The impulse to believe the absurd when presented with the unknowable is called religion. Whether this is wise or unwise is the domain of doctrine. Once you understand someone's doctrine, you understand their rationale for believing the absurd. At that point, it may no longer seem absurd. You can get to both sides of this conondrum from here.


Postby admin » Fri Nov 27, 2015 9:10 pm

Part 1 of 2



The various corporate entities of Scientology in the City of Clearwater, are taken together, the largest fundraising organization in the City which claims charitable status. Heretofore, Scientology has operated in almost total secrecy with regard to its operations and finances in the City. The ordinance is intended to give the City a legitimate means of investigating the affairs of Scientology, and to restrict the activities of Scientology if it obstructs an investigation or refuses to cooperate. The ordinance also gives the City the authority to seek abatement of specific acts which Scientology regularly engages in, and to warn the public of certain facts.

It must be noted that through many years of litigation with the Internal Revenue Service, the Food and Drug Administration, the United States Attorney's Office, the Pinellas County Tax Assessor, various agencies of foreign governments, and with private litigants, Scientology has consistently conducted itself in a profoundly rancorous, contentious, contemptuous and deceptive manner. It may reasonably be expected that Scientology will behave in the same manner with the City Consumer Affairs Commissioner. Every means of legal obstruction will be employed. Every subpoena will be resisted. No document or witness will be produced voluntarily. Witnesses will be instructed to commit perjury, or assisted in removing themselves from the State. Officers who are successfully subpoenaed will resign their offices. Accordingly, the city must be prepared to vigorously enforce the Ordinance. It is probable that effective enforcement could be a process that will take several years.

In,view of the probable response of Scientology, the ordinance has been designed with several self enforcing mechanisms. Refusal to provide the Commissioner with requested information is itself grounds for restriction of solicitation activities. The notice and warning provisions of the ordinance also provide effective and easily implemented means of dealing with the probable intransigent response of the Scientologists. Also, the Commissioner is empowered to conduct investigations and receive information from other sources. Thus, the enforcement of the ordinance is not dependent whatsoever upon the receipt of any information from the Scientologists. In fact, it is anticipated that they will produce nothing. In all likelihood they will not even file a registration statement.

As noted, the main features of the ordinance are 1) disclosure; 2) notice and warning to the public; and 3) power to abate prohibited acts. The following is a detailed description of how each of these provisions may be expected to affect the Church of Scientology and the issues that may arise in the enforcement process:

1. Disclosure - The ordinance requires the Church to disclose information it has never disclosed and has fought for years in court with the Internal Revenue Service and the Pinellas County Tax Assessor to avoid disclosing. [1] The information, if disclosed, would give the City the avenues to effectively investigate the financial affairs of Scientology. Since the principal corporate entity in Clearwater is the Church of Scientology of California, the activities of the entire corporation would be relevant to the registration and investigation. If such information had been truthfully disclosed in the past, it would have shown unequivocally that the Church devotes a substantial portion of its funds to non-charitable activities, specifically, the financing of a massive campaign of criminal activity including burglaries, infiltrations, illegal surveillance, perjury, kidnapping, and extortion.

Inurement of personal profit to L. Ron Hubbard and members of his family is an issue of proof which the IRS met in the early 1970's and which the requested information, if produced, would undoubtedly demonstrate again. The requested information would also demonstrate the exact relationship between the Church of Scientology and its various commercial affiliates such as the World Institute of Scientology Enterprises.

Scientology will either default and refuse to produce information, or will produce false information. There are several reasons for this. First, it cannot make an honest disclosure of the amount of money it funnels into Guardian's Office activities or open these records to inspection without incurring public scrutiny of the nature of Guardian's Office activities. As described elsewhere in this report, these are primarily criminal and tortious in nature.

Second, Scientology cannot afford to make known to its own members the details of its finances. Full disclosure of the extent of Scientology's assets and the ways in which it spends its money would deprive it of all justification for the exorbitant prices it charge. for its "services."

Finally, Scientology cannot reveal its connections to its commercial affiliates or to Hubbard and his family since these are evidence of non-charitable uses of funds.

2. Notice and Warning - Refusal by Scientology to register or cooperate with an investigation, or commission of prohibited acts, give the Commissioner authority to publish and post warnings to the public. The Commissioner is further authorized to seek permission of the Court to post warning notices on the premises of the Church in a manner calculated to give reasonable notice.

This provision would have a significant impact on Scientology operations. Many of the people who come to Clearwater are relatively new to Scientology. Wealthy people in particular, regardless of where they make their initial contact with Scientology, are soon solicited by "Flag" agents who encourage them to go to Clearwater and make payments to the organization of thousands of dollars. Often these people are given a special "kid glove" treatment. They are always told that Scientology is a charitable, non-profit organization. A strongly worded warning from the Commissioner would give people an opportunity to reflect on the wisdom of their payment while they are still capable of making an intelligent choice. It would give them access to information which the Scientologists specifically conceal. More important, it would notify them that the City has jurisdiction and an interest in the affairs of the organization and can entertain complaints from individuals. This would give defrauded individuals a place to seek a remedy and counteract the fear and isolation which the Scientologists intentionally create.

3. Prohibited Acts - The prohibited acts section of the ordinance, if vigorously enforced, would have a far reaching effect on many of the normal operations of Scientology. The Commissioner is given the power to abate these violations by seeking injunctions and fines. All of the prohibited acts can be fairly characterized as practices which are a proper subject of regulation. In the past, the Church of Scientology has committed most of these acts. The following is a description of Church practices which fit the definition of each prohibited act. The letters correspond to the lettered acts in the ordinance. (See pages 162 - 164 , infra).

a) As noted in other part. of the Report, Scientology used funds for a period of years to support a massive campaign of criminal activity directed at government agencies and private citizens. Scientology has paid substantial sums of money to Hubbard and other members of his family. Scientology has used funds to oppress, harass, and bring law suits against private citizens. Funds have been used to support massive campaigns of false advertising. Funds have been used to create false front groups created solely for the purpose of libeling and destroying the reputations of private citizens. All of these acts are well beyond any reasonable definition of "charitable purpose".

b & c) See (a).

d) Application is prospective. It may reasonably be anticipated that if Scientology behaves as it has in the past and obey its own written internal policies, it will give false information.

e) Application is prospective. The Internal Revenue Service is presently in litigation with Scientology to take away its claimed tax exemption for the years 1970-72. It is expected that Scientology will lose the case. The IRS will then go after Scientology for subsequent years. The ordinance allows the City to base certain actions on IRS determinations.

f) The manner in which Scientology sells "auditing" is overtly fraudulent for many different reasons which are discussed elsewhere in this Report, This section of the ordinance allows the City to base certain actions upon any determination that Scientology has violated the consumer protection laws of the City, County, State of Florida, or United States. Generally, the fraudulent nature of Scientology's sales techniques are contained in their representation that auditing has a scientific basis, that it is confidential, that it has guaranteed results, and that refunds are offered to those who are dissatisfied.

g) See (f).

h) Part of the action against Scientology by the IRS in Los Angeles is an effort to take away the tax exemptions claimed by a number of individuals who gave money to Scientology and then took a tax deduction. If the IRS wins its cases, and Scientology thereafter represented that a deduction was available, a violation would occur.

i) Scientology has made a common practice of maintaining running accounts for many of its members which are termed "freeloader debts". Although Scientology takes the position publicly that monies paid to it are donations, the members are told that the "freeloader debt" is a legally enforceable debt for which they can be sued, and in fact will be sued if they ever leave Scientology without permission.

j, k, &, l) Scientology always promises that refunds will be given upon request. In fact, this is not so. A person who requests a refund is told he has to go through a complex refund application process which is actually calculated to do nothing except dissuade him from requesting a refund. Long delays and hidden charges are assessed. In fact, refunds are not given.

m) Scientology commonly acquires information in "auditing", a process which is akin to psychotherapy, and later employs that information in an attempt to solicit the person who was audited or a relative or friend of the person who was audited to purchase additional auditing. Intimate information obtained in auditing is exploited to make further sales by a malicious process called pressing "buttons", things which the person is known to feel concern or embarrassment about. Often people are approached at a very vulnerable moment, for example after a recent death or divorce, and subjected to heavy sales pressure.

n) It is anticipated that the Church will claim that it cannot comply with the requirements of the ordinance because it does not keep sufficient records.

o) In its dealings with the IRS and in litigation with private individuals, the Church has attempted to frustrate investigations and discovery by changing its staff positions around, causing people to resign their position, etc.

p) The Church will always disclaim responsibility for the acts of any person. This provision requires the organizational affiliation of a solicitor to be established clearly and clearly fixes responsibility on the corporation for the acts of its solicitors.

q) See above. It is virtually certain that the Church will violate this provision in some way.

r) See above. It is virtually certain that the Church will violate this provision.


The following proposed ordinance is set forth in a preliminary form. It is intended to be consistent with modern Constitutional principle. Considerable effort was made to draft an ordinance which would withstand a Constitutional attack in court.

The ordinance is also drafted in view of the Florida Solicitation of Charitable Funds Act (s. 469.02 et seq.) The proposed ordinance is intended to complement existing laws by addressing problems which are unique to the City of Clearwater and not adequately covered by state law.

As previously stated, the main features of the ordinance are l) aggressive disclosure and warning provisions; 2) powers granted to a city official to investigate and abate specific prohibited acts. All of the contemplated prohibited acts are regularly occurring in the City of Clearwater.

Commission hearings prior to the adoption of this ordinance could develop a record showing the widespread occurrence of the types of things which the ordinance seeks to prohibit, and would strengthen the ordinance against Constitutional attack and develop public support for its passage.



1) "Solicitation" means the request directly or indirectly for money, credit, property, financial assistance, or other thing of value on the plea or representation that such money, credit, property, financial assistance, or other thing of value will be used for a charitable purpose as those purposes are defined in this part, including the following methods.

a) Any oral or written request.

b) The making of any announcement in the press or electronic media in which any member of the public is requested to pay money to a charitable organization in the City of Clearwater.

c) The distribution or circulation, posting or publishing of any handbill written advertisement, or publication which directly or indirectly encourages payment of money to a charitable organization in the City of Clearwater.

d) The sale of, offer of, or attempt to sell any advertisement, advertising space, book, card, tag, coupon, device, magazine, membership, merchandise, subscription, tangible items, course or course of study, or service in connection with which any appeal is made for any charitable purpose, or when the name of a charitable organization is used or referred to in such an appeal as an inducement or reason for making any such sale, or when, in connection with any such sale, any statement is made that the whole or any part of the proceeds from any such sale will be donated to or used for a charitable purpose.


The registration requirements of this Chapter shall not apply to a) charitable organizations which receive less than $100,000 per calendar year in contributions; b) collections or contributions during the regular worship services of any church or religious organization or the meetings or exercises of any lodge, fraternal order, or similar organization; c) the offering for sale or auction of any goods, services, or things of value upon the representation that the proceeds thereof are for a charitable purpose, where the proceeds thereof do not exceed $25,000 in any calendar year.

Power of Consumer Affairs Officer to Register and Investigate Charitable Solicitations

1) The Consumer Affairs Officer of the City of Clearwater is hereby vested with the general authority, power, and jurisdiction to enforce the provisions of this chapter.

2) The Consumer Affairs Officer may make such rules as he deems necessary from time to time to implement the provisions of this chapter, and may require from any organization subject to this chapter any reports and information he deems necessary for the administration of this chapter. The Commissioner shall have the power to prescribe forms for registration, disclosure, and other purposes, to adopt procedures, and when necessary, to hold hearings and make adjudications as provided in this chapter and make recommendations to appropriate prosecuting attorneys for enforcement of any penal provision of this chapter.

3) In Addition to the authority granted the Commissioner by this Chapter, he may commence and maintain in a court of competent jurisdiction all proper and necessary actions and proceedings to enjoin and abate any act prohibited by this chapter, or to enforce any subpoena issued by the Commissioner or to seek any injunction authorized by this chapter.

4) the Commissioner, upon his own motion or upon the complaint of any person, may, if he has reasonable ground to suspect a violation of this chapter, investigate any charitable organization, professional fund raising counsel, or professional solicitor to determine whether such organization, counsel, or solicitor has violated the provisions of this chapter or the rules and regulations promulgated by the commissioner, or has filed any statement or information required under this chapter which contains false or misleading statements.

5) All financial records of any professional solicitor or charitable organizations which pertain to the solicitation and expenditure of contributions received shall, upon demand, be available to the Commissioner for inspection and investigation and the term "financial records" shall be deemed to include banking records and statements, checks, drafts, receipts, and papers of any description which indicate the receipt or expenditure of funds. However, names, addresses, and identities of contributors and amounts contributed by them shall be exempt from the provisions of s. 119.07(1) of the public records law; shall not be disclosed by the Commissioner; and shall be removed from the records and the custody of the Commissioner at such time that such information is no longer necessary for the enforcement of this chapter and shall not be disclosed by the Commissioner.

6) The Commissioner may enter into reciprocal agreements with the appropriate authority of any other government, entity for the purpose of exchanging information with respect to organizations subject to the provisions of this chapter.

7) For purposes of enforcing the provisions of this chapter and making investigations of any violation thereof, and for purposes of investigating the practices and business methods of any organizations to determine if there have been violations of this chapter, the Commissioner shall have the power to subpoena and bring before it any person in the state and may require the production of papers it deems necessary and administer oaths and take depositions of any such person so subpoenaed. The Commissioner shall have the power to effect service of process of subpoenas. Upon failure of a person without lawful excuse to obey a subpoena issued and served by the Commissioner, the Commissioner may apply to the Circuit Court for an order compelling compliance.

8) In addition to all other powers and duties created by this Chapter, the Commissioner is empowered to receive and investigate complaints from any individual who claims to have been defrauded, deceived, or injured by the commission of any act prohibited by this Chapter as a result of a solicitation or solicitation activities in the City of Clearwater by an organization subject to this Chapter. The Commissioner may conduct hearings regarding any such complaint, after notice in writing to all parties affected. The Commissioner may make findings and recommendations, fashion order and remedies, and seek enforcement of any such orders, in the same manner as provided for in the City of Clearwater consumer protection Act. (Draft copy of such act included with this proposal).


1) Every charitable organization in the City of Clearwater which intends to solicit contributions in Clearwater, or to sell or render any goods or services in Clearwater in connection with a solicitation for a contribution, shall, prior to any solicitation, file a registration statement with the Commissioner of Consumer Affairs on the forms prescribed by him. The registration shall contain:

a) The name of the organization and the purpose for which it was organized.

b) The principal address of the organization and the addresses of any officers in the City.

c) The names and addresses of any chapters, branches, and affiliated organization in the City.

d) The place where and the date when the organization was legally established, the form of its organization, and a reference to any determination of its tax exempt status under the Internal Revenue Code of the United States, the laws of any state, and the laws of any county or municipality.

e) The names and addresses of all officers, directors, trustees, and the principal salaried executive staff officers.

f) A copy of a financial statement prepared pursuant to a recognized uniform system of accounting which shall be prescribed or approved by the Commissioner, audited with an opinion of an independent certified public accountant, and covering complete disclosure of all the fiscal activities, of the charitable organization during the preceding year. Said report shall conform to the the "Audit Guides" published by the American Institute of Certified Public Accountants, and as may be modified from time to time by said Institute.

g) The names and addresses of every person with any responsibility for receiving, depositing, handling, holding, or disbursing any funds on be half of the organization, and a statement of each person's responsibility.

h) Whether the organization intends to solicit contributions from the public directly or have such done on its behalf by others.

i) Whether the organization is authorized by any governmental authority to solicit contributors, and whether it has ever been enjoined or restricted in its manner of solicitation by any court or government agency.

j) The specific purpose or purposes for which contributions shall be used.

k) The name or names under which it intends to solicit contributions.

l) The cost of fundraising incurred or anticipated to be incurred by the organization, including a breakdown of all expenses and a statement of such coats as a percentage of contributions received. Said information shall include:

1) The cost of manufacturing, purchasing, renovating, or repairing any merchandise which is offered for sale in connection with a solicitation.

2) The cost of providing any service which is offered in connection with a solicitation.

3) The cost of any shows, theatrical presentations, lectures, or courses offered in connection with a solicitation.

m) A statement of the amount of funds expended by the organization to support or defend litigation.

n) A description of all commercial fundraising activities conducted by the organization and a statement of the amount earned at each activity. "Commercial fundraising activities" shall include:

1) The sale of goods and articles for a profit.

2) The provision of services for a charge in excess of their cost.

3) Collection of rent on real estate and interest on money loaned.

4) Any capital gains realized by the sale of any capital asset.

5) Interest and dividends earned on stocks, bonds, and securities.

o) The name and address of each person or entity to whom, in the preceding year, the organization paid more than $50,000 for any reason whatsoever.

p) The name and address of each person having custody of any financial record of the organization.

q) A narrative description of the promotional plan together with copies of all advertising material which has been prepared for distribution.

r) Such other information as may be reasonably required by the Commissioner for the public interest or for the protection of contributors.

2) The registration required under this section shall be filed and signed under oath by the chief executive officer of the organization. If the chief executive officer of the organization does not maintain a residence of principal office in the City of Clearwater, the registration shall additionally be endorsed and signed under oath by the highest ranking officer of the organization who resides or maintains a residence in the City of Clearwater. If said registration statement contains information the knowledge of which, or the documentary evidence of which is possessed entirely by any person or persons who do not reside or maintain an office or residence in the City of Clearwater, the statement shall designate any such information, and include the name and address of any such person, and specify the information and documents which any such person possesses.

3) No organization shall withhold any information of documents required to be produced under this chapter or requested by the Commissioner during an investigation on the basis that the documents or persons who possess the information are not located in the City of Clearwater. Any refusal to produce documents or information for such reason shall constitute sufficient grounds for the Commissioner to seek and obtain an injunction against all solicitation activities by the organization within the City of Clearwater.

4) If there is any change in fact, policy, or procedure that would alter the information given in any registration statement, the registrant shall notify the Commissioner in writing thereof within ten days.

5) Except as otherwise provided in this chapter, registration statements and all other documents and information required to be produced under this chapter by the Commissioner shall become public records in the office of the Commissioner and shall be open to the general public under such conditions as the Commissioner may prescribe.

6) If the Commissioner determines that any organization subject to this chapter has failed to file a registration statement or has filed a statement which does not contain information sufficient for the purposes of this chapter, he shall notify said organization in writing and specify what information it has failed to produce. If any such organization fails for fifteen consecutive days after receipt of notice to provide such specified information without legal excuse, the Commissioner shall declare a default, and such default shall constitute sufficient grounds for the Commissioner to seek and obtain an injunction against all solicitation activities by the organization in the City of Clearwater.

Maintenance of Records

Every organization subject to the provisions of this chapter shall, in accordance with rules and regulations promulgated by the Commissioner, keep true fiscal records as to its activities in conformity with the principles set out in the "Audit Guides" published by the American Institute of Certified Public Accountants. Such records shall be maintained for a period of three years after the end of each fiscal year of the organization and shall be made available to the Commissioner upon request.

Notice and Publication of Warnings Concerning Certain Charitable Organizations

If the Commissioner finds that any charitable organization subject to this chapter has failed to file a registration statement, or has filed a statement containing insufficient or false information, or has engaged in any act prohibited by this chapter, he may, in addition to all other actions authorized by this chapter, publish and promulgate notice to the public containing the following information: a) that the particular organization is subject to the provisions of this chapter; b) that the Commissioner is authorized to receive and investigate complaints relating to fraud and violations of this chapter; c) that the particular organization has failed to register, or provide sufficient information, or has engaged on prohibited acts, as the case may be. The publication may contain a description of the prohibited acts found to have been committed. The notice and publication may be placed in electronic and printed media and may be publically posted in a manner calculated to give reason able notice to all persons affected. Said notice may be termed or entitled a WARNING. In addition to the above, the Commissioner may apply to the Court for an order that the Sheriff post such notice at conspicuous places on the premises of the organization.

Prohibited Acts

No organization subject to the provision of this chapter, and no agent, employee, or officer of any such organization, shall engage in any of the following prohibited acts:

a) use, expenditure, or allotment of solicited funds for any purpose other than the charitable purposes of the organization.

b) use of any portion of solicited funds to plan, support, or execute any conduct which is criminal or illegal under the laws of the City of Clearwater, the State of Florida, or the United States.

c) use of any portion of solicited funds for the profit or enrichment of any person; provided, however, that payment of reasonable salaries to employees in exchange for substantial services shall not constitute a violation of this section, nor shall reasonable commissions paid to professional fund-raisers.

d) making of any false statement or giving of any false information pursuant to the provisions of this chapter.

e) commission of any act, acts, or course of conduct resulting in loss of the organizations tax exemption pursuant to s. 501(c) (3) of the Internal Revenue Code of 1954, or of any corresponding section of any subsequently enacted Federal Revenue Act.

f) commission of any violation of the consumer protection laws of the City of Clearwater, Pinellas County, the State of Florida, or the United States, in the sale of any goods or services in connection with which any appeal is made for a charitable purpose, or the name of any charitable organization or purpose is used as an inducement for the sale, or any statement is made that the whole or any part of the proceeds from any such sale will be used for a charitable purpose.

g) use of any scheme or artifice to defraud or obtain money or property by means of any false statement, representation, or promise.

h) falsely representing that any contribution will entitle the donor to a Federal or State tax deduction.

i) use of unconscionable pressure or threats to obtain a donation, or falsely representing to any person that a pledge or promise to make a contribution constitutes a legally enforceable obligation under circumstances in which no such legal obligation exists.

j) promising any person that a contribution will be refunded upon request, and thereafter failing to promptly make a refund which has been requested.

k) promising any person that refunds of contributions will be made upon request without pro viding such person, at the time such representation is made, with a written statement of the terms and conditions upon which refunds are made.

l) promising any person that refunds will be made without maintaining adequate records and reserve funds to allow for prompt refunds upon request.

m) receiving or disclosing confidential information about any person for purposes of engaging in solicitation of money or property, under circumstances in which the person who provided the confidential information was not aware that it would be used for solicitation purposes and did not thereafter consent to its use for solicitation purposes. For purposes of this part "confidential information" means information obtained upon a promise that it would be kept in confidence and shall include, inter alia, records of confidential information kept by attorneys, physicians, clergymen, and counsellors.

n) failure to maintain any records required under this chapter.

o) failure to make any disclosure required under this chapter or to report any change of condition as required by this chapter.

p) solicitation by any person on behalf of any organization without written authorization of a presently active officer of the organization whose name has been disclosed pursuant to this chapter.

q) obstruction of any investigation commenced under this chapter.

r) willful failure to honor a subpoena duly issued and served by the Commissioner.

Enforcement and Penalties

1) If, after investigation, the Commissioner has reasonable grounds to believe that an organization subject to this Chapter has failed to file a registration statement as required herein, or has filed a statement which is false or misleading, or has filed a statement containing insufficient information and has failed to correct such insufficiency after notice of default, he may bring an action in the District Court to enjoin any solicitation or solicitation activities by the organization in the City of Clearwater for a period of time sufficient to deter such failures but not to exceed one year. The Court, if it finds that such violations or failures have occurred, shall give injunctive relief accordingly.

2) If, after investigation, the Commissioner has reasonable grounds to believe that an organization subject to this Chapter has engaged in any of the acts prohibited herein, he shall apply to the District Court for injunctive relief to abate such violations. The Court, if it finds that such violations have occurred, shall assess a fine in an amount sufficient to deter future violations, but not exceed $2,500 per violation. In addition, the Court may award the Commissioner attorney's fees in an amount sufficient to cover costs of enforcement. As provided herein, the court may authorize the posting of notices in conspicuous places on the premises of any organization which has been guilty of prohibited acts sufficient to warn the public of commission or prohibited acts by the organization.

3) In addition to the foregoing, any person who willfully and knowingly gives any false information to the Commissioner in filing statements and reports required herein, or who willfully and knowingly obstructs an investigation of the Commissioner, or who willfully and knowingly leaves the State or assists any person to leave the State for purposes of avoiding the provisions of this part, shall be punishable (punishment is to be established by City Commission). If the Commissioner becomes aware of any such violation, he shall report to the appropriate prosecuting attorney and shall make available to the prosecuting attorney all records and documents which he may require.
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Postby admin » Fri Nov 27, 2015 9:10 pm

Part 2 of 2


The proposed ordinance may be expected to have a broad impact upon consumer affairs in the City. The most important parts of the ordinance, vis-a-vis Scientology, are the education, warning, and investigation provisions. Vigorous use of these provisions would give members of the public vitally important information, before they become deeply involved in Scientology, as to what they may expect. Use of the investigation provisions would enable the City to develop detailed information about ongoing violations, and provide members of the public who have been cheated and defrauded by Scientology a convenient forum to seek a remedy. There is a vital need for public action of this sort in Clearwater for two reasons. First, the Scientologists have announced and are apparently now moving ahead with plans to entice Clearwater citizens directly into paying money to them, whereas previously their Clearwater facility has only been a magnet for people from other parts of the country. Second, people who have been cheated by Scientology presently have a difficult time securing private legal counsel to assist them in getting redress, because of the well-known vicious and abusive litigation tactics of the Scientologists. Both of these situations create an urgent need for the type of remedies proposed in the ordinance.

The ordinance has been intentionally drawn so that the above powers of the Commissioner are not dependent upon court action. This has been done in view of the anticipated legal hailstorm which the Scientologists will attempt to bring down on the ordinance as applied to them. Nonetheless, the specific enforcement powers of the ordinance are important. The Commissioner is given the power to seek declaratory judgments that certain practices are illegal as well as injunctions. These actions may be expected to take longer, for obvious reasons, and the Scientologists will obviously take any decision against them to the Florida Supreme Court. The City can reasonably expect that a number of people will come forward with complaints about practices that have long been recognized as consumer violations by State and Federal courts. Investigations and hearings into these complaints will develop more than adequate record for legal action.

The following is a description of the types of practices which the Scientologists have engaged in which are well-recognized as consumer violations.

1) Sales methods. Apart from outright fraud, which is discussed below, the Scientologists often use coercive and oppressive sales methods whenever they spot a prospect, which they refer to as "raw meat". Intense and unconscionable sales pressure is common. Covert financial investigations are done on people before they are solicited. Solicitation is occasioned by repeated personal visits to a person's home and place of work, and repeated telephone calls. Whatever physical, mental, or financial benefit a person wants, he is promised he can get it through Scientology. Visits and phone calls often take place at night. People are encouraged to produce cash or checks immediately in order to qualify for generous discounts. An effort is always made to find and play upon the emotional weaknesses of the victim, always with the singular intent of getting as much money as possible. The names of well-known public figures are put forth as endorsing Scientology or participating in it when in fact this is false. Numerous false statements are always made about the founder of the cult, L. Ron Hubbard, the primary ones being that he has a scientific background, graduated from a university, and that he was a war hero. All of these practices are recognized as consumer violations.

"Bait and switch" is another common deception. The Scientologists convince a person to pay for and take a certain "course" which is promised to have certain benefits. In fact, the course proves to be nothing more than a skillful and aggressive sales pitch for subsequent more expensive courses. Numerous other obvious facts about Scientology are intentionally with held from the prospective "raw meat". He is not told, at the beginning, that he is being invited on a course that takes many years and thousands of dollars, that he will be threatened, his privacy invaded, his confidential disclosures widely disseminated, that he will be subject to severe disciplinary measures including forced labor, that he will be threatened with suit, that he will be forced to disconnect from family and friends, or that he can be "destroyed" if he ever criticizes or attempts to expose Scientology.

2. Fraud. Some or the overtly fraudulent promises of Scientology have been recognized in court decisions, particularly the case of United States vs. Article or Device. That case, decided by the Federal District Court for the District of Columbia, and subsequently upheld on appeal, dealt with the central practice of Scientology, E-Meter auditing. The Court decided, after lengthy review of the Scientologists' literature, that it was full of false claims with regard to scientifically guaranteed physical benefits produced by auditing. The Court ordered a warning to be affixed to all E-meters and all Scientology literature to the effect that audit ing is not scientifically shown to produce any physical benefit. The Scientologists have never followed that order. To this day, physical cures are commonly promised from auditing. People are told that it will improve their eyesight, intelligence, resistance to disease, coordination, etc. Specific individuals have been told that auditing cures back problems, cancer, muscular dystrophy, intestinal problems, the effects of smoking, drinking, or drug abuse, the effects of swine flu shots, hepatitis and other conditions. All of these promises are direct fraud, and direct violations of the Federal court order.

Another outright fraud, which is always committed is the promise that a full refund will be made to a dissatisfied "student". In fact, refunds are rarely made. A person who requests a refund is given a complex "routing" form which gives him a nearly impossible number of tasks to perform in order to "qualify" for a refund. Part of the process includes a repetitive series of interviews in which he is heavily pressured and sometimes threatened in an attempt to get him to give up his request. Numerous "charges'' are made for processing the refund request. The request itself is, if the person pursues it far enough and persistently enough, referred to a different corporation in a foreign nation. The totality of impediments to the giving of refunds is so great as to make the original promise overtly fraudulent.

Another common fraudulent representation involves the nature of the organization. The Scientologists say that their "Church" is a law-abiding, non-profit organization devoted to the betterment of mankind. These statements are all totally false. Large portions of income are devoted to criminal activities, and to the harassment and attempts to destroy the reputations of private citizens and organizations. The organization makes huge profits, and regularly violates the tax laws of the United States. Their only motive is to make money, and this overrides any desire to benefit mankind. Their principle means of "benefitting" mankind is to attack and destroy anyone who opposes Scientology. These beliefs are plainly set forth in their own books. They are directly contrary to the initial picture which is painted for the unwary "raw meat", and constitute fraud. It is clear that the fraud is material, since most people would not join such an organization initially if they were aware of its criminal and malicious activities.

Another prominent fraud involves the representation that auditing is confidential. Auditing is, in effect, psychotherapy done on a lie detector device. Extremely intimate information is revealed. The person being audited is not told, before he begins auditing, that this information will be recorded and turned over to other people, including individuals in the Guardians Office. They are not told that it is official policy of the organization to hold this information and later use it for blackmail and extortion purposes against defectors, and that this has been done on many occasions. Nor are they told that in the normal course of auditing a variety of different people are free to look at the records of their auditing statements, or that these statements will be used to encourage them to sever their relationships with family and friends. All of these activities are in direct contravention to the representation that auditing is confidential. For the protection of consumers, the Scientologists could be ordered to disclose that auditing is not confidential.

Another prominent fraud is the claim that Scientology promotes family harmony and marital unity. In fact, Scientology intentionally attempts to destroy these relationships whenever they interfere with the flow of money into their coffers, via a process called "disconnect". Again, the Scientologists could be required to make disclosures about the disconnect process.

3) Debt Collection Methods. As noted elsewhere in this report, any person involved for any period of time in Scientology accumulates a "freeloader debt" of thousands of dollars. People are told by "legal officers" that this is a legal debt for which they could be sued if they left Scientology without permission. This policy is set forth in the "Fair Game Doctrine". The Scientologists have been saying lately that "Fair Game" was cancelled, but this is an utter falsehood. There are documented examples of it as recently as 1979. Many people inside Scientology labor under a very real fear that they will be destroyed if they ever leave or go against Scientology. Such debt collection methods are well-recognized as consumer violations.

4) Unfair Business methods. There are, in the City of Clearwater, a number of businesses which are run by private individuals who are Scientologists. These businesses are part of the W.I.S.E. network (World Institute of Scientology Enterprises). They compete openly with other Clearwater businessmen in a variety of different fields. In other areas of the country, particularly in Boston, W.I.S.E. businesses regularly work closely with the local Scientology organization and employ other Scientologists at below minimum wage. The use of Scientology labor at below minimum wage as a commercial activity is clearly an unfair method of competition against other law-abiding businessmen in the same field (in addition to being a violation of the Federal Fair Labor Standards Act).

5) Minimum Wage Violations in General. Most working staff members of Scientology have been promised wages in return for services. These wages are never paid as promised. Legal redress through a local consumer protection ordinances should be considered for this overtly fraudulent practice.

The following proposed ordinance is presented in a preliminary form. As presented, it is not suitable for inactment by the City Commission, and requires considerable refinement and addition of numerous technical provisions. The material that follows gives a basic outline of the proposed ordinance.

The State of Florida as well as Pinellas County presently have consumer protection statutes in force. Both of these laws apply to transactions in Clearwater, but neither law precludes a more stringent or specific ordinance by the City. As noted elsewhere in this report, the City of Clearwater has a number of consumer protection issues which are unique to the City even as compared to other cities in Pinellas County.

The proposed ordinance is modeled closely after the Pinellas County Consumer Protection Act. That statute was declared to be Constitutional by the Florida Supreme, and close attention has been paid to drafting said ordinance which will survive a similar constitutional attack.


1) Title - this ordinance shall be designated the "Consumer Protection Ordinance of the City of Clearwater".

2) Legislative Intent - the public health, welfare, and interest require a strong and effective consumer protection program to protect the interests of both the consumer public and legitimate business man. Toward this end, the position of Consumer Affairs Officer is hereby created in the City of Clearwater to enforce all state laws, county ordinances, and municipal ordinances relating to consumer protection.

3) Definitions:

a) "consumer transaction" means a sale, lease, assignment, award by chance, or other disposition of an item of goods, a consumer service, or an intangible to an individual for purposes that are primarily personal, family, or household, or a solicitation by a supplier with respect to any of these dispositions. Said definition shall include, inter alia, transactions and solicitations relating to publicly offered vacation plans, courses of study or instruction, physical and mental self improvement courses, business and personal counseling services, but shall not include services rendered by licensed attorneys, physicians, dentists, or medical care practitioners. Said definition shall also include sales of goods and services by charitable organizations or solicitations for such sales, wherein a representation is made that the thing sold is of substantial value commensurate with the price charged as an inducement or reason for making such sale.

b) "supplier" means a seller, lessor, assignor, or other person who regularly solicits, engages in, or enforces consumer transactions, whether or not the supplier is a natural person, partnership, association, corporation, charitable organization, or non-profit organization.

c) "violation" means a violation at any state law, county ordinance, or municipal ordinance relating to consumer protection, whether civil or criminal in nature, including, but not limited to the Florida Deceptive and Unfair Trade Practices Act, as interpreted in light of the Federal Trade Commission Act and other Federal consumer protection acts, and the interpretations given them by the federal courts.

4) Powers and Duties of the Consumer Affairs Officer

a) To enforce the provisions of all state laws, county ordinances, and municipal ordinances relating to consumer protection, whether civil or criminal, according to the procedures set forth herein.

b) To receive and investigate complaints of alleged violations as defined in this ordinance.

c) To initiate investigations where there is reason to believe, based on evidence presented to him by any person that a violation has occurred or is occurring.

d) To refer complaints to the Office of the State attorney where there is reason to believe that a criminal violation has occurred or is occurring.

e) To institute actions in the Circuit Court, according to the procedure set forth herein, to obtain a declaratory judgement that an act or practice constitutes a violation, and to seek injunctive relief against a supplier or other person who has committed, is committing, or is threatening to commit a violation.

f) To effect service of process upon any supplier or other person charged as a respondent in a complaint.

g) To effect service of process upon witnesses.

h) To hold and conduct hearings, as set forth herein.

i) To order a supplier or other person to cease and desist from committing a violation.

j) To implement and administer consumer protection education programs and consumer warning campaigns.

5) Operating Procedures of the Commissioner

a) Any person may make or file a complaint with the Commissioner stating the name and address of a supplier or other person alleged to have committed the violation complained of and the particulars thereof, and such information as may be required by the Commissioner.

b) Upon this filing of a complaint, the Commissioner shall cause such investigation as he deems appropriate to be made. If the Commissioner determines that there are reasonable grounds to believe that a violation has occurred, he may attempt to conciliate the matter through conferences with all interested parties and such representatives as the parties may choose to assist them.

c) If the Commissioner determines that there is no reasonable grounds to believe that a violation has occurred, he shall dismiss the complaint. Any person who has filed a complaint which has ultimately been dismissed by the Commissioner may appeal by way of certiorari to the District Court within 30 days thereafter.

d) Whenever the Commissioner shall have reason to believe, based on evidence presented to him and based on his investigations, that a supplier or other person has committed or is committing a violation and if it shall appear to the Director that a hearing in respect thereof would be in the public interest, he shall issue and have served upon the supplier or other person a complaint and notice of hearing stating the charges and setting a hearing at a time and place certain. The respondent so complained of shall have the right to appear at the place and time so fixed and defend against the allegations contained in the complaint.

e) After a hearing the Commissioner shall make written findings and may make appropriate orders. Said orders shall be enforced by the Commissioner as provided herein.

6) Service of Process - Service of process upon a respondent shall be accomplished at least fourteen (14) days prior to the date of hearing and may be affected by personal service by a duly designated agent of the Commissioner or by certified mail, return receipt requested. Service by certified mail shall be effective three (3) days after depositing the complaint and notice of hearing in the United States Post Office addressed to the owner at his last known address with postage prepaid thereon.

7) Procedures Governing Commissioner's Hearings - The following procedures shall govern the conduct of hearings before the Commissioner:

a) Burden of Proof - The burden of proof shall be upon the complainant;

b) Order of Proof - The complainant shall present its evidence and testimony first. Thereafter, the respondent shall have the right to present its evidence and testimony. The complainant shall then have the right to present rebuttal evidence and testimony;

c) Admissibility of Evidence and Testimony - Any relevant evidence shall be admitted if the Commissioner finds it competent and reliable, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence. Hearsay evidence may be used for the purpose of supplementing or explaining any direct evidence but shall not be sufficient in itself to support a finding unless it would be admissible in civil actions. The rules of privilege shall be effective to the same extent that they are now or hereafter may be recognized in civil actions. Irrelevant and unduly repetitious evidence shall be excluded. At the hearing the parties may present testimony and evidence, and the right to cross-examine witnesses shall be preserved. All testimony and evidence shall be given under oath or by affirmation. The hearing record shall be public and open to inspection by any person; and upon request by a principal party to the proceeding, the Commissioner shall furnish such party a copy of the hearing record, if any, at such cost as he deems appropriate. Each party shall have the following rights:

i) To call and examine witnesses;

ii) To introduce exhibits;

iii) To cross-:examine opposing witnesses on any relevant matter even though that matter was not covered on direct examination;

iv) To impeach any witness regardless of which party first called him to testify;

v) To rebut the evidence.

d) Action by the Commissioner. If based upon the testimony and evidence presented in the hearing, the Commissioner determines that a supplier or other person has committed or is committing a violation, it may issue an appropriate Order or take any other action authorized under the provisions of this Act. Any Order or other action taken by the Commissioner shall be reduced to writing and shall specify the findings of fact upon which the order or other action is based.

e) Service of Orders - Any supplier or other person affected by any order or other action by the Commissioner shall be notified either personally or by mail of such Order or other action, and unless waived, a copy of the final Order or action shall be delivered or mailed to such supplier or other person or to his attorney of record.

8) Judicial Review - Any person, firm, corporation, or agency aggrieved by any decision of the Com- missioner may appeal to the courts as provided by general law within 20 days from the date of the decision sought to be reviewed; provided, however, that only final orders of the Commissioner may be so reviewed. Interlocutory procedural appeals are hereby specifically prohibited.

9) Enforcement of Orders - If the Commissioner determines that a party has failed to comply with the terms of an order within the time specified, he shall have the authority to initiate an appropriate action in the Circuit Court to compel compliance, including action for declaratory relief and actions seeking injunctive relief.

10) Enforcement of Subpoenas - Upon failure of a person without lawful excuse to obey a subpoena issued by the Commissioner and upon reasonable notice to all persons affected, the Commissioner may apply to the Circuit Court for an order compelling compliance.

11) Penalty for Violation of an Order - Any supplier or other person who violates an order of the Commissioner after it has become final, and while such order is in effect, shall forfeit and pay the City of Clearwater a civil penalty of not more than two thousand ($2,000.00) dollars for every violation which shall accrue to the City and may be recovered by it in a civil action. Each separate violation of such order shall be a separate offense, except that in the case of a violation through continuing failure or neglect of obeying a final order of the Commissioner, every day of continuance of such failure or neglect shall be deemed a separate offense.

12) Penalties for Hindering or Obstructing Investigations - Any person who shall hinder or obstruct in any way the commissioner or an investigator in the performance of his official duties shall be guilty of a misdemeanor of the second degree punishable as provided in s. 775.082 or s. 775.083, Florida Statutes.

13) Statute of Limitations - No action may be initiated by the enforcing authority under this act more than two (2) years after the occurrence of a violation.

14) Other Rights and Remedies - Nothing herein shall prevent any person from exercising any right or seeking any private remedy to which he might otherwise be entitled, or from filing any complaint with any other agency.


There are two primary issues confronting the city of Clearwater in deciding whether the property and the operations of Scientology within the City are properly taxable. The first issue relates to defining the respective power or authority of the State, County and Municipal government to impose and collect the various types of taxes that may be applicable to Scientology. The second issue is whether Scientology has conducted its affairs within the City in breach of the standards discussed in Section III-C of this Report as to warrant the conclusion that Scientology has not operated exclusively for religious purposes as required by said standards. This latter issue appears to be more easily resolved in favor of the power of the State, County or City to impose and collect taxes from Scientology. The former issue is less capable of clear resolution and the financial considerations involved warrant the conclusion that the City should conduct public hearings with respect to the proposed ordinances; and provide the results of those hearings to the State and County taxing authorities for purposes of collecting appropriate taxes.

Except in very limited areas of taxation, such as an occupational tax, the general power to levy and collect taxes lies within State and County jurisdiction. Taxation by a municipality must be expressly authorized by either the State Constitution or by legislature grant. City of Tampa v. Bridsong Motors, Inc., 261 So. 2d 1 (1971). The City may, however, petition the State or County through a writ of memorandums to compel collection of a tax. See, Opa Locka v. Metropolitan Dade County, 247 So. 2d 755 (1971). Oftentimes, a City joins with the County seeking collection of taxes. See Winter Park, et al v. Presbyterian Homes, etc., 242 So. 2d 133 (1971).

In view of the traditional approach of the Florida appellate courts to vest taxing authority within the County and the State, the most rational and appropriate course for the City of Clearwater is to investigate and collect information regarding Scientology practices within the City and turn over such evidence to the State and County agencies. The hearings proposed in connection with the solicitation of funds ordinance and the consumer protection ordinance should provide the City a strong basis upon which to initiate State and County collection proceedings. These proceedings should include assessment and collection of sales, use, personal property, real property, meals and other taxes. In the event that the State and County taxing authorities resist collection, the City may petition the Court via a writ of mandamus to compel collection.

The activities of Scientology within the City of Clearwater conclusively warrant the position that Scientology has carried on within the City such commercial activities of such magnitude, and for such profit making purposes, and of such non-tax exempt character, that the Corporation was not operated exclusively for religious or other tax exempt purposes. A large part of the earnings of the Church of Scientology within Clearwater have inured to the benefit of Hubbard as a private individual. The money and money's worth of benefits traceable to Hubbard include: a) salaries, b) royalties, c) large sums of cash, d) unrestricted control (amounting to ownership), over large amounts of funds in a corporate bank account, Savings and Trust accounts, e) free room and board at the corporation's expense, and unlimited access to, and use of castles, mansions, villas, seagoing vessels, automobiles, motorcycles, and other facilities owned or supported by Scientology throughout the world, f) a large retinue of servants, valets, messengers, secretaries, couriers, cooks, and other personal attendants, furnished and compensated by Scientology, g) the receipt, generally, in disguised form, of a substantial percentage of Scientology's earnings, and h) the diversion of large sums from Scientology to Hubbard to sham entities which are completely controlled and dominated by Hubbard.

Also, the policies and activities of Scientology, some of which have been previously discussed in this Report, vitiate Scientology's entitlement to exemption, because the policies amount to substantial recurring violations of clearly defined public policy including:

a) Conspiracy to impede and obstruct the I.R.S.;

b) Wrongful and malicious divulgence of personal and intimate information confided to Scientology by its members during auditing sessions, in reliance upon Scientology's deliberately false representation that such 1nformation would be strictly confidential;

c) Pervasive violations of the individual rights of human dignity by subjecting members to "amend projects", and "R.P.F.", which enforced performance of humiliating and degrading acts;

d) The infliction of serious, deleterious; mental and psychic damages that are a direct result of Scientology's dangerous techniques;

e) Depriving individuals of their own self-determination and ability to perform their own moral judgments through the use of brainwashing techniques;

f) Recurrent and pervasive use of blackmail, intimidation, and other egregiously anti-social acts by way of implementing Scientology's "Fair Game" policy;

g) Scientology's "Disconnect Policy", resulting in enforced dissolution of marriages and other close family relationships;

h) Insistence upon and use of non-voluntary lie detector (E-Meter) and security checks as a condition of employment in direct violation of state laws;

i) involuntary detention (equivalent to false imprisonment);

j) Drastic punishment of members and employees; and

k) The use of telex devices for the purpose of carrying on illegal covert activities in violation of the Federal Communications Act, together with a conspiracy to further such purpose.

The commercial activities of Scientology permeate its entire operation. They include things such as extensive advertising and solicitation of business; the payment of commissions to persons who can produce customers, the granting of discounts; an ever- increasing accumulation of earnings; granting first priority to customers who make the largest cash payment, rather than the one who is in the greatest need of Scientology services; the use of drastic, arm-bending and emotionally crippling procedures for the collection of delinquent accounts; the use of enforcement policies which are designed to extort from a customer his avenues of legal redress by threats of disclosure of confidential auditing information, and finally a a markup factor of as much as 789% on the sale of its goods.

The .flagrantly commercial profit motivated activities of Scientology are in violation of F.S.A. § 196.195(4) which requires that all religious organizations maintain a non-profit character. Although the following examples intend to be typical illustrations of Scientology commercialism, and hardly exhaustive, such examples constitute compelling evidence of a profit motivated scheme.

1) Advertising vacation packages to an oceanside resort in Clearwater, The Fort Harrison and Sand Castle (Scientology properties). The advertisement is totally devoid of any religious suggestion and clearly demonstrates the organization's profit oriented motives.

2) Advertising and rental of rooms at the Fort Harrison Hotel and Sand Castle at exorbitant rates. For example:

a) VIP Apartment - $75.00 per day
b) Grand Suite - 100.00 per
c) Dukes Chambers - 50.00 per day
d) Jade Palace Suite - 60.00 per day
e) Lotus Suite - 60.00 per day
f) Moon Garden Suite - 60.00 per day
g) Opal Suite - 60.00 per day

3) The sale of courses at astronomical rates which bear no relation to the service rendered. For example:

a) New Era Dianetics for OT Rundowns (50 hours) - $19,547.19
b) Section OT III - 9,021.78
c) OT I to OT VIII Package - 26,614.42
d) New Vitality Rundown (25 Hours) - 12,780.86
e) Full Org Exec Course (8 Volumes) - 12,029.04
f) Flag Effective Public Relations Course (includes apprenticeship) - 10,525.41

4) The operation of a corporate entity, WISE, an acronym for World Institute of Scientology Enterprises, which is bereft of any religious purposes. The sole purpose of WISE is commercial not religious.

5) The commercial transactions (purchase of course and hotel room rentals) are encouraged by Scientology's acceptance of Master Charge and American Express.

6) Scientology now offers rebates and "package reductions" to stimulate cash purchases.

7) The inurement to L. Ron Hubbard of 10%-50% of all funds collected in Clearwater, Florida.

