Dr. Jeff Wasel

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

Billionaire Bob Duggan, the Panama Papers, and the Scientology Money Club

The Scientology Money Project did an article recently on the US Bankruptcy Court’s denial of Matt and Kathy Feshbach’s attempt to discharge $3.8 million in back taxes via bankruptcy. This led me to do further research on Matt Feshbach’s Bahamian stem cell medical company called Okyanos Heart Institute. Please see my article on Matt Feshbach and Okyanos.

In the course of my research I found Feshbach and his business partner and fellow Scientology OT Manuel Vianna listed in the Paradise Papers:

BD.1

Curious as I am about Scientology and its sources of money, I checked into Okyanos and discovered its $14.2 million dollars in capitalization largely came from a Scientologist named Ali Shawkat, a man whose father is Mudhar Shawkat, a former member of the Iraqi parliament. The ICIJ Offshore Leaks Database page on Mudhar Shawkat states that Appleby Global — an offshore law firm that some have compared to the notorious Panamanian firm of Mossack Fonseca — set up the “Passion Group S.A.” for the Shawkat family. “S.A.” is a business term meaning “Society Anonymous.” A person who owns shares in an S.A. corporation can have those shares held by an offshore law firm. An S.A. grants a certain degree of anonymity.

There were concerns at Appleby about the Shawkat money and its Passion Group S.A., this according to an internal Appleby e-mail leaked by the Paradise Papers:

According to 2008 confidential emails, the lawyer representing Shawkat and his son, Ali, asked Appleby to hold in escrow about $140 million, the proceeds of the sale of the Shawkats’ shares in a joint venture with a Kuwaiti telecommunications company. The law firm refused that request but accepted them as clients later in 2008.

Appleby set up the Passion Group Trust for the benefit of Mudhar Shawkat’s family members and registered three affiliated companies in the British Virgin Islands in 2008 and 2011, according to the files. Shawkat was identified in the Appleby documents as an “additional settlor” (a person who creates and funds a trust) of the Passion Group Trust and as a shareholder of Passion Investment Ltd., the trust’s investment arm.

However, upon the incorporation of a not-for-profit entity, which was also a beneficiary of the trust, concerns about the Iraqi family’s reported association with Chalabi [Ahmed Chalabi, 1944-2015. A controversial Iraqi politician.] emerged at the law firm. “It is suspicious,” an Appleby employee wrote in an email, “that they are setting up a charitable company offshore [Passion for Change S.A.] for funds coming out of Iraq – there does not seem any benefit other than lack of accountability in doing so.”

A Paradise Papers page on Mudhar Shawkat shows the relationships for the Shawkat family and its Passion group; there are ties to Amman, Jordan and the British Virgin Islands:

BD.Passion.Group

In a development that could portend trouble for the Shawkat’s and all other Appleby clients, Appleby confirmed in October 2017 that it had been the victim of a massive computer hack. Some in financial circles are saying the hacked information from Appleby Global will amount to a Panama Papers II. In November 2017 Appleby released a less than reassuring statement to its clients:

We wish to apologise to our clients and to our colleagues for the difficulties which have arisen from this incident. We remain committed to working with each and every client to talk to them about what has happened so that they can understand its impact on them and in order to support them with their own reporting requirements.

I note in passing that when your offshore legal firm tells you that it will help you understand the impact of it being hacked and will support you with your “reporting requirements” this is not a good thing, particularly if one has not self-reported.

Ali Shawkat and his wife Noor donated $5 million to the IAS. This was covered in a 2014 article by Tony Ortega at the Underground Bunker.

BD.2
Ali and Noor Shawkat receiving their IAS trophy for donating $5,000,000

Things were intriguing at this point so I called upon my erstwhile colleague Dr. Jeff Wasel. As Jeff and I learned from the Okyanos website, Ali Shawkat’s Passion Group invested money in Feshbach’s stem cell company:

FREEPORT, The Bahamas, March 18, 2014 – Okyanos Cell Therapy, whose mission it is to bring a new standard of care and a better quality of life to patients with coronary artery disease (CAD) using adult stem cell therapy, announced today it has raised $8.9 million in its Series B offering. Passion Group founder Ali Shawkat led the round and is a visionary entrepreneur-investor with success in a diverse set of industries including cellular services, telecom, media and healthcare.

