC…

In finding that a portion of the Church’s net earnings inured to the benefit of L. Ron Hubbard, his family and OTC, the court isolated two indicia of inurement, overt and covert. The overt indicia included salaries, living expenses, and royalties. The covert indicia included “debt repayments”…”

.

 Ron Hubbard Took Drugs

In a letter Ron Hubbard wrote to his first wife, he said “I do love you, even if I used to be an opium addict.”

In a June 1950 lecture Ron Hubbard says he was a phenobarbitol addict. ¹

L. Ron Hubbard junior is a son of Ron Hubbard from an earlier marriage than Mary Sue.

L. Ron Hubbard junior was called Nibs. He made a sworn statement for a court case –

“I have personal knowledge that my father regularly used illegal drugs including amphetamines, barbituates and hallucinogens. He regularly used cocaine, peyote, and mescaline.”

Nibs said his father used drugs and self hypnosis in order to beef up his will:

His father (LRH) would write a list of Affirmations. He would write these up or he would take quotes from The Book of the Law; then he would take whatever he had in the way of drugs and read the Affirmations into a recorder, then play them back to himself.

Some of these Affirmations are: All men shall be my slaves! All women shall succumb to my charms! All mankind shall grovel at my feet and not know why!

Nibs left Scientology in 1959, he said that his father was still taking drugs then. ¹⁵

In late 1966 Ron Hubbard was “researching” OT 3. In the Spring of 1967 Hubbard was fresh from his misadventures in Africa and residing in Las Palmas in the Canary Islands. He sent a letter to his wife, Mary Sue, stating that “I’m drinking lots of rum and popping pinks and greys.”  (Pinks and greys are referring to uppers and downers, in drug slang.)

Hubbard summoned Virginia Downsborough to assist him. Upon her arrival in Las Palmas Virginia found Hubbard in bed in a hotel room, suffering from an apparent nervous breakdown. He was in a deep depression.

Virginia said, “When I went into his room there were drugs of all kinds everywhere. He seemed to be taking about 60,000 different pills. I was appalled, particularly after listening to his tirades against drugs.” Virginia tended to him until he got back on his feet.

John McMaster was on the Apollo in the late 1960’s. He saw Hubbard’s drug supply.

“It was the largest drug chest I had ever seen. He had everything! ” ^{1, 15}

In November 1973, the Apollo was in Tenerife. Hubbard went for a joyride on one of his motorbikes. The bike skidded on a hairpin bend, hurling the Commodore onto the gravel. He was badly hurt, but somehow managed to walk back to the ship. He refused a doctor, and his medical orderly, Jim Dincalci, was surprised at his demands for painkillers. ¹

In the summer of 1975 LRH had a heart attack and was hospitalized in Curacao.

In September 1978, Hubbard had another pulmonary embolism, a blood clot in the artery to the lungs. Kima Douglas fed him a huge dose of his pills. He drifted into a coma. ¹

In January 1986 Ron Hubbard died of a brain hemorrhage. The autopsy found the psych drug vistaril in his blood. Once again, many drugs were found at his residence, including illegal street drugs.

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Ron Hubbard and Aleister Crowley

Aleister Crowley was a member of the Hermetic Order of the Golden Dawn, he practiced their magic and he worshipped Lucifer. Crowley was one of the Brothers of Light.

As a teenager Ron Hubbard accompanied his mother to the Library of Congress in Washington D.C. He found a book there that interested him, it was The Book of the Law by Aleister Crowley. The whole of the law was – Do what thou wilt.

Crowley was an opium addict who engaged in sexual orgies and practiced ritual magic.
Thelemic Ordo Templi Orientis (OTO) was based on the teachings of Aleister Crowley.

Jack Parsons was chosen by Crowley to head a Ordo Templi Orientis lodge in California. Sarah Elizabeth Northrup was living with Parsons. In August 1945 Hubbard went to Jack Parson’s home and became involved with OTO. Sarah Northrup and Hubbard married. Hubbard participated in a magic ritual known as the Babylon Working, an attempt to summon a living goddess, in 1946. The magic rituals performed by Hubbard at OTO were not just a one day affair, the rituals were extensive and were carried on for months.

In another book written by Crowley, Magic and Theory In Practice, he states –

“The whole and sole object of all true magical training is to become free from every kind of limitation.”

The Tone Scale: Moving The PC Up The Scale, an LRH lecture 5 December 1952  -

“Our whole activity tends to make an individual completely independent of any limitation.”