8) Freeloader Debt - a concept designed by the Scientology corporation to extract monies from an individual who severs association with the Church. The debt is allegedly incurred for services rendered. However, the debt bears no relation to any service and is imposed only when an individual seeks to terminate association with the Church. The Scientology organization threatens litigation to collect the "debt" thereby adding additional funds to Church coffers. Alternatively, threatened legal action prevents a dissatisfied individual from leaving he organization.

Each of the acts designated above constitute violations of the statutory criteria for non- profit religious organizations. Specifically, the cash purchases of courses and the hotel room rentals constitute violations of F.S.A. § 196.195(e), regulating a nonprofit corporation's charge for services. This statute states that the taxing authority may examine,

e) the reasonableness of charges made by the applicant for any services rendered by it in relation to the value or those services.

Again, all religious organizations are required to remain non-profit and must comply with the statutory criteria for non-profit organizations. F.S.A. § 196.195(1)-(4). The mercenary motives of the Scientology organization, illustrated by the unreasonable cost of services (supra), constitutes a per se violation of F.S.A. § 196.195(4) and should invalidate the religious exemption.

Likewise, Scientology's use of Clearwater as a central communications link for its incredible world-wide pattern of criminal activity including Operations "Goldmine", "Snowwhite", "Freakout," "Project Owl", and hundreds of other such operations, all carried on through the use of tax exempt funds, clearly demonstrates the non tax- xempt purpose. The recommended public hearings will provide the City Commission a solid basis to enact the proposed ordinances as well as create a documented record of Scientology's breach of the standards applied to determine tax-exempt status as set forth in Section III-C of this Report.

The City's right to know whether Scientology is keeping adequate tax records, and whether it is using its funds exclusively for religious purposes is a compelling governmental interest. The recommended hearing and ordinances will provide a legitimate basis to secure this information. If Scientology fails to provide it, or if the documentary evidence acquired as a result of enforcement of the proposed ordinances indicates use of money for non-exempt purposes, the City may provide that evidence to the appropriate taxing authority.

The recommended hearings, possibly in conjunction with other proposed legislation, to examine the nature and extent of Scientology's activities in the City, would demonstrate the fraudulent, commercial and criminal activities carried on by Scientology in Clearwater, all of which are devoid of religious content. This evidence would demonstrate Scientology's failure to comply with the following tax regulating statutes:

a) Failure to use property for exempt purposes as defined by F.S.A. 196.012 (1) (2);

b) Failure to meet criteria for exemption based on nonprofit status as defined in F.S.A. 196.195;

c) Failure to meet criteria for exemption based on religious status as defined in F.S.A. 196.196.

The City could then present written findings together with exhibits to the County property appraiser with the recommendation of the City Commissioners and also to the State Sales and Use tax authorities, that Scientology properties be taxed, and that the organization present accurate and detailed records of its financial activities for each year it seeks qualification for exemption.

It is important to note that the long and detailed English inquiry (covering 182 printed pages) into Scientology ended with the following recommendations:

"Two further matters deserve mention. First, I am struck by the ease with which "non-profit making" companies or associations are able to escape the payment of taxes, even if they are not charities. An ordinary business pays tax on the whole of its income, after deducting only those expenses incurred "wholly and exclusively" for the purpose of the business, and the Inland Revenue authorities not unnaturally subject these expenses to close scrutiny. But in the case of an organization which renders paid services only to its members, the system is different: a principle of "mutuality" is applied, with the result that the full income from the members (in the form of fees) escapes taxation at that point, and so do donations from non-members. Moreover, if the organization then distributes its surplus by way of donations to associated companies, or even to individuals, these payments are still not assessable to tax because they are "voluntary" payments. If the services were sold to the general public who are not "members", such an organization would have to pay taxes like everyone else, and only legitimate business expenses would be deductable; but considering the case with which one can enroll "members", the distinction strikes me as artificial. This aspect of our tax system is in my opinion ripe for review.

Payments such as those shown in the Scientology Companies' accounts as being made to other Scientology organizations, or to Mr. or Mrs. Hubbard, who are not residents of the sterling area, of course require the consent of the Bank of England under the Exchange Control Act.

The other matter which deserves attention is the failure of a number of the Scientology companies to file accounts and annual returns within the time prescribed by the law, without apparently incurring any sanction at the hands of the Registrar of companies. These sanctions seem to me pointless if they are not enforced."

These recommendations should not go unheeded by the residents and officials of Clearwater.
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The provable facts relating to Hubbard's background, the creation, operation, policies and activities of Scientology, the findings made by formal inquiries and courts or both foreign nations and the United States, as well as the serious implications - financial, mental, emotional and societal, for Scientology's victims, all suggest that it is necessary, and legally permissible for the community of Clearwater, where Scientology maintains worldwide headquarters, to take appropriate action. This action must be reasonably related to legitimate public interests and it must be narrowly defined in order to avoid interference with the beliefs or doctrine of Scientology. Such beliefs, although ostensibly fanciful, dangerous or absurd, arguably fall within the domain of "religious beliefs", as that term is most broadly interpreted by American Courts.

In the final chapter of her work, "The Nazis and the Occult", the author draws many parallels between the Nazis, Hitler, Sun Myung Moon, Hubbard, and Scientology. Quoting from Sravepalli Radha Krishnan who stated, "If we believe absurdities, we shall commit atrocities", the author traces the development of irrational doctrines being enhanced by presumably sane and rational youth such as the "Hitler youth", leading to the abandonment of individual conscience, loss of objectivity and pathologically anti- social activity. Scientology's '"OT III level" material, for which proselytes [pay] tens of thousands of dollars, and which represents for some the culmination of Scientology dogma, suggests that Hubbard is leading his followers into belief of "absurdities". OT III material states that a Scientologist is a specially chosen "Thetan" from a civilization on the planet Helotrobus destroyed 40 trillion years ago by evil forces; and that Hubbard has united them on Earth where he is destroying evil through his "technology". Hubbard's "technology" exhorts his followers to do anything against an "enemy" of Scientology including destruction. These and similar doctrines are employed in a sufficiently rational and enticing sales technique to enlist the support of many rootless, unstable and troubled people. Many of these people, although not having yet committed atrocities akin to Jonestown or to Auschwitz, have engaged in a pattern of widespread and prolonged criminal activity challenging the fundamental precepts of our society, laws, and our government.

It is certain that the City of Clearwater cannot seek to prohibit or regulate Scientology beliefs or doctrine, including OT III, R-2-45, or "Fair Game", however fanciful and dangerous such doctrines may be. However, "The Constitution is not a suicide pact" and the First Amendment "embraces two concepts, -- freedom to believe and freedom to act. The first is absolute but, in the nature things, the second cannot be." Cantwell v. Connecticut.

Where Scientology belief culminates in activities which are fraudulent, mentally, emotionally, and physically destructive, and violative of recognized civil and criminal law, then the City of Clearwater is free to act in order to protect its citizenry. For example, if Scientology "scientifically guarantees" the cure of physical and mental ailments, which it does on a daily basis in order to make money, then such a representation is secular, not religious, and the City may prohibit or regulate such a fraudulent misrepresentation. See United States v. Article or Device, discussed herein. Or if Scientology employs the "disconnect" policy, or the "Freeloaders Debt" policy, or the "Attack the Attacker", or "Fair Game", in the face of representations that it is a religious, educational, charitable, non-profit organization, promoting family unity, etc. then the City may regulate or prohibit such activity. Or if Scientology violates the educational laws, the fire code, etc. then the City may investigate and regulate.

In the past, Scientology, under Hubbard's direction, has demonstrated flagrant disregard for the laws of our Society. It has instilled and encouraged this disregard in its followers. Although Scientology may eventually evolve to the point where it accepts traditional societal tenets and laws, Hubbard's "tech" is fanatically adhered to by many, including those who currently run the organization, and the "tech" absolutely forbids acceptance of "wog" or societal rules. A fervent Scientologist views himself, Hubbard, and the "tech," each as a law unto itself.

For example, one defector, who was "imprisoned" in the "R.P.F." in the Cedars of Lebanon complex in Los Angeles describes the following frightening sequence:

I walked and walked through tunnels I had never been in. Then I heard it. Inhuman screaming and ranting. It was coming from my right. There were four doors and someone was pounding on one of them. I ran over and tried to open the door. It was locked. I yelled, "Are you allright?" and got more screams. Suddenly someone touched my shoulder. I turned and looked at a man in clean overalls. "Hello", he said, "I'm the Ethics Officer for the RPF". "What are you doing to her?" I said. "Oh, she's just blowing off charge. When someone flips out on the RPF, we lock them up for a couple of hours. They calm down after a while." He smiled. I was stunned. "You look them up in here?" "Sure, you know the tech. The tech always works." I looked at him. Totally triumphant, with Scientology tech on his side. I felt sick to my stomach, the corridor started spinning around me. So this was it. The final answer. Cold, calculated, step by step, at progression to stamp out anyone who questioned, rebeled, criticized, disliked Scientology. Break them, all of us."

It is apparent that the Clearwater community has a legitimate public interest in prohibiting activity such as that described above and cited throughout this Report. The authors of this Report have been involved in the investigation of Scientology for approximately two years and have collected thousands of documents proving that anti- social, criminal and tortious activity has been a daily event within Scientology. Although Scientology may claim that the perspective of the authors of this Report is biased and prejudiced, it is submitted that any sane, rational, human being, adhering to fundamental values, would be both repelled and "biased" upon having hundreds of individuals and parents relate facts describing how Scientology "processing" encompasses a type of patently commercial fraud, causes severe mental illness occasionally resulting in institutionalization and death, and fosters a pattern of criminal activity to destroy all those seeking to investigate it.

Based on the foregoing perspective, and the facts and analyses set forth in this Report, as documented in the Appendices, the authors recommend the following to the City Commission:

(1) The Report should be submitted to 3 practising attorneys within the Tampa- St. Petersburg area who are deemed to have respective "expertise" in the areas of constitutional, tax and municipal law. The attorneys should be practitioners as opposed to strict academicians. They should be chosen by the Commission without influence from either the Church of Scientology or the public at large. They should be neither "liberal" nor "conservative" but should be chosen on their ability to analyze objectively existing case and statutory law in the three areas suggested. The Commission should request a short opinion of less than 5 pages from each attorney. It should conduct a public hearing on the matters, recommendations and proposals set forth in this Report and should weigh in its deliberations the contents of the Report as well as the opinions of the three independent attorneys.

(2) The City Commission should anticipate that the Church of Scientology will litigate every aspect of this Report, their deliberations, the decision and the subsequent enforcement of ordinances and legal proceedings. The Church of Scientology will seek to delay, obstruct, and interfere with every decision made by the City Commission. It will "attack", "manufacture threat", and pursue a "black PR campaign" pursuant to its written policy, seeking to discredit the authors of the Report, the City of Clearwater, and all public officials involved. The Church of Scientology will seek to exploit the judicial system to harass and discourage rather than to win", in accordance with its written policy, and will cause the City to expend large sums of money in order to deal with the problems it has created. It will immediately sue the authors of this Report as well as City officials pursuant to the aforesaid policy.

(3) The City should proceed to the drafting and implementation of the ordinances proposed, should conduct public investigations and hearings pursuant to those ordinances and then institute appropriate legal proceedings in court to enforce the ordinances.

(4) The City Commission should allocate at least $300,000 to finance the anticipated legal costs necessary to develop, implement, enforce, and defend its action.

(5) The City Commission should retain experienced trial lawyers, knowledgeable in Scientology litigation to present evidence at the recommended public hearings and to prosecute and defend anticipated litigation.

(6) The residents of Clearwater should anticipate a costly and vituperative legal battle between the City government and the Church of Scientology during which the Church will utilize every conceivable technicality to delay, obstruct, and interfere with the judicial process as well as every weapon to attack and discredit City officials, its attorneys, and any residents who actively support the City.

(7) The City should expect to be successful in the legal proceedings it institutes, and these proceedings should effectively prohibit the fraudulent practices and abuses cited in this Report. The evidence accumulated in such proceedings should result in a forfeiture of Scientology's tax-exempt status, in the appropriate tax proceedings, and the tax revenues generated should exceed the costs of any and all litigation.



1. It should be noted that neither of those agencies ever had as much information available to it as is presently available to the City of Clearwater. The availability of information to the City results from the criminal convictions in Washington, D.C., the large number of defections from the ranks of Scientology which followed those convictions, and the good communications which now exist for the first time among the many private citizens and government agencies around the world who are involved in litigation with Scientology.
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Part 1 of 6

Day 1: May 5, 1982

City of Clearwater City Commission:

Charles LeCher, Mayor
Thomas Bustin, City Attorney
Anthony L. Shoemaker, City Manager
Rita Garvey, City Commissioner
Paul Hatchett, Vice Mayor
James Calderbank, City Commissioner
James Berfield, City Commissioner
Lucille Williams, City Clerk


Michael J. Flynn, Esquire
12 Union Wharf
Boston, Massachusetts 02109

Thomas Greene, Esquire
12 Union Wharf
Boston, Massachusetts 02109

Thomas Hoffman, Esquire
12 Union Wharf
Boston, Massachusetts 02109

Kevin Flynn
12 Union Wharf
Boston, Massachusetts 02109

Also Present:

Paul B. Johnson, Esquire
Johnson, Paniello & Hayes
Exchange Bank Building
Post Office Box 3416
Tampa, Florida 33601

MR. LeCHER: The hearing will come to order.

I'd like to ask you to rise for the Pledge of Allegiance led by Police Chief Sidney Klein and remain standing for the invocation led by Commissioner Jim Berfield.

(Whereupon, the Pledge of Allegiance was recited.)

MR. LeCHER: Mr. Berfield.

MR. BERFIELD: Our humble Father, we thank Thee for this day, for the many blessings that this country has bestowed upon us. We thank Thee for this opportunity and may we be mindful of what our duties are here this day and may we carry them out to the best of our ability. May we be reminded of the rights of others and may our duties and our responsibilities to our community be forthwith, not neglecting the rights of others. This we pray in Thy name. Amen.

MR. LeCHER: Thank you, Mr. Berfield.

Ladies and gentlemen, I have an opening statement to read. We will then, after my statement is read, introduce Mr. Flynn who will introduce the witnesses.

This statement is concerning, primarily, the rules and procedures of these hearings.

The purpose of these public hearings is to investigate alleged violation of criminal and civil laws, and the alleged violation of fundamental rights by the Church of Scientology, an organization which now conducts extensive activities without our city. The purpose of the investigation is to determine whether there is a need for legislation to correct the alleged violations. It is not our purpose to interfere with any of the beliefs, doctrines, tenets, or activities of Scientology which arguably fall within the ambit of religious belief or activity in the broadest legal interpretation. It is not our purpose to conduct a witch hunt and receive testimony documents, or any other type of evidence which is not reasonably related to significant, vital areas of municipal concern.

We are compelled to undertake this investigation. There has been overwhelming, documented evidence presented to this Commission and attached to the report of the city's Consultant, Michael J. Flynn, which demonstrably indicates that the Church of Scientology has used our city as a base to engage in widespread, local and national criminal activities, pervasive fraud, and deceptive non-religious, secular, sales and recruitment practices, and to conduct vicious personal attacks on members of our community, including our former Mayor and other public and private agencies.

When faced with such probative evidence, as has already been presented to the Commission, we feel obligated to conduct open, public hearings to examine witnesses, subject the evidence to the light of day, and allow Scientology to present opposing or contradictory evidence, if it so desires.

These hearings are not without precedent in connection with the Church of Scientology. Many foreign countries, including England, Australia, and South Africa, have initiated formal inquiries into the activities of this organization, and those countries have published reports which contain an almost uniform recitation of anti-social, deceptive, and harmful practices by Scientology. The reports of these countries and that of our consultant relate to a consistent pattern of abusive violation of fundamental legal rights by Scientology. These violations have left a legacy of victims who have turned toward government agencies in many countries, including the United States, seeking aid and legal redress. It is our purpose to examine the non-religious, secular activities within our city of Scientology and to consider municipal legislation which may help to correct abuses and provide assistance to victims of fraudulent, unfair, and deceptive practices.

We conduct these hearings motivated by a desire to exercise fundamental fairness in dealing with the substantial issues presented by the consultant's report which are of compelling municipal concern. We open the door to interested parties within the framework of the rules and regulations adopted for these hearings to present evidence to this Commission which directly relates to the following areas of vital public interest.

Number one: The utilization of the City of Clearwater as a base to conduct and perpetuate wholesale violations of state and federal criminal laws, including larceny, breaking and entering, robbery, perjury, conspiracy, kidnapping, extortion, and blackmail, which is evidenced in the consultant's report.

Number two: The perpetration of fraud through uniform, secular, non-religious written and oral misrepresentations for the purpose of inducing people to pay money or provide labor or services, which is evidenced in the consultant's report.

Number three: The utilization of charitable tax-exempt status to conduct commercial, non-religious, non-charitable, anti-social, sometimes criminal activities within our city, without accountability to the proper taxing authority and without payment of real estate, meals, or lodging taxes.

Number four: The unlicensed practice of medicine on a widespread basis, including the concealment of epidemics and the treatment of actual diseases by unlicensed individuals holding themselves out to be medical practitioners, which is evidenced in the consultant's report.

Number five: The implementation of written policies of Scientology calling for flagrant physical and psychological abuse in order to coerce, deceive, and destroy those who Scientology considers to be its enemies. These policies and practices are evidenced in the consultant's report.

Number six: The failure of the Church of Scientology to meet minimal educational standards for numerous school children living within our city in Scientology-owned buildings and the intentional deception of our education officials as to the education of said children. This is evidenced in the consultant's report.

Number seven: The existence of overcrowded, insect-infested conditions in Scientology-owned buildings in violation of public health, safety, and welfare requirements and in violation of existing fire and building codes. This is evidenced in the consultant's report.

The second part of this statement concerns the rules and regulations for the conduct of the Commission Hearings. The rules are as follows: Number one: The Commission may make, amend, or cancel any rules or regulations for all purposes relating to the conduct of the hearings.

Number two: The Mayor, as Chairman of the hearings, may remove or exclude from the hearings any person or persons interfering with or disrupting the hearings.

Number three: The hearings shall commence, proceed, and terminate at such times and on such dates as the Commission shall determine. The following schedule is currently planned: May 5th, 6th, 7th, 8th, 10th, 11th, 12th, 13th, and 15th from the hours 9:00 a.m. till 12:00 p.m. and 2:00 p.m. to 5:00 p.m.

Number four: The Commission may limit, extend, or terminate the hearings at any time or any date as it deems warranted.

Number five: The Commission may limit, extend, or terminate the testimony of any witness as it deems warranted.

Number six: The Commission shall receive such testimony, documents, or materials as it deems warranted.

Number seven: There shall be no examination of any witness by any person other than the Commissioners, the City Manager, and the City Attorney.

Number eight: All witnesses shall testify under oath under the penalties of perjury.

Number nine: The consultant under contract with the City, Michael J. Flynn, shall submit documents and affidavits of witnesses not in attendance to be received and reviewed by the Commission. The consultant shall make an opening statement not to exceed 45 minutes, and said consultant shall proceed with the presentation of witnesses, documents, and materials subject to Rules 4, 5, and 6 hereof.

Number ten: The consultant shall present evidence on May 5 through the 8th. The Church of Scientology shall present evidence, if it so desires, from May 10th through the 13th. Two hours each shall be allocated to the consultant and to Scientology on May 15. This paragraph is subject, however, to Rules 4, 5, and 6 hereof.

Number eleven: No evidence shall be accepted or received by the Commission except that presented by the consultant or the Church of Scientology without receiving prior consent of the Commission.

Number twelve: At the conclusion of the hearings, the Commission shall determine whether further hearings are necessary and whether there is a need to enact legislation.

Number thirteen: The hearings are solely of an investigatory nature to determine whether there is a need for municipal legislation. The rules of evidence in judicial proceedings are not applicable to these hearings, but the traditional hearings process relative to legislative investigations will be implemented. The Commission shall endeavor to discriminate between hearsay evidence and direct percipient evidence, but it may utilize hearsay evidence to further its investigation, without relying on such evidence in its final determination.

The third part is the format of the hearings process, which is as follows: The consultant for the city will make an opening statement.

Number two: The consultant for the city will present a witness before the Commission who may give a statement about matters relevant and material to the areas of municipal concern previously outlined. During the making of the statement by the witness, the consultant may present documents or other materials relevant and material to the areas of municipal interest.

Number three: The consultant may present affidavits sworn to under oath of individuals who do not appear personally before the Commission, before, during, or after the testimony of any witness.

Number four: The consultant may present documentary evidence before, during, or after the testimony of any witness.

Number five: Each Commissioner shall have the opportunity to examine the witnesses presented by the consultant relative to any matters of municipal concern as previously outlined.

Number six: At the conclusion of the presentation of evidence by the consultant, the Church of Scientology, shall have the opportunity to present evidence relevant and material to the areas of municipal concern previously outlined.

Number seven: There shall be no presentation of any evidence by any person relative to matters which relate solely to the religious belief, faith, or convictions of any persons. There shall be no presentation of any evidence relative to the personal bias, motives, conduct, or interests of the Mayor, the Commissioners, the City Manager, the City Attorney, or the City Consultant. The purpose of these hearings is to inquire into the seven areas of municipal concern previously outlined and not to allow any person to utilize the hearings as a forum to attack personally either the participants in the hearings or any other person.

Number eight: At the conclusion of the presentation of evidence, the City Commission will deliberate as to whether further hearings are necessary and/or whether municipal legislation shall be enacted.

That concludes my prepared opening remarks. I would like to, again, reiterate that this Commission is here for very serious business and we're not going to tolerate any yelling, screaming, hooting, or clapping. If you do that, we're going to ask you to leave; if you don't leave, you're going to be escorted out by an officer.

Mr. Flynn.

MR. BUSTIN: Mayor, before you get started in the pending process, I had a call from Mr. Johnson representing the Scientologists. Mr. Johnson has requested permission to make an opening statement, which would be out of order in the format.

I bring it up now to find out what the pleasure of the Commission is with respect to that request.

MR. LeCHER: Commissioners, the Manager has sent Mr. Johnson a letter as of April 13th concerning the schedule of these proposed hearings, and it is the intent to allow representatives of the Church of Scientology to have equal time for presentation which is scheduled to commence on Monday, May 10th, 1982. They will have an equal time on Monday; these are the rules.

The rules, also, as stated, were sent to Hugh Wilhere yesterday. He has had time to read the rules.

I would suggest that we adhere to the original rules outlined as just stated by me; however, it would take a four to one vote to overrule the Chair.

MR. HATCHETT: Mr. Mayor --

MR. LeCHER: Yes, Mr. Hatchett.

MR. HATCHETT: I move that Attorney Johnson's request be denied.


MR. LeCHER: All those in favor, say. "Aye."

(Whereupon, the Commissioners voted and the motion carried.)

MR. BERFIELD: Mr. Mayor --

MR. LeCHER: Yes, sir.

MR. BERFIELD: His request is for an opening statement at this time?

MR. LeCHER: Yes.

MR. BERFIELD: But he would be allowed an opening statement?

MR. LeCHER: He will certainly be allowed an opening statement at another time when it is his time which is next Monday. And that is the way we decided to do it, and I don't think we should change the rules at this particular time.

MR. JOHNSON: Mr. Mayor, I'm Paul Johnson.

I called Mr. Bustin and he told me I would be afforded the opportunity to make an opening statement to help you and to guide you in your presentation. I think it would be only fair, as in any proceeding, that both parties have a right to make a brief opening statement for the guidance of the triers of fact or the finders of fact.

And I'm here at what I understand to be the advice and the authority of Mr. Bustin when I requested the right to come and make a brief opening statement. He told me he felt that you could afford me that right. And I'm here and I will make a brief statement, if you will permit me.

MR. LeCHER: Sir, I will not permit you. The Commission has decided to adhere to the original set of rules and, that is, that you will be afforded equal time when it is your time and you can speak uninterrupted and up to forty-five minutes at that particular time. But this is the City commission's time right now.

I ask you with due respect, sir, to sit down.

MR. JOHNSON: It will be too late to give my advice to you. After the horse has gone, you can't lock the barn door.

And what I want to say to you will be very helpful and very proper, and I --

MR. LeCHER: Sir, I've asked you to sit down, sir. I appreciate your concern and you advice to me and this Commission. I ask you again, once more, to please sit down.

MR. JOHNSON: Does that mean that Mr. Bustin's --

MR. LeCHER: That means, sir, sit down.

MR. JOHNSON: -- advice is withdrawn?

MR. LeCHER: That means sit down.

Thank you.

Mr. Flynn, are you ready?

MR. FLYNN: I am, Mayor.

MR. LeCHER: Then, let the proceedings begin.

MR. FLYNN: Mayor LeCher, Mr. Bustin, Mr. Shoemaker, Commissioner Garvey, Commissioner Hatchett, commissioner Calderbank, Commissioner Berfield, and people of the City of Clearwater: I have been contracted with by the City Commission as a consultant to present evidence to this Commission relative to the matters that have been set forth by Mayor LeCher in his opening statement

For the past three years, I have endeavored to collect evidence pertaining to the operating, non-religious, secular activities of the Church of Scientology. I have made that endeavor in connection with proceedings in cases that are not before this Commission.

Approximately a year ago, I was approached by city officials relative to the collection of that evidence, which was to some degree broadly known in the media across this country. Those, city officials examined some of that evidence. Subsequently, they consulted with you, the City Commission en bank, to determine whether I should prepare a formal report relative to matters of vital, municipal concern to the City of Clearwater.

And I did prepare such a report. And I attached to that report approximately three to five thousand pages of documentary evidence. That report set the initial base by which this Commission could proceed to determine, from a threshhold level, whether further consideration should be, given to the issues raised in the report. And this commission did, in fact, consider that report and decide in the early part of this year to conduct these hearings for the purpose that Mayor LeCher has stated, to subject that evidence to the light of the day, to give you people the opportunity to examine the people in part whose testimony and documents gave flesh and validity to that report. So, instead of having a piece of paper to read, you will have the opportunity to examine the people, to look them in the eye, to determine whether what they say is true, false, or to whatever degree of validity what they say should be accepted by this commission.

The City Commission was compelled to undertake these hearings, not only for the protection of the people of Clearwater but for the protection of the Church of Scientology and its members who are living in this city and residing in Scientology-owned buildings and receiving, in some measure, the benefits of the city, of residing in the city, and are receiving the alleged benefits of being a participant in the Church of Scientology.

The reason that these hearings are compelled on both counts for the people and for the Church is because of the history of events that have taken place within this city. And I do not intend in this opening to outline all of those events. I will simply point out to the commission and to the people of Clearwater that for approximately seven years, since the latter part of 1975, when the Church of Scientology came into this city, allegedly under a name or title that did not properly describe the nature of their organization or their purposes, the city began to question: Who was this large group that had undertaken to purchase Clearwater buildings and what were these people doing within the city? Your former mayor, to some degree, attempted to undertake and find answers to those questions for the people of Clearwater.

Thereafter, as many of the people of Clearwater know and the Commissioners know, various alleged operations were conducted against your former mayor. And since that period of time, there have been constant and uninterrupted media attention and. news items relative to not only the matters pertaining to your former mayor but other operations of the Church of Scientology across the United States. We are all aware of the fact that for seven years the media has raised these issues before the people of Clearwater and before you as their elected representatives.

The issues that have been raised by the media warrant scrutiny. They warrant a legal, official body of this city looking into them and determining whether they're true or whether they're false, both for the protection of the Church and for the protection of the people.

You, as the elected representatives, who, for the first time, have decided to undertake this task and I, to some degree, have been subjected to representations in the media as to our purposes. And that type of activity, as we all know, has gone on for seven years with anyone who has undertaken in this city to vocally speak about this subject in the media. There has also been attendant with it rumors, allegations, and media attention to the fact that there is harrassment, smear campaigns, and things of that type. It is fair to say, I believe, that that is what has been occurring within the City of Clearwater.

The Church and the people of Clearwater deserve to know whether such things took place, who did them, and under what circumstances they were done. A factual record that has legal validity with you people determining whether or not those facts are true and what should be done with those facts is a matter that should be set forth in a public record that the people of Clearwater can turn to and say definitively, "Our elected representatives have decided whether such things have taken place or have not taken place and this is what we intend to do about it." For that reason, for both sides, these hearings are absolutely necessary.

Attendant to or peripheral to some of these events have been tax considerations which have been raised in the media. It is not our purpose here, per se, to determine whether or not those tax considerations in the light of the factual evidence can be directly confronted by this Commission. However, it is a matter which is of importance to the people of the City of Clearwater, and some of the evidence pertaining to some issues relating to tax considerations can factually be decided by this Commission and turned over to whatever appropriate authorities the commission deems they should be turned over to.

During this entire period and right up to five o'clock yesterday afternoon, I think it is fair to say that there has been a response by the Church of Scientology, both in the media and before this Commission and prior Commissions to allegations made in the media about the Church. In light of the evidence and factual testimony that I am going to present, I would characterize that response to be one of using a defense of religious persecution to conceal the real nature of what the evidence will show and what the facts will be, at least out of the testimony of these witnesses and the documents that will be presented. I believe it is a fair statement to say that that defense has been proffered to this Commission.

I also believe it is fair to say that in line with that defense the Church of Scientology has characterized itself as an unpopular religion and, therefore, there are issues of religious persecution attendant to it. I would throw out to the commission that it is the Church. that says that it's unpopular.

The scrutiny will not be into popularity; the scrutiny will be into conduct. And if the conduct, as determined by this commission, turns out to be of the nature of the allegations that have been made in the press and that have been taking place in various courts across the country, then, the character of the description of saying that the Church is unpopular in light of some of their conduct may be warranted.

Fundamental to American jurisprudence and American lawmaking, of which this body is an inherent part, is due process: the right of both sides to be heard. The Church of Scientology will have an equal opportunity to be heard and to present evidence that will rebut the evidence that this consultant has collected and intends to present to this Commission.

In light of the requirements of due process, and having in mind what due process means, I hope and pray that the Church of Scientology will produce testimony and will produce witnesses and documents to rebut the evidence that will be presented by this consultant. I sincerely hope that the Church of Scientology will not simply listen to the evidence presented and seek to attack by whatever means, through whatever written policies, the people who are presenting the evidence. I sincerely hope that the Church will address the facts and the issues that will be raised by the testimony and will not attack the people who are raising the issues.

There is another right in the First Amendment in addition to the right of free exercise of religion and that right is just as vital. It is the right of free speech.

There will be people who will be presented to this Commission, based on the evidence that this consultant is aware of, who have been denied that right by written policies of the Church of Scientology. This Commission should be as concerned about that right as they should be of First Amendment rights of free exercise of religion on both sides of the fence.

Approximately, nine months ago, as virtually everyone in the city knows and the City Commission is aware, the top eleven people, excluding L. Ron Hubbard, of the Church of Scientology were convicted of a wide variety of crimes which, in themselves -- the convictions in themselves -- have no direct relevance to these proceedings. However, the facts that pertain to the indictments that were brought by the United States government, as they relate to the City of Clearwater in relationship to alleged criminal activity, have direct relevance to this Commission.

In those cases, the cases of Mary Sue Hubbard and the other top eleven officials of the Church of Scientology, the defense of First Amendment free exercise of religion was raised. The cloak of concealment of what those criminal activities were resulting in those convictions was placed with the use of First Amendment free exercise of religion arguments; it was placed over those activities. And I would like to read to you what the District of Columbia Court of Appeals, the Federal Court of Appeals just below the United States Supreme Court, which denied relief to those individuals who were convicted, said about that defense.

And I quote from the case of the United States v. Mary Sue Hubbard: "The crimes charged here are not ideological offenses. Those who formulate conspiracies to obstruct justice, steal government property, burglarize, bug, harbor fugitives from justice, and commit and suborn perjury before the grand jury have no constitutional right under the First Amendment to conceal the documentary evidence thereof. Likewise, none of the documents" -- referring. to documents seized by the Church -- "and freedom of religion is not endangered but encouraged when criminal conspiracies are suppressed that attempt to hide behind religion."

It is not the purpose of this Commission to determine whether the Church of Scientology is or is not a religion. It is none of your business; it is none of my business in this proceeding. It may be other government's business in other proceedings. But it is not the purpose of this Commission to determine that fact.

It is the purpose of this commission to open the cloak that has been placed over alleged violations of civil and criminal law in this city to determine whether they've taken place and to determine whether or not that cloak is being used to conceal. And in that way, freedom of religion will be encouraged.

The focus of the inquiry and the nature of the evidence, very briefly, will not seek to vilify, hold up to ridicule, or attack members of the Church of Scientology or anyone else. It will seek to deal with the corporate structure of the organization which has policies which have to do with and are relevant to the seven, areas of municipal concern. We are not here to find out whether members of the Church are good people or bad people; that is none of our concern.

In fact, as a matter of opinion, I would proffer to you people that I have many clients who are formerly members of the Church. who are very idealistic, well-motivated, well-intentioned people. As a matter of opinion, I would proffer to you people that the individuals residing now in your city are of the same type: they are idealistic, well-motivated, well-intentioned people.

We are not dealing, however, with just motivation and intention. We're dealing with conduct. Our inquiry is to determine whether the conduct of any individuals has been such as to be in violation of standard civil and criminal laws and fundamental human rights. We are not going to inquire into the beliefs or faith of any person. The evidence that will be introduced will be intended to deal with secular, non-religious practices.

A stringent effort has been made to deal with secular, non-religious practices. There is the consideration of the fact that a cloak of first Amendment protection has been placed around those practices. There is a need to open that cloak, and it must be done sensitively, and it must be done with all due caution by this Commission. But it must be done as the Court of Appeals in the District of Columbia did.

The evidence will involve several fundamental areas. It will involve, as I said, corporate policy as opposed to individual conduct that is not related to corporate policy. In that respect, there is one individual whose background, credentials, qualifications must be examined. The reason they must be examined is, not to vilify or hold up, to ridicule that individual; that, per se, is none of our concern. The reason this particular individual's credentials must be examined is because the evidence will be that the Church of Scientology has held out that individual for more than two decades in writing, consistently, uninterruptedly, to have certain qualifications upon which people have come to this city, paid money, provided labor, on the representations of the Church of Scientology that those credentials, qualifications, and background are accurate. And there has been, as the evidence will show, specific and trusted reliance on those credentials. And the evidence will show that those credentials are not accurate.

So, therefore, there must be an inquiry into L. Ron Hubbard's background to determine whether the written representations made about him by his organization are true or false, because people have come to your city and paid money, millions of dollars, for seven, years relying on those representations, as you people will hear.

The nature of the evidence will essentially deal with deceptive practices, misrepresentations concerning Mr. Hubbard's background, misrepresentations concerning the confidentiality of information given by Church members to this organization on the representations to them that it would be held in confidence and it would not be used against them.

If you people decide, from the evidence, that there are policies to not only use that information but to use in an extortionate manner of blackmail, then, that evidence will not only prove that there has been deception of these people who have paid money but it will prove that conduct has been engaged in by this organization that is specifically in violation of fundamental laws dealing with fiduciary obligations, invasion of privacy, and the sanctity of individual -- information that is given in confidence.

There will be, briefly, evidence relating to the conditions at the Fort Harrison and other buildings owned by the Church of Scientology in this city. That evidence will pertain to public health, safety, and welfare factors; fire, building, and municipal code factors; educational considerations relevant to whether children who have been living in the city are obtaining an education that is required under the laws of the State of Florida and Pinellas County.

There will be evidence pertaining to purely secular, legal, non-religious practices dealing with the signing of promissory notes, legal releases, waivers, and things of that nature that people who come into the Church are required to sign that have nothing to do with religion. They have to do with whether or not someone can walk over to the Pinellas County Courthouse or the Federal Court in Tampa and file an earthly lawsuit.

Finally, there will be evidence pertaining to some very fundamental policies of the Church of Scientology which are inherent in the very fabric of the organization, which relate to this city and to the people in the city, both inside the Church and outside the Church -- in an area of absolutely significant, substantial, vital, municipal concern. And that is a policy that allows the Church of Scientology to attack, lie, cheat, sue, and destroy its enemies. It is, as the evidence will show, a real policy that has been operating in the city for seven years, has been applied to members of this Commission in the past and, as the evidence will show, based on the nature of the policy, is in all likelihood being practiced today.

I ask, ladies and gentlemen, that you question and scrutinize the testimony of every witness in great detail. Seek to elicit from each witness as much as you can on all relevant matters. Do not hold back questions that your conscience in whatever way says should be asked. Subject the witness to a thorough examination. Bring out the facts to the people of Clearwater, and make a determination as to the accuracy of those facts.

Thank you.

MR. LeCHER: Thank you, Mr. Flynn.

Is your witness --

MR. FLYNN: The first witness will be Edward Walters.

MR. LeCHER: Please take Mr. Walters to the Clerk, Mrs. Williams, who will swear Mr. Walters in.

Face the Clerk, sir.

EDWARD WALTERS: Scientology, like everything, is not totally bad. There is some technology that is good. They're not going to have people like myself who are not complete idiots -- any of your sons or daughters, if they went into the first few courses, I'll tell you, they would like it. You're not asked to dress up in fancy robes, you don't cut your hair, you don't go singing songs, you don't go to the airport and elicit donations. In other words, it's not the appearance of a cult. It appears to be a very technical solution and education on the theory of life, et cetera. The general public is involved in that and they get fleeced for their money.
The staff member who works on the staff, again, is usually more brainwashed, more into working hard for Hubbard. And a lot of them are good, decent people, working very hard for practically no pay, working fourteen, fifteen hours a day, doing the slightest thing wrong and being beaten or thrown in the hold or many other things that -- subject to degradation, financial loss, suits, et cetera. Anyway, they're just young, decent people who, if they weren't in Scientology, I believe a lot of them would be in the Peace Corps or something like that.

Then, you have the higher officials of the Church. Some of them are decent people just brainwashed on Scientology and Hubbard. Others are out and out criminals who participated in criminal acts years ago and, I believe, are probably doing it up to this day, and are probably here in Clearwater.

Then, you have the Guardian's Office, which is a separate outfit, who is -- it's sort of on the outside of Scientology, but it protects Scientology and actually runs it. It's hard to explain it. The best example, which is very real to me, is like Hitler and the troops, which is the Sea org., then, you have the Gestapo, which is the Guardian's Office. And fear and the actual running of Scientology is actually from the Guardian's Office.

The Guardian's Office ranges anywhere from some young, new individuals who really don't know very much -- some probably don't even believe that they did break into the federal buildings or any of that stuff; they probably believe I never was in Scientology or whatever they're told about me -- and, then, you have further above them people who are inclined to become criminals and the type of people that would go in the SS in Germany. Then, in the higher-ups of the Guardian's Office, you have people who, from my experience, turn out to be criminals and people in hatred and fear of citizens throughout the land.

EDWARD WALTERS: a witness herein, having first been duly sworn by a clerk for the City of Clearwater, was examined and testified as follows:

MR. I.eCHER: Take a seat.

I have a few standard questions I'd like to ask you. I'm going to ask these same standard questions of every witness, whether brought by the city or by the Church of Scientology.

Sir, the first question is: Are you appearing here today and testifying under oath voluntarily?


MR. LeCHER: Number two: Have you been paid by anyone for your testimony, other than expenses for coming to Clearwater?


MR. LeCHER: Three: Do you have a lawsuit against the Church of Scientology?

MR. WALTERS: Personally, no.

MR. LeCHER: Does the Church of Scientology have a lawsuit against you?


MR. LeCHER: Number five: Has anyone suggested to you that you should state anything but the truth or has anyone suggested that you change your testimony for any reason?


MR. LeCHER: Okay, sir. Would you like to -- I believe you have an outline to follow. Would you like to --

MR. FLYNN: The practice, Mayor, will be the witness will seek to deliver a soliloquy or statement that he feels is pertinent to the matters of municipal concern previously outlined and, then, the Commission will undertake examination.

MR. LeCHER, Thank you.

Mr. Walters, would you like to proceed?

MR. WALTERS: All right.

I think it would be best, probably, for me to tell you how I started in scientology and my history and record and experience so that you'll have some -- you'll know where I'm coming from, otherwise, I'm sure some of the things I tell you just won't be believed.

Excuse my nervousness; this is the first time I've been in public.

MR. LeCHER: We're all a little tense here, sir.

MR. WALTERS: It's not easy to talk about this, and you'll see why when I tell you.

Okay. Around 1970 in Las Vegas, Nevada, I was an executive, casino executive, at the Sands Hotel. Through an individual who I had known a few years earlier in Las Vegas, Frank Freedman, who is here at Clearwater presently -- but at that time he was in Las Vegas -- introduced me to Scientology. He told me, you know, what it was, that it was founded by this famous man who was a great man, a nuclear physicist. He discovered the secrets to life, happiness. And Frank, knowing that I was interested in bettering my life, questioning the world around us, sked me to come down to a mission that he had. A mission is a small Scientology organization; it's the lowest on the chain of command.

He gave me some auditing. Auditing is a process where you sit in front of a Scientologist who uses a meter, called an E-Meter, and you are told that this E-Meter can detect whatever is wrong with you, the reasons why they're wrong with you, and it can find a thing called engrams, which, as Hubbard says, is the sole source of all sickness and aberration. And I did that for a few weeks.

I'd have to admit that the first introductions to Scientology were nice; it usually is for most people. I -- later, that mission closed and they went to Flag. Flag was a ship that L. Ron Hubbard resides on. That's the highest point in the Scientology organization, Flag. Flag is now here in your City of Clearwater.

I was then transferred to the Las Vegas Organization on Industrial Road in Las Vegas where it was suggested that I continue studies. I was, myself, interested in the technology. I had been, you know, very impressed of Hubbard's degrees, his studies, and that he was a sick man who made himself well, and that he had found a way of doing this for everyone.

I, at the time, had back trouble and stomach trouble, which I was going to Santa Barbara for, Santa Barbara Clinic in California. That came up in this auditing.

Anyway, at the organization in Las Vegas, the Las Vegas org., which is the next step up in the chain of command -- you've got a mission, then, the Las Vegas organization was an organization called an org. At the Las Vegas Org, I started a Dianetic course. Dianetics was introduced to me as the first book that L. Ron Hubbard read -- wrote. We were told to read it, and this told us and convinced us that this was the eradication of all illness, the sole source of aberration. It would make you well and happy, high IQ and total recall, the supreme being, et cetera, et cetera.

While at the Las Vegas Org., within the first few months, I was asked to -- my room was on the second floor. I was asked to go down in back of the building, in an office back there called -- to meet some people in the Guardian's Office. The Guardian's Office is a -- it was explained to me -- well, I'll just tell you exactly how it occurred.

I went down there and met -- I guess I can name names.

MR. LeCHER: Yes, you may.

Will you put the microphone a little bit closer to you? I'm just afraid there's somebody in the back who doesn't hear you.

MR. WALTERS: All right.

I met Susan Reed. I don't know what her name is now, but Susan Reed --

MR. LeCHER: Excuse me, sir.

If at sometime during your conversation you'd like to take a break, do it, if you're getting a little worn out. I believe you're going to be here for quite a bit of time. So, if you need a break, let us know.

MR. WALTERS: No, I'll be fine. We've been waiting a long time just to get here.

MR. LeCHER: Okay. Proceed.

HR. WALTERS: You'll just have to protect me when I leave the building.

So, I met Susan Reed, who was the Assistant Guardian, called AG, Madeline Reese, Maddy Reese, who was AGPRO, meaning Assistant Guardian Public Relations Officer -- you'll hear names like officer all the time; I later found out it's a very Navy-oriented thing -- and chuck Reese who was the Intell Officer for Intelligence, later changed to be called Information.

They invited me in and asked me how I was doing; they said they heard something about me -- to this day I don't know from who -- but they said I was a sharp guy and "We hear you 're doing well" and "You're interested in going clear," which is one of the early things that you're sold on is to go clear. Clear would be free of all the aberration and engrams that I mentioned earlier. And as a clear, you would have, you know, genius IQ, total recall, and free of illness, et cetera, et cetera. And I was very much interested in doing that.

So, they invited me, actually, many times, two or three times a week for a three-, four-week period. And, generally, what occurred was telling me the importance of the Guardian's Office, that it was an organization set up by L. Ron Hubbard to protect the Church of Scientology against the enemies that are out there. Enemies in 1970 and '71 were psychiatrists, doctors, government officials, mental health organizations; those are the ones explained to me at the meetings.

It was explained to me how important it was that Scientology was to clear the planet, meaning make everyone clear in the City of Las Vegas and throughout the world, that these enemies had to be stopped, that these enemies were actually suppressive people. Suppressive, meaning that they were out to destroy the Church of Scientology. And these suppressives were people who were actually criminals themselves and Ron knows this; they're actually anti-religion, anti-spiritual, and they're connected with the doctors and psychiatrists, et cetera.

So, it was approached to me from the viewpoint, you know, "We have to fight this war, Eddie, and that to possibly do the job we have to do and for you to go clear, Eddie, we will need your help." At the time, I'm embarrassed to say, I said, "Fine."

I had grown up -- I was not, as a normal citizen is, most infatuated with public officials and didn't really know much about them. So, whatever they told me was believable.

Anyway, a short time after that, I was invited down to the office and a fellow was standing there called Bruce Raymond. Bruce Raymond, Susan Reed, and Maddy Reese told me to go for a walk with Bruce Raymond. I did.

Bruce Raymond told me that he was -- well, first, he started talking to me again, constantly always telling you, you know, "Are you going clear," how important it was to beat the enemies, and that whole routine I had been eceiving for weeks. And I said, "Yes, 1 want to help; I want to clear the planet; I'll do whatever we can do." He told me that he was a special agent for L. Ron Hubbard and Mary Sue Hubbard and that he works with the Guardian's Office and that he works on the most sensitive and secret operations. You'll hear that word a lot; in short it's called ops. In fact, throughout Scientology, terminology is like the Navy; they cut everything into short terms.

He said -- he stressed to me the importance that serious things must be done to stop these enemies, that these were vicious people, and that -- so, I said, "Fine," you know, if there was any way I could help, I would.

He told me -- he was bragging to me about, again, the technology of L. Ron Hubbard and that L. Ron Hubbard had this mental technology so that, being the genius he was, he had developed the technology of espionage, intelligence, ferreting out the enemy, and -- so, I said, you know, "Fine, if this is what it takes to go clear, you know, and they're going to stop L. Ron Hubbard from helping all of us, I'll do what I can."

He told me that -- I asked him about the technology because I was interested. I was very technically oriented then and still am. He told me about the Guardian's Office technology, such as, "I'm sure you've heard, you know, people who go to a lawyer and try to cause trouble for Scientology," and I said, "Yeah, I've heard that." He said, "What we do is, you know, we investigate them and if we have to, we" -- he bragged, you know, "We just plant dope on the individual, and someone calls the police and the guy gets arrested and, then, it's broadly publicized, and the lawyer usually drops the case," and stuff like that.

And he impressed upon me two things: one, that anybody talking or criticizing the Church was connected to major operations to suppress the Church and, two, that anything will be done to stop these people. And that L. Ron Hubbard has the means and the technology to do it.

He said that -- all right, anyway, we talked a while. And in the coming weeks, he made me what we called an FSM for the Guardian's Office. I was an outside intelligence operator. I was given a code name. Any operations that were done were written up and sent back to headquarters in Los Angeles at that time.