Shawkat’s investment in Feshbach’s Okyanos is borne out by the Panama Papers’ mention that the Shawkat family invested in two medical companies:

In the following months, in 2009, the leaked files show that the Shawkats transferred more than $30 million to the family trust and one of its affiliated companies, some of which was converted into shares. Board meeting minutes of Passion Investment Ltd. chaired by Shawkat’s son show that from 2013 to 2016, the company has invested in two medical companies and in an Iraqi dealership for Peugeot cars.

On a side note to this story, Freewinds Captain Mike Napier’s son Sean Napier appears on the Okyanos website as the Director of IT & Operations:

Former US Ambassador to the Bahamas John Rood was brought in by Matt Feshbach to serve as a Director at Okyanos Holdings Co LLC. Because the Bahamian government had to pass a law allowing Okyanos to operate, Former Ambassador Rood’s contacts were undoubtedly invaluable. On a related note, John Rood is the Chairman of the Vestcor Companies Inc. This firm invests in multifamily dwellings. Scientology OT8 Grant Cardone’s firm Cardone Acquisitions follows the same business model as Rood’s Vestcor Companies Inc. This raises the question: Was Cardone introduced to John Rood via Matt Feshbach? If so, was Cardone inspired to get into investing in apartment buildings by seeing Rood’s success?

I found three UCC filings on Okyanos Operating Company Ltd. A “UCC filing” is an instrument that allows a lender to secure its interest on equipment for which they loaned money to a debtor to purchase. UCC’s are routinely used where a company borrows money to purchase expensive office equipment, phone systems, computer systems, medical equipment, etc. In the event of a default on the loan, the UCC protects the lender as it prevents the debtor from selling the equipment. The UCC also allows the lender to take physical possession of the equipment if the firm goes bankrupt. The UCC gives the lender first priority over other creditors in a bankruptcy.

The three UCC’s filed on Okyanos were filed by Prince’s Gate LLC of Santa Monica. A quick check shows Prince’s Gate LLC to be an entity owned by EarthLink founder and Scientologist Sky Dayton:

BD.8

According to news reports, Black Beret Life Sciences of Houston acquired Okyanos in a leveraged buyout in July 2017. This begs the question: Why would BBLS need to use an LBO to acquire an insolvent company? BBLS has cash. Indeed, in January 2017 Affigen announced a $17 million Series A led by Black Beret Life Sciences.

Genuine First Aid International Ltd

In the map below of the Shawkat offshore money we see a company with the innocuous name of Genuine First Aid International Ltd. A search of the Paradise Papers shows that Robert “Billionaire Bob” Duggan and Ali Shawkat to be shareholders and directors of Genuine First Aid International Ltd.:


Another Panama Papers diagram shows the relationship of Robert “Bob” Duggan with the Shawkat’s; Amman, Jordan; Beirut, Lebanon; and the British Virgin Islands via Duggan’s ties to Genuine First Aid International Ltd:

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What is Genuine First Aid International Ltd.? It is a company registered in the British Virgin Islands and based in Fujian, China. The company’s Chairman is a Danish Scientology OT8 named Michael Holstein. His Scientology Completions page is extensive:

Michael Holstein’s LinkedIn page leads to dietary supplements, vitamins, diabetes supplements, etc:

Michael.Holstein

Another Panama Papers diagram shows Ali Shawkat to be a director of Genuine First Aid International Ltd:

Yet another Panama Papers diagram shows Robert Duggan to be a shareholder of a company called Spang CM Ltd:

A more micro Panama Papers diagram shows a tighter Duggan relationship to Spang and Genuine First Aid International Ltd:

BD.9
While Spang CM Ltd. is registered in the Cayman Islands (tax identification number: 139726), the company is a Chinese manufacturing firm:

BD.Spang

The Scientology Money Club Investigation, as Dr. Wasel and I are calling it, will take a look into the intertwining  world of wealthy Scientologists and their money. We are not alleging anything untoward whatsoever. Rather, we are examining linkages amongst Scientology whales who donate big money to the IAS. That these relationships have been found in the Panama and Paradise papers is part of what Dr. Wasel and I will discuss in an upcoming podcast.

