How Scientology’s 1970s infiltration scandal led to the creation of its IAS slush fund

(Authored by Jeffrey Augustine, this essay was originally published by Tony Ortega at the Underground Bunker and is reprinted here for archival purposes)

July 8, 1977: The FBI conducts a massive raid on the Church of Scientology to find evidence relating to its “Snow White Program.” The raid eventually leads to eleven top Scientology leaders being criminally charged and convicted for their role in the conspiracy to burglarize federal offices.

SEFThese Scientology defendants, including Mary Sue Hubbard, wife of Scientology’s founder, L. Ron Hubbard, needed a great deal of money for legal defense. So in 1978 Scientology’s notorious Guardian’s Office created the “Safe Environment Fund” (SEF) to pay for the significant legal expenses of the GO members who had been indicted. Essentially, the SEF was a GO legal slush fund that generated a significant amount of unrestricted donations.

The GO could spend the money on almost anything broadly related to the defense of the Guardian’s Office members. This included funding private investigators to engage in spying and dirty tricks. Even as the GO became the precursor of OSA, the SEF became the precursor of the IAS.

One of the more notorious church operations likely funded by the SEF involved the private investigator Richard Bast, who was hired to find dirt on Judge Charles R. Richey.

After the Snow White Program was busted up, nine top Scientologists, including Mary Sue, were indicted and faced trial. (Two more, Jane Kember and Mo Budlong, first needed to be extradited from England.) Two judges recused themselves from the case before Richey took it, and then, in the summer of 1979, he traveled to Los Angeles to hold trial. After the defendants stipulated to evidence submitted by the FBI in return for the dropping of all but one charge against them, Richey found them guilty and prepared to sentence them. Bast, meanwhile, swung into action. He found a US marshal who had traveled with Richey to LA who told Bast that the judge had paid for prostitutes. Bast fed the information to columnist Jack Anderson, and Richey recused himself — but not before he’d sentenced Mary Sue and other initial eight defendants to prison sentences, most of about two to four years.

Bast was paid $321,000 and $84,000 in expenses for his work, which, adjusted for inflation, would be about $1.2 million today. In his book The Unbreakable Miss Lovely, Tony Ortega describes Bast’s operation not only against Judge Richey, but also against Paulette Cooper, who was duped into being hired by Bast under the pretense that the private eye was working for a Swiss millionaire who wanted to expose Scientology.

And Bast orchestrated one other nefarious caper designed to destroy an additional judge. Vicki Aznaran, the former President of the Religious Technology Center (Scientology’s nominally controlling entity), revealed this particular Bast caper in her declaration of August 9, 1998:

Dick Bast secured a yacht and attempted to get the judge on board for the purpose of filming him under compromising circumstances. The judge declined to go yachting and the operation was unsuccessful. Approximately $250,000 was spent on the operation.

While the US Government and the media took serious note of Scientology’s hardball tactics and willingness to spend vast sums of cash to smear a US Judge, so did a ruthless twenty-year-old Sea Org member named David Miscavige. While Miscavige was not a part of the Guardian’s Office, he was at this point handling some of L. Ron Hubbard’s more urgent problems.

When it became apparent that the GO defendants were going down in flames, the Church decided it was best to avoid a messy public trial in which Mary Sue Hubbard and the other defendants would be cross-examined at length on the record, and that’s why they signed the stipulation of evidence mentioned earlier.

Mary Sue appealed her prison sentence using SEF money while she remained in control of the Guardian’s Office. Meanwhile, L. Ron Hubbard went into hiding in February 1980 and remained in hiding until his death on January 24, 1986. Mary Sue never saw or heard from her husband after he went into hiding.

Although the Snow White Program had become a colossal train wreck, L. Ron Hubbard’s goal to eliminate, by all means possible, the legal threats against himself remained unchanged. In 1981, Hubbard effectively transferred the goals of the Snow White Program from the Guardian’s Office to a newly created entity called the “All Clear Unit.” David Miscavige was a prominent figure in this unit. During this period, Miscavige was able to force Mary Sue to resign as Controller of the Guardian’s Office and force her into exile and house arrest.

In the power vacuum created by the collapse of the Guardian’s Office and Mary Sue’s fall from grace, the Office of Special Affairs was created in 1982. The GO’s intelligence and Fair Game functions, and many of its personnel, were transferred into OSA. The Snow White Program’s “Programs Op” Linda Hamel was among the GO personnel relocated into OSA. Linda Hamel is now the Commanding Officer of OSA International.