Anyway, so, I did that. And I got involved in and also overheard and watched many covert operations done against the City of Las Vegas, against the city officials, a legislator, the director of mental health, psychiatrists, the Better Business Bureau, newspapers, the district attorney's office, infiltrations. I don't know how specific to get with you, if you're interested in me now answering questions.

Anyway, I'm embarrassed to say, at the time I thought it was all something you had to do to fight and to destroy the vicious enemies of the Church. I believed what they were telling me about the city officials, that they were connected with the government, that the government was connected with the psychiatrists, who were connected with doctors, who were connected with some mysterious voodoo from outer space, who were always trying to get Hubbard. It's embarrassing now, but at the time I thought, you know, this man's a nuclear physicist, he's an expert on the mind; he must know what he's talking about.

All right, anyway, I then went on to continue my training. Briefly, I can tell you I did every course offered in Scientology on the training side, meaning the side that teaches you the technology of Scientology. I did the Communications course, Dianetic course, the Minister's course, which -- I know, you know, it's easy to say now, I remember at the time I did the Minister's course, and I can remember talking to the GO people, you know, "Why are we doing the Minister's course?" They were telling me, you know, "The government thinks we're not a religion, so we'll make you and some others a minister. We want you to get a collar, a white collar, and a black thing." And I asked, "Why?"

And they said, "Well, that's what the public" -- they're called WOGS, you people are called WOGS - "that's what the WOGS think a minister looks like, so Ron has very cleverly -- never underestimate Ron, Eddie. We will give a presentation that will -- they want ministers, we'll show them what a minister looks like." Well, I can tell you, in nine years, I wore that minister's thing three times.

And it's very interesting to know the three times. The first time I wore it, they called me up to wear it. It was very important; the Guardian's Office wanted me to wear it because the district attorney's office was coming down. I didn't know for what, if somebody had made a complaint or they were checking something about city licenses at the time.

I wore it again shortly after that because it was explained to me that, to make us look like a religion, we had to have services. Ron had discovered just what the government really wants, which is, you had to have services, parishioners, and things like that. And so, they would start giving -- this was in '72 or '73, they would start giving Sunday lectures, and they'd call that the services. And they wanted me to give a lecture and wear this, and they were going to invite some news media down there, which I did.

Anyway, in my career in Scientology in Las Vegas, I did the Dianetic course and became a Dianetic auditor, the Dianetic CS course. I did, above that, the auditing grades, which are given to the public who come in. I became a Class 1 Auditor, Class 2 Auditor, 3, and a Class 4 Auditor. I went to Los Angeles in my quest for more technology. I became a Class 5 and Class 6 Auditor. As a class 6 Auditor, I was at ASHO, American Saint Hill Organization, Los Angeles, where you study from 8:30 in the morning until eleven at night. You listen to tape recordings and study L. Ron Hubbard's bulletins all day long. You get a break at twelve and again at six.

And a Class 6 Auditor was one who was totally an expert in all the technology of the -- of Scientology. I completed that course; I was down there a year and-a-half, I think. I completed that course. I did the Extended Dianetic course and the Clearing course. The Clearing course, as I told you earlier, is the thing where people go clear.

After the Clearing course, I was back in Las Vegas; after a year and-a-half, I was back in Las Vegas. Things were still the same. I had not seen the progress that I had hoped I'd see, and I thought I would see more auditors. I was hoping in Las Vegas, that the Guardian's Office was at least getting along with the city. And I thought it would be nice -- you know, it would be easy to audit and become friends and do all the things that we're told that will happen.

You see, one of the mysteries that confronts you as you go along is that you have what is preached by Scientology and, then, you have what is practiced, which is almost a dichotomy. It's hard to explain to you unless you're in; it's a hard analogy to give you.

But I'll never forget seeing a TV program on Reverend Jones in Guyana. If you'd listen only to Reverend Jones' lectures, they weren't half bad. But I wish some of the people in Guyana spoke up on what was really going on there. I mean, that's the same thing with Hubbard: the lectures aren't that half bad. Some of the technology isn't that bad. It's what it's used for, and I can get into that later.

Anyway, Las Vegas was just as, I thought, puzzling to me as ever. I was still involved in covert activities against officials. I was hearing the first mutterings of now they were going to attack and destroy the federal government. Jesus. I had heard in Los Angeles about now the new enemy was Interpol, in '73. It was Interpol; Ron had discovered that Interpol was the major suppressive.

Now, I get back to Las Vegas and they're into the FBI and the government, the IRS. And I hear mutterings that they're going to do something -- in Scientology, the Guardian's Office do something to infiltrate, breaking and entering, get whatever evidence they need or plant what -- it's a full-fledged operation, which I can talk about later, if you're interested in it.

Anyway, God, it was just so untechnical to me, and I was wondering how I, as this highly trained so-called auditor, could clear people, bring peace to the world, if there's this part of the Church that's doing psychotic -- and at that time, I just thought it was a bad part.

I was a Class 6 then around '75, '76. The only higher level attainable above that was a Class 8, who was promoted as the highest technical expert there is, totally can solve all cases; he was the ultimate surgeon, you might say, in a hospital.

So, I went down to do that course, figuring I would find, maybe, the final answers to the technology and insanity that I was starting to question in Scientology and our source in the world. This Class 8 course turned out to be a disciplinary and psychotic adventure, more geared to make you into a Gestapo auditor than it was to make you into a decent human being.

That explained to me why -- when I did the Class 8 course -- that was the highest you could go. And I found no goodness or compassion or caring. But I saw the actual teaching and hysterics of Hubbard. That explained to me then why in Las Vegas a Class 8 and others around the country could take the most intimate confessions of individuals that were given in this counseling, this auditing, and use it against them.

I never agreed with it. I saw it; I was involved in it. And when I got to the top and found that that not only is not -- it's not just Las Vegas that got into a bad thing, but it's the actual policy and practices of the Guardian's Office and the Church, so- called Church. Well, I knew, then, the ending was -- it would soon be over for me.

I went back to Las Vegas as a Class 8. I audited in the field at my home for a while; I tried to stay away from the Las Vegas Org. It wasn't easy because, at that time, the public was becoming aware or, at least, the FBI had broken into the -- you know, raided the Church, and now the public was becoming aware that there were burglaries and infiltrations into the federal government.

I knew this to be true and, yet, the Las Vegas Org. and Hubbard and the Guardian's Offices in Los Angeles, Clearwater, Artie Maren, and others like him were telling Scientologists that this was all false, this was lies, this was further proof how suppressive -- I know it may sound silly to you, it sounds silly to me. But at the time I thought we would be proud of this, like, as if we had broken in or exposed the FBI and exposed the government. Now, the Guardian's Office is saying they had nothing to do with it, these people were innocent, and telling all Scientologists that this was more lies and that you better get more auditing and spend more money to protect yourself from these evil people.

And I'm thinking. "God, could it be that all these years I've known of and participated in things like this, and now they're even lying about that?" I mean, it was just -- so, I intended to stay away from them; they knew I was discontent with them.

Anyway, then, some people -- Hubbard, by this time, was in hiding; we were, of course, always told that he was in Clearwater getting along with you fine people. Across the country we were told, you know, to come to Clearwater and "Spend your money here."

Some people in Las Vegas -- a friend of mine called me up and said he had a couple in Las Vegas who had just left L. Ron Hubbard and I better talk to them because I was a Class 8 and the senior tech person in that whole area.
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Part 2 of 6

I talked to these two people and they told me that they had -- they were in the Church of Scientology for a short time, they were at this secret base in the desert where L. Ron Hubbard was hiding out. They were told to fake names and hold covert operation, which, of course, was to me new. It just stunned me. It was just further proof, as I was starting to see all along, that the insanity and the criminal actions were coming directly from Hubbard and his paranoia.

I brought these people, when they came to me that day, to the Guardian's Office. I guess at the time I was just being a good, brainwashed Scientologist. You bring anybody who says anything wrong to the Guardian's Office. And it was very interesting to watch the Guardian's Office go berserk. And, then, I was thinking that probably fifty percent to ninety percent of what these people were saying was true. And, then, with the lies and the criminal actions they were encouraging -- anyway, I threatened to go to the authorities to do something about it.

They expelled me the next day. Artie Maren, one of the top church officials who came down to Clearwater many times, came and threatened me with the usual -- that I would be handled, and any trouble I cause L. Ron Hubbard, I will be taken care of. "Others have done it in the past, they're not around. Eddie, you will be taken care of."

He would go from -- we had a three-hour walk. He would go from threats to my life, and when I would get mad and say, "Great, let's go down to the police station right now, goddamn it" -- excuse my language. I would say, "Let's go down to the police station." I was hot and scared. And, then, he would back up and start egging. And it was funny, he started telling me that if he doesn't handle me, he'll be on the RPF and he'll be in trouble. And now he's begging. Now, I'm telling him, "Well, Artie, this is so nuts, why don't you tell the truth? This thing's insane." And then, when you'd do that, he'd switch again and be tough and tell me, "As you know, Eddie, stuff in preclears' folders" -- preclear, meaning a person who's not clear. Your folders are the most sensitive and intimate things that you have .old your so-called minister, who, most of them are not even ministers; they're young kids who took a week's course.

He told me, "Eddie, we will -- you know we've done it before, and we will expose you," you know. Anyway, he went through the typical threats and actions, that he knew that I knew about the Guardian's office participation for years, which I can go into later, if you're interested.

Anyway, it was the make/break point in my life. I either had to stay in Scientology, because if you're in -- you're either in and you do these covert operations or whatever you want; you're a true believer or you are the enemy.

So, I went to the FBI, me and about six or seven others. And then -- anyway, then, I'm in Las Vegas still the last few years under tremendous threats and harrassment. For just speaking up, they sued me. They threatened to sue me -- they'll sue me for talking to you here today. I'll be sued in Las Vegas as part of some grand conspiracy. They'll have me linked up with you people; I've never seen any of you before. But that's what it'll be.

Anyway, so, as far -- my training side was the highest you could go, processing, I went clear to OT 4. I'm familiar with all of the Church's highly technical information. I'm entirely familiar with the Church's organization and operation.

MR. FLYNN: One minute, Mr. Mayor.

MR. WALTERS: All right.

Should I go over some things that I found to be not nice conduct?

MR. LeCHER: If the consultant feels they're pertinent to --

MRS. GARVEY: Corporate policy.

MR. LeCHER -- corporate policy in general or Clearwater in particular, I believe we would like to hear from you.

MR. HATCHETT: We would.

MR. LeCHER: We would like to hear from you any thing you'd like to add.

MR. BERFIELD: Mr. Mayor?

MR. LeCHER. Yes, sir.

MR. BERFIELD: I have an important question directed to counsel.

Has he been given any immunity or been read his rights, his Miranda rights, or anything like that, so that anything he says here can't be used against him elsewhere?

MR. FLYNN: Yes, Mr. Berfield, that has been resolved. Immunity, no, but there have been discussions with public officials. both within Pinellas County and other places between Mr. -- with Mr. Walters, and those issues have been addressed.

MR. CALDERBANK: In other words, criminal acts that he would speak of that he participated in will not be --

MR. FLYNN: That issue has been resolved; that's correct.

MR. LeCHER: well, let's hear from Mr. Walters now. We can question Mr. Walters later on.

I'd like to have you finish your remarks, sir, about the business activities of the Church relating to Clearwater.

MR. WALTERS: All right.

As I became trained, it was evident to me that everything you did was totally from policy. And if a Scientologist tells you any different, I'm going to tell you he's lying. Everything you did was written from policy and policy had to be written by L. Ron Hubbard. In fact, it was a major crime in Scientology with severe penalties if you did anything except written by Source. In fact, the word was "If it's not written by Source, it isn't true." Source is L. Ron Hubbard; everybody else is secondary.

Some of the policies that I found to be repugnant were you would go into Ethics. There was a division in every organization called the Ethics Officer. The Ethics Officer is presented as an individual who is supposed to help you clean up your transgressions so that you can become a better person. Again, as with most of the things in Scientology, what is presented and the actual operations are two different things.

Ethics, actually, is a place to help ferret out the enemy, everything from penalties to degradation to investigations on an E-Meter. They will put individuals on an E- Meter and tell them that they must come up with any crimes or anything they've ever thought bad about L. Run Hubbard or the Church of Scientology. It is not for the protection of the individual; in fact, it's for the protection of Hubbard only.

There are policies, such as, disconnect. Disconnect is very important because Scientology professes to be -- help families, et cetera; it does not. The main thing that Scientology is involved in is Hubbard's paranoia and the enemies that are out to get him. He has formed a money-making outfit that obviously has to be protected. And in order to protect it, Ethics is used against individuals.

A Suppressive Person is a person who criticizes or is going to harm Scientology. Anybody associated with any of those people is called PTS, Potential Trouble Source. It's interesting even the term they give an individual, Potential Trouble Source: not to themselves, to Scientology.

You are taught per policy that all illness and aberrant behavior, sickness, comes from being PTS, meaning connected to suppressive people. So, when a person in Scientology is sick or ill -- and I was told that we would treat them and make them well -- Ethics takes them and wants to know what Suppressive they're involved with.

If that Suppressive is their mother or their father or another individual -- and I know many, many cases of this, thousands. An individual who's now feeling bad about being on course because he's never home, he talks different language than his mother understands, she wants to know whether he's involved in a cult, he now tells this in his confessional.

The confessional takes these private names and gives them to the Ethics officer. The Ethics Officer calls this individual and says, "Has your mother been criticizing the Church?" "Yes." "What questions is she asking you?" "Who L. Ron Hubbard is and how do you know he's this" and all this stuff. "So that she's against the Church?" "Yes." "Then, can't you see she's suppressive?" And the person will, you know, tend to see this.

He is then told that he has to disconnect or handle his parents, which means he has to handle them -- to handle them, they would have to become Scientologists. If they don't become a Scientologist, he has to disconnect from them because he's connected to a Suppressive Person. So, you have people continually becoming upset and disconnected from their families.

Now, if the individual won't do this, because, you know, leaving your parents and family is not the easiest thing in the world, you get threatened with being expelled from Scientology and things put against you, such as, fair game.

Fair game is a policy written up in the Church of Scientology. I've seen it. I know it's denied by the Guardian's Office; it's denied by Artie Maren and all these people. But I'm telling you that there is a policy that's never been presented to the public. It's -- but there is one; I've seen it, and it is practiced to this very day.

Those are the lower Ethics conditions, meaning that if you are dangerous to the Church or even if you've done something wrong, like, this individual hadn't told his family -- if he does not disconnect from his mother, he can be put in Enemy.

Now, this may sound nutty to you, but, if you realize that in Hubbard's thinking and in Guardian's Office thinking, he is an enemy because he's siding with his mother who is questioning the Church of Scientology. And she probably has a doctor; most people do. To the scientologist, that's considered, like, earth shattering. They will follow this woman around and if they find she went to a doctor, "Ah, interesting." They can tie her back to a doctor, doctors are tied to the government. "Ron is right again. He's just brilliant, this man."

So -- now, these are taken very seriously. I mean -- the wording there doesn't affect me that much, but there was a time when, if you would put me in one of those conditions, I would have been -- I would have done whatever it took to get out of them.

MR. LeCHER: You were disgraced?


MR. LeCHER: Disgraced? you were --

MR. WALTERS: Disgraced? Other scientologists will then be put in Enemy if they talk to you.

MR. FLYNN: Mr. Mayor, may the record reflect that we have posted on the easel a document, a blow-up of a document, which will be introduced into evidence as Exhibit 1, which is copyrighted by L. Ron Hubbard, and which states on it, for the record, "Enemy, SP, Fair Game, may be deprived of property or injured by any means by any scientologist without any discipline of the Scientologist, may be tricked, sued, or lied to or destroyed."

MR. WALTERS: Now, what he just read is true and is practiced, even though a few years later they put out an order saying that that was cancelled. If you look at the exact order, it says it's cancelled. And the second line says, "No actions or the way you handle these people are changed." The name was changed because the public has heard about it and don't like it.

This in very serious. A Fair Game person -- another Scientologist can do anything to him. He can lie about him, plant dope on him, use any of his confidential, things against him. He can be tricked, sued, whatever is needed to be done to stop him.

I have seen this done to individuals. I've seen individuals go into hiding over it: many are still out there. The Church of Scientology lists them as part of their rolls; these guys haven't been in the Church for years, they're afraid for their lives.

These lower Ethics conditions are very degrading. I mean, look at the names of them. They're not called "You're A Bad Boy." Liability, Treason, Doubt. Can you imagine a young man who spends two or three years studying all day long, giving every energy to this Church, and his mother doesn't like the Church so now he's called the Enemy to L. Ron Hubbard? And he's told that "The Enemy will be handled, and you'll either be one of us or we'll handle you. And it'll be done."

MR. FLYNN: May I interrupt, Mr. Mayor?

MR. WALTERS: You can ask questions --

MR. LeCHER: Well, I wanted you to complete your talk and, then, we will ask the questions. If you have completed your scenario, as you know it, at this point, then, I will --

MR. WALTERS: Well, let me just say this to you, otherwise, a lot of what I say won't be understood: Scientology, like everything, is not totally bad. There is some technology that is good. They're not going to have people like myself who are not complete idiots -- any of your sons or daughters, if they went into the first few courses, I'll tell you, they would like it. You're not asked to dress up in fancy robes, you don' t cut your hair, you don't go singing songs, you don't go to the airport and elicit donations. In other words, it's not the appearance of a cult.

It appears to be a very technical solution and education on the theory of life, et cetera. The general public is involved in that and they get fleeced for their money.

The staff member who works on the staff, again, is usually more brainwashed, more into working hard for Hubbard. And a lot of them are good, decent people, working very hard for practically no pay, working fourteen, fifteen hours a day, doing the slightest thing wrong and being beaten or thrown in the hold or many other things that -- subject to degradation, financial loss, suits, et cetera.

Anyway, they're just young, decent people who, if they weren't in Scientology, I believe a lot of them would be in the Peace Corps or something like that.

Then, you have the higher officials of the Church. Some of them are decent people just brainwashed on Scientology and Hubbard. Others are out and out criminals who participated in criminal acts years ago and, I believe, are probably doing it up to this day, and are probably here in Clearwater.

Then, you have the Guardian's Office, which is a separate outfit, who is -- it's sort of on the outside of Scientology, but it protects Scientology and actually runs it. It's hard to explain it. The best example, which is very real to me, is like Hitler and the troops, which is the Sea org., then, you have the Gestapo, which is the Guardian's Office. And fear and the actual running of Scientology is actually from the Guardian's Office.

The Guardian's Office ranges anywhere from some young, new individuals who really don't know very much -- some probably don't even believe that they did break into the federal buildings or any of that stuff; they probably believe I never was in Scientology or whatever they're told about me -- and, then, you have further above them people who are inclined to become criminals and the type of people that would go in the SS in Germany. Then, in the higher-ups of the Guardian's Office, you have people who, from my experience, turn out to be criminals and people in hatred and fear of citizens throughout the land.

MR. LeCHER: Are you prepared to answer or discuss questions about specific criminal activity?

MR. WALTERS: I'll answer any question you ask me.

MR. LeCHER: Would you like to volunteer anything specifically as to --

MR. WALTERS: I'll volunteer some. Do you want it --

MR. LeCHER: Specifically relating to Clearwater, if you know anything about that.

The Chair has the option to lead off or to yield, and I'm going to go from my right on down, so everyone gets a chance to speak.

MRS. GARVEY: This is something along with what you're saying, really what we want to know is some of the policies of the organization that you've been a part of, et cetera.

Can you give us some idea?

MR. WALTERS: Well, there are policies like attack the attacker; I forget the exact name of it. It's a policy that we all studied. Scientology denies it; I've seen it. And we are thoroughly indoctrinated on this, that we are to totally attack, investigate any group that dares criticize or investigate Scientology.

MR. LeCHER: Do you know anyone -- would this be happening currently in Clearwater, not only to myself but to others or any elected or appointed city officials?

MR. WALTERS: I can promise you it's occurring. I will give you experiences, if you're interested, in Las Vegas. I will tell you how the tech works, and I can promise you that it's being applied here.

MR. LeCHER: For my own benefit, since I am one of the principals here, I would like to know how it works.

MRS. GARVEY: Good point.

MR. WALTERS: All right.

Hubbard believes that there are enemies out to get him. He also believes that enemies that attack Scientology are actually criminals themselves. As I found out later, almost everything in Scientology is in fear. It turns out that's exactly what they do.

Anyway, so that the technology -- the technology of the Guardian's Office is this: Whenever somebody criticizes or attacks -- and you'll always hear the words like "attack." It's never, you know, speaks badly of; it's always attack and destroy; it's very military.

When the Guardian's Office goes into operation, the Guardian's Office has -- well, the three that I'm familiar with, Hubbard Relations Bureau, the Intelligence Bureau, and then the AG person himself. Their job is to operate on two fronts: one, publically -- well, first, the intelligence operation goes into effect. The city official, for example -- I'll give you specifics. It seems funny saying this.

MR. FLYNN: Do you want to take a break?

MR. WALTERS: No. I've started it. I better keep going.

In Las Vegas, there's a fellow called Otto Ravenholtz, who was the Director of Public Health, the Director of Mental Health, something like that. He, like you people, thought that the city ought to look into Scientology. And who are these young kids giving auditing? Are they trained counselors? You know, who are they? Are they administering mental health, which is the title of Ron's book, you know, Dianetics: The Modern Science of Mental Health. Jesus, the Guardian's Office went berserk.

So, they sent telexes and written coded messages to Los Angeles, which was the headquarters then; now their headquarters is here in Clearwater. They designed a program to handle.

Another thing, everything done in Scientology is written up as a program, first. That has since been their downfall because, when the FBI raided, they got all this. But none of this stuff is done because some individual did it on his own; I don't care what Artie Maren tells you or Hebert Jentz or one of these other guys that will do whatever it takes -- will tell you whatever Hubbard wants them to tell you about Scientology. They don't do anything without the planned operation.

The operation then was to -- the first thing that always happens is that you covertly investigate the individual, the city official. The Otto Ravenholtz thing was Chuck Reese. Chuck Reese then started following him around day and night. He was to get information to start a file on him. I promise you there are files in the Guardian's Office here on every one of you individuals.

You follow them around; you follow where they go, what they -- if Otto Ravenholtz stopped to have a drink, the guy sitting next to him was Chuck Reese. He'd listen to his conversations and, because of L. Ron Hubbard's technology, he listened for what they call buttons or psychological things. Like, if Otto Ravenholtz would tell a dirty joke or kid about girls, which is what I understand, it's what he kidded about, and the next operation is to use that against him. The operation was to plant a girl on Otto Ravenholtz to get something -- indiscretions done and hold it in the folder to expose when we need it.

MR. FLYNN: May I interrupt at this point, Mr. Mayor --

MR. LeCHER: Yes.

MR. FLYNN: -- just to simply say that, rather than interrupt the witness' testimony, we will be introducing documents that pertain to the program the witness has referred to, but I will wait until the end of his testimony --

MR. LeCHER: All right.

MR. FLYNN: -- and the end of the questioning. And we will be introducing those operations and programs and putting them on the overhead projector, in some instances. Those --

MR. LeCHER: I will start the questions, then, I'd like to go on to my colleagues. I'll start off.

You have, apparently, taken a large chance to come here today. You are obviously nervous and you are giving information that they wouldn't like to have out.

How do you think that you'll be characterized tomorrow by the Scientologists due to your presence here today?

MR. WALTERS: The policy -- I will be Suppressive, subject to Fair Game. To fit into the technology of Scientology, I will be made a Suppressive, who is in conspiracy with you people, and we are all in conspiracy with the government and with some monsters from outer space, whose real job is to do in Hubbard and all religion in the world.

MR. LeCHER: May I interrupt?

MR. WALTERS: Ninety-nine percent of all Scientologists will believe -- in fact, they will not be allowed to talk to me. If they are, they'll be put in Enemy.

What other Scientologists -- the public will be told --

MR. LeCHER: That's what I mean. You, apparently if this holds true to form, you're going to be discredited?

MR. WALTERS: Oh, yes. They have already done that in Las Vegas. They've gone --

MR. LeCHER: All right. What are they going to say about you? You might as well --

MR. WALTERS: All right. I told you about the Intelligence Bureau and the Guardian's Office, right --

MR. LeCHER: Yes.

MR. WALTERS: -- investigating the city officials, the district attorney's office, Better Business Bureau, and I have personal knowledge of all this. I don't care what they tell you, I will testify in any law court to it.

Anyway, now, when that is done -- after all that is done -- then, the Public Relations Bureau goes to work. They will use this evidence against the individual or they will make evidence that, from their surveys of the city, fits the tone of the city. It's very cleverly done. For example, in Las Vegas, if the city was afraid of crime, then, they would say, "Eddie Walters is speaking, yes, but did you know he's a criminal? And that is what you want to get rid of, people like Eddie Walters. He is a criminal. And we, in the Church, do not know anything about what he's saying."

And these people -- and if you press them, they'll say, "Well, if some former Scientologist -- if somebody did something on their own, that's it. Eddie Walters is a person that's been expelled from the Church." What they will tell the people in the Church is different than what they will tell you.

They will tell the citizens tomorrow that I have probably never been in the Church of Scientology.

MR. LeCHER: How long have you been in the Church of Scientology and when did you leave?

MR. WALTERS: I started on May -- I started in around late 1970 -- and there are records to prove all this -- and I was in till March of 1979. I spent full time. I was there -- as I told you, I took every technology course given.

MR. LeCHER: What do you -- are there Guardians in Clearwater, and are they carrying on covert activities within Clearwater now, to your knowledge?

MR. WALTERS: Well, I cannot speak specifically to what they're doing for the simple reason I don't even know who's here at the moment. But I can tell you, if they're good GO members, they better be doing it, or they'll get somebody who will. Hubbard does not put up with people like yourselves asking or investigating Scientology.

I mean, your first thing I read about Mayor Cazares being trapped and put in the thing and all, that's just normal tech. They would have done that to Otto Ravenholtz, I mean --

MR. LeCHER: What is tech? You keep talking about tech and --

MR. WALTERS: Oh, I'm sorry.

Tech is technology. See, L. Ron Hubbard professes to have the technology of the world in the mind. And that's what you study in Scientology. So, you are taught how the world thinks, what the mind is made up of, what causes all illnesses, what causes all irrational behavior. You are taught why public officials like yourselves will probably do hearings like this. We are taught that you are Suppressive and aberrant and really have hidden crimes.

I'm not telling you that some individual tells me this. This is the policy of this. It is attack the attackers, and the attackers are doing it because of your own crimes. And that is the policy written by L. Ron Hubbard and the Guardian's office will carry it out.

MR. LeCHER: Were you expelled or did you just quit?

MR. WALTERS: I was expelled. I was -- well, Artie Maren threatened me in the sense that, you know, if I would back off and go quietly away, I'm sure that I possibly wouldn't have been expelled. I don't know.

It was coming to a head. I mean, I couldn't -- and he knew it and I knew it.

MR. LeCHER: Where does the money come from to operate covert activities with respect to this Commission or to governmental agencies? Do you have to hire detectives? That needs cash. Who gives you that money?

MR. WALTERS: The Scientologists who are getting this auditing at very high prices designed to keep them going continually from one step to another. There's always a higher step; there's always more illnesses that you have, more research that Ron has just discovered. The money comes from there.

And I would tell you, quite frankly, most all the money to cover covert activities, from the way I understand when I was in, would now be raised in your City of Clearwater. You have the Fort Harrison here where the people that are brainwashed the most in Scientology are sent here to be, in my opinion, fleeced.

In fact, all the high, secret science fiction levels are done here in Clearwater.

MR. LeCHER: Do you think that the average young person that is walking around the streets, paying this amount of money to learn the truth as they see it, do they know that their money is being spent to indulge in operations to embarrass local officials or to break into offices?

MR. WALTERS: No, they don't. The average Scientologist does not read newspapers. I'm sure you'll find that the preclears, people getting counseling at Fort Harrison, will not attend these, because if they did and heard what I said, you'd have three to four hundred people filing new suits.

No. The average Scientologist does not know about it. Some of even the higher-ups -- it depends what level you're talking about. Covert operations are done entirely in the Guardian's Office. The Guardian's Office operates like the Gestapo of Germany, totally secret. They do not explain or tell what they do. They explain, though, that things are being done, but they do not say how.

MR. LeCHER: I'm sure my colleagues have a lot of questions. 1 just want to ask you one or two more.

Didn't you ever question that this man wasn't -- his education, his background, as far as being a nuclear physicist, able to heal people -- didn't you ever question that?

MR. WALTERS: Quite frankly, in the beginning? No. I mean, we were shown things that he was; it's mentioned in books, any lectures that we got we were told that. He himself --

MR. LeCHER: You assumed it to be true?

MR. WALTERS: Oh, yes.

MRS. GARVEY: Could you expand a little bit on what you were told about the background of Hubbard?

MR. WALTERS: Well, that he was Doctor of philosophy, he was a graduate of George Washington University, that he was one of the first nuclear physicists, that he was a great humanitarian, that he was an engineer, that he was a --

MR. LeCHER: How many collage degrees did he have? What schools did he attend?

MR. WALTERS: While I was in Scientology, what schools --

MR. LeCHER: No, he. Is he a nuclear physicist; is he an engineer?

MR. WALTERS: Well, I didn't find any of that out until I left Scientology.

MR. LeCHER: That he --

MR. WALTERS: I didn't find any of that out.

See, you must understand, I left Scientology, because I was like a surgeon in the hospital. I was the top surgeon in the hospital finding out my own hospital is crooked. And, then, even the operations that were done.

I didn't find out that much about Hubbard until I left. If I had known that, I would have left the first year. Probably, ninety percent of them in there would.

MRS. GARVEY: If you had not been impressed by his background, would you have gone into --

MR. WALTERS: Absolutely not.

I mean, I'm not -- it's embarrassing -- but I'm not totally an idiot. I was .a casino executive; I'm aware of scams. I'm not the most -- I'm not, you know, the most innocent individual in the world.

If he didn't have Doctors' degrees, and a philosopher, and nuclear physicist to back up the theories he was giving us on communications and the like, which are very technical, I wouldn't give them -- I gave them $35, $40,000.00.

MR. BERFIELD: How much?

MR. LeCHER: Mrs. Garvey, you have, apparently, the floor. Why don't you keep it and, then, use it until you yield. Then, we'll go down to Mr. Hatchett and go around in a row. With the next witness, we'll start with Mr. Hatchett.

So, Mrs. Garvey has the floor.

MRS. GARVEY: When did you discover that they were using these confessions for Fair Game?

MR. WALTERS: All right.

Confessions, I found out -- when I was -- I used to hang around the Guardian's Office in Las Vegas. If you remember, I was a field intelligence agent. I had the code name of Hustler. When the FBI broke in, 1 hear that there were documents that even have my name on it. It's terrible to say, but I'm glad they do because Scientology will tell everybody it was a lie, and I'm telling you it isn't.

My code name was Hustler, and you will find operations pertaining to -- that I was involved in in those files.

Anyway, while -- what was the exact question, again? I'm sorry.

MRS. GARVEY: When did you discover they were using confessions' folders, confidential information?

MR. WALTERS: I was on the technical line, meaning I was an auditor and helped train other auditors to give these people auditing. The Guardian's Office would come to me on a regular basis, whenever an individual was causing a flap -- a flap means he was mad, upset, talked, saying things that were suppressive, like, "I'm going to my lawyer" or "I'm going to officials" -- they would come and want his folder, which, I'm ashamed to say, I would give them at the time.

And they would go through his folder and make a list of any of his sexual improprieties or -- because I've seen many of these lists. They would be sexual or things that he has done that he feels bad about. In fact it's amazing, now, I look back and the lists they would write up tells you more about them than it does about the individual.

And that -- this would be -- he would be confronted with this and told it would be exposed.

It wasn't done on a regular basis for the years -- it was done entirely up until -- the latest was in 1977 or '78, I don't know exactly when, but Bruce Hamilton, who was the Intelligence Agent -- he replaced Chuck Reese in Las Vegas -- came to me for folders on orders of -- right here in Clearwater. They were --

MRS. GARVEY: Do you know who -- I mean, who told him --

MR. WALTERS; Yes. Bruce -- I'll tell you exactly what occurred.

Bruce Hamilton came to me; I was a CS, a case supervisor. I supervised the auditing that the auditor did on the individual. I was the top man on that line. So, I had the folders on my desk. My job was to make sure the auditing was done just exactly the way L. Ron Hubbard wants it to be done. Although, you slowly realize that it has to be done the way the Guardian's Office wants it to be done.

Anyway, Bruce Hamilton came to me and half bragging and half -- his latest thing, he was looking for some individual that he knew was in Las Vegas that threw a plant on an informant that they had at the North Las Vegas Police Department, because one of the technologies of the Guardian's office is to infiltrate city officials' offices, district attorneys' offices, Better Business Bureau, and the police.

They, apparently, I guess, from the way he talked, already had an informant or a plant in the North Las Vegas police Department, and he was saying that they were getting evidence that was either being given to Interpol or that Interpol was giving it to the North Las Vegas Police Department. I didn't understand it exactly.

From the evidence given, he wanted to know did I have anybody that was -- had been to Flag. And they think he had been to Clearwater and had gotten some auditing here in Clearwater. And he wanted to know if I had anybody who would fit above OT 3, had been to Clearwater, been to Flag, who was on staff at Flag, and he wanted his folders so that they could be sent.

I, at this time, was starting to rebel against a lot of this, and I said I did not want to participate in this Gestapo thing. And he threatened me with those lower penalties, that I'd be an Enemy subject to Fair Game, things like R245, which is a process.

I don't know if you ever heard of R245. It's a process --

MR. LeCHER: Explain it, please.

MR. WALTERS: Well, there are R processes, meaning Routine to go clear and exteriorize. Exteriorize -- you pay a lot of money on the belief that you will be able to leave your head and leave your body and, go to Paris or some place else --

MR. LeCHER: Paris?

MR. WALTERS: Paris or anywhere. Whatever you say, they match it; do you know what I mean? If you're ill, well, that's because you're in your body. If you leave your body, you won't be ill, et cetera, you know. If you've got arthritis, well, if you leave your body, you won't have arthritis. If you want to have a higher IQ, well, if you leave your body, the spiritual being has a higher IQ. It's the answer to everything.

And Hubbard has handled -- he brags about -- his early enemies with a process -- oh, the processes are called R216, that would be one process; R217 would be another.

And R245 means that you shoot the person in the head, which is forced exteriorization, meaning he leaves his body whether he wants to or not.

Now, this may sound a little nutty to you, but I promise you he's not kidding,

MRS. GARVEY: Did that worry you when you considered your own file?

MR. WALTERS: It worries every Scientologist and everybody who will come here before you.

MRS. GARVEY: Which goes back to a question, I guess, that I ask: Why are you here?

MR. WALTERS: Probably three reasons: one, I finally became disillusioned with the technology, which was what I was interested in; I knew of the crimes and all that, but I thought that it was for a good purpose. And it might be terrible, but that's what you have to do to straighten out society.

The technology was not workable to people higher at the top who -- remember, people at the bottom are paying large amounts of money to become better, more honorable, more ethical, more righteous at the top, right? But I knew the guys at the top were breaking into the federal buildings. And from knowing them personally and counseling, they were more psychotic than the new people.

So, obviously, the tech did not make you more sane; it made you more of a brainwashed Scientologist and. more into the paranoia that Hubbard personally has against officials.

All right. so, I left, originally, for that.

The second reason I left is because it was a major turning point in my life. I either had to become a Scientologist -- and you could see that Scientology was going to have what they call a war, and the war was to defeat the enemy, which I was not interested in the way the Guardian's Office was interested in doing that -- or I had to become a citizen. A citizen, meaning -- I found out that Hubbard was nuts and the tech was nuts and the science fiction of OT 3 and the space planets and Xeno and BT, your body thetan, and all the science fiction they tell the higher ups -- I had a dilemma.

I was left with "If I leave Scientology and if I become a citizen, I can't live with you people because you're suppressive" to the Hubbard people. So, the turning point was "I'll become a citizen." I went to the FBI figuring that they would grab me. I had heard that they were suppressive and they were anti-religious and all these things. They turned out to be decent people, in fact, if anything, very conservative, and half the stuff, like I tell you, they took with a grain of salt. Apparently, they also knew things about Hubbard and things that I didn't know.

The third reason that I came here to Clearwater --

MRS. GARVEY: What gave you the courage?

MR. WALTERS: -- I don't relish -- to come to Clearwater -- I don't relish the publicity and the harrassment and the possible danger my life will be in. But this may shocking to you, but the correlation and the example between Scientology and Reverend Jones in Guyana is amazingly similar.

I saw a TV show as a person totally inside of Scientology, totally familiar with the technology; I was astounded how Reverend Jones did the exact same things Hubbard did. And that -- these people, closest to him, brainwashed thoroughly, are totally dedicated to him. I mean, they are dedicated to him. The people in the Sea Org., who do work in Fort Harrison here in Clearwater, which is the top of the line, are joined in the Sea Org.

If Hubbard decides to leave this planet, he is going to take these others with him. These kids in the Sea Org. -- I don't care what lies they tell you; I'll get you people who are in Scientology who will tell you I'm telling the truth -- these kids have signed billion-year contracts. Right here, most all your staff in Fort Harrison right here have signed billion-year contracts. They are psychologically contracted and addicted to Scientology. They will take the Kool-Aid. It won't be Kool-Aid, but it will be this beautiful new process and the idea will be to meet Hubbard on another planet.

It was looking at that, that I decided to come here because, if somebody close to Jones had spoken up -- although, I know many people wouldn't believe it -- wouldn't believe, you know. It's hard to believe half the things I'm telling you. But I'd rather speak up, than reading about what will happen in the ensuing months, because you people have started an investigation into Scientology that's going to create total paranoia. Hubbard will not treat this lightly. And if he decides -- because he's basically a coward -- if he decides to leave, his Guardian's Office will fight; those kids, they're just automatic zombies, they'll fight. He will leave. And many of his dedicated followers, including many of your staff -- now, I'm talking about two to three hundred of them; I don't know how many you have out there, but the insiders -- they will go with him on the pretext -- especially, everybody above OT 3 who thinks he's filled with body thetans and he will -- his job is to meet Hubbard on another planet.

If I can help that stop happening --

MRS. GARVEY: Just one other quick matter, then, we'll go -- you paid a great deal of money to take these courses.

What were you paid to do your job to keep you in there?

MR. WALTERS: Nothing. I got no pay all the time I was on courses. In fact, I audited other people at high prices for Scientology. And when you're training -- like, you will come in to get processing from me, and you don't even know that I'm being trained while I'm giving it to you. Every day I audit you, somebody is correcting me: "Oh, you screwed this up, you did this." And you're paying two and three hundred dollars an hour, and that's what's done here at Clearwater, and I'm being trained,

Later on, I did some counseling in the field -- I mean, auditing in the field myself.

MRS. GARVEY: Which you got paid for?

MR. WALTERS: Yes. And they --

MRS. GARVEY: You were never paid while you were in field investigation or anything like that?

MR.. WALTERS: No, no. And the Church really resented that, me leaving the org. and auditing --


MR. WALTERS: -- on my own, because -- see, they tell you all these things when you first come in, and you can do all of them.

I took all my courses based on that I can become a professional auditor and be a boon to mankind, audit people like you. As soon as I did it, they went berserk and thought I was connected with Interpol and every other thing.

MRS. GARVEY: Thank you.

MR. LeCHER: Okay. Mr. Hatchett.

MR. HATCHETT: Thank you, Mr. Walters.

Do you have any evidence as to whether Mr. Ron Hubbard is alive or dead?

MR. WALTERS: Exact. evidence, no. No, I'm not -- I have pretty good experienced opinions. If he dies, you'll know.

MR. HATCHETT: All right.

The next question is -- thank you for answers to Mrs. Garvey's questions. I wish to go a little farther.

Do you have evidence or were you ever part of an impounding of people -- which I call kidnapping -- internally?

MR. WALTERS: Well, it's a common practice in Ethics to do that. What they do is: A person who will become very upset, like, that individual I told you, that he will not disconnect from his mother?


MR. WALTERS: Now, his mother and father are getting upset, and the father will say, "I'm going to the police; I'm going to the Better Business Bureau." He now goes into a, usually, psychological, heavy experience because he's torn between the teaching. of Hubbard and his family. He goes PTS and becomes dangerous.

Their thinking -- if the father says things like "I'm taking my son to a lawyer," they will then grab that son and, under the pretext of religion or that he is going berserk or having a serious upset, they will lock him in a room and force on him auditing for his own good. Why they're really there is to make sure that he does not leave the building.

In fact, people in the lower Ethics conditions can't even leave the building. They can't leave the building. It doesn't matter whether they have a family or not.

I have personal experiences with many young kids sweeping floors for days until they said, "Yes, I'm a bad boy. Ron's right and I'm wrong and I'll never talk to my parents again."

MR. HATCHETT: Now, the next question, please: From taking all these courses, was there anything like a contract that you signed for those courses for guarantees? You know, when you took the Dianetics course --


MR. HATCHETT: Did you get a guarantee that you would be cured from anybody throughout your courses?


You are -- you can pick up the book Dianetics right down here in Fort Harrison. Dianetics is told to you -- and you read it. It's professed as being the sole reason for all the sickness and aberration. And if I were to get Dianetic auditing, I would never be sick or ill again. And a lot of other things: have high IQ, be sane -- then, if I would become an auditor, I would learn the technology how Hubbard did that.

So, they got me coming and going. I got the auditing and, then, they asked me, "Would you like to get the technology?" And I paid for that, too. I did that all the way to the top.

MR. HATCHETT: My last question -- thank you. I see in my notes here that there are some Clearwater hot prospects, that they wish, you know, to get into Scientology. Was that the technique used in Las Vegas when you were active?


MR. HATCHETT: How did that come about?

MR. WALTERS: Now, which exactly are you talking about so I can --

MR. HATCHETT: Hot prospects from other churches, members in Scientology.

MR. WALTERS: Oh, oh, yeah. A prospect -- see, every week you sit, and the finance people sit, and decide which of the people coming in have the money, how much they have and how much they're going to get.

A person who, like, comes to Clearwater, who has we'll say, $80,000.00, he would be called a hot prospect, meaning "We can get most of what we can from him." And they will do a financial interview with him, talk to him. And they will ask questions that, to him at the time -- he doesn't even understand. They'll say, "Good. Were you in Cleveland? Do you own a home in Cleveland? Good. Do you have any stocks?" And I promise you that half way through him doing NED for OT or one of these other science fiction levels down here in Clearwater, they will then tell him that he needs to get more and it will cost him another eighty thousand. And they will be glad to show him how he can sell his home; they will gladly do this. And I know people who have come to Clearwater and done exactly that.

MR. HATCHETT: Thank you. I'll pause for other people.

MR. LeCHER: Thank you.

Mr. Shoemaker, do you have any questions?

MR. SHOEMAKER: Mayor, I do have a couple of questions I wanted to ask.

Mr. Walters, were you personally involved -- I think you answered this, but I'd like it for clarification on the record.

Were you personally involved in criminal activities on, as you saw, behalf of the Church, and who told you to do those?

MR. WALTERS. Yes, I was in some. I was told to do that by -- I'll tell you exact names -- Bruce Raymond of the Guardian's Office, who worked for L. Ron Hubbard and Mary Sue Hubbard through directions from here in Clearwater where L. Ron Hubbard was residing at the time; thorough -- I was told to do things by Susan Reed in Las Vegas, Madeline Reese in Las Vegas, AGPRO, Assistant Guardian Public Relations officer, Chuck Reese, who was the Intelligence Officer, Artie Maren, who was the United States AGPRO.

MR. SHOEMAKER. These particular instructions that you received, were they -- did they follow normal policy of the Church or were they --

MR. WALTERS: Exact policy of the Church. The policy always is the same.

For example -- do you want specifics?

MR. SHOEMAKER. Yes, sir.

MR. WALTERS: This might be embarrassing to some people in Las Vegas.

MRS. GARVEY: Well, don't worry about that.

MR. WALTERS: Well, I have to go back there.

MR. LeCHER: Well, don't --

MR. CALDERBANK: We worry about the people in Clearwater that might have this happen to them, too.

MR. WALTERS: That's exactly right.

The Better Business Bureau, people were sent in to steal things from their files -- I have personal knowledge of it; I was the one who cased the place -- also, to put things in their files, to steal something from the Review Journal, a newspaper in Las Vegas, also; an attempt to burglarize their -- what they call the hot file. They didn't know what was in it, but they felt that Interpol or the police or the city officials had evidence on Scientology, and they felt the guy was going to write a story on it. And through plants they already had there, they knew it was in a file.

And they asked me if I would go in and burglarize the file. And I wouldn't do it. They asked me to secretly tape record the conversations of Dr. O'Gorman, who was chief psychiatrist in Las Vegas; he was president of the psychiatric association there, a very well-respected man. We were to go into his office, talk to him, and try to find out things about him in his past and tape record them to be used later against him. A complete harrassment program was done against him; he was written up, including -- which would be done -- I would suggest, and I would think that the tech is still the same; I'm sure it is.

With city officials, you would follow them, they would be called late at night. You will be sent what is called dead agent information, meaning information that they hope you bring up that will dead agent you. Does that make sense to you?

MR. HATCHETT: Not quite.

MR. WALTERS: All right.

This is one of Hubbard's -- at the time I thought it was very clever. But --all right.

Let's say, Mr. Hatchett, they would say, "Well, Mr. Hatchett is a black man and we followed him around, we know him pretty well now." You will be sent a letter by someone professing about how he just wants to let you know that -- how it's a great job you're doing in the city and what a member you are and every thing. And one or two lines will be there: "We do not believe what" -- let's say, Mr. Calderbank -- "we don't believe what Mr. Calderbank says about people in your race. We just want you to know we think you're okay," knowing that you'll read the letter and say, "Calderbank said this about me? Interesting."

And this will create dissension among you. And it's a complete program. In fact, he will be sent a letter, too.

MR. SHOEMAKER: Sir, with the -- I think you indicated that your experience has mainly been in California and also in --

MR. WALTERS: Las Vegas.

MR. SHOEMAKER: -- Las Vegas.

The organizational structure, which is set up there, of the Church, how does that relate to the rest of the structure of the organization throughout the entire world?


MR. SHOEMAKER: Is it different or special or what?

MR. WALTERS: No. It's exactly the same. It's a very rigid, well-run organization by L. Ron Hubbard.

The lowest is the missions that are in the cities throughout the United states. Some are in certain high places, they have the lower level tech, they have none of the espionage in it. They are very -- they look like very nice places. To get your sons and daughters in, they appear very nice.

Above that is an organization. There are orgs. in most of the major cities of the United States. The organization has the next step higher level tech. It also gets into the brainwashing concerning the paranoia of the enemies of the Church.

Above the organization, the headquarters for the United States for a long time was California, the Guardian's Office and, since 1976 up to the present time, it is at here, Flag, in Clearwater. Flag is the home of L. Ron Hubbard; it is, also, for every Scientologist, where all the orders come from.

MR. LeCHER: Okay. 1 want to ask you one quick question.

If Mr. Hubbard dies for any reason -- let's say, he dies of old age -- will --

MRS. GARVEY: Will his mind leave his body?

MR. LeCHER: I don I t really care about his mind leaving his body.

Do you think there might be any suicides in Clearwater because of the -- or worldwide because people that are close to him believe in him that much?

MR. WALTERS: Yes, I do. That's one of the main reasons I'm here.