Dr. Wasel’s comments on offshore corporations:

So why go offshore? Well first, “offshore” has many connotations, and can denote both legal and illegal financial behavior. There are legitimate reasons for high net worth individuals to maintain offshore companies, trusts, and other “vehicles”, mainly to lessen one’s tax obligation or to ensure privacy in sensitive, though legal financial matters.

Other reasons include political instability or corruption in their home country, or the registration of expensive assets such as planes and boats, as well as financing the associated insurance costs. Lawful tax avoidance involves organizing one’s financial affairs to legally minimize the amount of tax to be paid, versus tax evasion, which involves hiding one’s assets altogether, from the responsible reporting authorities.

Large corporations such as Apple, Google, and others use favorable tax regimes in Ireland as an example of tax mitigation/avoidance, as do individuals in the Caribbean, Liechtenstein, Switzerland, and other “tax havens”.  These “Offshore Financial Centers” (OFCs) exist primarily to provide anonymity and tax regimes favorable to the investor and not the regulator; where the illegality occurs, is when an individual or entity fails to declare an interest in an OFC to their respective nation’s tax authority or financial regulator. The use of OFCs is significant; while verifiable data is difficult to collect, it’s estimated that some 20 percent of all private wealth is located in OFC’s, as is an estimated 75 percent of the captive insurance market.

The nexus of the OFC phenomenon is geography. In other words, “sunny places for shady people” to some extent, though the post-9/11 regulatory environment has drastically altered this perception. Indeed, The Cayman Islands, Bermuda, and other former “light touch” OFC locales, now often exceed US and EU anti-money laundering and tax reporting requirements.

That said, many significant loopholes exist in the structure of OFC’s, loopholes that, in a variety of ways, are structurally resistant to regulation, and still offer the less-than scrupulous individual or entity plenty of ways to create private banks, phantom or “shell companies” and fake trusts, and to hide money and other assets. One such option within this structure is the use of “bearer shares”, a term often reflected in the associated charts in this story. Implicit in the many OFCs available to the “sophisticated” investor, is the International Business Company, (IBC), which is a corporate vehicle that can be owned anonymously, and does not do business in the country where it’s domiciled (has physical residence), and usually located in an extremely “light touch” regulatory and tax locale. An IBC can be created online in less than an hour, involves minimal regulatory and ownership filings, and has limited liability. It’s unrestricted in the type of business it can entertain, and an IBC can consist of multiple sub-entities, complicating any future audit trail.

The main ownership stake in an IBC is a bearer share, which simply means that if you physically own the shares, you own the company, yet nowhere is it recorded that you physically hold them. In essence, the IBC is a truly “portable company”, allowing one to schlep a veritable business empire in one’s briefcase.

Adding to the attractiveness of portability, is a lack of accountability, in that most IBC’s allow for “nominee” directors; that is, hired-hand “directors”, who are usually employees of the registering agent, say a corporate registration house in Curacao. Thus there is no “official” record of who owns the bearer shares, and therefore, the company’s beneficiaries, nor is there any direct owner – a responsible fiduciary –  that can be held responsible for the company’s actions. While a more thorough discussion of all the permutations of this murky financial world is beyond the remit of this article, suffice to say, it’s the concepts of “plausible deniability” and anonymity, as well as the ability to hide one’s financial affairs,  that is the greatest lure to go offshore.
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Here is the Appleby Global document on the creation of the Shawkat’s Passion Group Trust. Hover over the document with your mouse to invoke the control panel at the bottom of the PDF:

Shawkat-2011-Passion-Group-Summary

Why Did the Church of Scientology Give $65,000 to a Hospital in England?