By April 1982, Mary Sue Hubbard had exhausted her legal appeals. On January 7, 1983 Mary Sue was sentenced to four years in prison (she actually served only a year):
MSHSentence

With the final Snow White Program defendant behind bars in 1983, the Guardian’s Office-tainted SEF had served its purpose. As with all people and things in the Church that have outlived their usefulness or have become a PR liability, Mary Sue Hubbard, the GO, and the SEF were, in L, Ron Hubbard’s words, “disposed of quietly and without sorrow.” Mary Sue’s name was even purged from the 1978 edition of What Is Scientology?

The Snow White Program and the SEF had taught the Church a very valuable lesson: Having a large slush fund that was legally autonomous from the Church was a very important resource to possess — particularly given Scientology’s penchant for vicious Fair Game tactics that were either on the edge of law or crossed over into illegality.

This lesson was particularly relevant to David Miscavige. Indeed, about one year after Mary Sue’s incarceration in a federal penitentiary, Miscavige learned that both he and Founder Hubbard were the subject of an investigation by the IRS Criminal Investigation Division (IRS CID). Miscavige needed to move fast to kill this looming IRS CID investigation. Therefore, just as the Church had dismantled the Guardian’s Office on paper and resurrected it as the Office of Special Affairs, the SEF was also resurrected as the International Association of Scientologists (IAS). As the old French proverb states, “The more things change the more they remain the same.”

With its usual sense of overblown grandiosity, the Church evoked the signing of the US Declaration of Independence when it created the IAS in October 1985, or “AD 35” in the “After Dianetics” Scientology calendar created by Hubbard. Held at Saint Hill, the event included a ceremony that featured “delegates” using a quill pen to sign a “Pledge to Mankind” printed on parchment.

After having been unceremoniously kicked out of Saint Hill at thirteen years of age for having slugged his female preclear during an auditing session, David Miscavige made a triumphal return to “Ron’s home” in 1985 as a signatory on the IAS Pledge to Mankind. Pictured below, Miscavige is seen front row center in his red tie:
SaintHillMiscavige

True to form, Miscavige rolled out the IAS by stating that the previous membership organization, the “International Membership” program that was sold to Scientologists between 1977-1984, was illegal and off-source. See underlined text in this excerpt from Scientology Policy Directive 104R of 31 October 1985:
IASRulesScientologists were told to cheer for the on-source IAS as it was a “war chest” beyond the reach of the evil IRS.

Just how beyond the reach of the IRS was the IAS?

Shares of the IAS were held in trust by two individual Scientologists: Carl Heldt and Maureen Brigatti. These shares, in turn, were held in trust by the shadowy Curaçao Trust Management on Curaçao. President of the IAS Janet Light owned 1 percent of the shares and these were ultimately held in trust by the murky Theta Management Ltd. on Cyprus:
IASOwnership If you cannot follow the chain of IAS ownership it is because no one is supposed to be able to follow it. Theta Management LTD. was dissolved in 1993 and its functions transferred to the IASA. Presumably, the shares held in trust by Theta Management were transferred to the IAS to be held in trust. Curaçao Trust Management (CTM) still plays an unknown role in the IAS. For many years, the IAS was purportedly based aboard the M.V. Freewinds and was thus considered a “non-situs” trust, meaning it had no fixed location.

As previously covered, the IAS domesticated in 2007 and became a Delaware corporation. This may have been due to two events. First, new and stricter US laws went into effect for American companies and individuals holding offshore assets. The US Government was cracking down on money laundering and money that could be used to fund terrorism. Second, it seems that Curaçao Trust Management was becoming increasingly involved in managing online gaming monies. The IAS perhaps may have wanted to distance itself somewhat from CTM and its owner the Dutch tax lawyer and Curaçao national Englemindus George Praag. One of the most shadowy figures in the “shadow side” of Scientology, George Praag goes back decades with the Church.

The Snow White Program was clearly a case of Scientology turning lemons into lemonade, or in this case felonies into a billion dollar slush fund. As mentioned in our previous article on the IAS, CO OSA Linda Hamel is a trustee of the US IAS Members Trust. Thus, Scientology’s spy boss has access to a pile of money to, say, pay lawyers to pay private investigators to pay other private investigators to hack the email accounts of Scientology critics and ex-members.

Documents filed in the Garcia vs. IAS et. al. lawsuit yielded an intriguing item. Buried in the back pages of one filing provided by the Church was a bad photocopy of CO OSA Linda Hamel’s driver’s license. At last, a photo of Linda Hamel:
Linda_Hamel

 

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