I'm not telling anything new. You citizens haven't heard any of this, but, I think, the federal government is familiar with it and some of the cities are -- but one of the main reasons I'm here is because, when Hubbard leaves, he --

MR. LeCHER: All right. I've been advised this area might be a little touchy, and I may have gone too far with the questions, so I will ask you to stop answering that question because that may have something to do with faith and, therefore, we shouldn't get into that.

MR. WALTERS: Well, let me say this --

MR. LeCHER: That is not really the issue what we're here today to --

MR. WALTERS: All right.

MR. LeCHER: I think we're here, primarily, for business activities.

I would like to ask: How would you have us get this information down to the local Scientologists or the worldwide or national Scientologists, who are probably decent people and have just been taken into this? Then, I'll turn the meeting over to Mr. Calderbank to ask some questions.

MR. WALTERS: I will -- I don't know if you can. The internal policies won't operate like that. Scientologists who are giving their money and the staff who are working at, let's say, the Fort Harrison, they cannot -- it is part of technology -- they cannot confront me; I'm a Suppressive. If they see or talk to me, weird things will happen to their minds and they will be doomed.

MR. LeCHER: Can they read the newspaper tomorrow?

MR. WALTERS: I don't know what the local plan is here. In Las Vegas they are told, you know, they are told to stay away from all those things because they're nothing but lies. I have not seen the plan for Fort Harrison, but I guarantee you you won't see Fort Harrison PCs at this hearing. The only ones you'll see will be Guardian's Office or Hubbard Relations people.

MR. LeCHER: RPF, what is that?

MR. WALTERS: Rehabilitation Project Force. That is a disciplinarian level. When a person is not following the written policy and intentions of L. Ron Hubbard, or they failed in any way to either get people's money or to brainwash them or handle somebody who goes to an official, he is then put in a very degraded position, which will be, like, being stripped of, you know, what ever titles he has. He has to wear dirty old clothes, a dirty rag. He must clean floors and sewers and things like that until he realizes how degraded he is. And when he does that, he is allowed, then, to come back. During that time, he is not allowed to talk to anyone; no Scientologist can talk to him. He is treated in a degraded manner; it's technology.

In other words, if you treat him in a degraded manner, he will realize he's degraded and realize how strong Hubbard is. Like I said, when I saw that television thing on Reverend Jones, I was amazed that Jones had those kids write up all -- every bad thought they had to him. There's "Dear Daddy" letters. That's the exact same phenomenon.

I'll tell you, Scientologists, after a few years, will be glad to scrub floors. I mean, it's that weird. It's not like he thinks it's bad; he is glad to do it because "Wow, I told my bad thoughts I must have that Scientology is not doing well. I must have them, it can't be Ron. So, I must have them." And he will search until he has them or he has to make them up or they're forced on him. And that's the only way he can get back in.

MR. LeCHER: That may have something more to do with faith, and we're trying to keep away from that, specifically.

Mr. Calderbank, do you have any questions?


Mr. Walters, thank you for coming. We appreciate your being here.

And I'm interested, number one: You said that, when you leave here, you'll feel threatened. And you talked about policies; one is R245 or exteriorization. Basically, that's shooting a person in the head.

Is this a policy of the Church that is read and open to most members?

MR. WALTERS: Yes. It's -- R245 is even in one of the most popular books.

MR. CALDERBANK: Would they -- many members, follow this policy --


MR. CALDERBANK: -- if either told to or induced to?

MR. WALTERS: Well, now, you can't say just members; it depends on the level. A regular staff member? No. A new person giving his money? No. A lower level Guardian's Office? No. A higher level Guardian's Office? Yes. A person directly connected to the safety of L. Ron Hubbard -- the inner core will do anything that it takes.

MR. CALDERBANK: Getting back to your fear: Artie Maren, he was also the one that was the last one to -- reputed to see Quentin Hubbard before Mr. Hubbard died mysteriously?


MR. CALDERBANK: Did he at any time threaten you?

MR. WALTERS: Did he threaten me, Artie Maren?


MR. WALTERS: Yes, he did.

MR. CALDERBANK: Did he threaten you with your life?

MR. WALTERS: Yes, he did.

MR. CALDERBANK: And that gets down to criminal activities and policies.

Are these policies followed -- you gave a lot of examples about Las Vegas, and these are policies that are carried out and followed by members.

Are these policies in every structure set up by Scientology? Are these policies followed by Scientologists throughout the country?


In every organization where there is a Guardian's office, the Guardian's Office follows Guardian's Office policy: to seek out and destroy the enemy.

MR. CALDERBANK: The structure in LA and the structure in Las Vegas and the structure in Clearwater are the same?

MR. WALTERS: Exactly.

MR. CALDERBANK: They follow the same policies?

MR. WALTERS: Exactly.

MR. CALDERBANK: One of these policies is the Fair Game policy, and that tells you to lie, cheat, just even destroy other people.

At any time, did you take part or know of people that participated in the Fair Game Policy?

MR. WALTERS: I personally did not get involved with destroying anybody; I wouldn't do that. I heard that it's done; I personally have not seen it.

But, listen, I gave people's folders to the Guardian's Office to be used against them. That's destroying them psychologically and emotionally. And let me tell you, those people never spoke up again.

MR. CALDERBANK: Were those break-ins that you discussed part of the Fair Game policy or as a result of this policy?


In the Guardian's Office -- Fair Game means that you do whatever you have to do.

MR. CALDERBANK: And you've seen criminal activities and participated in these criminal activities following out policy which is the structure of the entire Church?


MR. CALDERBANK: Did you talk to other Scientologists and participate in groups of Scientologists that, as their goal, carried out Fair Game policy on enemies or break-ins or other criminal activities?

MR. WALTERS: Yes, there are others who --

MR. CALDERBANK: Did you know at the time that this could be considered a conspiracy or a conspiratorial act to take away someone else's civil rights?

MR. WALTERS: I know we didn't know any of that.

MR. CALDERBANK: But it was part of the Church doctrine or policy that you followed?


MR. CALDERBANK: Did you ever see people held against their will as part of the Church doctrine, people that may be discontent with policies of disconnect, in other words, not being able to see any member of their family or communicate with any member of their family?

MR. WALTERS: Many times.

MR. CALDERBANK: Did you ever participate in it?


MR. WALTERS: Did you ever participate in framing someone, or to give a better analogy: committing criminal acts against a person so that their credibility would be destroyed in the eyes of either the public or investigators that were looking into Scientology?

MR. WALTERS: It depends what level of framing. I gave up folders to be used against individuals.

MR. CALDERBANK: You talked about planting dope and calling the police and, then, having the person arrested.

MR. WALTERS: I didn't do that. But it was done in Las Vegas as part of the normal Guardian's Office thing. I know of it --

MR. CALDERBANK: Can you give me one instance?

MR. WALTERS: All right.

MR. CALDERBANK: Could you give an instance at another investigation, given time to think?

MR. WALTERS: Oh, yes.

MR. CALDERBANK: Names, places?

MR. WALTERS: Yeah. Yeah, I'm willing to go to court and tell -- oh, yeah.
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Part 3 of 6

MR. CALDERBANK: In Las Vegas, did you see this happen at all?

MR. WALTERS: Oh, yes, yeah, against legislators --

MR. CALDERBANK: Because of this policy, this actual structure or corporate policy of this group, is that the same policy that induced people to criminal activities in LA, in Las Vegas, that you personally witnessed and that you participated in --

MR. LeCHER: Excuse me.

I know you're asking the questions, but give him a chance to answer it and get on with it. And he may have to have recall of seven to ten years ago. So, give him a little more chance.

MR. CALDERBANK: All right.

Have you seen it, participated in it, and can you give us an example where policy induced people into criminal activities?


I know of a new person that came in -- I can't think of her name now -- a young girl who was asked to plant dope on somebody. It was Susan Reed who recruited her. She was later kicked out because, apparently, she did it and, then, protested. I don't know who she laid it on.

They planted something on Otto Ravenholtz to bring publicity against him. I was not personally involved in that. I was just listening to the set up of it.

When the Nevada legislature, in '72 or '73 -- you can check the files back then -- was going to -- they were thinking of licensing counselors. In other words, why should these young kids be giving so-called auditing when they had no training or there -- you know, they weren't licensed? They should be licensed counselors.

There were a few legislators or senators, whatever you call them, who were going to pass a Bill, I believe, in the Nevada legislature. The Guardian's Office started a -- following people around, investigating them. For two nights before the hearing out in Carson City, they were called day and night. There was great joy over some woman councilman, or some name like that -- but she was a woman --who was driven almost to the point of hysteria because they called her day and night. It was Chuck Reese's job to do that, and he bragged about it and laughed that he didn't get any sleep, either.

They called this woman day and night and saying things to her, keeping her totally -- and we laughed that by the time she got to Carson City, she'd be berserk herself.

MR. CALDERBANK: You mentioned --

MR. WALTERS: These are normal activities of the Guardian's Office.

MR. CALDERBANK: And these activities are as a result of policy that's actually written?


It's not given to general Scientologists; they don't see it. It's called Guardian office policy. You will have it -- I mean, before '76, I would see it right in the Guardian's office there in Los Angeles, and you have it here.

But since the raid in 1976 by the FBI, they now do two things. They do -- I remember the order came down to -- vetting, which was to go through all the policy and if it said, "Make sure whenever you break in that you have a good cover," you had to cut that out of the piece of paper. So, thinking that if there was ever a raid again, it couldn't be used against them because -- a lot of the stuff that's going on now, you people wouldn't have known, no good citizen of the United States would have known it, if the FBI did not raid. It would still be going on even heavier.

Anyway -- until some of the policies looked like nothing but holes in it, because that's Guardian's Office policy. The average Scientologist doesn't see any of this. In fact, there are people in the Guardian's Office who don't see it. The Intelligence people see it all; the top people in the GO see it. But some of the newer -- especially, since '76, because I was in on the operation, some of the people, like, in the PR section, the guys that will come and talk to the mayor -- when a young fellow comes and talks to the mayor, he himself probably really doesn't believe any of this did occur. And honestly, you know --

MR. FLYNN: Mr. Calderbank, when every Commissioner has finished his questioning in a particular area - I'm not saying that you should discontinue your questioning -- what I will do is introduce the policy into evidence: it's a written document of the Church of Scientology. And most of the policies, if not all, that are testified about we have here, including, for instance, the Fair Game Doctrine which we put on the easel.

And we will introduce these policies. In some cases, we'll put them on the overhead projector as time allows, for instance, the policy dealing with framing and harrassing, the actual drills the Guardian's Office operative went through, as Mr. Walters knows. We'll be giving you the pieces of paper that the GO used.

MR. WALTERS: There are -- let me mention something to show you how the tech fits into this.

MR. CALDERBANK: Okay. And tech is technology?

MR. WALTERS: Technology. And why I tell you this -- the tech s very guarded and they're very proud of it.

I watched Guardian's Office people sit through what they told me was reporter TR. It was how to lie to a reporter.

MR. CALDERBANK: Is that TR 1, Training Routine 1?

MR. WALTERS: Yeah. There is -- now, there's comp courses, a routine, that they give the public called TR 0, l, 2, 3, and 4.

The Guardian's Office had their own TRs that are used to lie to officials, to lie at hearings, to lie to a reporter. I watched them actually drill. I watched Chuck Reese, you know, say to Madeline Reese -- his job was to act like a reporter, which they didn't want people to even see. You know, a reporter would go: "All right. We know that you're connected with the criminals and we know that you're not a religion; isn't that true?" And Madeline Reese would have to sit there and say, "We are an applied religious philosophy," whatever --

MR. CALDERBANK: Whatever the scenario --

MR. WALTERS: Yeah, everything.

And if she flinched or broke up or started to feel bad, he would flunk her. And she had to do it until she could do it like that.

MR. CALDERBANK: Mr. Flynn, do you have a copy of that Training Routine that teaches -- that Scientologists go through to lie to government officials, to the press, to the DA, whatever group is --

MR. FLYNN, Yes, we do.

MR. CALDERBANK: And you'll enter that into evidence?

MR. FLYNN: If you'd like to have it now -- what I was going to do, in order to create some orderliness --

MR. LeCHER: To preserve orderliness and keep order, I'd rather you just asked questions and, then, he will have certain things that he will present in his orderly way rather than have a hodgepodge of information that we cannot --

MR. FLYNN: What I'm a little bit concerned about is: There are so many documents, and interrupting the flow of the testimony -- so, if the witness can get most of his testimony out, then, we'll start putting documents in.

MR. LeCHER, The Chair is running the meeting.

MR. CALDERBANK: Thank you.

So, what you're establishing is that there are Training Routines that you go through, or procedures, policies, that you follow, that teach you how to lie under oath?


MR. CALDERBANK: And this is commonly done?

MR. WALTERS: In the Guardian's Office, yes. Not among normal Scientologists, no.

MR. CALDERBANK: You talked about casing and other criminal activities. Were you taught how to do this? I know that you said that you were a casino person and that you were well-educated and, now, looking back, you never would have thought you'd have done that.

Without the policies that were written down, would you have committed criminal acts or participated in them that you say you have?

MR. WALTERS: That's a very good question, a really good one. Absolutely not. I'm not going to -- I grew up in New York City, I was a pool player, a guy of the streets, you know; I was a casino executive. I'm not -- let's say I'm not a virgin.

If Chuck Reese or some Guardian's Office guy wanted to do some things on his own, there's no way I would do it. This came from Hubbard, written, shown to me. At that time I was proud of it. I thought that it was technology which would destroy you people and let Scientology clear the planet.

MR. CALDERBANK: How did you learn to case a building or burglarize them?

MR. WALTERS: Well, Chuck Reese told me to go down there to -- I was to, first, walk around the place and look for anybody that was suspicious or -- then, I came back to see him.

Then, I was asked to go into the Better Business Bureau and ask them for, I forget -- about something else. And I was to use that -- and it's very clever -- because they would think of the thing I was asking for, like, let's say, a popcorn company. I'd ask lots of questions about the popcorn company and, then, just gradually say, "Oh, yeah, I have a friend of mine in Scientology. Do you know anything about that?" And to see what he said.

Then, while I was there, I was to memorize the place, where the files were and stuff, and bring that back to him.

MR. CALDERBANK: So, you were told by a superior of this group, Scientology, how to commit criminal acts --


MR. CALDERBANK: -- to case a joint, then, participate in it?


MR. CALDERBANK: Were you aware at any time that there was a policy or is a policy that tells you how to burglarize?

MR. WALTERS: No. I mean, I'm sure there is. I did not myself see it.

MR. CALDERBANK: Okay, on to the auditing: You said that you came in, and being a casino executive, you understand risk and considerations, you know, getting something back for your money.

Now, you said you spent $35 to $40,000.00 in this organization, which is your choice. But were you given any guarantees? There must have been some consideration.

Did they tell you, specifically, that auditing was scientific, auditing would cure your back ailments, auditing would cure Ed Walters' stomach ailments? Did they say that? And based on that, did you give them money?

MR. WALTERS: Absolutely.

Not only did they tell me that they were going to do all that, I was then trained to do that to others.

MR. CALDERBANK: What were you trained to do?

MR. WALTERS: I was a registrar, a person who signs people up for auditing. I was trained to find out their illnesses, ailments. It's called their ruin. Ruin means what they think is ruining them. And then, we are told to tell them "We can handle that. We have the technology to do so."

MR. CALDERBANK: So, I come in and I'm having migraine headaches. What do you do?

MR. WALTERS: I would say to you --

MR. CALDERBANK: I have a thousand dollars.

MR. WALTERS: I would say questions like, "Mr. Calderbank, so you have migraine headaches? It sort of hurts your job?" "Yes." "Is it making you worrisome?'" "Yeah." "Well, would you say it's making you more able or less able?" In other words, "Is this the thing that's stopping you from being all the things you want to be?" "Yes." "And if you did not have migraine headaches, would you be a stronger, more able person?" Of course, you'd say, "Yes." "Well, we have the technology to handle that."

And it even goes further than that. I would, by listening to you, find out if you were medically inclined and move you into Dianetics. If you wanted to be spiritually inclined or do super tricks, like, walk on water and all that stuff, then, I would move you into Scientology.

MR. CALDERBANK: What you're telling me, then -- and I don't want to paraphrase you -- you just told me that, if I had a large sum of money, you would guarantee me, as a policy -- and they taught you to do this -- you would guarantee me that my ills would be cured --

MR. WALTERS: Absolutely.

MR. CALDERBANK: -- or --

MR. WALTERS: The exact word is "handled."

MR. CALDERBANK: -- handled?

And if I was medically inclined, you would tell me that it was a technology or something based on scientific proof?


MR. CALDERBANK: If I was religious in nature -- you would tell me anything I want to hear; is that what you're telling me?


MR. CALDERBANK: You did this?


MR. CALDERBANK: And you did it --

MR. WALTERS: I did it many, many times.

MR. CALDERBANK: All right.

MR. WALTERS: I mean, it's one of the reasons I'm here. I personally have brought hundreds into Scientology. I mean, I'm not very proud of what I did. Some of them are still in and are not allowed to talk to me. If they see me, they walk down -- they have to walk down the other side of the street because they'll be an enemy of the Church.

MR. CALDERBANK: You keep talking about technology. What were you told when you entered Scientology? What is auditing?

MR. WALTERS: I was told that auditing was the scientific practice that Hubbard had devised, as a scientist and as an engineer and a nuclear physicist. He had found the true cause of illness and could scientifically explain it and, by the courses, I would learn it: scientific explanation and theories concerning communication and the mind. And the source of all aberration is in the mind. And that by putting my hand -- by putting myself in the hands of an auditor, a Scientologist, he would ask me questions that would elicit answers from me, and this would scientifically handle my illnesses and I would attain, eventually, clear.

MR. CALDERBANK: So, since you were technically oriented, they told you it was scientific?

MR. WALTERS: Oh, yeah. I mean --

MR. CALDERBANK: And you gave them $30 or $40,000.00 based on this claim?


MR. CALDERBANK: Now, you know, I don't understand it. Why did you believe it? Why did you believe Mr. Hubbard's auditing, Scientology auditing. would cure your ills? You said they guaranteed --

MR. LeCHER: Is that a belief, sir?

MR. CALDERBANK: I'm talking about a guaranteed contract.

MR. FLYNN: Maybe you can rephrase it and say, "What did you rely on? What representations did you specifically rely on as a matter of fact or observable fact?"

MR. CALDERBANK: What did you rely on for that? What did you rely on --

MRS. GARVEY: To take the next course.

MR. CALDERBANK: -- to take the next course? And what did you rely on to give --

MR. WALTERS: I relied on --

MR. CALDERBANK: -- $40,000.00? What did you --

MR. WALTERS: I relied on what they told me, that L. Ron Hubbard was a nuclear physicist, an engineer, a scientist, a Doctor of Philosophy, who had studied extensively the mind, the source of aberration of illness. And if I learned this technology and practiced it, I would become clear, free of all illness, et cetera. And if I took the courses to train how to do this, I could do this to others. And I did it.

MR. CALDERBANK: So, they represented to you -- and the reason you paid is because they claimed that someone had devised this with research that had numerous philosophical and scientific degrees?


MR. CALDERBANK: Would you have paid $40,000.00 if this wasn't the case?

MR. WALTERS: Absolutely not.

MR. LeCHER: Excuse me.

I'd like to have Mr. Berfield to get a chance to speak, too, because we are running out of time, and I want to give everybody some time.

So, Mr. Berfield -- if you don't mind yielding?

MR. CALDERBANK: Just one more question: As a member of the Commission, you said that they would try to come between us --


MR. CALDERBANK: -- spread rumors so that, perhaps, I would be upset with Mrs. Garvey, they would find what she wants to hear, and that Mr. Hatchett would become upset with me?

MR. WALTERS: Dead agent operations, yes.

MR. CALDERBANK: Is this done throughout --


MR. CALDERBANK: -- Scientology?

MR. WALTERS: Yes, in all Guardian's Office activities; yes.

MR. CALDERBANK: Go ahead. Mr. Berfield.

MR. LeCHER: Mr. Berfield.

MR. BERFIELD: Mr. Walters, if I understand your testimony thus far, you admitted or stated that you'd lied and cheated, stolen, just about committed every crime --

MR. WALTERS: Well, I wouldn't go that far.

MR. BERFIELD: -- short of murder.

We appreciate your coming here today. But the question that goes through my mind is: Why should we now take what you're telling us as being the truth?

MR. WALTERS: That's a good question.

All I can tell you is what I know to be true and I know that it's very unbelievable. I feel like the guy -- if one of Jones' people had spoken up, he would have looked as much like a fool as I am. I mean, only later did you find out that he was homosexual, making his own laws up -- well, I'm in the same boat. And luckily, Scientologists are leaving now; the fear of the Guardian's Office is starting to drop and, more importantly, they can speak up.

MR. BERFIELD: I have a couple of basic questions -- but they encompass quite a bit of territory -- one is: You make reference to certain situations, but can you be more specific as to time and place? You make reference to a legislator, you make reference to somebody who planted dope.

I guess what I'm saying, as an adversary, is I can look at that and say, "Well, you can come in here and dream up any story you wanted to and tell us that it's true." But what do we have, or what can we look at, or who else can we call into this hearing to substantiate what you're telling us?

MR. WALTERS: Well, I think you're going to hear some people -- there are documents that are available to verify everything I'm saying; there are others who will verify what I'm saying. And then, you judge for yourselves.

MR. FLYNN: If I may just interject: What may be helpful is a continuous series or questions about a specific event and specific time or place about a particular act; that may be very helpful.

MR. BERFIELD: Okay. Well, I'm going to come to that.

There's one other thing that I'm not too sure about: You talk about policy -- and like any corporate policy -- how does one know that it's adhered to or condoned all the way up and down the line, that some zealous person some way down the line just doesn't say, "Gee, I'm going to make a name for myself in Scientology and I'm going to do this," and they do go off half cocked, and the Scientologists did not, in fact, condone them?

MR. WALTERS: Well, I'm familiar with the top officials in the Church; I know some of the eleven that have been indicted and convicted. And they're the ones intimately involved in this. The people that I was involved with took orders from them. And these people, like Bruce Raymond, worked directly for L. Ron Hubbard.

I mean, how high do you -- I mean, Scientology would like to say that an individual did this on his own. But I can tell you -- and you are taught quickly -- you do not do anything, anything, unless you see it in writing by L. Ron Hubbard.

MR. BERFIELD: I'm going to come back to counsel's point there and ask you to give me a specific event, but I have another question here: Mr. Calderbank did an excellent job of asking you about your signing up for these courses and what they represented to you.

When you signed up for them, was there any disclaimer or anything like that? Did you sign any waivers or anything along that line? Or did they just say, "We're going to cure your illness"?

MR. WALTERS: Well, it's not like that. It's more like I did with Mr. Calderbank. You find out what's wrong with you and, then, you say, "Yes, we can handle that. We have the technology to totally handle that."

MR. BERFIELD: But you don't sign any waivers against Scientology --

MR. WALTERS: Now, it all depends what year. See, Scientology puts out policy related to the latest thing that the country investigates.

In the early days, no. Then, when the government started looking into the non-profit status, they changed the word from "payment" to "donation," because donation sounded more like a Church. Then, in the later years, they started just exactly that thing. The Better Business Bureau, the government, and the city officials wanted to know -- people were complaining that they spent thousands and thousands and never got anywhere and couldn't get their money back.

So, now, you had to sign a thing saying that -- I know this sounds weird -- you're getting auditing but Scientology has nothing to do with it. I know it sounds weird. And that when you sign your story at the end, you actually sign a thing that L. Ron Hubbard has nothing to do with what you did and that Scientology is not held in any way responsible for whatever occurs.

But you are told to do this. And if you don't do this, you don't go to your next step.

MR. BERFIELD: Along this line, the books and the courses that you're talking about, do you know firsthand whether they are being taught here in Clearwater and the books can be purchased here in Clearwater?

MR. WALTERS: All the books can be purchased here in Clearwater; all the policy is here in Clearwater. The highest GO and covert activity and policy is here in Clearwater. Although, I would bet it's very safe -- it's not what I think you would find there. They're not -- they're not dumb.

MR. BERFIELD: Coming back to one thing, if you could, could you walk us through -- and this is the reason I asked counsel earlier whether you had any immunity on this, a particular criminal event that you may have been involved in personally and you have firsthand knowledge of?

MR. WALTERS: All right.

The latest flap meeting, you know, what was going on in the Guardian's office was that the mental health people in Las Vegas were meeting, talking about doing something about Scientology.

MR. BERFIELD: This would be during what year? Can you give us --

MR. WALTERS: Oh, this was, I would say, in 1972, in late 1972.

Chuck Reese, from his folders -- he has folders on most of the city officials and public people. He had been following these people and he knew that they met.

It was first public and, then, they were going to hold closed conferences at Rosa de Lima Hospital in Henderson, Nevada, which is about thirty miles outside of Las Vegas, which is, you know, an hour's drive.

Chuck Reese, through orders from Los Angeles, the Guardian's office, was told to go there and to bug those meetings and get all the evidence that they could.

MR. BERFIELD: Excuse me, if I interrupt: Do you know this firsthand?

MR. WALTERS: He told it to me. He said -- all right, I'll tell you exactly how it is. He called me in, I sat down, and he said, "Eddie, listen, I got a new ops." - ops. means operations - "a new ops. from LA. Now, they're going to hold closed meetings, these Suppressives, and they're going to meet at the Rosa de Lima Hospital, which is a hospital run by the nuns in Henderson. They're going to hold their meetings there, closed meetings. And we've got to go up and case the place and plant some bugs to listen in on the meetings."

And so, I went with him to Rosa de Lima Hospital two or three days before this. We had a whole plan of going in, pretending to be sick, just to, you know, get into the hospital. It turned out we didn't need any of it. We walked right through the place; it was on the ground floor. If I remember, you walk in, you walk to the right, all the way down there was a large meeting office with a large table in it with a whole bunch of chairs around it.

And Chuck Reese planted a tape recording device -- in those days, you know, tape recorders, even small ones, were very big -- with tape and stuff right under the table.

I left with him; we went back to Las Vegas. I told my wife about it, you know, I said, "Things were getting hairy again," hairy, meaning "There's a new flap and the GO tech is going in. And I, you know, I can't leave the casino and end up with something worse than the casino, but I want to do whatever it is for Scientology."

We talked it over and we thought that it was okay to help them in any way and not get directly involved. So, then, that day I didn't go back with him, again.

But I was in the office many times when he was typing up all the minutes or the conversations at the meeting of all the commissioners and city officials, and they would laugh about it, you know. They take what you guys say as very funny, you know. And --

MR. BERFIELD: Sometimes it is.


And they sent all this to the Las Vegas Guardian's Office -- to the United States Guardian's Office in Los Angeles.

MR. BERFIELD: One other one that Mr. Calderbank hit on: Do you have any firsthand knowledge of something that I would call kidnapping, holding or retaining some- body against their will? By "firsthand," you knew the person, you were there, you saw him, and it wasn't that somebody told you it happened.


Oh, in Ethics, I've been personally involved in probably fourteen or fifteen of them, where some local PC on line, meaning a person getting auditing -- brand new, he's in the early stages; he's not totally brainwashed, but he's sort of - he's still into wanting to handle Whatever illness he has. They haven't made him -- they haven't made him a soldier of Hubbard, yet.

All right, he's having trouble with his family, and Ethics is having trouble with him. And he comes to me because I'm the high technical person. You use mental tech on him to sort of -- and Ethics would hold him in a room, and they hold him there and do not let him out of the building for sometimes hours, sometimes days. They hold him there until he is handleable, meaning he has quieted down, subdued, given some counseling designed to do -- I've done it myself -- designed to do two things: one, to make him feel bad and up his -- why he is attacking the organization. That's called security checking. Two, is to find out who he's been talking to and, doing that thing, you find out who his parents have been talking to, to what lawyer they probably were going to go.

And that evidence goes directly to the Guardian's Office to be handled. I participated in quite a few of them.

MR. BERFIELD: Do you know firsthand whether any of this has ever happened in Clearwater?

MR. WALTERS: Well, not being here at Clearwater, I can't say that. I've spoken to people who have been to Clearwater who have spent $80, $90, to $100,000.00 and are still sick, still ill, and defrauded.

I -- but not being here, you know, I never did services in Clearwater.

MR. BERFIELD: I don't mean to sound critical, but you sound like a man that's what I used to call streetwise. And if you are streetwise: In your own mind you did not think you were committing a crime when you 'were doing all these things?

MR. WALTERS: All right. It's a good question. Why would Eddie Walters do that for Scientology?

One, I was in the casinos all my life. I started out in poolrooms, but I went to school and went to the casinos, so I was like what you call streetwise. I was, at that time in my life, looking for a better way of life. I wanted a more moral way of life. Working in casinos, to be frank with you, is not the most moral thing you can do. It's not as bad as you might read, you know, but it's not the most fulfilling thing you can do. I was, just right at that time in my life, I was looking for a better way of life.

I wanted to sort of -- how can I help my fellow man? And at the same time, I wanted to be -- so, I was just right -- right at the time. And I was told Hubbard had the technology to help his fellow man. And I'll tell you quite frankly I was glad to do it. I'll tell you, the original talks you get would appeal to your son, if you had one, or daughter. They don't get the bad people, I'm telling you; they get the good people. These kids on staff are not the gorillas; that's the GO.

The average kid on staff is working over there at Fort Harrison fourteen hours a day for nothing. He's a hard-working young man trying to help his fellow man.

MR. BERFIELD: If you had to define yourself in, let's use, a corporate organization, and using Mr. Hubbard as the president of that organization, where would you put yourself in that chain of command?

MR. WALTERS: In the chain of command, I would be in the -- if it was a business organization, I would be in the product division, meaning having to do with the dispensing of the sales of the product. And I would be, probably, like a chief technician of that; I would probably be director of production, if you would think of a business organization.

MR. BERFIELD: So, you would have knowledge as to their, let's call it, marketing and the way they paid their bills?

MR. WALTERS: That's right.

MR. BERFIELD: Now, there's been a lot of testimony about dollars here. How do these young people pay their bills? Was there promissory notes or security agreements or anything like that they'd sign?

MR. WALTERS: On staff or public?

MI\. BERFIELD: Well --

MR. WALTERS: I'll explain both.

MR. LeCHER: I'd like you to explain the freeloader's debt.

MR. WALTERS: Freeloader's debt?

MR. LeCHER: And -- I think that's what he's getting at.

MR. WALTERS: All right.

A staff member comes in, starts out like I did. They tried to get me on staff many times, officially on staff. But because I was made an outside intelligence agent, I didn't go on staff. Do you see that?

So, a person will go on staff and they say, "Do you realize you don't have to pay to get your auditing? You can become one of Ron's people and we will give you all this." Well, man, for a young kid who doesn't have a job, doesn't have any money, it sounds very good.

He slowly gets in, and the auditing he gets is all invoiced to him, meaning, every time he goes -- gets a session from somebody like me, he is charged for that at the highest rates there are, and he's charged fully. And this keeps adding up.

He is told if he ever leaves, he has to pay all this. In fact, he has to pay this plus penalties. That's just financial; that has nothing to do with Fair Game or R245 and all that, just financial. He is told he has a freeloader's debt, meaning "You came in here and freeloaded off of us. We treated you nicely. All you did was work fourteen hours a day, and now you want to leave? Well, we're going to charge you for all of that." They'll even charge him for when he washed the floor. And it's -- they will give him the biggest bill he can get. It's technically done to make sure that he does not go back into society. So, he gets a freeloader's debt.

And I know many, many people -- I know a person in Las Vegas who left Las Vegas, left -- they handled him technically and made him feel bad and repent. He paid them close to $30,000.00 just to get back in. I mean, this sounds -- and there are people all over the United States and, especially, people who have been to Clearwater who are now all over the United States paying Fort Harrison money so, if they pay all the freeloader's debt, they might be allowed to come back here.

MR. BERFIELD: Let's stay with that point a minute.

If I understand you correctly, there have been people who have been in Clearwater operating under this freeloader's debt. Are you personally aware of these people?

MR. WALTERS: Yes, I know some people.

MR. BERFIELD: And do you know that they worked here under these conditions?

MR. WALTERS: Oh, yes.

MR. BERFIELD: And that they owe the Church -- or the Scientologists this money?


MR. BERFIELD: And you've talked to them about this?


I believe -- I don't know of everything that's happening here -- I believe you might even meet one or two.

I'm not telling you -- I know what I'm saying to you is hard to believe, but I just happen to be the lead off witness. And I know it sounds a little nutty.

MR. BERFIELD: There are a couple of just --

MR. FLYNN: There will be a great deal of evidence on those issues.

MR. WALTERS: If I'm lying -- I'll tell you this, Mr. Berfield, if I'm lying, you'll know it in the four days.

MR. BERFIELD: There are a couple of other names that I have here: Cooper, Don Cooper, and a Broderick.


MR. BERFIELD: How do they fit in the ball game?

MR. WALTERS: Nice people that you've got here in Clearwater. No, I shouldn't say that.

Let me give you an example how the tech works. I leave the Church, right, I go to the FBI. A lot of Scientologists around me -- because I've been looked up to and respected, most of the OTs and Scientologists around me all immediately left, too, because we would all talk and we knew this thing was getting psychotic.

Don Cooper would come around us every day and, you know, help us in any way he could, you know, and "This is terrible" and although, I wondered why he didn't want to go to the FBI's office. We thought -- he said he was scared. He was with us day and night. He would come into my home and we would talk and laugh, because, as silly as it sounds -- you know, I feel a lot better now -- when we first got out, we were scared for our lives. And if we didn't laugh, we would cry, you know; it's that type of thing. He would laugh with us.

So, this went along, you know, and, finally, we got hold of some lawyers, Mr. Flynn here. And we felt that, eventually, this will come to the public, what needs to be done. Now, what exactly happened to -- oh. So, two people also found out that things were being done against me. See, while I'm outside now, the technology that -- operations were starting against me: following me, harrassing me.

One of the girls leaves the Guardian's Office, because she knew Eddie Walters to be a decent guy. "He may not agree with everything we're doing, but he's a decent guy." They' re painting me as a Xeno; I'm the implanter, and I'm evil, and I'm a criminal, and I'm no good, and I'm out to destroy religion, and I'm connected to the FBI and Interpol, you know, all this nonsense. And they were asking her to do things that she didn't feel good about.

She left, came to me, and do you know what she told me? "Eddie, you've got plants on you." I said, "No. Listen, I've got my friends and I'll say anything 1 want to my friends." "Eddie, hey, this guy comes back with stories and weird" -- and she described him to me. It's Don Cooper.

We have since found out -- well, I'll give you an example. I just had this deposition in -- and the lawyers -- see, they're suing me. They do depositions which really is to find out what I know; they do depositions. Their lawyer turns out to have stuff that Don Cooper has stolen from my home, you know. I mean, they turned him into -- from a Scientologist into an intelligence agent. And he was a nice guy. I mean, we were with him every day.

He is right now in Clearwater receiving, I believe, further training. We know a person in Las Vegas that talked to him a few months ago.

MR. LeCHER: What about Bill Broderick, since you're on that?

MR. WALTERS: All right.

A girl, Tonja Burden her name is, she used to be an aide to Ron Hubbard: dress him, take care of him. She left and, obviously, can tell the inside story on Hubbard. She was, again, harrassed, you know, all the things I went through.

When this Guardian's Office girl left -- should I tell them her name?

MR. FLYNN: She'll be testifying; her name is Janie Peterson.

MR. WALTERS: All right; when she left, she told us the operations against me and against Tonja Burden. And we said that Tonja Burden has a lawsuit in this. "Eddie, they're planting a person in her apartment. They have a person next to her they brought in from Phoenix. They have a guy who's with her all the time. In fact, he's with you guys." I said, "Who is it?" "Bill Broderick."

And she's right. Bill Broderick used to come around. His job was to get everything he could on Tonja Burden, create dead agenting, you know, tell me that Tonja Burden didn't like me or I didn't -- you know, start all this stuff.

I believe in Clearwater at the moment. I saw his name in a publication where he had just completed a course here. So, he's receiving further training to go out and --

MR. BERFIELD: I could go on and ask questions all day of this gentleman.

If I understand your testimony correctly, then, the courses that are being presented in Clearwater now, in your estimation -- there is misrepresentation in the presenting of those courses; is that what you're saying?

MR. WALTERS: Absolutely.

MR. BERFIELD: And then, there's fraud and deceit the further you go ill and get into these courses; is that --



MR. LeCHER: We're going to break in a minute, and may your witness return, too, just in case we'd like to ask him any more questions?

MR. FLYNN: He'll be available as long as the Commissioners wish to --

MR. LeCHER: All right.

I just have one quickie: I've heard that the -- they've changed their spots, they're no longer doing what they did do, that now they're good guys, and they denounce -- renounce the leaders that have been convicted.

To your knowledge, is that true? Have they changed their spots, and are they now a different organization than they were in 1979?

MR. WALTERS: No, they're not different. There's evidence· that's documented with the things they've been doing to me just recently. They will have a PR thing put out by Artie Maren and Hebert Jentz that will put a new face on it. But I guarantee you covert operations will, in fact, increase.

MR. LeCHER: Decrease or increase?

MR. WALTERS: Increase.

MR. LeCHER: Increase.

MR. WALTERS: When I want to the FBI, the normal person, like you, might say, "Well, I guess they won't bother you now." That's when Cooper was put on me. It increases.

In fact, the increased surveillance or harrassing of me will start even more now.

MR. LeCHER, All right.

Mr. Shoemaker has one quick question, then, we'll take a break.

MR. SHOEMAKER: Mr. Walters, if I might ask, during the break, if you would have a chance -- are you familiar with the Introduction to Scientology Ethics --

MR. WALTERS: I've studied it thoroughly.

MR. SHOEMAKER: If you might look at this relating to the high crimes, in section -- on 49 and, possibly, just consider those and maybe mention those to the City Commissioners when they come back --


MR. SHOEMAKER: -- as to how they relate to corporate policy?


MR. SHOEMAKER: Thank you.

MR. LeCHER: And when you joined, were you told that this information was in the Guardian's Office and that it would be used against you?


MR. LeCHER: In your folder --

MR. WALTERS: Oh, no. They told me that anything I tell in auditing --

MR. LeCHER: Is confidential?

MR. WALTERS: -- is totally confidential. And in fact, they said it was protected by the government.

MR. LeCHER: All right.

Ladies and gentlemen, thank you. We'll take a break and return around two o'clock.

The meeting is in recess.

(Whereupon, the luncheon recess was taken.)

Afternoon Session

MR. LeCHER, commissioners and staff, please take your seats. We are going to wait a few minutes to keep right on schedule, and we will again start at two o'clock, which means we have a few minutes left. Before we do start, however, I will remark that people in the audience are acting like perfect gentlemen and gentleladies and not getting out of hand, and giving the witness his due, and allowing the Commission to do their job, too.

I won't read the opening statement again because I read it earlier today. I'm sure everyone understands the purpose of these hearings and exactly what we're doing here. Okay.

So, welcome back to those who are watching at home. We are in the second half of our first day of meetings -- public hearings with reference to Scientology. We have heard the first witness, Mr. Ed Walters, who was a high ranking official in the Church of Scientology. We also heard some opening remarks from our Consultant, Mr. Michael Flynn.

Right now we would like to again address questions directly to Mr. Walters, and after that we will ask Mr. Flynn to show some documents on the screen, and then we will get back to our second witness, which is Mr. DeWolfe. We may not have time to conclude with Mr. DeWolfe today -- or finish with him. So, therefore, if that has happened, we will ask him to come back tomorrow morning.

Again, for those who are watching, we may be asking the same questions in many ways -- different Commissioners may be asking the same questions in different ways. We are doing this by design, for the most part, trying to establish a record -- for the record, the activities that relate to the Church of Scientology in general and, specifically, those in Clearwater.

I'll just start.


MR. LeCHER: Mr. Walters, what is this OP sheet? Can you tell me about that? How many people see it?

MR. WALTERS: All right.

In the Guardian's Office, everything is done to exact orders. There is an order out and there is a compliance. Hubbard designed what he calls a checksheet that lists -- if you have an operations, we'll say, to follow a commissioner, it would -- put at the top of it, the purpose for this. It would say step by step the exact duties, you know, first, like, "Correctly identify commissioner; establish residence." Then, there'd be a blank of who is to do this, specifically.

And when that person does it, there is a point where they sign it off, that they have completed in full compliance. On orders given by Hubbard, that shows compliance.

And at every step of the operation, this is done. It's usually a white piece of paper, listing every step from the surveillance all the way through whatever the operation was. Every step is listed, who is responsible, and the person who does it signs it off.

MR. LeCHER: How many people see this, this --

MR. WALTERS: Very few. Only the people in the Intelligence Bureau of the Guardian's Office, the higher officials of the Church, such as, in Los Angeles or Clearwater.

MR. LeCHER: All right.

What exactly is a routing form?

MR. WALTERS: A routing form is a form designed to take you step by step through the organization. There are all different kinds of routing forms. There is a brand new persons' routing form. If you came in for the first time, the reason that you would be hooked so well is because every step has been laid out. You would first talk to the registrar; the registrar will sign that off. The registrar, then, will find you a room, see what's wrong with you -- all the way through.

Now, the Guardian's Office routing form -- when they complete an operations, that is routed back up the lines, the communication lines, meaning from the Guardian's Office in whatever city back to their senior, which would usually be Los Angeles; Los Angeles would rout it to Flag, which is Clearwater, Florida.

MR. LeCHER: You indicated you -- earlier, that you may have -- they have a dossier?


MR. LeCHER: Is this routing form or this sheet -- would that also be used as a dossier or a threat to blackmail, et cetera?


In fact, usually, the first step of any operations is "Start Folder." It sounds silly, but the guy's told that, literally, "Open a folder, put your name on it." There's no step that's missed.

MR. LeCHER: If everyone knows this, then, why do you do it? You seem to perpetuate your own downfall. And who can you trust in the organization? And if you can't trust, then, how and why is the organization so successful?

MR. WALTERS: Very good question, very good. I'll be honest with you: When I used to get mad at something, I used to tell them what you just said. I was on an operations with Chuck Reese one time and I saw him typing it up and sending it up the lines, which now would mean Los Angeles and Clearwater, but at that time it was just Los Angeles or to England. And I said, "You've got to be crazy. You're going to write all this stuff? And this is nuts." But he said, "Ron gives an order, he wants compliance."

It's a great honor, see, to sign your name that you have complied with Ron's order. I mean, it's like points. I mean, it's -- "I followed three commissioners today." You're in, man. You can get a new typewriter or whatever you request that you need, you're liable to get it because you -- and Ron is very shrewd. He doesn't want his GO members saying "I did this or I did that." He wants proof, and very interestingly enough he has proof. He can look at these operations and compliance orders and he knows how hard you're working.

But you're right, sir, it is their downfall.

MR. LeCHER: I don't know -- if you can't trust your enemies, how can you trust your friends if your friends and your enemies are potentially the same people?

The telex that's used to distribute confidential files and criminal activities to various cities and groups: Can you tell us about the telex?

MR. WALTERS: There is a telex system that is extensive throughout Scientology. Every major org., organization, has a telex. When they deliver messages to Los Angeles, which are then sent to England, they're also sent to wherever L. Ron Hubbard is. For the last few years, they were sent to Clearwater.

Now, what is sent on the telexes is: The end of every week the stats for every division are sent. You know, like, "Ten people in, $30,000.00 raised, two people completed course, two went on to their next course," all these types of stats. Ron was very into that. It means statistics. And you actually had a graph.

The Guardian's Office uses the telex system in a coded manner. They have an elaborate code to send back questions concerning operations or whatever they're doing, and only the GO person knows the code and has -- in the last few years, they would send coded messages to Clearwater and Los Angeles.

MR. I,eCHER: Okay.

How do you think they're going to react -- you answered this earlier, so I'll pass it.

So, the telex commands -- does the telex command criminal activities to other cities and other states?


MR. LeCHER: Can you be given a job to do, something like to move to Clearwater and commit an illegal act from California or vice versa?

MR. WALTERS: Yes, if it's a -- when you're talking about planting dope and things like that --

MR. LeCHER: Tell me about planting dope.

MR. WALTERS: -- those things are not written down on paper; they are in code. Those are sent by coded telexes.

MR. LeCHER: All right.

Well, where would they get the dope to plant, then?

MR. WALTERS: I don't know. One of the higher Guardian's Office operatives, who, I'm sure has been here to Clearwater -- I don't know if you're familiar with the name; his name is Bruce Raymond. He's one of the -- he works for the Hubbards personally and handles the most secret, sensitive matters, so that I'm sure he would have been sent to Clearwater at one time or another. He specifically asked me to get some dope to put on -- I'll be very specific; it's going to astound some people in Scientology right now. Their names are Bruce and Danielle Harrell. They own a mission here, I believe, in Florida somewhere. I think they're still in.

At that time the GO was very suspicious of them. And they wanted to plant dope on them and have the police raid the place because they thought they were squirreling, meaning they were doing tech not written by L. Ron Hubbard.

MR. LeCHER: Is this --

MR. WALTERS: Anyway -- let me just finish this.

He asked me for the dope and, even though I started in a poolroom and I worked in a casino -- I'm forty-four, and at my age we didn't fool with drugs the way they do today -- I told him I wouldn't know where to get it. But I have reason to believe, from the gossip I heard in the Guardian' s Office, that they dropped doing that; they did something else.

MR. LeCHER: Were you led to believe that they grow or raise their own or do they buy on the open market or they're dealing in it?

MR. WALTERS: Well, to be frank with you, the majority of young men coming in, including the daughters and citizens of the people here in Clearwater -- drugs is a very prevalent thing among young people today. Once a person has a drug history -- and remember, that history is going to be in his files, isn't it, his confessional files? The confessional files go to the Ethics Office, the Ethics Office goes to the Guardian's Office. The Guardian's Office can easily pull one of them in and do the same thing they did with me, you know, "In order to help Scientology, do you think you can get any drugs," you know.

So, in today's market, it's not a hard thing to do.

MR. LeCHER: I thought that one of the beliefs -- not beliefs -- but one of the ways to be a good person would be not to take dope or alcohol or depend on any foreign substance in your system or in your body as a Scientologist?

MR. WALTERS: That has been -- when you get auditing, that is one of the technical things that must occur: that you must give up all drugs or alcohol or something like that. In fact, I would say that it's one of the good things about Scientology. I've seen many people come in who are drug addicts who gave up drugs just to get some counseling or auditing from me in Scientology.

MR. LeCHER: Are the Guardian's -- is the Guardian's Office explained to the group, the duties of the Guardian's Office, that, indeed, they do exist, why they exist?

MR. WALTERS: Their duties?

MR. LeCHER: Yes.

MR. WALTERS: Oh, yes, there's two forms. There is --

MR. LeCHER: But the recruit, the new person, new convert, does he get -- is he told as to the duties of the Guardian's Office?

MR. WALTERS: He is told -- that's not what they do. He is told -- he is told a certain statement about them. If you ask any Scientologist, "What does the GO do," he'd say, "These are the people that are here to help handle the turbulation of the area and make it safe in order to practice Scientology."

MR. LeCHER: You may have answered this before, but, for the record, I'd like the clarification: Are recruits told their personal information is available to the Guardian's Office?

MR. WALTERS: Oh, no. They are -- when they get auditing, they are specifically led to believe that it's totally personal and that no one will see their folders, except the auditor and the CS, the person who's supervising the auditing.

I have -- people discuss the most intimate -- I mean, if they knew it, they wouldn't continue it.