By Dr. Jeff Wasel

The BBC News published an article this week about a wholly uncharacteristic act of Scientology generosity. Written by John Sweeney, the article discussed Scientology UK’s £50,000 donation to The East Grinstead National Health Service Trust, specifically to the Queen Victoria Hospital. This donation is about $65,650 USD at current rates.

There article described the debate about the propriety of a National Health Service (NHS) Trust accepting a donation from the controversial Church of Scientology:

Mr Lamb said his “particular concern” was about the impact of the [Scientology] church’s “activities on people’s mental health”.

“Their secrecy and their refusal to be challenged or questioned is deeply disturbing.

“I hope that the Secretary of State and Simon Stevens as chief executive of NHS England make clear straight away that it is not appropriate to accept donations.

“It’s a sign of the intense pressure that the NHS is under that this trust decided to reverse its policy of not accepting donations.”

Scientology’s generous donation piqued my curiosity. National Health Service (NHS) Trusts are the primary health care management scheme used to regionalize all facets of healthcare delivery in the United Kingdom. It is thought that the regionalization of delivery allows for a more uniform quality of care and consistent outcomes while providing for better economies of scale in the cost, delivery, and maintenance of patient care in a particular locale.

NHS Trusts are the frontline of healthcare management and delivery in the UK; their importance cannot be understated. Working with General Practitioners, or what are called family doctors or “GP’s” in the US, NHS Trusts allocate treatment, purchase localized healthcare services, and manage palliative care including all forms of therapy, diagnostics, substance abuse treatment, in-home care, pre and post-natal care, and ambulance services to name but a few. Within this context, Scientology’s donation becomes even more of interest and raises significant questions. For example, certain Trusts specialize in specific types of care and therapies. In this particular case, Queen Victoria Hospital is renowned for its reconstructive surgery and burn care. Why did Scientology chose a hospital with these particular specialties?

With Scientology’s doctrine of exchange in mind, wherein your are required to receive “like for like” as it were, what’s the quid pro quo here? This donation had to have been authorized by David Miscavige, which then raises questions of a strategic and ongoing operational nature. Then we have the specifics of the treatment competencies of the Queen Victoria Hospital to consider, as well as how these competencies may or may not conform to Scientology’s modus operandi on the whole.

The immediate quid pro quo suggests the classic Scientology PR gambit called safepointing in which Scientology’s PR is enhanced by virtue of what, on the surface at least, appears to be a generous charitable donation to an NHS Trust hospital.

However, the UK National Health Service Trust also oversees the delivery of counseling, psychiatric services and psychotropic drugs; indeed drugs of all sorts that L. Ron Hubbard deemed antithetical to the very nature and purpose of Scientology. This begs the question: How could Scientology, which is dedicated to the complete annihilation of psychiatry and the prescribing of psychiatric medications, give $65,000 USD to a medical trust that actively delivers psychiatric services and medications to its patients?

Given this incongruity, an argument can be made that Scientology’s donation is a cynical means of buying Scientology access to the NHS Trust’s mid to high-level administrators — and they are legion in top-heavy bureaucracy of the NHS. This would be no different than Scientology in Los Angeles donating heavily to the LAPD in order to safepoint the Church. Indeed, Scientology’s long and suspect relationship with LAPD has caused many to ask if this is why the Los Angeles District Attorney’s Office has “slow rolled” the sexual assault investigation into actor and Scientologist Danny Masterson.

Queen Victoria Hospital could be viewed as a gateway into the overall NHS technology procurement system, providing Scientology operatives further access to the administrators who manage and operate the entire healthcare portfolio of the NHS on a UK national basis. Using this access would allow Scientology to pitch it’s WISE & ABLE businesses and services to the national UK healthcare system.

Specifically, the East Grinstead NHS Trust certainly does not enjoy the cash reserves that, for instance, the Guys and St Thomas NHS Trusts in London do. Additional service offerings provided by Scientology’s secular groups such could be construed as useful and therefore of potential interest to the East Grinstead NHS Trust.

