Clearwater

DOX: Scientology’s pricey Florida ‘spiritual mecca’ keeps up its value in latest tax records

(This piece was published on Tony Ortega’s Underground Bunker on 12.2.2017. It is republished here for archival purposes)

Jeffrey Augustine is once again keeping us up to date on Scientology’s financial documents. In this case, he has new figures on how much just one of many Scientology’s entities is worth, according to newly available tax documents.

In 2006, a change in the law required all non-profit organizations — even churches — to submit tax returns known as 990-T forms if they generated what is known as “unrelated business income.” A few years ago, I began finding and turning over to the Underground Bunker the 990-Ts for Scientology’s various entities.

Often, that income is fairly modest. But what’s more important for our purposes is that on each 990-T form there’s a box to fill out for “book value.” In other words, these organizations are asked to estimate their value in assets.

That requirement has led to a rare window into Scientology’s riches, and we like to keep up on the latest changes in those values.

In this case, I’ve found new documents related to the Flag Service Organization (FSO), the entity that runs Scientology’s Flag Land Base in Clearwater, Florida. This is where wealthy Scientologists from around the world come for expensive high-level auditing and other services. And keep in mind, FSO is just one of many entities that make up the Scientology movement, but it’s one of the more important ones.

So let’s see how the value of FSO has changed:

2008: $234.8 million
2009: $246.5 million
2010: $251.9 million
2011: $210.1 million
2012: $290.7 million
2013: $218.2 million
2014: $241.1 million
2015: $257.5 million

And here’s what that change in value looks like…

FSO is not the most valuable entity in the Scientology orbit. When we first began gathering these tax returns, for the year 2011, the Church of Scientology International was worth $790.8 million and the Church of Spiritual Technology listed a value of $434.4 million, for a total of $1.2 billion just for those two entities.

But even if it’s a distant third, the Flag Service Organization is steadily increasing in value.

This is consistent with what the newest defector from Flag told the Bunker recently. Peter Nyiri, who made a dramatic escape to freedom several months ago, said that the Flag Land Base is still bringing in huge income, of $2 million to $4 million a week — by starving the “outer orgs” and pressuring Scientology’s shrinking membership to come to Flag as often as they can for services.

Looking more carefully at recent returns by the FSO with the help of financial expert Dr. Jeff Wasel, we found a few noteworthy items…

In Part V of Flag’s 990-T returns filed in the period 2008-2013, FSO checked “Yes” on question 1 to indicate that it had an “interest in or other authority over a financial account (bank, securities, or other) in a foreign country.” Flag filled in the line to inform the IRS that it has financial interests in the United Kingdom and Australia. What are Flag’s financial interests in the United Kingdom and Australia? More importantly, how are they moving this money, and declaring these movements to the appropriate authorities, given these movements are between foreign entities?

In Part V of Flag’s 2014 and 2015, Flag checked “No,” indicating that it no longer had an “interest in or other authority over a financial account (bank, securities, or other) in a foreign country.” What happened to Flag’s financial interests in the United Kingdom and Australia?

In examining the 2013-2015 990-T’s, my personal view is that Flag’s stated costs for building improvements are either padded or excessive. For example, NOVA HRC is the firm that does the actual renovations on Scientology’s buildings (as well as many other clients). In the NOVA portfolio we have two hard data points:

1. Nova gives a project cost of $18,000,000 to renovate 393 guest rooms at the Ritz Carlton in Laguna Niguel, California. This is $45,801 per guest room.

2. Nova gives a project cost of $27,000,000 to renovate 220 guest rooms Flag’s Fort Harrison hotel. This is $122,727 per guest room. This seems utterly absurd and suggests, in my opinion, that the IRS should open an inquiry into why Scientology spends so lavishly on parishioner guest rooms. Scientology orders its parishioners to stay at Flag hotels and does not have to compete with secular hotels, so why the excessive spending?

In the Flag tax returns we see approximately $80,000 spent on exercise equipment for two properties. Additionally, their 2013 990-T form states that they spent some $14,296,680 on “improving” the Sandcastle Restaurant, used for public dining. For this money, it better be “Nobu” quality in food and atmosphere! The price mark-up on restaurant fixtures, as well as the same convoluted permitting process as that of the construction industry, are rife with the same potential for what seems to be excessive spending. What exactly is going on inside of Scientology and Nova that seems to be driving up renovation costs as compared to lower costs in the secular marketplace?

On a final note, even with the opening of the Super Power building on November 17, 2013 the Flag Land Base does not appear to have “boomed” whatsoever as a result of this edifice. Valued at $80,000,000, the Church of Scientology raised $145,000,000 for the project. Where did all the extra money go?

— Jeffrey Augustine

Flag Service Organization IRS 990-T forms 2008-2015

FSO Book Value 2015 $257,506,278

FSO Book Value 2014 $241,134,104

FSO Book Value 2013 $218,154,319

FSO Book Value 2012 $290,655,686

FSO Book Value 2011 $210,075,914

FSO Book Value 2010 $251,896,300

FSO Book Value 2009 $246,516,017

FSO Book Value 2008 $234,764,273

19,000 Scientologists?