MR. LeCHER: I would assume that everyone would have a skeleton in the closet, no matter who they are?

MR. WALTERS: Yeah. And people have their personal qualms, and -- plus CSs are -- you know, Scientology is very into, like, looking at sexual stuff. You know, young men go into personal things that they would not like --

MR. LeCHER: Well, I'm sure that nobody would want their personal life brought against them --

MR. WALTERS: Absolutely.

MR. LeCHER: -- or told to anyone else, to the attention of the public or the press.

One more question and I'll go to my right, again: Is -- do you feel you're in danger right now, and what do you think the reaction will be to your testimony here today? What will I read in the paper tomorrow of what their -- how they'll explain your testimony and reasons for being here?

MR. WALTERS: All right.

They will have to -- one, they will have to contain the people at Fort Harrison to make sure that they don't hear this. That's their major problem, otherwise, that would stop the money flow. They have to worry about the newspapers. Ron says you're never to defend, you attack.

They will give the newspapers serious allegations about me designed to technically be believed by Scientologists --

MR. LeCHER: In order to discredit you?


And anything involving conspiracies, suppressiveness -- those are the things believed by Scientologists. Their major problem is that the money flow here at Fort Harrison does not dry up.

MR. LeCHER: And you are testifying under oath and you are under the threat of perjury?

MR. WALTERS: Yes, yes.

MR. LeCHER: And you understand that we may take this information and use it ourselves or give it to another governmental agency?

MR. WALTERS: That's fine with me.

MR. LeCHER: All right. Thank you.

Mrs. Garvey, I started with you, but it's still the same witness, so, not to have confusion later, I'll let you again lead off because this is the same witness. We'll go down the line and, then, get the testimony -- the documents that Mr. Flynn would like to show us.

Mrs. Garvey.

MRS. GARVEY: Sir, one of the things the consultant reported to us is health conditions in the Fort Harrison. And I would like to know what you are -- what happened in Las Vegas. They're saying that there are -- there is concealment of epidemics and, also, the treatment of actual diseases by unlicensed individuals holding themselves out as medical practitioners.

Did you witness any of this kind of attitude or action in your area?

MR. WALTERS: Yes. In Las Vegas, yes.

MRS. GARVEY: Can you --


MRS. GARVEY: Excuse me; go ahead.

MR. WALTERS: The conditions -- the staff usually lived in a house, a staff house, that might be designed for a family, which would be a father, a mother, and three children. There, usually, might be thirty to forty living there in usual squalor. And children -- because of the kids -- the mother is working fourteen to fifteen hours a day, the child is left alone. They will tell you that they have nannies for them and all that. Even if they do, the nanny is some confused kid who is probably in Ethics anyway, which is why she's told to watch the kids.

I have personal knowledge in Las Vegas of kids going days without eating. My wife and I donated to them once in a while. You just -- God, you have to see it to believe it: kids, young kids, looking at a jar of peanut butter like it was gold.

MRS. GARVEY: So, you're saying that there is a practice of child abuse, whether it's emotional or physical?

MR. WALTERS: Yes. It's a side product of it. It's not that they mean it to occur; it's a side product. It's that --

MRS. GARVEY: Is it a policy of the Church to not refer people to doctors?

MR. WALTERS: Yes. 1 mean, in fact, it is suppressive to deal with doctors. Doctors are butchers.

MRS. GARVEY: But if a Scientologist went to a doctor, then, he would be put on -- he would be classified as a --

MR. WALTERS: Well, it all depends. If it's a legal cycle -- the GO staff is on a legal cycle. The GO will say things like: "Well, listen, Mr. Jones, you can go to a doctor if you like; we are not saying you can't. But you know what Ron says about these butchers." Well, that's all you have to say and the guy doesn't go on his own free will.

MRS. GARVEY: Because Mr. Hubbard considers them a menace?

MR. WALTERS. Oh, yes.

I mean, I don't know if you have documents here, but the Dianetics course is full with them, of Hubbard's theories and opinions about the doctors.

MRS. GARVEY: So, they may not encourage them not to go, but they will discourage them from going?


And they have very cleverly written policies saying that "We support doctors and, if you have any illness, you should see your doctor." That's put in the green volumes to show the public. But none of that is practiced.

MRS. GARVEY: One other thing: You said you worked as a registrar for a while as your job.

Did you ever portray this organization as a charitable organization? Is that something that's commonly taught -- mentioned to your people when they're interested in it, that the Church of Scientology is a charitable organization?

MR. WALTERS: Well, let me get it straight. I did not work as a staff member for the registrar because I was in the technical division.


MR. WALTERS: But I was always called in to handle a guy who wouldn't come up with the money, because I was more expertised, you see. They could say, "Let me bring the surgeon in. Here's the surgeon that's going to work on him. Now, Surgeon, can you handle him? He says he's got this -- of course, we can. Ron can handle anything." You know. That's when I would be brought in.

MRS. GARVEY: But did -- was it ever put across that, you know, the money that you -- that was going to the Church was for charitable purposes?

MR. WALTERS: No. It depends, again, what legal cycle Scientology was going through. In the early days, you just paid your money. Then, the government, I believe, raised some trouble about "What's a non-profit status doing charging people for all this? That you ought to be able to go in and just give them what you got." So, they changed it to call it donations.

But no Scientologist knows this. He doesn't even know why it's called donation. He thinks, "Well, I guess, it's a religion, it's a donation." I will tell you, he won't get a service for one dollar less.

MRS. GARVEY: But that's what I'm saying: If he didn't want to donate, he would not get a course?

MR. WALTERS: Absolutely.

And if you paid $5,000.00 for that course, you won't get it for 499, I'll tell you.

MRS. GARVEY: That's all.

MR. LeCHER: All right.

Mr. Hatchett, do you have any questions?

MR. HATCHETT: Mr. Walters, would you characterize such actions as a fraud --


MR. HATCHETT: -- to the individual?


MR. HATCHETT: Electronic bugging, or covert -- were you ever involved in the electronic bugging of someone's property: their home or their organization? Do you know about the specifics of --

MR. WALTERS: I know two very specifically and others that I know the results of.

MR. HATCHETT: Can you describe some of this as a physical bugging?


MR. HATCHETT: A bugging --

MR. WALTERS: Well, I'll tell you one, exactly. One is we bugged Dr. O'Gorman, a psychiatrist in Las Vegas, without his knowledge. The other one was at Rosa de Lima Hospital. Those are two that I participated in. But there's many others that I would just hear --

MR. HATCHETT: What type of physical equipment was used?


MR. HATCHETT: Telephone or --

MR. WALTERS: At Rosa de Lima, it was a new, little tape recorder that just came out, Panasonic or something like that, and it was the first time that the little speaker was, like, part of the set. You know, it wasn't, like, you know -- that was, like, really big in the GO at that time. And they taped that underneath the table.

The way it was done with Dr. O'Gorman -- it was done with a tape recorder inside a briefcase, with the cord going from the briefcase up my arm to here. And I sat and talked to him and recorded everything.
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Part 4 of 6

MR. HATCHETT: On the matter of extortion of money from people, can you give us an idea how this is really done, whether there was provocation, communication, or just verbal communication to a person to extort? Were threats involved?

MR. WALTERS: Again, it depends on the level of awareness of the individual. If you are, say, at Clearwater here and you are a sick person and you come down here to cure your ills and, now, you've spent eighty thousand, which is all you have, you are now starting to wonder about this or you read a Reader's Digest article or something like that, you will be told that -- you will be sent to Ethics for doubting. See, just a doubt is an Ethics offense.

In fact, one of the -- that's the name of it, see: Liability, Treason, Doubt. That's technically -- they want that word there just to say, you know -- "Yeah, but I gave you $80,000.00 and I'm not getting any better." "well, do you have any doubts about L. Ron Hubbard?" "Well, I'm just wondering." And you get put in Ethics.

And the reason he's put there is to keep him away from the others, because you can't have these guys sitting around in the lobby of the Fort Harrison saying, "Are you getting any better?" "No. Are you getting any better?"

So, one Scientologist who sees this writes it up, and he's sent to Ethics. And in Ethics he is pressured, depending on where he's at. They will send for his PC file, meaning his personal auditing file. And the Ethics Officer will pull out of there whatever he thinks -- let's say the fellow is down here for -- to get his illness handled, but he confessed about helping his business go bankrupt sometime, you know. They will sort of insinuate to him, "Well, if you do these type of things, I mean, society is not going to like this. And as Scientologists, we will be glad to expose you."

They'll give him something to read. I don't know if you have any of them here -- "Keeping Scientology Working."

Do you have that here?


MR. WALTERS: Can I see one? I'll show you something.

"Keeping Scientology Working" is What every Scientologist is brainwashed to do. "Keeping Scientology Working" is on every course that I ever did. It has lines on there, like, "We are a deadly serious game; We are hardly here to win not to lose; We'd rather have you dead than incompetent."

I mean, please get the bulletin, because of -- what I'm saying sounds awful. But it's on -- you can go down to Fort Harrison right now - if they don't change it by the time they hear this -- it's on the front of every course by order of Hubbard.

So, when you're reminded of these things in Ethics, I'll tell you, you come up with whatever money is needed. "Do your friends have any money; do your relatives have any money?" And you are shown how and helped to go back and sell your land or raise the money.

MR. HATCHETT: Thank you.

MR. WALTERS: And that, to me, is extortion and through harrassment.

MR. IHCHETT: Thank you.

MR. LeCHER: Mr. Shoemaker, do you have any questions?


Mr. Walters, in your initial presentation, you had mentioned a comment, which I wrote down, about that you were concerned or that you certainly didn't want to end up being beaten or thrown down into a hold --


MR. SHOEMAKER: -- or words such as that. Do you have specific knowledge of beatings occurring or --

MR. WALTERS: Well, it didn't --

MR. SHOEMAKER: -- some type of physical restraints other than being locked in a room, which you've already referred to?


It did not happen to me, but I've heard of others who were on the ship -- Hubbard was on a ship for a long time --


MR. WALTERS: -- who were put in the hold and were beaten and were locked in --

MR. SHOEMAKER: Physically put into some type of a --

MR. WALTERS: Oh, yeah.

MR. SHOEMAKER: -- hold below deck?

MR. WALTERS: A tiny little hold.

I don't know if I'm letting the cat out of the bag, but I think you're going to hear from somebody that had that exactly happen to him who will be in front of you in a few days.

MR. SHOEMAKER: You had also mentioned, too, that you had actually, in your training, gone through your -- the auditing training course, which you termed as Class 8, I think you said, which was almost, converting or changing somebody from being a human being to being like a Gestapo person.

MR. WALTERS: That's right.

MR. SHOEMAKER: Could you expand on that a little bit in terms of what you learned in this?

MR. WALTERS: That's a good question, a really good question, because you become an expert on the tech in Class 6. Remember, I spent a year and-a-half listening to five tapes a day, an hour and-a-half, ninety-minute tapes a day. You study from 8:30 to eleven at night every day for a year and-a-half, so you know the tech.

But Ron, because of his paranoia and troubles that he could have -- usually, go into a city, go into a nation criticize, defraud, government inspects and he runs away -- he went pretty berserk and hard-nosed around '67 and '68 with this Class 8 course, around '68, where the Class 8 now -- we were supposed to get on top and keep everybody in line. What I thought was going to be more technology on bringing peace and sanity to the world was technology on how to apply those Ethics conditions.

And Hubbard would tell you, "Anybody" who ever went to a policeman was because you didn't catch him in Ethics. And I'm tired of these failures, and you people let me down. And the tech works, remember that. My tech never fails. And you must ferret out the Suppressives."

And Class 8 was to go back to the city and be relentless in ferreting out Suppressives, people with counterintentions, meaning they thought differently than Scientologists, and we were to make them Scientologists or handle them.

MR. SHOEMAKER: Were you -- with all of this money that was going into the paying of courses and so forth --

MR. WALTERS: Oh, let me mention one more thing; it's very important.

The Class 8, also, is the one who handles the OT 3s and above. OT 3 level is the highest supersecret level where you find the secret of the universe. Guys who are hooked on this can cost them fifty, sixty, eighty -- they'll take all you have. In fact, many people don't leave because, no matter what happens to them, you're told that "When you reach OT 3, you will find out why insanity in the world is." And the Class 8s are the ones who administer this. And it's total science fiction.

MR. SHOEMAKER: With all the money that people are paying in for these various types of courses, where are they told that that money goes?

MR. WALTERS: Usually, a lot of them don't ask; they're too busy keeping Scientology working. If you do ask, the Guardian's Office has this thing written by Ron called "Where Your Fees Go." And it's beautifully written. When you get through with reading that, you almost want to give him more.

It tells about how he was researched this all this time, and he's holding the organization together, and people like yourselves are attacking him and causing him legal problems. And you just don't realize all the amount of money it takes to hold Scientology together and keep it working, and that Ron loves you and cares for you, you know.

MR. SHOEMAKER, Mayor, if -- I've just got one other question.

I had asked you, Mr. Walters, earlier if you were familiar with that Ethics book, I believe it is --


MR. SHOEMAKER: -- that has the high crimes?


MR. SHOEMAKER: Can you briefly refer to what those high crimes just say or what they are, please? It's 49, I believe.

MR. WALTERS: All right.

That's when the Ethics theory came out; that was around '67 because Ron had trouble in England. Things like this occurred; England started looking into him. So, he ran off on a ship, which is interesting and familiar seeing as James Jones did, he ran off. to Guyana. Hubbard went on a ship with his select crew by himself.

But he puts out this for the Scientologists to straighten out everybody. Hubbard always feels that, when things go wrong, he got betrayed. So, if you do things wrong and, then, you fail, you can be charged with these high crimes.

That's -- for example: "Attacks on Scientology and Scientologists." You realize that it is suppressive -- it is considered an attack -- for me to come here and talk to you. If any other Scientologist in the city does it, he would be considered suppressive, unless he's with the Guardian's Office.

MR. SHOEMAKER: All right.

MR. WALTERS: But a Scientologist, of his own free will, could not do this.

Look at number two -- I haven't seen this in years -- "Testifying hostilely before state or public inquiries against Scientology is suppressive." That's listed as a high crime.

So, when you study these things, I'm telling you, you just don't go visit people like you.

I could go over -- "Reporting or threatening to report Scientology or Scientologists to civil authorities."

So, you realize, when you get -- when that little old lady loses her eighty thousand and still has arthritis, she's caught between the Ethics Officer -- and she can't go to you because she'll be in a high crime. I mean, I sit here, you know, laughing about it, but it's very serious when you talk about people who've come hero to Clearwater and got fleeced and are in serious dilemmas; it's not really funny. But this is sold to every Scientologist and they are told to read and study it.

MR. SHOEMAKER: If I might ask just one other question, Mayor --

MR. WALTERS: Oh, let me go to seven. Oh, I'm really high crime. "Testifying as a hostile witness against Scientology and Hubbard."

MR. SHOEMAKER: And in all of these, if you're -- if you've violated these, in essence, then, you are a suppressing person and, therefore, the Fair Game Policy could be implemented against you --

MR. WALTERS: Absolutely.

MR. SHOEMAKER: -- or anything else?


MR. SHOEMAKER: I don't know if there was a question or not, but I know - - I think you alluded to it, basically, earlier. I know it's a question that's always been in the back of my mind and I think it's in others'.

You're certainly not a dumb man. You have a lot of intelligence and you've been around in the street and grew up and knew pretty much what was going on.

Why nine years before you came to the realization -- how could you have accepted so much of this for such a period of time before you came to the realization to get out?

MR. WALTERS: Very good question. Why I -- I ask myself that and actually studied it.

My hook -- with everybody, he has a carrot. If you've got cancer, of course, it's cancer. If you can't get along with your mother, bing; if you've got a sexual problem, it's that. Mine was -- I always thought, as many others did, that L. Ron Hubbard was a genius engineer/physicist who had found legitimate, workable laws and axioms that would help benefit mankind. And I thought somewhere I'd find it. Even after Class 6, when I studied everything, I was told, "Yeah, but, Eddie, wait till you get to Class 8."

MR. SHOEMAKER: So, it's always --

MR. WALTERS: Always more.

When I got to Class 8, it was the way I told you. The turning point for me was when they started lying to Scientologists about that they did not break into the Justice Department. I did not think -- and I thought, "Jesus, all this stuff we've been doing, now, they're even going to lie about that." I wanted out.

But everybody has their own carrot. Some are just disillusioned, or people who are stuck on Hubbard, others are sick people trying to cure their illness; some are people like myself looking for -- to study the works of a brilliant person in order to benefit myself and others.

MR. SHOEMAKER: Mayor, I don't have any other questions.

MR. LeCHER: Let me ask a question: What kind of things do you study in Class 8?

MR. WALTERS: All right.

Class 8 --

MR. LeCHER: Specifically--

MR. WALTERS: Specifically?

MR. LeCHER: Yes.

MR. WALTERS: You -- first, you go over all the basic tech, again: the tech of communication, the tech of auditing, the tech on cycles in life, a lot of the stuff. Then, you learn how to study folders and to find out why things did not work. But the reason you're given is that it is always was a Suppressive or a PTS person. It's like, in other words, if you don't find a mistake or where he did something wrong, you are to find who the enemy was and why he did it. Like, if any of you gentlemen or any person got counseling, auditing, and it didn't work, they would want to find what Suppressive you were connected with.

See, it cannot be anything at Fort Harrison; they're perfect. It's got to be you. My job was to learn to apply Ethics. We studied that heavily.

We were to put the person in Ethics and find out why he did not want to get better or what suppressive group they were involved in. Then, you studied OT 3; this was one of the major secret levels that you're all told, and you're told because -- after OT 3 came out in 1967, Scientology had a lot of serious internal problems because people, after this level -- and spent thousands and waited years to get it -- were acting as nutty as ever.

So, one of the Class 8 things to do was that we were taught how to repair these people. Like, you know, it involves space ships and mountains blowing up, the body is made up of body thetans. And this is very serious because an individual, when he completes OT 3, he thinks all of you people have body thetans that are really talking to you, little spirits. Your body is made up of spirits and they're talking to you, not you. So, that's the reason your mother did not want to support you in Scientology. It wasn't her, it was her body thetans.

So, this makes you join staff or --

MR. LeCHER. Well, we don't want to get too far. That may be construed as a belief.

MR. WALTERS: Well --

MR. LeCHER: But if I can ask: Eddie, were you ever -- I've heard a lot of stories and what not -- were you ever able to leave your body and go to Paris in the spiritual sense?

MR. WALTERS: No, no.

And that's what most everybody who's down here at Clearwater has been ordered to do. That's the end thing of OT 4, the next step above OT 3.

MR. LeCHER: It's to go to Paris or wherever you --

MR. WALTERS: Or wherever you want to go. If you leave your body, you will.

MR. LeCHER: You've never been able to do that?


Now, I've known people that said they do, I mean, you know. They could line up fifty Scientologists who'll tell you -- they'll sit here and tell you they're in Paris, but that doesn't, you know -- I'll tell what you can do, just write a number on a piece of paper and say, "Well, go into that pad and tell me what that thing is?"

MR. LeCHER: One other accusation that I heard -- and I don't know if it's true and maybe you have knowledge -- is that my office faces their office, that they can eavesdrop with some sort of a beam of sorts --

MR. CALDERBANK: Microwave.

MR. LeCHER: -- microwave, possibly, and hear what I say and I don't even know it because I can't see it.


That's discussed on the upper levels. You see, the Guardian's Office and the upper tech people tell the newer people that they can leave their bodies, see. So, "We're not worried about Mayor LeCher. Listen, that idiot is over there and we are on top of him all the time. We are spiritual beings. And we can sit in Fort Harrison and totally overhear every conversation."

MR. LeCHER. That's a spiritual sense. In the state of the art sense, the newest state of the art, is there a wave of sort of light or microwave or whatever that they can hear my conversations in my office with, let's say -- without my office being bugged, physically bugged?

MR. WALTERS: Electronically?

MR. LeCHER: Yes, electronically.

Do you know anything --

MR. WALTERS: I don't know, sir.

MR. LeCHER: All right, then.

I'd like to ask: Mr. Bustin, do you have any questions -- or Mr. Calderbank?


Mayor, first of all, I will recount one actual thing regarding bugging with some type of devices, whether it's coming from Fort Harrison or not. When Calvary Baptist Church put their new audio system in the Church, one of the engineers in my office did go out and take a reading for EMF, eloctromagnetic fields. And there was such an exceptionally high level -- of what they call a hot spot -- of these type of energy waves in this area, that they had to take special precautions in order to technically work it. So, I don't: know where that came from, but there -- it can happen.

MR. LeCHER: Okay.

MR. CALDERBANK: I'd like to get on to the fraud aspect, where, I think, perhaps, you gave money for your consideration based on representations or guarantees. And based on that, you gave $35 to $40,000.00 to an organization.

And auditing, you were told, was a scientific or worldly -- something that was on earth that was researched.


MR. CALDERBANK: You were told auditing was scientific in nature.


MR. CALDERBANK: And you were told that this had been researched by --

MR. WALTERS: L. Ron Hubbard.

MR. CALDERBANK: And why did you believe that auditing would help?

MR. WALTERS: Because, in the early courses, you were given some of his scientific discoveries that appealed to you. The very first thing you do is the communication course, where you sit across from each other in chairs and you do those training drills. But then, they will have you demonstrate a formula: cause, distance, effect. I create a cause that causes distance to an effect.

And if you are physically -- physics minded or interested in the way the world operates, that looks very interesting to you. "That's right. When I speak, you hear it. There's a cause and there's an effect there." And then, you originate a communication and send it across the space to me and I hear it. You actually demo this out, clay demo.

MR. CALDERBANK: And you were -- you spent money because you were told that a world renowned researcher that --

MR. WALTERS: Yes, yes.

MR. CALDERBANK: Then, you taught other people?


MR. CALDERBANK: Now, did you also represent to them, when they asked you, "Why should I spend this money" or "Does it work" -- did you represent to them the same things that were represented to you, that this was researched for thirty or more years by a nuclear physicist, et cetera, et cetera? In other words, did you continue this?

MR. WALTERS: Yes. You were -- yes. You were taught how to do it.

MR. CALDERBANK: And how did you do it? How did you make these representations? Were they published, were they in writing, orally, verbally? How did you show the person that it was --

MR. WALTERS: All right.

Some of the technology data is on the course that you're taking. You give them lectures. They're in all the books who Hubbard is and his credentials.

We, as higher Scientologists, gladly tell about the wisdom and great expertise of L. Ron Hubbard. And when a person says, "That's amazing course -- that's really scientific." "Of course. The man is a nuclear physicist; he's one of the great educators on the planet. And this is just a sampling of the great technology you can receive."

MR. CALDERBANK: So, one of the things is to bring people in. One of the major factors is this man, through out his life, had a high history of engineering, academic, physical experiences, and he actually cured himself and other people and had case histories?


MR. CALDERBANK: And were you ever guaranteed -- you said -- I don't want to get into the religion -- you said that you could do this and do that, which is fine. But were you ever guaranteed for your money that you would get well? Were you ever sat down and said, "Ed, this money, once you get to OT 3, we guarantee that you'll understand the universe?


MR. CALDERBANK: Or were you ever guaranteed -- religion aside, was there an actual guarantee -- you gave money for a guarantee that your stomach, your back would be better, you'd be able to exteriorize, et cetera? Were these actual guarantees that you based giving your money on?

MR. WALTERS: Every time.

All right, you take Dianetics. They'd show you: "This is Dianetics. This is what you will get, Eddie, you will get scientific auditing from an auditor. This is what you receive. What you get is you become a well and happy human being." They guaranteed that.

MR. CALDERBANK: Are you -- did you in auditing -- are you guaranteed, also, that this was confidential --

MR. WALTERS: Oh, yes.

MR. CALDERBANK: -- what you put down?

MR. WALTERS: Oh, yes.

MR. CALDERBANK: You said before that the government guaranteed it?

MR. WALTERS: Well, they tell you that it's pastoral counseling between a minister and you.

MR. CALDERBANK: It's a ministerial relationship?


And that the government protects religion, so they will protect us.

MR. CALDERBANK: But did you ever see this or take part in using these, what was told to you in confidential files, to harm someone?

MR. WALTERS: Were they ever used to harm --

MR. CALDERBANK: People; right.

MR. WALTERS: Yes; it went on on a regular basis.

MR. CALDERBANK: In other words, they were used to say, "If you go to the police or if you take your legal means or redress, we will expose what we told you were confidential files"?


MR; CALDERBANK: Can you give me an example of dates, when, where, and who?

MR. WALTERS: All right.

I'll give you the very 1atest. That'll be a good example to show you this hasn't stopped and they haven't cleaned up their act.

The fellow that I told you that came to me -- his name is Hartwell who came to me -- about where Hubbard was hiding in the desert, and I brought this to the Guardian's Office and left. They then told the newspapers and other Scientologists that he was a murderer and he murdered his father and called him an extortionist. And that came out of his folders, because no one knew anything about -- anyway, first thing, he didn't murder his father. I think he'd allow me to say that.

What he did is he ran a Dianetic incident in a past life -- I know this may sound really -- in a past life, a life before this one, he believed he might have killed his father, in a life before this one.

MR. CALDERBANK: So, they threatened to expose this?

MR. WALTERS: They brought it to the newspapers.

MR. CALDERBANK: And what did that prevent him from doing?

MR. WALTERS: That was -- well, in his case it didn't work. The idea was to back him off and show the newspapers that they could end up in legal trouble themselves because they were dealing with a murderer.

And his, you know, if you need to, you can fly down his auditor who audited him to tell you that he was dealing -- because I never knew it, and the only one who knew it was a person called Claire Brynner, who was his personal auditor. And it's interesting, that's why Claire Brynner left Scientology.

MR. CALDERBANK: Is this a common practice by policy?

MR. WALTERS: Very common.


Now, what's the difference, then, between a security check -- what's the purpose of the security check being on the same instrument that's used for auditing? What is the purpose of that; why did they do it?

And before you get into that, have you ever seen a disclaimer, because you realize by article or device you're supposed to disclaim any -- you were guaranteed that it would cure your stomach and back.

Did you ever at any time -- or were you told that by the court there were directions to put a disclaimer that it had no -- to paraphrase -- no medical validity? Did they ever tell you that auditing, Dianetics, et cetera would not do that?

MR. WALTERS; No, they never told us any of that.

What I heard was from the GO. I had heard that there had been some legal thing occurring and that they got caught acting like they could cure things and there was trouble with the E-Meter.

They made up some stickers that say something exactly like that, that "This E-Meter cannot diagnose any illness and blah, blah, blah, blah, blah, blah." But they're not used anywhere.

MR. CALDERBANK: Did you ever tell your students that?


MR. CALDERBANK: What did you tell your students?

MR. WALTERS: If you told a student that, he wouldn't give you the money.


And then, in addition to the E-Meter, et cetera, et cetera, you used -- I asked about the security check. What is its purpose? How is a security check run?

MR. WALTERS: That's a very good question, because, you see, in the early auditing, you are giving all your personal things: your family problems and et cetera. So, you develop a very confidential presence with your auditor. You will find out later, when you get into Ethics, that they will use the same machine and sit you down to do a sec check.

A sec check is a list of questions designed to ferret out if you' re possibly an enemy. But you are told it's to make you better. It's told that "Yes, we realize you're ill and we realize you're thinking of going to a lawyer" or something like that. "We need to do a sec check on you. And because -- you realize that if you give up your overts and transgressions that you will be a better person. That's the only way to go clear." So, the guy says, "Fine."

When he sits down to the sec check, it turns out to be "Have you ever talked to the FBI about L. Ron Hubbard? Have you ever talked to any legal authority about Mary Sue Hubbard?" It's totally to protect the organization, you know. But there are sec checks for sexual things, children.

Part of the policy is that if you are sick, you are PTS, which means you're a Potential Trouble Source. Hubbard has been burned too many times by people getting upset and going to the authorities. So, that guy is not allowed out of the org. He will be sec checked until he comes up with his crimes.

MR. CALDERBANK: So, basically, to capsulize that, you're telling me that auditing and sec checks -- these personal things that are told to you and guarantee your confidentiality -- are then used to prevent you from legal redress or from going to the authorities, basically what's known in law as extortion?


MR. CALDERBANK: Can you give any examples of that? My last one -- my last question deals with a criminal aspect, again. You mentioned points, a point system where people earn points. And we're looking at policies that -- as the Great Britain and Australia reports stated, that one reason that they banned that type of a thing in those countries is because they found that the policies induced people to commit criminal acts.


MR. CALDERBANK: Now, explain the point system and the Fair Game policy. You said that a person could, gain points. And is that favorable in Scientology -- they keep a record of it -- and are these points given for criminal activities or to complete the varying policies: attack the attacker, break-ins, or extortion?


In the paranoid attempt to defeat the enemy, if you cause trouble and you are convinced that you are -- have done bad and you degrade yourself, you must now strike a blow to the enemy. This is to get out of Ethics.

You have that -- okay.

You must strike a blow back. The Guardian's Office will help you, such as -- well, if a guy is in Ethics here at Fort Harrison, his job will be to sit down and write thirteen letters to the Commissioners on how great Scientology is. If he's inclined toward doing anything to get better, he might be assigned to follow you. And this would go on his Ethics record as showing good Scientologist, good intentions to safeguard Scientology.


Please give me a specific example of a criminal activity that Scientology did in performing a policy and how the points and the policy got him to commit the policy and the point system to gain favor again and got him to burglarize, or stop, restrain -- anything --

MR. WALTERS: All right.

MR. CALDERBANK: -- to go against an SP, or a Suppressive Person?

MR. WALTERS: For example, in Las Vegas, there's a city commissioner or legislator --

MR. CALDERBANK: Can you give when, where, and who, if you could?

MR. WALTERS: Yeah. All right, I'll give the Review Journal.

The Review Journal is a newspaper in Las Vegas. They had a plant in there who told them that a reporter was setting up to write a story on Scientology. People had come to him; this was in 1973, I think, or '72.

Chuck Reese was given the assignment, and his job was to stop that so- called flap. He asked me to -- if I would go over there and case the place and steal documents from the file. I wouldn't do it. They asked my wife if she would go over there to the -- because the reporter used to hang out in the Legal Research Bureau or something like that. And she wouldn't do it. Eventually he did, because he had an operations, right, and he had to comply. He has to comply with it within the time period that's given. If he does not, he's put in Ethics.

MR. CALDERBANK: So, based on the ops. sheet, which goes up and down from various division to division, arriving at what the Mayor brought up, this was given to him to fulfill Scientology policy? You cased it knowing that the documents would be illegally removed?


And if he doesn't do this in the prescribed time, then, he has not produced for that week; his stats are down, and he can be put in one of those conditions.

MR. CALDERBANK: And he received points for this?

MR. WALTERS: Oh, yes. There is, in Volume I -- you have it in Volume I. There is the exact policy on how to figure a stat. A chart with a stat going up like this, would be normal. You're supposed to always do more burglary, more things. A stat like this is better. A stat, like level, would be emergency. A stat like this would be -- you could be in Liability or Treason.

MR. CALDERBANK: Are you saying that the stats were transmitted to L. Ron Hubbard over telexes? They contained points for actual criminal activities. So, not only did they have the policies throughout the structure of Scientology -- you said this is throughout, in Clearwater, also -- but you also got points.

So, he encouraged you to commit any acts against a Suppressive Person on two accounts. It would be in policy and also to get points; is that what you're saying?


MR. CALDERBANK: And he had stats delivered to him weekly or monthly across telex showing this?

MR. WALTERS: Absolutely. In fact, he had the room at Flag -- I'm sure you have it here -- where the stats from all over around the United States are kept.

MR. CALDERBANK: Give me another example of who, what, when, and where of, say, another criminal activity that put a Scientologist in good stead on both policies and points, if you can?

MR. WALTERS: I'll give you an example. I mean, we do it -- it's not all burglary and stuff.

Your registrar goes out, right? His job is to get the money from the individual, right? He is given hot prospects, lists, so that's his stat; he's got to complete six of them, five of them, whatever it is. In order to do that, that person will resort to whatever it is to get the money, because that registrar cannot -- if she only takes in ten thousand for the week and her goal for the week was twenty-two thousand, she is now in one of those lower conditions.

And these kids who will go to any -- who will do anything -- lie. They will even go to the bank with the person to try to get the person to give up their money. I mean, you'll hear this from other people. I mean, I know this may sound like I'm making this all up to you -- because the severity of these lower conditions and the harrassment internally in Scientology is so bad that good people are directed toward doing not nice things and harrassment and defrauding and lying about Scientology in an effort to do a good job so they can go clear.


And you're prepared for another agency to ask you more specifically -- or you would be prepared --


Mil. CALDERBANK: -- to give specific examples?


MR. CALDERBANK: Thank you. That's all I have.

MR. LeCHER: Mr. Berfield, do you have any questions for the witness?

MR. BERFIELD: Yes. Mr. Walters, you made a reference to Mr. Hubbard. Have you ever personally met him?


MR. BERFIELD: You also talked about Flag and made reference to Clearwater. Is Clearwater the Flag or one of the Flags?

MR. WALTERS: No. It's the Flag.

MR. BERFIELD: It is the worldwide headquarters or U.S. headquarters for --

MR. WALTERS: Right. It's the worldwide. It's --

MR. BERFIELD: Worldwide?

MR. WALTERS: Flag is the highest point on the organization board.

MR. BERFIELD: What -- we've seen some documents over here. Having not met Mr. Hubbard, how would you know that those documents were even produced by him or sanctioned by him?

MR. WALTERS: Well, it's a good question. Can I say I saw him write it? No. I've talked to people that have seen him write them. I've studied with people that were on the ship with him. I can tell you that it is a high crime to do something not written by him. I mean, the discipline is severe. If L. Ron Hubbard didn't write it, it isn't true.

So -- and the higher up you go, the more severe the discipline. It's easy to say, because -- in fact, what you are thinking of, I don't think it in that way. I used to think of that, that "Listen, maybe the guys in Las Vegas are nuts and maybe there are only nuts in Los Angeles, too. Maybe in Clearwater it's a lot better. I mean, you know, that's where Ron is."

Then, this guy comes to me telling me about Ron's in the desert. And you'll probably meet him.

All I can tell you, I traced it all the way to the top and it was just as severe at the top, in fact, more criminal at the top than it is at the bottom.

MR. BERFIELD: Well, that's what I'm trying to establish in my own mind here with these procedures, where they came from.

Did anybody, in fact, know that they came from the top or did some clown like Jim Berfield sit up there and dream them up? Because if we' re talking about all those procedures that you've mentioned here, that must be all Mr. Hubbard does is sit around and write procedures.

MR. WALTERS: That's about -- if you have any Volumes here -- there's a Volume right there. Can you hold that up? That's Division 1. There are seven of those, and that's only up to 1976 or something. He does nothing but write this stuff.

Anyway --

MR. BERFIELD: There are still other questions that kind of fit in, but -- one you made mention of earlier today and one a little while ago, and that was the dividing of the family or the use of Scientology to divide the family.

Can you personally, from firsthand information, state that you've seen that used?

MR. WALTERS: Oh, absolutely. I've, I'm sorry to say, participated in some technically. It's a standard practice.

If your son goes in, sir, and you did not like Scientology, you would be declared a Suppressive and thoroughly investigated. And your son, if he wants to continue, must disconnect from you to strike a blow with you.

MR. BERFIELD: The other one that follows along somewhat in the same vein was: You used a hypothetical of a little old lady who had invested thousands of dollars and could not turn to any governmental body or could not turn to Scientology.

What we're saying, in essence, is that that person is just sitting there in limbo; is that correct?

MR. WALTERS: Very good; that's exactly -- there are thousands of them across the United States. And I believe, when this hearing goes public and this thing -- it becomes okay to speak up, you're going to have a mass of lawsuits, probably, against the City of Clearwater and Fort Harrison. There are thousands of Scientologists scared to speak up.

I just got so hot -- I'm a pretty tough cookie. But there are people not in very good shape who have lost everything they have.


MR. WALTERS: I call it a holding pattern, you know.

MR. BERFIELD: I don't mean to sound like the devil's adversary in this, but I cannot get it out of my mind and I've heard you say why you were here. I do not have the time to watch television, but what you've described here sounds like one of these horror stories you get on television.

But it sounds like something you read out of -- that came out of the second World War. Do you do a lot of reading that would prompt some of this in your own imagination?

MR. WALTERS: No. To be totally frank with you, you haven't heard all of it. In four days, ask me that question again.

MR. BERFIELD: Fair question.

MR. WALTERS: Because what I'm telling you, I could he totally lying. You might have the individuals I'm talking about in front of you.

You see --

MR. BERFIELD: You have -- and you may have been asked this a couple of times already. You recognize you're under oath.

Have you ever been under oath before and lied?

MR. WALTERS: Under oath and lied? No.

MR. BERFIELD: So, you've never perjured yourself before? All I'm --

MR. WALTERS: For Scientology? No.

MR. BEPFIELD: In any civil, legislative, or any type of court or swearing in ceremony, have you perjured yourself?

MR. WALTERS: No, absolutely not.

MR. BERFIELD: I come down to the loaded question: Recognizing where you have been, we're sitting here thinking about this little old lady with the problems that she has, what would cause you, if the tables ware turned, if you were me, to believe what you say to be the truth?

MR. WALTERS: I'd say, "Sit right where you are, and in four days you'll be" -- then, Scientology, I guess, will get a chance. If you can't make a decision after that, then, don't do anything.

MR. LeCHER: Thank you.

Did you ever lie under oath for Scientology?

MR. WALTERS: For Scientology? No.

MR. LeCHER: We have been drilling you for a good part of the day and we appreciate your coming. I know it's been difficult for you mentally, physically, and I'm sure financially. And we wish you well. And we thank you for coming and we admire you and respect your courage.

MR. WALTERS: Oh, I appreciate the courage from you just being here. You've taken a hard task on yourselves, and the court and public opinion, I think, will win out. I -- you guys are in the soup just as much as I am, because, as I say, you're going to have a hell of a battle on your hands.

MR. FLYNN: Mayor, at this point, I will introduce some documents. And we'll keep the witness here. And in the event that any of you have any questions about the documents that are put on the overhead projector, and Mr. Walters, if he is able, whatever questions you can ask, will answer.

MR. LeCHER: And this will take about forty-five minutes to an hour, approximately?

MR. FLYNN: I would estimate. It's difficult to -- I would estimate about an hour.

The first exhibit, which is on the easel, also, that will be marked is --

MR. SHOEMAKER: Do you want the lights out?

MR. FLYNN: Yes. However the system works, I'm not familiar with it.

That will be Exhibit 1; it's already been put on the easel.

(A copy of a document, entitled "Fair Game Doctrine," was marked as Exhibit No. 1, as of this date.)

MR. FLYNN: I've just marked, for the record, Exhibit 1, a copy of it, which is called the "Fair Game Doctrine," which an enlarged version appears on the board over there, to Which the witness has referred several times in his testimony.

Exhibit 2 is a -- the more extensive or complete version of the Fair Game Doctrine of some four or five pages. It comes right out of --

MR. LeCHER: Excuse me, Mr. Flynn.

Take the mike, so we can hear you in the back and, also, for the tape.

MR. FLYNN: Exhibit 2 is the complete Fair Game Doctrine, as it appears in the Green Volumes published by the Church of Scientology of California. All of these documents are copyrighted by L. Ron Hubbard. That will be marked as Exhibit 2.

Perhaps, if we could have the lights off -- or would that affect the camera?

(A copy of the complete Fair Game Doctrine was marked as Exhibit No. 2, as of this date.)

MR. FLYNN: There are pertinent portions of Exhibit 2 which I would like to bring to the Commission's attention, and Mr. Greene will read from his copy in front of him of the pertinent portions that appear on Exhibit -- on the projector.

MR. LeCHER: Identify yourself, please?

MR. GREENE: I'm Attorney Thomas Greene; I'm a co-counsel here with Mr. Flynn.

I'm reading from page three of the exhibit, the corporation's policy. The page we see on the overhead projector indicates, quote, "The homes, property, places, and abodes of persons who have been active in attempting to suppress Scientology or Scientologists are all beyond any protection of Scientology Ethics, unless absolved by later Ethics or an amnesty."

Page one, which is not on the overhead projector, of this same exhibit which has been introduced into evidence, defines a Suppressive Person or group, quote: "A Suppressive Person or group is one that actively seeks to suppress or damage Scientology or Scientologists by suppressive acts."

MR. FLYNN, If any of the Commissioners have any questions, you might make notes about this policy and where it appears in Scientology publications, the Volume number, and Mr. Walters can answer specific questions on that fact.

MR. GREENE: Again, that was Exhibit 2 that I made reference to.

Also, on page one of that exhibit, quote, "A Suppressive Person or group becomes Fair Game," close quote.

Suppressive acts are defined on page two of the exhibit. Their corporate policy defines the acts as follows, quote: "Proposing, advising, or voting the legislation or ordinances, rules, or laws directed toward the suppression of Scientology." Second definition, quote: "Testifying hostilely before state or public inquiries into Scientology to suppress it," close quote. A third definition: "Testifying as a hostile witness against Scientology in public," close quote.

MR. CALDERBANK: So, if you were a good Scientologist, you would lie if you were brought before a legislative hearing or criminal proceeding?

MR. WALTERS: Yes. Well, if you were a good Scientologist, you would not -- it is a suppressive act to appear before you as a hostile witness. So, to remain a good Scientologist, you would have to lie.

MR. CALDERBANK: Thank you.

MR. GREENE: Again, making reference to the same exhibit and reading from page four of that exhibit, the reference to disconnection, quote: "Disconnection from a family member" --

MR. FLYNN: Tom, perhaps, we could use a pointer so the Commissioners --

MR. SHOEMAKER: I got it.


MR. GREENE: Again, quote: "Disconnection from a family member or cessation of adherence to a suppressive Person or group is done by the Potential Trouble Source publically publishing the fact as in the legal notices of "The Auditor" and public announcements and taking any required civil action, such as, disavowal, separation, or divorce and, thereafter, cutting all further communication and disassociating from the person or group."

MR. FLYNN: Moving on to the next exhibit, which we will have marked as Exhibit 3, is a document, entitled "Attacks on Scientology," part of which also appears on the easel.

And if we could put page one on the projector.

(A copy of a document, entitled "Attacks on Scientology," was marked as Exhibit No. 3, as of this data.)

MR. GREENE: Making reference to corporate policy, which has just been marked as Exhibit 3, entitled "Attacks on Scientology," quote: "Anyone proposing an investigation of or an inquiry into Scientology must receive this reply and no other proposal. 'We welcome investigation into' -- parentheses -- '(mental healing or whatever it is attacking us)' -- close parentheses -- 'as we have begun one ourselves and find shocking evidence.' You can elaborate on the evidence we have found and lay it on thick, attacking the attackers only. Never agree to an investigation of Scientology, only agree to an investigation of the attackers."

Fifth, below that paragraph, the correct procedure as set forth, quote: "This is correct procedure: one, spot who is attacking us; two, start investigating them promptly for felonies or worse using our own professionals, not outside agencies; three, double curve our reply by saying, 'We welcome an investigation of them'; four, start feeding lurid blood, sex, crime, actual evidence on the attackers to the press. Don't ever tamely submit to an investigation of us. Make it rough, rough on attackers all the way."

The last sentence in the next paragraph: "Use their blood, sex, crime to get the headlines. Don't use us. I speak from fifteen years of experience in this. There has never yet been an attacker who is not reeking with crime. All we had to do was look for it and murder would come out."

The second page of that exhibit, if we could have that on the projector --

MR. LeCHER: Who wrote this? Who is the author of this?

MR. GREENE: This appears on page two at the bottom of the sheet, "The Founder, L. Ron Hubbard."

MR. LeCHER: This is the writings of L. Ron Hubbard?

MR. GREENE: And copyrighted by Mr. L. Ron Hubbard.

MR. BERFIELD: Is this policy in that green book?

MR. FLYNN: Not this particular one.

MR. BERFIELD: Well, I mean, one of the volumes that is set forth as being the --

MR. FLYNN: Let him -- he can answer that.

MR. WALTERS: This particular one has been changed and cleaned up. And you'll find that one in there. But there are many copies of the original one here, which is the one the Guardian's Office will always operate on.

MR. BERFIELD: But these policies, these corporate policies, are in these bound books?

MR. WALTERS: Yes. Well --

MR. FLYNN: Some aren't.

MR. WALTERS: -- all the general Scientology policies are in those. Guardian's Office policy is found nowhere, except in locked files at Fort Harrison or Los Angeles.

MR. CALDERBANK: So, what you're saying is the policies that the public can get a hold of may say one thing, but the policies that came out of the FBI raids, at cetera, ones that they actually go by are this?


MR. CALDERBANK: So, what we perceive and what actually goes on may be two different things?


MR. LeCHER: Commissioners, I wish you would refrain from speaking now, unless it affects the flow and the continuity of the evidence he is presenting. We can get back and ask the questions later. But if it's that important, just jump in anyway.

MR. GREENE: Again, directing your attention to page two of Exhibit 3, quote: "How to stop attacks. The way we will eventually stop all attacks from there on out is by processing the society as follows: one, locate a source of attack on us: two, investigate it; three, expose it with wide, lurid publicity."

If you drop down midway on that page, page two, quote: "Remember churches are looked upon as reform groups. Therefore, we must act like a reform group."

At the bottom of -- I believe it's at the bottom of this page or, perhaps, it's page three, the last page of this exhibit. If we could have that put on the overhead projector, you'll see that this policy was written by L. Ron Hubbard and copyrighted to him.

MR. FLYNN: Exhibit 4 is the document, entitled "Declare," involving a subject or particular person whose name has been whited-out to the Fair Game Doctrine. And 1 would suggest that the Commissioners might note, specifically, the date on this up in the upper right-hand corner, if Mr. Greene would point it out. And, also, if Mr. Walters could probably be specifically questioned about a document which alleged, at least, for public purposes, to cancel the Fair Game Doctrine and the date that Mr. Walters might recall it of when that public document said it was cancelled as opposed to the date that appears on the upper right-hand corner. You might make a note of that.

I would point out that the date, 8 June 1979, is when this particular individual was declared a Suppressive Person, and in the last sentence of the last paragraph the statement appears that he be subjected to the Fair Game Law of 23 December '65, which has been marked as Exhibit 2.

And Mr. Walters, at this point, I think, might want to clarify what I previously stated to you about a purported public cancellation of the Fair Game Doctrine.


Publically, there was a policy put out saying that this did not occur. As you can see, it does occur. By the way, this is here at Fort Harrison, which is Flag, and in '79 was here. And this is telling every Scientologist that they can now treat this person as Fair Game.

MR. CALDERBANK: How do you know that?

MR. WALTERS: Because it says it on it, Scientology and Scientologists and the Fair Game Law. He is not permitted in any org., given any training in any Scientology org. -- oh, the routing tells me.

MR. FLYNN: Right.

MR. WALTERS: It goes to FOLOs, all orgs., all missions, and Guardian worldwide. Every organization in Scientology will get this. Wherever this guy goes, he will be handled.

MR. LeCHER: Was he still a member?

MR. WALTERS: No. He'd either be a member, legally -- because he's still a Suppressive Person --

MR. LeCHER: Because he signed a million-year contract?

MR. WALTERS: No, because he's still stuck in Scientology.


MR. WALTERS: He is -- this is the handling they' re doing on him. He'll either be handled or he will admit to whatever they want him to admit and become a good Scientologist.