Then there’s the tax ramifications of the donation for Scientology as well, given that Scientology does not enjoy charitable status in the UK. If Scientology’s income is as depressed in St. Hill as it is elsewhere in the church, the donation to Queen Victoria Hospital would prove significant in mitigating St. Hill’s 2017 HMRC tax obligations. These are the simplest explanations for the church’s otherwise inexplicable and sudden generosity. Yet there may be more afoot.

Leah Remini’s A&E show Scientology and the Aftermath has reached a significant new audience across many demographics. In doing so, Leah’s show has made millions of people fully aware of the Scientology’s history of egregious conduct in the United States.

If Scientology is to survive, then, it must seek new markets outside of the US and revitalize its non-US Orgs that are currently on life-support. With the opening of the new Dublin and Birmingham Scientology Orgs, it’s clear the church still considers the UK & Ireland viable sources of new members.

However, is the Church of Scientology truly seeking new members, or does this large cash donation indicate that an alternative initiative is underway? This would be an initiative aimed at alliance-building for the many business interests of Scientology’s high net-worth members who now provide a disproportionate amount of donations, and thus much-needed operating income for the Church.

Among critics, journalists, and other interested parties that scrutinize the Church of Scientology, a variety of “end-state” scenarios are beginning to emerge, one of which has the Church primarily existing for the benefit of its high net worth individuals colloquially referred to as “the whales.”

If one considers Scientology’s $1.5 billion cash fund known as the International Association of Scientologists (IAS) as a sort of internal hedge fund for both Scientology management and the whales, such a possibility may indeed prove to be the case.

So how does Scientology’s donation to an NHS trust fit into this emerging scenario?

A recent article on the Scientology Money Project, highlighted what appears to be a curious series of transactions in which Scientologist Matt Feshbach’s stem cell medical venture in the Bahamas was sold and resold in a very short period of time to three sequential entities without explanation. As originally conceived, Feshbach’s company Okyanos was focused upon the use of adult stem cells extracted from adipose tissue to repair cardiovascular decay.

Queen Victoria Hospital specializes in burn treatments and reconstructive surgery, a significant component of which involves the use of a variety of cell regeneration technologies, using stem cells and other organic matter, that could potentially be obtained using techniques similar to those touted by Fesbach’s Okyanos venture.

While this may be coincidental, I would argue this may be the first example of a new Miscavige strategy, whereby St. Hill, or other large orgs, are used as a localized business development vehicle for various whale enterprises, or even the church’s own for-profit companies.

In this scenario, the donation to Queen Victoria Hospital can be reconceptualized as an initial tranche of cash that represents a seed investment. In this example, the Scientology cash opens a door into the many procurement vehicles within the NHS Trust system.

The proximity of Queen Victoria Hospital to Scientology’s St. Hill base allows for an appropriate Miscavige-level of micro-management for the duration of this exercise in covert investment under the guise of a donation.

It would stand to reason we may see similar efforts in Taiwan, Russia, and other Scientology beachheads, that also harbor untapped entrepreneurial opportunities. It’s important to remember, that both Dublin and Birmingham are located in areas already receptive to emerging technology and subsidized investment, and possess a highly educated, technology savvy workforce.

At a macro level, such a strategy is in keeping with Scientology’s demonstrated tactic of infiltration on multiple fronts, in this case, using WISE or ABLE-centric businesses as the means of dissemination, rather than the usual, increasingly counter-productive, org-centric, one-on-one recruitment model. Rather than this labor-intensive and often times, less-than successful effort, cash donations provide a deliberate, highly targeted, highly visible means of obtaining a desired outcome.

Aside from what this donation may imply, specifically, a novel means for David Miscavige to court opportunities for his cartel of whales, it also represents yet another significant deviance from long-held doctrinal and practical operational tenants, resembling the unprecedented attempt to silence Leah Remini’s Emmy award-winning Aftermath show via an Internet-sourced petition.