SCNS.SF

Marauding Scientologists in San Francisco take to the streets with their pseudoscientific literature on drugs. Scientology’s cure for drugs? $360,000 in Scientology auditing and courses.

A frequently asked question: How many members does the Church of Scientology have?

I suggest that the better question is this: How many Scientologists are left in the Church after what has been a continuing mass exodus since 2005?

In 2014, Scientology Public Affairs Director Ms. Pat Harney was quoted in a Scientology-commissioned study in which she gave a figure of 19,000 Scientologists:

In 2013 over 9,000 parishioners visited the Church from around the world for Scientology religious services, many more than once, and for an average 36 days per visit. Additionally, about 10,000 Scientology parishioners currently reside in the Tampa Bay area. It is expected that those current numbers will increase given the recent opening of the Flag Building (providing additional specialized religious training and counseling services)

I am always skeptical of Scientology’s numbers because the Church has routinely lied about numbers since it began. For example, Scientology has variously claimed 12,000,000 members, 8,000,000 million members, and millions of members. None of these claims have ever been substantiated by something as simple as an independent third party audit of Scientology’s actual IAS list of active members in good standing with the Church. That’s what it would take to find the real number because Scientology has zero transparency on anything.

Nevertheless, as Pat Harney offered her 2014 numbers to the Center for Economic Forecasting and Analysis at Florida State University, let us give them credibility. I say this because one would certainly expect the study’s authors Julie Harrington, Ph.D., Martijn Niekus, Drs., and David Glassner to have verified Harney’s numbers against internal Church of Scientology records.

Pat Harney’s number is buttressed by Scientology’s number given on its webpage about the 2013 grand opening of the Flag Building in Clearwater:

10,273 Scientologists.

One perfectly poised ribbon.

One ceremonial stage.

Welcome to the crowning accomplishment at the top of our Bridge.

Using Pat Harney’s number of 19,000 Scientologists gives us a year 2013 baseline of the approximate total members remaining in the Church: 10,000 in the Tampa Bay area of Florida and 9,000 elsewhere. We can safely assume that the vast majority of the 10,000 Scientologists in Tampa Bay attended the grand opening of the Flag Building as this was a mandatory event at which Scientology leader David Miscavige spoke.

Much to the consternation of Mr. Miscavige the event was memorably overflown by the Messrs. Rinder and Bennitt in a helicopter:

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Harney opined that Scientology’s membership would increase with the opening of the Flag Building. Harney, however, has not offered a current statement of Scientology’s membership based on 2013-2017 numbers. Thus, Harney’s 2013 expectation of increased membership remains purely speculative.

It has long been maintained that Los Angeles has the highest concentration of Scientologists in the world but the Church of Scientology is itself contradictory on this matter. In 2010, David Miscavige opened the “Ideal Church of Scientology Los Angeles” which was actually the same old Church of Scientology Los Angeles that it has always been. At Scientology’s own website we are informed of the following:

The fully renovated Church of Scientology of Los Angeles was rededicated April 24, 2010 in ceremonies attended by 6,000 Scientologists and their guests.

While speaking at this 2010 rededication David Miscavige himself stated:

In describing the significance of the city of Los Angeles to Scientologists, Mr. Miscavige said: “It’s the city where the Church of Scientology was first incorporated in 1954. While even more than that, it’s the city with the largest concentration of Scientologists on Earth.”

Pat Harney claimed that 10,000 Scientologists lived in the Clearwater area in 2013 and 9,000 lived elsewhere. Harney’s statement falsifies David Miscavige’s assertion that Los Angeles is, “the city with the largest concentration of Scientologists on Earth.”

Events at which David Miscavige speaks are considered mandatory events and all Scientologists are expected to attend. Indeed, there is a huge effort made weeks before a Miscavige event to get everyone to attend. Sea Org are ordered to attend and to dress in civilian clothing, their so-called “Uniform K.”

Assuming, therefore, that the 2010 Los Angeles Miscavige event had maximal attendance, the numbers indicate that the location with the largest concentration of Scientologists on Earth is, in fact, the Tampa Bay area of Florida. According to Harney’s 2014 numbers, Tampa Bay has 4,000 more Scientologists residing there than in Los Angeles.

As for the Los Angeles numbers: The Shrine Auditorium in Los Angeles seats 6,300 people and Scientology rents the Shrine for events. Thus, the 6,000 in attendance at the rededication of the Church of Scientology of Los Angeles and the 6,300 seat capacity at the Shrine give us a reasonable basis to conclude that there are about 6,000 Scientologists in the Los Angeles area.

If the Tampa Bay area has 10,000 Scientologists and Los Angeles 6,000, then the remaining 3,000 Scientologists would most likely be concentrated in England, Italy, Germany, Taiwan, and Russia. Given the uncompromising determination of the Russian Federal Police to protect Russians from fraud by continually raiding Scientology’s Orgs in that country, Russia may well be outlawed there soon. The same goes for Hungary.

Please do comment. I would like as much data as possible on how many Scientologists you think remain in the Church. Leaks are always welcome.