MR. LeCHER: He doesn't want to leave at this paint?

MR. WALTERS: No. He's -- this is why you do these things to these fellows. A normal person like you, you'd go to your lawyer.

MR. LeCHER: I see.

MR. CALDERBANK: What was that, Exhibit 3?

MR. FLYNN: That was Exhibit 4.

(A copy of a document, entitled "Declare," was marked as Exhibit No. 5, as of this date.)

MR. FLYNN: Exhibit 5 is a document called "Condition of Liability," and I'm going to refer Mr. Shoemaker, probably, about midway down the page, where it begins: "Deliver an effective blow to the enemies of the group, one that has been pretending to be part of, despite personal danger."

(A copy of a document, entitled "Condition of Liability," was marked as Exhibit No. 5, as of this date.)

MR. WALTERS: Line two, as far as talking to Mr. Berfield, when I said his son, if he's put in Liability, will either disconnect from you, sir, or he will strike a blow to you. And that's where it's written. It is policy ; it's not just a cute idea. He must do that. to you or he cannot stay in Scientology.

MR. LeCHER: Is that similar to the Eagleton affair?

MR. WALTERS: That's exactly what it is --

MR. LeCHER: What--

MR. WALTERS: -- in my opinion.

MR. LeCHER: -- leads to made up stories about Senator Eagleton?

MR. WALTERS: Yeah. Because we had -- we knew in GO files that he had --

MR. CALDERBANK: Psychiatric --

MR. WALTERS: Yeah, before. He had --

MR. CALDERBANK: Electroshock?

MR. WALTERS: -- electroshock treatment.

MR. FLYNN: Exhibit 6 is a multi-page exhibit from the Church of Scientology of California, Hubbard Communication Office, a policy concerning security checks about which -- which the witness testified about. And Mr. Greene will read from portions of that exhibit.

MR. GREENE: As Mr. Flynn explained to the Commissioners, when these documents are put on the overhead projector, you should examine the top of the document where it mentions, in this case, Hubbard Communication Office, Saint Hill Manor, East Grinstead, Sussex.

MRS. GARVEY : What's the date?

MR. GREENE: This is dated 3 February 1960.

Security check. I read the second sentence: "An E-Meter is better known as a lie detector and it's used to ascertain truth of background and conduct. The following points will be covered by the examiner: any criminal background, any Communist or subversive connection, spreading of slander concerning Saint Hill or its people, discouraging new employees by malicious lies, receipts of commissions on purchases for Saint Hill, overts against Dr. or Mrs. Hubbard. No staff at Saint Hill are exempt. No suspicion is necessarily attached to any person at Saint Hill. This is a security check. It is an effort to clear the air."

MR. CALDERBANK: Even though the date was '60, Mr. Walters, is this still being done, security checks?

MR. WALTERS: Yes, it is.

MR. SHOEMAKER: Mr. Walters, how can the Commission determine which policies, such as these -- certain of these that are older, whether they're still in effect or whether they've been changed in the process?

MR. WALTERS: If it -- if -- like, if that one was cancelled, a policy coming out expressly cancelling that would come out.

MR. SHOEMAKER: It would come out?


MR. CALDERBANK: And as you indicated before, that might not be truly indicative that it has been cancelled, such as, the Fair Game Policy?

MR. WALTERS: Right; right.

But these are all -- these are oldies. These are well studied by -- because I'm the type -- I'm the person who would give these security checks.

MR. CALDERBANK: And those policies are done? And every Scientologist --

MR. WALTERS: Every --

MR. CALDERBANK: -- has access to it, and it's followed at specific levels?

MR. WALTERS: Not every Scientologist. If you get in trouble, you'll get this.

MRS. GARVEY: By their definition of trouble.

MR. WALTERS: That's right, like, being here today.

MR. GREENE: I 'm going to read from page six of the security check, several questions, so if I could have page six on the overhead projector.

This page six refers to the same exhibit number. Exhibit 6, page six. These are a number of questions that are asked on a security check. Midway down: "Have you ever blackmailed anybody? Have you ever been black- mailed? Have you ever smuggled anything? Have you ever been in prison? Have you ever indulged in drunkenness? Have you ever done any reckless driving? Have you ever burgled any place? Have you ever embezzled money? Have you ever had anything to do with pornography? Have you ever committed arson? Have you ever been a drug addict? Have you ever peddled dope? Have you ever had any dealings with stolen goods? Do you have a police record? Have you ever been raped? Have you ever been involved in an abortion? Have you assisted in any abortions? Have you ever committed adultery? Have you ever practiced homosexuality? Have you ever had intercourse with a member of your family? Have you ever been sexually unfaithful? Have you ever practiced sodomy?"

Page seven and eight of the same exhibit follow with similar questions. Page eight of the exhibit sets forth three questions: "Do you have any overts on LRH? Have you ever had unkind thoughts about LRH?"

Again, for the Commissioners, these references "LRH" are L. Ron Hubbard and --

MR. BERFIELD: Leave that up there for a minute. Is this part of the information that you were talking about that was in the confidential document, this --

MR. WALTERS: Absolutely.

MR. BERFIELD: And the answers that you give to that are what they use to -- if I can use the word -- blackmail, or to --

MR. CALDERBANK: Extort you.

MR. BERFIELD: -- extort you --

MR. WALTERS: Right. Coercion.

MR. BERFIELD: -- coercion, or what have you.

MR. WALTERS: This --

MR. BERFIELD: Well, what happens if you don't answer all of this? Do they --

MR. WALTERS: Well, I don't know if you have it here, there's drills on how to handle people that don't answer them. I mean, a guy is trained to get an answer. If that person doesn't answer, he'll end up in those Ethics conditions and he'll be sweeping the floor, and he will not be allowed to leave the building until he goes back there and answers these questions.

MR. LeCHER: Is seventy passing, or is it on a curve or what?

MR. WALTERS. Well, you know, a funny thing about it is you know the people who may have had some indiscretions in their lives, you know, will actually come up with answers to these things, you know, like, "Have you ever taken money for giving anyone sexual intercourse? A woman might admit -- and actually will receive some benefit from feeling good about saying that, you see. And when she does, they will expound on that and get more of it.

But if she ever goes to leave or cause a flap, then, this is given to the Ethics Officer or given to the Guardian's Office.

Somebody earlier asked where do they get drugs and stuff? These security checks tell you who takes drugs, who doesn't, who burglarizes. Recruitment is very easy.

MR. LeCHER: Do you ever see your grade?

MR. WALTERS: No. They come to us: I was a CS. It's a technical action; there's no grade on this.

MR. LeCHER: No. Does it say "Passed" and "Lied" --

MR. WALTERS: All I care as a CS is "Did we get everything? Is the guy critical of Scientology?" If he's critical, he goes back in the room. If he's not critical anymore, then we let him out.

MR. BERFIELD: This document is a corporate document?

MR. WALTERS: Absolutely.

MR. BERFIELD: And it's made out on everyone?

MR. WALTERS: Everyone that needs it. If you are critical of Scientology, you will get it.

MRS. GARVEY: This -- they're asked these questions while they're attached to an E-Meter --


MRS. GARVEY: -- which, supposedly, they think is a lie detector?


MR. LeCHER: Is it?

MR. WALTERS: A lie detector? It is a rough form of a lie detector in the sense that it's biofeedback. It does react to what you do. But you are led to believe that it tells if you're lying or not.

MR. LeCHER: Can you lie to pass this to get out of the room?

MR. WALTERS: Well, technically, I would say yes, because -- if you -- if you were an honest person who stole twenty dollars, if I asked you about it, you would normally react to it, wouldn't you? You'd have that feeling of oh- oh. If you were a total criminal, you could sit and go through this and not have any trouble.

You've got to remember these kids are brainwashed into telling Ron everything. If you don't, he'll get it all.

MRS. GARVEY: And this is part of the counseling session for --

MR. WALTERS: That's right. And he thinks that this will -- nobody will ever see this. He's encouraged to -- "Who did you have sex with? Tell me about it. What did you do?" And --

MR. LeCHER: I asked that we refrain, but I think I'm going to have to rescind on what I said, because, if you wanted to ask something specifically to this in a half hour, we're going to have to take another twenty minutes to find it.
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Part 5 of 6


MR. LeCHER: So, go ahead and ask questions of the witness or the consultant, but try and make it brief.

MR. CALDERBANK: Can you give me a specific example? Was this ever used on you where they told you to pay up, to stay in, or they would expose confidential files?

MR. WALTERS: Yes. On --

MR. CALDERBANK: Specifically --

MR. WALTERS: -- 1978, at Celebrity Center, I was a CS, the top technical person. The Guardian's Office came in and sec checked everybody on staff.

MR. CALDERBANK: But did they use that information to make you do something?

MR. WALTERS: Not me, no.

MR. CALDERBANK: Did you ever participate in something like that? 1f so, when?

MR. WALTERS: Sec checking myself?

MR. CALDERBANK: Using it to stop someone from --


MR. CALDERBANK : -- leaving or paying --

MR. WALTERS: No, I didn't do it. I gave it to the Guardian's Office and they'd do it.

MR. CALDERBANK: Do you know that for a fact?


MR. FLYNN: Just for the record, there'll be many, many exhibits of such actual practices.

MR. LeCHER: Okay. Thank you.

MR. FLYNN: Mr. Hatchett?

MR. HATCHETT: Mr. Walters --

MR. WALTERS: Yes, sir.

MR. HATCHETT: -- can you describe to me how the E-Meter is actually placed in contact with the human body or the counselee?

MR. WALTERS: The person holds two soup cans that the labels have been taken off; they're silver. And they hold the two soup cans.

MR. HATCHETT: In their hands?

MR. WALTERS: In their hands. And they are connected to wires to the E- Meter.


MR. LeCHER: What is this -- go ahead, I'm sorry.

MR. HATCHETT: Is this battery --

MR. WALTERS: It is battery operated, yes.

MR. HATCHETT: All right.

So, a person's nervous system is the key for a counselor to make his interpretations for him --

MR. WALTERS: That's right.

MR. HATCHETT: -- is that right? Reaction of blood --


MR. HATCHETT: -- protein or muscles?


MR. HATCHETT: All right.

MR. WALTERS: It attaches -- it operates just like a lie detector.

MR. LeCHER: With all the money they had, why didn't they get a real lie detector, rather than use two soup cans and string?

MR. WALTERS: Now, for two reasons: one, the thing that they made, probably, cost them about twelve dollars to make, and we go and buy them at $250.00 apiece; the second reason is Hubbard is the sale source of everything. He believes that everything that you use, the police, or anything is totally ten years behind. He tells us everything he's got comes from the space planets, so it's always better.

MR. LeCHER: It just seems more believable if you had a real one than two soup cans.

MR. CALDERBANK: I guess -- in case anyone would say that this is part of their religious doctrine, the E-Meter, you're also saying that this is used in auditing scientifically, which is held out to you as a scientific thing that was researched?

MR. WALTERS: Absolutely.

MR. CALDERBANK: Was this one of the things that: you were guaranteed that you paid money for?

MR. WALTERS: Right. There' s no religious connotation to this at all.

MR. CALDERBANK: And this is also used for some of the activities for --


MR. CALDERBANK: -- extortion?

MR. WALTERS: It's a totally investigative thing.

MR. CALDERBANK: Thank you.

MR. LeCHER: All right.

Mr. Flynn?

(A copy of a multi-page document concerning security checks was marked as Exhibit No. 6, as of this date.)

MR. FLYNN: The next exhibit is an exhibit, entitled "organization of a PE Foundation." We'll mark that as Exhibit 7, and if you could put page two of that on the projector, please.

(A copy of "organization of a PE Foundation," was marked as Exhibit No. 7, as of this date.)

MR. GREENE: Page two of that exhibit reads -- at the top of the exhibit -- second sentence: "Never let anyone simply walk out. Convince him he's loony. He doesn't gain on it, because that's the truth."

MR. FLYNN: Exhibit 8 is a policy, HCO policy letter of 15 August 1960, under the heading "Department of Government Affairs." Put page two of that on the overhead projector, please.

(A copy of an HCO policy letter, dated August 15, 1960, under the heading "Department of Government Affairs," was marked as Exhibit No. 8, as of this date.)

MR. GREENE: Reading from page two, third paragraph: "In the face of danger from governments or courts, there are only two errors one can make: a, do nothing" -- third paragraph down: "In the face of danger from governments or courts, there are only two errors one can make: a, do nothing and b, defend. The right things to do with any threat are to: one, find out if we want to play the offered game or not; two, if not, to derail the offered game with a feint or attack from the most vulnerable point which can be disclosed in the enemy ranks, three, make enough threat or clamor to cause the enemy to quail; four, don't try to get any money out of it; five, make every attack by us also sell Scientology: and six, win.

"If attacked on some vulnerable point by anyone or anything or any organization, always find or manufacture enough threats against them to cause them to sue for peace."

MR. WALTERS: I just want to say something here. This is stuff that we've studied. I hope that leaves some credibility to some of the things I've been saying.

I -- policy is to investigate you people. If you can't find anything, then, you plant the dope on them. You either find or manufacture. The crimes must be attributed to you people. If they're not, people at Fort Harrison will wonder: "You must be decent people." The only thing that keeps people at Fort Harrison giving the money is Scientology tells them that you are criminals. And if they can't find it, they will manufacture it.


MR. WALTERS: And it's there in policy.

MR. CALDERBANK: Just to make it perfectly clear: You're saying that this is well understood in the GO and in the high tech levels, that this encourages or induces or condones criminal activities such as burglary?

MR. WALTERS: Sir, this is not only understood; this is studied and clay demoed and diagrammed until you have it down pat.

MR. CALDERBANK: And of all the examples you gave of extortion and burgling and casing, this policy is something that induced you to do it?

MR. WALTERS: Yes. This is one of many. You've only hit the surface so far.

MR. CALDERBANK: Does this encourage -- do you get points for this?


MR. CALDERBANK: And this runs throughout the policy on government --


MR. FLYNN: The next exhibit, number nine, is an example of an SP list.

(A copy of an SP List was marked as Exhibit No. 9, as of this date.)

MR. FLYNN: And you'll note on that list there are various people who have been assigned "Freeloaders" in various places. And that corroborates the testimony of Mr. Walters with regard to freeloader debts.

If you have any questions, he could probably give you a twenty-minute address on that subject alone.

MR. WALTERS: Mike, let me just say -- to lend validity to this, Al Adcock, I know him; Liz Bubke, a staff member, you know. Going down the line, Culpepper, Gary Davis; Gary Davis was an auditor and left. This is what they did to him, they gave him a freeloader's letter. John Digre ended up paying off all his freeloader's debt and came down here to Clearwater, I believe.

John Gallagher I know; Charlie Groff, a long-time Scientologist, who -- they won't allow him back on until he pays all the money they want. Lynn Hearn, a long-time Scientologist, still paying off in order to get back in. These are all people I know and --

MR. SHOEMAKER: Mr. Walters, would you -- do you believe that there are such lists now that are current, 1982?

MR. WALTERS: Absolutely. They're listed -- they're according to tech. They'll come out this month right here in Fort Harrison. And if you had any authority to have them give it to you, they would give it.

MR. SHOEMAKER: Who would this go to, Mr. Walters?

MR. WALTERS: It comes from the Division 3, which is the financial division, and it's issued through an Ethics order. You see at the top it says, "HCO Ethics Order." This is to tell that it will be published.

It is given -- sent to them individually. That's why it says, "To those concerned," because, when a guy sees this, he knows he's got to pay to get back in. It is also sent to all the Scientologists in the org. so that we know not to communicate with these people. They are Scientologists not in good standing.

MR. FLYNN: As the hearings progress, the legal significance of the freeloader's debt, in connection with other documents, which I won't presuppose, will become apparent.

MR. CALDERBANK: Will you also show that this freeloader's debt has, within the last year, been acted upon, or other people -- this is 1972.

Can you give a specific example of one for a freeloader's debt that has occurred in this year? Or will someone come forward and describe it?

MR. FLYNN: There will be a great deal of evidence on the subject.

MR. LeCHER: In our discussion with you here, if we're asking questions that will be covered more fully later by the witness, just let us know and we will not dwell on that subject or aspect at this time.

MR. FLYNN: Exhibit 10 is HCO policy letter, 5 April 1965, and the specific portion that I am referring to is going to be the -- what they call Blown Student Doctrine about which Mr. Walters testified concerning going and picking up a student.

(A copy of an HCO policy letter, dated April 5, 1965, referring to the Blown Student Doctrine, was marked as Exhibit No. 10, as of this date.)

MR. WALTERS: Blown -- blow means to try and leave the premises.

MR. GREENE: I'll read that middle paragraph: "The Blown Student. The student, however, may have blown off the premises or he has gone entirely. On a minor, momentary blow, where all it took was the student's auditor and a few words to get the student back, the matter is not a real blow. But where a student leaves the premises in a blow or doesn't turn up for class, the tech division must send an instructor and the student's auditor over to HCO Department of Inspection and Reports, and HCO representatives should go with them at once to pick up the student. The student is brought back with as little public commotion as possible and the procedure of HCO check-out, et cetera, is followed as above."

MR. LeCHER: All right.

Can this happen to any of these kids that walk up and down the street with the blue pants and the white shirts?


MR. LeCHER: If they want to blow, they're brought back --

MR. WALTERS: Well --

MR. LeCHER: -- by the auditor forcibly and the inspector?

MR. WALTERS: The person's auditor will have --

MR. LeCHER: Do these kids -- any of these kids just keep walking that are walking up and down the street?

We have these young -- they all appear to be young. They walk between the various buildings in the uniform of the day which is white and blue. They can't just keep walking, then. These kids can be picked up by these auditors?

MR. WALTERS: If they blow. If they're going to lunch and they do not come back from lunch, somebody will go get them.

MR. LeCHER: They can't walk to the bus station and get a bus and go back home to Miami?

MR. WALTERS: Well, they could if the org. didn't know about it.

MRS. GARVEY: Would they --

MR. LeCHER: But if they did, would the auditor go to Miami and pick them up and return them?

MR. WALTERS: Those instructions are there. Those instructions are followed explicitly. If you don't follow them -- if I -- I'm the technical. If I don't do what that says, I'm an enemy. I'll tell you, I'd go get the guy.

MR. CALDERBANK: Did you ever physically bring someone back? You were an auditor. Did you ever physically bring someone back?


MR. CALDERBANK: Against their will?

MR. WALTERS: Yes, in Las Vegas.

MR. CALDERBANK: Did you ever see other people do it? Is it a common occurrence?

MR. WALTERS: I wouldn't say it's common, it's not a daily occurrence.

MR. CALDERBANK: But it is done?

MR. WALTERS: Yes. It has to be done. You are not allowed to leave unhappy, upset, or you might go to the authorities.

MR. CALDERBANK: Even if it's against their will? physically, you restrain them or bring them back?

MR. WALTERS: Absolutely.

MR, LeCHER: Okay.

MR. HATCHETT: You know, that brings another question in my mind. What if the struggle gets so intense you can't get him back? You tell me this has to be done. Not to me. I'll tell you I'm not coming back. I would proceed to resist you or run or duck or hide thereafter.

MR. WALTERS: Good question, but Ron Hubbard is a very clever man, If you look at line -- second paragraph of the Blown Student, the second line: "The tech division must send an instructor and student's auditor." In other words, the auditor knows this stuff inside out. Remember, he's the guy who knows who he's doing what to who and blah, blah, blah, blah. He will remind him of this, and he will come back.

If he does not come back -- policy says to do it with as little public commotion as possible -- then, you leave him there, because you cannot create a flap yourself, otherwise, you'll be in trouble. Then, you give it to the Guardian's Office. See, the tech failed. Now, you give it to the Guardian's Office and they'll handle it.

MR. BERFIELD: Mr. Walters, this one question that I asked you this morning: In your own appraisal and own thoughts, when you were bringing somebody back against their own will, you didn't look upon that as being something close to kidnapping?

MR. WALTERS: Well, I never even looked at it from a legal point of view, sir. I looked at it that the man was upset, that he was confused, that he had probably been talking to Suppressives or the police or something, and we had to get him back to save him. I mean, I believed in what I was doing.

MR. CALDERBANK: There is a policy of restraint that defines it as -- that you can bring these people back, either morally, using the auditing information, or physically?

MR. WALTERS: I had to bring them back. If I don't, I failed.

MR. CALDERBANK: But that's lined out in policy called restraint -- the definition of restraint?

MR. WALTERS: Yes. There's more to come.

If you --

MR. CALDERBANK: I've noticed the outline.

MRS. GARVEY: I think what Mr. Walters is saying -- if you read the third and last paragraph, if they can't get the student back, they blame the auditor.

MR. WALTERS: That's right.

And then, that goes to the Guardian's Office --

MR. SHOEMAKER: The Guardian's Office --

MR. WALTERS: That's right.

MR. CALDERBANK: And the auditor becomes an enemy to --


MR. WALTERS: That's exactly right. And I get sec checked for why I did not bring him back. It's not a winning game.

MR. CALDERBANK: You're damned if you do and damned if you don't.

MR. FLYNN: The next exhibit is entitled "Level Zero Checksheet." They're both written by L. Ron Hubbard.

(A copy of a document, entitled "Level Zero Checksheet," was marked as Exhibit No. 11, as of this date.)

MR. GREENE: Reading from page 54 of Exhibit 11, Mr. Hubbard's book: "The defense of anything is untenable. The only way to defend anything is to attack. If you ever forget that, then you will lose every battle you are ever engaged in, whether it is in terms of personal conversation, public debate, or a court of law. Never be interested in charges. Do yourself much more charging and you will win. And the public, seeing that you won, will then a communication line of the effect that Scientologists win. Don't ever let them have any other thought than that Scientology takes all of its objectives."

Yet, on page 55: "The purpose of the suit is to harrass and discourage rather than to win. The law can be used very easily to harrass. And enough harrassmant on somebody who is simply on a thin edge anyway, well-knowing that he is not authorized, will generally be sufficient to cause a professional to cease. If possible, of course, ruin him utterly."

MR. SHOEMAKER: Mayor and Commissioners, it's interesting, I received in the mail today a copy of an item, apparently from the Church, that says, "Demands, demands, demands" on it, anonymously sent, and I copied it for you today, which relates specifically to this --

MR. LeCHER: When we hired you, or at least we considered hiring you, and we spent $4,950.00, they were in front of City Hall passing out almost posters offering $4,950.00 leading to the arrest and the conviction of any dishonest politician. Well, that almost had my name on it or my colleagues on it for public official.

And I'm sure that everyone on this bank may have at one time had an enemy that in the city employ -- there must be sixteen hundred of them. But we couldn't have got to them or would want to do that to them, so I can just see how it's affecting our own lives as recently as when we originally contacted you in your office. I can see it falling into place.

MR. CALDERBANK: In addition, when we originally contacted Mr. Flynn, they also passed around a -- maybe you would like to comment on this, Mr. Flynn -- version of your background, your credentials, your purported disbarment or transgressions that you made that put you in a very incredible light.

Was there any truth to that? Could you go into that so that the people here know that this happened within the last five, six months? From your own personal experience.

MR. FLYNN: Well, I'm not under -- I'm not a witness, and it would probably be inappropriate. The degree of harrassment, the numbers of lawsuits against myself and my colleagues, the Bar complaints that have been filed against us, the defamatory statements that have been issued to the press against us, and the three years of what I can only categorize unmerciful harrassment will someday be a matter of a court record and will be litigated.

MR. LeCHER: All right. Thank you.

Continue, please, sir.

MR. FLYNN, The next exhibit is a document, entitled "Introduction to Scientology Ethics," a xeroxed copy from the book that was referred to, and Mr. Greene will read from a portion of it.

(A copy of a document, entitled "Introduction to Scientology Ethics;" was marked as Exhibit No. 12, as of this date.)

MR. GREENE: This exhibit, Exhibit 12, is from a book by L. Ron Hubbard. On page 49, he sets forth high crimes which are suppressive acts, parentheses, below that title.

"A suppressive Person or group is one that actively seeks to suppress or damage Scientology or Scientologists by suppressive acts. Suppressive acts are acts calculated to impede or destroy Scientology or a Scientologist and which are listed at length below."

Below, listed as number one, "Proposing, advising, or voting for legislation or ordinances, rules, or laws directed towards the suppression of Scientology; two, testifying hostilely before state or public inquiries into Scientology to suppress it; three, public statements against Scientology or Scientologists but not to committees of evidence duly convened."

You will recall a "committee of evidence" is a Scientology term.

"Seven, testifying as a hostile witness against Scientology in public; eight, being at hire of anti-Scientology groups or persons," and so forth.

MR. CALDERBANK: On number nine, "Infiltrating Scientology," I can't understand why it would be a crime to infiltrate Scientology. However, it's well documented they infiltrated the former mayor's staff, when' he ran for election; they infiltrated The Clearwater Sun, the District Attorney's Office, Attorney -- Mr. Russell.

Is this -- is this common? They say that this is a crime to them, but, yet, they, as policy, go out and do it. Why is that?

MR. WALTERS: Because these are really Hubbard's fears is what I've finally come to realize. These are Hubbard's fears. And he uses his fears and his demented mind to attack other people then. And, obviously, number nine is in there because he would not want people coming into Scientology, like an IRS agent, and find out where the money goes, et cetera. That would be a high crime.

MR. LeCHER: Next.

MR. FLYNN: Exhibit 13 is a document, entitled "TRL -- Intelligence Specialist Training Routine." This particular document may have some -- a great deal of importance to this Committee if the Scientologists produce witnesses.

(A copy of a document, entitled "TRL Intelligence Specialist Training Routine," was marked as Exhibit No. 13, as of this date.)

MR. GREENE: "Intelligence Specialist Training Routine, TRL. Purpose: To train the student to give a false statement with good TR 1. Train the student to outflow false data effectively. Position: Same as TR 1.

"Commands: Part one: Tell me a lie. Command given by coach.

"Part two, Interview Type 2 WC by coach.

"Training Stress: In part one, coach gives command, student originates falsehood. Coach flunks for out TR, for TR 1 or TR O. In part two, coach asks questions of the student on his background or subject. Student gives untrue data of a plausible sort that the student backs up with further explanatory data upon the coach's further questions. Coach flunks for out TR 0, TR 1 and for student fumbling on question answers. Students should be coached on a gradient until he or she can lie facilely.

"Short example: Coach: Where do you come from? Student: I come from the Housewives' Committee on Drug Abuse. Coach: But you said earlier that you were single? Student: Well, actually, I was married but am divorced. I have two kids in the suburbs where I am a housewife. In fact, I'm a member of the PTA. Coach: What town is it that you live in? Student: West Brighton. Coach: But there is no public school in West Brighton? Student: I know. I send my children to school in Brighton, and that's where I'm a PTA member. Coach: Oh. And who is the chairman there?" Et cetera.

MR. BERFIELD: Again, is this in the procedures manual?

MR. WALTERS: No. These are Guardian's Office technology. That would not be in public volumes.

MR. CALDERBANK. How do you -- how did you obtain this document for submission as an exhibit?

MR. FLYNN: This particular document comes from documents that the Federal Bureau of Investigation seized in July 1977.

We'll go on with the next one. The document is entitled "Re: Intelligence."

(A copy of a document, entitled "Re: Intelligence," was marked as Exhibit No. 14, as of this date.)

MR. GREENE: This is Exhibit 14, "Re. Intelligence. The following are possibilities for collecting data: one, infiltration; two, bribery: three, buying information; four, robbery: five, blackmail. The last two are, of course, illegal.

"Infiltration covers two methods: someone joining the enemy without the enemy's knowing and someone disaffecting, presumably, to join the enemy. For giving the enemy false data, you can do the following: one, use infiltrator to spread alarm and false data; two, send out false data purposely."

MR. CALDERBANK: A scenario: The upcoming election for City Commission or the recent election for Mrs. Garvey or Mr. Berfield. Do you mean to tell me that it would be not only within the realm but a distinct possibility that not only false data would be disseminated to do harm or take votes away from these two?

MR. WALTERS: Yes. I can tell you in the tech department what will probably occur. That, by the way, involves Mo Budlong.

MR. CALDERBANK: Wasn't he indicted?

MR. WALTERS: Yes, he was.

As far as your elections in this town, a girl will go around to citizens and tell she's writing a book. And she will say, like, "I'm writing a book about Clearwater's great day. Are you aware of Mr. Calderbank?" "Yeah." And somewhere, going into that, will mention: "Do you know about the problems he had in the last place he lived?" "No, I didn't." "Are you not aware that his wife's pregnant?" "No, I didn't." "Well, that's okay."

And just do a cycle interview, you go from person to person. It may sound nutty, but it's very effective. Before you know it the citizens will all be saying to themselves, "Did you hear what I hear about Calderbank?"

MR. CALDERBANK: Would they encourage passing out either illegal pamphlets or try to raise some kind of conflict between the other Commissioners?

MR. WALTERS: Yes. In fact, they will have members send dead agent letters to different ones of you. Person in Ethics will do this.

MR. LeCHER: Okay. We're trying to move right along here. We do have a long way to go.

MR. FLYNN: Along those lines, I would point out that attached to the report that we filed with the city are, perhaps, four or five thousand documents. And we have simply selected a few that are just barely representative. And these documents are on file with the City of Clearwater and have been since September of 1981.

And what we attempt to show you is soma of the documents pertaining to some of the activities. But there are literally thousands of these.

Some of the direct policies with regard to burglary and larceny will be coming up, and we will try to show it in a little more detail on the issue of policy. But many of these documents -- there's just so many of them that it's difficult to get them all before the Commission in this proceeding.

The next document is Exhibit 15, and it's a document called "Re: Bs and Es." And you'll notice in the upper -- excuse me -- in the upper left-hand corner the people that Mr. Walters will describe or. the agencies to whom it goes within the Church, on which, I might suggest to you, bear on the factor of corporate policy.

(A copy of a document, entitled "Re: B and Es," was marked as Exhibit No 15, as of this date.)

MR. WALTERS: The -- those are the top leaders of the Church: Deputy Guardian 1, U.S. Communicator; Deputy Guardian 1, U.S.; Deputy U.S. communicator; Deputy Guardian, U.S., which is in Los Angeles. I don't know what GDA -- GDA. Anyway, that's worldwide, which is in England; that's Communicator. Guardian Worldwide, which is Jane Kember; Deputy Guardian 1, Worldwide, which is in England; Deputy Guardian 1, Worldwide is in England; Deputy Guardian 1, Worldwide -- Assistant Deputy Guardian; U.S. Director; Secretary, Worldwide, again in England; Bureau 1 Director, U.S., that's in Los Angeles.

MR. GREENE: Reading from Exhibit 15, "Re: B and Es. When Dick first wrote you on this subject, a few of us in the office have been comparing notes and smatterings of legal knowledge on this subject with the end result of deciding that we needed to research the differences between breaking and entering and unlawful entry. On searching through legal dictionaries and various legal sources, I discovered in West's California Penal Codes," parentheses, "(which except for varying technical differences by state as representative of the basic U.S. statewide laws on this subject)," close parentheses, "that the technical differences between the B and E and unlawful entry become relatively meaningless when it can be seen that a large portion, if not the majority, of our high priority successful collections actions fall into the category of second degree burglary, which is a felony.

"Some of our successful collections actions in the recent past and present, which falls into this category are past GO 1222, GO 1300, GO 1361, GO 1344, GO 1080, YOKO, DEA, present GO 1361, GO 1344, DEA. This is not an exhaustive rundown, just enough to demonstrate the importance."

The last sentence: "From my study of the codes and from my knowledge of how the collections actions are done, one of the key points in solidifying the burglary commission is basically the theft of xerox paper and xerox machine use of whatever is approached. Without this theft, then the distinction between B and E and unlawful entry would become important. It could mean the difference between a felony and a misdemeanor."

MR. FLYNN: The next document is a document calling "Vetting Hat Write Up," which Mr. Walters referred to in his testimony. It will be, for the record, Exhibit. 16.

(A copy of a document, entitled "Vetting Hat Write Up," was marked as Exhibit No. 16, as of this date.)

MR. GREENE: Exhibit 16, the "Vetting Hat Write Up," the purpose, as set forth on the document, quote: "To clean USB 1 files of legally actionable evidence against the GO and its personnel." Then, set forth is a definition of evidence: "Something legally presented before a court, as a statement of a witness and object et cetera which bears on or establishes the point in question, distinguished from testimony and proof. The valuable final product: the file is free of illegal evidence.

"Steps taken to vet the file cabinet, drawer, or box: one, take one file folder at a time to vet from a bunch of folders; two, scan through each particle in the file and vet each one as it comes up; a, using a razor blade, cut out all parts of reports written by us that would indicate something illegal was happening, already did happen, or was being planned: b, if the particle is then so cut up that it is impracticable to have in the files, staple it to a larger piece of paper and stick it in the files; c, if, in order to properly vet a particle, some of the data of the report is lost, write up the data on a separate sheet and shred the first report. Make sure to note the date and originator, et cetera, of the origin." And "d, if the report is an actual operation report and not just an account of covert data collections, do not vet the report. Rather, write the data down that is in the files, if applicable, and send the full report containing actual ops actions to Ops."

Page two of this same exhibit, midway down the page: '''Now, the details of what you vet. One, mentions or the ordering of a B and E; two, evidence that anything was stolen by one of our guys. This does not mean someone like PC saying he stole something; this means us saying we stole something.

"Three, lying similar to 'Here are the docs we got in our usual way late last night'; four, implications of casing, including keeping checks on schedules and working hours, as well as locks on doors, et cetera; five, implications of posing as a government agent; six, evidence of tapping phone lines or an illegal taping of conversations; seven, mentions of harrassment of an individual, although not necessarily a full operation; eight, any evidence of bribery; nine, any mentions of recruitments of FSMs to be any kind of an agent. This is solicitation and a crime.

"Ten, also vet wordings like 'This will get him' or 'Let's wipe him out' or 'This will be good for dead agenting' or 'We are planning a covert op on him to handle him' or 'This will strengthen our attack on him'; eleven, any mentions of entrapment, setting up someone to commit a crime either directly or indirectly."

MR. FLYNN: The next exhibit, number 17, will be "Re: Red Box" --

MR. SHOEMAKER: Could I ask a question of what the date of this particular exhibit was, number 16?

MR. FLYNN: 9 March '75.

MR. LeCHER: We only have a few more to go, ladies and gentlemen, and then we'll conclude with any questions you may have of the consultant or the witness. And then we will take a very short break and allow -- and then Mr. DeWolfe will be here.

(A copy of a document, entitled "Re: Red Box," was marked as Exhibit No. 17, as of this date.)

MR. GREENE: This exhibit has been marked as Exhibit 17, and it refers to Red Box. If I could have page two placed on the overhead projector, first, we'll see how Red Box Data is defined by the corporation.

"Red Box Data Information Sheet" appears at the top of this page two. "One, what is Red Box Data? A, proof that a Scientologist is involved in criminal activities; b, anything illegal that implicates MSH or LRH; c, large amounts of non-FOI" -- which, I would suggest, is Freedom of Information -- "docs; d, operations against any government group or persons; e, all operations that contain illegal activities; f, evidence of incriminating activities; g, names and details of confidential financial accounts.

"Two, Where is Red Box Data kept? A, out-of-date material or finished cycles that can be shredded should be; b, large amounts of Red Box Data that is not needed for day-to- day function and cannot be destroyed is located with all our non-FOI docs and can be called for via CIC, c, small amounts of data that must be kept on hand due to security and frequent use is to be kept in a briefcase locked up and is to be marked.

Finally, "three, How is Red Box Data kept on the B 1 premises cared for? A, this data will be picked up and carried out of the building by owner immediately upon notification of raid, search warrant, et cetera; b, persons carrying this data, as few as possible, will leave the premises and only return when they have called in and received an all clear."

MR. CALDERBANK: Tom, will you describe the B 1 group as it is defined or read and, specifically, what it does in the GO organization, Guardian Office organization?

MR. WALTERS: B 1, as I remember, is the Intelligence Bureau of the Guardian's Office, now called Information.

MR. CALDERBANK: What's their purpose?

MR. WALTERS: Their purpose is to investigate and ferret out the enemy, expose, or, if need be, create or manufacture evidence against the enemy.

MR. FLYNN: I would also point out at this point, that, when the FBI seized some eighty thousand documents from the Church of Scientology in July 1977, they missed by two days obtaining any Red, Box Data. All the Red Box Data that is referred to in this exhibit was not seized, it was --


MR. FLYNN: -- missed by the FBI.


MR. FLYNN: Because they didn't know its location at the time. And that's a matter of court record.

MR. CALDERBANK: I'm intrigued that not only do they have policies that would condone criminal activities and give points for successful criminal activities being carried out, but they also have a policy that they participate in that covers up criminal activities by members.

Is this another policy that they utilize day in and day out?

MR. WALTERS: Yeah. That's standard Guardian's Office function.

This is a lot -- in the front of this book, you'll read all about how nice it is to be good. But this is what occurred.

MR. CALDERBANK: Let's forget about it a minute and let's forget about doctrines. This is conduct. This is the conduct of the policies --

MR. WALTERS: This is all --

MR. CALDERBANK: -- that they induce people to do?

MR. WALTERS: This is -- this says burglary, criminal actions by a group, planned, executed --

MR. SHOEMAKER: Mayor and Commissioners, that particular letter is dated the 25th of March 1977.

MR. LeCHER: As far as you know, it is still going on now. I have had conversations with Scientologists, not recently but certainly within the past year, who've said that they no longer do these things.

That's -- again, I'm going to ask you the same question: Do they still do these things? Do they still act this way or is this ancient history that dates back to 1975 or '76?

MR. WALTERS: Well, I'd put it like this: I'm not here in Clearwater, so I can't tell you specifically. But what I'm talking about here today is the hallmark of Scientology. It is the technology of Scientology. For them to survive, it must be done.

MR. CALDERBANK: When was the last time that you saw these policies carried out? What was the date; what was the time?

MR. WALTERS: I've seen them all through '70, '71, all the way on up to '78, '79.

MR. CALDERBANK: And you --

MR. WALTERS: I had Cooper -- Don Cooper, one of their intelligence agents, who's now down here in Clearwater -- stole things out of my house that showed up at the lawyer.


MR. WALTERS: This was done -- oh, the lawyer showed it to me two months ago at the deposition.

MR. CALDERBANK: So, you've had actual, personal involvement and know these things are happening up to two months ago?

MR. WALTERS: Absolutely.

I saw them then and participated in them; now, they're being done to me. There is no change in this group at all.

MR. LeCHER, One more question: What would happen if, as of tomorrow morning, Scientology, the Church of Scientology, said, "We will stop all these dirty tricks; we will rewrite our literature and we will act like any other organization that is in business, and we will no longer -- not to mention religion, I don't want to bring that into it -- we will no longer engage in these tricks and we will let Scientology fall or rise on its own merits and its teachings"?

MR. WALTERS: If they said that?

MR. LeCHER: Yes.

MR. WALTERS: All right. Well, they're going to say this. PR will -- they're already writing it right now. To me, it wouldn't mean anything. I've been --

MR. LeCHER, Well, what if they did, indeed, do that? Would Scientology still be as --

MR. WALTERS: I will --

MR. LeCHER: -- powerful as it is?

MR. WALTERS: I'll tell you what, I'll invite them to invite me to Fort Harrison, and I will be glad to give a lecture to all Scientologists there now. And if they can confront what I say and want to remain at Fort Harrison, we can end the problems.

I extend -- Scientology talks about communication and good will. They can come and see me; they don't have to burglarize my home. They can come and see me any time.

I will be glad to go to Fort Harrison tonight and talk to all of the Scientologists.

MR. LeCHER: What I'm really asking is: Can Scientology succeed if they no longer use the enemies list and attack the attacker and all these things that we have seen in the documents?

MR. WALTERS: But then you wouldn't have Scientology.

MR. CALDERBANK: In other words, you're saying --

MR. LeCHER: Well, then, what would you have?

MR. WALTERS: I don't know what you'd have. If you wouldn't have the cult of Scientology, you'd probably have something new starting. I don't know.

See, Scientology isn't all bad. If it was, you wouldn't have decent people entering it.

MR. BERFIELD: Yeah, but if you rewrote these articles, you'd almost have to rewrite most of the ones that you were talking about involving fraud and misrepresentation and everything else.

MR. WALTERS: You'd have to rewrite almost eighty percent of Scientology policy and, probably, seventy percent of the tech.

MR. BERFIELD: So, what -- then, what would happen to their income?

MR. WALTERS: They wouldn't have an income.

MR. CALDERBANK: You're saying that these policies form a fabric that is interwoven over, perhaps, seventy to as great as eighty percent of all their activities and conduct?


MR. CALDERBANK: And these policies call for criminal and fraudulent activity, which you have given examples of?

MR. WALTERS: To defeat the enemy.

MR. CALDERBANK: And if that means casing, burglarizing, manufacturing evidence, extortion, kidnapping --

MR. WALTERS: Yeah. I mean, you've seen --

MR. CALDERBANK: I'm just giving back to you the examples that you've given me.

MR. WALTERS: Absolutely.

MR. HATCHETT: If I hear you correctly, Mr. Walters, you're saying regardless of whether they rewrite, they're not going to change. Is that the implication I hear?

MR. WALTERS: No, because we're talking about a philosophy. We're talking --

MR. HATCHETT: That's ingrained.


I welcome Mr. Hubbard to come here and sit with me now. If he could do this, you wouldn't have Scientology. You see, if Reverend Jones could leave Guyana and come and talk to the congressman, you realize you wouldn't have a cult anymore, because he was -- you have to handle the mental paranoia of Hubbard. Until that is done, you're going to have consistent defrauding of individuals and also criminal activities taken against perceived enemies.

MR. LeCHER: So, you're saying they couldn't exist without any of that, without this doctrine or without these teachings. They couldn't -- well, they couldn't exist without any money coming in; is that what you're saying? They wouldn't get the money to exist worldwide?

MR. WALTERS: No -- yeah, well, it all depends. Most all the money is being made in Clearwater right now.

MR. LeCHER: In Clearwater? All the money is supposed to --

MR. WALTERS: Being made.

MR. LeCHER: The money supporting the whole operation is being made in Clearwater?

MR. WALTERS: I would say -- I would say Clearwater is the single, primary source of most of the money coming in. The people in Clearwater are higher up, fully programmed and conditioned. I mean, this is -- they originally bought courses for two thousand. They are now down here giving ten, twenty, and thirty thousand at a time.

MR. LeCHER: What do the poor people do?

MR. WALTERS: Poor people are not in Scientology, or they join staff.

MR. LeCHER: If you're poor, then -- you mean, they only pick on the wealthy kids? And if you're poor, you've got to work for seventeen hours a week and for nothing?

MR. WALTERS: A wealthy person is a hot prospect.

MR. LeCHER: Okay.

Ladies and gentlemen --

MR. FLYNN: Mr. Mayor -- we've got two more, Mayor, and then -- two more documents and, then, that will be the end of the documents for the day.

Exhibit 18 is a document, entitled "Operations Definitions," which pertains to the drills that a Guardian's Office operative goes through, as described by Mr. Walters in his earlier testimony with regard to framing or smearing someone, of which Mr. Greene will read some.

(A copy of a document, entitled "Operations Definitions," was marked as Exhibit No. 18, as of this date.)

MR. GREENE: You have the drill on the overhead projector. "Recognizing Basic Effectiveness or Plans. Take into account effectiveness, security, legality, workability, et cetera when making your decisions. Choose which basic plan is best. A, General Scene: Person to restrain or remove Mr. Jones, employee in local government agency attacking the org. One, order hundreds of dollars worth of liquor in Jones', name and have it delivered to his home causing trouble and make the liquor store owner dislike him: two, call up Jones' boss and accuse Jones of being a homosexual: three, send Jones' boss evidence of Jones accepting bribes on the job with copies to police and local FBI.

"B, General Scene: psychiatrist who has instigated attacks on the org. via police and press. One, expose his Nazi background to the press with evidence that he still attends local Nazi meetings; two, wake him up every night by calling him on the phone and threatening him; and three, send an FSM in to be a patient of his for a year to disperse the psych during sessions."

Finally, "C, General Scene: A newspaper executive Clyde McDonald who is behind local attacks. One, poison him while he's asleep so he'll never start another attack; two, make known to the paper's owner that McDonald is responsible for the paper's decreasing advertising revenues; three, spread rumor around to the paper's employees that McDonald is a Communist; and four, put itching powder in McDonald's clothes so he'll scratch himself all day thus preventing him from writing stories."

MR. LeCHER: Where is McDonald today?

MR. WALTERS: Selling millions of hamburgers.

MR. FLYNN: I don't know where Mr. McDonald is, but Paulette Cooper will be testifying before this Commission.

MR. LeCHER:, Okay.

MR. GREENE: If we could have the next page in this series --

MR. CALDERBANK: I've got a personal example of that.

MR. GREENE: -- D and E. Let me direct your attention to "E, General Scene: A local Catholic bishop is causing many local attacks on the org. One, send several FSMs" -- you remember, Mr. Walters testified is a field staff member -- "over to the Catholic church to swear at him in confessionals; two, connect him up to abortion and/or pornographic activities, three, write the Pope an anonymous letter stating that the bishop is really a rabbi under cover; and four, spread a rumor around town that he's against air pollution."

MR. FLYNN: The next exhibit is called "Correct Use of codes," which will be Exhibit 19.

(A copy of a document, entitled "Correct Use of Codes," was marked as Exhibit No. 19, as of this date.)

MR. GREENE: This is a Guardian order, as it appears on the top of the exhibit. If you could move the exhibit down, you'll see the Guardian's order and the date, September 17th, 1976. Mr. Walters can explain the routing form in the upper left-hand corner when I've completed.

"The correct use of codes to insure that coding is done correctly with the correct subjects coded and overcoding avoided, the following steps are laid down. Codes are used for the following general headings: one, incriminating, undercover, or misinformation of covert operations and the like. Incriminating activities would include things like lobbying where this is inhibited in non-profit corporations, also, money deals that might provoke government tax offices.

"Two, things that we want unknown as connected to the Church of Scientology, secret TR and B 1 front groups; three, legal PR and B 1 traffic on B 1 flubs; four, things that we want unknown LRH or MSH connected to, this is handled by coding of their names; five, words or actions that would tend to dispute the fact that the C of S's motives are humanitarian; i.e., harrass, eradicate, attack, destroy, annihilate, cave in, third party, spreading rumors, entrapment, trap or entrap, stir up the opposition.

"Six, actions of confidential corporate tax bodies. Strategy: Some B 1 money, CSWs, and occasionally the names of accounts. Seven, anything that gives specific and actual evidence that Scientology is in legal control of B 6-type groups. These are groups that are separate, legal entities from the Church of Scientology. Eight, admission to unpunished crimes and/or incriminating data. This would mostly come on personnel lines.

"In addition to the following, there are certain things that get government customs upset and more curious about what is in the mailbag. These are such things as: confidential, secret, highly confidential, top secret, very highly confidential, restricted, et cetera written across the top."

MR. FLYNN: Mr. Walters would like to make one closing statement. And for today, that will be all the documentary evidence.

MR. LeCHER: Before -- I'd like to ask one more question: I have met most of the Scientologists as they come into town; they try and make a social call. I don't necessarily talk to them anymore, unless they give me a false name and false reason to be here.

I met Reverend Whitman -- is that his name?

MR. WALTERS: Kenneth Whitman.

MR. LeCHER: Kenneth Whitman, who is a rather angelic-looking young man with a turned around collar and a soft voice and a nice, easy manner.