Furthermore, in deliberately ignoring these and other core tenets, such as lambasting all things psychiatric, or asserting that the mainstream mental health establishment is intrinsically devoted to destroying Scientology, the Church of Scientology may indeed be demonstrating a deliberate acquiescence to a new reality: The need to evolve in a post-“Aftermath” age or die.

Significantly, we may be witnessing the first indication of a newly emerging, two-tier church operational model, with the IAS and it’s whales as the church’s preferred public face; and the other, a faceless one, wherein the remaining staff and Sea Org toil on in further obscurity, slowly withering on the vine, becoming nothing more than custodians for an empire of dormant real estate. This new development may well be the first harbinger of Scientology’s end game, so stay tuned.

Examining Scientology’s Claims of Victimhood

A Lavish Banquet at Scientology’s Celebrity Centre in Hollywood. This doesn’t look like persecution.

In a previous article we reported on journalist Alexandra Bruell’s exceedingly sloppy work in her Wall Street Journal article on Scientology. Essentially, Bruell uncritically repeated Scientology’s undocumented claims of persecution arising from Leah Remini’s Emmy-winning show Scientology and the Aftermath. As we noted in our previous article:

Without bothering to substantiate even one of Scientology’s claims, WSJ columnist Alexandra Bruell uncritically quoted this bit of Scientology hysteria:

“Leah Remini’s hate campaign of religious bigotry in its first season alone generated more than 400 incidents of harassment, threats of violence and vandalism against our churches and members,” reads one letter from STAND, dated from August and addressed to Geico’s assistant vice president of marketing Bill Brower. “The threat level has again risen, precisely coincident with A&E’s promotion and airing of the second season of this show, now spawning even more threats—bombings, murder and acts of physical violence.”

Alexandra Bruell apparently couldn’t be bothered to ask for even one shred of hard evidence from Scientology in the form of police reports, threatening e-mails, or any other substantiating proof. Instead, Bruell simply repeated Scientology’s claim. This sort of lazy journalism is highly offensive to the victims of Scientology and serves only to tarnish the reputation of the Wall Street Journal. I actually wondered how this unvetted story got by WSJ editors.

What are the real facts about violence against Scientology?

For a more in-depth analysis of Scientology’s suspect claims, we turn to Dr. Jeff Wasel.

Dr. Wasel holds Masters and Ph.D degrees from the London School of Economics (LSE), and is an expert in financial crime and related criminal behaviors, risk, and compliance. As a researcher with the LSE’s Information Systems Innovation Group, he was one of the earliest, post-9/11 investigators to examine the use of behavioral profiling, data mining and data analytics, in uncovering, understanding, and disrupting the use of money laundering, hawala, and other terrorism-related financial networks, as well as those of trans-national criminal organizations (TCOs). Additionally, Dr. Wasel and his LSE colleagues contributed to an EU-sponsored, multi-year, multi-disciplinary, profiling, data privacy and data protection research initiative, the Future of Identity in the Information Society, (FIDIS). Outcomes from the FIDIS initiative, made a significant contribution to the enactment of the robust, EU-wide data protection statutes now in place, and recently used so effectively by Hungarian authorities against Scientology in Hungary.

Using a variety of perspectives, methods, and tools, Dr. Wasel has been investigating the financial irregularities of the Church of Scientology for over ten years. While Scientology has been the subject of studies by several noted New Religious Movement (NRMs) scholars, Dr. Wasel’s ongoing work differs significantly in this regard; rather than researching Scientology from a theologian’s historical, and/or subjective, philosophical perspective, his research emphasizes a quantitative, forensically-grounded, multi-disciplinary approach, drawn from the fields of accounting, psychology, criminology, statistics, and data science, among other fields.