“A magician- the magic cults of the eighth, ninth, tenth, eleventh, twelfth centuries in the Middle East were fascinating. The only modern work that has anything to do with them is a trifle wild in spots, but it’s fascinating work in itself, and that’s work written by Aleister Crowley, the late Aleister Crowley, my very good friend. And he did himself a splendid piece of aesthetics built around those magic cults. It’s very interesting reading to get a hold of a copy of a book, quite rare, but it can be obtained, The Master Therion, by Aleister Crowley.  He signs himself  The Beast; The Mark of the Beast, 666.”

Crowley saw himself as the Beast in the Book of Revelations.

According to Nibs, his father considered himself to be Crowley’s successor; that he had taken on the mantle of the “Great Beast”. Ron Hubbard told Nibs that Scientology actually began on 1 December 1947. This was the day Crowley died. ¹⁵

Ron Hubbard did consider himself to be Crowley’s successor, Prince of Darkness…

What Is to Be Done in Course, an LRH lecture 1 December 1952 -

I just got a wonderful wire… and it just came just now. They pick a pc off the street, you see, and they start running them, and this pc gets the idea that he is practically the Prince of Darkness or something of the sort and that it’s all a big plot and they just start asking this person this. And they’re the Prince of Darkness from Venus or someplace, you see… And so I’m going to send him back a letter, “So you say you have some connection with the Prince of Darkness out there and you’re very worried about this. Who do you think I am? “

Excerpts from The Book of the Law:

“We have nothing with the outcast and the unfit: let them die in their own misery. Compassion is the vice of Kings: stamp down the wretched and the weak: this is the law of the strong: this is our law and the joy of the world.

I am of the snake that giveth Knowledge & Delight, and stir the hearts of men with drunkenness. To worship me take wine and strange drugs… They shall not harm ye at all. It is a lie, this folly against self. Be strong oh man! Lust, enjoy all things of sense and rapture… the kings of the earth shall be kings forever: the slaves shall serve.

Them that seek to entrap thee, to overthrow thee, them attack without pity or quarter; and destroy them utterly. I am unique and conqueror. I am not of the slaves that perish. Be they damned and dead! Amen. “

Ron Hubbard wrote “Fair Game” policies calling for attacks on critics of Scientology.
When Ron Hubbard wrote the Fair Game policies, stating that critics of Scientology should be viciously attacked, he was applying a statement from The Book of the Law :

“Them that seek to entrap thee, to overthrow thee, them attack without pity or quarter; and destroy them utterly.”

Ability magazine, March 1955, page 151 of the new Tech Vol II  -

“The purpose of the suit is to harass and discourage rather than to win. The law can be used very easily to harass, and enough harassment on somebody who is simply on the thin edge anyway… will generally be sufficient to cause his professional decease. If possible, of course, ruin him utterly.”

In the Policy Letter 18 October 1967, Ron Hubbard said a critic could be “tricked, sued or lied to or destroyed.”

Church PR tried to cover up the fact that LRH joined a group run by Crowley in 1945. They say he was working for Naval intelligence to infiltrate the group. The above data shows that to be false. From an early age, before Hubbard entered the Navy, he admired Crowley and believed the ideas that Crowley presented. He joined the group because of shared beliefs, beliefs that Hubbard continued to practice after Crowley died. Two of those beliefs were – take illegal drugs and utterly destroy those who would oppose you.

References

1. A Piece of Blue Sky by Jon Atack
2. The Scandal of Scientology by Paulette Cooper
3. Church of Scientology vs. Commissioner Internal Revenue, United States Court of Appeals,
Ninth Circuit, No. 85-7324.
4. Russell Miller, book: Bare Faced Messiah
5. Who’s Who in Scientology by Martin Hunt
6. Willamette Week June 1985, “Scientology on trial”
7. United States District Court Central District of California, Michael Pattinson vs RTC
Case No. 98-3985CAS (SHx)
8. United States District Court Central District of California, Michael Pattinson vs RTC
Case No. 98-3985CAS (SHx) Vicki Aznaran affidavit, Jesse Prince letters,  Stacy Young affidavit
9. The San Diego Union-Tribune   January 1, 1987
10. Church of Spiritual Technology vs United States, United States Claim Court -
Case No. 581-88T
11. David Miscavige affidavit 15 Oct 1999
12. United States of America v. Church of Scientology of California Nos. 85-6065, 85-6105.
United States Court of Appeals, Ninth Circuit.
13. United States District Court Central District Of California, No. Cv 91-6426 Hlh (tx);
Church Scientology International, Plaintiff, Vs. Steven Fishman And Uwe Geertz,
Declaration of Vicki Aznaran
14. Forbes Magazine October 27, 1986
15. L. Ron Hubbard Messiah or Madman? by Bent Corydon

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*You can also peruse a complete listing of available Scientology Roots chapters.