And he says that they no longer act that way, that he is the president of the Church. And as the president, he led me to believe that he calls all the shots.

Is that true that Mr. Whitman, Reverend Whitman, with turned around collar, does call the shots for the Church?

MR. WALTERS: No, he does not. I'm sure if he says he's president, he's president. It would be a legal position to be in to protect L. Ron Hubbard. But Mr. Whitman and every Scientologist only does what L. Ron Hubbard wants him to. Maybe he doesn't know it now, but it'll probably add a few years to his sentence, if he gets any. I mean, Hubbard designs things so that it does not come back to him.

Now, Kenneth Whitman -- I personally don't know if he's involved in any of this. But I would assure you, as president of the Church, he is told exactly what to say and the plan, in fact, to handle the city is drawn up exactly like this.

MR. SHOEMAKER: Mr. Walters, following up on that: Would he, as being president of the Church, have any control over the Guardian's Office?

MR. WALTERS: No, no. It's a legal title, it's a PR title. He's the person that, when you want to see the big boss, you'll get him. The guys who follow you home are the guys running the show.

MR. LeCHER: Does he normally walk around in his home town with a turned around collar or does he wear regular street clothes?

MR. WALTERS: Well, he's been so busy now because of everything going on, he's probably in legal mock-up, meaning in dress, almost all the time.

The little -- I've known him just very little. He's, basically, a very nice guy and very suited to what he does.

MR. LeCHER: Mr. Calderbank, let's try and take a break before we get to the next witness.

MR. CALDERBANK: Very quickly, I've been waiting to ask either an ex-Scientologist or a current Scientologist: Number one, tell me if this -- it was -- these examples were in the paper, by the way.

I was coming out, after Mr. Flynn presented his report, and someone that I didn't know came up to my car and said, "Hello, you're such and such. I've seen your picture in the paper." And as was reported by the paper, that person then said, "Does your sister" -- and my sister is a dentist in Pittsburgh -- "Does she worry, about malpractice suits?"

I got out of the car and asked him -- looked for another person, and he told me to get my hands off him, that he didn't know what I was talking about. About two weeks later, after notifying my sister's attorney, she had patients that came in with various ailments that would not follow her prescribed dental practices. And when she made them sign charts off, they left.

MR. WALTERS: That sounds --

MR. CALDERBANK: In your opinion -- which, this has appeared in the paper -- is this a coincidence?

MR. WALTERS: It sounds to me like a very standard, good B 1 operation.

MR. CALDERBANK: Number two, her own -- I met in a --

MR. LeCHER: Wait. We -- we -- I don't know if we know that he knows that they are coming after your sister. That's really hearsay and --

MRS. GARVEY: What's a B 1?

MR. LeCHER: Yes. What's a B l?

MR. HATCHETT: That's intelligence.

MR. LeCHER: That's intelligence.

Well, we really don't know that.

MR. WALTERS: Well, I would take his word it happened.

MR. LeCHER: Yeah. Well, I know -- I believe that it happened. But you don't know that --

MR. WALTERS: Oh, no.

MR. LeCHER: -- the reasons why it happened.

MRS. GARVEY: I mean --

MR. WALTERS: He only asked for my opinion from my experience.

MR. LeCHER: I don't want to get too far astray from what we're here for.

MR. WALTERS: True. I don't claim to know everything on Scientology.

MR. LeCHER: Would you like to make a final statement, sir?


I'd just like to close -- because we've been talking about such terrible things here, which is, of course, one of the reasons I came here. And I'm glad to do it as a citizen and I'm glad to see that the truth will come out and, if it's confronted and pursued long enough, it will.

But I want you to know and anybody listening -- because the PR campaign against me will start tomorrow -- I am not anti-religion, I am not looking to destroy anyone; I want to lead a good, decent life. I have many friends in Scientology; there are a lot of good, caring people.

When I was in Scientology, I loved and admired L. Ron Hubbard. I admired a man who was in the war and got war injuries and healed himself, and he's confronting enemies and continually going on to create the worldwide game that everybody could win. I believed it; I loved it.

Now, that I'm out and I've learned the truth about it, I'm not -- I'm embarrassed by it. But I want the truth to come out that I am not in a vendetta. I care for Mr. Hubbard. It's going to be like Howard Hughes and he's going to end up in a lonely room knocking himself off, until somebody who cares enough for him, instead of these Gestapo agents, somebody who cares for him helps him.

I have no hatred for the individual; I loved him. I don't love him now, but I probably understand him better. If he's listening, I'd tell him, "Get in touch with me. I won't harm you; I'll help you. Do it now before you create a catastrophe here in Clearwater or injure thousands of young people."

Many Scientologists are good people. Most of them are. They've just been led astray. And even though you're going to hear some shocking things in the next few days -- and I suggest you really do look into this cult of Scientology -- there are a lot of good people and some that I truly like and admire.

I appreciate you listening to me.

MR. LeCHER: Thank you for being a very courageous man and courageous witness, and we wish you well no matter where life takes you from now on.

We will take a ten-minute break.

(Whereupon, a recess was taken.)

(Whereupon, the hearing resumed.)


MR. LeCHER: Vision, are you on? You are now on, okay.

Welcome back, ladies and gentlemen. We are going to proceed with the next witness, which will be -- we will not speak at such length as we did with the previous witness. But this witness will come back tomorrow morning at nine o'clock and we'll resume.

We are now waiting for Mr. Ron -- Ronald DeWolfe to come in.

Thank you, Mr. DeWolfe, we will attempt to make this as painless a possible for you, sir. I know that you are also a courageous individual to be here with us this afternoon, especially, because of your background.

I would like to ask you a few -- before we do ask you questions, sir, I would like to ask you if you would be sworn in by our clerk.

RONALD DeWOLFE: My father had a bodyguard ... One of the guys, by the way, was Ernie Kitsch, and he was connected in Philadelphia with organized crime. ...
But insofar as the major corporation take overs were concerned, there was the one in 1953 in Philadelphia where we had given an accomplice that December of '53 -- and it was John Naugerbauer and Helen O'Brien. And they were somewhat reluctant to pay my father the money for the big congress they had. And he had a course -- it was called the Philadelphia Doctorate Course.

So, this Ernie Kitsch, who was a great, gargantuan man, well above six feet, probably weighed two hundred and fifty pounds -- and he had half his front forearm and his left hand sawed off, which he himself had sawed off with a bandsaw -- And he went along because he was a longshoreman.

And -- okay. Well, Mr. Kitsch and I, we went over to John's place and we tried to get the money from the Philadelphia Center. And we collected the money. In fact, we collected all the money, and collected the tapes and collected all of their books. And they quite willingly signed over their bank accounts and what have you, because, to put it pleasantly, we used physical force to do so.

RONALD DeWOLFE, a witness herein, having first been sworn by a Clerk for the City of Clearwater, was examined and testified as follows:

MR. LeCHER: Thank you.

Mr. DeWolfe, I'd like to ask you these same five standard questions I'll be asking every witness that we will be listening to on both sides of the issue.

Number one: Are you appearing here today and testifying under oath voluntarily?


MR. LeCHER: Number two: Have you been paid by anyone for your testimony, other than the expenses of coming to Clearwater?


MR. LeCHER: Number three: Do you have a lawsuit against the Church of Scientology?


MR. LeCHER: Does the Church of Scientology have a lawsuit against you?


MR. LeCHER: Has anyone suggested to you that you should state anything but the truth? Or has anyone suggested to you that you change your testimony for any reason?


MR. LeCHER: Okay, sir.

Your name is Robert DeWolfe?

MR. DeWOLFE: Ronald DeWolfe.

MR. LeCHER: Ronald DeWolfe.

MR. DeWOLFE: Ronald Edward DeWolfe.

MR. LeCHER: Are you the natural son of L. Ron Hubbard?

MR. DeWOLFE: Yes, I am.

MR. LeCHER: All right.

So, your surname was not DeWolfe but Ronald Hubbard?

MR. DeWOLFE: That's correct.

MR. LeCHER: And I see here that you were born in 1934 in California, and your mother was Margaret Louise Grubb --


MR. LeCHER: -- is that correct?

I don' t think we have to go too much into the fact -- I read that the contributions to Scientology are processing of courses as written by Mr. DeWolfe.

Is that you, sir?


I didn't quite understand your statement.

MR. LeCHER: Well, do you know anything about TR -- TRs and 8-C and miscellaneous Scientology processes?

MR. DeWOLFE: Yes, because I helped create them.

MR. LeCHER: All right. That's what I was really getting at.

Do you want to tell us what TRs are and 8-C, and when and why you did these things?

MR. DeWOLFE: Well, the TRs -- TR stands for training routine, which we called training drills. They were used in the beginning or formulated in the beginning in order to -- as a method at that time in communication and in control of someone's body, because, if you can control someone's body, you can control the mind.

There were several of them. I don't happen to have a copy of them. It's been many years ago, but I can go over them point by point, if you'd like.

MR. LeCHER: If you would, just in your own words, sir, if you want to describe what you did or what your job was within the organization.

MR. DeWOLFE: Oh, well, I was, at various times, Director of Training, Director of Processing, the Executive Secretary, which, in those days, would be the person responsible, for instance, here in the United States for the entire United States.

MR. LeCHER: Okay.

When did you leave the Church of Scientology?

MR. DeWOLFE: I left November 23rd, 1959 at nine a.m. at Washington, D.C.
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Part 6 of 6

MR. LeCHER: 1959?


MR. LeCHER: When did you become involved in the Church of Scientology?

MR. DeWOLFE: In the very beginning, in 1950, with the first book, Dianetics: The Modern Science of Mental Health.

MR. LeCHER: I'm going down the outline here, and I see that Hubbard's primarily -- primary means of income as a write -- he wrote such things as Arabian Night Adventures, westerns, confessions in magazine articles, he wrote as a woman with problems, science fiction, screenplays up until -- this is how your father originally gained his main source of income?

MR. DeWOLFE: Yes, it was. There are -- but the problem there is a lot of his writing -- he didn't really write as many words as he said he did. Through the early fifties, he used to tell everybody that he had written seven million words of fiction. But, in fact, it probably never exceeded a million words, and that was during the thirties and forties. And, of course, during the thirties, that was mainly in what was called pulp magazines, and he was paid, like, a penny a word, which doesn't amount to a great deal of money, if you add it all up.

But as far as his -- the one thing that caught my eye in the outline in number five, it says screenplays. And I only know of one screenplay that he possibly was involved in, and it was a serial, one of those Saturday matinee serials that went on for thirteen or twenty-six weeks or something. And it came -- he either had a small part in writing it or it came from a story of his, but there were many other screenwriters. By the time the -- by the time the play -- the serial came out, there were several other screenwriters who had rewritten it and been added to the credits. So, that's the only screenplay that I personally know of.

And as far as his income is concerned, a great deal of his income came from my mother who -- and my grandfather, his father -- who supported him.

MR. LeCHER: Then, much that has been written and said about your father is a figment of his imagination, would you --

MR. DeWOLFE: That's quite correct, particularly, in the areas of G here, page one, where "Hubbard's primary means of income is writing." Yes, that was his income, but, again, if you multiply a million words times a penny, then, we're talking about what, ten thousand dollars or something.

MR. LeCHER: By a penny, yes, sir.

MR. DeWOLFE: But --

MR. LeCHER: Yes, sir. Go ahead.

MR. DeWOLFE: No, but the -- I remember some of these Arabian Night adventures because he had some of the original artwork paintings around. And he wrote westerns under Winchester Remington Colt and, also, he wrote quite a number of confession magazine articles posing as a woman, that's quite correct, posing as a woman with problems.

MR. LeCHER: Is that like advice to the lovelorn? Something like --

MR. DeWOLFE: Yes -- well, not really. It is -- I think you can still see some of that type of literature today where --

MRS. GARVEY: True Confessions?

MR. LeCHER: Like True Confessions or My True Story --

MR. DeWOLFE: Yes, exactly.

MR. LeCHER: -- or things like that?

MR. DeWOLFE: And, of course, quite a bit of science fiction to various magazines and, particularly, two unknown stories in 1940, '39 and '40, which later became -- which later became Astounding Science Fiction, which later became Analog.

MR. LeCHER: According to the outline, there are a lot of things here concerning your life, your early life, and your relationship with your mother and your father. I don't know if you want to go into that.

MR. DeWOLFE: Sure.

MR. LeCHER: But if you'd like to, I'd like to hear about it in your own words.

Looking at it, you were married -- this marriage -- Margaret bore one child, et cetera, et cetera. And I hesitate to ask you about them, too, about --

MR. FLYNN: Would you like to read this?

MR. DeWOLFE: Oh, certainly.

Well, okay. My father's been married three times. I know in Scientology literature and what he tries to to get other people to believe in his writings of these biographies that he's only been married once to Mary Sue Hubbard. But he's been married three times.

His first marriage was to my mother, Margaret Louise Grubb. They were married April 13th, 1933 in Elkton, Maryland. By the way, my mother was born September 22nd, 1907 in Maryland. And then -- just to cover some of the vital statistics --

MR. LeCHER: Yes, sir, I want you tell it in your own words, because I don't know how you want to say this.

MR. DeWOLFE: Then, my mother and father were divorced December 24th, 1947 in port Orchard, Washington. And then my mother died November 17th, 1963 in Coatesville, Pennsylvania.

Then, he married a Sarah Northrup -- and let me get the exact date; it's in here somewhere.

MRS. GARVEY: It says 1946, but that's before the divorce.

MR. LeCHER: In 1946, Hubbard married Sarah Northrop.

MR. DeWOLFE: That's correct. It was a bigamous marriage.

MR. LeCHER: That's why you said there's a clear inference here that he must have been married to two people at the same time. And that lasted a few years and she bore one child.

MR. DeWOLFE: Correct.

MR. LeCHER: Some of these other things are rather personal in nature, and you may want to talk about them or you may not want to talk about them

MR. DeWOLFE: No. I'm perfectly willing to talk about them, because I believe that all of the facts of the true history of L. Ron Hubbard should come out and should be known by people. I'm talking about the documented facts and the actual occurrences in his lifetime, because he has built up over the years, since 1950, a great mystique and a great amount of false and imaginary data.

I could say flatly that ninety-nine percent of what my father wrote about his own life and what he has done is false. And since it has always been an equal part of Scientology itself, that I think that people should know who this man is.

MR. LeCHER: All, right, sir.

MR. DeWOLFE: Any -- any part of this -- any part of this, I would be very happy to go over --

MR. LeCHER: Do you have anything about an example about being false? I mean, can he -- was he really in the war and shot up and healed himself with his own mind --

MR. DeWOLFE: He was in the Navy in World War II, but he wasn't shot up.

MR. LeCHER: Okay.

What about --

MR. DeWOLFE: He was never wounded or blinded.

MR. LeCHER: -- this --

MR. DeWOLFE: Excuse me, sir.

MR. LeCHER: Certainly.

MR. DeWOLFE: I said he was never wounded or blinded.

MR. LeCHER: He has attributed to his great powers because he has had this fantastic educational background.

Would you like to go into how far in college did he, indeed, go and what degrees does he have?

MR. DeWOLFE: He spent a few months, as far as college is concerned, at George Washington University. And one of the major points that he has said that he -- he has said that he has a degree in engineering -- at one point he has a degree in nuclear engineering. Now, of course, that changed.

As far as any nuclear engineering is concerned, he only took one semester and he received an F, as in failure, for the one semester.

MR. LeCHER: I think that's pertinent, because Mr. Walters spoke earlier today about one of the reasons why he believed in all these principles and successes is because of your father's background; it was so significant. But, apparently, that is not true.

Can you tell me something about Dianetics? Apparently, Hubbard -- I'm told, Mr. DeWolfe, in 1947, he was thinking about writing a book called Dianetics.

MR. DeWOLFE: That's correct. He was in Washington at the time, and he had -- some of these, as I try to explain there -- it's sometimes difficult to explain simply in easily straightforward terms, because sometimes these incidents are kind of highly complex and lead from one thing to another.

My father at the time was -- had Sarah Northrup with him in a trailer over in Port Orchard, Washington, which is six miles away from Burlington, Washington. And that's what he had told me, that he was thinking about writing a book about the mind, and in subsequent phone calls and contacts he mentioned calling it Dianetics. This was in 1947 and, then, through '48.

I can go through it, sir, chronologically, if you'd like.

MR. LeCHER: All right, sir.

Did Dianetics -- then, The Modern Science of Mental Health deals greatly with husbands beating their pregnant wives.

Is there anything --

MR. DeWOLFE: That's correct.

There's, I believe --

MR. LeCHER, -- in the book about husbands beating pregnant wives? That's part of the book?

MR. DeWOLFE: I believe, all together, there's something around two hundred seventy, I believe, various incidents in it which had to do with a great deal of prenatal experiences: husbands beating wives, and attempted abortions by husbands on wives, and then attempted abortions on women by themselves. And the general focus of the book is, I would say, generally one of sex.

MR. LeCHER: All these unusual ways of abortion is under the title of a book called The Modern Science of Mental Health?

MR. DeWOLFE: Correct.

The -- but one of the things about Dianetics: The Modern Science of Mental Health, and an offshooting -- Dianetics: The Modern Science of Mental Health was at various times written, he said, in three months. And, also, he has said it was written in six weeks. What he has told me -- we visited Bay Head, New Jersey where he wrote the book with Sarah there.

And when we returned to a very small cottage on the beach -- it was empty at that time, but the door was open and we walked around inside. He said that he had written it in less than a month.

And -- but the incidents in Dianetics: The Modern Science of Mental Health came from, generally -- from his imagination and, also, at least two attempted abortions on my mother. One I observed when I was around six or seven. And these other activities with other women -- but as far as any research is concerned, he has said at various times that he has spent thirty some years researching it, but he didn't.

This stems from -- there were, I think, a one- two- or three-part article in Astounding Science Fiction, which is now called Analog Magazine -- but at that time it was Astounding Science Fiction -- and it came out about 1948 or '49. And the response to it was so overwhelming that John W. Campbell, the editor of the magazine, and other people insisted that Dad make a complete book out of it. So, he had to hurry and write it very quickly.

Then, the book came out in May, May 9th, 1950. So, there was an original magazine article, which, I notice in recent and even earlier Scientology literature -- that they never mention the magazine article, which was the original.

MR. LeCHER: Since your father used the principles in the book, The Modern Science of Mental Health, to perform an abortion on your mother, how did this all relate or lead to Scientology?

MR. DeWOLFE: Oh, wow, have you got about three weeks? Well, anyway --

MR. LeCHER: Well, see, it doesn't -- it's hard for me to follow --

MR. DeWOLFE: Yeah, I understand.

MR. LeCHER: -- sir, how he started all this.

MR. DeWOLFE: I find it easier to do this in, a chronological order --

MR. LeCHER: Yes, sir, all right.

I'm trying to lead you through it and if I -- all right. It says that the book preys on mentally impaired or ill people, and the Dianetics book represents that the methodology will cure more than seventy percent of all man's ills. It has claimed to cure cancer, tuberculosis, arthritis, heart disease, retardation, and you can increase your IQ, et cetera.

Do you think that he has been successful in any of these things?

MR. DeWOLFE: He claims it cured anything and everything.

MR. LeCHER: The list could be larger --

MR. DeWOLFE: No. You see, Dianetics and Scientology -- I can back up on this later. But Dianetics and Scientology is, according to Dad, a -- the one and only true path to freedom and the one and only true alleviation of any aberration or human problem. It is the solution to anything that a human being may want to do, or if you may have any sickness or illness.

I know that over the years -- if you remember in the fifties, we were putting across it would cure anything, including falling hair and dandruff. And the lawyers and attorneys and the government were getting very uptight and very upset about it, us using the word "cure." Because the very first Dianetic Research Foundation -- this was in New Jersey in 1950. That's one of the reasons it got closed up and why Dad had to move on to Wichita, Kansas.

But the main idea here is it -- we had to alter what we were selling out.

MR. LeCHER: Was it the local AMA that decided your father's book was nothing more than quackery?

MR. DeWOLFE: I'm sorry, sir?

MR. LeCHER: Did the AMA, the local AMA --

MR. DeWOLFE: Yes, right.

MR. LeCHER: -- in Elizabeth, New Jersey, --

MR. DeWOLFE: You see, what happened was Dad wrote Dianetics: The Modern Science of Mental Health in 1950. The response was so overwhelming -- if you had to look at 1950 within that context of time, it was the first do-it- yourself psychotherapy book really to come out, and how to cure yourself of anything all by yourself or with another fellow, your next door neighbor. You just sit down on your couch, open the book up, and have a whack at it.

But the overwhelming response to it -- it really was an incredible best seller. Mail was coming in to the Wichita foundation literally by the mail truckload. I wasn't there, but my father has told me quite a bit about it. Other people who were connected with the Research Foundation -- this was in -- the very first one, as I said, was formed in Elizabeth, New Jersey.

MR. LeCHER: He then --

MR. DeWOLFE: Now, this is something in the very beginning that got my father very deeply involved in this thing because there was so damn much money involved. So, they formed -- the foundation was formed.

Then, doctors and other people there were trying to legitimize it, that is, they were -- they wanted to do before and after testing. They wanted to do before and after x- rays, before and after medical exams, and show the differences and great benefits of it.

Well, since the whole book, Dianetics: The Modern Science of Mental Health, was written off the top of my father's head, Dad didn't really appreciate that very much, because people were getting too close into investigating him. Plus, reading that very first book with the best seller jacket and all of the other claims that were in the very first edition -- I haven't read it for umpteen years and I haven't seen the movie version -- but anyway, there were claimed actual cures. We can cure anything.

MR. LeCHER: Guaranteed cure?

MR. DeWOLFE: Yes, right.

All you had to do was just run out your birth or run out your prenatal experiences, and that is the basil -- that was the basis of all of your problems. It was all of these things that people did to you in moments of pain and unconsciousness called engram. And if you cleared up this moment of pain and unconsciousness and -- then, that would release all of the terrible charge you had deep within your subconscious.

All right, well, this whole thing in Elizabeth, New Jersey -- as I said, they were getting into -- they were getting into cures and actual -- the practice of medicine.

What happened then was the New Jersey Medical Association started investigating the foundation and forced its closure because they were practicing medicine without a license. And that forced, then, Dad to go on to Wichita, Kansas, which we can cover later if you want. But --

MR. LeCHER: What is a prenatal experience?

MR. DeWOLFE: A prenatal experience -- well, any experience that you could have experienced in sexual relations: experiences of attempted abortions. I can get very graphic if you'd like, but with TV camera here --

MR. LeCHER: I don't think we should get too graphic.

MR. DeWOLFE. There would be an incredible amount of editing going on; there'd be more bleeps than words.

MR. LeCHER: Okay, sir. Now, we're in Wichita.

MR. DeWOLFE: Wichita, Kansas.

MR. LeCHER: Your father married his third wife, Mary Sue Whitman --


MR. LeCHER: -- who was a student at the Dianetic Center in Wichita.

MR. DeWOLFE: She, by the way, is only a couple of years older than I am. But I first met her in 19 -- February 1951.

The Dianetic -- here's where it really gets kind of interesting. The Wichita foundation -- the Dianetic Research Foundation in Wichita, Kansas was formed. He at this time was still with Sarah, Sarah Northrup. And since -- as I said, there's a recurring theme here throughout his life, what I've always termed fleeing in the night. That is, that he grabbed, whatever cash he could from the Elizabeth, New Jersey foundation and went to Wichita, Kansas.

And there, with a Don G. Purcell and some other people, they formed up the Dianetic Research Foundation in Wichita, Kansas.

Now, this was in 1951.

MR. LeCHER: 1951--

MR. DeWOLFE: We're up to 1951; we have another thirty years to go.

MR. LeCHER. Okay.

That's when, then, he apparently went bankrupt.

MR. DeWOLFE, No, he didn't go bankrupt. Let me give you what happened on him going bankrupt.

There's quite a number of things occurring in Wichita, Kansas. There, again, he attempted legitimizing Scientology with medical doctors and with other verifications. There, too, in Wichita, Sarah and my father got into a tremendous battle, divorce battle, where Sarah was claiming the same things, as an example, that he had been doing with my mother many years before that: beatings, attempted abortions, et cetera. And she -- he claimed that Sarah was a Communist and claimed that she attempted to kill him by injecting heroin into his heart with a hypodermic and, also, poisoned a bottle of whiskey Both of them untrue and pure fabrication by my father.

But, then -- the reason I bring up this area is because it's pretty, I would imagine, pretty well known. But as far as the -- let's see.

Then, he went flying off to -- taking off to Puerto Rico, because the key to the divorce and -- he had claimed mental derangement caused by Sarah and that's why he was off to Puerto Rico. I read a letter in one of the files that he had written and that he was slowly going -- he was going insane and how they had had their -- which was a lot of nonsense.

But she -- Don G. Purcell got him back up out of Puerto Rico and propped him up a little bit there. And Don G. Purcell wanted to help him out financially, and my father, at this point in 1951, sold Don G. Purcell all of the rights to -- all of the rights to Dianetics and Dianetics: The Modern Science of Mental Health. That's a fact that I haven't ever really seen come out before.

So, at that juncture in -- throughout 1951, he no longer owned the rights to Dianetics. This is important because this is how -- one of the reasons of why Scientology was created.

MR. LeCHER: Okay.

MR. DeWOLFE: Now, in all -- in every legal sense, he did not -- just to jump forward very quickly -- he did not reacquire the rights to Dianetics and the book, Dianetics, and the use of it and the processes and everything else until, I believe, 1955. I remember we had one hell of a great celebration around Washington, D.C., where we were at the time, because we finally -- he had finished destroying Don G. Purcell and getting back -- getting back all the rights to Dianetics. But to back up to where he had sold all the rights -- my father has only had one basic driving goal in any organization, and that is total and complete control. He could never share responsibility, sit on a board of directors, or even operate in any way in a group.

And he felt he was being constrained, and he thought he was being confined, and he quite literally -- he was in terrible financial straits, because he spent money like water, and Don G. Purcell had come around to help him out financially. And, also, Purcell thought that Dianetics, the processes of Dianetics, the books and what have you, quite -- they should belong to the foundation themselves -- the foundation itself. And so, he paid quite a bit of money. I don't remember what the sum of the money -- how much the money was.

But he, then -- he was there at the Dianetic Research Foundation in Wichita for a while. Then -- but he didn't own the rights to it anymore, and he was forced to sit on a board of directors, which he never could stand to do.

This is, by the way, in response to your question about bankruptcy. Yes, the foundation went bankrupt. But all of a sudden one day, my father and Mary Sue, they -- they emptied all the bank accounts. Now, he was only able to sign on one small bank account. But I can remember my father talking about how he had gotten other people to empty them and how he had forged the names on checks.

But anyway, he had emptied the entire bank accounts -- all bank accounts of the Wichita Dianetic Research Foundation and did another one of these fleeing in the nights to Phoenix, Arizona.

So, here he was in Phoenix, Arizona with the federal bankruptcy court looking down his throat, with the police looking down his throat, with Don G. Purcell looking down his throat. And my father only felt good with incredible amounts of cash with him. And I remember -- jump forward slightly -- I remember being, when I first arrived there in 1952 to start working with him very closely -- that he kept shoeboxes of money in his closet, all cash. And he had, I believe, somewhere around five or six shoeboxes with $25,000.00 apiece in them in his closet.

That, by the way, is something he's always done, which is, he kept an incredible amount of cash close at hand so he could grab it and run.

And that is the reason for the bankruptcy and the failure in Wichita of the Dianetic Research Foundation. That answers that question.

MR. LeCHER: How did he destroy this Purcell, Don D. -- Don Purcell, is it, this man that eventually gained the rights to Dianetics?

MR. DeWOLFE: Oh, Don G. Purcell?

MR. LeCHER: Yes.

MR. DeWOLFE: Well, the -- I don't know all the particulars, but I do know that he used quite a smear and libel campaign, which is standard procedure.

See, my father would -- my father only wanted to do one thing, and that was to destroy people. He would not -- he did not do anything lightly. To him, anybody who did anything against him, criticized him -- he would just flat go after their throat. And I think that he was quite happy. And I don't remember exactly, but I think Don G. Purcell got quite ill. But I do know that my father spent a great deal of money in 1952 to 1955 in, I believe, court battles and in a standard misinformation campaign to bury Don.

MR. LeCHER: Okay.

Back now to 1951, Dianetics offered in Wichita, Kansas -- offered a process called auditing.

MR. DeWOLFE: That's correct.

MR. LeCHER: Can you tell us how he conceived the term "auditing" and the principles behind auditing?

MR. DeWOLFE: Oh, wow, okay.

The auditing and the word "clear" come from that -- comes from the field of accounting. I have to back up a little bit and give definitions of the words, if you don't mind.

MR. LeCHER: Well, I -- that's okay. I was just wondering how he -- how did he conceive that idea and does he have any background, to your knowledge, scientific background, that auditing could be plausible and worthwhile medical --


MR. LeCHER: It's just something he made up, then, auditing?

MR. DeWOLFE: I'm sorry?

MR. LeCHER: Auditing is just something he made up or --


As I explained, the basis of Dianetics: The Modern Science of Mental Health, the basic book as I said, we could go through all sorts of --

MR. LeCHER: Well, we just want to run -- walk through this gradually with you and, then, tomorrow, my colleagues and I will really get into anything they'd like to get into. I know that -- we want to be easy with you today and, of course, the entire time you're here.

So, any time -- if we run a little long with you today, we can stop and pick it up again tomorrow morning.

MR. DeWOLFE: Okay.

MR. LeCHER: I read the AMA, American Medical Association, denounced Hubbard and claimed that he was practicing medicine without a license and making outrageous claims like Dianetics would cure all man's ills. And apparently, your father was humiliated sometime around there at the Scientology headquarters --

MR. DeWOLFE: We can back up and cover that in detail, if you'd like --

MR. LeCHER: I'd certainly like -- I want to go at your pace.

So, you might tell me about 1953 when your father was humiliated or he was accused of practicing license -- practicing medicine without a license.

MR. DeWOLFE: Well; 1953 -- I would like the opportunity, too, since I -- I don't want to be monopolizing the microphone or anything like that. But --

MR. LeCHER: You're here to monopolize it.


MR. LeCHER: That's why you're here, to monopolize the microphone.

MR. DeWOLFE: No, but there's -- I want to back up 1n sort of a quick chronological order, because I have found, in my experience, that it makes things a bit more understandable --

MR. LeCHER: Certainly.

MR. DeWOLF: -- because of the tremendous fog. You have to view the past of L. Ron Hubbard almost like a great big ball of tangled barbed wire, and you look at it and you can scratch your head and say, "Wow, look at this."

As I said, you can refer back to one of my original statements, ninety-nine percent of what my father wrote about himself is untrue. But there've been so darn many different biographies -- he and I used to joke that he would write a bio a week. And he would shift and alter things as he pleased as he went along down the line. That's why I have found it to be advantageous to sort things out; that's sort of how my head works anyway.

MR. LeCHER: Certainly.

Would you like --

MR. DeWOLF: Oh, what was the question I hadn't answered?

MR. LeCHER: Yes. I was asking about auditing. I was also asking about when he was humiliated by the medical -- the AMA, and he felt that he was humiliated at the Church of Scientology headquarters?

MR. DeWOLF: Well, humiliated really by the federal -- the federal court in 19 -- that would be December '53 or '52, I could double check it. Anyway, finally, the federal court caught up with him about the Wichita Dianetic Research Foundation, the financial fiasco. And the U.S. Marshalls -- in December '53 -- and the U.S. Marshalls finally caught up with him when he had returned from London, after giving some courses, and he returned to Philadelphia for the -- what do you call them -- doctors' series of lectures on December 1st -- December the 19th, 1953.

MR. LeCHER: Three, I believe --

MR. DeWOLFE: Right. And this was in Philadelphia. And right in the middle of the lecture, the U.S. Marshalls, unsuspectingly just knocked on the door -- we were upstairs in a big meeting room. They thought they were just going to serve the normal summons or subpoena to court. But they didn't know they were dealing with Scientologists, and it got into be one heck of a donnybrook with -- it wound up with the FBI, the Philadelphia police, and almost all of the U.S. Marshalls in town, and a couple of hundred Scientologists.

It took the various areas of law enforcement trying to get up the stairs -- and there were two hundred of us coming down the stairs. It was one of those incredible, almost western-style, fights, you know, you see in a barroom.

And the -- but in any event, I can go over that in further detail, if you'd like --

MR. LeCHER: All right.

MR. DeWOLFE: The subpoena got served. My father had a bodyguard and, of course, at that time I weighed about two hundred forty pounds and I was pretty darn solid. And I had done a great deal of physical activity, so I was no weakling. And we kind of dusted off and cooled off everything. And the marshalls, I think, were kind of afraid to shoot because we were going to -- we were going to trash them.

One of the guys, by the way, was Ernie Kitsch, and he was connected in Philadelphia with organized crime.

Any one of these things, by the way, I'd be very happy to go into any kind of detail on. But I don't want to --

MR. LeCHER: Well, we just want to keep it in sequence.

He left from Phoenix and went to Camden. Apparently, things got hot for him in Phoenix and he then went to Camden and we have the brawl that you mentioned in Philadelphia.

MR. DeWOLFE: Yeah.

Well, as I said, I can make little notations here and expand it further. But that is basically one of the reasons he got caught in court. And I remember his incredible rage afterwards, because he had an incredible temper, that he would never be in another court again. And because of the problems that he had been having with the AMA and Elizabeth, New Jersey and the problems he had also with the AMA in Wichita, Kansas -- because they were also on his back because they were still practicing medicine without a license.

And this is one of the major reasons that he later that month formed the basis of the three basic Scientology corporations in Camden, New Jersey.

MR. LeCHER: So, then, to get the medical authorities off his back --

MR. DeWOLFE: Right.

MR. LeCHER: -- he then formed a religion --

MR. DeWOLFE: And by this time --

MR. LeCHER: -- based on faith, I suppose, and that's when Scientology was created; is that correct around --

MR. DeWOLFE: No. That's sometime in 1952. But this is when it became incorporated --

MR. LeCHER: A corporation, legal corporations in 1953 --

MR. DeWOLFE: In Camden, New Jersey. I was one of the signatories on all three corporations, as far as the incorporators are concerned.

MR. LeCHER: All right.

When it first -- when he first incorporated, was he --

MR. DeWOLFE: When he was first what, sir?

MR. LeCHER: When he first became incorporated as a religion -- I guess I shouldn't get involved, that's not the issue. That's another case.

What was the motivation of becoming a religion?

MR. DeWOLFE: Well, as I said, he had been having quite a bit of harrassment with the court, with the medical profession. He had quite a bit of problems with money, taxes, IRS. And he later -- it was a secondary or a second idea, saying "Well, we're dealing with the faith and the human spirit so, therefore, we're perfectly legal to have -- to be dealing with that."

But it, to him, was the only solution he had to all of the problems he had been experiencing up to then. That's what -- I think it was December 18th, 1953, if I'm correct. That's when the three corporations were formed: The Church of Scientology, The Church of Human Engineering, and The Church of American Science in Camden.

MR. LeCHER: And is it safe to assume that he became a religion because he wanted money?

MR. DeWOLFE: Correct.

Well, one thing about that form of corporation is that it's pretty easy to move money and what have you about in that type of corporation.

MR. LeCHER: Was your father a deeply religious man as a young man or did he have any deep religious experiences that moved him to --


MR. LeCHER: -- start his own religion?


MR. LeCHER: All right.

There are some things --

MR. DeWOLFE: Sir, there were three questions that I've answered, and there are three nos.

MR. LeCHER: Yes, sir, I understand.

You've got something about Mr. Hubbard's, your father's, biography, and I won't go into it very much. But I'd like to ask you a question you can answer yes or no: Was, indeed, your father a nuclear physicist?


MR. LeCHER: Was --

MR. DeWOLFE: As I said, he took one semester at George Washington University, which he failed, in nuclear physics.

MR. LeCHER: All right.

Number two: Did he have a Bachelor of Science and a Ph.D. degree?

MR. DeWOLFE: Not from an accredited college or university. Either it was self- conferred through the Scientology organization or through Sequoia University, which was a diploma mill in Los Angeles, which, in those days, you could send in five dollars and get a Doctor of Science degree or whatever.

There was an association between the two, between my father and Sequoia. They got together an agreement where we could trade certificates.

MR. LeCHER: You recognized each other's degree, then?

MR. DeWOLFE: No. I mean, you traded and gave them out.

MR. LeCHER: Then, the Church of Scientology --

MR. DeWOLFE: We agreed to give out -- we were to -- this fell apart because this arrangement fell apart because there, again, my father could not work with anyone. I mean, he wanted -- not as an equal or any kind of a business arrangement like that.

But what -- we were going to set it up in order to try to legitimize the organizations by giving out Sequoia University degrees. And Sequoia could -- if they -- if somebody took one of our courses in Scientology, then, Sequoia could give a degree because Sequoia had been formed many years before that as a -- under one of those sort of neat little loopholes in the educational laws in the State of California, which made them sort of quasi-valid, even though all a guy did was buy it.

MR. LeCHER: Does Sequoia exist?

MR. DeWOLFE: Does it now exist?

MR. LeCHER: Yes.

MR. DeWOLFE: No. It did then.

MR. LeCHER, Did it ever teach classes?


MR. LeCHER: Did it ever hold classes?

MR. DeWOLFE: No. It was just as I said: You could send in five dollars and get a degree.

MR. LeCHER: Okay.

He also claimed he graduated from George Washington and Princeton. Is that true?

MR. DeWOLFE: No. He did attend Princeton --

MR. LeCHER: But he never graduated --

MR. DeWOLFE: -- but that was with the U.S. Navy. When he was in the U.S. Navy, he took a military government course, which, after that, gave him, he felt, the -- all the technology he needed in order to govern or to produce the organization board or to map out the organization itself.

But he was -- no, he reported in 1945, I believe. He was assigned there by the U.S. Navy for, I believe -- I think, three months; I'm not sure. This was because he -- they were about to send him to Japan to be part of the occupational military government in Japan at the end of 1945. But he engineered himself out of that.

But the only time he had spent in Princeton was a military -- it was called a Military Occupation Training Course.

MR. LeCHER: All right.

Did he travel extensively through Asia?


MR. LaCHER: Did he live on a large cattle ranch and had a brother of Indian tribe? Was he related with Indian or --


MR. LeCHER: -- any tribe?

MR. DeWOLFE: I don't know about the Indian tribe. He might have known -- because there were a number of Indians around. But as far as owning any land in Montana, no. My grandfather, his father and mother, didn't own any land out in Montana.

But, I think, in several of the biographies they mentioned that his grandfather owned a great cattle ranch. At one time he had written that it was a quarter of the size of Montana. That's an awful lot of land.

Anyway, his grandfather, I believe, Waterbury or the other grandfather -- they didn't own any land whatsoever, except maybe a small house.

MR. LeCHER: All right.

Was he a friend of Presidents and their families?

MR. DeWOLFE: No. He never met any of -- he never knew any of the Children of the Presidents. I believe he was referring to Calvin Coolidge.

What that stems from -- you see, what my father has done is he takes one tiny, small fact and then he balloons it way up. And what happened was that he had become an Eagle Scout in one year. That's one accomplishment he did do was become an Eagle Scout in one year from the age of eleven to twelve. He did it birthday to birthday. It was in Washington, D.C. I remember reading his small Boy Scout diary.

And I remember -- I still remember to this day, you opened it up and on a Monday it said, "I am going down today to see the President on the trolley." He's twelve years old; all right. And the next page it -- "Shook hands with President. It felt like a dead fish." And that was his extent or contact with the Presidency or families of Presidents.

MR. LeCHER: That was his contact --

MR. DeWOLFE: Because he was --

MR. I.eCHER: He shook hands with --

MR. DeWOLFE: President Coolidge.

MR. LeCHER: At twelve years old --

MR. DeWOLFE: And he said it was like a dead fish.

MR. LeCHER: At twelve years old and --

MR. DeWOLFE: It felt like a dead fish.

MR. LeCHER: Okay.

Did he ever perform a mineral -- did he ever study minerals for the United States and Puerto Rican governments?

MR. DeWOLFE: In Puerto Rico? No, no.

Somewhere in the twenties, there was a great big hurricane in Puerto Rico. You'd have to really do a bit of research to pin the date down. But there was a big hurricane and -- my father was a terrible student. My grandfather told me many times of all the times he had to go down and please talk the teachers into -- please talk the teachers into letting him stay in school, because he also was not a very good student at all.

So, my grandfather got the idea -- well, they had a big hurricane. The -- they were calling for volunteers because, evidently, it had pretty well devastated the island. So, my father -- my grandfather sent my father down there to help out. There were -- I think several of his other school friends went along with him. And all he did was whack around like a big old vacation.

Now, if that's a mineralogical survey -- in essence throwing rocks or something. But, no, there was no mineralogical survey that was made.

MR. LeCHER: He also claimed to do research at the university of Michigan --

MR. DeWOLFE. No, he did not do that.

MR. LeCHER: We -- I must ask you these questions because these are the questions that the faith is built on that your father can do all these things --


MR. LeCHER: -- and that's why he has so much credibility with Mr. Walters and others -- other high-ranking members of the Church of Scientology. So, therefore, we must ask you these things for the record.

How are you feeling, sir? Would you like --

MR. DeWOLFE: Fine.

MR. LeCHER: -- to continue?

MR. DeWOLFE: Sure.

MR. LeCHER: I'll just try again to walk you through this.

Apparently, there's something about L. Ron Hubbard as an individual to persuade a reluctant person who runs a Scientology organization to turn over all the proceeds to Hubbard.

Do you know anything about that?

MR. DeWOLFE: Oh, we did that several times. That was standard operating procedure. SOP.

MR. LeCHER: You mean, they built up the organization and he'd take their money?

MR. DeWCLFE: Right.

MR. LeCHER: Did he --

MR. DeWOLFE: He'd take over the organization, not just the money.

I mean, in the very beginning, you. must realize that it was a growing thing and there wasn't too many -- too many organizations. And building organizations in the early days was pretty difficult, and people had a great deal of faith and belief in Scientology and they worked very hard for it. And when they got an organization, we would take it over.

I can give you several examples of that that come to mind; there are probably more of them. And -- let me catch a few of them here for the fun of it.

MR. LeCHER: Were they like franchises?

MR. DeWOLFE: Yeah. They started out as independent -- as independent organizations, but, from the very beginning, since Scientology -- that is, since December of 1952, everybody was required to pay ten percent. If you audited professionally -- if you were a professional Scientologist, you paid ten percent. And this also included anything that was construed to be an organization, whether it be a corporation or just a group or a center. In those days we generally called them centers.

But insofar as the major corporation take overs were concerned, there was the one in 1953 in Philadelphia where we had given an accomplice that December of '53 -- and it was John Naugerbauer and Helen O'Brien. And they were somewhat reluctant to pay my father the money for the big congress they had. And he had a course -- it was called the Philadelphia Doctorate Course.

So, this Ernie Kitsch, who was a great, gargantuan man, well above six feet, probably weighed two hundred and fifty pounds -- and he had half his front forearm and his left hand sawed off, which he himself had sawed off with a bandsaw --


MR. LeCHER: And what did he --

MR. DeWOLFE: And he went along because he was a longshoreman.

MR. LeCHER: This is Mr. Kitsch?

MR. DeWOLFE: Yes, Mr. Kitsch.

And -- okay. Well, Mr. Kitsch and I, we went over to John's place and we tried to get the money from the Philadelphia Center. And we collected the money. In fact, we collected all the money, and collected the tapes and collected all of their books. And they quite willingly signed over their bank accounts and what have you, because, to put it pleasantly, we used physical force to do so.

That's where the first major --

MR. SHOEMAKER: Second --

MR. DeWOLFE: -- I'm sorry, second major take over of an organization. And then, as I said, we established our center in Camden, New Jersey, which is right across the river from Philadelphia, because we had set up the three -- the three non-profit corporations in New Jersey in December of '53.

The very first time we cancelled out on an organization was Ross Lamoureau had -- a man by the name of Ross Lamoureau had an organization in Phoenix, Arizona. It was a Dianetic Research -- it was a Dianetic type of center or foundation in Phoenix.

Well, Dad had left Wichita, Kansas in 19 -- in early 1952 and went to Phoenix. He didn't have any organization; all he had was his shoeboxes full of money. And we later, as time went on, took that organization from Ross to operate because Ross was doing very well and had a quite a number of people hanging about. And this is where -- this is the first experience I had -- the first experience I had where we leaned on blackmail, because, as I remember, he liked to have sex with little boys.

And in those days, of course, that type of activity was very punishable by the police, as I imagine it is now today. But today people can discuss that kind of thing, and it's okay if they know you're a homosexual or something like that. But in 1952, the people were pretty well strait-laced and that was devastating information. So, Ross Lamoureau rather thoroughly cooperated with us in what we wanted to do.

MR. LeCHER: So, we -- we can get into a lot of these things tomorrow. I want -- a few more questions, then, we'll leave the bulk of it for tomorrow.

You say these missions are like franchises?

MR. DeWOLFE: That's right.

MR. LeCHER: Is Clearwater a franchise? And Miami? I know Miami is smaller.

MR. DeWOLFE: No, I've had no dealings with it. But from looking at it on the periphery, it would have to be one of the main centers. But -- the three main centers would be Los Angeles, Clearwater -- Los Angeles, California, Clearwater, Florida, and East Grinstead, Sussex, England -- Saint Hill Manor -- in -- just outside of London.

MR. LeCHER: Could someone, say, go to Tampa and start a mission and pay ten percent as a franchise fee or as a rent or --

MR. DeWOLFE: Could someone do that?

MR. LeCHER: Yes.

MR. DeWOLFE: Yes, certainly.

As I said, it's always been that way from 1952 forward that people were expected and required to pay the ten percent. If they didn't, we'd do such things as revoke their certificates, or force them to come in for more training, or tell everybody that they couldn't go to a particular center now because they didn't have the latest tech -- tech, meaning technology -- or the latest full science on the world of Scientology.

MR. LeCHER: Sir, I think we'd like to just adjourn now until tomorrow morning. We have so much more to go. A lot of the meat of the issue is in here, and I would hate to get you in the middle of it and then we must adjourn.

MR. DeWOLFE: Also, I'd like to back up chronologically.

MR. LeCHER: Yes, sir.

And is there anything you want to say before we adjourn the meeting?

MR. DeWOLFE: No. I certainly appreciate you inviting me here.

MR. LeCHER: Thank you for attending, and thank you for being such a cooperative person. Again, we admire your courage.

Thank you ladies and gentlemen for staying with us. And we'll reconvene at nine o'clock tomorrow morning.

The meeting is adjourned.

(Whereupon, the hearing was adjourned until 9:00 a.m. on Thursday, May 6, 1982.)


I, Karen E. Rizman, a certified court reporter and Notary Public, do hereby certify that the foregoing hearing transcript of the City of Clearwater Commission Hearings Re: The Church of Scientology, pages 4 through 300, is a true and accurate transcription of my dictated tape recordings of the proceedings taken at the Clearwater City Hall, Clearwater, Florida, on Wednesday, May 5, 1982.

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Part 1 of 6

Day 2: May 6, 1982


Clearwater, Florida
May 6, 1982
Morning Session

MR. LeCHER: Good morning, ladies and gentlemen. Participants and interested bystanders, please take your seats. Good morning, again, and welcome back to the Clearwater City Commission Public Hearings. This is our second day, and I'd like to start again with the Pledge to the flag, led by Sid Klein, our Police Chief. And, also, the invocation will be given by our own vice Mayor, Paul Hatchett. So, please rise. (Whereupon, the Pledge of Allegiance was recited.)