With this unique approach, Dr. Wasel has identified patterns of behavior that may indicate violations such as inurement, entanglement of funds, corporate governance irregularities, and tax avoidance/under-reporting; financial crimes such as fraud, structuring, and money laundering; and immigration crimes such as visa fraud, and human trafficking among other, ongoing egregious activities; such patterns are in addition to the Church of Scientology’s already extensive list of widely-documented and verified cases of criminal and anti-social behavior. I asked Dr. Wasel for his analysis of Scientology’s claims of having been the target of “increased violence” due to Leah Remini’s show. His analysis is as follows:

It is clear from her recent article, that WSJ reporter Alexandra Bruell failed to properly source or validate any of Scientology’s claims of “violence”, wherein Scientology asserted increased threat levels against both it’s members and property, as a means to legitimize its call for a boycott against those companies sponsoring Leah Remini’s “Aftermath” show on the A&E network. In addition to these perceived threats of physical violence, Scientology has also called for a boycott in response to alleged “religious bigotry”, above and beyond the alleged “hate crimes and violence” against its members. However, as the following analysis will demonstrate, there is no substance to the Church of Scientology’s allegations; moreover, given the seriousness of these allegations, both the Church of Scientology and Ms. Bruell, have failed to produce any independently substantiated evidence for the Church’s sensationalistic claims.

A basic Google search uncovers easily verifiable evidence that Scientology’s claims have no basis in fact. As an example, a recent report (2016/2017) conducted by the Center for the Study of Hate & Extremism, a research institution located within California State San Bernardino, and entitled “Final U.S. Status Report: Hate Crime Analysis & Forecast For 2016/2017,” provides a wealth of data refuting the Church’s spurious claims, all in a concise, well-articulated, and visually compelling format; an earnest skimming of the charts and graphs alone, would have invalidated the church’s position, let alone a thorough reading of this detailed investigation. The detail in the report is reflected in both the breadth and depth of it’s data sources: for instance, the authors note that it is a “compilation of official, vetted police data from over 40 U.S. cities, counties and states.” Subsequently, given the depth of analysis therein, as well as my own efforts in analyzing this report, it’s not surprising that I can find no evidence of any hate crime or hate-related violence, directed specifically towards the Church of Scientology or any of its members or properties. Indeed, no mention of Scientology appears anywhere in the report. (A PDF of this report appears at the bottom of this article). If such violence against Scientologists occurred as alleged, it was never reported in a way that would reflect among the widely available criminal justice and policy-related statistical data sources included in this report.

Tellingly, law enforcement agencies for both Los Angeles, which has the highest concentration of Scientologists anywhere in the world, and Clearwater, Florida, home to the second largest concentration of Scientologists world-wide, (as well as both cities having provided significant data sources for this report), reported no acts of criminal violence against Scientologists or their property. Perhaps more revealing, is the fact that the Church hasn’t produced any rebuttal, nor supporting data, for either the media or the public to review, in substantiating not only their most recent claims, but historical evidence of any concerted “pattern of violence” against church property or it’s individual members.

This lack of data stands in stark contrast to the expensive study the Church of Scientology funded to show its positive financial impact on the City of Clearwater. In that study, released in 2014 and conducted by the Center for Economic Forecasting and Analysis at Florida State University, the Church spared no effort in offering a wealth of detailed information on its beneficial financial contribution to Clearwater.

However, what the report doesn’t say reveals more about the church’s motivations: the “contribution” the church touts, is the result of hotel taxes and property taxes it pays as a result of it’s significant real estate holdings in the Clearwater area; no where does the report mention any ecclesiastical, social, or cultural benefits resulting from Scientology’s presence. That’s not surprising, given Scientology contractually shields itself in this regard, by stating that by practicing it’s “religion”, it promises no spiritual outcomes whatsoever, nor does it’s “dissemination,” Scientology’s version of proselytizing, involve anything less than a hard sell cash grab.

This begs the question: Why then, has the Church of Scientology not funded an equally extensive study, supporting its claims of increased violence against it’s members and property, as a result of Ms. Remini’s show? The answer is simple: The evidence for Scientology’s claims is statistically nonexistent; moreover, any efforts towards inferring even the slightest connection between the two, however tangentially, have been half-hearted or uncoordinated at best. Aside from an isolated incident of a young man, the son of former Sea Org members, throwing a hammer through the window of a Scientology church — a crime for which he was arrested and convicted for — Scientology has produced no hard evidence to sustain its claim that Ms. Remini’s show resulted in “more than 400 incidents of harassment, threats of violence and vandalism against our churches and members.”