MR. HATCHETT: our Father, I ask for you by name on all of the earth, and we pray for Thine divine guidance during our times of real sincerity. Give us courage, give us strength and the ability to be reasonable, courageous, and honest. We ask that in Thy name. Amen.

MR. LeCHER: Thank you. Thank you, Mr. Hatchett. That's really very appropriate. To those of you that are new to this, we have been through one day of hearing. We are now in our second day. And, of course, the Scientologists will have an equal time when our time is through. And we would hope that they would participate so that we can get an honest opinion about the business at hand with respect to Scientology. Yesterday, we were talking to Mr. Ron DeWolfe, who is the natural son of L. Ron Hubbard, who had a surname of Hubbard at one time.

RONALD DeWOLFE, a witness herein, having been previously sworn by a Clerk for the City of Clearwater, was examined and testified as follows:

MR. LeCHER: And Mr. DeWolfe, you do understand that you were previously sworn in?

MR. DeWOLFE: Yes, I do.

MR. LeCHER: And anything you say is under the threat of perjury. Mr. Flynn, do you understand that he does not have to be sworn in again; is that correct?

MR. FLYNN: That's correct, sir.

MR. LeCHER: All right. Yesterday, Mr. DeWolfe, we were talking primarily about the history of the organization, how you fit into it, and we kind of left off yesterday -- we were about to get into Dianetics and E-Meters. You could start there or you could backtrack and start wherever you'd like. I'm suggesting to you Dianetics and the E-Meter
as a starting point, but it's up to you, sir.

MR. DeWOLFE: The E-Meter would be fine. The E-Meter was invented by a Paul B. Mathieson in 1951. He was a chiropractor in Los Angeles. And he had been using it on his own and selling it on his own, and then brought it to my father. And for a short time through '51 and '52, he used his E-Meter but he would not let -- he would not let my father manufacture it. My father also demanded royalties and a piece of the action concerning its manufacture and sale. So, then, through the '51 and '52 era and even possibly even into '53, we were having to purchase the E-Meter through Bob Mathieson. But what happened here, it was used in early Dianetic auditing, but when Bob would not turn the rights to the E-Meter over to my father or give him a royalty, my father quit using it. And there was a time period in there in which he totally invented and created various Scientology processes which did not require the E-Meter. Then, later, we were with a Don Green in Washington, D.C., I think in 1954 or '55 a Don Green and Joe Wallace put together our own E-Meter and, all of a sudden, Scientology could now use E-Meters again. And we had -- he invented other processes that could be used with the E-Meter. It was a flow and ebb thing.

I think I want to make this point very clear: that the -- as long as my father had some control over the E-Meter in the beginning, then, it was used in Dianetics and Scientology. When he got into a war with Bob over money and we couldn't shake the E-Meter out of Bob's hands, then, we quit using the E-Meter. And then when they invented -- when Joe Wallace and Don Green in the mid-fifties in Washington, D.C. he then manufactured -- had those two guys manufacture the E-Meter in the basement of our headquarters at that time which was 1812 19th Street, Northwest. And then it became popular. It depended upon his control of it, of the instrument.

MR. LeCHER: Did Mr. Wallace improve upon the E-Meter, redesign it?

MR. DeWOLFE: Joe Wallace and Don Green made it solid state. Before that, the E-Meter was a tube affair, a lot of tubes, and it was a fairly good size. It was about the size of - I don't mean this as a joke - it was about the size of a breadbox. And then it also got to be a very big projection job, and it became more and more complicated. There were E-Meters with double dials, with four dials, with enough switches and dials on it to confuse you for a week. But -- and it got to the point, there were a few of them that were two feet by a foot by, say, eighteen inches tall and weighing about ten or fifteen pounds, which was kind of hard to lug around from one session to another, from an auditing session to another.

MR. LeCHER: Is the E-Meter a deeply religious symbol? If it is, I don't want to go into it any further, or is it used for other reasons? Like, a crucifix may --

MR. DeWOLFE: Well, I'm testifying to the early days where -- prior to, I believe, a court decision where this now becomes a religious artifact. But in those days it was not. So, I leave that to your decision as far as whether to continue with it. But it was -- an E-Meter was basically a skin galvanometer, a lie detector, and it would be technically called a balanced wheatstone ridge, which is a very simple basic electronic circuit. And one of the main things that I used to remember about the E-Meter was that our favorite electrodes, which we put onto Campbell soup cans - and Campbell Soup probably made a great deal of money from us -- but there was a small, very small -- in those days anyway, particularly, the ones that plugged into the wall; today they're battery-powered, and when it was designed and built in the mid-fifties it was battery-powered. But the ones that plugged into the wall had a tendency to, because of the amount of very microscopic electrical flow through it, electroplate your hands. That is, that the tin covering or the metal covering of the Campbell soup cans would come off on your hands and so your hands smelled pretty wierd most of the time.

But it was used in the beginning to, as I said, a crude lie detector. And when I say "crude," that's a relative statement compared to the, for instance, the present day polygraph that measures heartbeat, respiration, et cetera, et cetera, you know, several different patterns. So, anyhow, that kind of covers the E-Meter. As I said, the point I wanted to make about the E-Meter here is that it ran hot and cold with Dad, depending upon his control of it. And he would say, like, "Well, we don't need the E-Meter anymore because we have these new great, wonderful processes and techniques which don't require the E-Meter." He said that because he couldn't use the E-Meter because Bob Mathieson wouldn't cough it up.

Let me back up to a couple of other areas here, if you don't mind. I finished off where I had -- was discussing --

MR. LeCHER: Go at your own pace, sir.


MR. LeCHER: Go at your own pace and back up if you want to.

MR. DeWOLFE: I'm sorry, I didn't hear you, sir.

MR. LeCHER: I said just go talk at your own pace and back up whenever you feel like it.

MR. DeWOLFE: Well, I was talking about in the beginning where you had I think I was referring to the question about franchises, ten percent, and successful organizations.

MR. LeCHER: Yes, sir.

MR. DeWOLFE: Very quickly, to recap: There was the original Dianetic Research Foundation, Elizabeth, New Jersey, and that folded because of AMA pressure. And then there was the foundation in Wichita, Kansas, and that folded because of AMA pressure and, also, because of my father's taking off with all the money and fleeing in early 1952. So, getting together of organizations was rather difficult. But there were other people.

As an example, when they set up -- as good businessmen, they set up very successful organizations, and I had mentioned a couple yesterday. And one that crossed my mind was in Phoenix, Arizona. There's two more that are pretty important because they formed the basis today of -- and throughout the years -- the various corporations and organizations. In 1954, there was a J. Edward Farber, who had worked very hard and long in setting up the very first Church of Scientology in California. Looking at this you have to look at this slightly in retrospect and within the context of the time of 1954, it wasn't all that easy to set up a very solid bullet-proof church corporation in which you could do anything within the corporate structure. So, the Chamber of Commerce had this in California. And here, again, it also demonstrates the front organization thrust of my father's, that is, many organizations which are very confusing and -- by the way, to me, Scientology is Scientology. I've always understood it that way. It doesn't make any difference to me about what the corporation says or where the corporation is; it is a corporate-type of entity. To me, Scientology is Scientology, whether it's in Los Angeles or Clearwater or London or Quebec, Canada. It makes no difference; it's Scientology. And Scientology is L. Ron Hubbard. And there's many, many times, hundreds of times, he would get into terrible rages about "This is mine; this is mine. I run it, I own it, and I created it. And nobody is going to make any money out of it except me." And that is a synthesis of a theme which was pushed at me hundreds of times and anybody at the planning sessions.

So, anyway, J. Edward Farber had this tremendously wonderful corporation in California which he was very
proud of. And so, we whiplashed J. Edward Farber around and took the corporation over. He resigned and turned over the corporation to us. Now, one of the things, too, about corporations is that I was one of the early signatories to the very first Scientology corporations. In all, in any Scientology corporation, apparently ...

MR. SHOEMAKER: I'm sorry, I did that.

MR. DeWOLFE: -- apparently, quote, unquote, "run by Hubbard," my father always held signed, undated resignations. Immediately the very second you were put on the Board of Directors, you signed at the same time. I did it and a lot of other people did it. You signed an undated resignation which, then, he kept in his safe. So, if you didn't play by his rules, all he had to do was put the date on it and that was it, you were out.

MR. LeCHER: What was the reason that he started Dianetics and went from Dianetics to a corporation for a religion? How did you get in -- why did you leave the Church of Scientology?

MR. DeWOLFE: Okay. Well, you're going ahead a great many years and things. The -- how did Dianetics --

MR. LeCHER: Yes. What was the reason for converting Dianetics to something else, to a religion?

MR. DeWOLFE: Well, first of all, he couldn't use Dianetics anymore. He had sold the rights to Don G. Purcell in Wichita, Kansas, and he couldn't use Dianetics. He couldn't use the techniques, he couldn't -- he sold the copyrights to the books. And he had fled out from Wichita with all of the monies of the Wichita foundation. But he couldn't, as I said, use it. By the way, Scientology -- the word "Scientology" is not original to my father; my father told me. And it is that it comes from the German "scientologie" -- and if you ask me how to spell that, I don't know in German.

The best way I can really explain it very quickly -- very quickly, to bring you up to date, a little bit of biographical data here, autobiographical and otherwise. And when I was born -- I think I mentioned it before I was born at two pounds, two ounces and prematurely. My father had rather severely beaten my mother, and that's what caused that, while he was trying to get involved with black magic rituals. But throughout all of my early years, I had been with him quite a bit off and on. And then, of course, there was the major trauma of the divorce from my mother and the bigamous marriage with Sarah. But in early 1952 -- in early 1952, 1 went from Burlington, Washington, drove down, and started living with my father on a continuous basis. My very first connection -- my very first connection with Dianetics or Scientology, of course, was when my father mentioned about the book, Dianetics, and about the article in Astounding Science Fiction and then, of course, the book. In 1950, I was living in Burlington, Washington and he arranged for my auditing, my very first auditing.

My very first auditing was rather strange, because he had arranged it through the Seattle Dianetic group for me to commute from Burlington over there. But he told me that -- he told me two things: one was that I had to be -- he wanted me audited, and I had to be audited under an assumed name. He didn't want me to disclose who I was. And then he also told the auditors that he only wanted them to concentrate on my mother, because he didn't want to -- he didn't want me to disclose anything about him. And I thought that was sort of interesting.

I kept that up for a couple of weeks. Then, I got tired of not being able to tell anybody who I was. And how can one be audited Dianetically or remember incidents from the past when you had to completely edit and delete anything concerning your father and concentrate on your mother, and at the same time not disclose who you were? It got to be and I wasn't very old at the time, I was sixteen, but I knew enough then to figure out that that was very confusing. Then, I arrived in Phoenix, Arizona in early '52. He had just arrived from Wichita with Mary Sue. And the very first day -- the very first day I arrived, he wanted me audited immediately. But I had been driving all night and I was eighteen years old. I knew nothing about Scientology. All I had read was Dianetics*: The Modern Science of Mental Health, and it never really interested me very much as a book when I was young.

So, after about a couple of weeks there, we got involved -- he asked me to sit down on the couch, and I was high on Benzedrine, Bennies. And we started doing, quote, "research" on a book called History of Man. So, we spent a couple, three days on that. Here's the book here, The Scientology History of Man; here's a copy of it. And all the incidents -- he did a few with Mary Sue, but the majority of incidents in it were off the top of my head, as I had upwards of twenty, thirty milligrams of Bennies in me.

MR. LeCHER: It's a very small book, The History of Man.


MR. LeCHER: How many pages?

MR. DeWOLFE: But the thing about this that interests -- the interesting thing about the book is that this is purported to be, it is presented that these are incidents which are common to everybody's past. This is the PR about the book; this is the thrust of the book that these are early genetic incidents in the ancient primordial past of each and every man, woman, and child on earth. And it came out of my drug trip. And I don't know how many thousands of people have been audited on those particular incidents, like, return to the clam. That is where, genetically, you were a clam and you're having jaw trouble, and that was one of the bases of -- according to Scientology and my father, that's one of the bases of bad teeth, having trouble with your jaws, because you were having an engram as a clam fifty trillion years ago. But --

MR. LeCHER: That may be considered to be religious. And judged primarily on its face, we really don't want to pursue that. I'd like to ask you one more -- let's get back to the E-Meter.

MR. DeWOLFE: One quick thing, sir, I wanted to mention was that the areas I'm talking about in the fifties, it was not a religion then. We're talking about -- that didn't come in as a corporation until December 1953. Up through -- 1950 through '53, it was a science, so that's what I'm referring to here and I'm not getting into the area of beliefs in any way, as far as I personally am concerned.

MR. LeCHER: I realize that's a very fine line for us, too.

MRS. GARVEY: The book was written in '52.

MR. LeCHER: Then, the book was written -- thank you, Mrs. Garvey -- in 1952. Now, back to the E-Meter: Did the U.S. National Bureau of Standards describe the E-Meter as worthless as a diagnostic service?

MR. DeWOLFE: Yes. The FDA was concerned with the E-Meter because it was being used as a diagnostic tool, which, in fact, was true, I mean, the actual practice.

MR. LeCHER: The people that normally take these courses, are they the average run-of-the-mill person that you see in the street, or are they there because they're looking for help? I've read where the auditing can cure arthritis and leukemia. I've also read where your father cured an eighteen-month old girl, a child, I believe it was a girl -- of leukemia.

MR. DeWOLFE: That's not true.

MR. LeCHER: Is it possible, do you think, that your father has those powers?

MR. DeWOLFE: I'm sorry, what was that?

MR. LeCHER: Do you think your father has those powers or is that a hoax?

MR. DeWOLFE: No, but those are claims. And --

MR. LeCHER: Tell me about those claims.

MR. DeWOLFE: Well, first of all, leukemia is cancer and, according to my father, all cancer stems from the center of man. The center of man in Scientology is sex. His logic at the time that he was talking about leukemia and cancer -- was that cancer is cells which are dividing, and dividing cells is a sexual thing and -- as in prenatal activity, the conception. And so, therefore, the basis the basis of all cancer is sex. If you had any big bad problems with sex in the early childhood or something like that, then, this is what's causing your cancer. And --

MR. LeCHER: What about being a celibate?


MR. LeCHER: If you're a celibate, would that eliminate your possibility of having cancer?

MR. DeWOLFE: Well, that probably will cause cancer because of your lack of sexual activity.

MR. LeCHER: I guess there's no way you can win.

MR. DeWOLFE: Correct. And then, of course -- then, you know, compulsive sex or too much sex or something like that, that could cause cancer, too.

MR. LeCHER: Was your father preoccupied with sex?

MR. DeWOLFE: Very much so, yes. Anyway, getting back to your question on leukemia, he has -- he had written many things about the ability of Dianetics and Scientology to cure cancer and, also, has reportedly, in those days -- of auditing an eighteen-year old baby -- eighteen-month old baby successfully with cancer. And in my experience throughout Scientology, I have never seen any cure or remission or halting of cancer, period. And he had -- if you wait a second, I think I have -- this comes from -- I don't want to get all involved in the whole thing -- but this comes from "The Journal of Hubbard's Association of Scientologists International." You see, that was a quote, "scientific organization," and quote, "not a religious organization." It was copyrighted in 1953, and quote: "Leukemia is evidently psychosomatic in origin, and at least eight cases of leukemia have been treated successfully by a Dianetic Center medicine had traditionally given up. The source of leukemia has been reported to be an engram containing the phrase," quote, "'it turns my blood to water,'" unquote.

MR. LeCHER: What does that mean?

MR. DeWOLFE: That means that eight cases of leukemia had been treated successfully by Dianetics.

MR. LeCHER: Okay.

MR. DeWOLFE: And that it's not true, but that's what -- this was written by my father, L. Ron Hubbard.

MR. LeCHER: Tell me about The Old Man's Casebook?

MR. DeWOLFE: That's just where I pulled it from.

MR. LeCHER: The Old Man's Casebook?

MR. DeWOLFE: Yes. That's it; I just pulled it from there.

MR. LeCHER: That's where the source of the cure of leukemia --

MR. DeWOLFE: The Old Man's Casebook by L. Ron Hubbard, and it's a -- this was the journal of Scientology which we put out. And he wrote virtually every word in all of the journals. And, also, you will find in some of those journals a man by the name of Tom Esterbrook, and that is L. Ron Hubbard, too.

MR. LeCHER: Did he ever have any other nom de plume, other than Esterbrook and L. Ron Hubbard?

MR. DeWOLFE: In Scientology, that was the two main ones. He had them previously in his science fiction and western writing. Winchester Remington Colt was one of them. I believe --

MR. LeCHER: That's his gun or his name?

MR. DeWOLFE: That was his pen name. He had Rene Lafayette. He wrote the book, The Dr. Methuselah Stories, under that name. I believe there was something like Captain Phillips. He had half a dozen different pen names.

MR. LeCHER: You left Scientology in 1959, and you began to disassociate yourself from the organization. According to this that I have, you watched the organization become a criminal conspiracy. Can you tell me about that?

MR. DeWOLFE: Well, that is slightly incorrect. I was very much a part of the criminal conspiracy through the fifties,* so it really wasn't me watching it become a criminal conspiracy. It would have to be I watched it continue to become a criminal conspiracy, to be more accurate. Well, you must realize that power corrupts, and absolute power corrupts absolutely. But I wish to paraphrase on that, which is that, for instance, power is very enjoyable, and total and absolute power is ecstasy. Scientology is a power and money game. The definition of life in Scientology is what is called a game. Life is a game, the same as Monopoly or playing Gin Rummy. And it doesn't have all that much reality to it, which means that you can pretty well do what you please. And one of -- my father always felt that he was above the law because he had created the law. He created whatever rules, regulations, and laws to be lived by. There was only one sin in Scientology which was repeated to me at least a few thousand times, which is getting caught.

MR. LeCHER: Can you be more specific about --

MR. DeWOLFE: Well, I'll give you a basic viewpoint.

MR. LeCHER: We'll get into that a little later.

MR. DeWOLFE: I think, yesterday I alluded to several things that we did. For instance, in the Philadelphia fiasco being served the papers by the U.S. Marshals in December '53, I ran around and emptied all of the bank accounts out, which was, I guess, subverting the purposes and the desires of the federal court. And we grabbed up all of the mailing lists and ran off with them. And I remember going around all day before the court thing and hoarding and putting away what money we could from a couple of -- I think we had two bank accounts.* I didn't have, my father did, two bank accounts. And we went out in the country and I hid for a day or so to make sure that both the mailing lists and the money were protected. This was money which, I would imagine, rightfully the federal court would have been interested in. We did such things as when we took the organization over from John Naugerbauer and Helen O'Brien, I mean, we beat the hell out of them. I mean, that --

MR. LeCHER: Physically?

MR. DeWOLFE: Huh? This would be in 1953.

MR. LeCHER: Physically, did you beat them or mentally --

MR. DeWOLFE: Yes, yes. And --

MR. LeCHER: Physically, you beat the hell out of them?

MR. DeWOLFE: Correct. We -- that was Ernie Kitsch and I did that little number.

MR. LeCHER: Is that the man -- the one-armed man?

MR. DeWOLFE: Yes. His favorite phrase was "I'm going to go have a con with him." And it meant more than a conversation. And as an example, transportation of funds in and out of the country. And I carried a whole valise full of money into England. It wasn't breaking English law, but it was breaking American law. And because, after all, it was, you know, from a non-profit corporation that was going into my father's Dollar Account in England. A Dollar Account is a special bank account. It's set up with permission of the Bank of England, and that meant that you could bring money in and out of that Dollar Account without any problem. This and a couple of checks upset Immigration, and they sent me back to -- British Immigration, they sent me back to Ireland -- I mean, Holland, and I got brought before a member of Parliament. And that was a very interesting thing, but not really appropriate here. I'm trying to remember specific things. Now, you're talking about --

MR. LeCHER: Well, we could --

MR. DeWOLFE: Criminal activity?

MR. LeCHER: Yes. If you could -- I'd like to just go through the outline, and my colleagues can get more specific things. And we could maybe take a break and you could refresh your memory. But I also see that your sister, Kay, was apparently blackmailed by -- she thought she was -- by the Scientology movement. Is that true? Do you have a sister, Kay?

MR. DeWOLFE: Yes, I do. That's her name.

MR. LeCHER: Apparently, she was given auditing and she was blackmailed by that auditing.

MR. DeWOLFE: Yes. I think she still is being --

MR. LeCHER: Do you want to talk about that?

MR. DeWOLFE: Certainly. Do you mean, what the blackmail was or --

MR. LeCHER: Well, if it's too personal in nature, I don't really have to hear that.

MR. DeWOLFE: I don't mind telling you what I know.

MR. LeCHER: But, apparently, your sister, Kay, was blackmailed by her father's own organization?

MR. DeWOLFE: Yes. To -- as one matter, to want to keep in touch with me would -- she's my full sister and I loved her very much and still do. And we're a very tight, small family. But still they wanted her to keep -- to keep tabs on me. And there are two pieces of information which would really, as far as she is concerned -- as far as I am concerned, there isn't -- but as far as she is concerned would upset her a great deal and upset her husband's family and all of that.

MR. LeCHER: Okay. Can you tell us about the Sea Org? Did your grandfather die and then, they sent the Sea Org to pick up your grandfather's remains at the funeral and --

MR. DeWOLFE: Yes, that's correct.

MR. LeCHER: I'd like to hear about that. And what about the trust fund for Leif DeWolfe?

MR. DeWOLFE: That's my son.

MR. LeCHER: All right. Can you tell us something about that?

MR. DeWOLFE: Well, my grandfather died in 1975; my grandfather was eighty-eight years old. Up to about thirty days before he became ill, he had a very solid good memory, and we were extremely close. My grandfather was almost the total opposite of my father. My grandfather had spent thirty-six years in the Navy as an officer and a gentleman. And he had gotten very ill, and I didn't know that he was ill because nobody -- as soon as he got ill, my father had given instructions to my grandfather's wife, Marjorie -- it was his second marriage -- that I was not to be told. And so, the very second that he got ill, she was to inform my father. And they sent in a full Sea Org crew to supervise things. Because I remember, when I did find out about it, I was terribly upset, because they hung around town and the very second he died, they took off with everything that he owned. This was, possibly, an attempt to cover his past and, also to -- cover the past of my father. But, also, remember that he has a basic thing that he owns everything, and that was all of his things, he thought. So, he took them all. And, also, later on, Marjorie had said he had told her and a couple of other relatives that I was somehow directly responsible for my grandfather's death, which is totally untrue.

MR. LeCHER: He then purchased a ship, a three hundred-foot transport with -- what was that ship used primarily for?

MR. DeWOLFE: Well, he was rather -- from what I was reading and what I also knew of him in personal experience, being moved around. If you had a total litany of all the moves that we made organizationally -- I'm talking about geographically -- it was back and forth around the United States a great deal, because he kept creating heat wherever he was at, as I said, going back to the Elizabeth, New Jersey foundation. He was very -- the British government were looking into the affairs of Scientology to a great extent. He has an org in Rhodesia; Rhodesia kicked him out. In South Africa, they didn't like him.

MR. LeCHER: Would you say he was like a ship without a country?

MR. DeWOLFE: Yes. So, what was -- that's why he got into the Apollo. That's why he got that so he could have some freedom of action of having a complete headquarters that could leave at a moment's notice. Because, ever since Elizabeth, New Jersey, he has always been totally and fully prepared to leave at a moment's notice anywhere, any time. He's always kept great chunks of cash literally within arm's length so that if there was any problem he could just take off right out the window. Starting off, when I first saw it in 1952, as an example, there were shoeboxes full of money in his closet. All he had to do was throw it in a suitcase and go. Nobody could trap him that way. And at one time I helped him transport -- later on, in Washington, D.C. in the mid-fifties -- two suitcases full of money that I, at two hundred forty pounds, could barely pick up.

MR. LeCHER: What kind of activities took place on that ship?

MR. DeWOLFE: I don't really know, sir. I was never on the ship. I wasn't there when he purchased it. I was just trying to explain his motivations for being on the ship. So, I'm sorry, I can't answer that.

MR. LeCHER: If you can't answer that question, then, I'll go to something else.

MR. DeWOLFE: No, I wasn't on the ship.

MR. LeCHER: Well, what kind of activities went on on the ship? Was it for study or for --

MR. DeWOLFE: Well, it was a complete floating headquarters. He had everything there.

MR. LeCHER: Like a training ship or --

MR. DeWOLFE: Training ship, processing, auditing, including communication. This was all -- this was the private world headquarters of L. Ron Hubbard.

MR. LeCHER: Did they eventually -- did this ship eventually land or dock and are those people, those kinds of organizations being now performed by the Church at the Fort Harrison Hotel?


MR. LeCHER: So, that's a land-based operation that used to be on the ship?

MR. DeWOLFE: Right.

MR. LeCHER: All right. Let's get to the 1960's and, apparently, the Scientology organization is being sued by the United States government and Hubbard claims there's a criminal conspiracy and operations against the U.S. and private citizens, et cetera, et cetera. Then, we get down to Fair Game Policies, disconnecting. How do these -- all these fit in from the 1960's until the present, or at least as far as you know?

MR. DeWOLFE: Well, as far as, like, the R 245, we'll cover that and the Fair Game Policy. The R 245 occurred, I believe, in December '54 or '53. He was at a congress -- a congress would be like a convention -- in Phoenix, Arizona, and all of the delegates were there and all of the attendees and members. And I was standing in the wings and he pulls out a Colt .45 semi-automatic pistol.

MR. LeCHER: Is that your father?

MR. DeWOLFE: Yes. My father pulled out this 1911 Army model. I remember he had it for years; he stole it from the Navy. Anyway, he also stole a machine gun from the Australian government which he kept for years, until the Australian government tracked it down and told him to give it back. Anyway, all of sudden, it was a total surprise, with his right hand he just pointed the gun at the floor and fired it. And he has said here and later written -- wow, written up by Al D. Hart, the editor of the Journal Magazine in the fifties, that it was a blank, but it wasn't, because, later on, I happened to see the hole in the floor. But R 245 is a one-shot -- as he said on the stage then, a one-shot clearing process, particularly useful on psychiatrists. And everybody is laughing, of course. When the gun went off, everybody jumped about a foot in the air and there was a lot of confusion because it was a pretty good sized hall, and a lot of people in the back really couldn't see the gun because it came out so quickly. And everybody was laughing kind of nervously. And as he came off the stage towards me, I'm laughing about it. And he looks me right in the eye and he says, "I mean it." Now --

MR. LeCHER: So, permanent clear is when someone --

MR. DeWOLFE: Permanent clear, yeah, you know that's -- the whole thing is quick exteriorization, that is, leaving -- an instant out of the body, a permanent experience, an instant clearing. And through the fifties, it was -- at least, I considered it to be a joke. And then later, see, he got very serious about things that I had thought in the beginning were jokes, and that was one of them. And the various policies of disconnect -- we had a slightly different one. You must realize one thing here that many, if not most, of the basic, very basic, policies of Scientology that are now written weren't written then. They were practiced first and, then, later on at sometime written. So you will find that a lot of things that I am talking about and other people throughout the fifties talking about, that it was the standard, routine operating procedure, but it just wasn't a written down thing. And later; it was written down and what he would term codified.

And the Fair Game Policy, he's had that as long as I've known him.

MR. LeCHER: That's the attack the attacker. Fair Game is to --

MR. DeWOLFE: That's correct.

MR. LeCHER: -- pursue in an effort to destroy --

MR. DeWOLFE: Destroy the attacker. And there's only one good defense, and that's to attack, quote, unquote.

MR. LeCHER: Okay. And I'm trying to get through this so that we can all get a chance to question you further. The Blown Student is the policy that is to kidnap a student that tries to leave.

MR. DeWOLFE: Oh, yeah, I invented that.

MR. LeCHER: You invented that?

MR. DeWOLFE: Sure.

MR. LeCHER: Tell me about that.

MR. DeWOLFE: Oh. Let me back up slightly by saying this --

MR. LeCHER: Okay.

MR. DeWOLFE: I ran, as chief instructor, oh, about two dozen advanced clinic courses; those were six-week courses. I ran the very first one and, starting about 1953, I set up all of the training routines and all the training programs. I invented and put them together. I started doing the training at the age of eighteen in 1952. My father gave me a set of tapes that I hadn't heard, and I'm eighteen years old. And he says, "Here, teach these. I'm going to London." And I said, "Well, I don't know what they say." He said, "Well, just listen to them yourself and, then, talk about them to the students." Now, here's an eighteen year-old guy who went to three high schools, never graduated from any one of them, who had never studied the subject, and now I am the chief instructor and the chief training officer in Phoenix, Arizona in 1952. There was only one other man in the office, Al D. Hart. So, here I am at what my father called later college. And that's the way I learned it. In fact, most of the tapes and lectures that you see clear through the fifties in the United States and quite a number of them in England was when I was there when those lectures were made live. What the procedure was: He would give the lecture, giving a slight outline, and then I would stand up and teach what I just heard. So I got very good at double talk and being pretty good at it. Also, it was up to me to formulate and set up all of the training programs, all of the training courses. I originated the grind, which -- I don't know if you hear that word today or not -- but that was like eight o'clock in the morning for students to ten o'clock at night, seven days a week. You got grounded into the ground, okay. You also must realize that at that time I was pretty fat, sassy, and brassy -- and as I was referring to earlier about the exercise of power -- here's a kid eighteen, twenty, twenty-one, twenty-two who was teaching people that were doctors, lawyers, rich people, people like that, and so I really exercised power. They did what I told them to do or else. And I ran them ragged. I was probably equal or even rougher and tougher than a Marine GI, and that's no exaggeration. Okay. As far as Blown Student goes, that was a big ego trip. Nobody blew my courses. In fact, even a few times, I'd handcuff them to their chairs. And I originated that that there's a basic thing with the road out is the road to -- that was a very early pre- religious thing statement of Dad's. So, the thing to do was to continue with the course, continue with the training. So they had to finish it. And I was pretty big physically, and if somebody ran out on me, I went and got him. And it might take me and half a dozen other guys to go get him, but I got him. And they came back. Several times, they dragged them back by their teeth, you know, "Just sit down." A good friend of mine -- I still know him -- I chased him down the street. He locked himself in his apartment. I just knocked the door down, smashing and punching, and grabbed him by the collar and drug him screaming all the way back and threw him in the auditing chair -- in the training chair. So, Blown Student, that's where that comes from. That originated the eighteen-to twenty-hour training schedules, the heavy SS style training methods.

MR. LeCHER: Okay. We've gotten -- I'd like to ask you about Hubbard's fees --

MR. DeWOLFE: I'm sorry, sir?

MR. LeCHER: How much does your father charge, or his organization -- does he charge -- well, I see Hubbard charges heavily for books and courses and, if he sets up organizations, he demands members pay him ten percent of their gross.

MR. DeWOLFE: That's right.

MR. LeCHER: So, if a man or woman makes $10,000.00 a year, does that mean they will pay him one thousand --

MR. DeWOLFE: Yes, if they --

MR. LeCHER: Like a tithe?

MR. DeWOLFE: Yes, ten percent. And I know his lecture fees, quote, unquote, for various conferences were a minimum of $5,000.00. You've got to realize in the early and mid-fifties, $5,000.00 was a lot more money than it is today. And the same with the advanced clinical courses; it was for $800.00. Every course was for $500.00, and auditing was $500.00 per twenty-five hours. But in 19 -- as I said, in the mid-fifties, $500.00 was a darn good average month's salary.

MR. LeCHER: Well, I see a man here charged $25,000.00 in 1955 to a person who teaches a Doctor of Scientology course. Twenty-five thousand dollars is a lot of money today.

MR. DeWOLFE: Sure. Yes. And he also guaranteed to clear a guy, Tom Maxwell of New Orleans, in '52. I remember that because we -- he must have had a dozen different auditors, including me, but he wouldn't get clear. And he had paid all this money to get clear, and it was one of those things that he just flat, Dad just flat guaranteed to clear him.

MR. LeCHER: Every six months, apparently, your father came out with a new discovery; is that true?

MR. DeWOLFE: Yes, because that was just about the time period it took to teach one course and interest would start to lag a little bit. And so Dad had an insatiable desire for an awful lot of money. He would come in, and he would come up with new processes and new techniques. So it was set up fairly well routinely on almost a six-month basis of new courses, new things.

MR. LeCHER: Every time he got in trouble with the authorities and there was a law case, did he go out and pass the hat amongst the various missions to raise fees? I see that he raised $100,000.00 for fees. Was that for legal fees or was that just for fees for his --

MR. DeWOLFE: I don't have any knowledge about that particular incident. But during the fifties, there was not much legal trouble. He -- as I said, he would take an organization over or -- everything accrued to him. He signed on every bank account. He and Mary Sue Hubbard were the only two people that could sign on the major bank accounts. During the fifties, in a couple of organizations, there were a couple of other women or men who would sign, which he -- in the mid-fifties -- but that was mostly, I guess you would call, housekeeping accounts, just to pay the utilities, et cetera.

MR. LeCHER: Why does the organization cause people to work so hard. Like, I see that they may work fourteen hours a day at little or no pay with virtually no sleep. How can you think -- what's the answer -- how can you continue to work this way seven days a week, and why must you work so hard to be a Scientologist?

MR. DeWOLFE: Well, as I -- I want to point out that I left in 1959, and I don't know as much about --

MR. LeCHER: You said that you devised the Blown Student --

MR. DeWOLFE: The Blown Student, yes. Right.

MR. LeCHER: -- and brought them back --

MR. DeWOLFE: That set the tone and the standard for the long, drawn out, heavy amounts of times that people had to put in it. Also, the pay was incredibly low I can remember, even in the fifties. Sometimes, even then, people in the organization were only getting five or seven or ten dollars a week, and they were living sometimes a dozen to a room.
All the money went to Dad -- he could financially about paying things out. What is true: If you're not receiving much money and you're putting a great deal of -- see, we had a goal to clear the planet, and everybody was being very dedicated about it. But another problem he had too, then, of course, was health. Now remember that psychiatry and medicine was one of our major enemies and opponents. And, of course, since Scientology Dianetics could cure and alleviate anything and everything and had the answer to all of man's problems, one did not go to doctors. Of course, one didn't have enough money to anyway, but one did not go to doctors. And people's health suffered a great deal. And there's quite a number of people that I know personally that suffered a great deal because of that.

MR. LECHER: All right, one other question before I turn it over to my colleagues. Do you think that people who are in Clearwater who parade up and down the street -- do you think they are dangerous to themselves or to the people of Clearwater?

MR. DeWOLFE: Are they dangerous to themselves?

MR. LECHER: Or to the people of Clearwater?

MR. DeWOLFE: Both.

MR. LECHER: Would you like to explain that?

MR. DeWOLFE: It's not really easy to explain. But first of all, they really don't know what they're doing. The average people coming in the door to Scientology, until they get to the very, very top, they don't realize that they buy step by step. They start believing all of the various falsehoods, like, for instance, L. Ron Hubbard's past, et cetera. And they just don't know what they're doing. And --

MR. LECHER: Well, do you feel, if your father should die of natural causes, what effect would that have on the faithful?

MR. DeWOLFE: I really have no way of predicting, but I think that there's a couple of quotes that my father used to say all the time that really scared me to death. He at one time was also talking about really taking on the world. And I remember in 1958 an example which scared me to death and started myself thinking -- he wanted me to devise a plan to try to steal an H-bomb.

MR. LECHER: Your father wanted you to steal an H- bomb?


MR. LECHER: Your father wanted you to steal an H- bomb?

MR. DeWOLFE: Yeah. He wanted me to --

MR. LECHER: From whom?

MR. DeWOLFE: Anybody and everybody. I never got into it, because I said, "Oh, no, thank you." And sort of -- things went click in my head, and I said, "I have two children and I don't want to get involved in that." And that was in late 1958.

MR. LECHER: He wanted you to steal the parts or the whole bomb?

MR. DeWOLFE: No. He wanted a whole package. As an example, one of the things he said to me was -- he said it many, many times -- he said, "Don't call it murder, call it suicide." And there's another quote, "I connotate loyalty as the highest ethic." That means, "Follow me." That means, "Total dedication, total loyalty to me, L. Ron Hubbard." And that's the one thing that he put before any and all -- everything. And --

MR. LECHER: Because of --

MR. DeWOLFE: So, anyway, that would lead me to believe that this -- knowing as much as I know about it, that --

MR. LECHER: I will not pursue that anymore at this point. One other question: Is it -- do you think that the organization wants to control our economic system?


MR. LECHER: Thank you. I would like to ask Mr. Hatchett if he would like to ask any --

MR. FLYNN: Mayor, may the witness make one more statement about a particular area before we get into questions?

MR. LECHER: Certainly.

MR. DeWOLFE: Okay, sorry. I left Scientology November 23rd, 1959. I tried to do one or another thing up till about 1962, and that didn't work too well. So then I got a job. Almost immediately upon my leaving, on January 3rd, 1960, my father sent me a telegram threatening to have me arrested for stealing a mailing list. There were other threatening telegrams and activities in which he was applying to me the standard tech of attack and destroy, but he was applying it to me. I helped him do it, and I thought this was kind of incredible. But he turned around and tried to destroy me. This happened in 1960 and kept up with a whole variety of things, which are really unimportant. But at this juncture and to the question. So I got very angry and upset because I had the children, and the only thing I knew how to do in the world was auditing, and I had a hard time getting a job because I didn't know how to do anything, except, you know, how to be a ridiculous rock star jumping around, pushing students around.

Anyway, I left originally, by the way, very -- which is very important to this thing -- is because of my children. I didn't want my children involved. I had had a pretty well messed up, turned around childhood. And the weekend around November 23rd, my wife -- twenty years at the moment -- she just flatly -- she's the type of person that's very calm, cool, and collected; she gets angry about once a year -- about once every five years. She flatly just came out and said, "Okay, you've got a choice between me and the children or Scientology. Make up your mind." This was on a Friday. And I said, "Okay. It's you and the children." Zip, off we went. And so, that was one of the basic reasons I left, plus the fact that I was getting very tired of all of the scam and the con and the fraud. And also, even though I was L. Ron Hubbard, Jr., I wasn't being paid much more than the people struggling for seven and ten and $25.00 a week. I just didn't have any money. Okay. That's one of the basic reasons, and I now have six children, five of them up and grown and all of that.

In 1962, 1 got very angry and upset. All I wanted to do with Scientology was to forget it, which was an impossible situation. I've tried to do it for twenty-three years. So, I decided, "Well, the heck with it." It's one of those things that's, I believe, humanly impossible to either cover your past or to turn a blind eye to it or forget it.

So in 1962, I contacted law enforcement and said, "Do you want to hear a few things?" And starting off from there, I got involved in an E-Meter case that the FDA brought against Scientology and, also, an IRS case, and helping other lawyers, authors over the years. And so, it's just a matter of disseminating information. Okay. Well I got involved in the IRS case, and I don't quite at this instant have the exact dates at my fingertips. And they were really pretty upset that I had appeared in public and started spilling the beans, even though it was highly limited about strictly financial affairs.

And so, about 1972, they embroiled me in a sales organization in Beverly Hills that I, in the beginning, didn't realize was a Scientology front organization that Bob Thomas had set up with an Alan Walters to suck me in and try to nail my hide to the barn door. At this was, I believe, in the early part of '72. I would have to check around on dates to give you the exact date. But I walked there one night to -- thinking it was a sales meeting, and it was Bob Thomas. Bob Thomas, by the way, at the time was the Guardian U.S. I mean, he was the head of all of the Guardian offices in the United States. That's what I understood at the time.

And he starts telling me how I was such a terrible, awful person, et cetera. I'm using very nice language which wasn't the exact phrasing. I do feel constrained about that, about the fact that he wanted me to take back the testimony that I gave in the case. He wanted me to recant all of the various things that I had said about Scientology, which, up to that time, had been very honest, truthful, and factual, and given under oath, as it is today, which, by the way, since I left Scientology, is something that I consider to be quite valuable and I cherish a great deal. I'm talking about the laws and the constitution, and I take my oath as something very serious.

MR. LeCHER: You were the Founder's son and you were there since the beginning and you had --

MR. DeWOLFE: I would like to finish this.

MR. LeCHER: I'm sorry, sir.

MR. DeWOLFE: But I just had to slow up a little bit because I do get just slightly emotional about this.

MR. LeCHER: Sorry to --

MR. DeWOLFE: That's all right. It's very important. So, anyway, Bob Thomas, to make a long story short or we'll be here until tomorrow, to make a long story short, showed me photographs of my children going to and from school. And we got calls in the night. My wife was scared to death with calls; strange people would be looking through the window of our little house. I believe at the time that I was working for Sales Training, Incorporated, which was a thing about selling sales courses in Los Angeles. And I didn't have any money, and I lived in a very small house. I think the house was probably, if you put it all together, you could fit, maybe, two of them in your chamber here.

And so they wanted me to recant. I had refused. And then he brought in about how my father still loved me and how I shouldn't do such terrible things to dear, sweet, wonderful Dad. And then what happened was -- because they wanted me to recant -- and so, because I was under duress at the time because I was scared stiff, there's a lot of things that happened in Scientology that I haven't brought up at the hearing simply because they are not really apropos to here.

And I hadn't been out of Scientology really that long, and it I didn't know what the legal ramifications were and I didn't want other things to get out about -- I mean, I was scared of police, I was scared that somewhere along
the line, and throughout the other things I did in the fifties might be coming out and they might try to blackmail me, which they did. And so I signed a thing recanting the testimony. If you carefully examine that, I don't think it has a great deal of legal validity. But that occurred in 1971, '72.

This also was in relationship to a Paulette Cooper who had written a book, "The Scandal of Scientology," and getting involved in the writing of an article called "A Look Into Scientology" or "One-Tenth of Scientology." Also, there's a Robert Kaufman who wrote a book called "Inside Scientology," and he was going through a lot of hell trying to get it out. And evidently, Paulette Cooper was all involved and getting sued in a real donnybrook with Scientology. And I had read the book. In fact, I found the book on the newsstand. I didn't even know the book existed until I saw it on the newsstand. I picked it up and read it and, then, I called Paulette Cooper and one thing led to another in my involvement in giving her information. A Maurice Gerulius of Nuclear Press wanted an introduction to the book, "Inside Scientology," by Robert Kaufman. And, of course, Scientology didn't want me to write the introduction. And, of course, they were trying to destroy Paulette Cooper and they were trying to destroy Maurice Gerulius, the publisher of the Nuclear Press, and they-were trying to destroy Robert Kaufman. And then, they were also trying to destroy me.

And then, in order to protect my wife and my children, and quite literally to protect them -- I mean, the other people involved -- I signed the recant.

MR. LeCHER: Thank you. Before this meeting started, we said that we might like to take a break for five or ten minutes. Would you like to take one now or --

MR. DeWOLFE: That would be nice.

MR. LeCHER: It would be nice to take a break? All right. Before we start with our questions, we'd like to take a short five-or ten-minute break and then come right back.

(Whereupon, a recess was taken.)

(Whereupon, the hearing resumed.)

MR. LeCHER: Please take your seats, Commissioners, staff, and consultants, and witnesses. Commissioners, I know that we have a very interesting witness and we'd like to question him at length, but if we could keep it brief. We have many others to go and time may be running out. And we also must quit early tonight because we have a Commission meeting at five. So we will be here for virtually all day and all night. As far as tonight, I would like, if possible, to quit at ten so that we can get home and be here at nine tomorrow morning again. So I would ask if you would be brief and to the point. Nor do I want to stifle any questions you may want to ask, too.

We're going to lead off with Mr. Hatchett now, so everybody has a chance to lead off first. We're going to alternate as the various witnesses come before us. So, now, I'd like to introduce to you Paul Hatchett, the vice Mayor, who will lead off.


MR. HATCHETT: Mr. DeWolfe, is it true you lost power in the Church before you left?

MR. DeWOLFE: I lost power in the Church?

MR. HATCHETT: Lost power in the Church of Scientology before you decided to leave? Was your power base waning?


MR. HATCHETT: You still had --

MR. DeWOLFE: I was Executive Secretary when I left.

MR. HATCHETT: I read in the notes about an entry of your son's trust fund in --

MR. DeWOLFE: Well, my father believed that everything that my grandfather and grandmother owned belonged to him. My grandfather had set up a trust fund unbeknownst to me until he died and his Will was probated, and evidently, my father wanted it. It was an educational trust fund so that my son, Leif, my oldest son, could go to college. And it amounted to about ten, $12,000.00.

Later, evidently through my sister, they sent a poison pen letter to the insurance company, saying I had misappropriated the funds and I had misspent the money and fouled up in various ways. And so that took a little bit of juggling around to sort things out.

But in the very beginning with the attorneys, it was a legal matter. So I had a very good attorney that handled all of the estate problems, what have you, and liens on the matter. And, of course, there was the original trustees of the People's Bank in Burlington and, of course, the insurance company and the probate court, the probate court in Seattle, Washington. So, the whole thing, I was -- it was kept very legal and very proper and, in general, I handled very little of the money and the arrangements.

But anyway, it was just a matter to try to gain control of the money, or keep my son, Leif, from being able to use it for his education, which he did use it for.

MR. HATCHETT: Well, the crux of my prior question is, is it still in force? Does your son still have benefit of the trust fund?

MR. DeWOLFE: No, no, no. It was only ten or $12,000.00, and he had to work and we had to work to get him through college. He graduated from college in less than four years with about a 3.95 grade average.

MR. HATCHETT: All right, thank you. I'm going to ask you a few rapid fire questions.

MR. DeWOLFE: Sure.

MR. HATCHETT: Your father wrote from the top of his head you kept emphasizing.

MR. DeWOLFE: Yes, correct.

MR. HATCHETT: A lot of fictional writing.

MR. DeWOLFE: That's correct.

MR. HATCHETT: Apparently, you did the same.

MR. DeWOLFE: No, not throughout the period there. I had written part of a book, as far as my own writing is concerned. I wrote all of the techniques and processes in a book which was published in England called Creative Learning. That was a series of processes used on children in school. The fictional thing would be, for instance, like, "The History of Man," coming up and creating the incidents, as I mentioned the clam, that type of thing. But I have written very little of anything after Scientology.

MR. HATCHETT: All right, thank you. That satisfies me. You mentioned, also, that I imagine, your father deserted you, and you mentioned that he sent very little money back for food and clothing.

MR. DeWOLFE: I'm sorry, I didn't quite hear that.

MR. HATCHETT: Your father sent very little money.

MR. DeWOLFE: That's --

MR. HATCHETT: -- for food and clothing.

MR. DeWOLFE: That's correct.

MR. HATCHETT: Did he desert the family; is that what you really said?

MR. DeWOLFE: He sent very little money or used very little money. At one time he had a boat -- excuse me. He sold a story and I believe it was about twenty-five hundred dollars. He went down to the post office to get the check, and he was gone all day, and we couldn't figure out where he went, and he bought a yacht. And we didn't have much food. As I said, my father's support came from my mother and also came from my grandparents to a very great extent. And it was pretty much of a hard scramble for money throughout the thirties and the forties.

MR. HATCHETT: Did you ever have a desire to be number one in the Church of Scientology order or hierarchy?

MR. DeWOLFE: Sure; sure.


MR. DeWOLFE: Yeah.
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