Not only does Scientology fail to produce any evidence, of what would be a statistically significant representation, (it’s alleged “400 incidents”), it also fails to prove any causal relationship between Ms. Remini’s show and any claimed acts of violence, let alone a statistically significant, Federally-monitored “hate crime”. Rather, Scientology typically relies upon worn-out, demographically or culturally suspect tropes, red herrings, or vague, academically tenuous or discredited “studies”; for instance, in regards to causal factors of “violence”, they reference the statistically tenuous links between violent, first person shooter video games, and varying indicators of supposed increased levels of violence among particular “categories” of “young” people. It’s clear that analyzing, or more so, the accurate parsing of data, is incompatible with the generalities and situational veracity that comprise any Scientology narrative or behavioral rationalization; though when all else fails, the default defense or “reasoned response” is one of misdirection, ad hominem, slander, or gross generalization.

While the report shows that there has been a significant rise in hate-related crimes across the country, such crimes are predominantly racially-based. Religious-specific hate crimes comprise 19.7% of the aggregate, with anti-Muslim and anti-Jewish crimes predominating. As I indicated, Scientology is not mentioned anywhere in the span of this report, nor in any reliable reporting for 2017 that I was able to source otherwise. More revealing, is that the vast majority of crimes are against people, not places, further exposing Scientology’s lie as to violence directed against Scientology-owned properties. One can further extrapolate from this distinction, that in addition to the dearth of property crime, any concerted efforts directed at individual members is also exaggerated, given Scientology’s hysterical pronouncements regarding any perceived slight, let alone physical assault.

In assessing the context of the report, I would offer a few considerations to the reader. Although America’s post-election social domain has certainly been turbulent, the author(s) appear to have omitted a competent contextual discussion, in situating a comparison between the current state of anti-Muslim bias/violence, as it relates to, for instance, the last 10 years, or the role of media bias. Furthermore, they fail to include any baseline longitudinal (time) stipulations or controls in this regard, given that anti-Muslim behavior has risen steadily since 9/11, potentially skewing the mean; it could well be considered a constant in this regard.

Additionally, political/terror actions by jihadists, or conversely, by Jews, both here or in the Middle East, can induce random situational spikes, and I see no mention of having longitudinally rationalized these spikes in the data. The contextual significance evolves from factors such as the editorial coverage of ISIS’ and other terror group activity in 2016, along with repressive Israeli military activity, and increased pro-Palestinian activism, specifically the Boycott, Divest, Sanction (BDS) movement across the academic and SJW world. That said, in all fairness, responsibility for my concerns rests on both those compiling the data sourced by the authors, as well as the authors themselves.

Lastly, the use of unqualified data from the Southern Poverty Law Center (SPLC) is problematic in my view; in recent years, much of SPLC’s analysis and research has become verifiably politicized, and no longer enjoys it’s previous reputation for objectivity and methodological rigor. Having used earlier examples of Mr. Dees and Co.’s data on extremism in America, it pains me to make such an observation. Aside from subjectivity of it’s advocacy efforts, it’s worrying that the SPLC is not unique these days, in having the objectivity of its research and policy data subverted through a variety of questionable means. It’s an unfortunate reflection of contemporary norms within the “wonk world,” in that the sourcing and delivering of objective research, has become more incumbent on sponsor dollars, rather than scholarship, intellectual rigor, and personal integrity.

In closing, I would encourage readers to study the report; stylistically, it’s well-written and refreshingly free of multi-syllabic academic drudgery, and significantly, is disturbingly informative. To that, this report certainly refutes the Church of Scientology’s victimization narrative, and all of it’s hypocritical, hyperbolic venting regarding “bigotry and hate”, while simply reiterating that STAND, (STTAD? STOOD? Whatever the hell), has no leg to “STAND” on… Surprise, surprise.

Final Hate Crime 17 Status Report pdf

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